I hereby give notice that an ordinary meeting of the. Audit and Risk Committee. will be held on:

Transcription

1 I hereby give notice that an ordinary meeting of the Audit and Risk Committee will be held on: Date: Tuesday 20 September 2016 Time: Venue: 2.00 pm Meeting Room, Kaipara District Council Office, Unit 6, The Hub, 6 Molesworth Drive, Mangawhai Agenda Membership Chair: Members: Commissioner Richard Booth Commissioner Peter Winder Commissioner John Robertson Staff and Associates: Chief Executive, General Manager Finance, Governance Services Manager (minute-taker). Seán Mahoney Governance Services Manager SM:yh(OPonly) A&R Agenda 20 September 2016 PEX

2 Contents Page 1 Opening Present Apologies Confirmation of Agenda Conflict of Interest Declaration 1 2 Confirmation of Minutes Audit and Risk Committee Minutes 16 May Operational Annual Report 2015/ Audit Action Plan Update Treasury Management Legislative Update Health and Safety Review Public Excluded Audit and Risk Committee Items for 20 September Open Committee Meeting: 20 September Closure 289 SM:yh(OPonly) A&R Agenda 20 September 2016 PEX

3 Ordinary Meeting Audit and Risk Committee Tuesday 20 September Opening 1.1 Present 1.2 Apologies 1.3 Confirmation of Agenda The Committee to confirm the Agenda. 1.4 Conflict of Interest Declaration Committee Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a Committee Member/Commissioner and any private or other external interest they might have. It is also considered best practice for those members to the Executive Team attending the meeting to also signal any conflicts that they may have with an item before the Committee. 2 Confirmation of Minutes 2.1 Audit and Risk Committee minutes of 16 May 2016 Governance Services Manager /May 2016 A copy of the unconfirmed minutes is attached. Recommended That the minutes of the Audit and Risk Committee meeting held 16 May 2016, be confirmed as a true and correct record. 1

4 Audit and Risk Committee Date: Monday 16 May 2016 Time: Venue: Status: The meeting commenced at 2.00pm The meeting concluded at 3.06pm Meeting Room, Kaipara District Council Office, Unit 6, The Hub, 6 Molesworth Drive, Mangawhai Unconfirmed Minutes Membership Chair: Members: Commissioner Richard Booth Commissioner Peter Winder Commissioner John Robertson Staff and Associates: Acting Chief Executive, General Manager Finance, Governance Services Manager (minute-taker). Seán Mahoney Governance Services Manager 2

5 Contents 1 Opening Present Apologies Confirmation of Agenda Conflict of Interest Declaration Confirmation of Minutes Audit and Risk Committee minutes of 21 April Public Excluded A&R Committee Minute Items 16 May Open Minutes Audit and Risk Committee: 16 May Audit and Risk Committee Public Excluded Minutes: 21 April 2016 (Agenda Item 3.1) /2017 insurance renewal strategy (Agenda Item 3.2) Closure

6 Ordinary Meeting Audit and Risk Committee Monday 16 May Opening 1.1 Present Commissioner Richard Booth (Chair Commissioner Peter Winder In Attendance Name Designation Item(s) Jill McPherson Acting Chief Executive All Glennis Christie General Manager Finance All Paul Cresswell Financial and Corporate Planning Manager All Dave Corp Crombie Lockwood All Steve Wolston Crombie Lockwood All Gina Knowles Technical Support Officer Resource Consents All (minute-taker) Adjournments Nil. Absences Nil. 1.2 Apologies Moved Booth/Winder That the Audit and Risk Committee receives the apology of Commissioner John Robertson. Carried 1.3 Confirmation of Agenda The Committee confirmed the Agenda. 1.4 Conflict of Interest Declaration Nil. 4

7 2 Confirmation of Minutes 2.1 Audit and Risk Committee minutes of 21 April 2016 Governance Services Manager /April 2016 Moved Booth/Winder That the confirmation of the minutes of the Audit and Risk Committee meeting held 21 April 2016, be deferred to the next Council meeting. Carried 5

8 3 Public Excluded A&R Committee Minute Items 16 May 2016 The meeting went into Public Excluded session at 2.05pm Moved Booth/Winder That the public, excluding Mr Corp and Mr Wolston, be excluded from the following part of the proceedings of this meeting, namely; Confirmation of Audit and Risk Committee Public Excluded Minutes 21 April 2016; and 2016/2017 Insurance renewal strategy. The general subject matter of each matter to be considered while the public is excluded, the reasons 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 are as follows: General subject of each matter Reason for passing this Ground(s) under Section 48 (1) to be considered: resolution for the passing this resolution: Confirmation of Audit and Risk Committee Public Excluded Minutes 21 April Section 7(2)(g) maintain legal professional privilege Section 7(2)(i) enable any authority holding the information to carry on, without prejudice or disadvantage negotiations (including commercial and industrial negotiations). Section 48(1)(a) That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist. 2016/2017 Insurance renewal strategy. Section 7(2)(g) maintain legal professional privilege Section 7(2)(i) enable any authority holding the information to carry on, without prejudice or disadvantage negotiations (including commercial and industrial negotiations). Section 48(1)(a) That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist. Carried 6

9 4 Open Minutes Audit and Risk Committee: 16 May 2016 Moved Booth/Winder That the public be re-admitted to the meeting and resolutions made whilst in Public Excluded, be confirmed in Open meeting. Carried 4.1 Audit and Risk Committee Public Excluded Minutes: 21 April 2016 (Agenda Item 3.1) Governance Services Manager /April 2016 Moved Booth/Winder That the confirmation of the Public Excluded Minutes of the Audit and Risk Committee meeting on 21 April 2016, be deferred to the next council meeting. Carried /2017 insurance renewal strategy (Agenda Item 3.2) Corporate and Financial Planning Manager Moved Booth/Winder That the Audit and Risk Committee: 1 Receives the Corporate and Financial Planning Manager s report 2016/2017 insurance renewal strategy dated 06 May 2016; and 2 Believes 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 the provision of s79 of the Act determines that it does not require further information prior to making a decision on this matter; and 3 Receives the Insurance Pre-Renewal Strategy Paper prepared by Council s insurance Brokers, Crombie Lockwood, Attachment A of the above-mentioned report; and 4 Considers the recommendations in the paper and directs staff to instruct Council s insurance brokers to proceed with the renewal strategy as amended; and 5 Recommend to Council, that delegated authority is given to the named Commissioners Robertson, Winder and Booth to approve the final renewal package. Carried 5 Closure Confirmed Chair.... 7

10 3 Operational 8

11 File number: Approved for agenda Report to: Audit and Risk Committee Meeting date: 20 September 2016 Subject: Annual Report 2015/2016 Date of report: 09 September 2016 From: Paul Cresswell Financial and Corporate Planning Manager Report purpose Decision Recommendation Information Assessment of significance Significant Non-significant Council is required to develop and adopt an Annual Report within four months of the end of a financial year. Development of Council s Annual Report for the 2015/2016 financial year has now been completed subject to final Audit Opinion. The Annual Report (Attachment 1) compares and comments on the performance of Council against the budgets and operating targets set in the Annual Plan. A summary of the Annual Report has also been completed. The annual audit by Deloitte has been completed and a draft audit opinion has been incorporated into the Annual Report. In addition, their Report to Commissioners is attached (Attachment 2). The Audit and Risk Committee is to consider this matter at this meeting and needs to make a recommendation as to whether Council should adopt the Annual Report on 26 September 2016 as currently presented. Recommendation That the Audit and Risk Committee: 1 Receives the Financial and Corporate Planning Manager s report Annual Report 2015/2016 for discussion dated 09 September 2016; and 2 Believes 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 the provisions of s79 of the Act determines that it does not require further information, further assessment of options or further analysis of the costs and benefits of different options prior to making a decision on this matter; and 3 Recommends to Council that it adopts the Annual Report 2015/2016, subject to final Audit Opinion for the year ending 30 June 2016 at its meeting on Monday 26 September 2016; and 4 Notes that the Summary Annual Report 2015/2016 has also been completed and will be released to the public in due course; and 5 Receives the Deloitte Report to Commissioners dated 12 September Reason for the recommendation There is a statutory requirement for Council to adopt an Annual Report and a summary of the information in the Annual Report. 9

12 Reason for the report To enable the Audit and Risk Committee to consider whether they should recommend to Council adoption of the Annual Report 2015/2016 (Attachment 1). Background The Local Government Act 2002 requires Council to prepare and adopt an Annual Report within four months of the end of each financial year. Council has adopted its Annual Report within three months for the previous three years and will do so again this year. 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. The Annual Report details the operating activities of the Council and includes financial statements for Council. The Report and financial statements have been audited by Deloitte on behalf of the Auditor-General. The Annual Report and Summary Annual Report must be publically available one month after the adoption of the Annual Report. They 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. The Summary of the Annual Report, which has also been completed and is to be audited, is not required to be adopted by the Governing Body. At the completion of the audit, a management report is prepared by Deloitte for the Commissioners. The report, dated 12 September 2016, is attached (Attachment 2). Factors to consider Review of organisational performance The Annual Report 2015/2016 details performance of the organisation against the objectives that were specified in the Annual Plan 2015/2016. Statement of Compliance 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 Chair of Commissioners. 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, 10

13 for example, that Council has met all of its statutory responsibilities during previous decision-making processes. Audit opinion The Annual Report 2015/2016 has been reviewed by Deloitte on behalf of the Auditor-General who is appointed as the Council s auditor under the Public Audit Act Community views The community expects Council to adopt an Annual Report in accordance with the requirements of the Local Government Act 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 Annual Plan. Policy implications 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. Financial implications There are no additional financial considerations associated with making a decision on whether to adopt the Annual Report. Legal/delegation implications Section 98 of the Local Government Act 2002 requires Council to adopt an Annual Report within four months of the end of the financial year. The Act also requires that Council publishes a Summary of the Annual Report within one month of the Annual Report being adopted. Officers have prepared a Summary document which will be released in due course. Part 3 of Schedule 10 also outlines a number of disclosures that are required to be included in the Annual Report. Options The following options exist: Option A Recommend adoption of the Annual Report. Under this option the Audit and Risk Committee would agree to recommend to Council adoption of the Annual Report 2015/2016 subject to Audit Opinion. Option B Ask for further adjustments Under this option the Audit and Risk Committee would not recommend to Council adoption of the Annual Report 2015/2016 and would ask that further adjustments be made. The Audit and Risk Committee would need to be clear about the specific concerns and/or adjustments that it requires to be made to the proposed Annual Report so that staff can ensure that they are adequately reflected in any revised Report and submitted to Deloitte for audit clearance. 11

14 Assessment of options The Annual Report 2015/2016 has been audited by Deloitte. The draft opinion is included in the Annual Report. In deciding whether to adopt the Report, Council needs to satisfy itself that the Report is complete and that it has been prepared on an appropriate basis. Assessment of significance Council is required to comply with the decision-making provisions outlined in Part 6 of the Local Government Act Under Council s Significance and Engagement Policy, a decision in accordance with the recommendation is considered to have a high degree of significance. The information contained within the Annual Report will be of considerable interest to the community and of some significance in that it reports on the performance of Council over the 2013/2014 financial year. Recommended option The recommended option is Option A - that the Audit and Risk Committee recommends to Council adoption of the Annual Report 2015/2016 subject to final Audit Opinion. Next steps Make recommendation to Council. Attachments Annual Report 2015/2016 Deloitte s Report to Commissioners 12

15 Kaipara District Council Audit and Risk Committee Draft 14/09/ Annual Report 2015/2016

16 Statement of Comprehensive Revenue and Expense for the Year Ended 30 June Statement of Financial Position as at 30 June Statement of Changes in Net Assets/Equity for the Year Ended 30 June Statement of Cash Flows for the Year Ended 30 June Annual Report Disclosure Statement for the year ending 30 June Notes to Financial Statements How to read this section Community Activities Regulatory Management Contents Part One Introduction 14 Kaipara District... 2 Commissioners Foreword... 3 Your Commissioners... 5 Chief Executive s Overview... 6 Statement of Compliance... 8 Audit Report... 9 Readers Guide Setting the Scene Council working with Maori The Year in Review Part Two - Finances Part Three Groups of Activity Statements

17 Emergency Management Flood Protection and Control Works District Leadership Solid Waste The Provision of Roads and Footpaths Sewerage and the Treatment and Disposal of Sewage Stormwater Drainage Water Supply Council Directory Organisational Structure 2015/ Council/Committee Structures Appendix 15

18 16 Part One Introduction

19 Stretching from coast to coast, Kaipara district is located at the entrance to Northland at the top of the North Island. Travelling from east to west, the Kaipara is a district of contrasts and spectacular scenery. Residents and visitors enjoy the magic of the east coast settlement of Mangawhai, the peacefulness of New Zealand's largest harbour the Kaipara and the wild beauty of the west coast beaches. Kaipara District Council is the seat of local government for the district. Councils exist to provide a broad role in meeting the current and future needs of their communities as outlined in Council s Community Outcomes, for good quality local infrastructure, local public services, and the performance of regulatory functions. Kaipara District 17 Kaipara's economy has historically been based around pastoral farming and, to a lesser extent, horticulture and forestry. However, developments in tourism are growing in importance and there is a trend toward small mixed-use farm holdings. The district s rural nature, especially in the heartland, is one of the charms residents are keen to preserve.

20 The Kaipara District Council is in good shape. It is running, and can continue to run, a balanced budget. Debt reduction has been particularly significant this year with a total of $10.9 million being paid off primarily towards the district-wide debt for the Mangawhai Community Wastewater Scheme (MCWWS). Nearly half of this was a payment in settlement from the Auditor-General as a result of mediation of the case taken by Council against her in the High Court. The Community Advisory Panel appointed last year to assist Council with decision-making on future investment in the MCWWS, provided us with their report and recommendations in July Council values their contribution. It is clear that the scheme, with some extension of the disposal field on the Browns Road farm, can cope with all the new connections expected for some years. A further review should take place in 2018, alongside the review of the current Long Term Plan. The Commissioners and Council officers have continued to engage extensively with members of the community, proactively meeting with community groups and following up enquiries from individuals. In this year, community planning programmes continued in Kaiwaka, Dargaville and Mangawhai. Action plans were put in Commissioners Foreword It is a pleasure to present this Annual Report to Kaipara residents and stakeholders. The Statement of Comprehensive Revenue and Expense for the year ending 30 June 2016 advises of rate revenues of $31.3 million ($30.5 million 2015), of total revenues of $56.9 million ($49.4 million 2015), and of total expenditure of $46.9 million ($45.9 million 2015). Thus the net surplus in the year under review was $10.0 million compared to the 2015 year surplus of $3.6 million. Surpluses are forecasted to continue. External debt has been reduced to $65.0 million, an improvement of $10.9 million over the 30 June 2015 position. The east of the district continues to grow 18 Mangawhai s growth has exceeded all predictions, and our Building Control Team is permitting an average of two new houses a week in Mangawhai and the surrounding area. This year, we have added 110 new connections to the Mangawhai Community Wastewater Scheme (MCWWS). Next year we expect continued growth. As a result of growth further infrastructure investment will be needed in the east. Council has initiated work on a Mangawhai Town Plan to ensure that there is an appropriate response to the future needs of this area. The community is working with Council to care for their place

21 place, after community consultation, for Pouto Peninsula, Baylys, Tangiteroria and Mangawhai Village. We have contracts with 17 community groups who are caring for and developing public spaces for the community. We co-govern three premier parks in partnership with Iwi and community representatives. Legal action continues Although our focus is on the future, there is still significant time and cost being spent on defending Council against Court action, initiated by the Mangawhai Ratepayers and Residents Association (MRRA). Our attempt to bring the former Chief Executive to account continues. The organisation is in good shape The Council organisation is in good shape. In-house staff numbers have increased to replace contractors and consultants, with savings from this available to be applied to improving areas where we had gaps. The demand for building and resource consents has meant that we have increased our staff involved in consent processing so that we can continue to provide a good and timely service. This service is funded from fees charged. 19 We have built a Council that is well prepared for the return of elected representatives in October Chief Executive, Graham Sibery, who began on 04 July this year, will use his expertise to further improve the organisation and to provide professional support to the elected Council. We thank the people of Kaipara, for their support as we have undertaken the task that we were given in September John Robertson Chair of Commissioners

22 Peter Winder Peter is a former Chief Executive Officer of the Auckland Regional Council, Director of Transport at the Auckland Regional Council, and Chief Executive Officer of Local Government New Zealand. He is a Director of McGredy Winder & Co, advisers to local and regional government authorities. Your Commissioners John Robertson QSO Chair John has public sector experience as a former Member of Parliament, as a former Mayor of Papakura and a Chair of Infrastructure Auckland. He is an accredited member of the Institute of Directors, is a Chartered Accountant and a professional Director. 20 Richard Booth Richard is a Whangarei-based horticulturalist and farmer, with considerable experience in the dairy industry and as a Director. He is Chair of Delta Produce and a Director of Northpower.

23 Council continues to invest in future Asset Management Plans. Following a good financial year, we will be able to complete more condition assessments of our water supply assets earlier than envisaged in the Long Term Plan 2015/2025. Future capital expenditure in our road and water infrastructure has been increased. Chief Executive s Overview Welcome to the Annual Report 2015/2016. This is my first official report as the newly appointed Chief Executive. Kaipara District Council has had a particularly busy year. A lot has occurred to resolve historical issues, and the organisation has continued to invest in improvements. Our financial status is secure, more services and investment have been delivered and debt has reduced faster than planned. The Council is in an increasingly strong position. A high performing organisation The Council organisation is a good one and continues to improve. 21 The number of outsourced contracts has been reduced and key functions brought in-house. This includes the managing of our roads, our resource consent responsibilities, health and food inspections, general engineering work for stormwater and building inspections. Maintenance of our parks and other infrastructure remains contracted out, as does animal management. Our capability has increased, continuous improvement is now part of our culture and we have prioritised improving customer service. Caring for the district s infrastructure Council completed 86% delivery of its capital works programme this year which is a strong improvement. The remaining value of $1.5 million has been approved and will be carried over to 2016/2017. Community planning Council continues to engage locally through the community planning programme started in Most areas of the district now have a Community Action Plan, and several of these have had all actions resolved or delivered. We have initiated the development of a Mangawhai Town Plan. This will guide future investment in public infrastructure and may result in some changes to the Kaipara District Plan.

24 We are also working with community groups in Dargaville and Kaiwaka to improve the look, feel and function of these town centres. Rates arrears are reducing with a total of $4.7 million rates arrears at 30 June 2016 compared to $5.0 million at June 2015 and $6.3 million the year before. Financial performance This year we joined the Local Government Funding Agency. This has allowed access to Local Government debt packaging enabling us to reduce rates and the amount spent on debt servicing. We now have a well-established discipline of running a balanced budget. Service levels focus on core responsibilities. Debt is well within manageable limits and reducing. Our finances are well within prudent levels. Risks Over the last 12 months we continued to make good progress in addressing the issues facing Council. The organisation has built its capability and is working well. The team is looking forward to the return to local democracy and continuing to build on sound foundations. 22 Responding to matters from the past The appeal against the first Judicial Review between the Mangawhai Ratepayers and Residents Association (MRRA) and Kaipara District Council was dismissed in December The subsequent application for leave to appeal to the Supreme Court was dismissed in May There is a second Judicial Review process underway. This case was heard in May 2016 and we await the Courts decision. Graham Sibery Chief Executive

25 Statement of Compliance The Kaipara District Council hereby confirms that all statutory requirements in relation to the preparation and publication of information required to be included in the Report as outlined in the Local Government Act 2002 have been complied with. John Robertson QSO Graham Sibery Chair Chief Executive September September 2016

26 - present fairly, in all material respects, the District Council levels of service for each group of activities for the year ended 30 June 2016, including: - the levels of service achieved compared with the intended levels of service and whether any intended changes to levels of service were achieved; - the reasons for any significant variation between the levels of service achieved and the intended levels of service; and Audit Report INDEPENDENT AUDITOR S REPORT TO THE READERS OF KAIPARA DISTRICT COUNCIL ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2016 The Auditor-General is the auditor of Kaipara District Council (the District Council). The Auditor-General has appointed me, Peter Gulliver, using the staff and resources of Deloitte, on her behalf, to: - audit the information included in the District Council annual report that we are required to audit under the Local Government Act 2002 (the audited information);. - report on whether the District Council has complied with the requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report and the Local Government (Financial Reporting and Prudence) Regulations Opinion on the audited information 24 In our opinion: - the financial statements on pages [ ] to [ ] and pages [ ] to [ ]: - present fairly, in all material respects: - the District Council s financial position as at 30 June 2016; - the results of its operations and cash flows for the year ended on that date; and - comply with generally accepted accounting practice in New Zealand and have been prepared in accordance with Tier 1 of the Public Benefit Entity reporting standards, - the funding impact statement on page [ ], presents fairly, in all material respects, the amount of funds produced from each source of funding and how the funds were applied as compared to the information included in the District Council s annual plan - the Groups of Activity Statements on pages [ ] to [ ]:

27 - the funding impact statement for each group of activities on pages [ ] to [ ], presents fairly, in all material respects, the amount of funds produced from each source of funding and how the funds were applied as compared to the information included in the District Council Long-term plan; and The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and our responsibilities, and we explain our independence. Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers overall understanding of the audited information. If we had found material misstatements that were not corrected, we would have referred to them in our opinion. An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the information we audited. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the information we audited, whether due to fraud or error. In making those risk - complies with generally accepted accounting practice in New Zealand; - the statement about capital expenditure for each group of activities on pages [ ] to [ ], presents fairly, in all material respects, actual capital expenditure as compared to the budgeted capital expenditure included in the District Council annual plan; - the disclosures on pages [ ] to [ ] required by the Local Government (Financial Reporting and Prudence) Regulations 2014 represent a complete list of required disclosures and accurately reflects the information drawn from the District Council s audited information. Compliance with requirements The District Council has: - complied with the requirements of schedule 10 of the Local Government Act 2002 that apply to the annual report; and 25 - made the disclosures on pages [ ] to [ ] which are required by the Local Government (Financial Reporting and Prudence) Regulations 2014 which represent a complete list of required disclosures and accurately reflects the information drawn from the District Council audited information. Our audit was completed on 26 September. This is the date at which our opinion is expressed. Basis of opinion We carried out our audit in accordance with the Auditor-General s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the information we audited is free from material misstatement.

28 assessments, we consider internal control relevant to the District Council s preparation of the information we audited in order to design procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the District Council s internal control. - determining the appropriateness of the reported statement of service provision within the District Council framework for reporting performance; and The Council s responsibilities arise under the Local Government Act 2002 and the Local Government (Financial Reporting and Prudence) Regulations An audit also involves evaluating: - the appropriateness of accounting policies used and whether they have been consistently applied; - the reasonableness of the significant accounting estimates and judgements made by the Council; - the adequacy of the disclosures in the information we audited; - the overall presentation of the information we audited. We did not examine every transaction, nor do we guarantee complete accuracy of the information we audited. 26 When reporting on whether the District Council complied with the requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report, we limited our procedures to making sure the annual report included the required information and identifying material inconsistencies, if any, with the information we audited. We carried out this work in accordance with International Standard on Auditing (New Zealand) 720; The Auditor s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements. We did not evaluate the security and controls over the electronic publication of the information we are required to audit and report on. We believe we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion. Responsibilities of the Council The Council is responsible for meeting all legal requirements that apply to its annual report. The Council is responsible for such internal control as it determines is necessary to ensure that the annual report is free from material misstatement, whether due to fraud or error. The Council is also responsible for the publication of the annual report, whether in printed or electronic form.

29 We are responsible for expressing an independent opinion on the annual report in accordance with the reporting requirements of the Local Government Act 2002 and the Local Government (Financial Reporting and Prudence) Regulations Our responsibility arises from the Public Audit Act Responsibilities of the Auditor Independence When carrying out our audit, we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the External Reporting Board. We draw your attention to the fact that the Council has settled a claim against the Auditor - General in relation to previous audits of the Council by her service provider Audit New Zealand. In December 2012, the Auditor-General appointed Peter Gulliver of Deloitte to carry out audits of the Council on her behalf to reduce any independence threat to an acceptable level. Other than this audit, we have no relationship with or interests in the District Council. 27 Peter Gulliver Deloitte On behalf of the Auditor-General Auckland, New Zealand

30 The Annual Report sets out Council s achievements for the year and reports on whether we reached the targets forecasted in our Annual Plan. Not achieved: The activity was not significantly progressed or the work undertaken did not meet the requirements of the target (e.g. where the target stipulates a customer satisfaction rating of 80% and a rating of 73% was achieved then the measure would be rated as not achieved). Not applicable: Due to events beyond Council s control, the activity was no longer relevant and the work was not carried out. Readers Guide What does the Annual Report include? The first part of this Report introduces Kaipara District Council and provides an overview of events during 2015/2016. It also includes the Audit Report. The second part contains the financial results for the year to June It also includes the accounting policies and notes to the financial statements. The third part includes Council s Groups of Activity Statements. Activities Based on the performance targets listed in the first year of the Long Term Plan 2015/2025, Council s work programme is divided into 10 significant activities and individually assessed to determine how well targets have been met. Performance ratings used in this Report are as follows: 28 Achieved: All aspects of the performance target were achieved (including time, cost, quality, quantity and location). Not measured: Performance could not be conclusively reported on (e.g. systems were not in place to measure performance or carrying out the target could have led to a duplication of activities). Where does the Annual Report fit into the planning and reporting cycle? This Annual Report is reporting on the delivery of year one of Council s Long Term Plan 2015/2025.

31 Confirms each non-long Term Plan year what Council intends to do and how it plans to fund it and notes any minor differences to the Long Term Plan. Annual Plan Setting the Scene The purpose of this Annual Report is to tell you whether we did what we said we would in the 2015/2016 year. This is the first year of the Kaipara District Council Long Term Plan 2015/2025 adopted by Council on 30 June It sets out what was achieved and not achieved and the associated costs as compared to what was signalled in the Long Term Plan. Consequently, this Annual Report needs to be read in conjunction with the Long Term Plan 2015/2025. Annual Report 29 Strategic Framework Lets you know each year whether Council delivered what it said it would. Understanding community aspirations and the context within which we operate, and setting direction - reviewed three-yearly with Long Term Plan. The Planning Cycle Long Term Plan Lets you know every three years on a 10 year timeframe what Council intends to do and how it plans to fund it.

32 Council is committed to constructive engagement and acknowledges the positive approach to Council initiatives in 2015/2016 to decision-making processes. Council working with Maori Council recognises its obligations to Maori under the Local Government Act 2002 and the Resource Management Act 1996, and continues to look for ways to facilitate Maori input into decision-making. Council recognises the importance of its relationships with Te Uri o Hau, Ngati Whatua, and Te Iwi O Te Roroa. Council and Te Uri o Hau have a Memorandum of Understanding and is negotiating a Mana Enhancing Agreement with Te Roroa. Kaipara District Council is a member of the Northland Iwi and Local Government Chief Executives Forum. This group meets quarterly with the key objective of bringing consistency to approaches across the Iwi organisations and councils. Council s commitment to partnership with Iwi on matters of importance to Maori is further illustrated by: Council s contribution to the Integrated Kaipara Harbour Management Group (IKHMG) project which is led by Te Uri o Hau; 30 Iwi is given the opportunity for input into the Long Term Plans and Annual Plans during the consultation process; Council and Te Iwi O Te Roroa/Te Kuihi joint management of the Taharoa Domain; and Council and Te Uri o Hau joint management of Harding Park/Pou Tu o Te Rangi in Dargaville.

33 We have continued to improve our smaller parks with the rollout of new signage and improved safety with the installation of bollards to separate pedestrians and cars. In response to feedback from community plans we have been upgrading gardens in Dargaville and Mangawhai to smarten up the look of our town centres. The three premier parks, Pou Tu Te Rangi Harding Park, Taharoa Domain and Mangawhai Community Park are the focus of our capital development programme. Working in partnership with Te Uri o Hau we have rebranded Pou Tu Te Rangi Harding Park and developed new walkways, removed exotic trees to make the most of The Year in Review The past year has seen further progress within Council as we strive to become a high-performing organisation that can better serve Kaipara and make a positive difference to the district s future success. The changing way we deliver services has been a particular feature this year. We continue to roll out our vision - Kaipara where it s easy to live which provides our staff with a strong focus on what we need to do to achieve the results you expect of us. This means working with you to help make it easy to enjoy nature, to join in, and to do business. The emphasis is on partnership, working with you as well as for you, to do the things needed to make Kaipara s communities strong and successful. Community Placemaking - a strong focus We have continued with our community planning programme and completed six community action plans in Pouto Peninsula, Baylys, Tangiteroria, Kelly s Bay, Glinks Gully and Mangawhai Village, with 14 other community plans updated. The focus for the year has been on implementing the larger projects identified by the planning in Dargaville and Kaiwaka, in conjunction with these communities. 31 The Dargaville Placemaking Vision Guide has been developed in consultation with an advisory group and community feedback. The Kaiwaka Improvement Plan, developed to improve traffic and pedestrian safety, has been developed in partnership with the community and NZ Transport Agency. Reserve management planning has continued with a draft Reserve Management Plan (RMP) developed for Taharoa Domain (Kai Iwi Lakes). There was considerable interest in the development of this RMP which reflects the importance of this place to many people. Kaipara s Premier Parks Community facilities are an important part of every community. We have refurbished the Baylys, Whakapirau, Omamari, Maunganui Bluff, Kellys Bay, Mangawhai Heads and Moir Street public toilet facilities. Newly built facilities at the Mangawhai Activity Zone and Alamar Crescent have been accomplished to meet increased demand from visitors.

34 We have been actively working with Northland s other councils to find ways to work more closely together through shared service initiatives. We began the process in the second half of the financial year as part of the establishment of the Kaipara Roading Business Unit. This unit has combined into the regional Northland Transportation Alliance (NTA), which began on 01 July 2016, with all four Northland councils contributing towards this. This alliance is primarily designed to bring about cost-savings, having internal capacity and capability which provides opportunities for knowledge sharing between councils. the panoramic views and installed interpretative signage. At Taharoa Domain we have continued to improve biodiversity with over 10,000 native plants in the ground this year. Good progress is being made in the pest plant removal programme and 60ha is being actively managed. New walking/cycling tracks have been developed around Lake Taharoa and Lake Kai Iwi that are getting positive comments from visitors and campers. After a slow start Mangawhai Community Park development is progressing with the Pioneer Village site works complete and ready for new buildings to arrive early next year. Working in partnership regionally 32 We are teaming up with Whangarei District Council for the delivery of Animal Management, Noise Control and Parking activities, and are looking into efficiencies regionally for delivery of IT and Water Services. Roading services progressing well Roading continues to, and will always, be a big ticket item with 67% of Council s capital expenditure budget spent here in 2015/2016. We have completed our planned sealed road rehabilitation projects as well as heavy maintenance on our unsealed roads. There are 1,572.1km of roads in our network, 92.5% rural and 7.5% urban, with 71.6% unsealed and 28.3% sealed. Road safety promotion is also important to us. We have spent a total of $90,506 on initiatives like the Drive Soba programme, which is part of the alcohol and drugs Safer Journeys Area. We assisted with the younger drivers programme, with the mentor driving programmes and the Rotary Youth Driver Awareness (RYDA) programme. The RYDA programme is a partnership with Rotary, Road Safety Education, Safer Journeys and Council.

35 One of our objectives is to ensure we provide a reliable and sustainable infrastructure for Kaipara district. During the past year, we delivered the majority of our water services capital expenditure programme successfully, with some savings and some projects carried forwarded to the next financial year. Council has reviewed the bulk water supply agreement with Fonterra resulting in an increase to the annual charges. Water services has continued to install SCADA (Supervisory Control and Data Acquisition) at key locations to have better control and improve overall efficiency. We also reviewed our critical assets for Three Waters, leading to a more focused and targeted condition assessment programme to improve our knowledge of the condition of our assets. Enhancements to water and wastewater We successfully accomplished the key contract tender, awarding the Three Waters Operation and Maintenance Contract to the new contractor, Broadspectrum. The tendering was publicly notified and Broadspectrum started on 01 July Improved service from strengthening our capability 33 In keeping with making it easy we now have a projects office with project management and business analysis resource delivering projects and initiatives across the organisation, the prime project being the Business Plan. We look to make improvements across the entire organisation supporting the Commissioners intention that Council be a high performing organisation. Other projects include Mangawhai Community Wastewater Scheme Extension, Taxonomy/EDRMS, Mangawhai Harbour Water Quality, Customer Database, Northland Transportation Alliance (NTA), Land Information Memorandum (LIM) Improvement and Mangawhai Town Plan. Project methodology and disciplines are utilised and the organisation is able to undertake and deliver projects alongside ongoing operational activity. Economic growth increases A positive sign for 2015/2016 was an increase in residential building consents and resource consents. Kaipara s economic growth accelerated in the second half of the 2015/2016 year. Building activity meant an increase in resourcing and in-house capability for Council. Implementing a training needs analysis programme to assist staff training skills and preparing for Building Control Authority accreditation were highlights for 2015/2016. Planning was another area of strong growth for the year. Additional internal resourcing and use of external contractors was a beneficial tool in managing peaks in applications due to economic growth.

36 Council s position has improved significantly again with debt of $65.0 million compared with the budgeted $74.5 million at 30 June This was due in part to the settlement with the Office of the Auditor-General (OAG). Council acceded to the Local Government Funding Agency (LGFA) in March As a result of this, Council is able to refinance debt at a lower cost and can access a wide range of funding maturities. We thank our banking partners for their continued support. Internal capability was also strengthened in Regulatory for alcohol management, environmental health and consent monitoring. Transitioning of the new contractor for Animal Management, Noise Control and Parking will begin shortly. Financial position improved 34

37 35

38 36 Part Two - Finances

39 Statement of Comprehensive Revenue and Expense for the Year Ended 30 June 2016 The Statement of Comprehensive Revenue and Expense details income and expenditure relating to all activities of Council. The supporting Funding Impact Statements for each activity provide further details as to the costs and revenues of each activity. Annual Annual For the year ended: Actual Plan Report 30 June $'000 $'000 $'000 Revenue Note Rates 2a 31,297 31,751 30,511 Subsidies and grants 2c 10,202 10,269 11,971 Activity income 9,216 3,915 4,393 Contributions 3, ,595 Investments and other income 2c 2, Total revenue 2a 56,928 47,271 49, Expenses Activity costs 26,516 22,450 25,974 Employee benefits 6,726 6,714 6,016 Finance costs 3,613 4,294 4,119 Depreciation 10a,11 10,091 9,458 9,747 Total expenses 3 46,946 42,916 45,856 Surplus/(deficit) for the period 9,981 4,355 3,576 Other comprehensive revenue and expense (Items that will not be reclassified subsequently to surplus or deficit) Gain/(loss) on revaluation 4a,10a 15,849 13,239 25,713 Total comprehensive revenue and expense for the period 25,830 17,594 29,289 The accompanying notes form part of these financial statements.

40 Rates: Rates revenue is $0.4 million lower than budget due to lower water by meter charges and an adjustment for prepaid rates. Contributions: Contributions are $3.1 million above budget due to development and financial contributions received reflecting increased activity in the district. Consultancy and legal advice to support Council with rating issues, the Judicial Review and other organisational service delivery matters $0.9 million. Finance costs: The favourable variance in finance costs of $0.7 million is due to lower than budget external interest costs as a result of lower debt levels. Explanation of major revenue and expenditure variances against Annual Plan Revenue Activity income: Activity income is $5.3 million above budget due to a settlement with Office of the Auditor-General (OAG) and increased building control and resource consent income. Investment and other income: The favourable variance against budget of $1.8 million is due to the revaluation of forestry, land assets vested in Council and gains on sale of assets. Expenditure 38 Activity costs: The major factors contributing to the unfavourable variance of $4.1 million are: Revaluation of interest rate swap derivatives to fair market value $3.7 million Higher contracting and professional services costs of $0.3 million. Partially offsetting these increases were below plan costs for: Lower maintenance costs of ($0.8 million) Gain on revaluation: The favourable variance of $2.6 million is due to higher than budget gain on revaluation of Council's roading, water supply, stormwater and land drainage infrastructure, as assessed by independent engineers at 30 June 2016.

41 Statement of Financial Position as at 30 June Annual Annual As at 30 June Actual Plan Report $'000 $'000 $'000 Net assets/equity Note Accumulated comprehensive revenue and expense 4a 370, , ,805 Asset revaluation reserves 4a 199, , ,649 Restricted reserves 4a 5,673 5,618 5,692 Council created reserves 4a -16,965-19,130-18,909 Total net assets/equity 559, , ,238 represented by Current assets Cash and cash equivalents 7,285 3,821 9,926 Trade and other receivables 6 6,180 7,688 7,208 Accrued revenue 1,883 2,700 1,079 Other financial assets 5a Non current assets held for sale less Current liabilities Total current assets 15,649 14,211 18,708 Trade and other payables 7 8,254 7,485 9,611 Provisions 8a Employee entitlements Public debt 9a 6,983 1,986 5,609 Total current liabilities 15,889 9,885 15,950 Working capital/(deficit) ,326 2,758 plus Non current assets Property, plant, equipment 10a 624, , ,882 LGFA Borrower notes Biological assets 13 3,466 2,372 2,697 Derivative financial assets Other financial assets 5a Total non current assets 628, , ,853 less Non current liabilities Public debt 9a 57,978 72,550 70,258 Provisions 8a 4,570 3,756 4,295 Derivative financial liabilities 18a 6,448 2,648 2,819 Total non current liabilities 68,997 78,954 77,372 Net assets 559, , ,238 The accompanying notes form part of these financial statements.

42 Trade and other receivables: Trade and other receivables are $1.5 million lower than budget due to continuing focus on collecting outstanding debt. Accrued revenue: Accrued revenue is lower than budget by $0.8 million primarily due to timing of receipts for the NZTA subsidy. Non-current assets held for sale: A number of properties were sold in the year. Efforts continue to dispose of the remaining non-strategic properties. Provisions: The increase reflects the calculation of the aftercare costs for closed landfills based on engineering estimates over the term of the care.. Explanation of major variances against Annual Plan Equity: The favourable variance relates to the revaluation of infrastructure assets and higher than budgeted net surplus. Cash and cash equivalents: Cash and cash equivalents are $3.5 million higher than planned. Cash is being retained to meet capital commitments now planned for the next two years. Trade and other payables: An increase in revenue in advance and bond money held has increased payables. Property, plant and equipment: Revaluation of roading, water supply, stormwater and flood protection and control coupled with capital works programme have increased the value. 40 New Zealand Local Government Funding Agency (LGFA) Borrower notes: Deposits required to be held as part of joining LGFA in April Biological assets: Higher than budget Biological Assets reflects the increase in fair value of Council's forestry assets following an independent forestry valuation at 30 June Derivative financial assets and liabilities: Council uses interest rate derivatives to assist in achieving a long term stable interest rate on debt. Higher than budget derivative liabilities of $3.8 million is due to the nature of these financial instruments whereby their value is not able to be budgeted with certainty due to the unpredictability of interest rates. Derivatives are marked to market at each balance date, and as the floating interest rate is lower than at last balance date, the interest rate derivatives were valued at less than they were when Council entered into the agreements. This resulted in an increase in the liability Council has on some derivatives. Public debt: Approximately $10.9 million of existing debt was retired during the year which was $9.6 million higher than planned. Council is now, in keeping with its Treasury policies, utilising surplus cash to reduce external borrowing. Council is ensuring that it maintains adequate working capital by having committed bank short term borrowing facilities in place. The variance to budget on both the Public Debt in Non-Current Liabilities and the Public Debt in Current Liabilities reflects the repayment and classification of the current loan maturity dates.

43 Statement of Changes in Net Assets/Equity for the Year Ended 30 June 2016 Annual Annual For the year ended: Actual Plan Report 30 June $'000 $'000 $'000 Note Balance at 1 July 533, , ,949 Comprehensive revenue and expense for the period Surplus/(deficit) for the period 9,981 4,355 3,576 Other comprehensive revenue and expense for the period Surplus on Revaluation of Infrastructure 10a 15,849 13,239 25,713 Total comprehensive revenue and expense for the period 25,831 17,594 29, Balance at 30 June 559, , ,238 The accompanying notes form part of these financial statements.

44 Statement of Cash Flows for the Year Ended 30 June 2016 Annual Annual For the year ended: Actual Plan Report 30 June $'000 $'000 $' Cash Flow from Operating Activities Note Receipts: Rates 31,605 28,601 28,929 Fees, charges and other 13,225 8,262 8,230 Grants and subsidies 11,570 10,269 11,250 Interest received sub total 56,428 47,182 48,479 Payments: Suppliers and employees 31,912 29,161 24,772 Taxes (including the net effect of GST) Interest expense 3,613 4,294 4,119 sub total 35,546 33,455 28,641 Net Cash Flow from/(to) Operating Activities 14 20,882 13,727 19,838 Cash Flow from Investing Activities Receipts: Sale of Property, plant and equipment 1, Mortgage Repayments Received sub total 1, Payments: LGFA Borrower notes Mortgage advances Property, plant and equipment purchases 13,425 15,150 14,025 sub total 13,985 15,150 14,125 Net Cash Flow from/(to) Investing Activities -12,616-15,000-14,068 Cash Flow from Financing Activities Receipts: Loans raised (Net) Payments: Loans repayment (Net) -10,906-1, Net Cash Flow from/(to) Financing Activities -10,906-1, Net Increase/(Decrease) in cash and cash equivalents -2,640-2,605 5,338 Cash and cash equivalents at beginning of period 9,926 6,426 4,588 Cash and cash equivalents at end of period 7,285 3,821 9,926 The accompanying notes form part of these financial statements.

45 The purpose of this Statement is to disclose the Council s financial performance in relation to various benchmarks to enable the assessment of whether the Council is The Council is required to include this Statement in its Annual Report in accordance with the Local Government (Financial Reporting and Prudence) Regulations 2014 (the regulations). Refer to the regulations for more information, including definitions of some of the terms used in this Statement. The following graph compares the Council s actual rates income with a quantified limit on rates contained in the Financial Strategy included in the Council s Long Term Annual Report Disclosure Statement for the year ending 30 June 2016 What is the purpose of this Statement? prudently managing its revenues, expenses, assets, liabilities, and general financial dealings. Rates affordability benchmark The Council meets the rates affordability benchmark if: its actual rates income equals or is less than each quantified limit on rates; and its actual rates increases equal or are less than each quantified limit on rates increases. 43 Rates (income) affordability Plan. The quantified limit for 2015/2016 was set in the Long Term Plan at $27.9 million excluding water meter billing. Rates affordability benchmark - rates (income) affordability Millions Year Actual Rates Income (at or within limit) Actual Rates Income (exceeds limit) Quantified Limit on Rates Income

46 Rates (increases) affordability The following graph compares the Council s actual rates increases with a quantified limit on rates increase included in the Financial Strategy included in the Council s Long Term Plan. The quantified limit for 2015/2016 was 4.94% above the previous year s rates excluding water meter billing. Rates affordability benchmark - rates (increases) affordability 40.0% 20.0% 0.0% -20.0% -40.0% Year 44 Actual rates increase (at or within limit) Actual rates increase (exceeds limit) Quantified limit on rates increase Debt affordability benchmark The Council meets the debt affordability benchmark if its actual borrowing is within each quantified limit on borrowing. The following graphs compare the Council s actual borrowing with a quantified limit on borrowing stated in the Financial Strategy included in the Council s Long Term Plan. Prior to 30 June 2012, Council operated a segmented debt policy for debt associated with the Mangawhai Community Wastewater Scheme (MCWWS). There was no quantified limit and the balance of debt ( core debt ) was subject to 2:1 ratio of normal operating revenue to debt.

47 % of Revenue 300% 250% 200% 150% 100% 50% 0% Debt affordability benchmark (maximum borrowing limit) Balanced budget benchmark Year Actual debt (at or within maximum limit) Actual debt (exceeds maximum limit) Maximum limit 45 The following graph displays the Council s revenue (excluding development contributions, financial contributions, vested assets, gains on derivative financial instruments, and revaluations of property, plant, or equipment) as a proportion of operating expenses (excluding losses on derivative financial instruments and revaluations of property, plant, or equipment). The Council meets this benchmark if its revenue equals or is greater than its operating expenses. Balanced budget benchmark Revenue/Expenditure (%) 140% 120% 100% 80% 60% 40% 20% 0% 114% 119% 96% 101% 79% Year Benchmark met Benchmark not met Benchmark

48 The following graph displays the Council s borrowing costs as a proportion of revenue (excluding development contributions, financial contributions, vested assets, Note: Statistics New Zealand information shows that the total growth rate for New Zealand between 2006 and 2013 was 5.1%. Kaipara s overall growth for the same Essential services benchmark The following graph displays the Council s capital expenditure on network services as a proportion of depreciation on network services. The Council meets this benchmark if its capital expenditure on network services equals or is greater than depreciation on network services. 46 Essential sevices benchmark Capital expenditure/depreciation (%) 150% 141% 129% 100% 68% 66% 62% 50% 0% Year Benchmark met Benchmark not met Benchmark Debt servicing benchmark gains on derivative financial instruments, and revaluations of property, plant, or equipment). Because Statistics New Zealand projects the Council s population will grow more slowly than the national population growth rate, it meets the debt servicing benchmark if it s borrowing costs equal or are less than 10% of its revenue. period was 3.8%. Within this 3.8%, growth rates ranged from negative 9.7% for Maungaturoto to positive 44.8% for Mangawhai.

49 Debt servicing benchmark Borrowing costs/revenue(%) 14% 12% 10% 8% 6% 4% 2% 0% 12.3% 11.6% 9.4% 8.2% 7.0% Year Benchmark met Benchmark not met Benchmark Debt control benchmark 47 The following graph displays the Council s actual net debt as a proportion of planned net debt. In this statement, net debt means financial liabilities less financial assets (excluding trade and other receivables). This Council meets the debt control benchmark if its actual net debt equals or is less than its planned net debt. Debt control benchmark Actual/Budget net debt(%) 105% 100% 95% 90% 85% 102% 94% 92% 91% 92% Year Benchmark met Benchmark not met Benchmark

50 This graph displays the Council s actual net cash flow from operations as a proportion of its planned net cash flow from operations. The Council meets the operations control benchmark if its actual net cash flow from operations equals or is greater than its planned net cash flow from operations. Operations control benchmark Operations control benchmark Actual/Budget net casflow from operations (%) 200% 150% 100% 50% 0% 18% 55% 78% 90% 152% Year Benchmark met Benchmark not met Benchmark 48 All benchmarks were met in 2015/2016.

51 The primary objective of Kaipara District Council is to provide core services for the community which focus on a social benefit rather than making a financial return. Accordingly, Kaipara District Council has designated itself as a Public Sector Public Benefit Entity (PS PBE). Council will be classified as a Tier 1 entity. These financial statements are expressed in New Zealand dollars, which is Kaipara District Council s functional currency. All financial information has been rounded to the nearest thousand, unless otherwise stated. The measurement basis adopted in the preparation of these financial statements is historical cost, modified by the revaluation of infrastructure assets and certain financial instruments as identified in the specific accounting policies below and the accompanying notes. Notes to Financial Statements 1 Statement of Accounting Policies for the year ended 30 June 2016 Reporting entity Kaipara District Council is a territorial local authority governed by the Local Government Act The financial statements of Kaipara District Council are for the year ended 30 June The financial statements were authorised for issue by the Commissioners on xx September Basis of preparation 49 These financial statements have been prepared in accordance with the requirements of the Local Government Act 2002, which includes the requirement to comply with Tier 1 PBE Standards Going concern This Annual Report has been prepared on the assumption that Council is a going concern. This means Council has a reasonable expectation there are adequate resources to continue operations, having regard to known circumstances, in the next year and those events known to occur further in the future. As such, adoption of the assumption has been based on the provisions of PBE IPSAS 1. Significant Accounting Policies Revenue Revenue is measured at fair value.

52 Water billing revenue is recognised on an accrual basis. Unbilled usage, as a result of unread meters at year end, is accrued on an average usage basis. Sales of goods are recognised when a product is sold to the customer. Sales are all in cash. The recorded revenue is the gross amount of the sale. Revenue is comprised of exchange and non-exchange transactions. Exchange transaction revenue arises when one entity receives assets or services, or has liabilities extinguished, and directly gives approximately equal value in exchange. Non-exchange transaction revenue arises from transactions without an apparent exchange of approximately equal value. Non-exchange revenue includes rates, grants, subsidies, fees and user charges derived from activities that are partially funded by rates. Revenue relating to non-exchange transactions is recognised as conditions, if any exist, are satisfied. Rates revenue Rates are set annually by a resolution from Council and relate to a financial year. All ratepayers are invoiced within the financial year for which the rates have been set and are considered to be fair value. Rates revenue is recognised when payable. Rates collected on behalf of NRC are not recognised in the Financial Statements as Council is acting as an agent. Grants revenue 50 Council receives Government grants from NZTA, which subsidises part of Council s costs in maintaining the local roading infrastructure. The subsidies are recognised as revenue upon entitlement as conditions pertaining to eligible expenditure have been fulfilled. Other revenue Provision of service Revenue from the rendering of services is recognised by reference to the stage of completion of the transaction at balance date, based on the actual service provided as a percentage of the total services to be provided. Sales of goods Vested assets Where a physical asset is acquired for nil or nominal consideration the fair value of the asset received is recognised as revenue. Assets vested in Kaipara District Council are recognised as revenue when control over the asset is obtained.

53 The revenue recognition point for development and financial contributions is when Council provides or is able to provide the service for which the contribution was levied. Otherwise, development or financial contributions are recognised as liabilities until such time as Council provides, or is able to provide, the service. Interest and dividend income Interest income is recognised using the effective interest method. Dividends are recognised when the right to receive payment has been established. Development contributions Borrowing costs Borrowing costs are recognised as an expense in the period in which they are incurred. Grant expenditure 51 Non-discretionary grants are those grants that are awarded if the grant application meets the specified criteria and are recognised as expenditure when an application that meets the specified criteria for the grant has been received. Discretionary grants are those grants where Council has no obligation to award on receipt of the grant application and are recognised as expenditure when a successful applicant has been notified of Council s decision. Operating leases An operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership of an asset. Lease payments under an operating lease are recognised as an expense on a straight line basis over the lease term. Cash and cash equivalents Cash and cash equivalents include cash in hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less. Trade and other receivables Trade and other receivables are measured at fair value, less any provision for impairment. Council maintains a provision for impairment losses when there is objective evidence of debtors being unable to make required payments and no other recourse available to Council.

54 Financial assets are classified as fair value through surplus or deficit, loans and receivables, held to maturity and available for sale. The classification depends on the purpose for which the financial assets or liabilities are held. Council determines the classification of financial assets and liabilities at initial recognition. When the receivable is uncollectable, it is written off against the provision. Overdue receivables which have been negotiated are reclassified as current (that is, not past due). Financial assets The applicable categories of financial assets are: 1 Financial assets at fair value through surplus or deficit Either, financial assets held for trading and those designated at fair value through profit or loss at inception. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated by management. 52 Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the balance sheet date. After initial recognition they are measured at their fair values. Gains or losses on re-measurement are recognised in the surplus/(deficit). 2 Loans and receivables These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition they are measured at amortised cost using the effective interest method, less impairment. Gains and losses when the asset is impaired or de-recognised are recognised in the surplus/(deficit). Loans, including loans to community organisations made by Council at nil, or below-market interest rates are initially recognised at the present value of their expected future cash flows, discounted at the current market rate of return for a similar asset/investment. They are subsequently measured at amortised cost using the effective interest method. The difference between the face value and present value of expected future cash flows of the loan is recognised in the Statement of Comprehensive Revenue and Expense as a grant.

55 Non-financial assets are reviewed at each reporting date to determine whether there are any indicators that the carrying amount may not be recoverable. If any such indicators exist, the asset s recoverable amount is estimated. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use. Value in use is depreciated replacement cost for an asset where the future economic benefits or service potential of the asset are not primarily dependent on the assets ability to generate net cash inflows and where the entity would, if deprived of the asset, replace its remaining future economic benefits or service potential. Any increases in fair value (less costs to sell) are recognised up to the level of any impairment losses that have been previously recognised. Impairment Financial assets carried at amortised cost are assessed each reporting date for impairment. If there is objective evidence of impairment, the difference between the asset s carrying amount and the present value of estimated future cash flows, discounted at the financial asset s original effective interest rate, where appropriate, is recognised in the surplus/(deficit). The value in use for cash-generating assets is the present value of expected future cash flows. 53 An impairment loss is recognised in the surplus/(deficit) for the amount by which the asset s carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash-generating units). The reversal of an impairment loss on a revalued asset is credited to the revaluation reserve. However, to the extent that an impairment loss for that class of asset was previously recognised in the surplus/(deficit), a reversal of the impairment loss is also recognised in the surplus/(deficit). Non-current assets held for sale Non-current assets held for sale are classified as held for sale if their carrying amount will be recovered principally through a sale transaction, not through continuing use. Non-current assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment losses for write-downs of non-current assets held for sale are recognised in the surplus/(deficit). Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised. Property, plant and equipment Property, plant and equipment consist of: Operational Assets

56 Infrastructural assets are revalued with sufficient regularity by independent valuers to ensure their carrying amount does not differ materially from fair value and at These include land, buildings, plant and equipment, and motor vehicles. Restricted Assets Restricted assets are community housing and parks and reserves owned by Council which provide a benefit or service to the community and cannot be disposed of because of legal or other restrictions. Infrastructure Assets Infrastructure assets are the fixed utility systems owned by Council. Each asset class includes all items required for the network to function, for example, sewer reticulation includes reticulation piping and sewer pump stations. Property, plant and equipment are shown at cost or valuation, less accumulated depreciation and impairment losses. Additions The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits or service potential associated with the item will flow to Council and the cost of the item can be measured reliably. 54 In most instances, an item of property, plant and equipment is recognised at its cost. Where an asset is acquired at no cost, or for a nominal cost such as a vested asset, it is recognised at fair value as at the date of acquisition. Work in progress is recognised at cost less impairment and is not depreciated. Disposals Gains and losses on disposals are determined by comparing the proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the surplus/(deficit). When revalued assets are sold, the amounts included in asset revaluation reserves in respect of those assets are transferred to accumulated funds. Subsequent Costs Costs incurred subsequent to initial acquisition are capitalised only when it is probable future economic benefits or service potential associated with the item will flow to Council and the cost of the item can be measured reliably. Revaluation

57 The net revaluation results are credited or debited to other comprehensive revenue and expense and are accumulated to an asset revaluation reserve in equity for that class of asset. Where this would result in a debit balance in the asset revaluation reserve, this balance is not recognised in other comprehensive revenue and expense but is recognised in the surplus/(deficit). Any subsequent increase on revaluation that reverses a previous decrease in value recognised in the surplus/(deficit) will be recognised first in the surplus/(deficit) up to the amount previously expensed, and then recognised in other comprehensive revenue and expense. least every three years. All other asset classes are carried at depreciated historical cost. The carrying values of revalued assets are assessed annually to ensure that they do not differ materially from the assets fair values. If there is a material difference, then the off-cycle asset classes are revalued. Revaluations of property, plant and equipment are accounted for on a class-of-asset basis. Depreciation Depreciation is provided on a straight line basis on all property, plant and equipment other than land, at rates that will write off the cost (or valuation) of the assets to their estimated residual values over their useful lives. 55

58 Depreciation straight line Roading Water Supply %-4% Top surface (seal) %-25% Wastewater %-7% Pavement (basecourse) Stormwater %-2.5% Urban sealed %-2.5% Landfills and transfer stations % Rural sealed %-2.5% Halls 50 2% Unsealed % Community housing 50 2% Foundation and unsealed subgrade n/a 1 - Plant, equipment and motor vehicles %-20% Signs % Computer and office equipment 5 20% Lights %-6% Library collection 5 20% The useful lives and associated depreciation rates of major classes of assets have been estimated as follows: Expected life years Depreciation straight line Expected life years 56 Culverts %-4% Buildings 50 2% Kerb and channel %-4% Building contents 10 10% Bridges %-2.5% Other plant 5 20% Footpaths %-4% Drainage %-6% The residual value and useful life of an asset is reviewed, and adjusted if applicable, at each financial year end. Biological (forestry assets) Forestry assets are independently revalued annually at fair value less estimated point of sale costs. Fair value is determined based on the present value of expected net cash flows discounted at a current market determined pre-tax rate. 1 Not depreciated

59 Creditors and other payables are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Gains or losses arising on initial recognition of biological assets at fair value less estimated point of sale costs and from a change in fair value less estimated point of sale costs are recognised in the surplus/(deficit). The costs to maintain the forestry assets are included in the surplus/(deficit). New Zealand Units (Forestry) Emissions Trading Scheme Emission Trading Units allocated under the Emissions Trading Scheme (ETS) are recognised at deemed cost based on the fair value at the date of receipt (that is, historic value). The units are recognised when they have been received and are recognised as income in the Statement of Comprehensive Revenue and Expense. After initial recognition ETS units are recognised at cost and reviewed annual for impairment. Creditors and other payables Employee benefits 57 Employee benefits Council expects to be settled within 12 months of balance date are measured at nominal values based on accrued entitlements at current rates of pay. These include salaries and wages accrued up to balance date, annual leave earned to, but not yet taken at balance date. Superannuation schemes - defined contribution schemes Obligations for contributions to defined contribution superannuation schemes are recognised as an expense in the Statement of Comprehensive Revenue and Expense. Provisions Council recognises a provision for future expenditure of uncertain amount or timing when there is a present obligation (either legal or constructive) as a result of a past event, it is probable that expenditures will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a discount rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised as an interest expense and is included in Finance Costs.

60 Borrowings are initially recognised at their fair value. After initial recognition, all borrowings are measured at amortised cost using the effective interest method. Financial guarantee contracts New Zealand Local Government Funding Agency Council is a guarantor of the New Zealand Local Government Funding Agency Limited (LGFA). The LGFA was incorporated in December 2011 with the purpose of providing debt funding to local authorities in New Zealand. LGFA has a local currency rating from Fitch Ratings and Standard & Poor s of AA+ and a foreign currency rating of AA. Council is one of 43 local authority guarantors of the LGFA. When aggregated with the uncalled capital of other shareholders, $20 million is available in the event that an imminent default is identified. Also, together with the other shareholders and guarantors, Council is a guarantor of all LGFA s borrowings. At 30 June 2016, LGFA had borrowings totalling $6.501 billion (2015: $4.9 million). Financial reporting standards require Council to recognise the guarantee liability at fair value. However, Council has been unable to determine a sufficiently reliable fair value for the guarantee, and therefore has not recognised a liability. Council considers the risk of LGFA defaulting on repayment of interest or capital to be very low on the basis that: 58 We are not aware of any local authority debt default events in New Zealand; and Local government legislation would enable local authorities to levy a rate to recover sufficient funds to meet any debt obligations if further funds were required. Borrowings Borrowings are classified as current liabilities unless the Council has an unconditional right to defer settlement of the liability for at least 12 months after balance date or if the borrowings are expected to be settled within 12 months of balance date. Net assets/equity Net assets/equity is the community s interest in Council and is measured as the difference between total assets and total liabilities. Net assets/equity is disaggregated and classified into a number of reserves. The components of net assets/equity are: Accumulated comprehensive revenue and expense; Restricted reserves;

61 All items in the financial statements are stated exclusive of Goods and Services Tax (GST), except for receivables and payables, which include GST invoiced. The budget figures have been prepared using accounting policies that are consistent with those adopted by Council for the preparation of the Financial Statements. Council-created reserves; and Asset revaluation reserves. Restricted and Council-created Reserves Restricted and Council-created reserves are a component of equity generally representing a particular use to which various parts of equity have been assigned. Reserves may be legally restricted or created by Council. Restricted reserves are subject to specific conditions accepted as binding by Council and which may not be revised by Council without reference to the Courts or a third party. Transfers from these reserves may be made only for certain specified purposes or when certain specified conditions are met. The Mangawhai Endowment Fund referred to in this document includes the Mangawhai Endowment Lands Account (MELA) referred to in section 8 of the Mangawai Lands Empowering Act 1966 (sic). Council-created reserves are reserves restricted by Council decision. Council may alter them without reference to any third party or the Courts. Transfers to and from these reserves are at the discretion of Council. 59 Asset revaluation reserves These reserves relate to the revaluation of property, plant and equipment to fair value. Goods and Services Tax (GST) Budget figures Cost allocation Council has derived the cost of service for each significant activity of Council using the cost allocation system outlined below: Direct costs are those costs directly attributable to a significant activity. Indirect costs are those costs which cannot be identified in an economically feasible manner, with a specific significant activity; Direct costs are charged directly to significant activities; Indirect costs are charged to significant activities using appropriate cost allocations determined by management.

62 All Council landfills are now closed. Provision has been made for the future costs of closing the Dargaville and Hakaru landfills being the aftercare of the landfill for the prescribed period. Estimated costs, adjusted for inflation, have been built up on an item by item basis. The provision held, at each balance date, represents the net present value of the estimated future costs. A detailed reassessment and the anticipated remaining lives of the landfills are performed regularly. There are a number of assumptions and estimates used when performing Depreciated Replacement Cost valuations over infrastructural assets. These include: the physical deterioration and condition of an asset, for example Council could be carrying an asset at an amount that does not reflect its actual condition. This is particularly so for those assets which are not visible, for example stormwater, wastewater and water supply pipes that are underground. This risk is minimised by Council performing a combination of physical inspections and condition modelling assessments of underground assets; estimates made when determining the remaining useful lives over which the asset will be depreciated. These estimates can be impacted by the local conditions, for example weather patterns and traffic growth. If useful lives do not reflect the actual consumption of the benefits of the asset, then Council could be over or under-estimating the annual depreciation charge recognised as an expense in the Statement of Comprehensive Revenue and Expense. To minimise this risk Council s infrastructural asset useful lives have been determined with reference to the New Zealand Infrastructural Asset Valuation and Depreciation Guidelines published by the National Asset Management Steering Group, and have been adjusted for local conditions based on past experience. Asset inspections, Critical accounting estimates and assumptions In preparing these financial statements Council has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations or future events believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Closure and post-closure provisions 60 The impact of changes to the provision arising from the reassessment of the life of the landfill and estimated future costs are capitalised to deferred closure and postclosure costs within property, plant and equipment in the Statement of Financial Position. The annual change in the net present value of the provision due to the passage of time is recorded as the time value adjustment of provisions in the Statement of Comprehensive Revenue and Expense. Infrastructural Assets estimating any obsolescence or surplus capacity of an asset; and

63 Management has exercised the following critical judgements in applying Council s accounting policies for the period ended 30 June 2016: deterioration and condition modelling are also carried out regularly as part of Council s asset management planning activities, which gives Council further assurance over its useful life estimates. Experienced independent valuers perform Council s infrastructural asset revaluations. Critical judgements in applying Council s accounting policies Classification of property Council owns a number of properties, which are maintained primarily to provide community housing to elderly persons. The receipt of market-based rental from these properties is incidental to holding these properties. These properties are held for service delivery objectives as part of Council s social development policy. These properties are accounted for as property, plant and equipment. 61

64 2 Income and Expenditure Summary 2(a) Non-exchange revenue summary Annual Annual For the year ended: Actual Plan Report 30 June $'000 $'000 $' Non exchange revenue Rates 31,297 31,751 30,511 Resource consents 1, Solid waste recoveries Community spaces access fees Total Non exchange revenue 32,431 31,751 31,280 Exchange revenue 24,496 15,520 18,152 Total revenue 56,928 47,271 49,432 2(b) Rating Base Information The following disclosures are made in accordance with the Local Government Act 2002 Amendment Act 2014, clause 30A of Schedule 10. As at 30 June 2015 As at 30 June 2014 Number of rating units within the Kaipara District 15,036 units of which 14,210 are rateable 14,696 units of which 14,146 are rateable Total capital value of rating units within the Kaipara District $6,358,815,225 of which $6,187,157,350 is rateable $6,206,788,200 of which $6,036,684,150 is rateable Total land value of rating units within the Kaipara District $3,715,405,125 of which $3,648,211,350 is rateable $3,651,092,600 of which $3,583,705,550 is rateable

65 2(c) Revenue Summary - Analysis 2(d) Targeted Rates for metered water supply Annual For the year ended: Actual Report 30 June $'000 $'000 Annual For the year ended: $'000 $'000 Actual Plan 30 June Subsidies and grants NZTA Roading Subsidies 10,202 11,973 Total Subsidies and grants 10,202 11,973 Investments and Other Income Petrol tax Gain on disposal of property, plant and equipment Unrealised gain on forestry revaluation Finance income Vested assets Sundry income Total Investment and Other Income 2, Targeted Rates for metered water supply Water Supply 2,936 3,150 The Local Government (Financial Reporting and Prudence) Regulations 2014 require, from 01 July 2015, Water by Meter charges to be classified in rating income. Total Targeted Rates for metered water supply 2,936 3,150

66 Total Asset Revaluation Reserves 199, , Cost of Service Summary Analysis The auditor of Council is Deloitte for and on behalf of the Auditor-General. Salaries and wages also includes employer contributions to KiwiSaver which is a Defined Contribution Plan. Employer contributions totalled 2016: $162,088 (2015: $143,900). Annual For the year ended: Actual Report 30 June $'000 $'000 Analysis of expenditure Depreciation and amortisation 10,091 9,747 Swaps revaluation through revenue and expense 3,629 3,233 Asset revaluation revenue and expense Other expenses 22,709 21,574 Employee benefit expenses Salaries and wages 6,850 6,040 Increase/(Decrease) in Annual leave provision Finance costs Interest on loans 3,227 3,771 Interest on Local Government Stock Fees paid to Principal Auditor Fees for audit of the Long Term Plan Fees for audit of the Annual Report Fees for other services 0 6 Interest on loans includes hedge costs.. Total expenditure 46,946 45,856 4(a) Ratepayers Equity Annual For the year ended: $'000 $'000 Accumulated Comprehensive Revenue and Expense plus Surplus/(deficit) for the period 9,981 3,576 Actual Report 30 June Balance at 1 July 362, ,549 Transfers from Accumulated Revenue and Expense to: Restricted reserves Council created reserves 8,490 7,324 Total Transfers from Accumulated Comprehensive Revenue and Expense 8,471 7,538 Transfers to Accumulated Funds from: Restricted reserves Council created reserves 6,547-23,921 Total Transfers to Accumulated Comprehensive Revenue and Expense 6,547-23,782 Closing balance as at 30 June 370, ,805 Asset Revaluation Reserves Gain/(loss) on revaluation 15,849 25,713 Balance at 1 July 183, ,936 Asset Revaluation Reserves Operational assets: Closing balance as at 30 June 199, ,649 Land Buildings 0 0 Total Operational assets Infrastructural assets: Roads and Footpaths 174, ,622 Water Supply 8,494 7,192 Sewerage and the treatment and disposal of sewage 0 0 Stormwater Drainage 13,427 10,042 Flood Protection and control works 2, Total Infrastructural assets 199, ,347

67 Financial Contribution Reserve Opening Balance 4, ,259 Deposited 1, ,575 Withdrawn -1, ,937 Closing Balance 4, ,897 Provision Expenditure Reserve Opening Balance Deposited Withdrawn Closing Balance Restricted Council Reserves Restricted Reserve Opening Balance , ,692 Deposited Withdrawn Closing Balance , ,673 4(b) Statement of Reserves Funds Activities For the year ended: Community Activities Regulatory Management Emergency Management Flood Protection and Control Works District Leadership Solid Waste The Provision of Roads and Footpaths Sewerage and the Treatment and Disposal of Sewage Stormwater Drainage Water Supply Total Reserves Funds 30 June $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Council Created Reserves Depreciation Reserve Opening Balance , ,488 Deposited , ,229 Withdrawn , ,869 Closing Balance , , Development Contribution Reserve Opening Balance , ,656 Deposited , ,409 Withdrawn Closing Balance , ,987

68 Restricted Reserve is for the Mangawhai Endowment Fund which relates to assets vested to the Council from the Mangawhai Harbour Board via the Mangawai Lands Empowering Act 1966 (sic). The Act requires the Fund (assets) to be held for county (or Council) purposes that are of benefit to the Mangawhai area. Council has set aside reserve funds for the purposes of asset renewal (Depreciation Reserve), development contributions and financial contributions. These funds are grouped under the heading of Council Created Reserves. The funds are required by the Local Government Act 2002 to be separately disclosed for each activity to which they pertain. Purpose of each Reserve Fund: Council-created Reserves: Depreciation (Asset Renewal) Reserves are used for the funding of capital renewals and/or to repay loans and are derived from the funding of depreciation within each asset carrying activity in accordance with the existing revenue and financing policies. Contributions towards infrastructure growth through the provisions of Council's Development Contributions Policy are separately recognised and accounted for in Development Contribution Reserves based on the specified activities. 66 Financial Contributions towards infrastructure growth through the provisions of Resource Management Act are separately recognised and accounted for in Financial Contribution Reserves based on the specified activities. Provision Expenditure Reserve Council funds reserved for expenditure provisioned to be spent in future years.

69 An estimate of the fair value is based on Council's share of the net assets. 67 5(a) Other Financial Assets Other financial assets are valued at fair value. Annual For the year ended: Actual Report 30 June $'000 $'000 Current portion of investments Loan Total Current financial assets Non-current portion of investments Emission Trading Scheme - NZU's NZLG Insurance Corporation Shares Total Non-current financial assets Compensation is provided to forestry owners via the allocation of compensation units known as New Zealand Units (NZUs) in two tranches. Council received the first tranche of 14,927 units in December 2012 and the second tranche of 24,013 in February Compensation units are recognised at deemed cost based on the fair value at the date of receipt (that is, historic value). The units are recognised when they have been received and are recognised as income in the Statement of Comprehensive Revenue and Expense. After initial recognition NZUs are measured at cost with an annual review for impairment. 5(c) Shareholdings New Zealand Local Government Insurance Corporation Limited: 13,629 shares of $1.00 each. Council holds 0.1% of the issued shares. 5(b) Emissions Trading Scheme (ETS) Council has 631 hectares of pre-1990 forest land. This land is subject to the provisions of the New Zealand ETS. The implication of this for the financial statements is two-fold: Should the land be deforested (that is, the land is changed from forestry to being used for some other purpose) a deforestation penalty will arise; and As a result of the deforestation restriction, compensation units are being provided by the Government.

70 6 Trade and other receivables 68 As at 30 June 2016 all overdue receivables, including rates, have been assessed for impairment and appropriate provisions applied. Council holds no collateral as security or other credit enhancements over receivables, but does have rates recovery powers under the Local Government (Rating) Act Those powers are exercised to recover all rates other than on some Maori land with multiple owners, impairment of which is included in Council s doubtful debt provision. Annual For the year ended: Actual Report 30 June $'000 $'000 Trade and other receivables Sundry debtors 1,755 2,849 Land rates and penalties 4,761 5,033 Water rates and charges 929 1,010 Dog licences and dog infringements Prepayments Gross Trade and other receivables 8,418 9,621 less Provision for impairment- Land rates -2,130-1,999 less Provision for impairment - Other debtors Total Non-current financial assets 6,180 7,208 Annual For the year ended: $'000 $'000 Exchange 2,439 3,108 Non exchange 3,741 4,101 Actual Report 30 June Exchange/ Non exchange receivables Total Exchange/ Non exchange Receivables 6,180 7,208 Movement in Impairment Provision Estimated (increase)/decrease in doubtful debts Opening balance - Impairment provision -2,413-2,078 Total Non-current financial assets -2,238-2,413 The carrying value of trade and other receivables approximates their fair value. Annual For the year ended: $'000 $'000 Not past due 2,807 3,403 Past due 1-30 days Past due days Past due 60 days 3,146 3,576 Actual Report 30 June Analysis of Total Trade and Other Receivables Ageing Total trade and receivables ageing 6,180 7,208

71 7 Trade and other payables 8(a) Provisions 69 Annual For the year ended: Actual Report 30 June $'000 $'000 Trade and Other Payables Trade creditors 1,943 3,754 Accrued expenses 3,156 3,355 Deposits held 1,992 1,861 Receipts held in advance Income in advance Total Trade and other payables 8,254 9,611 Exchange/ Non exchange payables Exchange 7,660 9,083 Non exchange Total Exchange/ non exchange payables 8,254 9,611 Annual For the year ended: $'000 $'000 Actual Report 30 June Current provisions Landfill closure and aftercare Building repairs Total Current provisions Non-current provisions Landfill closure and aftercare 4,570 4,295 Total Non-current provisions 4,570 4,295 Total Provisions 4,709 4,480 Trade and other payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying value of trade and other payables approximates their fair value.

72 8(b) Provisions Movement in provisions Landfill closure & aftercare Building repair Total $'000 $'000 $'000 The movement in the provisions are represented by: 2016 Balance as at 1 July , ,480 Passage of time adjustment Amounts used Discount rate adjustment Unused amount reversed Balance at 30 June , , Balance as at 1 July , ,238 Passage of time adjustment Amounts used Discount rate adjustment Unused amount reversed Balance at 30 June , ,480 Landfill Aftercare Provisions Council has resource consents to operate landfills at Dargaville and Hakaru. These landfills are now closed. Council has responsibility under the Resource Management Act (1991) to provide ongoing maintenance and monitoring of the landfills after the sites are closed. The provision for Hakaru closure and post-closure costs was increased in 2012/2013 following an independent assessment by VK Consulting Environmental Engineers Ltd. A number of Hakaru landfill closure options were presented to Council s management including maintaining the status quo (which requires the continuation of leachate removal) through to the excavation and removal of all refuse from the site in Apart from the refuse removal option, all other options require ongoing cost to Council. Council s management preferred the removal option on the basis that it was the only option that will enable Council to eliminate the ongoing liability. The cost of the removal option was provided for in the 2012/2013 financial statements. Options for the Dargaville landfill are about to be considered and works under taken in the next two to three years.

73 Costs associated with the removal of refuse from Hakaru to remain at current day levels adjusted only for inflation per latest Annual Plan. Closure and post-closure responsibilities include the following: Final cover and vegetation; Drainage control features to minimise infiltration of stormwater; Completing facilities for leachate collection and treatment; Ongoing monitoring as per discharge consent conditions; and Completing facilities for monitoring of landfill gas and ensuring no hazard exists. Post-closure responsibilities Treatment and monitoring of leachate; Ground water and surface water monitoring; Gas monitoring and flaring if required; 71 Implementation of remedial measures such as needed for settlement and cracking of capping layer; Ongoing site maintenance for drainage systems, final cover and vegetation; and Ensure closed landfill is suitable for intended future use. Provision The cash flows for the landfill post-closures, particularly for Hakaru, are expected to occur up to The long term nature of the liability means that there are inherent uncertainties in estimating costs that will be incurred. The provision has been estimated taking into account existing technology and is discounted using a discount rate of 5.23% (2015: 6.12%). The following major assumptions have been made in the calculation of the provision: The cost of monitoring of surface / ground water including the removal of leachate; and No major remedial works being required at any of the sites; and

74 9(a) Public Debt Annual For the year ended: Actual Report 30 June $'000 $'000 Opening balance 75,868 76,299 add Funds raised 119,111 48,580 Total Funds 194, ,879 less Repayments -130,018-49,012 Closing balance 64,961 75,867 Current portion 6,983 5,609 Non-current portion 57,978 70, Total Public debt 64,961 75,867 Balances are represented by: Bank Loans 29,961 71,137 Local Government Funding Agency (LGFA) 35,000 0 Local Government Stock 0 4,730 64,961 75,867 All term liabilities are secured under a Debenture Trust Deed. Maturity Interest Annual For the year ended: Rates Actual Report 30 June $'000 $'000 Maturity and Interest Rates for Public Debt ANZ April % to 4.55% 6,983 12,280 ANZ October % 17,978 52,978 BNZ May % to 6.52% 0 5,609 BNZ July % to 4.89% 5,000 5,000 Local Government Funding Agency (LGFA) 2021 to % to 3.34% 35,000 0 Total 64,961 75,867

75 Undrawn facilities Undrawn facilities of $18 million were available at 30 June 2016 (2015: $12.7 million). Loan covenant Council has loans that amount to $64.96 million at 30 June 2016 (2015: $75.9 million). There are a number of covenants included within the loan agreements that Council has with its lenders. These include a requirement to adopt an Annual Report within four months of the end of the financial year and then forward a copy of that Annual Report to the bank. The LGFA requirement is to deliver a copy of the Annual Report within five months of the financial year end. No breach of these loan covenants has occurred during the period. 9(b) Compliance with Liability Management Policy 73 Target Achievement Policy Compliance % % Y/N Comment Overall Fixed: Floating Mix 60%-90% 89% Yes Achieved Debt and Facilities/Current External Debt 110% 128% Yes Achieved Net Debt as a percentage of Total Revenue <170% 113% Yes Achieved Net Interest as a percentage of Total Revenue <10% 7% Yes Achieved Net Interest as a percentage of Annual Rates Income <30% 12% Yes Achieved Fixed Rate Debt Maturity Profile: Debt Maturity Profile: 1-3 years 15% - 60% 18% Yes Achieved 3-5 years 15% - 60% 25% Yes Achieved 5-10 years 0% - 60% 58% Yes Achieved 0-3 years 15% - 60% 58% Yes Achieved 3-5 years 15% - 60% 30% Yes Achieved 5 years plus 10% - 40% 12% Yes Achieved

76 10(a) Property Plant and Equipment 74 Opening Cost Opening Accumulated Depreciation & Impairment Charges Carrying Amount Additions Current Year Reclass Current Year Net Disposals Current Year Transfer to Assets Held for Sale Impairments Current Year Depreciation Current Year Revaluation Surplus/(loss) Current Year Closing Cost/ Revaluation Closing Accumulated Depreciation & Impairment Charges $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Property, Plant and Equipment: Jul-15 1-Jul-15 1-Jul Jun Jun Jun-16 Infrastructural assets Roads and Footpaths 456, ,254 9,099 1, ,577 9, , ,827 Stormwater Drainage 21, , ,387 24, ,075 Flood Protection and Control Works 12, , ,801 14, ,031 Sewerage and the Treatment and Disposal of Sewage Plant 49,154-1,340 47, ,349 49,872-2,689 47,183 Sewerage and the Treatment and Disposal of Sewage Land 3, , , ,670 Water Supply 28,801-2,263 26,538 1, ,124 1,302 28, ,215 Solid Waste 1,318-1, ,318-1, Work in Progress 1, , , Total Infrastructural assets 574,944-5, ,211 12, ,536 15, ,834-3, ,951 Carrying Amount Restricted assets Operational assets Reserves 17, , , ,450 Community Housing 2, , , ,922 MEF Property Halls 2, , , ,549 Total Restricted assets 22, , , ,535 Land 7, , , ,738 Buildings 6,467-1,315 5, ,866-1,448 5,417 Building Contents 1,388-1, ,418-1, Mobile Plant (incl MV's) Static Plant Library Books Office Equipment 3,488-3, ,641-3, Total Operational assets 19,743-6,094 13,649 1, ,044-6,526 13,518 Total Property, plant and equipment 617,572-12, ,882 14, ,091 15, ,363-11, ,003

77 75 Opening Cost Opening Accumulated Depreciation & Impairment Charges Carrying Amount Additions Current Year Reclass Current Year Net Disposals Current Year Transfer to Assets Held for Sale Impairments Current Year Depreciation Current Year Revaluation Surplus/(loss) Current Year Closing Cost/ Revaluation Closing Accumulated Depreciation & Impairment Charges $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Property, Plant and Equipment: Jul-14 1-Jul-14 1-Jul Jun Jun Jun-15 Infrastructural assets Roads and Footpaths 426, ,511 9, ,279 25, , ,254 Stormwater Drainage 21, , , ,859 Flood Protection and Control Works 12, , , ,220 Sewerage and the Treatment and Disposal of Sewage Plant 48, , ,340 49,154-1,340 47,814 Sewerage and the Treatment and Disposal of Sewage Land 4,548 4, , ,670 Water Supply 27,831-1,110 26, , ,801-2,263 26,538 Solid Waste 1,314-1, ,318-1, Work in Progress , , ,732 Total Infrastructural assets 543,324-2, ,555 13, ,243 24, ,944-5, ,211 Carrying Amount Restricted assets Operational assets Reserves 17, , , ,647 Community Housing 2, , , ,967 MEF Property Halls 2, , , ,591 Total Restricted assets 22, , , ,022 Land 7, , , ,313 Buildings 6,144-1,189 4, ,467-1,315 5,152 Building Contents 1,388-1, ,388-1, Mobile Plant (incl MV's) Static Plant Library Books Office Equipment 3,270-2, ,488-3, Total Operational assets 19,485-6,151 13, ,845-6,196 13,649 Total Property, Plant and Equipment 585,453-9, ,756 14, ,747 24, ,674-12, ,882

78 The ownership of urban portions of the State Highway network is unclear although there is legal opinion indicating that the ownership rests with local authorities. NZTA maintains these highways in their entirety without any costs accruing to local authorities. The Kaipara district contains 17.7kms of urban State Highway. Quotable Value Land associated with and included within water supply and flood protection and control works Council has applied the historical cost method under PBE IPSAS for buildings and land. This does not include land associated with infrastructure assets. This land like all other infrastructural assets, continue to be revalued periodically, but at least every three years. Restricted assets are held by Council for the benefit of the community and are not, because of their nature or the title to their ownership, generally available for disposal by Council. Urban portions of the State Highway network. Urban portions of the State Highway network As a consequence, even if ownership resides with local authorities, in practice NZTA controls the economic resources. Pending clarification of ownership and further consideration of the accounting issue which may arise, Council has not recognised the urban portion of the State Highway network as an asset in these financial statements. Accounting for revaluations 76 The most recent valuations were effective as at 30 June The names, and asset responsibility, of the valuers engaged are as follows: Valuer Asset Responsibility MWH New Zealand Limited (Independent external professional engineers and valuers) Roads and footpaths, water supply, stormwater drainage and flood protection and control works The methodology base of all infrastructural valuations other than land was Depreciated Replacement Cost, with reference as necessary to the following standards - PB IPSAS17 (Property, Plant and Equipment), PB IPSAS21 (Impairment of Assets), National Asset Management Steering Group (NAMS Group), NZ Infrastructural Asset Valuation and Depreciation Guidelines (version 2), the Local Government Act 2002, and NZPI Standards. Land was revaluated primarily with reference to comparable sales.

79 Roads and footpaths, stormwater drainage, flood protection and control works, sewerage and the treatment and disposal of sewage and water Supply assets are valued under at least a three-yearly valuation cycle. Sewerage and the treatment and disposal of sewage assets were not revalued as at 30 June These will There are a number of estimates and assumptions exercised when valuing infrastructure assets using the Depreciated Replacement Cost method. These include: Estimating the replacement costs of the asset. The replacement cost is derived from recent contracts in the region for similar assets. Estimating the remaining useful life over which the asset will be depreciated. If useful lives do not reflect the actual consumption of the benefits of the asset the Council could be over/or under-estimating the annual depreciation charge recognised as an expense in the Statement of Comprehensive Income and Expense. To minimise the risk infrastructure asset useful lives have been determined with reference to the NZ Infrastructure Asset Valuation and Depreciation Guidelines Remaining useful lives have been determined by calculating the difference between the respective asset s Total Useful Life (TUL) and the age of the asset. Note that for assets that have exceeded their TUL the Adjusted Total Useful Life is calculated as the age Remaining useful lives have been determined by calculating the difference between the respective asset s Total Useful Life (TUL) and the age of the asset. Note that for assets that have exceeded their TUL the Adjusted Total Useful Life is calculated as the age Infrastructure Valuations be revalued in 2016/2017. Estimating any obsolescence or surplus capacity of the asset. published by the NAMS Group and have been adjusted for local conditions based on past experience. 77 Category Methods and key assumptions Roading Depreciated replacement cost is calculated using the NZTA cost adjustment factor (CAF). At the time of valuation, the CAF was available to the March 2016 quarter. of the asset plus the Minimum Remaining Useful Life. Water, stormwater and flood protection Depreciated replacement cost is determined through comparing unit replacement values per the previous valuation to recent construction, operation, and maintenance costs incurred by the Council, and either updating to reflect significant changes or rolling forward to the current year by applying a CAF. of the asset plus the Minimum Remaining Useful Life. Land under water Land has been valued through reference to comparable sales.

80 10(b) Property Plant and Equipment Analysis 10(c) Capital Expenditure (Disposals) for Year 78 Closing Book Value Acquisitions Constructed Acquisitions Vested Latest Estimate of Replacement Cost $'000 $'000 $'000 $'000 Property, Plant and Equipment: Jun Jun Jun Jun-16 Infrastructural assets Roads and Footpaths 469,827 8, ,549 Stormwater Drainage 24, ,069 Flood Protection and Control Works 14, ,610 Sewerage and the Treatment and Disposal of Sewage Treatment plants and facilities 31, ,375 Other assets 19, ,057 Water Supply Treatment plants and facilities 10, ,016 Other assets 18,106 1, ,339 Property, Plant and Equipment: Jun Jun Jun Jun-15 Infrastructural assets Roads and Footpaths 456,254 9, ,328 Stormwater Drainage 20, ,432 Flood Protection and Control Works 12, ,102 Sewerage and the Treatment and Disposal of Sewage Treatment plants and facilities 32, ,179 Other assets 19, ,538 Water Supply Treatment plants and facilities 13, ,764 Other assets 13, ,582 Annual For the year ended: $'000 $'000 Actual Report 30 June Capital expenditure Community Activities Regulatory Management 0 0 Emergency Management 0 0 District Leadership Solid Waste 0 4 The Provision of Roads and Footpaths 9,884 11,583 Stormwater Drainage Flood protection and control works Sewerage and the treatment and disposal of sewage Water supply 1, Disposals Total Capital expenditure 14,158 14,093 Community Development 0 0 MELA Property Other Total Disposals

81 The following disclosures are made in accordance with the Local Government Act 2002 Amendment Act 2014, clause 31A of Schedule Depreciation Summary Annual For the year ended: Actual Report 30 June $'000 $' by Groups of activities Community Activities Regulatory Management 0 0 Emergency Management 3 0 District Leadership Solid Waste 0 0 The Provision of Roads and Footpaths 6,576 6,279 Stormwater Drainage Flood protection and control works Sewerage and the treatment and disposal of sewage 1,349 1,335 Water supply 1,124 1,153 Total Groups of activities depreciation 10,091 9, Insurance of Assets A Total value of all assets that are covered by insurance contracts Maximum amount to which these assets are insured B Total value of all assets that are covered by financial risk sharing arrangements Maximum amount available to Council under those arrangements C Total value of all assets that are self-insured Value of any fund maintained by Council for that purpose 2016 $000 s 113,942 92,711 nil nil 530,987 nil 2015 $000 s 108,574 91,141 nil nil 514,227 nil

82 In accordance with Council s accounting policy requiring annual revaluations, Chandler Fraser and Keating (Forestry Consultants) performed an independent Desk-top valuation of the forests as at 30 June The calculation of the revaluation was fair value less estimated point of sale costs. Fair value was determined based on: The present value of expected net cash flows discounted at a current market determined rate of 10.5% (2015:11%) for mature trees; and The forest has been valued on a going concern basis and includes only the value of the existing crops on a single rotation basis; 13 Biological Assets The replacement cost method for younger trees. The movement in asset value is as follows: 80 Annual For the year ended: Actual Report 30 June $'000 $'000 Forestry assets movements Opening balance 2,697 2,289 Annual revaluation movement Harvesting removals Closing balance 3,466 2,697 Council acquired the Hobson County Council forestry estate as a consequence of the 1989 Local Government Amalgamation process which formed Kaipara District Council. Council owns and leases nine small forest blocks of radiata pine (631 productive hectares) which are at strongly biased toward young replanted strands (2-15 years) and an area of year strands. The overall weighted average is 11.6 years. Valuation assumptions A discount rate of 10.5% (2015; 11%) has been used in discounting the present value of future cashflows; Notional land rental costs have been included for freehold land; Log prices are based upon the valuers latest survey supplemented by local prices to reflect the Northland market and takes into account key price drivers (market prices, exchange rates and shipping).

83 The replacement cost methodology has been applied for the younger strands at $1,250 per hectare to provide a floor value. It is assumed beyond five years prices remain flat; Financial risk management strategies The Council is exposed to financial risks arising from changes in timber prices, foreign exchange rates, disease, climatic conditions and potential plagues (rodent and insect). Council reviews these risks regularly in considering the need for active financial management. Council strategy in respect of these forestry assets involves outsourcing the annual maintenance and harvesting, of all the individual blocks, to a specialist firm of forest management professionals, with a view to maximising financial returns. Such returns are then utilised on an annual basis for capital improvements across the District. There is no rating input into the operation of this activity. Net income from forest harvesting for the year was $nil (2015: $310,000). 81

84 The operating leases are in relation to Council properties Reconciliation of Net Surplus/(Deficit) to Net Cash Flow from Operating Activities Annual For the year ended: Actual Report 30 June $'000 $'000 Surplus/(deficit) for the period Note Surplus/(deficit) for the period 9,981 3,576 add/(deduct) Non-cash movements Property, Plant and Equipment vested to Council (Gain)/Loss on sale of assets Forestry revaluation gain Asset revaluation through Profit and Loss Increase/(decrease) in Provisions Depreciation 10,091 9,747 Unrealised (gain)/loss on interest rate swaps 3,629 3,233 Other Financial Assets Total Non-cash movements 12,799 13,522 add/(deduct) Movements in working capital Items Trade and other receivables 1, Accrued Revenue Employee Entitlements Trade and other payables (net of capital accruals) -1,356 2,062 Total Movement in working capital Items -1,165 2,741 Net Cash Inflow from Operating Activities 20,882 19, Capital Commitments and Operating Leases Annual For the year ended: $'000 $'000 Actual Report 30 June Capital commitments Property, Plant and Equipment 180 1,806 Total Capital commitments 180 1,806 Operational non-cancellable contracts Not later than one year 11,677 11,871 Later than one year and not later than five years 6,457 3,080 Later than five years Total Operational non-cancellable contracts 18,386 15,216 Operating leases as lessee Not later than one year Later than one year and not later than five years Total Operating leases as lessee Operating leases as lessor Not later than one year Later than one year and not later than five years Later than five years Total Operating leases as lessor

85 Local government legislation would enable local authorities to levy a rate to recover sufficient funds to meet any debt obligations if further funds were required. The Council has given a $750,000 guarantee to Westpac Banking Corporation Ltd on loan advances to the Mangawhai Harbour Restoration Society. The purpose of the loan advance was to fund the Society s harbour restoration project. The Society funds the loan repayments from Council grants. Council has for many years and 16 Contingent Liabilities Guarantees Annual For the year ended: Actual Report 30 June $'000 $'000 Contingent Liabilities Guarantees to other organisations 1,003 1,003 Total Contingent Liabilities 1,003 1,003 New Zealand Local Government Funding Agency 83 Council is a guarantor of the New Zealand Local Government Funding Agency Limited (LGFA). The LGFA was incorporated in December 2011 with the purpose of providing debt funding to local authorities in New Zealand. LGFA has a local currency rating from Fitch Ratings and Standard & Poor s of AA+ and a foreign currency rating of AA. Council is one of 43 local authority guarantors of the LGFA. When aggregated with the uncalled capital of other shareholders, $20 million is available in the event that an imminent default is identified. Also, together with the other shareholders and guarantors, Council is a guarantor of all LGFA s borrowings. At 30 June 2016, LGFA had borrowings totalling $6.501 billion (2015: $4.9 billion). Financial reporting standards require Council to recognise the guarantee liability at fair value. However, Council has been unable to determine a sufficiently reliable fair value for the guarantee, and therefore has not recognised a liability. Council considers the risk of LGFA defaulting on repayment of interest or capital to be very low on the basis that: We are not aware of any local authority debt default events in New Zealand; and Other

86 In 1998 a $108,000 letter of credit was issued in favour of the Northland Regional Council, being a performance bond in respect of the future capping of district landfills. In respect of all of the above guarantees, Council has assessed the risk factor and any uncertainty at zero. Therefore any question of reimbursement is not applicable. plans to continue to rate properties in the catchment area of the Mangawhai Harbour to fund the grants. The Society controls all of the activities of the restoration project. The Society's loan balance at 30 June 2016 was $164,942. Council has given a $100,000 guarantee to the ASB Bank Limited in respect of their loan to the Mangawhai Club Incorporated. A $45,000 guarantee to the Bank of New Zealand exists for Council credit card limits. MRRA and RB & HE Rogan (CIV ) 84 On 16 July 2015 Northland Regional Council (NRC) and Kaipara District Council (KDC) were served with a Notice of proceeding by Mangawhai Ratepayers and Residents Association (MRRA) and Richard Bruce Rogan & Heather Elizabeth Rogan who have applied for a Judicial Review in regard to the validity of rates from 2011/2012 to 2015/2016. The proceeding was jointly defended by NRC and KDC. The Rogan s also appealed the decision of the District Court that they were required to pay their outstanding rates in full (RB and HE Rogan v KDC and NRC (CIV )). Both cases was heard in the High Court by Judge Duffy in May 2016 with both decisions being reserved. The Court indicated that if any of the judicial review is upheld, a further hearing will be required to establish what relief, if any, is granted. It is not possible to quantify liability at this time but in respect of Mr and Mrs Rogan as the only ratepayers in the proceeding, Council has assessed the risk and does not consider this to be a material issue. Building weathertightness claims Council is subject to two building claims in respect of repair costs for leaky buildings. At balance date there was one claim for $7,000 which has been inactive for several years, being dealt with through the Weathertight Homes Resolution Service. There has been no activity on the other claim of $25,000 since December This claim is being handled through Council s insurers. Council no longer has insurance cover for any weathertightness claims received after 30 June No provision has been made due to the low likelihood of any additional claims in relation to weathertightness.

87 Other legal claims In addition to the weathertightness building defect claims, there are a small number of potential legal claims against Council as at 30 June All seek compensation related to resource consents, property damage, contractual disputes, or other aspects of Council s operations which the claimants believe have caused them loss. Council will vigorously defend all claims and expects its actual liability to be minimal, if indeed there is any liability at all. Social housing caveat Council undertook the modernisation of 34 of its social housing units, which works programme was completed in March The programme was funded by the Housing New Zealand Corporation by way of an interest-free suspensory loan, conditional on the completion of the work, after which the liability ceased. A caveat remains, however, requiring Council to neither withdraw from providing social housing, nor significantly altering its investment in this joint-funded housing modernisation programme. At this time Council does not expect to withdraw or significantly alter its investment in social housing. The total value of the interest-free suspensory loan is $1,020,000 which was previously recognised as revenue. 85 Riskpool exposure New Zealand Mutual Liability Riskpool (Riskpool) provides public liability and professional indemnity insurance for its members. Council is a member of Riskpool. The Trust Deed of Riskpool provides that if there is a shortfall (whereby claims exceed contributions of members and reinsurance recoveries) in any fund year, then the Board may make a call on members for that fund year. Council has no knowledge of any further calls. Earthquake risk to buildings Council is required, under the Building Act 2004 to have an earthquake prone buildings policy. Under this policy Council is required to assess whether there is any risk to buildings in the Kaipara district. At this point Council has only just begun the task of evaluating buildings to determine if they may be earthquake prone. The former Dargaville Municipal Building has been identified as having an earthquake risk and is defined as earthquake prone under the building code New Building Standard (N.B.S). Assessments by qualified building engineers estimated structural repairs could cost up to a maximum of $425,000. The chances of a moderate earthquake that would cause structural damage actually occurring in Dargaville are deemed to be a low risk.

88 17 Statutory disclosures and remuneration and related party transactions 86 Annual For the year ended: Actual Report 30 June $'000 $'000 Chief Executive Remuneration: Acting Chief Executive Salary 221,386 68,110 Lump sum payment 0 0 Vehicle 15,000 4,644 Other Benefits 7,092 6,312 Total Acting Chief Executive Remuneration 243,478 79,066 Commissioners Remuneration: Chairperson of Commissioners: Commissioners: John Robertson 209, ,261 Richard Booth 52,083 60,577 Peter Winder 48,289 55,575 Total Commissioners Remuneration 309, ,413 Council Employees remuneration: Annual remuneration by band: $0 - $60, $60,000 - $80, $80,000 - $100, $100,000 - $120, $120,000 - $140,000 5 $120,000 - $180,000 4 $140,000 - $220,000 3 $220,000 - $260, Total Employees by remuneration band Number of Employees: Full time employees Part time employees (FTE) Total Employees (FTE) Severance Payments to Employees 0 Redundancy Payments to Employees $14,067 Number of Employees 1 Key management personnel include the Chief Executive, senior management and a team of three Commissioners. During the year Council did not purchase any services from any key management personnel other than as disclosed in this note. During the year the Commissioners and senior management, as part of a normal customer relationship, were involved in minor transactions with Council (such as payment of rates etcetera). A small parcel of land was sold to Delta Produce for $17,391. The chair of Delta Produce was also a Commissioner. There are no material amounts owing to related parties at year end. Annual For the year ended: $'000 $'000 Key management personnel compensation Salaries and other short term employee benefits 1,456 1,212 Actual Report 30 June Total Key management personnel compensation 1,456 1,212

89 18(a) Categories of Financial Assets and Liabilities 87 Annual For the year ended: 30 June Actual Report $'000 $'000 Loans and Receivables Cash and cash equivalents 7,285 9,926 Trade and other receivables 6,180 7,208 LGFA Borrower notes Emission Trading Scheme - NZU's Loan Total Loans and Receivables 14,398 17,506 Financial assets: Fair value through revenue and expense NZLG Insurance Corporation Shares Total Fair value through revenue and expense Financial liabilities measured at amortised cost Trade and other payables 8,254 9,611 Public debt 64,961 75,867 Total Financial liabilities measured at amortised cost 73,216 85,478 Financial liabilities measured at fair value through revenue and expense Interest rate swaps 6,448 2,819 Total Financial liabilities at fair value through revenue and expense 6,448 2,819 Fair Value Hierarchy Actual Interest Rate Swaps Level 2 NZLG Insurance Corporation Shares Level 3

90 Council raises long term borrowings at floating rates and swaps them into fixed rates using interest rate swaps in order to manage interest rate risk. Such interest rate swaps have the economic effect of converting borrowings at floating rates into fixed rates. Under the interest rate swaps Council agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts (2016: $91 million, 2015 :$87 million). Included in these totals are forward start interest rate swaps with notional principal of $34 million (2015: $35 million). Financial instrument risks Council has a series of policies to manage the risk associated with financial instruments. Council is risk averse and seeks to minimise exposure from its treasury activities. Council has established Council-approved Liability Management and Investment policies. These policies do not allow any transactions that are speculative in nature to be entered into. Fair value interest rate risk Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. Borrowings issued at fixed rates expose Council to fair value interest rate risk. Council s Liability Management Policy outlines the level of borrowing that is to be secured using fixed rate instruments. Investments at fixed interest rates expose Council to fair value interest rate risk. The fair value of the debt is not considered to be materially different from the carrying amount. Cash flow interest rate risk 88 Cash flow interest rate risk is the risk that the cash flows from a financial instrument will fluctuate because of changes in market interest rates. Borrowings and investments issued at variable interest rates expose Council to cash flow interest rate risk. Such risk is considered to be low given Council has utilised interest rate swaps to manage these risks. Financial Instruments Liquidity risk The Council is exposed to liquidity risk as a guarantor of all LGFA s borrowings. This guarantee becomes callable in the event of the LGFA failing to pay its borrowings when they fall due. Information about this is explained in note 18(a).

91 Council s Investment policy limits the amount of credit exposure to any one financial institution or organisation. Investments in other local authorities are secured by charges over rates. Other than other local authorities, the group only invests funds with entities that have a Standard and Poor s credit rating of at least AA-. Maximum exposure to credit risk Credit risk is the risk that a third party will default on its obligation to Council, causing Council to incur a loss. Due to the timing of its cash inflows and outflows, Council invests surplus cash into term deposits and local authority stock which gives rise to credit risk. Council has no collateral or other credit enhancements for financial instruments that give rise to credit risk. 18(b) Financial Instrument Risks 89 Annual For the year ended: 30 June Actual Report $'000 $'000 Council's maximum credit exposure by class Note Cash and cash equivalents 7,285 9,926 Trade and other receivables 6 6,180 7,208 LGFA Borrower notes Total Council's maximum credit exposure by class 14,026 17,133 The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to Standard & Poor s credit rating (if available) or to historical information about counterparty default rates: Annual For the year ended: 30 June Actual Report $'000 $'000 Counterparties with Credit Ratings Cash and cash equivalents: AA 0 0 AA- 7,845 9,926 Total Cash and Cash Equivalents 7,845 9,926

92 Debtors and other receivables mainly arise from Council s statutory functions, therefore there are no procedures in place to monitor or report the credit quality of debtors and other receivables with reference to internal or external credit ratings. Council has no significant concentrations of credit risk in relation to debtors and other receivables. The Local Government (Rating) Act 2002 provides powers to recover outstanding debts from ratepayers. Credit risk The Council is exposed to credit risk as a guarantor of all LGFA s borrowings. Information about this is explained in Note (c) Contractual Maturity of Financial Liabilities The table below analyses Council s non-derivative financial liabilities to relevant maturity groupings based on the remaining period at the balance date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows. 90 Principal Carrying Amount Contractual Cash Flows Less than 1 year 1-2 years 2-5 years More than 5 years $'000 $'000 $'000 $'000 $'000 $'000 Maturity analysis Financial liabilities Note Council 2016 Trade and Other Payables 7 8,254 8,254 8, Public Debt 9a 64,961 72,382 9,094 19,480 33,222 10,586 Total Council ,216 80,636 17,348 19,480 33,222 10,586 Council 2015 Trade and Other Payables 7 9,611 9,611 9, Public Debt 9a 75,867 83,879 9,222 15,172 59,485 0 Total Council ,478 93,490 18,833 15,172 59,485 0 Note: Contractual cash flows includes principal and interest.

93 18(d) Contractual maturity of derivative financial assets and liabilities Notional Value Fair Value Less than 1 year 1-2 years 2-5 years More than 5 years $'000 $'000 $'000 $'000 $'000 $'000 Maturity analysis - Council 2016 Derivative financial liabilities Interest rate swaps 91,000 6, ,898 Total Derivative financial liabilities 91,000 6, ,898 Maturity analysis - Council 2015 Derivative financial liabilities Interest rate swaps 87,000 2, ,867 Total Derivative financial liabilities 87,000 2, ,867 The fair value of forward start interest rate swaps is $1.66 million (2015: $0.95 million) 91 Liquidity Risk Management of Liquidity Risk Liquidity risk is the risk that Council will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Council aims to maintain flexibility in funding by keeping committed credit lines available. In meeting its liquidity requirements, Council maintains a target level of investments that must mature within the next 12 months. Council manages its borrowings in accordance with its funding and financial policies, which include a Liability Management Policy..

94 The Council s capital is its ratepayers equity, which comprises retained earnings and reserves. Equity is represented by net assets. The Local Government Act 2002 requires Council to manage its revenues, expenses, assets, liabilities, investments, and general financial dealings prudently and in a manner that promotes the current and future interests of the community. Ratepayers funds are largely managed as a by product of managing revenues, expenses, 18(e) Sensitivity Analysis The following table illustrates the potential surplus and deficit and equity (excluding retained earnings) impact for reasonable possible market movements, with all other variables held constant, based on Council s non-derivative financial instrument exposures at balance date. 92 Interest rate risk Financial assets Financial liabilities Actual Actual Actual Actual Actual Actual Actual Actual $'000 $'000 $'000 $'000 $'000 $'000 $'000 $' bps Profit -100bps Equity +100bps Profit +100bps Equity -100bps Profit -100bps Equity +100bps Profit +100bps Equity Cash and deposits Total financial assets Public debt Total financial liabilities Total sensitivity to interest rate risk Capital Management assets, liabilities, investments, and general financial dealings. The objective of managing these items is to achieve intergenerational equity, which is a principle promoted in the Local Government Act 2002 and applied by Council. Intergenerational equity requires today s ratepayers to meet the costs of utilising Council s assets and not expecting them to meet the full cost of long term assets that will benefit ratepayers in future generations. Additionally, Council has in place AMPs for major classes of assets detailing renewal and maintenance programmes, to ensure ratepayers in future generations are not required to meet the costs of deferred renewals and maintenance.

95 The Local Government Act 2002 requires Council to make adequate and effective provision in its Long Term Plan and in its Annual Plan (where applicable) to meet the expenditure needs identified in those Plans. The Local Government Act 2002 sets out the factors that Council is required to consider when determining the most appropriate sources of funding for each of its activities. The sources and levels of funding are set out in the funding and financial policies in Council s Long Term Plan. Details of Council s various reserves can be found in Note 4(a). 20 Service Concession Arrangement Council has a service concession arrangement, with Trility Pty Ltd (2014: Works Infrastructure Group now renamed Trility Pty Ltd), in respect of operation of the MCWWS. The obligation on Council, under the arrangement, is the payment of an annual operating toll for a period of 10 years, which commenced on 01 August The total financial commitment during those 10 years, excluding the annual inflation adjustments which apply to the contract, is approximately $9.3 million spread fairly evenly by year. The $9.3 million in the present value, and includes a quantum of asset renewal expenditure being provided by, and paid for, by Trility Pty Ltd. 93 If the facility is damaged or destroyed, other than by, or as a result of, the actions or omissions of Trility Pty Ltd or their parties, costs of rectification or reinstatement will be treated as a cost to Council. There have been no changes in the service arrangement since its inception. The arrangement may, or may not, be renegotiated toward the end of the 10 year period. Council has a contractual option to require the operator to enter a new arrangement, for a further five years, on the same terms and conditions, subject to agreement on the quantum of toll payments. The services arrangement is reflected in these annual accounts only to the extent of the $1,092,895 booked as wastewater operating expenses for 2015/2016 (2015: $903,166).

96 94 Part Three Groups of Activity Statements

97 This note outlines the significant negative effects (if any) from the activity and the initiatives planned or in place to address these effects. How to read this section What we do This section includes a description of the services offered in each activity. Why we do it This section includes a brief description of why we undertake this activity on your behalf, including the benefits to the community and which community outcome the activity contributes to. What we did this year This section includes a brief description of what we did in that activity over the last year. What levels of service we agreed to provide 95 This section includes service level statements, our targets for performance against each service level, and our measure on how we performed against those targets. Where targets are not achieved, an explanation is provided. A number of these performance measures are based on the KeyResearch Report which was completed in June The survey was conducted via telephone interviews with 401 respondents, 90 from the Dargaville Ward, 166 from the Otamatea Ward and 145 from the West Coast/Central Ward. This survey is intended to give an indication of residents satisfaction with Council services. Significant negative effects Operating expenditure and revenue This section details the expenditure and revenue for each group of activities, and how the financial performance compares to what was budgeted for the year. Variances are explained.

98 Community Activities What we do Community activities that Council supports or delivers include an open space network, libraries, community spaces, street amenities, public toilets, community housing and grants. Council owns the Northern Wairoa War Memorial Hall (Dargaville Town Hall). Other halls in the district are now owned and/or managed by community volunteer organisations. Community housing Council owns 56 residential units in Dargaville, Ruawai and Mangawhai for single person accommodation. Tenants need to be over the age of 55 and meet certain criteria, including the capability of living independently. Open spaces 96 Council provides a network of parks, reserves and open spaces to cater for physical exercise, visual amenity and environmental protection. The maintenance is contracted out through competitive tender, with the exception of some development and management work at Taharoa Domain (Kai Iwi Lakes) which is done directly by Council. Council has two campgrounds at Taharoa Domain (Kai Iwi Lakes) that it owns and operates, three that are leased out to commercial operators and five that are community-run. Community assistance Council offers grants to community organisations that apply, and meet the criteria, under the Community Assistance Policy. The grants are discretionary and the final decision is made as a Council resolution. Council continues to distribute the income from the Mangawhai Endowment Lands Account (MELA). Decisions are made by the MELA Committee which consists of two Commissioners and two appointed members from the Mangawhai community. Libraries Council operates the Dargaville Library. This is the only Council library within Kaipara. There are a further four volunteer libraries which operate independently, with financial support from Contract for Services, in: Paparoa;

99 Reserves and parks are held and managed by Council in trust for the benefit and enjoyment of the public. They contribute significantly to the quality of life in the district, the health of the community and the sense of place for local residents. Some functions within this activity are discretionary. However, there is significant community support for many of the functions and most are listed in the Local Government Act 2002 as core services for a Council. Maungaturoto; Kaiwaka; and Mangawhai. All libraries share a catalogue and collection. Why we do it What we did this year Community assistance 97 The Community Assistance Policy was applied as usual this year. The applicants for one-off operational grants were considered and funds allocated in March Applications for funds from MELA were also considered and agreed by the MELA Committee, made up of two Commissioners and two community members. Applicants for Contracts for Service and Capital Grants assistance were considered and agreed as part of the Annual Plan 2016/2017. Contracts for Service and Capital Grants Council received 16 applications for Contracts for Service, totalling $328,387 for the 2015/2016 year. Council also received 8 applications for Capital Grants totalling $46,026 and 12 applications for Operational Discretionary Grants totalling $51, for the 2015/2016 year. Contracts for Service and Capital Grants were approved at the end of the 2014/2015 financial year and paid out during the 2015/2016 financial year, Operational Discretionary Grants were both approved and paid out during the 2015/2016 financial year. There is $80,000 available for Capital Grants, new Contracts for Service and Operational Grants for 2015/2016. The amount approved from applications totals $68,082 from this budget, plus $27, for Operational Discretionary Grants Council has also agreed in principle to pay for the insurance of community halls that were handed back from Council to the community. Last year this was approximately $19,290. This is also paid for out of the Grants budget.

100 This past year the following organisations received Council funding support: 98 Contracts for Service Amount Baylys Beach Society $1,000 per year for three years Pahi Reserves Society $7,000 per year for three years Dargaville Gardens Trust $12,000 per year for three years Paparoa Community Library $4,921 per year for three years, plus the cost of rent of their premises (approximately $6,402 per year) Kaiwaka Library $4,000 per year for three years Mangawhai Library $13,725 per year for three years Maungaturoto Public Library Inc. $6,020 per year, plus electricity, water and rent costs (approximately $6,278 per year) Kauri Coast Community Pool Trust $250,000 per year for three years Sport Northland $26,000 per year for three years Maungaturoto Residents Association $3,500 per year for three years Capital Grants Amount Maungaturoto Centennial Community Centre Society Inc. $2,907 towards blackout curtains Kaiwaka War Memorial Hall Association Inc. $4,411 towards new carpet Mangawhai Library Hall $818 towards fencing materials Operational Grants Amount Chamber of Commerce and Industry of Northland Inc. $5, Pouto Landcare $5, White Rock Gallery $2, Dargaville Dalmatian Cultural Club $1, Northern Wairoa A&P Association Arapohue Hall $4, Kauri Coast Promotion Society $4, Dargaville and Districts Citizen s Advice Bureau $5, Wednesday Craft $ Kumarani Productions -$2, (hall hire and photocopying; is absorbed into existing budgets so is cost-neutral)

101 Playground upgrades and improvements were made at Maungaturoto, Paparoa and Jaycee Park in Dargaville. Unfortunately the playground replacement planned at Tinopai, in partnership with Tinopai Community Kids Trust, has not progressed as quickly as hoped and funding has been carried forward to next financial year. Council worked in partnership with the Tinopai community to upgrade the wharf which needed significant work to make it safe for public use. As a result of strong community interest from the Maungaturoto community, Council has removed the View Street property from the portfolio of properties Council was selling. It has been purchased with reserve contributions and will be declared reserve once a playground has been developed by the community. Open spaces Although there was a significant carry forward capital budget transferred into the 2015/2016 year good progress has been made to deliver the capital works programme. The source of all the funding is reserve contributions. Reserve contributions are collected from property development under provisions in the Resource Management Act and Kaipara District Plan, for investment in open space enhancements and must be used for that purpose. New toilets were constructed at Alamar Crescent and Mangawhai Community Park (MAZ) to meet the demand from increased visitors to this popular holiday community. The deferred toilet renewal project at Baylys Beach was completed as well as upgrades to toilets at Maunganui Bluff, Omamari, Whakapirau, Moir Street (Mangawhai Village) and at Kellys Bay (water tanks). In partnership with the community, the Alamar Crescent (Mangawhai) traffic study and public space project has developed a range of options for improvements to parking, traffic flow and pedestrian safety. Council has engaged the community to determine support for the first phase being cost-effective solutions for improved pedestrian and road safety. It is intended the first phase of improvements would be implemented prior to summer Progress on creating all-tide pedestrian access from Mangawhai Heads to the Mangawhai Village has not progressed at the pace we would have liked. Small improvements have been made at Back Bay (Molesworth Drive), Findlay Street and Awatea Street. A feasibility study for a track from Mangawhai Heads to the campground was completed followed by detailed design of Stage 1. Subject to its affordability it is intended that Stage 1 will be constructed in 2016/2017. A range of smaller park improvements were made around the district that included new park signs, bollards to improve pedestrian safety at Selwyn Park (Dargaville) and Village Green (Paparoa), seawall improvements at Pahi and the installation of security cameras at Dargaville gardens. The deferred Selwyn Park drainage was completed along with the construction of a half basketball court, a project highlighted in the Dargaville Action Plan. Kauri Coast Recreation Society secured significant funding towards the development of its Sportsville project at Memorial Park in Dargaville. Council granted a Licence to Occupy and released a $100,000 grant towards changing rooms within the development.

102 At Taharoa Domain, Council has continued to make good progress implementing the current reserve management plan (RMP), while ensuring it is consistent with the direction set by the review. Over 10,000 plants, eco-sourced from within the Domain, have been planted. Campground improvements that include stormwater and ablution block upgrades have also been completed. In partnership with the NRC, the pest animal and plant programme has continued. This includes removal of acacia, wattle, wilding pines and the aerial sprayed pampas. The track around Lake Taharoa has been upgraded to cater for cyclists and walkers. This year good progress has been made at Harding Park/Pou Tu o Te Rangi to implement the RMP. New tracks have been constructed to create a loop walk through the old cemetery and back up to the Pa site providing a new way to explore the Park. Around 80% of the invasive pest plants have been mulched which has enhanced the panoramic view, particularly from the Pa site. This has been appreciated by local residents and visitors alike. The branding of the Park has concluded and as a result new Park signs will be installed in early July 2016 reflecting the new brand Pou Tu Te Rangi Harding Park Heritage Park. Dargaville Library and our four community libraries have been working together well this year with all volunteers commenting on the benefits of weekly visits from Dargaville Library staff. All libraries have been addressing growth and increasing digital services. In consortia with Whangarei and Far North libraries BorrowBox by Mangawhai Community Park Governance Committee formally established Friends of Mangawhai Community Park to help co-ordinate the development and implementation of the master plan. To ensure the Park is being developed in a co-ordinated manner an infrastructure and landscape plan has been developed. The removal of car parks from lease agreements to create shared car parks has progressed well. These car parks will be for shared use and maintained by Council. The future layout of the pioneer village has been approved and the majority of site clearance completed. 100 Council has three parks that are now co-governed: Pou Tu Te Rangi Harding Park with Te Uri o Hau; Taharoa Domain with Te Roroa and Te Kuihi; and Mangawhai Community Park with members of the community. The development of these reserves is now progressing well as the governance committees get up to speed with what is required to implement their respective RMPs, and while the RMP review for Taharoa Domain is continuing to be processed. A second version of an Asset Management Plan (AMP) for Reserves and Open Space was completed. Implementation of the AMP will focus on data and condition assessment to improve the knowledge and maintenance of the assets. Community housing The units are usually fully occupied although there has been regular turnover, mainly due to residents requiring additional health services. The units have been refurbished on a case-by-case basis, between tenancies. In May 2014 a request was received from the Dargaville Foundation Trust (now called Dargaville Community Development Board Inc.) to manage the community houses in Dargaville and Ruawai. Council agreed to this proposal and the units were handed over in December Libraries

103 Sustainable economy Provides open spaces and facilities that encourage tourism, visitors and travellers. Strong communities Provides open spaces and facilities that encourage social interaction and healthy pursuits. Safety and good quality of life Provides open spaces and facilities that are safe and meet community expectations. Bolinda has been added to our Ebooks and Eaudio offering. We have also partnered with Whangarei to offer Zinio digital magazines. Working together has brought the cost down considerably and given our readers a much larger range of material than we could afford ourselves. Our free Wi-Fi continues to be popular with both locals and tourists. We recognised that many customers being referred to the library computers did not have the skills to use them. In August 2015 we partnered with the 20/20 Trust and the Te Roroa Learning Centre to offer free computer training in Dargaville. This service was expanded to Maungaturoto in February this year. We are currently running 10 week courses in both centres during school terms. In addition to our popular school holiday programmes in Dargaville, this year we have offered a treat for our older customers. In partnership with Dargaville Medical Centre we hold A Cuppa and A Story, a storytime for those aged 50+ and our audience is increasing. We also work with the local schools to promote our summer and winter reading programmes aimed at increasing literacy in the region. Work has gone into addressing space and health and safety issues at Dargaville Library with our proposed re-design being accepted. Once a project manager is appointed we will get started on the physical work. 101 Northern Wairoa War Memorial Hall/old Municipal Chambers Building Dargaville Arts Association, a local community arts group, and Council has recently agreed on a Licence to Occupy for the old Municipal Chambers Building in Dargaville. With the completion of the roof replacement the Dargaville Arts Association commenced occupation of the Municipal Chambers Building in May. Maintenance issues identified have been and are continuing to be addressed. Both the Citizens Advice Bureau and Dargaville Community Cinema Trust continue to operate out of the Hall. The contribution of this activity to community outcomes: Community outcome How this activity or service contributes Special character and healthy environment Provides open spaces and facilities that safeguard the environment.

104 Community Activities Funding Impact Statements Operating and Capital 102 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties 3,371 3,373 2,914 Targeted rates Subsidies and grants for operating purposes Fees and charges 825 1,139 1,046 Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 4,913 5,180 4,437 Application of operating funding Payments to staff and suppliers 3,417 3,881 3,422 Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding 4,341 4,806 4,062 Surplus (deficit) of operating funding Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions 1, Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding 1, ,003 Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service ,123 Capital expenditure - to replace existing assets Increase (decrease) in reserves 653-1,244 0 Increase (decrease) of investments Total applications of capital funding 2, ,378 Surplus (deficit) of capital funding Funding Balance Financial comment Lower fees received due to the lease of the Mangawhai Campground. This also reduced the associated costs. Financial contributions are well ahead of plan due to high levels of activity. Capital expenditure is ahead of budget with an increased programme to utilise the financial contributions..

105 Achieved Comments Not formally measured This measure is to be undertaken from 2016/2017. Not achieved This measure is to be undertaken from 2016/2017. Community Activities Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Community Halls Provision Actual 2014/2015 Actual 2015/2016 Publicly available hall in every urban settlement with a resident population exceeding 1, Measured by Annual count. A public hall is available in Dargaville, Mangawhai Village and Mangawhai Heads Community Housing Quality: Affordability New Measure from 2015/2016 A public hall is available in Dargaville, Mangawhai Village and Mangawhai Heads To provide housing suitable for members of the community who have difficulty providing it themselves. Measured by Annual Tenant Survey - percentage of tenants satisfied with standard of accommodation and services. Annual Tenant Survey - percentage of tenants who rate Council response to request for service as excellent/good. 95% 91% Not formally measured 90% 94% Not formally measured

106 Comments the budget on the Dargaville and Ruawai units was incurred in anticipation of the handover to the Dargaville Community Development Board Inc. Annual occupancy rate. 90% 97% 98% Achieved Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Net cost to ratepayers for Council s Community Housing services. Zero Zero $22,000 Not achieved Additional expenditure in excess of 104 Compliance with the Memorandum of Understanding with Housing New Zealand for the management (not necessarily by Council) of Dargaville, Ruawai and Mangawhai Community Housing. 100% New measure from 2015/ % Achieved The Memorandum of Understanding mostly deals with the refurbishment that occurred some years ago.

107 Comments developed and the level of maintenance into public toilets over the last year. Although this has resulted in increased satisfaction levels it is not consistent across the District. rates are inconsistent across the district with only 64% satisfaction in Otamatea ward. Performance indicator/service level LTP Year 1 Target 2015/2016 Reserves and Open Space Actual 2014/2015 Actual 2015/2016 Open Spaces, linkages and facilities To provide and enhance open spaces, linkages and facilities to promote community well-being and enjoyment. Measured by Percentage of residents who are very/fairly satisfied with their local parks and sports fields. 85% 74% 84% Not achieved The community is generally satisfied with the spread of premier parks being 105 Percentage of residents who are very/fairly satisfied with their public conveniences. across the district. 65% 61% 72% Achieved A significant investment has been made User satisfaction with cleanliness and lack of litter and graffiti. 70% 82% 70% Achieved Although the target was met satisfaction

108 Comments requests, Health and Safety reporting and Quality and Environmental Management Plans. develop toilet and changing facilities at Memorial Park they will not be operational until December space project if implemented will come close to meeting current demand. completed in 2015/2016. Performance indicator/service level LTP Year 1 Target 2015/2016 Parks Maintenance Contract measures are met. Actual 2014/2015 Achieved New measure from 2015/2016 Actual 2015/2016 Achieved Achieved Compliance with response to service An active sports park within a 40 minute drive of all residents (not all belonging to Council) with toilet and changing facilities. Achieved New measure from 2015/2016 Not achieved Not achieved Although Kauri Coast Recreation Society has secured sufficient funding to 106 Coastal access and esplanade reserves in urban areas already developed or zoned for residential development in the District Plan, with car parking areas. Achieved New measure from 2015/2016 Not achieved Not achieved Parking shortage in peak period identified at Alamar Crescent (Mangawhai). Traffic study and public A local purpose reserve within 15 minute walk of residents in urban areas already developed or zoned for residential development in the District Plan. Achieved New measure from 2015/2016 Not formally confirmed through the development of omnibus RMPs. These plans were not Not achieved measured This measure was going to be

109 Comments areas servicing an urban population over 2,000. Implementing the Community Assistance Policy including Grants, Contract for Service, Licence to Occupy and the Mangawhai Endowment Lands Account. the district. presented to all residents rather than Dargaville residents only, as was intended. Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 A public toilet in shopping areas servicing an urban population over 2,000. Achieved New measure from 2015/2016 Achieved Achieved A public toilet is provided in all shopping Community Assistance Measured by 107 Contract for Service, Operational and Capital Grants, Mangawhai Endowment Lands Account applications called for and processed within timeframes. Achieved New measure from 2015/2016 Achieved Achieved Although grant funds were oversubscribed a wide range of grants were made to organisations throughout Libraries Accessibility To provide accessible library services to the residents of Kaipara. Measured by Percentage of householders that have used the District s libraries in the past 12 months. 60% 54% 24% Not achieved This question was inadvertently

110 our libraries. Comments The overall Kaipara community is made up of a number of communities of interest which can be defined by location, age group, ethnicity, gender or issue; and Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Quality To provide a range of quality resources and material relevant to the residents of Kaipara. Measured by Percentage of library users who are very/fairly satisfied with the Kaipara district s library services. 81% 86% 90% Achieved This is a pleasing result and reflects the comments of customers who come into 108 To comply with Library and Information Association of New Zealand Aotearoa (LIANZA) guidelines for populations of 5,000 or more the Public Library in Dargaville is open for 43 hours per week including Saturdays. Achieved Achieved Achieved Achieved Community Activities Significant Negative Effects Sometimes when Council takes a step in providing support it can create an expectation of ongoing assistance; dependency can be created. This is the opposite of what Council seeks to achieve; resilient, vibrant, sustainable communities albeit supported strategically by Council.

111 Building control services Council processes building consents and undertakes inspection work. Council issues Property Information Memoranda (PIMs); Resource management services processing of resource consent applications, issuing Land Information Memoranda (LIMs); Council delivers regulatory services as required under multiple Acts and regulations on behalf of central government. These include: Regulatory Management What we do Council delivers: Environmental health services controlling food safety, sale of liquor, registering premises where there is a restricted use, monitoring gambling and responding to complaints; and Animal management services including dog licensing, managing through contract impounding facilities for stock and dogs, responding to complaints and public education. 109 Council is an accredited Building Control Authority and, as part of this, intends to continually improve consent processing times, quality assurance systems and address the backlog of outstanding Code Compliance Certificates (CCC). Why we do it Building Act 2004, and associated regulations including the New Zealand Building Code; Resource Management Act 1991 and the Kaipara District Plan; Sale and Supply of Alcohol Act 2012; Health Act 1956; Food Act 1981; Dog Control Act 1996; and Impounding Act 1955.

112 RegtheDog (allows online registration and payment of dog fees). Customers continue to enjoy the ease of registration and service excellence. The animal management and out of hours contract was carried out by Environment Northland Limited (ENL) during 2015/2016. The contract was put out to tender during the year and has recently been awarded to Armourguard. The service will transition to Armourguard as of 12 September 2016 for a three year period. Full implementation of the Sale and Supply of Alcohol Act 2012 has progressed well. Implementation of the new Food Act 2014 has begun, however the full cost of this will not occur until 2018 as premises transition to Food Control Plans. The Northland District Health Board s one year contract for 2015/2016 ceased on 30 June From 01 July 2016 the services of Environmental Health Officers and Alcohol Licensing Inspectors will be by in-house appointments. What we did this year Building control services Fees and charges for building services have been reviewed for implementation in July Council ensured building quality was checked by carrying out inspections of new buildings to ensure they comply with consented building plans and inspecting construction of buildings to ensure that the code of compliance could be achieved. Properties were also visited where enforcement by Council for breaches of the Building Act was required. This included illegal activity that the inspectors became aware of either through complaints about unauthorised work or while carrying out their other duties in the field. Resource management 110 The RMA Consents Team has now brought all services, including development engineering, in-house but is continuing to use consultants and contractors to help with processing consents, which have increased by 33% on the previous financial year. Involvement in PIM checks for building consents and comments on LIM reports has also increased as interest in the property market in Kaipara continues to grow at a high level. There has been a significant increase in subdivision activity including the finalising of subdivisions consented in the last 10 years. Proactive monitoring of resource consent conditions is ongoing, but restricted by limited staff resources and other workload priorities of the Monitoring Officer and RMA staff. Animal management Environmental health/alcohol licensing

113 Safety and good quality of life Public health and safety protected through administration of rules and monitoring of standards. Special character and healthy environment Works within development framework to ensure the environment is protected. The contribution of this activity to community outcomes Community outcome How this activity or service contributes Strong communities Provides for community participation in resource management issues. 111

114 Regulatory Management Funding Impact Statement Operating and Capital 112 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties Targeted rates Subsidies and grants for operating purposes Fees and charges 3,184 2,487 2,026 Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 4,229 3,528 2,863 Application of operating funding Payments to staff and suppliers 3,149 2,608 2,291 Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding 4,069 3,528 2,863 Surplus (deficit) of operating funding Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding Surplus (deficit) of capital funding Funding Balance Financial comment Total fees and charges and payments to staff and suppliers are above budget due to the ongoing high levels of activity in the district. However this is offset by revenue and is $0.2 million above budget.

115 Comments Regulatory Management Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Building Control Inspections, Compliance and Enforcement Customer Benefits Ensure effective response to customer enquiries about building standards. Measured by Percentage of customers who rate Request for Service responses as excellent/good. 85% Not measured 85% Achieved 113 Responsiveness To process applications in accordance with statutory timeframes. Measured by Percentage of Building Consents (BC) processed within 19 working days. Percentage of Project Information Memoranda (PIM) processed within 19 working days. 95% 95% (18 day measure) 95% 95% (18 day measure) 99.77% Average processing time is days. Average PIM days are 6.57 days. Achieved 99.49% Achieved Percentage of Code Compliance Certificates (CCC) issued within 20 working days. 100% There were 446 CCC s issued within the 2015/2016 financial year. The average time to issue a CCC was 100% 99.33% Not achieved 0.51 days.

116 Comments Performance indicator/service level LTP Year 1 Target 2015/2016 Quality Actual 2014/2015 Actual 2015/2016 Monitoring of Building Consent applications and inspections to ensure projects comply with New Zealand Building Code. 114 Measured by Advise building owners/occupiers of the expiry date of their Warrant of Fitness one month before the expiry date. 95% 100% 85% Not achieved Due to the high volume of Territorial Authority work, assisting Building Consent Authority with resource shortfall and loss of administration support along with high volumes of service requests requiring investigation. This is being addressed by allocating casual administration support. All new buildings in the Kaipara district for which Building Consent has been issued comply with the NZ Building Code (includes approval of building plan, as well as confirmation that the resulting building matches the approved plans). Buildings under construction inspected to ensure that code compliance is achieved. Illegal activity/unauthorised work complaints investigated within three working days. 95% New measure from 2015/ % New measure from 2015/ % New measure from 2015/ % Achieved 100% Achieved 100% Achieved

117 Comments Performance indicator/service level LTP Year 1 Target 2015/2016 Resource Consents, Monitoring and Enforcement Actual 2014/2015 Actual 2015/2016 Customer Benefits Ensure effective response to customer enquiries about District Plan/Resource Consent requirements. 115 Measured by Percentage of customers who rate Request for Service responses as excellent/good. 85% Not measured 77% Not achieved Target not met due to this being the first full financial year a full RMA Consents service was offered, and a lack of understanding and engagement in the resource consent process in the developer community. The fire safety resource consent process has in particular caused a lot of frustration for customers. Responsiveness To process applications in accordance with statutory timeframes. Measured by Percentage of non-notified Resource Consents processed within 18 working days. 95% 95% 93% Not achieved Target not met due to subdivision consents due to deferral to allow customers to review their conditions. Deferral extends the timeframe of a consent, it does not stop the clock. Allowing customers to review their conditions reduces the likelihood of costly, nonrecoverable objections to conditions. The average processing days was The number of consents deferred was 61.

118 Comments Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Percentage of Resource Consents notified by Council that is subject to objections/appeals against consent conditions. Percentage of Land Information Memoranda (LIM) processed within 10 working days. 1% Due to allowing deferral of consents for reviewing of consent conditions as described above. 2% Nil Achieved 100% 100% 100% Achieved Quality Resolving of complaints concerning breaches of conditions of resource consent and other non-compliance with the District Plan. Measured by 116 Percentage of complaints concerning breaches of Resource Consent conditions relating to earthworks and/or sediment control that are resolved to ensure compliance within 5 working days. 95% 100% 100% Achieved Percentage of complaints regarding unconsented works and non-compliance with the District Plan and Resource Consent investigated within 5 working days. Percentage of all new granted Resource Consents are audited each year to ensure they comply with relevant conditions. 80% New measure from 2015/ % New measure from 2015/ % We have exceeded the required 10% figure as set by audit Ministry for the Environment. Achieved 64% Achieved

119 Comments Performance indicator/service level LTP Year 1 Target 2015/2016 Environmental Health Actual 2014/2015 Actual 2015/2016 Health and Safety Customer Service Regulate commercial operations to protect public health. Measured by 117 Percentage of food premises inspected at least once per year. Percentage of alcohol premises inspected at least once per year Reliability 100% 100% 100% Achieved 100% 100% 100% Achieved Respond to environmental health issues in the interest of protecting public health. Measured by Percentage of customers who rate Requests for Service responses as excellent/good. 85% Not measured 38% Not achieved We are anticipating a much improved performance in response times in the coming months as the service is now inhouse.

120 Comments Performance indicator/service level LTP Year 1 Target 2015/2016 Animal Management Actual 2014/2015 Actual 2015/2016 Reliability Respond to animal management issues. Percentage of priority response times being met. 85% New measure from 2015/ % Achieved 118 Percentage of customers who rate Request for Service responses as excellent/good. 85% 95% 44% Not achieved The response is poorly reflected due to the emotive/sensitive issues surrounding animal management. The contract is to be renewed as of 12 September 2016 and the performance will be carefully monitored to lift this result. Regulatory Management Significant Negative Effects Compliance costs to complete subdivisions can be significant before the developer receives the subdivision title. The recent accumulative effect of increased subdivisional and construction activity, perceived by the community on the environment, can have an adverse effect i.e. economic growth too quick. The BCA and RMA process improvements have resulted in an increase in perception from developers/customers that compliance and a higher level of consent information is required resulting in elevated costs.

121 These duties are defined by statute in the Civil Defence Emergency Act 2002, the Forest and Rural Fires Act 1977 and the Forest and Rural Fire Regulations A civil defence emergency exercise was carried out in April The exercise was used to test the ability and capacity of Kaipara District Council s Emergency Operations Centre s (EOC) response to the notification of a near source tsunami that would impact on the entire coastline of upper Northland. Emergency Management What we do Emergency management consists of two activities civil defence and rural fire. In civil defence, Council s role is to increase community awareness, understanding and preparedness for emergencies, reduce the risk from natural hazards to the district and enhance the district s capability to manage and recover from emergencies. In rural fire, Council s role is to safeguard life, property and the environment by firstly, prevention and secondly, the control of fires if they occur in forest and rural areas within the Kaipara District Council Rural Fire Authority boundaries. Why we do it What we did this year 119 Civil defence We continued to work with communities to assist them to plan to mitigate risks, and improve their preparedness for emergency situations. We also made provision for emergency power supply and telecommunications backup for us to function as headquarters. The development of a community response plan for civil defence purposes for Dargaville has been completed. Community response plans are already in place for Ruawai, Matakohe, Paparoa, Maungaturoto, Kaiwaka and Mangawhai. No more are currently scheduled. Five of these areas have local plans published on Rural fire We continue to upgrade rural fire equipment on a planned basis, recruit and train volunteers and provide rural fire forces with depots for housing fire appliances and equipment.

122 Replace fire appliance $153,000 Deferred to 2016/2017 due to Fire Services reorganisation proposal. It was a relatively quiet fire season. The largest fire was at Glinks Gully in March. The costs of this fire were mostly recovered by way of claim against the National Rural Fire Authority. All fires were fought successfully. The capital expenditure programme has been delivered as follows: Description of project Stage Budget from Annual Plan Progress description The contribution of this activity to community outcomes Community outcome How this activity or service contributes 120 Sustainable economy Provides safe and efficient management in times of emergencies and effective response times so as to minimise impact on local economy. Strong communities Provides for community participation in emergency management planning and response. Safety and good quality of life Communities can feel safe in any emergency event.

123 Capital expenditure is $0.2 million lower than budget due to the planned replacement of a fire engine not being required this year. Emergency Management Funding Impact Statements Operating and Capital Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties Targeted rates Subsidies and grants for operating purposes Fees and charges Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding Application of operating funding Payments to staff and suppliers Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding Surplus (deficit) of operating funding Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding Surplus (deficit) of capital funding Funding Balance Financial comment

124 Comments Emergency Management - Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Civil Defence Actual 2014/2015 Actual 2015/2016 Reliability To build a resilient and safer Kaipara District and communities understanding and managing their hazards and risks. 122 Measured by Number of Civil Defence training exercises conducted per annum. Time taken to activate the Emergency Operations Centre after the notification of a local Civil Defence emergency. 1 Civil Defence training exercise was conducted on 20 April Achieved <1 hour <1 hour Not formally No emergency event occurred requiring an measured activation. Three yearly updating and reviewing of Kaipara 4 plans updated New measure from 4 Achieved Community Response Plans. Plans will be and reviewed per 2015/2016 New plan for Pouto developed and reviews displayed on Regional Council s website and a year of three others completed. link from Kaipara.

125 Comments Extinguishing rural fires may require the use of water chemical suppressants resulting in damage to the environment, ground and air pollution. This is mitigated through limiting the use of suppressants to essential requirements and compliance with National Rural Fire Authority standards; Performance indicator/service level LTP Year 1 Target 2015/2016 Rural Fire Actual 2014/2015 Actual 2015/2016 Health and Safety To protect life and property from rural fires with trained personnel within the Kaipara District Rural Fire Authority Area Measured by Percentage of fire fighters who meet the National Rural Fire Authority Training Standards. 80% 53% 100% Achieved All firefighters trained. Health and Safety 123 Fire safe behavior and practices through public education and rural fire co-ordination. Measured by The number of public awareness campaigns run At least one New measure from One campaign Achieved each year. campaign per year 2015/2016 was held Summer Fire Campaign run. Emergency Management Significant Negative Effects Fire sirens and warning systems result in noise pollution. The use of sirens will be limited to testing and emergency requirements. Preferential use of alternative technologies, such as telecommunications, will be investigated and applied where applicable; and Damage to the natural environment such as broken vegetation and spoilt beaches may occur during emergency response and recovery activities for example, providing access to at risk people, property and infrastructure, disposal of slip and flood material and restoration of hazard protection structures and lifelines. Activities will be limited, where possible, to the protection of life and property.

126 Programmed maintenance consisting of drain spraying, machine cleaning and stopbank maintenance has been completed on time and within budget. Flood Protection and Control Works What we do We aim to protect people and property from flooding caused by severe weather events, and possible damage caused by coastal erosion. The flood protection and control works includes: Flood control schemes; Rivers alignment control; and Land drainage. Land drainage work is undertaken in 29 drainage districts, each of which is currently self-funded and self-managed. The Raupo Drainage District, administered by a committee of Council, is the largest. 124 Flood protection is carried out through control schemes and a system of stopbanks. Rivers are also monitored in storm events to warn of potential flooding. Council also: Maintains floodgates; and Monitors floodbank settlement rates. Why we do it Council has a long history of involvement in this activity. It was historically done through drainage boards. Only the Raupo Drainage District continues under a similar model in Kaipara. Responsibilities are also mixed between Council and Northland Regional Council (NRC). Council has chosen to continue with drainage districts across parts of the district, in addition to the Raupo area and areas managed by the regional council. The rationale for this was the importance to the district that people and property, especially productive land and infrastructure, are protected from flooding and tidal flows. What we did this year Raupo Drainage District

127 Stopbank improvements have been completed along the main tidal bank from Simpson Road to the Awaroa Outlet, a total of 280 metres. Programmed maintenance was completed on time and within budget to maintain the current capacity of the land drainage network consisting of: Following the condition assessments of floodgates, two floodgates were identified as needing replacement. Replacement of Floodgate N o 2 was completed in January 2016 to a very high standard and to the satisfaction of the Raupo Drainage Committee. The other identified floodgate is N o 38, this replacement has been delayed until the summer months. The pre-cast concrete panels have already been constructed. The Raupo Drainage Committee met quarterly. Other Drainage Districts Weed spraying; Drain cleaning; and Floodbank and stopbank inspections and maintenance. 125 The drainage network was inspected twice to ensure it was working well. For improvement of the Land Drainage GIS information, it was decided that in this year we will capture information about drain lines and floodgates. Of the 29 catchments 28 have now been captured into the GIS system. The contribution of this activity to community outcomes Community outcome How this activity or service contributes Sustainable economy Provides safe and efficient management in times of flood protection and effective response times so as to minimise impact on local economy. Strong communities Provides for community participation in flood protection management planning and response. Safety and good quality of life Communities can feel safe in any emergency event.

128 Flood Protection and Control Works Funding Impact Statement Operating and Capital 126 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties Targeted rates Subsidies and grants for operating purposes Fees and charges Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding Application of operating funding Payments to staff and suppliers Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding Surplus (deficit) of operating funding Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding Surplus (deficit) of capital funding Funding Balance 0 0 0

129 Comments Flood Protection and Control Works - Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Reliability Actual 2014/2015 Actual 2015/2016 Monitor drainage of rivers and streams. Ensure minimal flood risk and coastal erosion to the community. Measured by The number of schemes maintained to their 100% of schemes New measure 100% Achieved full service potential. maintained to ensure that from 2015/2016 they provide protection to the agreed standard and the 127 scheme assets are maintained as established in the adopted Asset Management Plans. Non-performance of drainage network due < 5 service requests New measure 0 Achieved to poor monitoring or maintenance causing per year from 2015/2016 Managed through the an inability to contain a 1 in 5 year flood as Drainage Committees. measured by public feedback i.e. service requests that result in additional cleaning to drains needed. Council inspection of drainage network to Minimum yearly inspections New measure Minimum yearly inspections Achieved ensure that a 1 in 5 year flood is contained and targeted maintenance from 2015/2016 and targeted maintenance by the network. completed. completed.

130 Comments Achieved Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Targeted maintenance of the stopbank Minimum yearly inspections New measure Minimum yearly inspections system in the Raupo Drainage District to and targeted maintenance from 2015/2016 and targeted maintenance prevent tidal flows from inundating private completed completed property during high tide and/or when the river is in flood. Flood Protection and Control Works Significant Negative Effects 128 A lack of drainage networks or a lack of maintenance on the existing network could result in increased flooding of farming and cropping communities in low-lying land near rivers, streams and canals; and The frequency of significant storm events and rainfall intensities are expected to increase steadily along with sea levels in the future.

131 District Leadership What we do Governance Through its governance activities, Council plans, makes decisions and takes action for and on behalf of communities to promote the well-being of the Kaipara district now and for the future. A key part of Council s representation work is to ensure that Council and Committee meetings are well-run and managed. Council staff provide advice, information and administration support to enable these functions to occur. They make sure that meetings follow correct processes and comply with legislation, record decisions and subsequently communicate these decisions to the community and other stakeholders. Officers involved with District Leadership support and enable Council (and Commissioners) to make plans that are in line with strategic goals and to make appropriate decisions. 129 Community planning There continues to be population growth in the eastern areas, while other communities experience a static population growth. The community planning area of activity deals with managing and providing Council s strategic policy development, assisting resource and district planners in their roles, community planning programme across the district and the development of the District Plan. Council no longer has a direct provision of economic development services, however has incorporated local economic development outcomes into community planning work. Corporate planning This includes the organisation s internal documents such as business plans, as well as external documents like Council s Long Term Plan, Annual Plan and Annual Report.

132 Working through the actions and outcomes recommended by the Mangawhai Community Wastewater Scheme Advisory Panel. Why we do it This activity is largely driven by statutory requirements. Council is required to work in compliance with multiple Acts of Parliament including: Local Government Act 2002; Local Government (Rating) Act 2002; Resource Management Act 2007; Local Government Official Information and Meetings and Act 1987; Public Records Act 2005; Local Authorities (Members Interests) Act 1968; and Kaipara District Council (Validation of Rates and Other Matters) Act What we did this year Overall, Council delivered the current levels of service within this Activity. Governance Commissioners appointed by the Minister of Local Government continue to govern the district, replacing the elected representatives until the triennial election scheduled for October 2016 (after a year s extension was made in April 2015). Governance activities outlined in the Annual Plans give the Commissioners the support required to enable them to fulfil the various roles which they undertake. Governance arrangements continue to be open and transparent. Significant milestones were achieved during the year addressing past issues: Reaching a mediated settlement with the Office of the Auditor-General and continuing to pursue legal actions and recovery against MRRA and the former Chief Executive; and

133 Continued with a plan change to reduce the water storage requirements for firefighting. A fresh approach is being considered. The Commissioners have had many engagements with communities, public interest groups and key stakeholders to identify their priorities and preferences, and keep people informed of Council activities. This helps to ensure that decisions are made that take into consideration the preferences of the wide range of communities across the district. Community planning Council has: Held community planning meetings and developed community action plans for Pouto Peninsula, Baylys, Mangawhai Village and Tangiteroria. For Dargaville and Kaiwaka, placemaking and improvement initiatives have been the focus in partnership with the community; Completed a private plan change for land in Tinopai; and Corporate planning 131 The Annual Report 2014/2015 was adopted in September 2015, a month early. Preparation for this Annual Report also commenced in the latter half of the 2015/2016 financial year. The Annual Plan 2016/2017 was adopted on 28 June The Plan was prepared under new provisions of the Local Government Act which required the use of the same year for the Long Term Plan 2015/2025 as a reference point. The final Plan was a streamlined version of previous annual plans. Prior to adoption of the Plan, community feedback was sought using a Consultation Document prepared for that purpose. A comprehensive business improvement programme is continuing including business-wide customer service training. Significant investment in the IT system has improved reliability and capacity at all the sites from which we operate. Capital expenditure for this activity related to vehicles, information systems and Council buildings.

134 Sustainable economy Provides regular, timely, transparent and accessible communication along with clear and simple procedures. Strong communities Encourages communities to work together in moving forward by actively providing various methods of support. The contribution of this activity to community outcomes Community outcome How this activity or service contributes Enables commercial and industrial development to occur without undue restrictions. Provides the community with the opportunity to be involved in decisions which affect them. Provides support to the business community to develop. 132 Special character and healthy environment Reflects the Kaipara culture with a small, friendly, approachable organisation which tailors services to cater for Kaipara s unique needs. Provides a development framework while safeguarding the environment. Economic growth enables improved social conditions.

135 District Leadership Funding Impact Statement Operating and Capital 133 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties 4,030 4,065 3,850 Targeted rates Subsidies and grants for operating purposes Fees and charges 4, Internal charges and overheads recovered 5,145 5,147 5,279 Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 14,369 9,628 10,068 Application of operating funding Payments to staff and suppliers 9,247 8,916 7,925 Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding 8,635 8,983 8,315 Surplus (deficit) of operating funding 5, ,753 Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt -10, ,477 Gross proceeds from sale of assets 1, Lump sum contributions Other dedicated capital funding Total sources of capital funding -9, ,462 Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves -4, Increase (decrease) of investments Total applications of capital funding -3, Surplus (deficit) of capital funding -5, ,753 Funding Balance Financial comment: Fees and charges includes receipt of a settlement with the OAG of $4.7 million excluding GST. Finance Costs are $0.7 million lower than budget due to lower than budget public debt levels during the year. Decrease in debt reflects the additional debt retired during the year.

136 District Leadership - Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Governance Compliance with legal requirements (as stipulated in the Local Government Act 2002 and Local Government Official Information and Meetings Act 1978) around formal meetings of Council and its Committees. Measured by Meetings of Council and Committees are correctly convened and legislatively compliant. All New measure from 2015/2016 All Achieved 134 Elected Members/Commissioners are provided with detailed, accurate and relevant information. Measured by Comprehensive reporting to Council and Committee meetings uses approved systems and processes. All New measure from 2015/2016 All Achieved Commissioners/Elected Members are satisfied with the level of support and service provided by officers. Percentage of residents that are very/fairly satisfied with how rates are spent on services and facilities provided by Council. Increasing trend Options to improve this percentage to be reviewed with annual plan and long term plan feedback/consultation. 75% 100% Achieved 60% 56% 43% Not achieved

137 That the Elected Members/Commissioners identify and respond to external risks to reduce or mitigate effects on the community. Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Measured by Percentage of residents that are very/fairly satisfied with the way Council involves the public in decision-making. 35% 47% 46% Achieved A proactive programme to develop good relationships with the community and mana whenua. Measured by 135 Of those residents which have a view, the percentage of residents and non-resident ratepayers who have some level of confidence in the Council to make plans for the future that are in the best interests of the District. Increasing trend 51% 40% Not achieved Unclear what has driven this. Percentage of residents who rate the performance of Commissioners/Elected Members as very good/fairly good. 45% 43% 60% Achieved That the Mana Whenua Forum meets regularly. 4 times per year New measure from 2015/ times during the year Not achieved Forum met twice during the year and plans to meet 3 times a year in the coming year

138 Processes established and maintained that provide opportunities for Maori to participated in decision-making (Section 81 LGA 2002) Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments The transition from Commissioners back to Elected Members is successful. Measured by Committees Governance Structures are reviewed and adopted by a new Council. New measure from 2015/2016 Not measured Delayed for the 2016/2017 year as per delayed election. Good levels of participation in elections. New measure from 2015/2016 Not measured No elections were held in this current financial year. This measure will come into effect during the next financial year. 136 Measured by Iwi Relationship Plan is developed and used. Iwi Relationship Plan is implemented Participation in Iwi Chief Executive s Forum. Chief Executive attends at least 2 meetings per year Maori Staff Advisory Group. Meets 4 times per year New measure from 2015/2016 New measure from 2015/2016 New measure from 2015/2016 Achieved. The Iwi Relationship Plan states that Mana Whenua Forums should be held, two of which have been held. We have also been working with two iwi on relationship agreements. Attended a meeting in August 2015 and in February The Maori Advisory Group has meet on average once a month over the last year. Achieved Achieved Achieved Achieved Achieved

139 Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Community Planning Community Action Plans produced to build community trust in Council. Measured by 137 Number of Community Planning meetings held Community planning meetings were held with Mangawhai Village, Baylys and Tangiteroria. In addition, telephone surveys and Action Plans were undertaken with Glinks Gully, Pouto and Kelly s Bay. All statutory required plans and documents are produced in accordance with legislative processes and requirements e.g. District Plan, Reserve 4 per year New measure 4 Achieved and Community Action Plans developed. from 2015/2016 Plans developed for four communities. Management Plans, Gambling Policy. Measured by District Plan: Percentage of Building Consents that do not require a Resource Consent. Reserve Management Plans for all reserves in the District. 30% New measure from 2015/ % New measure from 2015/ % The percentage has had a small margin under or over the 30% target. The development of the omnibus (RMP) (that groups all reserves based on their use or character) has been deferred until after the Kai Iwi Lakes (Taharoa Domain) RMP has been made final. Not achieved 0% Not achieved

140 Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Community Development Fund distributed through Community Planning, recorded, reported and within budget. Measured by Percentage of Community Development Fund distributed. Corporate Planning 100% New measure from 2015/ % Achieved Legal compliance of all statutory plans in accordance with the Local Government, with unqualified audit opinions. Measured by 138 Council has adopted Long Term Plan/Annual Plan at 30 June of each year. Achieved New measure from 2015/2016 Achieved Council s Annual Plan 2016/2017 was adopted on 28 June Organisation has a Business Plan to implement Annual Plan/Long Term Plan by October each year. Achieved New measure from 2015/2016 Achieved The new 2015/2017 Business Plan was developed in July 2015, implemented in August and began monthly status reporting in September Council is a going concern. Council has an adopted Annual Report at 31 October of each year with a clean audit report. New measure from 2015/2016 Achieved Council s Annual Report 2014/2015 was adopted on 29 September 2015.

141 Delays in amending and updating the District Plan affects the Plan s effective implementation and can result in a Plan that is not current and responsive; By its very nature, future planning needs to balance the desires of some citizens with the desires of the wider community. This often takes the form of influencing or controlling development activity so that the development of a property does not unreasonably distract from the quality of life of their neighbours or the wider community. In other cases development can impose unacceptable costs on community facilities and infrastructure, or on the environment; Economic activity without regard to environmental values in ecologically sensitive areas could result in adverse economic as well as environmental outcomes. District Leadership Significant Negative Effects Growth, if not carefully managed, can have significant negative effects on the district s community, environment, economy and cultural well-being. The aim is to enable growth to take place while successfully managing its impacts; and 139

142 Solid Waste What we do Solid waste activities include: Kerbside refuse bag collection; Recycling collection in key urban areas; Two transfer stations for residential and residual waste disposal; Public litterbins; Collection of illegally dumped rubbish (often referred to as fly tipping ); Removing abandoned vehicles; 140 Supporting waste minimisation initiatives; and Monitoring, maintaining and management of a number of closed landfills in the district. The aims and objectives of the solid waste activity are outlined in the Refuse AMP for the district. Why we do it We said we would deliver affordable, hygienic refuse collection and disposal that is environmentally sustainable, meets our statutory requirements and meets the needs of our communities, at the current levels of service. The statutory requirements are defined in the following Acts: Local Government Act 2002; Waste Minimisation Act 2008; Resource Management Act 1991; Hazardous Substances and New Organisms Act 1996; and Litter Act 1979.

143 Private operators are responsible for all waste collection, recycling and disposal services for Council. In May 2016 the current contract for Eastern and Western Waste and Recyclables Collection Disposal and Transfer Station Operation was rolled for a further three year period commencing 01 November Council is working to gain a retrospective consent for a recently uncovered illegal landfill on Bickerstaff Road, Maungaturoto. The majority of the work, including Assessment of Environmental Effects (AEE) has been completed, and consent application and capping proposed to be completed in 2016/2017. Recycling was expanded at Dargaville Transfer Station, this allows users to drop off their sorted recycling for free during opening hours. What we did this year An investigation of options for the cost-effective management and disposal of the Hakaru Closed Landfill leachate has commenced and this investigation is expected to be completed in the 2016/2017 financial year. Both Glinks Gully and Mangawhai Closed Landfills were re-consented. Funding received from the Waste Minimisation Levy was used to fund a pilot programme to increase public awareness around recycling. This was mostly focused on Pouto Peninsula and Kaipara Schools. 141 Refuse cages at Oneriri, Topuni, Petley Road, Pouto and Hoanga Roads were removed and kerbside collections extended in these areas. The removal of these cages has seen a decrease in illegal bags and other rubbish being left at these sites. Litterbins have been reviewed and upgraded where needed throughout the year. The contribution of this activity to community outcomes Community outcome How this activity or service contributes Safety and good quality of life Communities are able to dispose of refuse in a hygienic and sustainable manner. Special character and healthy environment Transfer stations, litterbins, closed landfills and removal of illegally dumped rubbish minimise possible environmental impacts.

144 Solid Waste Funding Impact Statements Operating and Capital 142 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties 1,003 1, Targeted rates Subsidies and grants for operating purposes Fees and charges Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 1,586 1, Application of operating funding Payments to staff and suppliers 1,119 1, Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding 1,274 1, Surplus (deficit) of operating funding Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding Surplus (deficit) of capital funding Funding Balance 0 0 0

145 Solid Waste - Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Reliability To provide regular community kerbside collections. Measured by 143 Percentage of residents who are satisfied with rubbish collection measured by the number of complaints received per calendar year regarding collection as a percentage of the total service requests. 73% satisfied New measure from 2015/2016 To ensure that closed landfill activities meet legislative compliance. Measured by 99.5% Achieved 46 requests received in 2015/2016 year (182 in total including illegal dumping) from a total of 13,320 requests to Council. Percentage of compliance with our Resource Consents. 100% New measure from 2015/ % Achieved Annual Reports for closed landfills are due 31 July 2016, this ensures compliance. No abatement notices were received. To encourage recycling and reduction of waste to landfill. Measured by Reduction in amount of waste to landfill from 1% less than New measure 22% Not applicable recycling activities with a percentage drop from year previous year from 22% (521 tonnes) of the total refuse taken to Awakino Road to year being a total of 3% less in three years. 2015/2016 Transfer Station (2,339 tonnes) was diverted to recycling.

146 Leachate production is a significant negative effect of the solid waste activity which can pollute the natural environment if left unmanaged; Risk that with the upgrading and extension of collection points that illegal dumping is happening/shifting to more remote areas of Kaipara district. Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments NB: Baseline measurement for recycling in Note 1: Hakaru Transfer Station data not included in this 2014/2015 is 450 tonnes of recycling diverted from report. The 2016/2017 report will include Hakaru. landfill. Note 2: Scrap metal including whiteware also not accounted for, this will be estimated and included in 2016/2017 report. Percentage of residents who are very/fairly satisfied with recycling collection in the annual Communitrak Survey. 52% New measure from 2015/ % Achieved Taken from Key Research Survey. 144 Solid Waste Significant Negative Effects Should the solid waste activity not be conducted correctly, this can result in odours, pests and loose refuse from uncollected rubbish; Kaipara has a dispersed population and the significant negative effect of the solid waste activity in rural areas is household rubbish not being placed in approved collection bags (referred to as illegal dumping). Where possible this is mitigated by the enforcement of appropriate bylaws and issuing of infringement notices; and

147 The Council s Roads and Footpaths network consists of 1,575 km of mainly rural roads and includes the following assets (excludes State Highways): Advocating on Kaipara s behalf to central government on transport matters, especially in response to the reduction in the NZ Transport Agency (NZTA) subsidy; The Provision of Roads and Footpaths What we do 448 km Sealed roads (28%) 1,127 km Unsealed roads (72%) 139 km Roadside drainage 13,985 Drainage structures 88 km of Footpaths 351 Bridge Assets 7,845 Signage 145 1,168 Streetlights. Council s Roads and Footpaths activity consists of: Managing and maintaining all the district s roads and footpaths except State Highway/carriageways; Promoting road safety; Extending seal where there is local (residents or developers) and/or NZTA funding; Resealing approximately 30kms of road annually; Responding to damage from storm events; Heavy metalling on forestry impacted roads; Improving road signage; and Upgrading footpaths as funding allows.

148 Resurfacing Completed $1,164, kms of resurfacing was completed. Thin asphalt resurfacing Completed $0 Although there was no budget for thin asphalt resurfacing 51m was completed through the resurfacing allocation. Structural components replacement Completed $436,000 Contract 788 is complete. Some minor repairs were completed by the maintenance contractor. Why we do it Roading is a Council core business. It is the service most used by people of the district and is essential for communication, social connection and doing business. The majority of Council s capital expenditure is spent on roads. What we did this year The Roading and Footpath capex programme was largely completed. A few projects that were delayed were carried forward to the next financial year for completion during favourable weather conditions. The status of the capital works programme at the end of the financial year was as follows: Description of project Stage Budget from Annual Plan Progress description Pavement rehabilitation Completed $2,599,000 All rehabilitation projects are completed. 146 Minor improvements 80% complete $1,128,000 Pouto Road culvert work in progress, Mangawhai widening deferred. Minor improvements carried forward $810,000 Other works completed. Heavy unsealed road re-metalling various sites Completed $2,005,000 Heavy metalling works are completed including forestry related roads. Development contribution works Completed $145,000 Associated with Estuary Drive and Moir Point Road seal extension, completed. Drainage renewals Completed $410,000 Works completed.

149 New footpaths Completed $60,000 New footpath completed - associated with the seal extension on Estuary Drive and Moir Point Road. Resilience (preventative maintenance) Design/construction $305,000 Projects have been designed for Pukehuia and Arapohue Roads. As at 01 June no physical works have been completed. Description of project Stage Budget from Annual Plan Progress description Signs and markings Completed $190,000 This work was undertaken under the maintenance contract. Seal extension Completed $250,000 Estuary Drive completed. Safety Completed $125,000 Programme completed. Total $9,627, The MWH professional services contract expired on 30 June Council decided to set up its own in-house business unit and also join the NTA (Northland Transportation Alliance) to deliver their roading projects. The NTA will formally commence on 01 July The contract for road maintenance with Broadspectrum (formerly Transfield Services (NZ) LTD) was also rolled over for a further year until June A review of Broadspectrum s performance is carried out on a monthly basis through their KPI measurements, however an overall assessment was completed to determine whether it was appropriate to roll over the contract for another year. An unsealed road trial is underway, with six sites currently being treated to measure road performance from blending aggregates. This will determine whether there is an advantage over the current regime of using the closest quarry source material versus mixing materials. The outcome improvements hoped for are improved longevity after maintenance grading, reduced pothole repairs and reduced cost to maintain roads at current levels. Kaipara District Council and New Zealand Cycle Trail (NZCT) have been working together for some years to develop an on-road cycleway connecting Pouto in the Kaipara to Rawene in the Far North. These routes (the Kauri Coast and Kaipara Missing Link Cycleway) have been officially opened and promoted for some years and this year, have been sign-posted. Councils are assessing the new levels of service driven by the Roads Efficiency Group (combination of local government and the NZTA) to determine whether there are efficiency gains to maintaining roads. The outcomes of this assessment will be announced during the coming year.

150 Sustainable economy Provides for safe and efficient transport of people, goods and materials. This is achieved by maintaining pavement surfaces, replacing one lane and weight restricted bridges and removing road hazards. Strong communities Appropriate transportation links between and within communities and access to properties. This is achieved by maintaining all-weather surfaces, providing adequate directional signage and by repairing road instabilities. Safety and good quality of life Safe road network that is well-delineated and minimises road hazards. This is achieved by providing skid resistant surfaces, improving warning signage and markings, and by removing roadside hazards. Special character and healthy environment Provides access and directional signage to key areas of natural, cultural and historic significance. The contribution of this activity to community outcomes Community outcome How this activity or service contributes 148

151 The Provision of Roads and Footpaths Funding Impact Statement Operating and Capital 149 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties 9,305 9,300 9,853 Targeted rates Subsidies and grants for operating purposes 5,424 4,621 3,834 Fees and charges Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 15,231 14,311 14,090 Application of operating funding Payments to staff and suppliers 8,614 7,802 6,621 Finance costs Internal charges and overheads applied 2,710 2,711 3,630 Other operating funding applications Total applications of operating funding 11,394 10,583 10,337 Surplus (deficit) of operating funding 3,837 3,729 3,753 Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure 4,685 5,483 10,544 Development and financial contributions Increase (decrease) in debt ,062 Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding 5,166 5,446 13,823 Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service 3,039 1,529 3,350 Capital expenditure - to replace existing assets 5,680 7,919 14,226 Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding 9,003 9,175 17,576 Surplus (deficit) of capital funding -3,837-3,729-3,753 Funding Balance Financial comment Total operating funding is higher than budget due to more maintenance work completed during the year which resulted in higher operating subsidies from NZTA. Payments to staff and suppliers are higher to reflect the work undertaken. Capital expenditure is lower than budget as is the resulting NZTA funding. Works are planned to be carried forward to next year. Development contributions are well ahead of plan due to high levels of activity.

152 The Provision of Roads and Footpaths - Performance Measures (Measures 1-5 are statutory requirements) Performance indicator/service level LTP Year 1 Target 2015/ Safety Actual 2014/2015 Actual 2015/2016 The transportation network is designed and managed for safe use with low crash and injury rates. Comments Measured by Number of road fatalities and serious injuries caused by road factors. 13 New measure from 2015/2016 Nil Achieved There were 4 fatal crashes during 2015/2016, 3 recorded in January 2016 and 1 recorded in June 2016, however none of the fatalities were caused by road factors Road Condition (Smoothness) The average quality of ride on a sealed local road network, measured by smooth travel exposure. Measured by Smoothness within average range as below: <90 smooth average <110 rough The latest smoothness results were taken from the RAMM database after the 2016 High Speed data Achieved survey. 2.2 Road Condition (Pavement Integrity Index) The Pavement Integrity Index (PII) is a combined index of the pavement faults in sealed road surfaces. It is a weighted sum of the pavement defects divided by total lane length. Measured by PII within average range as below: <90 poor >90 good >95 very good New measure from 2015/ Achieved The latest figures were taken from NZTA website. This shows the result fits the good performance range for sealed roads.

153 Performance indicator/service level LTP Year 1 Target 2015/ Road Maintenance Actual 2014/2015 Actual 2015/2016 The percentage of the sealed local road network that is resurfaced. (This is based on a design life of 15 years). Measured by Comments Minimum reseal percentage of the total sealed length of the network that will be undertaken each year to keep up with surface determination rates. 6.8% New measure from 2015/ % Achieved The current length of sealed network resurfaced (chipseal and AC) is kms. Sealed network length = 448kms Footpaths The percentage of footpaths within the district that fall within the level of service as determined by the condition rating (facilities are up-to-date, in good condition and fit for purpose ). Measured by Percentage of residents who are satisfied with footpaths. 73% 52% 54% Not achieved This measure is the latest received as part of the KeyResearch report. 5 Response to service requests Measured by Percentage of customer service requests, approved for action, closed (customer informed of intended work schedule) within the target day timeframes set. 90% New measure from 2015/ % Achieved We have received 2,082 service requests in total for roads and footpaths. Of these 1,962 have been completed, 93.3% of these within the timeframes set.

154 Significant negative effects from vehicles using the roads and roading network itself include traffic hazards and accidents, dust, noise, emissions and other Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Road Maintenance The length of the unsealed* local road network that is graded. Measured by The length of the unsealed local road network that is 140km New measure 118.6kms Not achieved graded per annum for Secondary Collector. minimum from Grading of secondary collector roads below minimum 2015/2016 target. The length of the unsealed local road network that is 1,200km New measure 1,537.7kms Achieved graded per annum for Access. minimum from Grading of access roads above minimum target. 2015/ The length of the unsealed local road network that is graded per annum for Access (Low Volume). 750km minimum New measure from 1,090.7kms Achieved Grading of Access (Low Volume) above minimum 2015/2016 target. *One Network Road Classification (ONRC) The Provisions of Roads and Footpaths Significant Negative Effects amenity effects and environmental effects; Council s Roading AMP describes its roading assets and details the practices used to manage those assets which helps to reduce possible negative effects and risks; and Storms, greater than average size weather events, will require a restructure of the annual budgets to accommodate the costs to repair district roads.

155 Glinks Gully servicing 24 houses. The system includes approximately 494m of pipeline and 1 pump station discharging to a disposal area; We provide services to ensure that the district s wastewater is collected, treated and disposed of in a cost-effective, sustainable and environmentally friendly manner. The provision also protects public and environmental health through economic and environmentally sustainable treatment and disposal of wastewater. Sewerage and the Treatment and Disposal of Sewage What we do Council provides wastewater collection and treatment systems in: Dargaville servicing the urban area except part of the Beach Road industrial area. The system includes around 46kms of pipeline, 15 pump stations and a treatment plant (oxidation pond, maturation pond and wetland) with a continuous discharge to the Northern Wairoa River; Kaiwaka servicing 163 houses. The system includes approximately 5.3kms of pipeline, 1 pump station and a treatment plant (oxidation pond and wetland) discharging to the Kaiwaka Stream; Maungaturoto servicing approximately 369 sites. The system includes approximately 12kms of pipeline, 3 pump stations and a treatment plant (oxidation pond and membrane plant) discharging into the Wairoa River on each outgoing tide; 153 Te Kopuru servicing the urban area. The system includes approximately 6.6kms of pipeline and a treatment plant (oxidation pond and wetland) discharging to the Northern Wairoa River; Mangawhai servicing or able to service approximately 1,833 users in the Mangawhai Village and Heads areas. The system includes approximately 69.3kms of pipeline and 18 pump stations, a water reclamation plant, and a transfer main to Lincoln Downs where the treated water is stored awaiting irrigation to pasture; and Council also regulates trade waste discharges to the wastewater system. Council s Wastewater AMP defines wastewater standards, levels of service, and funding levels to maintain sustainable and affordable services in the above communities. Why we do it

156 Safety grates have been installed at all pump stations in the district this year, to reduce the risk of any persons falling into pump station wet wells. Resource consents: There have been no major issues regarding the resource consents apart from minor transgressions of some parameters, the same have been What we did this year General operations: Since 2007, Downer has been the Three Waters operation and maintenance contractor. The operation and maintenance contract was updated and went to tender. Council received three tenders and the operation and maintenance contract was awarded to Broadspectrum who was due to commence as the new contractor on 01 July Health and Safety Risk registers to identify risks and hazards for all activities and areas and how these can be managed through a risk elimination or minimisation strategy, have been developed. Regular audits of these sites will identify any non-compliances, which Council will have a process to manage. investigated and managed with the help of NRC. Ongoing monitoring to identify any seasonal trends is also in place. 154 The capital works programme was largely completed with some projects carried forward to the next financial year as follows: Description of project Stage Budget from Annual Plan Progress description Dargaville - Increase pump station capacity Awarded $100,000 Balance of work will carry forward to 2016/2017. Dargaville - Renewal of reticulation areas Completed $425,000 Dargaville - Safety grills at pump stations Completed $4,000 Dargaville - Renewal of reticulation areas to reduce Completed $150,000 inflow/infiltration Kaiwaka - Environmental compliance Completed $2,000 Mangawhai - Effluent discharge options Deferred $445,000 Carry forward to 2016/2017. Mangawhai - Additional capacity for growth Completed $40,000 Mangawhai - MCWWS scheme and disposal system capacity - options for improving disposal system performance and expansion Completed $280,000 $73,862 has been utilised on options for the MCWWS. The balance will be carried forward to complete the Estuary Drive pump station upgrade in 2016/2017.

157 A Community Advisory Panel was appointed to recommend to Council how the scheme might be extended to cater for more connections in the future. Description of project Stage Budget from Annual Plan Maungaturoto - Pump stations and rising mains renewal Completed $20,000 Progress description Maungaturoto - Safety grills at pump stations Completed $3,500 Maungaturoto - Environmental compliance Deferred $2,500 Carry forward to 2016/2017 Te Kopuru - Environmental compliance Completed $2,000 Total $1,474,000 Mangawhai Community Wastewater Scheme 155 The Panel provided a report to Council. In response to the Panel s report, and specifically the 22 recommendations given, Council clustered the responses under six theme headings being: 1 Maintaining good Mangawhai Harbour water quality; 2 Ensuring disposal quality and capacity is sufficient; 3 Ensuring there is capacity for future growth in Mangawhai; 4 Ensuring all properties that can be connected to the scheme are connected; 5 Applying a user pays principle; and 6 Ensuring long term financial affordability. Resolution of some issues have commenced, e.g. review of Council s Wastewater Bylaw. Funding to work through the remaining responses has been included in the 2016/2017 Annual Plan, and will also be included as part of the Long Term Plan 2018/2028. The contribution of this activity to community outcomes Community outcome How this activity or service contributes Sustainable economy To process the wastewater generated from industry and commercial activities. Safety and good quality of life To maintain a good standard of public health. Special character and healthy environment Treatment of pollutants to reduce the impact on the environment.

158 Sewerage and the Treatment and Disposal of Sewage Funding Impact Statement Operating and Capital Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties 2,729 2,729 1,891 Targeted rates 4,579 4,804 4,901 Subsidies and grants for operating purposes Fees and charges Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 7,349 7,542 6,809 Application of operating funding Payments to staff and suppliers 2,099 2,649 2,591 Finance costs 3,705 3,705 3,375 Internal charges and overheads applied Other operating funding applications Total applications of operating funding 6,740 7,290 6,578 Surplus (deficit) of operating funding Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions 2, Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding 2, Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves 1, Increase (decrease) of investments Total applications of capital funding 2,632 1,174 1,070 Surplus (deficit) of capital funding Funding Balance Financial comment Payments to staff and suppliers are $0.5 million lower than budget due to lower desludging costs from a change in process and the carry forward of other planned desludging to next year. Engineering consultancy, plant running costs and maintenance costs are also lower than budget. Development contributions are well ahead of plan due to high levels of activity.

159 Sewerage and Treatment and Disposal of Sewage - Performance Measures (Measures 1-4 are statutory requirements) Capital expenditure is $0.7 million lower than budget primarily due to the deferral of the Mangawhai irrigation extension while Council considers alternative effluent disposal options. Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments 1 System and adequacy Legal compliance with all Resource Consents for discharges into the environment from Council systems. The exception, provided for in the consent, is severe weather events and power failure. Measured by The number of dry weather sewage overflows from 2 New measure 2 Achieved 157 Council s sewerage systems, expressed per 1,000 sewerage connections to that sewerage system. The from 2015/2016 resource consent provides for severe weather events and power failure exceptions. 2 Discharge compliance Compliance with the Council s Resource Consents for discharge from its sewerage system. Measured by The number of abatement notices received by the Council in relation to its resource consents for discharge from its sewerage system. 0 New measure from 2015/ Achieved One abatement notice was received on 03 June, however this abatement was appealed and discussed with NRC staff. As a result of appropriate measures taken, NRC cancelled the abatement notice.

160 Performance indicator/service level The number of infringement notices received by the Council in relation to its Resource Consents for discharge from its sewerage system. The number of enforcement orders received by the Council in relation to its Resource Consents for discharge from its sewerage system. The number of convictions received by the Council in relation to its Resource Consents for discharge from its sewerage system. LTP Year 1 Target 2015/2016 Actual 2014/ New measure from 2015/ New measure from 2015/ New measure from 2015/2016 Actual 2015/2016 Comments 0 Achieved 0 Achieved 0 Achieved Fault response times Where the Council attends to sewerage overflows resulting from a blockage or other fault in the Council s sewerage system. Measured by Attendance time: from the time that the Council receives notification to the time that service personnel reach the site. 1 hour New measure from 2015/ mins Achieved (12 month average) Resolution time: from the time that the Council 4 hours for minor New measure 2 hours Achieved receives notification to the time that service personnel blockages from 2015/ minutes (12 month average) confirm resolution of the blockage or other fault. 3 days for significant blockages

161 Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments 4 Customer satisfaction The total number of sewerage system complaints received by the Council. Measured by The total number of complaints received by the 16 New measures 2.3 Achieved Council about sewage odour. Expressed per 1,000 from 2015/2016 sewerage connections to that sewerage system. The total number of complaints received by the 16 New measures 3.4 Achieved Council about sewerage system faults. Expressed per from 2015/2016 1,000 sewerage connections to that sewerage 159 system. The total number of complaints received by the 15 New measures 6.2 Achieved Council about sewerage system blockages. from 2015/2016 Expressed per 1,000 sewerage connections to that sewerage system. Council s response time to complaints regarding its sewerage system. 1 hour New measures from 2015/ minutes Achieved (12 month average)

162 Possible negative effects of this activity could include system failure or pipeline breakages that result in contamination of public waterways which results in an environmental or public health risk. Overflows of sewerage to waterways during heavy rainfall events may also be a negative effect. Council s Wastewater AMP describes its wastewater assets and details the practices used to manage those assets which helps to reduce possible negative effects and risks; Council has installed a warning system at critical wastewater pumping stations to warn its operations staff before they overflow; Failure of wastewater treatment plant in meeting the resource consent parameters may result in NRC issuing an infringement notice. Council measures performance of its wastewater treatment plants on a regular basis to monitor the treatment processes and ensuring compliance with the resource consents; The aging membranes at the Maungaturoto Membrane Filtration Plant requires higher maintenance which means higher costs; and Sewerage and the Treatment and Disposal of Sewage Significant Negative Effects Overflows from the wastewater pumping stations to river/water bodies may result in NRC issuing an infringement notice; It has been identified there is a need to desludge the Maungaturoto Wastewater Pond to improve the quality and capacity of the Maungaturoto Wastewater Treatment Plant. This is planned for 2016/

163 Stormwater systems in Baylys, Te Kopuru, Kaiwaka, Pahi, Whakapirau, Tinopai, Paparoa and Maungaturoto are predominantly related to the road network; The Stormwater Asset Management Plan (AMP) has been developed alongside Council s Engineering Standards 2011 to determine priorities and maintenance activities. Investment is balanced against a community s ability to pay. The stormwater quality is regularly monitored across the district. Planning and building controls are used to reduce harm to property in flood-prone areas by, for example, imposing minimum floor levels and other building restrictions. Stormwater Drainage What we do The primary stormwater system consists of pipes, drains, swales, sumps and channels. The secondary stormwater system comes into effect during significant heavy rain events, and carries excess stormwater which the primary system cannot contain. This consists of stormwater overland flowpaths through reserves, private properties and along road corridors. Stormwater is managed differently across the district: Council provides a piped stormwater system in the Dargaville urban area with some open drains; Stormwater control in Mangawhai is provided by a combination of soakage, stormwater reticulation and open drains; 161 Road culverts are provided in Tinopai, Kelly s Bay and Glinks Gully; and Stormwater management in Ruawai is integrated into the Raupo Drainage District works. Why we do it Stormwater is managed to protect people and property from flooding and to ensure roads remain safe in most weather events. Stormwater is piped in most urban areas. What we did this year Council continued to deliver the current levels of service for stormwater drainage, to ensure that stormwater flooding and discharge to the environment is contained and managed to minimise the impact on people, property and the environment.

164 High tides coinciding with high sea levels resulting in high winds in May this year put stopbanks to the test, however no failures occurred. Health and Safety Risk registers to identify risks and hazards for all activities and areas and how these can be managed through a risk elimination or minimisation strategy, have been developed. Regular audits of these sites will identify any non-compliances, which Council will have a process to manage. The capital works programme has been delivered as follows: Description of project Stage Budget from Annual Plan Progress description Dargaville - Pipeline renewal Murdoch and Liverpool Streets Completed $299,000 Baylys All asset group renewals Deferred $20, Mangawhai - All asset groups renewal and consent related projects Deferred $25,000 Carry forward to 2016/2017 for resolving flooding issues at Pohutukawa Place Mangawhai Estuary Drive pond Deferred $35,000 Carry forward to 2016/2017 for resolving flooding issues at Pohutukawa Place Mangawhai Additional capacity for growth Deferred $38,000 Carry forward to 2016/2017 for resolving flooding issues at Pohutukawa Place Mangawhai Estuary Drive stormwater improvements Deferred $169,000 Carry forward to 2016/2017 for resolving flooding issues at Pohutukawa Place Mangawhai - Project generated from Mangawhai resources consent Deferred $100,000 Carry forward to 2016/2017 for resolving flooding issues at Pohutukawa Place Total $686,000

165 A renewal application to discharge stormwater at Mangawhai has been submitted to NRC. As part of the same, we have sent letters to the affected parties to inform them before they receive the notification from NRC. The draft consent conditions have been discussed with NRC and we are now awaiting formal approval. Sustainable economy Minimises flood damage to properties by ensuring stormwater systems have adequate capacity. Special character and healthy environment Minimises scour from stormwater by controlling and discharging stormwater flows at protected outfalls. General operations: It was business as usual for most of the stormwater operations. Detailed Stormwater Catchment Management Plans will be prepared with the help of consultants in the 2016/2017 year. The contribution of this activity to community outcomes: Community outcome How this activity or service contributes Safety and good quality of life Minimises flooding of dwellings by ensuring stormwater overland flowpaths have adequate freeboard to buildings. Ensures that stormwater systems do not present a safety hazard. 163

166 Capital expenditure is $0.5 million lower than budget due to timing of planned capital works and $0.3 million carried forward to next year. Stormwater Drainage Funding Impact Statements Operating and Capital Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties Targeted rates 1,192 1,186 1,078 Subsidies and grants for operating purposes Fees and charges Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 1,363 1,357 1,202 Application of operating funding Payments to staff and suppliers Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding Surplus (deficit) of operating funding Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding Surplus (deficit) of capital funding Funding Balance Financial comment Payments to staff and suppliers are $0.1 million lower than budget due to lower maintenance costs.

167 Stormwater Drainage - Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments System Adequacy To provide stormwater drainage systems in urban areas with the capacity to drain water from normal rainfall events and cope with a 1 in 10 year rain event. Measured by The number of flooding events that occur in Kaipara District. 2 New measure from 2015/ Achieved 165 For each flooding event, the number of habitable floors affected. (Expressed per 1,000 properties connected to the Council s stormwater system.) 10 New measure from 2015/2016 Discharge Compliance Compliance with the Council s resource consents for discharge from its stormwater system. Measured by 0 Achieved The number of abatement notices received by the Council in relation those Resource Consents. The number of infringement notices received by the Council in relation those Resource Consents. The number of enforcement orders received by the Council in relation those Resource Consents. The number of convictions received by the Council in relation those Resource Consents. 0 New measure from 2015/ New measure from 2015/ New measure from 2015/ New measure from 2015/ Achieved 0 Achieved 0 Achieved 0 Achieved

168 Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Response Times The median response time to attend to a flooding event. Measured by The time from when Council receives notification to 2 hours for New measure N/A No significant flooding events the time that service personnel reach the site. urgent events from 2015/2016 Customer Satisfaction The total number of stormwater system complaints received by the Council. Measured by 166 The number of complaints received by Council about the performance of its stormwater system, expressed 18 New measure from 2015/ Not achieved Most complaints are in regards to blocked drains, per year. with rubbish or leaves. Stormwater Drainage Significant Negative Effects The greatest significant negative effect occurs when high levels of stormwater enter the wastewater reticulation. When this happens the wastewater system can be overloaded, requiring wastewater to be directly discharged into the river to deal with the overload. To respond to this issue, parts of Dargaville have been investigated and a number of issues confirmed which need to be rectified to reduce the stormwater infiltration into the wastewater network. Repairs to both the public stormwater system and privately owned stormwater pipes and gully traps still need to be completed; Significant storm events overload the stormwater networks which may result in flooding of habitable dwellings and non-habitable buildings, and flooding of the low-lying portions of the road network causing temporary disruptions; and A further negative effect is the amount of gross pollutants (bottles, plastics, rubbish, hydrocarbons and various other pollutants) discharged into the natural receiving environment from the stormwater system.

169 Communities with water supplied are Dargaville (including Baylys), Maungaturoto, Ruawai and Glinks Gully. Fonterra receives untreated (raw) water from the Maungaturoto supply. A smaller scheme at Mangawhai services the Mangawhai Heads Camp Ground, Wood Street shops, public toilets, community houses and 17 other connections. Council s Water Supply AMP defines the levels of service and funding requirements, including an engineering standard to guide maintenance. To ensure communities with public water reticulation have a reliable supply of potable water, Council is continuing to improve levels of service to implement the 2005 New Zealand Drinking Water Standards (Dargaville, Maungaturoto and Ruawai only). Those who receive this water pay the cost of its production. Flow meters have been installed and SCADA implemented at the Maungaturoto raw water takes which has improved the raw water take management. Water Supply What we do Why we do it What we did this year 167 The existing service levels were delivered for water supply. Knowledge of the condition of water infrastructure was improved again this year and a much improved AMP is being produced. All systems operated without major fault. General operations: It was business as usual for most of the water operations. Supervisory Control and Data Acquisition (SCADA) has been implemented at Ruawai, and a further upgrade has been completed at the Maungaturoto water treatment plant (WTP) to continuously monitor the dosing of the Ultra Violet disinfection system. The Maungaturoto plant is now being continuously monitored via SCADA. Council engaged a consultant in 2014/2015 to study and review water leakages for the water supply schemes and provide water loss percentages. Using that same method, an internal study was completed in May After comparing this year s data to last year s data, results show there has been an improvement in all schemes, with the percentage of water loss decreasing. Drought Management: Drought Management Plans for both Dargaville and Maungaturoto have been developed this year with the assistance of both contractors and the NRC. There was no drought this year due to sufficient rainfall over the summer period.

170 Risk registers to identify risks and hazards for all activities and areas and how these can be managed through a risk elimination or minimisation strategy, have been Health and Safety developed. Regular audits of these sites will identify any non-compliances, which Council will have a process to manage. The capital works programme was largely delivered with some budgets carried forward to the next financial year as follows: Description of project Stage Budget from Annual Plan Dargaville - Bowen and Victoria Streets, Finlayson Park Completed $250,000 Avenue pipe renewals Progress description Dargaville - Normanby Street pipe renewal Completed $53,000 Dargaville - Manage ex-water source and Ahikiwi preliminary and project cost estimation Completed $212,000 Balance of $101,000 will be carried forward to 2016/2017 for gated weir across Kaihu River Dargaville - Gordon Street pipe renewal Completed $320, Dargaville - Ranfurly Street pipe renewal Completed $220,000 Dargaville - Waiatua Dam improvements - capacity estimation Completed $50,000 and bell-mouth raising Gated weir across Kaihu River or Waiatua Stream and pipeline to better utilise dam water Protection of raw water main under stormwater pipes and bridge at Rotu Stream Deferred $60,000 Carry forward to 2016/2017 Completed $50,000 Mamaranui Pump VSD Completed $20,000 Automate shut-off valve (250mm dia) at Dargaville Water Treatment Plant Maungaturoto - New backflow prevention for water takes Install actuator Maungaturoto - Install alarm for pump failures at water takes and generator interface Completed $30,000 Completed $30,000 Completed $10,000 Maungaturoto - Whaka Street water main renewal Completed $70,000

171 Mangawhai - Take consent compliance Deferred $2,000 Carry forward to 2016/2017 Glinks - Take consent compliance Deferred $1,000 Carry forward to 2016/2017 Sustainable economy Reliable and regularly available potable water supplies for commercial and industrial activity. Description of project Stage Budget from Annual Plan Maungaturoto - Gorge Road renewal Completed $90,000 Progress description Maungaturoto - Install meters at raw water takes - consent compliance Completed $20,000 Maungaturoto - DWS and consent compliance Completed $8,000 Ruawai - Reticulation renewal Completed $40,000 Ruawai - NZDWS compliance Completed $2,000 Mangawhai - Provisional sum to proceed with a preferred option of WTP Upgrade to meet DWS2005(08) Deferred $30,000 Carry forward to 2016/2017 Total $1,568, The contribution of this activity to community outcomes Community outcome How this activity or service contributes Strong communities Promotes community growth by providing a safe and reliable water supply. Safety and good quality of life Raw water is treated to a sustainable standard against waterborne diseases.

172 Water Supply Funding Impact Statement Operating and Capital 170 Annual Annual For the year ended: Actual Plan Plan 30 June $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties Targeted rates 2,936 3,150 0 Subsidies and grants for operating purposes Fees and charges ,851 Internal charges and overheads recovered Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 2,931 3,173 2,863 Application of operating funding Payments to staff and suppliers 1,089 1,059 1,120 Finance costs Internal charges and overheads applied Other operating funding applications Total applications of operating funding 1,925 1,895 1,821 Surplus (deficit) of operating funding 1,006 1,277 1,042 Annual Annual For the year ended: $'000 $'000 $'000 Actual Plan Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure Development and financial contributions Increase (decrease) in debt Gross proceeds from sale of assets Lump sum contributions Other dedicated capital funding Total sources of capital funding Applications of capital funding Capital expenditure - to meet additional demand Capital expenditure - to improve the level of service Capital expenditure - to replace existing assets 1,097 1,064 1,227 Increase (decrease) in reserves Increase (decrease) of investments Total applications of capital funding 1,006 1,547 1,375 Surplus (deficit) of capital funding -1,007-1,277-1,042 Funding Balance Financial Comment Targeted rates now include water by meter charges which were lower than budget for the year.

173 Water Supply - Performance Measures Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Safety of drinking water in accordance with NZDWS 2005 (2008) Measured by The extent to which Council s drinking water Dargaville New measure Dargaville Achieved supply complies with part 4 of the NZDWS Maungaturoto from Maungaturoto Achieved (bacteria compliance criteria). Ruawai 2015/2016 Ruawai Achieved The extent to which Council s drinking water Dargaville New measure Dargaville Achieved 171 supplies complies part 5 of the NZDWS (protozoal compliance criteria). Maungaturoto Ruawai from 2015/2016 Ruawai Maungaturoto Achieved Not achieved Maungaturoto will not achieve protozoal compliance because UV dose was not Maintenance of the reticulation network. Measured by The percentage of real water loss from Council s Dargaville 28% New measure Dargaville 26% networked reticulation system. Maungaturoto 33% from 2015/2016 Ruawai 25% Source: Water Balance and Review for Kaipara Ruawai 33% Mangawhai 32% District Council dated January Mangawhai 65% Maungaturoto 35% Note: Nationally adopted practices for calculating a water balance (this includes the Infrastructure Leakage Index) have been used in this exercise. continuously monitored for the first 3-4 months. Council has upgraded current SCADA system for continuous monitoring of UV dose. Achieved Achieved Achieved Not achieved Real water loss was 2% higher than last year, this could be due to the large watermain leak detected at Gorge Road / Hurndall Street.

174 Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Fault response times Where Council attends a call-out in response to a fault or unplanned interruption to its networked reticulation system. Measured by The median response time for attendance for urgent call-outs: from the time that the local authority receives notification to the time that service personnel reach the site. 1 hour New measure from 2015/ minutes Achieved (12 month average) The median response time for resolution of 2 hours New measure 2 hours Not achieved 172 urgent call-outs: from the time that the local authority receives notification to the time that from 2015/ minutes The 12 month average was adversely affected due to a single failure that took 11 hours service personnel confirm resolution of the fault 20 minutes to resolve. or interruption. The median response time for attendance for 2 hours New measure 2 hours Not achieved non-urgent call-outs: from the time that the local from 18 minutes (12 month average) authority receives notification to the time that 2015/2016 service personnel reach the site. The median response time for resolution of non- 3 days New measure 6 hours Achieved urgent call-outs: from the time that the local from 40 minutes (12 month average) authority receives notification to the time that 2015/2016 service personnel confirm resolution of the fault or interruption.

175 Performance indicator/service level Customer Satisfaction LTP Year 1 Target 2015/2016 The total number of water supply complaints received by the Council. Measured by Actual 2014/2015 Actual 2015/2016 Comments The total number of complaints for the district received by Council about drinking water clarity. 5 New measure from 2015/ Not achieved The total number of complaints for the district received by Council about drinking water taste. 6 New measure from 2015/ Achieved The total number of complaints for the district received by Council about drinking water odour. 4 New measure from 2015/ Achieved 173 The total number of complaints for the district received by Council about drinking water 18 New measure from 2015/ Achieved pressure or flow. The total number of complaints for the district received by Council about continuity of supply. 8 New measure from 2015/ Achieved Council s response time to complaints regarding Council s water supply clarity, taste, odour, <24 hours New measure from 2015/ mins Achieved (12 month average) pressure and continuity of supply.

176 Performance indicator/service level LTP Year 1 Target 2015/2016 Actual 2014/2015 Actual 2015/2016 Comments Demand Management Measured by The average consumption of drinking water per Dargaville 275 Dargaville 285 Not achieved day per resident within Kaipara District = Billed Metered Consumption (m 3 ) x 1,000 Maungaturoto 340 Ruawai 130 Maungaturoto 293 Ruawai 134 Achieved Not achieved Number of connections x 365 x 2.5 (occupancy rate). Glinks Gully 52 Mangawhai 230 Glinks Gully 50 Mangawhai 264 Achieved Not achieved Water Take Consents 100% compliance New measure 100% Achieved with Northland from 2015/ Regional Council Water Take Consents

177 A potential negative effect is the supply of non-compliance drinking water to the community. The non-compliance can occur at the water treatment plant or within the water network. Council has stringent water monitoring and testing regimes to control and supply community with compliant drinking water; and A potential negative effect is that a drought could occur over the dry summer months. Council has developed Drought Management Plans to best manage a drought if it occurs, with stringent internal monitoring of river and dam levels. Consistent rainfall helps to reduce any potential drought situations. Water Supply Significant Negative Effects Possible negative effects of this activity could include water treatment system failure that could affect dialysis patients or the flooding of property due to a breakage in the pipeline. Council s contractors have a list of patients on dialysis and notify them immediately of any outages, supplying them with water if needed. Breaks in the lines are unpredictable, however Council has an alarm activation system that triggers any change to the plant and a 24 hour service to repair faults. Council s Water Supply AMP describes its water assets and details the practices used to manage those assets which helps to reduce possible negative effects and risks; Council mitigates these potential negative effects by a mix of asset management planning activities including: o Asset development work; o Monitoring and testing; 175 o Demand management initiatives; and o Public education, including water conservation programmes.

178 Funding Impact Statement Whole of Council Operating and Capital 176 Annual Annual Annual For the year ended: Actual Plan Report Plan 30 June $'000 $'000 $'000 $'000 Operating funding Sources of operating funding General rates, uniform annual general charges, rate penalties 21,306 21,339 20,903 20,255 Targeted rates 9,991 10,412 6,934 6,855 Subsidies and grants for operating purposes 5,516 4,671 5,201 3,834 Fees and charges 9,216 3,914 7,066 6,723 Interest and dividends from investments Local authorities fuel tax, fines, infringement fees and other receipts Total operating funding 46,374 40,687 40,558 37,903 Application of operating funding Payments to staff and suppliers 29,682 29,161 28,205 25,944 Finance costs 3,613 4,294 4,119 4,504 Other operating funding applications Total applications of operating funding 33,295 33,455 32,324 30,448 Surplus (deficit) of operating funding 13,078 7,232 8,234 7,455 Annual Annual Annual For the year ended: $'000 $'000 $'000 $'000 Actual Plan Report Plan 30 June Capital funding Sources of capital funding Subsidies and grants for capital expenditure 4,685 5,598 6,770 10,544 Development and financial contributions 3, ,595 1,423 Increase (decrease) in debt -10, ,754 Gross proceeds from sale of assets 1, Lump sum contributions Other dedicated capital funding Total sources of capital funding -1,028 6,093 8,152 14,736 Applications of capital funding Capital expenditure - to meet additional demand 1, Capital expenditure - to improve the level of service 4,451 3,706 2,066 5,291 Capital expenditure - to replace existing assets 7,860 10,745 11,609 16,612 Increase (decrease) in reserves -1,392-1,826 2, Increase (decrease) of investments Total applications of capital funding 12,050 13,325 16,386 22,191 Surplus (deficit) of capital funding -13,078-7,232-8,234-7,455 Funding Balance

179 Reconciliation of Funding Impact Statement to Statement of Comprehensive Revenue and Expense Annual Annual For period ended: Actual Plan Report 30 June $'000 $'000 $'000 Revenue Statement of Comprehensive Revenue and Expense Total revenue 56,928 47,271 49,432 Funding Impact Statement Total operating funding 46,753 40,687 40,559 Total sources of capital funding 8,670 6,495 8,365 add Provisions 1, Total revenue 56,928 47,271 49, Expenses Statement of Comprehensive Revenue and Expense Total expenses 46,946 42,916 45,856 Funding Impact Statement Total applications of operating funding 33,295 33,455 32,324 Restatement - Land Write off add Depreciation expense 10,091 9,458 9,747 add Provisions 3, ,286 Total expenses 46,946 42,916 45,856

180 178 Appendix

181 Council Directory Address: Main Office 42 Hokianga Road Dargaville 0310 Postal address: Private Bag 1001 Dargaville 0340 Telephone: (09) or Mangawhai Service Centre Unit 6 The Hub 6 Molesworth Drive Mangawhai 0505 Facsimile: (09) council@kaipara.govt.nz 179 Website: Bankers: Bank of New Zealand Victoria Street Dargaville 0310 ANZ National Bank Corporate Banking Albert Street Auckland 1010 Auditors: Deloitte on behalf of the Auditor-General Private Bag Auckland 1140

182 General Manager Strategy and Administration Duncan McAulay Organisational Structure 2015/2016 Acting Chief Executive Jill McPherson 180 General Manager Community Venessa Anich General Manager Corporate Services Peter Marshall General Manager Finance Glennis Christie General Manager Infrastructure Curt Martin General Manager Planning and Regulatory Fran Mikulicic

183 Each Commissioner cannot be expected to have an in-depth knowledge of all components of Council s business. The appointment to both internal and external Committees means that each Commissioner gains an in-depth knowledge of his/her committee(s) which they in turn impart to their fellow Commissioners. A Committee Holder is the champion of the subject(s) of his/her Committee. There should be a close relationship with the relevant Manager(s) with the Commissioner providing the governance and political input and the Manager providing the technical and operations input. Together they should work to advance solutions and successes. Body Meeting Frequency Purpose Members Peter Winder Council/Committee Structures The following is a list of the current Committees and Committee Holders. It should be noted that Commissioner Colin Dale resigned from his position as a Commissioner at Kaipara District Council on 26 February As the Minister for Local Government made the decision not to replace him his positions on Council Committees were filled by other Commissioners as shown below: 181 Council Monthly Overall governance body. John Robertson (Chair) Richard Booth Audit and Risk Committee Four times per year To ensure Council has appropriate financial, risk management and internal control systems in place to provide: Richard Booth (Chair) Peter Winder John Robertson An overview of the financial performance of the organisation; Effective management of potential opportunities and adverse effects; and Reasonable assurance as to the integrity and reliability of Council s financial and non-financial reporting.

184 Body Meeting Frequency Purpose Members Peter Winder (Chair) John Robertson Ric Parore Alan Nesbit Ian Beattie (Chair) David Hart Brian Madsen Ross McKinley Ken Whitehead Peter Wilson Richard Booth (Council representative) Mikaera Miru (Chair) Colleen Urlich (to September 2015) Robbie Sarich Hal Harding Peter Winder Richard Booth Willie Wright (from December 2015) Peter Winder (Chair) Maurice Langdon Jim Wintle Richard Booth Chief Executive Performance Twice per year To comply with the provisions of local government and John Robertson (Chair) Review Committee employment legislation and the requirements set out in the Richard Booth contract between the Chief Executive and Council. Peter Winder Taharoa Domain Governance Committee Six times per year Co-governance of Taharoa Domain on behalf of Council and Iwi in accordance with the Taharoa Domain Reserve Management Plan. Raupo Drainage Committee Four times per year To make recommendations to Council on the maintenance of drains, floodgates and stopbanks in the Raupo Drainage District. 182 Harding Park Committee/Pou Tu o Te Rangi Joint Management Committee - Combined Four times per year Co-governance of Harding Park and Pou Tu o Te Rangi on behalf of Council and Iwi in accordance with the Harding Park/Pou Tu o Te Rangi Reserve Management Plan. Mangawhai Community Park Four times per year Governance of Mangawhai Community Park in accordance with the Mangawhai Community Park Master Plan.

185 Body Meeting Frequency Purpose Members Mark Vincent Mark Farnsworth John Robertson (Chair) Richard Booth Joanna Roberts Alan Russek Richard Booth Iwi Representative (vacant) Bernard Makoare Peter Winder District Licensing Committee As required but generally twice To deal with licensing matters for its district Peter Winder (Chair) Members pool: monthly Gordon Lambeth Mangawhai Endowment Lands Account Committee As required but generally twice yearly Determining grants to be made from the Mangawhai Endowment Lands Account (MELA) in accordance with the provisions of the Mangawai Lands Empowering Act 1966 (sic). 183 Sport NZ Local Funding Allocation Committee Four times per year To administer the Sport NZ Rural Travel Fund to support and Chris Biddles (Chair) encourage participation in local sport competitions of young Roxanne Kelly people aged between 5-19 years old. Karen Smales Creative Communities Local Funding Allocation Committee Four times per year The administration of the Creative Communities Scheme to support and encourage local communities to create and present diverse opportunities for accessing and participating in arts activities within their defined geographical area. Debbie Evans (Chair) Allan Mortensen Maura Flower Elena Nikolaeva Local Government New Zealand Zone One As required John Robertson (alternative: Peter Winder)

186 Body Meeting Frequency Purpose Members Body Purpose Representative Sport Northland Board of Trustees Governance of Sport Northland. Richard Booth Local Government As required John Robertson (alternative: Richard New Zealand Rural Sector Booth) The following is a list of the current external Committees that Council has representation on: 184 Civil Defence Emergency Management Group (NRC) Regional Transport Committee (NRC) Environmental Management Committee (NRC) Kaihu River Liaison Committee (NRC) To improve and promote the sustainable management of hazards in a way that contributes to the social, economic, cultural and environmental well-being and safety of the public and also to the protection of property. Governance of the region s land transport matters including policies, procedures and the Regional Land Transport Plan. To provide an advisory service and make recommendations to Northland Regional Council on environmental matters. To advise and make recommendations to the NRC, via the Environmental Management Committee, on all matters pertaining to the development and implementation of the Kaihu River Management Plan. Peter Winder (alternative: Richard Booth) Peter Winder Richard Booth Richard Booth Kaipara Harbour Joint Political To promote effective integrated management of the Kaipara Harbour and its Richard Booth Committee catchments by councils and Iwi for present and future generations until a formal governance structure is determined. Pouto Catchment Group To work collaboratively to maintain and improve the state and management of fresh water in the Pouto Catchment. Richard Booth

187 Body Purpose Representative Hughes Trust Charitable purposes. Mayor/Chair At its meeting dated 23 March 2011 the past Council resolved to appoint a panel of Independent Commissioners, any one of whom can act on Council s behalf in determining resource consent applications which require a Hearing in terms of Council s delegations. Having independent professionals involved produces consistent, high quality decisions, and ensures transparency in separating the Regulatory decision-making function from Council s other roles. Northland Chamber of Commerce Richard Booth To positively influence the environment in which businesses operate and by providing opportunities, products and services that will improve the success and vitality of business. Northland Sport and Physical Chief Executive or nominee Activity Strategy Group Mangawhai Community Trust The objects of the Trust are for the benefit of sport and recreation in the Mangawhai district. Chief Executive or nominee Matakohe Church and Reserve Committee To support the maintenance of Matakohe Church and reserve. Chief Executive or nominee 185 Paparoa County Depot Trust Charitable purposes. Chief Executive or nominee Road Safety Committee To progress and complement actions identified in the regional Road Safety Chief Executive or nominee Action Plans and local Road Safety Action Plans. Council s decision-making function for resource consents requiring hearings

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208 `` File number: Approved for agenda Report to: Audit and Risk Committee Meeting date: 20 September 2016 Subject: Audit Action Plan Update Date of report: 08 September 2016 From: Shelley Paniora, Executive Assistant Report purpose Decision Recommendation Information Assessment of significance Significant Non-significant Summary Under the Local Government Act 2002 Council is required to have its Annual Report and Long Term Plans (including Long Term Plan Amendments) audited. Following completion of the audits, Council s auditors, Deloitte, produce a report to Council detailing findings from each review and highlighting areas for improvement: The Report to the Commissioners for the year ended 30 June 2014, dated 29 September 2014, was presented to the Audit and Risk Committee on 17 November The Constructive Report to Management for the year ended 30 June 2014 was received by the Audit and Risk Committee in February Recommendations from this have been incorporated into the Audit Action Schedule (Attachment 1) The Kaipara District Council Report to the Commissioners (that was available for the September 2015 Audit and Risk Committee meeting) and the Kaipara District Council Constructive Report to Management for the year ended 30 June Recommendations for this have also been incorporated into the Audit Action Schedule (Attachment 1) In addition, Council initiated a fraud risk review that was completed 31 October A Key Risk Treatment Plan (Attachment 2) is included. Progress is noted against the recommendations and presented to each Audit and Risk Committee meeting until the actions have been cleared. Recommendation That the Audit and Risk Committee: 1 Receives the Executive Assistant report Audit Action Plan Update dated 08 September 2016, Audit Action Schedule and Key Risk Treatment Plan. Reason for the recommendation It is appropriate that the Audit and Risk Committee monitors progress in addressing actions identified by Council auditors. Reason for the report To enable the Committee to review the updated External Audit Management Letter Action Schedule and Key Risk Treatment Plan. 206

209 Background Under the Local Government Act 2002 Council is required to have its Annual Report audited. This work was completed by Deloitte for the 2012/2013 to 2014/2015 years on behalf of the Auditor-General. In addition to their formal audit opinion, which is included in the Annual Report, the auditors also produce a Report to the Council 1 and a Constructive Report to Management. An Action Schedule has been created in order to track and action the outstanding issues identified by Deloitte. There were no recommendations in the Report to Commissioners however there were some in the Constructive Report for Management Two reports form the foundation of the current Audit Action Schedule (Attachment 1). These are the Constructive Report to Management for the year ended 30 June 2014, dated 23 November 2014 which was derived from the Annual Report 2013/2014 and the Constructive Report to Management for the year ended 30 June 2015 dated 10 November 2015 for the Annual Report 2014/2015. Similarly, when the Long Term Plan was audited, Deloitte issued a document setting out key findings and recommendations that are also incorporated in the Action Schedule. It should be noted there were no recommendations to be incorporated into the Action Schedule. The Annual Report 2015/2016, including the audit by Deloitte, is the subject of a separate report on this agenda. Issues External auditors summarise the overall findings from their audits, note the range of issues that Council faces or should consider (such as improvements that could be made to Council processes) and makes recommendations for action by Council. These issues remain as a clear area of focus for the Commissioners and Staff. These improvements will need to be considered as part of Council s ongoing work programme. Attachment 1 is an action schedule, identifying the issues where it is considered that further follow-up action is warranted. Attachment 2 is an action schedule for the recommendations that came out the fraud risk review that was completed 31 October In April 2016, an internal audit of progress against the Counter Fraud Gap Analysis and Fraud Assessment report dated 31 October 2014 was completed. This report is set out as Attachment 3. The follow-up report notes progress to date and suggests other areas for review. Additional action will be incorporated in the next iteration of the action schedule as appropriate. Next step The Committee should satisfy itself that all of the necessary actions are provided for in the attached Action Schedules and that appropriate action is being taken to address these issues. 1 Or Commissioners as the case may be. 207

210 Attachments Attachment 1: Action Schedule identifying issues which require follow-up action Attachment 2: Key Risk Treatment Plan identifying issues from the fraud risk review which require follow-up action Attachment 3: Review of Fraud Risk Treatment Plan Implementation 208

211 1. Annual Report 2013/2014 (Constructive Report to Management for the year ended 30 June 2014, dated 23 November 2014) 1 References are to the Deloitte Constructive Report to Management for the year ended 30 June 2014 (received by the Audit and Risk Committee in February 2015) Attachment 1 2 RM (Revenue Manager), FSM (Financial Services Manager), GMI (General Manager Infrastructure), GMF (General Manager Finance), GMCS (General Manager Corporate Services), ISM (Information Services External Audit Management Letter Action Schedule Item Description 1 Action Required Fixed Assets Track individual assets within each asset class to enable a physical check to Register (FAR) be completed on the fixed asset balance; maintenance (A3) Software should be separated out into intangible assets to ensure that the fixed asset and intangible balances reflect the appropriate accounting policies in the financial statements (NB: noted that not material). Staff Resp 2. Progress to Date Completed FSM The FAR will look to be incorporated into existing Council software. It is intended to have the FAR in place before the interim audit due May Property, plant and On a monthly basis or at least on a quarterly basis the PPE balances should be FSM Discussion with Council s auditor equipment (PPE) updated for actual 3 may see a shift in Deloitte s 209 monitoring (B8) operational expenditure; understanding. Council manage capital expenditure; and Capital Expenditure through the depreciation. budgeting and monthly reporting system not the PPE. Repairs and Maintenance Introduce an R&M Policy. 3 FSM Draft Policy to be completed by November 2016 (R&M) Policy (B9) Manager), GMC (General Manager Community), HR (Human Resources), CSM (Customer Services Manager), EO (Executive Officer), EA (Executive Assistant) 3 First noted by Audit as part of the Annual Report for year ended 30 June 2013.

212 210 Item Description 1 Action Required Reconciliations Detailed reconciliations should be performed to ensure the general ledger does (B10) reconcile with the FAR on a regular basis i.e. monthly 4. With respect to the underlying databases again these reconciliations should be done on a regular basis. We understand that the reconciliation may not be able to be done on an overall basis however sample checks should be completed to ensure the FAR information is consistent with the underlying databases and that all assets included in the revaluation report are consistent with the FAR and general ledger. Request for service The system should be strengthened in the following ways: (RFS) system Before the request is sent to the Contractor, implement a review process (B13) which will help to ensure the request is valid (and Council funds are not being used on requests being considered by Contractors which do not need work); and As discussed with management to include a code when entering the request to indicate what activity the request is related to. (Note: acknowledgement that a process has been started to implement some of the recommended controls). Staff Resp 2. part of the FAR system. Completed for validation of contractor requests and Council software providers to look at the inclusion of additional fields for coding of Service Requests Progress to Date Completed FSM This matter is being addressed as CSM EO/EA Additional resourcing employed Work being undertaken with IT 4 First noted by audit as part of the Annual Report for year ended 30 June 2013.

213 2. Annual Report 2014/2015 (Constructive Report to Management for the year ended 30 June 2015, dated 10 November 2015) 5 References are to the Deloitte Constructive Report to Management for the year ended 30 June 2015 (received by the Audit and Risk Committee in December 2015) 6 FSM (Financial Services Manager), RM (Revenue Services Manager), GMCS (General Manager Corporate Services), GMI (General Manager Infrastructure), GMF (General Manager Finance), ISM (Information Services Manager), GMC (General Manager Community), HR (Human Resources), CSM (Customer Services Manager), EO (Executive Officer), EA (Executive Assistant). 211 Item Description 5 Action Required Review of USER Implement a process to regularly review changes in user permissions within the IT access and system. modification rights (A2) KDC payable to A detailed review of the payable balance to NRC should be performed including NRC (A3) an assessment of penalties due and payable to NRC as a result of overdue rates. This total amount due and payable should then be communicated to NRC. Water and Either implement a function within the service request system for coding to specific wastewater KPI issues or consistently applying these codes within the documentation of service testing (A6) requests. Staff Resp 6. diary reminder to be organised by IT Manager for future review. providers NCS about creation of codes for use in service request system. Progress to Date Completed GMCS This has been undertaken and a Completed FSM/ Completed RM EO/EA Query with Council software Legislative Completed Write a formal policy to document the procedures in place. EA framework (B2)

214 Attachment 2 1 References are to the Deloitte Counter Fraud Gap Analysis & Fraud Risk Assessment dated 31 October 2014 (received by the Audit and Risk Committee in November 2014). Key risks were pulled 3 FSM (Financial Services Manager), RM (Revenue Manager), GMI (General Manager Infrastructure), GMCS (General Manager Corporate Services), GMF (General Manager Finance) 212 Counter Fraud Gap Analysis and Fraud Assessment report dated 31 October 2014 Key Risk Treatment Plan - Action Schedule Key Risk 1 Suggested treatments 2 Staff Resp 3 Progress to date Completed Fictitious invoicing by employee or third party Introduce supplier set-up checklist. FSM All active current suppliers have been updated. The introduction of Electronic Purchase Orders will allow control of new suppliers. Fraudulent manipulation of bank payments Consider implementing further banking security. FSM Council is awaiting further banking upgrades from BNZ before moving to enhanced banking systems. Restrict access to banking Run.txt file on network. FSM Access to Run.txt files is restricted. Staff with access to banking Run.txt files are unable to authorise payments. Issuing of credit notes Define clear policies around the issuing of credit notes. RM A procedure for issuing credit notes has been implemented. Regularly audit credit note payments. RM All credit notes and refunds are authorised by Suppliers invoicing for work not completed. Consider implementing regular formal audit of ordered works. GMI, GMF For major Council contracts routine auditing is undertaken as part of authorising a monthly claim. together from the risk that were perceived as high and medium. 2 Recommended by Deloitte.

215 213 Key Risk 1 Suggested treatments 2 Staff Resp 3 Progress to date Completed For some services use a limited number of approved suppliers only. FSM Council is awaiting the implementation of Electronic Purchase Orders to limit approved suppliers for use. Audit yearly-spend over top 50 suppliers. FSM Follow-up review indicates second tier suppliers the Consider bringing some out-sourced operational works in-house. GMI, GMF All activities capable of being undertaken in-house currently are. Further work is being undertaken to Completed and 4 Waters. Fraudulent manipulation of Audit current NCS access permissions and GMCS Latest software upgrade included a roles matrix to supplier bank accounts in NCS. restrict to required roles. ensure only access to relevant data is available. Installed and ready for testing. Segregate roles. GMCS To be commenced. Retire old NCS accounts. GMCS Creditor accounts are retired after being inactivate after two years or more.

216 RE Business Services were engaged by the General Manager Finance to perform a review on Kaipara District Council s (KDC) implementation of the suggested treatments from the Deloitte Counter Fraud Gap Analysis & Fraud Risk Assessment reported to the Audit and Risk Committee in November The Gap Analysis Treatment Plan and Key Risk treatment Plan Action Schedule were used as the basis for discussions with KDC staff responsible for implementing the risk treatments. Audit comments were added to the treatment plans to update the status and progress of implementation of the suggested treatments. These are attached as Appendix one. Progress has been made against most of the risk treatments during 2015 as staffing and priorities have allowed. The fraud awareness workshop was well received by all staff and key financial and policy treatments have been implemented. KDC has a good fraud and ethics policy framework in place, which meets best practice. Further improvements are needed in the application and communication of the policies, which, with new staff on board will be able to be addressed. This will reinforce the work done in the past year and set the tone for new staff. Further projects are well in progress to address the majority of outstanding risk treatments, including the implementation of electronic purchase orders, updating the staff intranet and implementing Internet banking. Scope Work performed The work primarily involved discussions on progress with relevant KDC staff and some limited testing. Some limited testing was performed to confirm that the treatments were in place where this was appropriate. This included: 214 Testing of 2 months of supplier invoices Confirmation of user access rights in NCS and the network Thankyou to all KDC staff for their cooperation and assistance during the review. Results Conclusion

217 The following recommendations have been made to further enhance progress on implementing the fraud risk treatment plans. Reference is made to the relevant risk, suggested treatment and responsible staff member as per the updated treatment plans attached in appendix one. Recommendations 215 Key Risk/Better Practice Attribute Fictitious invoicing by employee or third party Suppliers invoicing for work not completed 3 rd parties and corruption Suggested Treatments Staff Resp Introduce supplier setup checklist FSM For some services use a limited number of GMF approved suppliers only Purchase orders are signed off under delegated authority levels Introduce more thorough vetting and verification steps for new suppliers. Communication Add introduction to Fraud policy and Protected Disclosures as part of induction Senior management understanding and commitment Line Managers Communication Internal controls Whistle-blower protection Leverage the Fraud assessment to build training sessions for senior managers (and staff) covering KDC internal and external fraud and corruption risks. Make available some ethics, fraud and corruption awareness session to key operational supervisors, highlighting potential threats as well. Implement a communications initiative around policies that are not well understood. Clearly communicate whistle-blower protection and the availability of Protected Disclosures. Recommendations Continue with the implementation of electronic purchase orders in order to strengthen the controls around purchase order approval, matching purchase orders against invoices and new supplier setup. Implement new supplier verification procedures once electronic purchase orders are in place. HR New employees need to sign off that they have read and understood the key staff ethic policies as part of their induction. Add a checkbox to checklist in appendix of induction manual to cover these. GMF Run the fraud awareness training for all staff at least every two years. This will capture new staff and provide refresher training to existing staff to keep awareness updated. GMCS Include all ethical policies on the intranet, so they are easily accessible by all staff. Separate page on intranet under Working Here on Protected Disclosures.

218 Counter Fraud resourcing Appoint key roles to designated individuals: Fraud Control Officer and Protected Disclosures Officer GMCS Clarify the roles and responsibilities between the GMCS and the HR Manager and include in their respective job descriptions and policy documents. 216 Communicate the assignment of roles across all staff to raise awareness and include on intranet. Employment Criminal checks for all new starters. HR Credit checks to be done for potential employees with cash handling, finance roles and senior managers. Fraudulent manipulation of Audit current NCS access permissions and FSM Review access to the NCS Creditors Officer role for nonfinance supplier bank accounts restrict to required roles. staff Fraudulent manipulation of bank payments Fictitious invoicing by employee or third party Restrict access to banking run.txt file on the network Consider implementing further banking security Complete regular data analysis on payment data FSM Access to the PC Banking folder on the O: drive needs to be restricted to those who need it only. Remove maintenance rights to files kept in this folder. FSM to PC Banking/Internet banking permissions. There should be two administrators required to make changes FSM Implement the change to Internet banking from PC banking. FSM Implement at least yearly analysis of masterfile and payment data Detection programme Refresh fraud analytics periodically Suppliers invoicing for work not completed Audit yearly spend of top 50 suppliers 3 rd parties and corruption Introduce strong anti-corruption statement to KDC website Add positively worded brief statement to supplier facing documentation Supplier yearly spend should focus on lower level suppliers as the risk of fraud is higher. GMCS Update website to include an anti-corruption statement FSM Introduce KDC supplier terms and conditions (for noncontract suppliers) including an anti-corruption statement as part of electronic purchase orders Issuing of credit notes Regularly audit credit note payments FSM Implement analysis of credit notes against debtors to highlight any trends or unusual items.

219 1 References are to the Deloitte Counter Fraud Gap Analysis & Fraud Risk Assessment dated 31 October 2014 (received by the Audit and Risk Committee in November 2014). Key risks were 3 FSM (Financial Services Manager), RM (Revenue Manager), GMI (General Manager Infrastructure), GMCS (General Manager Corporate Services), GMF (General Manager Finance), HR (Human 217 Counter Fraud Gap Analysis and Fraud Assessment report dated 31 October 2014 progress updated April 2016 Key Risk Treatment Plan- Action Schedule Key Risk 1 Suggested treatments 2 StaffResp 3. Progress to date Audit Comments (04/16) Fictitious invoicing by employee or third party Fraudulent manipulation of bank payments One-up segregated sign-off. FSM All employee-related items are signed off by their relevant manager. Purchase orders are signed off under delegated authority levels as defined by Council and the Chief Executive. An approved list of delegations is maintained. Introduce supplier set-up checklist. FSM All active current suppliers have been updated. A new supplier checklist is being developed with assistance from Auckland Council. Complete regular data analysis on payment data. Consider implementing further banking security. FSM All maintenance data is reviewed for changes and signed off. Delegations list is in place, well known and is enforced by Accounts Payable. Currently, invoices are the key document for approving expenditure, as PO s are still manual. Audit review of 2 months of payments found that all invoices had been approved and coded. Electronic Purchase orders are in process to be implemented. All suppliers were reviewed and masterdata updated in 3 rd quarter Supplier checklist not yet in place. Awaiting the implementation of electronic purchase orders in order to control supplier selection and implement supplier vetting. Finance have manually reviewed one month s payment data and followed up issues identified. They are looking at implementing more regular and comprehensive data analysis. FSM To be considered. Letter was sent to the bank informing them of staff delegations and limits related to banking. Internet banking is to be implemented soon to replace PC banking, as it has improved controls. PC banking is now on each staff member s PC per recommendation. pulled together from the risk that were perceived as high and medium. 2 Recommended by Deloitte Resources Manager, ET (Executive Team

220 218 Key Risk 1 Suggested treatments 2 StaffResp 3. Progress to date Audit Comments (04/16) Finance management review and sign off on all changes to supplier masterdata in NCS. The PC banking administrator is assigned to one person who has no processing or approval functions. Restrict access to banking Run.txt FSM To be investigated. Access to the PC banking files on the network are not restricted to essential staff file on network. only. Issuing of credit notes Suppliers invoicing for work not completed. Fraudulent manipulation of supplier Define clear policies around the issuing of credit notes. Regularly audit credit note payments. Consider implementing regular formal audit of ordered works. For some services use a limited number of approved suppliers only. Audit yearly-spend over top 50 suppliers. Consider bringing some out-sourced operational works in-house. Audit current NCS access permissions and restrict to required roles. RM Requires credit note form to be filled out and approved. Requires appropriate approval under delegations. process. Under action. Procedures for Credit notes are in place. RM Will be put in place once policies are implemented. Not done yet, but will be part of year end GMI, GMF GMI, GMF GMI, GMF GMI, GMF Yet to commence. engineer sign-off and/or Council officer review to ensure that service standards are met. The introduction of in-house roading staff will improve review of works. introduction of electronic purchase orders. Ordered works already have professional To be considered. To be implemented as part of the Yet to commence. (approx 62% of activity costs) with it s top 5 suppliers. All this work is subject to formal contracts and formal review. Lower level expenditure (<$25,000per invoice) is more likely to be fraudulent, and should be reviewed at least yearly. with professional services coming back inhouse. Council spends approximately $16 million To be considered. This is being done in the roading area, GMCS Latest software upgrade included a roles matrix to ensure only access to relevant data is available. Installed and ready for testing. NCS access permissions updated for all finance staff in December A number of non-finance staff have access to the Creditors Officer role which maintains creditor masterdata.

221 Key Risk 1 Suggested treatments 2 StaffResp 3. Progress to date Audit Comments (04/16) bank accounts Segregate roles. GMCS To be commenced. Refer above. in NCS. Retire old NCS accounts. GMCS To be commenced. Done by IT once Human Resources form received. This has recently been reviewed by HR. 219 Better Practice Attribute 1 Plan features, Plan review (1&2) Plan features, Plan review (1&2) Suggested treatment 2 to close the gap (suggested priorityfor 2015) Assign Fraud Control Officer (FCO) responsibilities (<3 months) FCO to document and communicate a plan which explains what activity is planned and who is responsible (< 6 months) Staff Resp 3. Progress to Date Audit Comment (April 2016) ET staff are unsure who the FCO is. With the restructure, roles and responsiiblities between GM Corporate Services and recently appointed HR Manager need to be defined. roles and responsibilities defined as per above. HR Manager appointed Assigned to HR Manager in Fraud Policy, but HR In progress Not yet developed. Will be done once new Counter Fraud resourcing (3) Appoint key roles to designated individuals: FCO and Protected Disclosures Officer (also known as Whistle-blower Protection Officer ) N/A These roles are part of the HR responsibilities HR manager is designated these roles, but with the restructure and appointment of a new HR manager, the roles and responsibilities between GM Corporate Services and the HR Manager are still to be defined. (<3 months) Internal Audit Role (4) Consider implementing modest internal audit function - target at specific GMF This is in the business Plan. Ideally complete process improvement process and self-assessment first. Currently being considered. identified risks (<12 months) Integrity Framework (5) Introduce scheduled monitoring of ethical culture- potentially as part of the annual remuneration survey (Next annual HR Suite of ethics policies presented to all staff when adopted. Planned to make this an annual event. Included in staff induction and to be incorporated in Included in staff induction manual. Not on the intranet. Current annual staff survey to include ethical question. review) next annual staff survey

222 Better Practice Attribute 1 Suggested treatment 2 to close the gap (suggested priorityfor 2015) Staff Resp 3. Progress to Date Audit Comment (April 2016) Senior Management Understanding and commitment (6) Leverage the Fraud assessment to build training sessions for senior managers (and staff) covering KDC s internal and external fraud and corruption risks. (<6 months) GMF First Fraud Awareness workshop held. Two other planned for May to ensure all staff have opportunity to attend. Done in May 2015 for all staff. Line Managers (7) Make available some ethics, fraud and corruption awareness session to key GMF As above Done in May 2015 for all staff. operational supervisors, highlighting potential threats as well. (<6 months) 220 Line Managers (7) Consider the best forum to elevate KDC s line managers responsibility for prevention and detection (<3 months) All managers Risk chats will be rolled out once awareness training completed. Can be incorporated with the rollout of the Risk Management Framework. Risk Chats not yet implemented. Level 3 Managers and above need to sign a pecuniary interests form every year. Internal controls (8) Implement a communications initiative around policies that are not well understood, including Procurement, Process owners/ ET Communications is initiated as part of the policy rollout. Ongoing training planned for key processes Monthly staff meetings receive updates on new/revised policy s. New delegations register (Oct 15). Procurement manual training for all staff done early Fraud Policy and Delegations (<3 months) Communicatio n (10) Add introduction to Fraud Policy and Protected disclosures as part of induction (<6 months) HR GMF Completed Will be completed by end of May 2015 References to Fraud, Code of Conduct, Conflict of Interest, Protected Disclousres included in Induction Manual. Fraud awareness per (6) and (7) above Employment screening (11) Criminal checks for all new starters(asap) While criminal checks may be too HR In place Criminal checks are being done for all new staff. problematic to carry out for contractors,

223 221 Better Practice Attribute 1 3 rd parties and corruption (12) 3 rd parties & corruption (12) Detection programme (13) Detection programme (13) Reporting system (15) Reporting system (15) Whistle-blower protection (16) Suggested treatment 2 to close the gap (suggested priorityfor 2015) complete checks for those employees moving from low to high risk roles Introduce strong anti-corruption statement to KDC website. (<6 months) Add positively worded brief statement to supplier facing documentation. Introduce more thorough vetting and verification steps for new suppliers (asap) Complete some variance and exception reporting around supplier payments. (<12 months) Refresh fraud analytics (DCode) periodically (<12 months) Develop messages and communicate in a positive fashion while keeping your eyes open is important - regardless of where the concern emanates from. Include in training sessions. (<3 months) Consider follow-up phase to extend the mechanism to suppliers (<3 months) Clearly communicate whistle-blower protection and the availability of Protected Disclosures. Include in induction. (<3 months) Insurance (17) Review insurance cover around fraud and confirm appropriate level of cover Staff Resp 3. Progress to Date Audit Comment (April 2016) GMCS Could not find a statement on the website. ET/ FSM In progress No KDC supplier terms and conditions (except contracts). Vetting and verification of new suppliers not possible until electronic purchase orders implemented, which is currently in progress. FSM December 2015 supplier payments were reviewed. Identified issues were communicated to relevant managers. Discussed with finance staff and they will run analytics. GMF, FSM EO Under review Not refreshed yet. Discussed with finance staff and they will do some analytics. HR In train Included in fraud awareness workshop. ET Not yet done. Include as part of KDC supplier terms and conditions. HR Actioned Included in induction manual, but some new staff not clear on what these are. Not available on staff intranet. CFPM Part of insurance renewal process underway now Insurance policies include a Crime Policy which covers for misappropriation of money or goods by employees and Crime

224 Better Practice Attribute 1 Investigation Reporting and Disciplinary (19) Suggested treatment 2 to close the gap (suggested priorityfor 2015) Staff Resp 3. Progress to Date Audit Comment (April 2016) against third party fraud and corruption GM Corporate Services has a record of all investigations performed. events by employees or third parties. Cover is risks. (<3 months) for $500,000. This policy is an upgrade on the previous policy to cover third parties. Keep formal register HR Actioned While no formal register is maintained the 222

225 File number: Approved for agenda Report to: Audit and Risk Committee Meeting date: 20 September 2016 Subject: Treasury Management Date of report: 09 September 2016 From: Violeta Kayryakova, Assistant Accountant Report purpose Decision Recommendation Information Assessment of significance Significant Non-significant Summary Council undertakes Treasury management activities in accordance with its Treasury Policy and Treasury Operations schedule and with the active assistance of its Treasury advisors, PwC. In addition to the treasury reporting that is part of the Chief Executive s monthly report it is intended to provide the Audit and Risk Committee (the Committee) with more detailed operational Treasury reporting at each meeting. Tools and techniques that are used to manage debt are: Cash flow forecasting, undertaken in-house (using an excel spreadsheet); Treasury worksheet, managed jointly by Council staff and PwC (using an excel tool provided by PwC) to monitor Council s debt management position at a given point; Active advice and information from Council s Treasury advisors, PwC. There are no out of policy positions to report. Council acceded to the Local Government Funding Agency (LGFA) on 24 March Since that time Council has progressively refinanced debt; a total of $43 million of the original $53 million Mangawhai Community Wastewater Scheme loan has now been refinanced. The balance is funded on a short term basis as necessary. Recommendation That the Audit and Risk Committee receives the Assistant Accountant s report Treasury Management dated 09 September Reason for the recommendation It is appropriate that the Audit and Risk Committee is informed and receives information relating to Treasury management activities and can monitor positions and strategy. Reason for the report To provide the Audit and Risk Committee detailed Treasury operations and management information and to provide an opportunity to discuss ongoing strategy. Background Council s first industry standard Treasury management policies were adopted in December They were recently reviewed and Council adopted the updated Treasury management policies on 03 August

226 Council s first appointed specialist Treasury advisors, APRM (now PwC), in 2011 and this service continues. Routine Treasury reporting is part of the Chief Executive s monthly report. It is intended to provide the Committee with more detailed operational Treasury reporting at each meeting. Treasury operations and management Treasury operations and management are untaken jointly by in-house staff and with Council s advisors, PwC. Tools and techniques that are used to manage debt are: Cash flow forecasting, undertaken in-house (using an excel spreadsheet). This projects the timing of actual cash movements over the course of the year; Treasury worksheet, managed jointly by Council staff and PwC (using an excel tool provided by PwC) to monitor Council s debt management position at a given point. This tool records all loans and swaps that have been entered into (Attachments 1 and 2 respectively) and monitors the position against policy limits. It is used to project future position as well as current and is used as a vehicle to scenario model. The tool generates a one page Council report which indicates whether or not we are within Policy and parameters (Attachment 3), one page summaries of Council s funding and liquidity risk position (Attachment 4) and Council s interest rate risk position (Attachment 5). Active advice and information from PwC in the form of a monthly telephone conference to discuss the current position in relation to the market and strategies going forward, ad hoc meetings or telephone conversations as required, general market bulletins and other material that is more specific to Kaipara District Council as required. General bulletins from PwC are supplemented by market material from banks. Attachment 6 is an example of a general bulletin. In addition excel tools have been provided to calculate the cost of funds for budgeting and forecasting purposes (undertaken jointly). A benchmark tool is also being developed and populated. Treasury policy positions There are no out of policy positions to report. Treasury strategy Council s long time strategy has been to join the Local Government Funding Agency (LGFA) in order to access funding and pricing enjoyed by its peers. On 24 March 2016, Council acceded to the LGFA. Council has progressively refinanced a total of $43 million debt: $20 million on 11 March 2016, $15 million on 16 May 2016 and further $8 million on 29 August This was used to refinance part of the Mangawhai Community Wastewater Scheme debt. The balance is funded on a short term basis as necessary. Further opportunities to reduce the cost of funds are to be implemented shortly. Currently the all up cost of funded of the debt portfolio is 5.80%. 224

227 Factors to consider Community views The community would expect industry standard Treasury management practices. Policy implications This report is in line with Policy. Financial implications There are no financial implications as a result of this report. Legal/delegations implications This report is for information and does not trigger legal or delegation implications. Options The options available to the Committee are: Option A: Accept the report. Under this option the Committee would receive the information. Option B: Ask for additional information or further clarification. Under this option the Committee could ask for additional information or further clarification. Assessment of options These options are not necessarily mutually exclusive, however Option A is more immediate. Assessment of significance Receiving Treasury information is a routine business practice issue and is not significant in terms of Council s Significance and Engagement Policy. Recommended option Option A, receive the report. Attachments Attachment 1: Loan portfolio at 31 August 2016 Attachment 2: Swap portfolio at 31 August 2016 Attachment 3: Council s Policy Position report at 31 August 2016 Attachment 4: Funding and liquidity risk position at 31 August 2016 Attachment 5: Interest rate risk position at 31 August 2016 Attachment 6: Strategy and Tactics New Zealand Interest Rates at 31 August

228 Loans as at: 31-Aug % Margin Attachment 1: Loan portfolio 0.29% Line 1.19% Weighted Average Duration 3.43 Years Total debt 2.27% 90 day 0.00 Fixed loans 4.43% Fixed 4.43% Swaps % 4.61% *Do not Delete or Insert Rows Deal Date Bank Loan Type Drawdown Amount (NZD $m) Limit (NZD $m) Start Date Interest Rate Repricing Maturity Drawdown Maturity Facility Maturity Interest Rate Commitment/L ine Fee Margin Comments Loan 7 Mangawhai Waste Water Loan Apr Oct Oct % 1.10% ANZ Short-term cash advance facility ($15m) Apr % 0.90% Loan 8 Drawdown Nov Apr Apr % 0.72% 0.90% loan 9 Drawdown Apr Apr % 0.90% Drawdown Apr Apr % 0.90% Drawdown Apr Apr % 0.90% Drawdown Apr Apr % 0.90% Drawdown Apr Apr % 0.90% BNZ BNZ working capital facility ($5m) Jun % 1.14% Drawdown Aug Jun Jun % 1.14% ANZ Short-term cash advance facility ($10m) Apr % 1.00% Drawdown Apr Apr % 1.00% Drawdown Apr Apr % 1.00% Drawdown Apr Apr % 1.00% LGFA FRN Apr Apr % LGFA Borrower note Apr Apr % LGFA FRN May May % LGFA Borrower note May May % LGFA FRN Apr Apr % LGFA Borrower note Apr Apr % LGFA FRN May May % LGFA Borrower note May May % LGFA FRN Dec Dec % LGFA Borrower note Dec Dec % LGFA FRN Mar Mar % LGFA Borrower note Mar Mar % LGFA FRN Apr Apr % 226

229 Swaps as at: 31-Aug-16 Attachment 2: Swap portfolio Weighted avg fixed rate of current swaps: 4.43% Weighted average duration of fixed portfolio 5.25 Years Notional of Live Borrower Swaps *Do not Delete or insert Rows Deal Date Deal Reference Number Bank Pay / Receive Fixed ("Pay" or "Rec") Notional (NZD $m) Start Date Maturity Date Interest Rate Does the swap have a linked Forward Start? Is the swap an outright new forward start? Actual Notional of original swap (for partial forward start situations) 01-Mar-12 IRS ANZ Pay Jul Jul % Y 18-Feb BNZ Pay Jul Jan % 01-Mar-12 IRS ANZ Pay Apr Jul % 18-Feb BNZ Pay Feb Nov % 04-Apr BNZ Pay Jul Jul % 04-Apr BNZ Pay Apr Jan % 06-Nov BNZ Pay Apr Oct % Y 25-Sep BNZ Pay Oct Jul % 19-May BNZ Pay Oct Oct % 01-Mar-12 IRS ANZ Pay Jul Jul % Y 19-May BNZ Pay Jul Apr % Y 18-Feb BNZ Pay Jul Apr % 21-Oct BNZ Pay Apr Oct % 04-Apr BNZ Pay Oct Jul % Y 18-Feb BNZ Pay Jul Oct % Y 21-Oct BNZ Pay Oct Oct % 18-Feb BNZ Pay May Nov % 23-Jul BNZ Pay Oct Apr % 18-Feb ANZ Pay Apr Jan % 227

230 12 Month Forecast Core Debt: Aug-16 Policy Limits 60% - 90% Overall Fixed:Floating Mix 88.80% Policy Compliance Y Fixed Rate Maturity Profile: Years 1-3 years 3-5 years 5 years plus Policy Limits 15% - 60% 15% - 60% 0% - 60% Actual Hedging 26% 25% 49% Policy Compliance Y Y Y Liquidity Ratio: 110% Actual % Policy Compliance Y Funding Maturity Profile: Years 0-3 years 3-5 years 5 years plus Policy Limits 15% - 60% 15% - 60% 10% - 40% Actual Hedging 52% 32% 17% Policy Compliance Y Y Y Weighted Average Duration: Funding Fixed Rate Portfolio (swaps and fixed rate loans) Kaipara District Council Interest Rate Position Weighted average fixed rate on current borrower swaps*: 3.43 Years 5.25 Years Attachment 3: Policy position Swap Portfolio 4.43% * Note: non-active forward starts are not included. Counterparty Credit Risk (Interest Rate Risk Mgmt Instruments and investments) Policy Credit Limit (NZ$) per NZ Registered Bank (Interest rate risk management) $ 20,000,000 Policy Credit Limit (NZ$) per NZ Registered Bank (Investments) $ 15,000,000 Policy Credit Limit (NZ$) per NZ Registered Bank (Total maximum per counterparty) $ 30,000,000 Credit Exposure Credit Exposure (Swaps) (Investments) Compliance ($m) ($m) WPC Y ANZ Y ASB Y BNZ Y Kiwibank Y CBA Y 228

231 Attachment 4: Funding & Liquidity 31-Aug-16 Kaipara District Council Funding & Liquidity Risk Position Committed Loan/Stock/Facilities/Investments $77.3m Current External Debt $52.5m Policy Liquidity Ratio >=110% Actual Liquidity Ratio 147% Current Net Debt $52.5m 0-3 years 3-5 years 5 years plus Policy Target Band 15%-60% 15%-60% 10%-40% Actual 52% 32% 17% NZDm Maturity Date Bucket (Years) Drawn Loans Commercial Paper Available Linked Deposits 229

232 Attachment 5: Interest rate risk 31-Aug-16 Kaipara District Council Interest Rate Risk Position Overall Fixed Policy Min 60% Actual Floating based on 12 Month Debt Forecast $64.19m Policy Max 90% 11% Actual 89% 1-3 years 3-5 years 5 years plus Policy Target band 15%-60% 15%-60% 0%-60% Actual 26% 25% 49% NZ$M Months Floating Debt Fixed Debt Interest Rate Risk Position The interest rate risk position visually represents the Council's interest rate position within approved interest rate control limits as set out in the treasury policy document. The chart takes a snapshot of the risk position as at the reporting date. The brown part of the graph shows the amount of debt which is fixed - (this includes fixed rate bonds together with payer swaps) meaning debt which gets repriced in one years time or later. The top of the red area represents the forecast debt in a year's time. The yellow area therefore illustrates the amount of debt deemed floating rate and will include any forecast debt that has not been pre-hedged. Any existing loans or financial instruments which will be repriced within the next 12 months are included in the red area. The key areas of focus are; Fixed Rate Percentage Limit: (wholesale interest rate certainty) The fixed rate percentage calculation is the total amount of fixed rate debt/interest rate hedges over the 12 month forecast net debt Fixed Rate Maturity Limits: (spreading of wholesale interest rate maturity risks) Fixed rate repricing maturity dates are spread based on defined maturity band limits, 1-3 years, 3-5 years and 5-10 years. Minimum and maximum percentage limits within each time band ensure a spread of maturities and reduces the risk of maturity concentrations. 230

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239 . File number: Approved for agenda Report to: Audit and Risk Committee Meeting date: 20 September 2016 Subject: Bills in Parliament: Legislation Progress Date of report: 7 September 2016 From: Venessa Anich/Linda O'Reilly General Manager Community/Brookfields Lawyers Report purpose Decision Recommendation Information Assessment of significance Significant Non-significant Summary New Zealand Parliament is currently considering a number of Bills that may impact on the business of local government. This report provides a Summary (Attachment 1) of these Bills to ensure that Council is well prepared when Bills are enacted and/or submitted to the Select Committee responsible for commenting on a Bill. Only those Bills that have been introduced as of 8 April September 2016 are included in this report, they are: Bills gaining Royal Assent (i.e. now enacted) Appropriation (2016/17 Estimates Bill) Appropriation 2014/15 Confirmation and Validation) Bill Appropriation 2014/15 Supplementary Estimates Bill Appropriation 2015/16 Supplementary Estimates Bill Building (Earthquake-prone Buildings) Amendment Bill Climate Change Response (Removal of Transitional Measure) Amendment Bill Health Protection Amendment Bill Human Rights Amendment Bill Imprest Supply (First for 2016/17) Bill New Zealand Business Number Bill Official Information (Parliamentary Under-Secretaries) Amendment Bill Residential Tenancies Amendment Bill Sale and Supply of Alcohol (Exemption for RNZRSA Clubs from Special Licencing Requirements for Anzac Day) Amendment Bill Shop Trading Hours Amendment Bill Social Security (Extension of Young Persons Services and Remedial Matters) Amendment Bill Taxation (Transformation: First Phase Simplification and Other Measures) Bill 237

240 Bills Introduced since last report Contract and Commercial Law Bill Fire and Emergency New Zealand Bill Food Safety Law Reform Bill Local Government Act 2002 Amendment Bill (No 2) Taxation (Annual Rates for , Closely Held Companies, and Remedial Matters) Bill Taxation (Business Tax, Exchange of Information and Remediail Matter) Bill Te Ture Whenua Maori Bill Telecommunications (Property Access and Other Matters Amendment Bill) Trans-Pacific Partnership Agreement Amendment Bill Other Bills before Parliament Civil Defence Emergency Management Amendment Bill Evidence Amendment Bill Healthy Homes Guarantee Bill (No2) Land Transfer Bill Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill Smoke-free Environments (Tobacco Plain Packaging) Amendment Bill Statutes Amendment Bill Members Bill newly introduced Land Transfer (Foreign Ownership of Land Register) Amendment Bill Our Work Our Future Bill Residential Tenancies (Safe and Secure Rentals) Amendment Bill Recommedation That the Audit and Risk Committee receives the Policy Planner s report titled Bills in Parliament: Legislation Progress dated, for information. Reason for the Recommendation Council needs to be aware of proposed Bills that may impact on local government and Kaipara District Council. Reason for the Report This report is to make the Audit and Risk Committee aware of current Bills that are progressing through Parliament that are relevant to Council, to enable them to consider the potential impact they may have and consider whether there is a need for further action, such as the lodging of a submission. It also provides information on consultation being undertaken by Government and other agencies that may result in legislative change or have an impact on Council. Background Council operates in what can be described as a dynamic environment where changes are always 238

241 happening. In order for Council to respond to proposed changes it firstly needs to be aware of any proposals. This will allow Council to respond appropriately when required. If Council is not aware of proposed changes then it would be unable to respond when required. It will also allow Council the time to put in place any changes and prepare for any budgetary implications it may have where possible. Issues Changes in legislation have the potential to affect how Council undertakes and manages its functions. Issues that can arise out of any change include affordability, resourcing and having people aware of changing processes and changing criteria required for decisions. There are some proposed legislation changes that have not been introduced to Parliament yet and therefore may not feature in the information provided. The information is obtained from the Parliament website which is updated every two to four weeks, therefore changes may have occurred between the period between Audit and Risk Committee Agenda closing and the Audit and Risk Committee sitting. Factors to Consider Community Views Other than the Bills to which Assent has been given, information provided in the attached legislation progress worksheet (Attachment 1), is not yet law and therefore is not binding on Council. As such community views are not required as a result of presenting this information. Enacting legislation is a full public process, with the community able to provide their views to Parliament through submissions to the appropriate Select Committee. Policy Implications Some of the information provided may impact on Council policy if/when Bills come into law. There are certain times within the Parliament process in which the Council can express its views on a proposal. The information provided may trigger the need for Council to respond by, for example, lodging a submission to the appropriate Select Committee. Once a Bill has been passed into law it is important that staff identify the implications of the changes made for Council and develop an Action Plan to ensure that any necess ary changes, for example, to Council processes, are made. Financial Implications The information does not pose any financial implications merely to highlight potential impacts when Bills come into law. It is at the point where a Bill comes into law that it may have financial implications for Council. Legal/Delegation Implications This Agenda item is for information only and has no legal implications. While this does not affect any Council delegations, the Audit and Risk Committee may decide at any time that it is prudent for Council to submit on a proposal. Attachment Legislation Progress Spreadsheet (Attachment 1) 239

242 Date of Assent Manager Assent: 29/6/16 Assent: 17/8/16 Assent: 9/5/16 Responsible Executive Team Attachment 1: Progress of Legislation Bills gaining Royal Assent 240 Title (Low Medium Overview Impacts on Council? High) Imprest Supply (First for This bill provided the sole financial authority from the start of the Low: The level of 2016/17) Bill 2016/2017 financial year until the Appropriation (2016/2017 impact on Council is Estimates) Bill was passed. not clear. However, it is important for Council to remain Appropriation (2016/17 This bill seeks parliamentary authorisation of the individual updated on legislative Estimates Bill) appropriations contained in The Estimates of Appropriations for the changes relating to the Government of New Zealand for the year ending 30 June 2017 (B.5), Government's budget presented to the House of Representatives as part of the 2016 Budget allocation and the documentation subsequent impact on Council. Appropriation 2014/15 Confirmation and Validation) Bill The bill confirms and validates unappropriated expenses and capital expenditure incurred for the 2014/2015 financial year. It also confirms Public Finance Order 2015 and expenses incurred for the 2014/15 financial year.

243 Date of Assent Manager Assent: 22/6/16 Assent: 29/6/16 Responsible Assent: 13/5/16 GM Corporate Servicves Bills gaining Royal Assent (Low Medium Title Overview Impacts on Council? High) 241 Appropriation 2014/15 Supplementary Estimates Bill Appropriation 2015/16 Supplementary Estimates Bill Building (Earthquakeprone Buildings) Amendment Bill These bills seek parliamentary authorisation of the individual appropriations and changes contained in the Supplementary Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2015 (B.7) and 30 June 2016 (B.7) (the Supplementary Estimates) presented to the House of Representatives on 21 May 2015 and 26 May The aim of this bill is to amend the Building Act 2004 to improve the system for managing earthquake-prone buildings. The bill defines an earthquake-prone building and prescribes how they are to be managed. The bill also prescribes timeframes that are to be met in order to `fulfil the bill's requirements'. Medium: This bill sets more specific guidelines as to what needs to be included in Council's Earthquake-prone Buildings Policy. This includes specific timeframes which Council needs to meet, by ensuring identification, assessment and

244 Date of Assent Manager Responsible Assent: 30/5/16 GM Regulatory Bills gaining Royal Assent 242 Title (Low Medium This is likely to require some additional staff corrective actions. It is estimated that Kaipara will have less than 50 the District which this bill would apply to. Overview Impacts on Council? High) corrective actions have taken place. resourcing to undertake the identifying and ensuring people undertake assessments and buildings throughout Climate Change The purpose of this bill is to phase out the transitional temporary onefor-two Low: The impact on Response (Removal of surrender obligation measure from the New Zealand the Council is not Transitional Measure) Emissions Trading Scheme. The one-for two surrender measure clear. However, local Amendment Bill means that non-forestry emissions trading scheme participants have government is had to submit just one emissions unit for every two tonnes of carbon responsible for

245 Date of Assent Manager Responsible Assent: 4/7/16 GM Regulatory Bills gaining Royal Assent 243 Title (Low Medium climate change. It is important to remain up Council is meeting its Government Act 2002 and other legislation when carrying out its planning and policy Overview Impacts on Council? High) dioxide. functions that relate to to date with any legislative requirements to ensure that the requirements under the Resource Management Act 1991, Local functions. Health Protection This bill proposes amendments to the Health Act 1956 to improve the Low: This does not Amendment Bill tracing of people who may have an infectious disease, or may have directly affect the been exposed to one; increase the range of infectious diseases that Council. are notifiable, and provide incremental options for the management

246 Date of Assent Manager Responsible Assent:14/6/16 GM Corporate Services Bills gaining Royal Assent 244 Title (Low Medium Council. However, it is 1993 approach to its policies. Therefore, maintain a watching brief on any legislative Overview Impacts on Council? High) of individuals with significant infectious diseases. The bill also proposes introducing a ban on the provision of commercial artificial UV tanning services to people under 18 years of age and seeks to make a number of administrative changes to streamline legislation including the inclusion of tuberculosis as a notifiable infectious disease under the Act and the consequent repeal of the Tuberculosis Act Human Rights This bill seeks to establish a full-time Disability Rights Commissioner Low: The legislative Amendment Bill within the Human Rights Commision, and make changes to the role changes do not and structure of the commission. directly affect the important that the Council apply the Human Rights Act new and existing the Council should amendments.

247 Date of Assent Manager Responsible Assent: 15/4/16 GM Corporate Services Bills gaining Royal Assent 245 Title (Low Medium Council may deal with businesses and can every NZBN entity. Overview Impacts on Council? High) New Zealand Business The main aim of the bill is to enable "certain entities to obtain, or be Low: The impact on Number Bill allocated, a New Zealand Business Number (NZBN) and to be Council is not direct. registered on a New Zealand Business Number". This is part of a As a business, Council programme called "Better Public Services" and is aimed at reducing should be across all the costs to businesses of dealing with Government by 25% by legislation relating to business, central government and government organisations. utilise the public Business Register containing "primary business data" for

248 Date of Assent Manager Responsible Assent: 4/7/16 GM Corporate Services Assent: 2/6/16 GM Corporate Services Bills gaining Royal Assent 246 Title (Low Medium The Council should amendments on the Official Information Act 1982 to ensure that it access to information Overview Impacts on Council? High) Official Information The aim of this bill as introduced is to amend the Official Information Medium: As a local (Parliamentary Under- Act 1982 (the Act) to make Parliamentary Under-Secretaries subject authority the Council Secretaries) Amendment to that Act in the same way that Ministers of the Crown are subject to may receive official Bill it. information requests. The definition of "Minister of the Crown" is amended so as to include remain up to date with a "Parliamentary Under-Secretary". legislative can maximise its under the Act. Residential Tenancies The main aim of the bill is to amend the Residential Tenancies Act Medium: Council as a Amendment Bill 1986 to require smoke alarms and insulation in residential rental social housing properties, providing greater enforcement powers in relation to unsafe provider should be or unhealthy rental properties and reforming the law in relation to informed on any abandoned rental premises. The main provisions include: legislative updates in a) Section 13A of the Act requires certain information must be relation to housing, included in the tenancy agreement such as whether insulation is tenancies and land.

249 Date of Assent Manager Responsible Bills gaining Royal Assent Title Overview Impacts on Council? High) installed in the premises and whether or not the tenancy is an income related rent tenancy; b) Requiring landlords to comply will all requirements in terms of smoke alarms; 247 c) Section 48 of the Act gives a landlord certain rights of entry to the premises where the rent is 14 days in arrears and there is reasonable cause to believe that the tenant has abandoned the premises; and d) The Chief Executive of MBIE may take proceedings against a landlord as if the Chief Executive were the tenant, if the Chief Executive is satisfied that it is in the public interest to do so. Sale and Supply of Alcohol (Exemption) for RNZRSA Clubs from Special Licencing Requirements for Anzac Day Amendment Bill The aim of the bill is to amend the Sale and Supply of Alcohol Act 2012 to exempt those RNZRSA (Royal New Zealand Returned Services Association) clubs that hold a current general liquor licence from having to seek an additional special licence to enable them to serve liquor before 1pm on Anzac Day. Medium: There is no direct impact on the Council but the District Licensing Committee should be across any legislative changes relating to the sale and supply of alcohol. Assent: 13/4/16 GM Regulatory

250 Date of Assent Manager Responsible Assent: 29/8/16 GM Regulatory Bills gaining Royal Assent 248 Title (Low Medium must use the "special proposing to make, amend or revoke such Overview Impacts on Council? High) Shop Trading Hours The aim of this Bill is to amend the Shop Trading Hours Repeal Act High: Council as a Amendment Bill 1990 to allow the statutory restriction on shops opening on Easter territorial authority has Sunday to be removed by granting the territorial authorities the power the power to create a to create a policy to permit shops to open in all or part of their districts policy to permit shops on Easter Sunday. to trade on Easter Sunday. The bill provides that the territorial authority consultative procedure" when a policy. Section 83 of the Local Government Act 2002 sets out the special consultative procedure.

251 Date of Assent Manager Responsible Assent: 7/7/16 GM Community Assent: 2/6/16 GM Finance Bills gaining Royal Assent 249 Title (Low Medium Youth Services. A few local councils across collaborate and work with Youth Services to support young people Overview Impacts on Council? High) Social Security This bill amends the Social Security Act 1964 to extend the existing Low: The impact on (Extension of Young Youth Service to all 19-year-old beneficiaries with children, and 18- Council is not direct. Persons Services and and 19-year-old beneficiaries without children who are considered at However, 18 and 19 Remedial Matters) significant risk of long-term welfare dependency. It also fixes certain year olds who are at Amendment Bill deficiencies and ambiguities in the legislation. risk of long-term welfare dependency will be referred to New Zealand getting paid employment. Taxation This taxation omnibus bill introduces amendments to the following Medium: As a (Transformation: First enactments: Income Tax Act 2007; Tax Administration Act 1994; business organisation Phase Simplification and Goods and Services Tax Act 1985; KiwiSaver Act 2006; Child and employer, the Other Measures) Bill Support Act 1991; Student Loan Scheme Act 2011; Gaming Duties Council should be Act 1971; and Accident Compensation Act updated with any tax requirements and

252 Date of Assent Manager Introduction: 19/5/16 16/6/16 Select Committee Responsible Bills gaining Royal Assent Title Overview Impacts on Council? High) amendments. The aim of the bill is to amend the statutes above in order to facilitate easier communication with Inland Revenue, simplify tax rules and provide for the sharing of information. 250 Bills Introduced Title Overview Impacts on Council? Current Manager (Low Medium High) Status Responsible Contract and Commercial Law Bill This is a revision bill to re-enact, in an up-to-date and accessible form, the Carriage of Goods Act 1979, the Contracts (Privity) Act 1982, the Contractual Mistakes Act 1977, the Contractual Remedies Act 1979, the Electronic Transactions Act 2002, the Frustrated Contracts Act 1944, the Illegal Contracts Act 1970, the Mercantile Law Act 1908 (other than Part 5), the Minors' Contracts Act 1969, the Sale of Goods Act 1908, and the Sale of Goods (United Nations Convention) Act Low: The impact on Council is not clear. However, as a business the Council should be across any legislative amendments that relate to commerce and business. First Reading: GM Corporate Services

253 Current Status Introduction: 30/6/16 First Reading: 5/7//16 Select Committee Introduction: 2/6/16 First Reading: 16/8/16 Manager Responsible Commercial Advisor GM Regulatory Bills Introduced 251 Title (Low Medium High) new fire and emergency service to assist with the Overview Impacts on Council? Fire and Emergency This bill repeals the two Acts governing fire services, the Fire Service Medium: Local New Zealand Bill Act 1975 and the Forest and Rural Fires Act 1977, to give effect to a Government supported single, unified fire services organisation for New Zealand. the reform to modernise The bill also provides for: New Zealand's fire services. Local (a) an updated penalties regime; government has also been (b) removal of powers to recover the cost of rural fires; a key player in delivering (c) new powers for managing hazardous substances incidents; and funding rural fire services. Councils across (d) new measures to encourage compliance among levy-payers and New Zealand will be to protect the integrity of the levy. working closely with the transition. Food Safety Law Reform Bill This bill is an omnibus bill introduced in accordance with Standing Order 263(a). The bill makes improvements and enhancements to three Acts governing the food safety system, improving their alignment, operation, and design so as to better protect human health, However, from 2017 local government will no longer operate or separately fund rural fire services. Medium: As a monitoring authority tasked with ensuring compliance with the Food Act 2014, issuing

254 - the changed role and powers of the Commission (especially the provisions that facilitate local authority led Current Status Committee Manager Responsible Executive Team Bills Introduced Title Overview Impacts on Council? (Low Medium High) and maintain and strengthen New Zealand's reputation as a supplier food licences and food of safe and suitable food both domestically and internationally. grades, the Council should The main amendments include: (a) implementing recommendations made by the inquiry; remain updated with amendments to the Food Act. (b) food control plans for high risk businesses such as restaurants; (c) national programmes designed to identify, control, manage, and eliminate or minimise hazards or other relevant factors for the 252 Local Government Act 2002 Amendment Bill (No 2) purpose of achieving safe and suitable food. The main aim of the bill is to amend the Local Government Act 2002 to provide a broader range of functions to be transferred between local authorities, joint government arrangements for areas of common or High: The bill is directly relevant to the Council especially with regard to: shared interest, and greater use of joint council-controlled organisations (CCO's). - the transfer of the responsibilities between the Council and the Northland Regional Council. Select Committee Introduction: 9/6/16 First Reading: 15/16 Select

255 Current Status Manager Responsible GM Finance Bills Introduced Title Overview Impacts on Council? reorganisations); 253 Taxation (Annual Rates for , Closely Held Companies, and Remedial Matters) Bill This omnibus bill sets out the annual rates of income tax for the 2016/2017 tax year, and makes changes relating to closely held companies, non residents withholding tax for related party and branch lending, goods and services tax and land tainting and council controlled organisations. - the provisions for the establishment of CCO's. Medium: As a business organisation, the Council should be updated with any tax requirements and amendments. Specifically in relation to the tax for Council controlled organisations. Introduction: 3/5/16 First Reading: 15/6/16 Select Committee Taxation (Business Tax, Exchange of Information and Remediail Matter) Bill This omnibus bill introduces amendments to the Income Tax Act 2007, the Tax Administration Act 1994, and the Student Loan Act The three main proposals in the bill are: (a) changes to business taxation to make tax simpler; (b) implementing the G20/OECD standard for Automatic Exchange of Financial Account Information in Tax Matters; and (c) changes to implement the disclosure requirements for foreign trusts recommended by Government Inquiry into Foreign Trust and disclosure Rules. The main aim of the Bill is to amend the tax statutes for various purposes businesses. Accordingly, informed and updated on including to simplify processes and compliance costs for the Council (as a business) should be Introduction: 8/8/16 First Reading: 11/8/16 Select Committee

256 any legislative changes. Current Status Manager Responsible Executive Team GM Corporate Services Bills Introduced Title Overview Impacts on Council? (Low Medium High) Te Ture Whenua Maori Bill The aim of the bill is to "restate and reform the law relating to Maori land." Maori land is land which has the status of Maori freehold land. Low: As a landowner, any legislative amendments The bill is needed to reflect the dual kaupapa expressed by the NZ Maori Council, and reflects a policy shift to more clearly support land utilisation as determined by the owners themselves. and legal requirements in relation to Maori landholdings are relevant to the Council. 254 Telecommunications (Property Access and Other Matters Amendment Bill) The main aim of the bill is to amend the Telecommunications Act 2001 to: (a) introduce new measures in relation to access to property, involving rights of multiple parties and to deploy fibre optic media; (b) make amendments in relation to amounts payable by liable persons to the Crown; Low: As a local authority, the Council should be across any internet/broadband legislative updates. Many regions/communities in New Zealand are digitally (c) introduce dispute resolution service; remote. Internet (d) amend the liability allocation process for telecommunication providers. connectivity is an interest to the Council and local boards to ensure better access to information and services. Further, there may be an opportunity Introduction: 14/4/16 First Reading: 11/5/16 Select Committee Introduction: 29/6/16

257 - Policy making and planning decisions, bylaws and regulations, property development, Current Status Introduction: 9/5/16 First Reading: 12/5/16 Select Committee Manager Responsible Executive Team Bills Introduced Title Overview Impacts on Council? (Low Medium High) presented presenting in the future for the Council and central government to collaborate on the parameters of any local programmes. 255 Trans-Pacific Partnership Agreement Amendment Bill The aim of the bill is to amend New Zealand law as part of the implementation of the free trade agreement named the Trans-Pacific Partnership (TPP) Agreement between New Zealand, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Medium: significant effect on local The TPP Agreement has a government. These Singapore, the United States, and Viet Nam, signed at Auckland on 4 include but are not limited February 2016 (the Agreement). The bill is intended to align New to: Zealand s domestic law with certain obligations in the Agreement, and thereby enable New Zealand to ratify it. - local government will be required to comply with certain rules and restrictions in the same way central government does;

258 Current Status Manager Responsible Bills Introduced Title Overview Impacts on Council? zoning, utilities and resource management activities that may be affected. 256

259 Current Status Manager Introduction: 11/11/15 First Reading: 8/12/15 Select Committee: 26/8/16 Introduction 27/5/15 First Reading: 2/7/15 Second Reading: 9/6/16 Committee of the whole House: 23/8/16 Responsible Executive Team Executive Team Other Bills before Parliament Title Overview Impacts on Council?(Low - Medium - High) 257 Civil Defence Emergency Management Amendment Bill Evidence Amendment Bill This bill amends the Civil Defence Emergency Act 2002 to enable better recovery from New Zealand's most frequent emergencies. The new bill will provide clarity for those leading this work and ensure it can be carried out as swiftly and responsibly as possible. The bill does this by providing accurate authority for those directing, coordinating and managing recovery. The bill makes a number of minor and technical amendments recommended by the Law Commission, following its 2013 review of the Evidence Act Medium: Civil Defence Management happens at both a central and local government level, therefore the Council needs to remain updated on legislation changes in order to effectively respond/manage emergencies. Low: Council should be aware/informed on changes/amendments to evidence in relation to hearings or any other legal matters concerning Council business.

260 Current Status Manager Introduction: 15/10/15 First Reading: 4/5/16 Select Committee Introduction: 11/2/16 First Reading: 15/03/16 Report Due: 15/9/16 Responsible GM Corporate Services Commercial Advisor Other Bills before Parliament Title Overview Impacts on Council?(Low - Medium - High) Healthy Homes Guarantee This bill amends the Residential Tenancies Act 1986 to provide that Medium: The bill directly Bill (No2) the Ministry of Business, Innovation and Employments must set affects the Council as a minimum standards, binding on landlords, for the heating and social housing provider and insulation for every rental home in New Zealand. landlord. 258 Land Transfer Bill The aim of this bill is to replace the Land Transfer Act 1952, the Land Transfer Amendment Act 1963 and the Land Transfer (Computer Registration and Electronic Lodgement) Amendment Act 2002 and to create a new updated statute relating to NZ's land transfer system. The main provisions include mortgages and the exception to indefeasibility where the Bill provides that the High Court may order an alteration of the register in cases of manifest injustice on the application of a person who has been deprived of an estate or interest in land by the registration under a void instrument of another person as the owner of the estate. Medium: Council should be informed about legislation relating to the sale and purchase of land and dealings in land as this is an area of local interest and involvement. Amendments to the bill also provide that consent of a sublessee is not required to surrender the lease, that a person may lodge a caveat against dealings with an estate or an interest in land on the basis that the person claims an estate or interest in the land, and that a right of

261 Current Status Manager Responsible Other Bills before Parliament Title Overview Impacts on Council?(Low - Medium - High) appeal to the High Court from a decision under the Bill by the Registrar or the person acting under a delegation may be made directly to the Court rather than first having to apply to the Registrar. 259

262 Current Status Manager Introduction: 7/12/15 First Reading: 15/3/16 Report Due: 5/11/16 Responsible GM Regulatory Other Bills before Parliament Title Overview Impacts on Council?(Low - Medium - High) Sale and Supply of This bill provides for the mechanisms to correct certain minor technical Low: There is no direct Alcohol (Display of Low- issues that have emerged with the Act. The bill does not affect the impact on the Council but the alcohol Beverages and original policy intent or amend any substantive issues District Licensing Committee 260 Other Remedial Matters) Amendment Bill The first change addresses how non-alcoholic and low-alcohol beer and wine are displayed in supermarkets and grocery stores. The second change is in respect of the definition of "company". Under the previous legislation companies were explicitly included under the category of those who could hold an alcohol licence. This was not carried over in the same way to the new Act. The oversight has not caused any problems but it is important to make clear that companies should be across any legislative amendments relating to the sale and supply of alcohol in determining whether to issue an application for a liquor licence. can continue to hold licences as they always have done.

263 Current Status Manager Introduction: 17/12/13 First Reading: 11/2/14 Second Reading: 30/6/16 Responsible Executive Team Other Bills before Parliament 261 Title Overview Impacts on Council?(Low - Medium - High) Smoke-free Environments The main aim of this bill is to amend the Smoke-free Environments Act Low: There is no direct (Tobacco Plain 1990 (the Act) to introduce a plain packaging regime for tobacco impact on the Council. Packaging) Amendment products. However, some councils in Bill New Zealand have passed updated on legislation

264 Current Status Manager Introduction: 14/10/15 First Reading: 9/12/15 Select Committee 21/06/16 Responsible GM Corporate Services Other Bills before Parliament Title Overview Impacts on Council?(Low - Medium - High) 262 Statutes Amendment Bill The aim of this bill is to amend various statutes including among others: a) Employment Relations Act 2000 as it deals with personal grievances. One of the grievances is the grievance that an employee may have against his/her employer or former employer; b) Protection of Personal and Property Rights Act 1988 Medium: As an employer the Council is affected by any amendments to the Employment Relations Act 2000 and should remain updated and informed on legislative requirements and updates. The bill was divided by the Committee of the whole House: a) Victims Orders against Violent Offenders Bill; and (b) Charities Amendment Bill There is no direct impact on the Council.

265 Current Status Introduction: 11/8/16 First Reading Introduction: 26/05/16 Introduced: 11/8/16 Manager Responsible Property Officer GM Corporate Services Property Officer Members Bill 263 Title (Low - Medium - High) across New Zealand and are encouraged to apply Overview Impacts on Council? Land Transfer (Foreign Currently there is no easy or accurate way to measure the amount of Low: As a landowner and Ownership of Land land under the control of foreign nationals. This bill would ensure that local authority and policy Register) Amendment a comprehensive register of all foreign-owned New Zealand land is maker the Council can Bill compiled and made available to the general public. utilise this register as a resource to gauge foreign landholdings the Kaipara/Northland communities. Our Work Our Future Bill The aim of the bill is to require the Ministry of Business, Innovation, Low: Although these and Employment to amend the Government Procurement Rules and rules of Sourcing Principles of Government Procurement to make job creation the overall represent the benefit to New Zealand a determining factor in their decision making. government's standards The Principles of Government Procurement and the Government of good practice for Rules of Sourcing set out rules for Government Agencies as to how procurement planning, procurement should be carried out. approaching the market and contracting, local government agencies them. Residential Tenancies This bill amends the Residential Tenancies Act 1986 to strengthen Medium: As a landowner (Safe and Secure tenants rights and promote secure, long-term tenancies. The changes and landlord, the Council Rentals) Amendment Bill include: should be updated on

266 (a) there will an addition to the Act that provides for all existing tenants to have the right of renewal/right of refusal on the home they live in once the lease expires; (b) any rental contract must include an area where the landlord(s) must state what criteria they will use to calculate any future rental increase; any legislative amendments and legal requirements in relation to housing, renting and land. (c) the obligation on tenants to pay any leasing fee that may arise from renting a property is removed; (d) fixed term tenancies are for a default term of three years on standard tenancy agreements; (e) rents cannot be increase more than once every 12 months; 264 (f) the ability of landlord(s) to give a reduced notice period of 42 days in the event that the property is sold is removed and restored to a 90 day notice period.

267 File number: Approved for agenda Report to: Audit and Risk Committee Meeting date: 20 September 2016 Subject: Health and Safety September update Date of report: 09 September 2016 From: Hannah Gillespie Human Resources Manager Report purpose Decision Recommendation Information Assessment of significance Significant Non-significant Summary This report has been prepared to provide the Audit and Risk Committee with a report of health and safety incidents and accidents up to 31 July 2016, and an update to the Committee on current activities being undertaken at Council to reduce Council s health and safety risk. Recommendation That the Audit and Risk Committee: 1 Receives the Human Resources Manager s report Health and Safety September update dated 09 September 2016; and 2 Believes 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 the provision of s79 of the Act determines that it does not require further information prior to making a decision on this matter; and 3 Notes the update on Health and Safety Performance; and 4 Notes the work currently being conducted for compliance with the Health and Safety at Work Act Reason for the recommendation To update the Committee on Council s Health and Safety performance, and Council changes in response to new Health and Safety Legislation. Reason for the report Health and safety is a key risk we need to report to Council and the Audit and Risk Committee. This report summarises health and safety incidents and accidents reporting to date (July 2016, August reporting due to Council on 10 September), and an overview of current activity in this area to ensure Audit and Risk is aware of all health and safety risks internally and with all Persons Conducting a Business or Undertaking (PCBU s) we interact with. 265

268 Background Health and Safety at Work Act 2015 The key new principles the Act introduces are: Rather than limiting employers responsibilities to their employees at work, the Act introduces the concept of Persons Conducting a Business or Undertaking (PCBU) which imposes responsibilities on all organisations undertaking an activity; PCBU s have a primary duty of care for the health and safety of workers and others affected by the work carried out by the PCBU; Workers include employees, contractors and subcontractors, employees of contractors and volunteers who perform the work of the PCBU; The PCBU s duty of care extends to doing everything reasonably practicable to ensure that the health and safety of workers is not put at risk; PCBUs must consult, co-operate and co-ordinate when duties overlap to manage health and safety risks; The focus is to manage health and safety risks as far as reasonably practicable by either eliminating the risk, or minimising it; In managing the risk, consideration can be given to the likelihood of occurrence and the degree of harm, with cost only being a factor if it is grossly disproportionate to the risk; Officers of a PCBU (Directors, Chief Executives or equivalent) must exercise due diligence to ensure that the PCBU is meeting its health and safety obligations by actively engaging in health and safety risk management; The Act strengthens worker engagement by requiring PCBUs to engage with workers on health and safety matters, and requiring PCBUs to have effective worker participation practices; and PCBUs, officers and workers will be subject to significant penalties if they fail to fulfil their duties and obligations. Health and safety incidents and accidents reporting month ending 31 July 2016 Attached (Attachment 1) is the incidents and accidents report for month ending 31 July Reporting from all contractors and community/volunteer groups is due the 10th day of every month. In July there were two accidents and two incidents reported: one accident was reported with a Kaipara District Council staff member injured in the workplace. Improvements to mitigate this from happening again have been noted. The second accident was reported by Kaipara Refuse. A dog bit a runner working on a refuse truck. The dog was reported to animal control. The two incidents were reported by Kaipara Refuse. A container of hazardous weed killer was dropped off at the gate. Staff have contacted a specialist contractor to remove the hazardous chemical. The other reported incident was a concrete slab slipped at the transfer station. This has been assessed by builders and fixed. 266

269 Work In Progress Contractor Audit Management and Reporting Development of Council s contractor Health and Safety Management is continuing. The following documents have been sent to responsible managers to provide to all active contractors no later than 16 September 2016: A covering letter to contractors (Attachment 3); A flow chart representing how Council contractors risks will be managed (Attachment 4); A contractor risk rating chart (Attachment 5); and A contractor supervision guide (Attachment 6). Additionally a programme of audits of contractors is being developed depending on the level of risk. There will be an additional form of reporting to the Executive and Council on audit activity. Audit reporting is mandated by the level of risk an activity poses. We are at present collating all health and safety documentation from all contractors, with high risk activities as a priority. Working Alone The Health and Safety at Work (General Risk and Workplace Management) Regulations 2016 has given specific requirements on the need to manage the risks associated with remote or isolated work for PCBUs. Council is a PCBU and must comply with these regulations. Section 21 of the regulations states: 21 Managing risks associated with remote or isolated work; (1) A PCBU must manage, in accordance with regulations 5 to 8, risks to the health and safety of a worker who performs remote or isolated work. (2) To minimise risks to the health and safety of a worker associated with remote or isolated work, a PCBU must provide a system of work that includes effective communication with the worker. [Emphasis by author] A policy on staff working alone is developed and on the agenda for Council Executive Team to discuss. This policy will also incorporate the use of GPS tracking technology as a risk management strategy. A paper has been written for the Executive Team with recommendations on various options available and costings. A lone worker risk calculator is in draft form. This will help Council determine the individual risk and mitigation strategies for lone workers and get consistency across all departments. This will need to be socialised internally once approved. 267

270 Health and Safety Committee The Health and Safety Committee met on 10 August 2016, with the next meeting scheduled for 04 October All the new reporting tools have been socialised with the Committee along with policy development. Staff feedback around health and safety suggestions will be presented to the Executive Team. The Executive Representative on the Committee is Peter Marshall, General Manager Corporate Services. Elected members guide on Kaipara District Council Health and Safety With upcoming elections, a draft guide has been developed and with the Executive Team for consideration. It describes elected members obligations under the new act, major areas of risk to Council, risk to internal staff, and how Council will encourage a positive health and safety culture. Attachments Att 1 Report to Council to July 2016 Att 2 KDC Master Hazard and Risk Register Att 3 Covering letter to contractors Att 4 Council Contractors risks flowchart Att 5 Contractor risk rating chart Att 6 Contractor supervision guide 268

271 NB: The high reporting rates of events form some contractors is to be taken as an indication of good communication within the organisation. Report to Council - Health and Safety For 2016 up to end of July I = Incidents A = Accidents Staff Public High Risk Contractors Medium Risk Low Risk 269 Month KDC Staff KDC. Public Downer Broadspectrum Kaipara Refuse Fulton Hogan Northland Trility Forestry Management Other High Risk < $.5 M / Year I A I A I A I A I A I A I A I A I A I A I A I A I A I A I A I A I A I A January February March April May June July Recreational Services Council Drainage E.N.L Northland Health Other Med Risk <$.5 M / Year M.W.H. Northland Reg' Council Cato Bolam Other Low Risk < $.5M / Year

272 Date Type Company Name Details of Accident Improvement to our system 6/02/2016 Accident Recreational Services Worker strained back. Excessive lifting. Need to reduce waits lifted discussed. 30/05/2016 Accident E.N.L Graze and bruising from dog restraint. Dog to be handled by two people in future. 30/05/2016 Injury KDC Mangawhai Staff Staff member swerved vehicle off road and Staff vehicle accident in private time. Staff member was Accident Details 1/01/2016 Accident KDC. Public Near drowning day visitor got cramp. Beyond council control. 2/01/2016 Accident KDC. Staff Council staff member strained lower back whilst helping to save a lady from drowning. Action was appropriate for situation no improvement to system required /02/2016 Accident Fulton Hogan Worker had own vehicle roll on to him was struck and pinned and burnt by vehicle. Broken pelvis (had rods inserted) Skin graft to burn on leg. WorkSafe informed. Investigation found no fault with the vehicle handbrake. Being in front of truck was acceptable safe work practice to give protection from passing vehicles. Possible human error in not applying the hand brake sufficiently. Truck park brake alarms now being progressively retro fitted to all trucks. WorkSafe took no further action. 7/03/2016 Accident Kaipara Refuse Worker slipped and grazed knee. First aid. 26/03/2016 Accident KDC. Public Lady cut leg on prop' of boat at Kai Iwi Lakes. 4/04/2016 Accident Kaipara Refuse Broken bottle in recycling bag cut leg of runner. Beyond council control. Contractor reminded runners to watch for protruding objects. 28/04/2016 Accident Recreational Services Worker strained back after a long day removing vines. Issue raised contractors at monthly H&S meeting. 24/05/2016 Accident Recreational Services Worker cut into side of wrist with pruning saw. Non serious laceration. Worker had training update on safe use.

273 4/07/2016 Accident Kaipara Refuse Runner bitten by dog. Bruising to skin. Dog reported to animal control. Date Type Company Name Details of Accident Improvement to our system Staff rolled. Vehicle damaged and written off by insurance company. Staff member suffered laceration and concussion. relocating vehicle to new house after moving on the weekend. Beyond council control. Appropriate action was taken by manager. Sensitive, personal details omitted from this report. 5/07/2016 Injury KDC Staff Dargaville Staff Staff member experienced back pain whilst sitting down at work. Visited doctor and was recorded as strained back. Was given sick note for five days including weekend. Now using back support. Possibly age related but it has to be noted that a large part of the work that we ask staff to do is sedentary and therefore bad for health. Some initiatives to encourage more movement in the working day will benefit all. Raised at H&S Committee meeting on 10/8/16 271

274 Date Type Company Name Details of Incident Improvement?/1/16 Incident contractor Northland Forest Managers Minor damage to 4x4 vehicle. No details. 10/02/2016 Near miss contractor Broadspectrum Operator drove roller in reverse (not permitted). Operator spoken to by supervisor. Driver stopped traffic controller spoke to driver. Signage and cones reset. Site traffic manager notified. 29/03/2016 Near miss KDC Staff Dargaville Library Group of boys causing disturbance in library. Situation handled well but system for dealing with disruptive people reviewed. Staff reminded of the need to clear up any spills promptly. Staff reminded to check shelves as part of their process. Incident Details 18/01/2016 Incident contractor Environment Northland Ltd Worker intimidated by member of the public whilst Reported to Police. driving. 2/02/2016 Near miss contractor Broadspectrum Driver failed to secure ladder to vehicle, ladder fell off whilst driving. Tested for drugs. Negative. 12/02/2016 Near miss to Public Recreational Services Stone from weed eater hit and broke window of Staff training improved regarding campervan. weed eating around vehicles /02/2016 Near miss contractor Broadspectrum Public vehicle drove through roading site ignored signage and knocked over speed sign and road cones. 25/02/2016 Near miss contractor Broadspectrum Staff inspecting roadside culverts were approached by unfriendly dog. Staff retreated to their vehicle until dog left and then resumed work. 1/04/2016 Near miss KDC Staff Dargaville Library Staff member almost slipped over on water from dehumidifier. 5/05/2016 Near miss to Public Dargaville Library Customer leant on shelf and it tipped books on to floor.

275 Date Type Company Name Details of Incident Improvement eye protection or glasses must be worn. Direction on this was circulated at the Mangawhai office and will be included in a new staff health and safety update newsletter. Workers will give more attention to checking sand in future. Staff to be more aware and attempt to get vehicle registration plates. Possibility of getting a camera set up around gate area and record registration plates. 18/05/2016 Near miss to Public Recreational Services Contractor s truck caught the bumper of vehicle that was driving off road around the Mangawhai fire Need for caution around people driving was raised at safety meeting station. 9/06/2016 Near miss KDC Staff Mangawhai Staff Light bulb broke whilst being changed by staff member. Glass fell on to face, no injuries. We are happy to have staff undertake this work at low level but /06/2016 Incident KDC Staff Kai Iwi Lakes Staff Small tractor "Tracker" stuck in sand, had to be towed out. 12/07/2016 substance at gate that he claimed was "2-4-5T" (a could be taken. The container was treated as such Incident contractors Kaipara Refuse Ltd Member of the public dropped off a container of a hazardous weed killer now banned in NZ) at the transfer station. He drove off before any details and moved to hazardous waste shed for later collection / disposal by a dedicated company. 12/07/2016 incident contractors Kaipara Refuse Ltd Concrete retaining slab slipped off mounts in bunker at the transfer station. Slab has been assessed by builder and repairs arranged.

276 Extreme High Moderate Low None S C R O L L Eliminate Substitution Total Enclosure Segregation Part Enclosure Safety Device Safe System Reduced Ex Supervision Training P.P.E. Monitoring Hazard Description Risk of? Risk Type Controls Risk Future Options Review Date Manual Handling Muscular Skeletal injury High Reduced Ex Use trolleys where possible Moderate Reduced Ex Ask for assistance two person lifts Moderate Training Staff refresher programme for safe lifting technique Moderate Substitution Make arrangements with couriers to handle heavy packages or take them where they need to go Low Security Assault on staff working alone or Key pad entry to areas. No unknown persons to High Segregation entering/leaving the building be let in to the building Low Safe System minimum of two people to be present at opening up and closing Low Assault Extreme Supervision Staff have back-up alert process in place. Moderate Slip/Trip Falls Slippery floors Cords Unsecured floor coverings Stored items High Reduced Ex Clean up any spills immediately Low Substitution When replacing floor coverings use anti-slip variety Low Eliminate Arrange office so extension cords are not across walkway None Safe System Identify trouble spots (e.g. loose carpet corner), arrange for repair work and take measures to Moderate minimise risk in the interim Eliminate Keep walkways clear of stored items None Hazard and Risk Register - Office and General 274

277 Stress Various work / personal pressures leading to staff stress. High stress can result in a higher risk of accidents and poor health High Supervision Keep manager informed of both personal and work pressures. Moderate Reduced Ex Workers to be given less workload when stressed. No high risk activities when manager is aware of high stress. Moderate Supervision Employee Assistance Programme. EAP can be contacted independently of your manager. Moderate Staffroom/Kitchen Boiling water Moderate Safe System Cleanliness Moderate Reduced Ex Good movement flow around bench areas and food preparation areas Designated person to clean coffee machine, fridge and other small appliances Sharp knives Moderate Safe System Knives used, washed and stored safely Low Communicable Diseases Illness Moderate Reduced Ex Stay at home when sick (e.g. flu) to avoid spreading diseases Low Reduced Ex Include disinfection procedures when cleaning up bodily fluid spills and disposing of bodily Low waste Eliminate Dispose of rubbish regularly None Training Ensure adequate staff trained in first aid Low Low Low Electrical Hazards Existing Appliances High Safe System New Equipment Moderate Reduced Ex Staff to inspect equipment before use faulty equipment sent for repair Sockets and wiring checked on a regular floor inspections to ensure no fraying or splits exposing wires Low Low electrical testing and tag of all appliances on an annual basis later part 2016 Overloading power points High Safe System no extension or splitter box to be plugged into any extension or splitter box Low Telephone Use Abusive/threatening calls Moderate Training Ensure staff are aware of how to deal with abusive or threatening calls Low occupational overuse highly repetitive movements constricted postures leading to Occupational Overuse Syndrome High Reduced Ex Exercise and stretching take regular breaks from your work station Moderate Poor ergonomics Reduced Ex improve ergonomics Moderate Ergonomic assessments for all staff workstations later 2016 Protruding Sharp Objects (e.g. staples) Puncture wounds Moderate Safe System use proper tools for removing staples and fasteners Low Safe System don t pass on damaged documents Low Hazard and Risk Register - Office and General 275

278 Sedentary Work health problems associated with long periods of sitting Moderate Reduced Ex Desk adjustable from sitting to standing are available. Consult with your manager Low Reduced Ex take breaks from your work and walk around the office or block Low Desktop monitor reminder to be investigated e.g. every 20 mins? late 2016 work at height Higher risk of injury from falls High Eliminate High level storage to be avoided None Safe System use heavy duty step ladders with platform and handrail. No carrying items up or down steps Moderate Reduced Ex No heavy storage at height Low Fire Risk of injury from fire High Reduced Ex fire extinguishers available for fighting to an exit (or small fires) Moderate Reduced Ex fire doors kept clear and not held back Low Safe System fire alarms and evacuations held regularly Low Hazard and Risk Register - Office and General 276

279 Extreme High Moderate Low None Eliminate Substitution Total Enclosure Segregation Separation Part Enclosure Safety Device Safe System Reduced Ex Supervision Training P.P.E. Monitoring Hazard Description Risk of? Risk Type Controls Risk Future Options Review Date Plant & vehicles on site Hit by moving vehicles Extreme S C R O L L Segregation Separation keep 3 M clearance from all plant Moderate Eliminate have plant stop working when in the area Low P.P.E. high viz vest Moderate Safe System Isolate machinery working areas with tape Moderate Lone working increases severity of other risks such as falls or assault High Eliminate do work in pairs where possible None Safe System Use buddy system in remote areas either with other staff or partner to ensure your location is known at max every hour Moderate vehicle and personal tracking system to be investigated report later part 2016 Training lone working training at induction and ongoing Moderate Hot bitumen burns High Segregation Separation keep distance from all hot bitumen work Low P.P.E. wear all PPE if you have to work around hot bitumen Moderate silica dust lung damage Moderate Reduced Ex ensure contractors are dampening dust Low P.P.E. wear PPE Low 277

280 Extreme High Moderate Low None Hazard Description Risk of? Risk Lone working Control Type Eliminate Substitution Total Enclosure Segregation Part Enclosure Safety Device Safe System Reduced Ex Supervision Training P.P.E. Monitoring Controls Risk Future Options Review Date increases severity of other risks such as falls or assault High Eliminate do work in pairs where possible Moderate Use buddy system in remote areas either with Safe System other staff or partner to ensure your location is known at max every hour Moderate vehicle and personal tracking system to be investigated report Training lone working training at induction and ongoing Moderate Chemical Sprays/Poison Baits/Predator traps irritation, poisoning & death High Substitution use a safer chemical where possible Moderate Safe System follow good handling practice Moderate P.P.E. wear PPE. Gloves overalls face shield respirator Moderate Chainsaw and scrub bar Cuts from chain High Training experienced workers only Moderate P.P.E. mesh visor, gloves and chaps Moderate hearing loss High Reduced Ex only use for brief periods Moderate P.P.E. class 5 hearing protection Low Reduced Ex keep machine well serviced Moderate S C R O L L later part 2016 insect bits anaphylactic shock High Safe System Staff with insect allergies to inform manager and carry epipen at all times Low Dogs Bitten lacerations or infected by High Safe System use safe system when working around dogs Moderate Sun UV exposure leading to cancer High Reduced Ex wear wide brim hats wrist to ankle clothing and use sun block Moderate no lone entry to any steep areas (buddy Working around Dams/ponds slipping and falling on poor ground High Safe System system) Low Eliminate no entry to any confined space Low Ensure operators of plant are aware of your Working around heavy machinery and plant hit by machinery High Safe System presence and keep clear of operating vehicles. Make eye contact before approaching Moderate SOP to be developed l P.P.E. wear high viz jacket Moderate People attack from persons High Reduced Ex work in pairs were possible Moderate SOP to be developed Part Enclosure retreat to vehicle and call for help Moderate investigate training for frontline Training? Violence avoidance training staff late 2016 Quad bikes and farm vehicles accidents and roll over High Safe System experienced drivers only Moderate safer vehicles to be selected and roll protection Reduced Ex investigated Moderate Bio hazards toilets and drains High Reduced Ex use vacuum devises where possible Low P.P.E. wear gloves, overalls and glasses Low Safe System do not do the work with any open wounds Low Reduced Ex use disinfectant during operation Low 278

281 Extreme High Moderate Low None Eliminate Substitution Total Enclosure Segregation Part Enclosure Safety Device Safe System Reduced Ex Supervision Training P.P.E. Monitoring Hazard Description Risk of? Risk Type Controls Risk Future Options Review Date Security Assault on staff working alone or entering/leaving the building in the dark High S C R O L L Segregation Safe System Key pad entry to areas. Only known staff to be let in to the building by staff. All others via reception minimum of two people to be present at opening up and closing Assault Extreme Supervision Staff have back-up alert process in place. Moderate SOP to be developed Low Low Telephone Use Abusive/threatening calls Moderate Training Ensure staff are aware of how to deal with abusive or threatening calls Low Fire Risk of injury from fire High Reduced Ex fire extinguishers available for fighting to an exit (or small fires) Moderate Reduced Ex fire doors kept clear and not held back Low Safe System fire alarms and evacuations held regularly Low work at height Higher risk of injury from falls High Eliminate High level storage to be avoided Low Safe System use heavy duty step ladders with platform and handrail. No carrying items up or down steps Moderate Reduced Ex No heavy storage at height Low Hazard and Risk Register - Reception and Library 279