Agenda of Risk and Assurance Committee - Wednesday, 30 April 2025

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

Date:

Time:

Meeting Room:

Venue:

Wednesday 30 April 2025

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
	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

Risk and Assurance Committee

30 April 2025

ITEM TABLE OF CONTENTS PAGE

KARAKIA TIMATANGA

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.

PROCEDURAL

1 Apologies 5

2 Late Items 5

3 Declarations of Interest 5

4 Confirmation of Minutes 5

REPORTS

5 Reports for Noting

5.1 PwC Tax Governance Presentation 7

5.2 Continuous Improvement and Audit Actions Monitoring Report 21

5.3 Health, Safety and Wellbeing Dashboard - Quarterly Report 73

5.4 Legislative Compliance 99

5.5 Risk and Assurance Committee Work Programme 115

5.6 Financial Dashboard as at 31 March 2025 119

5.7 Treasury Update - March 2025 123

C1 Discussion on the Options for Credit Rating Services

C2 Risk Management Quarterly Report 135

KARAKIA WHAKAMUTUNGA

Kia whakairia te tapu

Kia wātea ai te ara

Kia turuki whakataha ai, kia turuki whakataha ai

Haumi e, hui e, taiki e!

Restrictions are moved aside

so the pathway is clear

To return to everyday activities

Draw together, affirm!

Risk and Assurance Committee

30 April 2025

File No.: 25/203

5.1 PwC Tax Governance Presentation

Author(s)

Pei Shan Gan

Financial Controller | Kaiwhakahaere Tahua Pūtea

Approved by

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Monique Davidson

Chief Executive Officer | Tumuaki

Purpose | TE PŪTAKE

1. This report presents the Risk and Assurance Committee with the PricewaterhouseCoopers (PwC) annual tax update for the Horowhenua District Council, as part of the tax governance framework programme.

2. PwC will be in attendance to lead the presentation.

This matter relates to Ensuring Financial Discipline and Management

Ensure financial discipline and compliance with our financial strategy and benchmarks.

Provide transparent financial reporting and regular updates to the community on the Council’s financial performance and initiatives.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/203 PwC Tax Governance Presentation be received and noted.

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

C. That the Committee notes the Annual Tax Update presentation by PwC.

bACKGROUND | hE KŌRERO TŪĀPAPA

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

4. 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.

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

6. 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.

DISCUSSION | HE MATAPAKINGA

7. Proactive tax risk management can facilitate the 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.

8. 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.

9. Table below shows Council’s tax compliance evaluation journey:

Financial year	Tax Compliance evaluation completed
2021/22	PAYE independent tax evaluation
2022/23	GST independent tax evaluation
2023/24	FBT independent tax evaluation
2024/25	PAYE independent tax evaluation

10. For the 2025/26 financial year we are planning an evaluation by PwC on payroll analytics. Inland Revenue have invested heavily in data analytics, particularly in relation to KiwiSaver and Employer Superannuation Contribution Tax (ESCT). Accordingly, PwC have developed data analytic capability that run off the payday returns (Employment Information) filed. These are comparable to the tests that PwC understands Inland Revenue are now performing, and can assist Council in being prepared for any data scrutiny by Inland Revenue.

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Horowhenua District Council - Annual Update - April 2025 by PwC	9

Risk and Assurance Committee

30 April 2025

File No.: 25/195

5.2 Continuous Improvement and Audit Actions Monitoring Report

Author(s)

Pei Shan Gan

Financial Controller | Kaiwhakahaere Tahua Pūtea

Approved by

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Purpose | TE PŪTAKE

1. This report updates the Risk and Assurance Committee on progress on the action items from previous resolutions.

This matter relates to Pursuing Organisation Excellence

Continuing the journey of organisational transformation by enabling a culture of service, excellence and continuous improvement.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/195 Continuous Improvement and Audit Actions Monitoring Report be received and noted.

bACKGROUND | hE KŌRERO TŪĀPAPA

2. This paper reports on actions generated from Committee resolutions, and any requests noted through the minutes, or requested through external and internal audit work and for actions accepted by the Chair.

3. Much like the Committee Work Programme, the Continuous Improvement and Audit Actions Monitoring Report is a standing item, and reported through at each committee meeting.

4. The monitoring report includes actions that have been carried over from the Finance, Audit and Risk Committee from the previous Triennium.

DISCUSSION | HE MATAPAKINGA

5. Below is a summary of the status of all recommendations:

	Open recommendations at 1 July 2024	Recommendations completed and archived	New	Recommendations completed	Outstanding recommendations
Audit Management report 2023/24 previous recommendations	19	(5)	4	(5)	13
GST Compliance evaluation by PwC recommendations – 17 February 2023	19	(16)	-	-	3
PAYE Compliance evaluation by PwC recommendations – 11 May 2023	18	(18)	-	-	-
FBT Compliance evaluation by PwC recommendations – June 2024	15	(11)	-	-	4
Total	71	(50)	4	(5)	20

6. There was a total of 18 open recommendations from the Audit Management letter for the year ended 30 June 2024. There are 13 outstanding recommendations that are being followed up and worked on. Some will take longer to complete due to resourcing or system constraints to implement changes or improvements. Some are also waiting for Audit NZ to finish their assessment during their 2025 annual audit visit.

7. On the 9^th of April, officers held a meeting with Audit NZ to address some of the older open recommendations from previous years’ Audit Management letters. Officers have since provided more supporting information to Audit NZ regarding three recommendations:

· “Establish a separate GL account for contract retentions”

· “Record keeping and evidence of approvals”

· “Legislative Compliance”

Audit NZ’s have indicated that they are likely to close three recommendations off as part of finalising the interim audit. These relate to the recommendations officers have deemend completed. There was also mutual agreement to merge some open recommendations together, particularly those around asset valuation, and service performance reporting, as well as the mutual agreement to close the recommendation for “Sensitive expenditure policies and procedures” and for “Three Waters infrastructure assets”. There are likely to be three of the 13 open recommendations cleared by Audit NZ as part of the 2025 annual audit.

8. Discussion and consideration mentioned in the point above will be included in 2025 Audit Management letter. Audit NZ will also be providing a summarised interim audit management letter to reflect the outcome.

9. Four outstanding recommendations resulting from the FBT Compliance evaluation by PwC are in progress. Two recommendations were completed and archived relating to HDC motor vehicle private restriction letters which had been actioned.

10. Three outstanding recommendations resulting from the GST Compliance evaluation by PwC are in progress. These involve fundamental changes needed to Council’s ERP system to allow for GST coding to be utilised, and drafting of the Asset Management Policy and so this might not be able to be completed until the next financial year or as part of the upgrade of our ERP starting in the later part of 2025/26.

11. One outstanding item resulting from the PAYE Compliance evaluation by PwC relates to the review of policy regarding clothing/uniform in the Collective agreement. Full review of facilities uniform is underway and will be completed by the end of the year including alignment across of other roles where a uniform is required. Current view is to remove the uniform. This recommendation was completed and archived since it was last reported to the committee.

12. Completed recommendations are archived and shown towards the end of the monitoring report in Attachment A.

13. As part of the Tax Governance Framework, PwC has completed the PAYE Compliance evaluation in April 2025. At the time of writing this report, officers have just received the draft report from PwC to review. The final report will be tabled with this Committee in subsequent meeting. Any recommendations resulted from this evaluation will be added to subsequent monitoring report.

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Risk & Assurance Committee Monitoring Report	24

Risk and Assurance Committee

30 April 2025

Risk and Assurance Committee

30 April 2025

File No.: 25/207

5.3 Health, Safety and Wellbeing Dashboard - Quarterly Report

Author(s)

Tanya Glavas

Safety and Wellbeing Lead | Kaiārahi Whai Oranga

Approved by

Ashley Huria

Business Performance Manager | Tumu Tutukinga Pakihi

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Purpose | TE PŪTAKE

1. This report provides the Committee with Health, Safety and Wellbeing information and insights for the quarter from January 2025 – March 2025.

This matter relates to Pursuing Organisation Excellence

Continuing the journey of organisational transformation by enabling a culture of service, excellence and continuous improvement.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/207 Health, Safety and Wellbeing Dashboard - Quarterly Report be received and noted.

DISCUSSION | HE MATAPAKINGA

Health Safety and Wellbeing Dashboard

2. 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.

3. The dashboard report for this quarter shows a positive approach to reporting across Council, including the areas of leadership engagement and incident reporting.

4. The HDC Safety Index on the front page has changed as of November 2024. We no longer have access to our external provider for Health and Safety indices and as such, we had to change our report to reflect internal data only. This change has come about due to no longer having complimentary access to this information. This gave us the opportunity to create a standardised marking criteria that will allow changes and growth to be better tracked across the months of the dashboard reports.

Deep Dive – Local Water

5. The Local Water deep dive supports due diligence by providing Elected Members with assurance that Health and Safety has been effectively addressed and continues to improve since the work was brought in-house. It highlights a strong focus on risk reduction and preparedness through training. The deep dive also provides evidence that Council has appropriate resources and processes in place to identify, manage, and minimise significant risks.

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Health, Safety and Wellbeing - Dashboard Report - January to March 2025	75
b ⇩	HSW - Local Waters Deep Dive - April 2025	86

Risk and Assurance Committee

30 April 2025

File No.: 25/208

5.4 Legislative Compliance

Author(s)

Ashley Huria

Business Performance Manager | Tumu Tutukinga Pakihi

Approved by

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Monique Davidson

Chief Executive Officer | Tumuaki

Purpose | TE PŪTAKE

1. This report details the Council’s legislative compliance for the 12 months to 28 February 2025.

This matter relates to Pursuing Organisation Excellence

Continuing the journey of organisational transformation by enabling a culture of service, excellence and continuous improvement.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/208 Legislative Compliance be received and noted.

bACKGROUND | hE KŌRERO TŪĀPAPA

1.1 The previous Legislative Compliance Report, presented to the Risk and Assurance Committee on 16 August 2023, provided an overview of best practices, clarified the concept of legislative compliance, and outlined the benefits of regular reporting in this area.

1.2 At that time, the following were identified as the key legislative acts for short term reporting focus:

· 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

1.3 Officers manually reported on compliance with these acts to the Risk and Assurance Committee. However, due to the early stage of maturity in the compliance framework, and the absence of formal training and development, the reporting was based largely on individual officers’ knowledge. A comprehensive legislative review had not yet been completed, and as a result, the level of confidence in the data provided was considered moderate pending the completion of a full review.

DISCUSSION | HE MATAPAKINGA

2. Following this 2023 report it was decided that we would investigate a better option for monitoring compliance through completion of a regular survey. Officers selected the company ComplyWith, after reviewing the product and discussing with other Council’s across the country utilising the tool.

3. ComplyWith is a New Zealand-based compliance management software solution designed to help organisations understand and meet their legal obligations. The platform focuses on simplifying legal compliance through plain-language legal content, personalised obligation reporting, and intuitive software tools that enhance accountability and reduce compliance risks.

4. Key features of ComplyWith include:

· Tailored Legal Obligations for each role: Delivers obligation summaries written in plain language, specific to the organisation’s operations and structure.

· User-Friendly Reporting Survey Tools: Enables staff to easily identify and report on legal compliance risks, promoting internal ownership and awareness.

· Reporting & Risk Visibility: Powerful tools to track compliance status, identify potential risks, and provide clear, real-time reporting for decision-makers.

· Legal Assurance: Regularly updated legal content authored and verified by experts to ensure accuracy.

5. ComplyWith is particularly well-suited for councils, and other organisations seeking transparency, clarity, and efficiency in managing their legal obligations. The platform supports a culture of proactive compliance, reducing the risk of legal issues and enhancing governance outcomes.

6. Alongside the software implementation, the previously outlined programme has commenced, with many elements now underway or completed, including the identification of all relevant legislation, including the higher risks areas and targeted training and development.

7. In March 2025, the first comprehensive legislative compliance survey was conducted, covering the period from 1 March 2024 to 28 January 2025. A total of 47 individuals were assigned 1,461 compliance obligations from 104 different legislations. Of these, 1,004 obligations were met in full, 40 were partially met, 2 were not met, and 415 obligations did not arise during the reporting period.

8. Upon review of the report, it was identified that one of the two obligations recorded as having zero compliance, specifically relating to have a separate account for Land Transport revenue and expenditure was in fact compliant, but had been answered incorrectly. This has been noted within the report. While the survey is now closed and no changes can be made to the submitted data, the review process reflects positively on both officers and Council. It demonstrates a strong culture of risk awareness and a proactive approach to reviewing and investigating reported compliance matters.

9. Attached to this paper is the detailed report.

NEXT STEPS | HEI MAHI

10. Officers will review all obligations recorded as partially or non-compliant and implement the associated action plans to progress toward full compliance.

11. A monitoring report of partial and zero compliant actions will be present in the upcoming agenda.

12. The next survey period will be 1 March 2025 to 28 February 2026.

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Legislative Compliance - HDC Legal Compliance Survey (1 March 2024 to 28 February 2025	102

Risk and Assurance Committee

30 April 2025

File No.: 25/220

5.5 Risk and Assurance Committee Work Programme

Author(s)

Ashley Huria

Business Performance Manager | Tumu Tutukinga Pakihi

Approved by

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Purpose | TE PŪTAKE

1. The purpose of this report is to provide the Risk and Assurance Committee with an outline of a draft Work Programme for 2024/25.

This matter relates to Pursuing Organisation Excellence

Continuing the journey of organisational transformation by enabling a culture of service, excellence and continuous improvement.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/220 Risk and Assurance Committee Work Programme be received and noted.

B. That the Risk and Assurance Committee supports the proposed Risk and Assurance Committee Work Programme for 2024/25

DISCUSSION | HE MATAPAKINGA

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

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Risk and Assurance Committee Work Programme 2024/25	117

Risk and Assurance Committee

30 April 2025

File No.: 25/224

5.6 Financial Dashboard as at 31 March 2025

Author(s)

Pei Shan Gan

Financial Controller | Kaiwhakahaere Tahua Pūtea

Approved by

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Purpose | TE PŪTAKE

1. This report presents a high-level overview of the financial position and results to the committee, with a focus on the March 2025 results.

This matter relates to Pursuing Organisation Excellence

Continuing the journey of organisational transformation by enabling a culture of service, excellence and continuous improvement.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/224 Financial Dashboard as at 31 March 2025 be received and noted.

bACKGROUND | hE KŌRERO TŪĀPAPA

2. The purpose of the dashboard is to provide an overview of the Financial Results to enable the committee to understand the results from a risk perspective.

DISCUSSION | HE MATAPAKINGA

3. So far this year we have received $3.2m less income than planned. This is mainly due to lower funding from Waka Kotahi, which is offset by lower spending agreed by Council. It is also due to delayed CIP funding with changes in the timing of the associated capital projects. The position is forecast to continue for the year. While the grants are lower, we are tracking well in our Regulatory area with income for consenting higher than planned and additional waste rebate received.

4. Our operating expenditure is currently $1.7m below budget which is largely due to lower professional services and other operating costs. We also have some savings in employee costs due to vacancies in the first half of the year. This is offset by $1.761m loss on interest rate swap. A loss on an interest rate swap occurs when the value of the swap decreases due to unfavourable changes in interest rates. Swaps are used to manage interest rate risk and potentially lower borrowing costs.

5. We are tracking well to meet the underlying operational budget (excluding capital items) and we are targeting net savings of $200k to $300k. This is mostly due to additional net income in Regulatory. There are some risks within the three waters budget that need to be monitored closely for this to be achieved.

6. We have completed just under $20m for the capital programme, with around $15.5m planned to be spent for April – June 2025. This was discussed at the Capital Projects Steering Group on 19 March and subsequently at the Council workshop for 2025/26 Annual Plan on 9 April. Overall, we are projecting a reduction in capital spending this year of $7.7m with a net reduction in borrowings of $5m for 2024/25. Over the four years (up to 2027/28) it is anticipated that we will have a net reduction of $4.7m.

7. Rates remission of $691,641 for 2025 is over the budget of $629,982 predominantly due to Part 13 Council Owned Utilities remission ($175k vs a budget of $120k). This is funded from additional rates income.

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Financial Dashboard as at 31 March 2025	121

Risk and Assurance Committee

30 April 2025

File No.: 25/202

5.7 Treasury Update - March 2025

Author(s)

Pei Shan Gan

Financial Controller | Kaiwhakahaere Tahua Pūtea

Approved by

Jacinta Straker

Group Manager Organisation Performance | Tumu Rangapū, Tutukinga Whakahaere

Monique Davidson

Chief Executive Officer | Tumuaki

Purpose | TE PŪTAKE

1. To update the committee on the treasury activity for the last quarter, which is outlined in the Bancorp Treasury Reporting Dashboard for the March 2025 quarter.

This matter relates to Ensuring Financial Discipline and Management

Monitor Treasury opportunities to take advantage of favourable interest rates, reduce debt servicing costs, and maintain the Council’s credit rating.

Provide transparent financial reporting and regular updates to the community on the Council’s financial performance and initiatives.

Ensure financial discipline and compliance with our financial strategy and benchmarks.

RECOMMENDATION | NGĀTAUNAKITANGA

A. That Report 25/202 Treasury Update - March 2025 be received and noted.

B. That this matter or decision is recognised as not significant in terms of S76 of the Local Government Act.

C. That the Committee notes the Bancorp Treasury Reporting Dashboard for the March 2025 quarter.

D. That the Committee notes the presentation from Bancorp Treasury that is tabled at the committee.

bACKGROUND | hE KŌRERO TŪĀPAPA

2. This quarterly Treasury Reporting Dashboard is produced by Council’s treasury advisors, Bancorp Treasury Services Limited.

3. The Local Government Act (LGA) 2002 requires:

· liabilities to be managed prudently and in a manner that promotes the current and future interests of the Community (Section 101(1));

· A Liability Management Policy to be adopted by Council (Section 102); and

· specific content of such a policy (Section 104).

DISCUSSION | HE MATAPAKINGA

4. Council had $212m of current external debt as at 31 March 2025 (no change since the last quarter), which was all sourced from the Local Government Funding Agency (LGFA). $22M of this debt relates to funds borrowed last year and placed on term deposit to repay debt coming due this financial year. Currently fixed term debt is $57m and represents 47.2% of our total debt. Floating debt is $155m and represents 52.8%.

5. Council is in compliance with it’s the debt profile targets set in its Treasury management policy:

Years	Minimum Fixed Rate Amount	Maximum Fixed Rate Amount	Sept	Dec	MAR	Compliant
0 - 2 years	40%	100%	47%	47%	45.2%
2 – 4 years	25%	80%	46%	49%	47.9%
4 -8 years	0%	60%	30%	27%	26.5%

6. Since 1 July 2024, we have entered into $50m worth of interest rates swaps.

Amount	Maturity	Rate
$10m	17-Jul-28	3.51%
$10m	16-Jul-29	3.48%
$10m	15-Jul-30	3.4%
$10m	23-Oct-29	3.67%
$10m	23-Jul-29	3.64%

We initially planned for a further $22.5m of forward start swaps in the last quarter with maturity in 2029 and 2030 when interest rates are within the range from 3.6% to 3.65%. This did not eventuate due to the volatility in interest rate market. Officers continue to monitor interest rates closely together with Bancorp and will make prompt decisions on utilising forward swaps as the market changes.

7. Our average cost of funds as at 31 March 2025 was 3.82%. As at 31 March 2025, net interest against budget and forecast is depicted in the table below. The higher forecast is largely due to the interest free loan of $12.5m from Crown Infrastructure Partners being delayed to 25/26 due to the project timeframe shifting.

	Actual as at 31 March 2025	2024/25 Budget	2024/25 Forecast
Interest Revenue	$0.865m	-	$1.326m
Interest Expense	$7.324m	$7.624m	$9.420m
Net Interest	$6.459m	$7.624m	$8.094m

8. Council did not borrow as part of the LGFA bond tender on the 12^th of March. Prefunding for our 2026 debt maturities was completed as part of the tender on the 10^th of April. A total of $43m was borrowed as prefunding. This is borrowing will be put on term deposit to repay borrowings coming due in the 2025/26. No other extra borrowing was required in the March quarter.

9. Council’s net debt to total operating revenue as at 31 March 2025 is 196%. Officers have continued to closely monitor the net debt to operating income ratio, which is now expected to be below the budgeted level of 229% due to the net reduction in the capital programme of $5m. This remains below the 250% financial strategy limit.

10. Council has recently confirmed the review meeting date for the annual credit rating review with S&P Global Ratings. Meetings will be held with Council Officers and the Mayor on 29 May and the rating will likely be provided in late June.

Next Steps | Hei Mahi

11. The Committee will be discussing the options for credit rating services as part of a public excluded session following this report.

Confirmation of statutory compliance

In accordance with sections 76 – 79 of the Local Government Act 2002, this report is approved as:

a. containing sufficient information about the options and their advantages and disadvantages, 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.

Attachments | NGĀ TĀPIRINGA KŌRERO

No.	Title	Page
a ⇩	Horowhenua DC Treasury Report as at 31 March 25	126

Risk and Assurance Committee

30 April 2025

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 Discussion on the Options for Credit Rating Services

Reason:	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.
Interests:	s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.
Grounds:	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.
Plain English Reason:	This report is to facilitate a discussion of potential suppliers. Discussion of this item in public would disadvantage Council in potential future negotiations.

C2 Risk Management Quarterly Report

Reason:	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 6.
Interests:	s6(a) - The making available of the information would be likely to prejudice the maintenance of the law, including the prevention, investigation, and detection of offences and the right to a fair trial.
Grounds:	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 6.
Plain English Reason:	This report identifies potential vulnerabilities and strategies to manage these vulnerabilities. Disclosing these would negate the effectiveness of risk mitigations..