Introduction

Mayor’s introduction

Kei te arotahi mātou ki te kaunekenga tauwhiro, me te mahi whakatinana i tō mātou pūmanawa nohopuku ā-ōhanga

Koromatua Justin Lester

I tēnei wā tonu, kei te haruru a Pōneke, engari, he nui tonu ake ngā mahi hei whakatutuki, kia kaha pai ake ai. Ahakoa ngā whakatara nui i puta nā runga i te rūwhenua o tērā tau, kei te tupu rawa tō tātou ōhanga. Nā runga i te ū o te katoa o ngā tāngata o tō mātou rōpū, kei runga mātou i te ara tōtika ki te whakatipu i a Pōneke me te whakarite, ka noho tonu a Pōneke hei wāhi tumeke rawa.

Kei te tere tipu tō tātou taupori. Ko te tikanga o tēnei, kei te whai kiko ā mātou mahi taupatupatu me ētahi atu taone huri noa i te ao, mō te whai hunga whai pūmanawa. Otirā, nā runga i te kaha tipu o te taupori, me huri mātou ki te whakapiki ake i ō mātou haumi whare, haumi waka, me te haumi hanganga, kia noho whakarunga tonu ai te kounga oranga.

Ko te whakarite whare noho te whakatara nui rawa atu. E pīrangi ana mātou kia whai toronga ngā tāngata katoa o Pōneke ki ngā whare noho. Hei wāhanga ki tērā, kei te whai mātou ki te whakatū i ngā whare hou pāpori, māmā hoki ki te hoko, e 750, i ngā tekau tau e tū mai nei. Kei te tirotiro anō hoki mātou ki ngā mahi whakapaipai i ngā whare o te pokapū taone hei kainga noho hou, me te hoatu i tētahi moni tuku e $5000 ki ngā kaiwaihanga whare-tuatahi, me te whakangāwari ake i ngā whakaaetanga kia māmā ake te mahi hanga whare, me te tuku haumi mō te Whare Okioki, he momo whiringa wāhi noho mā te hunga kua mōhio rawa ki tēnei mea, te kainga kore whare mau tonu me te maurutanga waipiro wā-roa. He mea tuatahi tēnei ki Aotearoa, ā, kei te mahia ngātahi e mātou me te Manatū Whakahiato Ora.

Ko tā mātou arotahi i ngā marama tata kua hori, ko te kaupapa kauneke tauwhiro, me te mahi whakatinana i tō mātou pūmanawa nohopuku ōhanga. Ko te tikanga o tēnei, ko te whakatutuki pai i ngā mahi matua me te arotahi anō hoki ki ngā kaupapa kōkiri hou ka āwhina i a Pōneke kia noho ngahau ai, tātāwhāinga hoki. Me pai ake, me kamakama ake ā mātou mahi, ā, me te hōpara i te whakaaro ki te whakatū i tētahi pokapū pūoro ā-motu, hei kaupapa mahitahi me te Tira Whakatangi Pūoro o Aotearoa me te Whare Wānanga o te Ūpoko o te Ika a Māui.

Kei te haumi anō mātou ki roto i tō mātou kōtuinga waka hei whakatenatena i ngā kainoho ki te haere mā ngā waka tūmataiti, mā raro, mā te paihikara rānei. Kua whakaraupapatia e mātou te rāngai toi, e kaha nei ki te hoatu i te āhuatanga o tō tātou taone.

Whai muri i te au o te rūwhenua, i whakaritea e mātou te manahau hei tino mahi tuatahi. I te tau 2014 i puta a Pōneke hei wāhanga o te kōtuinga Taone Manahau 100, i tīmataria e te Rockefeller Foundation i te pito tōmua o tēnei tau, i whakaputaina e mātou tō mātou ake rautaki manahau, e whakatakoto ana i te mahere whakatutukinga āmiki ki te whakataka pai ake i ngā kainoho o Pōneke mō ngā tauwhatinga. Huri noa i te tau, e mahi tata ana mātou me ngā rangatira o ngā whare whakawhiti noa i te taone e pā ana ki te mahi whakapakari hanganga, a, i tīmataria hoki e mātou tētahi mahinga tuatahi ā-ao ki te tūwiri mō te wai māori i raro i te moana, hei whiringa mātāpuna mō te whakaputunga wai.

Ko tō mātou whāinga ko te tuku i ngā mahi e whakarato ana i te uara pai rawa mō te moni. Kei te noho pai ā mātou pukapuka pūtea engari, me kaha tonu tā mātou mahi matawhāiti mehemea e pīrangi ana mātou ki te whakaiti ake i ngā rēti. Ko te tikanga o tēnei, ko te noho arotahi ki runga i ngā wāhanga ka āwhina i a tātou kia tū manahau ake, hei taone ngākau titikaha, me te whai mahi nui tonu te utu, me te whai whare ka taea noa iho te hoko, me tētahi pūnaha waka māia, me tētahi tirohanga ahurea ngahau.

He wā whakataratara, whakaongaonga hoki tēnei. He nui ngā mahi hei whakatutuki ā, kāore mātou mō te noho ki runga i ō mātou ringaringa. I tēnei wā tonu, kei runga a Poneke i te huarahi tika. Kei te haumi mātou i roto i tō mātou taone mō ngā rā ki mua, e mahi tahi ana mātou ki te whakapakari ake, me te whakapai ake i runga i te āhua o tōna noho i nāianei mō te katoa.

Nā Justin Lester

Our focus is on sustainable growth and realising our economic potential

Mayor Justin Lester

Right now, Wellington is humming, but there’s more work to be done to make it even better. Despite the huge challenges that have come from last year’s earthquake, our economy is booming. Thanks to the commitment of everyone on our team, we’re on track to grow Wellington and ensure it remains a great place to be.

Our population is growing fast. This means we’re competing effectively with other cities around the world for talent. But a growing population also means we need to invest more in housing, transport, and infrastructure so that quality of life remains high.

Housing is the biggest challenge. We want all Wellingtonians to have access to housing. As part of that, we have agreed to build 750 new social and affordable houses over the next decade and we will explore refurbishing inner city buildings for new apartments. Since July, first-home builders also benefit from a $5000 rates rebate. We’re taking steps to simplify consents to make it easier to build, and investing in Te Whare Oki Oki, an accommodation option for people who have experienced chronic homelessness and long-term alcohol dependence. This is a first in New Zealand and we’re doing it in partnership with the Ministry of Social Development.

Our focus over these past months has been on sustainable growth and realising our economic potential. This means doing the basics well while also focusing on new initiatives that will help Wellington be more vibrant and competitive. We need to work better and smarter, and explore opportunities to work with others. We’re working with Greater Wellington Regional Council to explore building an indoor arena that will draw more international acts. And we’re making progress towards establishing a world-class national centre of music, in partnership with the New Zealand Symphony Orchestra and Victoria University.

We’re also investing in a balanced transport network, doing more to solve congestion, and supporting public transport, walking, and cycling. Our goal is that no matter how you choose to get around Wellington, you can do so easily and affordably. And we’ve prioritised the arts sector that gives the city so much of its character.

In the wake of the earthquake, we’ve also made resilience a priority. In 2014, Wellington became part of the 100 Resilient Cities network, pioneered by the Rockefeller Foundation. Earlier this year, we released our own resilience strategy, which sets out a blueprint to better prepare Wellingtonians for disruptions. Over the past year, we’ve been working closely with building owners across the city on strengthening infrastructure, and we began a world-first operation to drill for freshwater under the sea, which could provide an alternative water supply.

Our goal is to do things in a way that delivers the best value for money. Our books are in good order but we need to be prudent if we want to keep our rates low. This means staying focused on those areas that will help us become a more resilient, confident city, with well-paid jobs, affordable housing, an efficient transport system, and a vibrant cultural scene.

These are challenging and exciting times. There is a lot to get on with and we’re not sitting on our hands. Right now, Wellington is on the right track. We’re investing in the city’s future, and working together to make it stronger and even better than it already is, for everyone.

Justin Lester

Chief Executive’s introduction

Ahakoa ngā taumahatanga ā-pūtea i puta nā te rūwhenua, i iti ake tā mātou whakapaunga moni, tērā i te pūtea i whakaaehia.

Kaiwhakahaere Matua Kevin Lavery

He tau whakatara, whai tikanga hira hoki tēnei – he tau tēnei ka awe i ngā mahi whakamahere a te Kaunihera i ngā tau tini kei mua i te aroaro.

Kāore i roa, whai muri i te tīmatatanga o te Kahika hou me ngā Kaikaunihera hou, ka pā te rūwhenua ki Kaikōura.

Tere tonu te huri a te Kahika me āna kaimahi ki ngā mahi, me tā rātou whakawhanake i tētahi hōtaka e toru tau te roa, hei whakatutuki i ngā kaupapa matua mō Pōneke, pērā i ngā kaupapa whare, ngā kaupapa waka, ngā kaupapa mahi, me ngā kaupapa ā-toi, ā-ahurea – mā konā e whakapakari ake ai te taone nui.

Ahakoa ngā whakatara hou i mua i a mātou, kāore te Kaunihera i karo ki te tuku ratonga kairangi ki ngā tāngata o Pōneke:

I iti ake tā mātou whakapaunga moni tērā i te pūtea i whakaaehia, ahakoa ngā taumahatanga ā-pūtea i puta i muri mai i te rūwhenua.

He nui te pikinga – maha rawa i ētahi marama – o ngā tono whakaae whakatū whare, i mahia e mātou

I kaunekehia te tūmahi ki te whakapakari i te Hōro Matua o te Taone e utua ana ki te $90 miriona..

I tautokona e te rangahau mānawa kiritaki ā-tau te mahi a te Kaunihera ki te hora i ngā ratonga matua:

E ngata ana te 86 ōrau o ngā kainoho ki te kounga me te tiakitanga o ngā pito whenua kākāriki – ngā papa rēhia ā-rohe, ngā wāhi haututu me ngā whenua rāhui; ngā māra huaota; ngā tātahi me ngā wāhi takutai; me ngā wāhi hīkoikoi hoki

E ki ana te 94 ōrau o ngā kairēti kaunihera, he pai, he tino pai rānei te āhua o ō rātou whare, whaitua noho rānei

E ngata ana te 90 ōrau o ō mātou kiritaki mō te whakaputunga wai ki te kāinga, ā, e 82 ōrau e ngata ana ki ngā ratonga parawai a te Kaunihera

E 92 ōrau o ō mātou kiritaki e ngata ana ki ō mātou ratonga ā-wharepukapuka

I whakautua te 73 ōrau o ngā waeatanga mai ki tō mātou Pokapū Whakapānga i mua i te paunga o te 30 hēkona - ā, i whakautua te 98 ōrau o ngā īmēra i roto i te huri o te 24 hāora.

I tino pai rawa tā mātou uruparetanga rūwhenua, mahi whakaoranga hoki. He tika tonu tā te Kaunihera ki te whakamahi i te rūwhenua hei wā whakarite panoni kaupae ki tō mātou ahunga kia tū manahau ai – ki roto i te kaunihera, ki roto i te taone, ki te rohe hoki.

Ko te manahau te mea kei mua, kei te pokapū hoki o ngā mahi katoa a te Kaunihera.

Ahakoa te tikanga o te Pūrongo ā-Tau ki te whakaata i ngā whakatutukinga mahi i te tau kua hipa, me matua titiro anō hoki ki ngā rā ki mua. Hei tērā tau, ka whai mātou i tētahi Mahere Wā-roa Hou. Ko te whāinga i ngā tau e toru ki muri a te Mahere Wā-roa, ko te whakarite i a Pōneke kia whai i tētahi huarahi pakari, kaunekenga tauwhiro hoki – ā, koinei tonu te mahi i tutuki. I ngā tau e toru kua pahure ake, kua rongo a Pōneke i te tipunga ōhanga me te tipunga taupori, me te ara ake anō o ngā whakatara hou ki te Kaunihera – tae noa ki te whai wāhi o te tangata ki te hoko whare me ngā āhuatanga waka.

Nā reira, ko te arotahi ka puta i te Mahere Wā-roa, 2018-2028 he whai tonu i te whakahaere me te toko i te kaunekenga.

Ko te tikanga, nā runga i tō mātou ahunga matawhāiti ki ngā whakapaunga moni, kei te tino pai te āhua ā-pūtea o te Kaunihera. Heoi anō, nā te rerekētanga o te taiao, kua kōpā rawa mō ngā nekenekehanga.

Ko te whakatara ki te Kaunihera i ngā tau kei mua, ko te tū kamakama ake mō ngā mahi haumi ki roto i te taone, me te āhua o tōna utu me te tuku i ōna ratonga.

Nā Kevin Lavery

We came in under budget despite financial pressures as a result of the earthquake

Chief Executive Kevin Lavery

It’s been a challenging and eventful year – one that will influence the Council’s planning for many years to come.

No sooner had the new Mayor and Councillors been ushered into office than the Kaikoura earthquake struck.

The Mayor and his team quickly got to work, developing a 3-year work programme tackling priority issues for Wellington such as housing, transport, jobs, arts and culture – and, of course, making the city more resilient.

Despite the new challenges we faced, the Council didn’t break step in its delivery of high-quality services to the people of Wellington:

We came in under budget despite the financial pressures as a result of the earthquake.

We handled a big increase – record numbers in some months – of building consent applications.

We made progress on the $90 million project to strengthen the city’s Town Hall.

The Council’s performance in the delivery of frontline services was borne out in our annual customer satisfaction survey, which showed:

86 percent of residents are satisfied with the quality and maintenance of green open spaces – local parks, playgrounds and reserves; botanic gardens; beaches and coastal areas; and walkways

94 percent of Council tenants say the overall condition of their house or apartment is good or very good

90 percent of our customers are satisfied with household water supply, and 82 percent with the Council’s wastewater services

92 percent of customers are satisfied with our library services

73 percent of all calls to our Contact Centre were answered within 30 seconds – and 98 percent of emails were responded to within 24 hours.

We handled the earthquake response and recovery really well. The Council has rightly used the earthquake as an opportunity to change our approach to resilience – within the Council, the city and the region.

Resilience is now front and centre of everything the Council does.

While the Annual Report is about reflecting on our performance over the past year, we also have to keep one eye on the future. Next year we will update our Long-term Plan. The goal of our Long-term Plan 2015–25 was to put Wellington on a path to strong, sustainable growth – and that is what happened. In the last 3 years, Wellington has experienced economic and population growth, which has presented new challenges for the Council – especially housing affordability and transport.

So the focus of our Long-term Plan 2018–2028 will be to manage and sustain growth.

Our prudent approach to spending means the Council is in good shape financially. But the changed environment means there is less room to manoeuvre.

The challenge for the Council in the coming years is to be smarter about investing in the city and the way it pays for and delivers services.

Kevin Lavery

Our city, who we are, what we do

Under the Local Government Act 2002, Wellington City Council is tasked with meeting the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions.

From mowing lawns and building seawalls to installing street lights and fixing potholes, we work around the clock for the city and its population.

We manage many areas – from parks and cemeteries to parking and pools, from water supply and waste management to cycleways and animal control. We also actively support the city’s economic growth and cultural development through a range of projects and initiatives.

Residents pay an average of $6.52 per day for these services. That roughly equates to what residents pay per day individually for petrol, power, phone, or internet. Given the breadth of our services, this is good value for money.

We have seven key operating areas:

Governance – We manage local elections, inform residents, and engage with them about the city and the issues it faces, and work with mana whenua to make decisions in the best interests of the city and its people.

Environment – We manage services such as water supply, and waste reduction and disposal, as well as wastewater and stormwater. We fund conservation attractions and manage 355 kilometres of tracks and walkways.

Economic development – We attract and support business activity, market Wellington to tourists from New Zealand and overseas, and own and operate performance venues and conference facilities. We also help promote business, education, and cultural links with sister cities such as Sakai in Japan and Sydney in Australia.

Cultural wellbeing – We fund city events and festivals such as the New Zealand Festival and CubaDupa. We also support attractions, galleries, and museums, as well as community art and cultural activities.

Social and recreation – We provide a wide variety of community facilities throughout the city. This includes swimming pools, sportsfields, recreation centres, and playgrounds, as well as two marinas and a golf course.

Urban development – We manage urban planning and design, control building activity and land use, and assess risks from earthquake-prone buildings. We also develop and enhance public spaces.

Transport – We provide and maintain 700 kilometres of road, 92 bridges, five tunnels, 3207 walls, nearly 30 kilometres of cycleways, and 885 kilometres of pedestrian paths. We also provide bus shelters, bus stops, and bus lanes, and signs and traffic signals.

How we govern and engage with the community

The Council is a representative democracy. Our role is to determine the public interest and decide on areas of priority for the good of the city and its people.

Our legislative framework

Under the Local Government Act 2002, our statutory roles are:

to enable democratic local decision-making and action by, and on behalf of, communities;

to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is cost-effective for households and businesses.

Council elections are held every 3 years. The last election was held in October 2016 and the next will take place in October 2019.

Our governance structure consists of the Council and its committees, which are designed to enable elected members to perform their governance roles effectively and to ensure the democratic process operates smoothly. The committees are:

City Strategy Committee

District Licensing Committee

Long-term Plan/Annual Plan Committee

CEO Performance Review Committee

Regulatory Processes Committee

There are two joint committees:

Wellington Region Waste Management and Minimisation Plan (joint committee)

Wellington Regional Amenities Fund (joint committee)

And three subcommittees:

Council Controlled Organisations Subcommittee

Finance, Audit and Risk Subcommittee

Grants Subcommittee

Our people

Wellington City Council is made up of 14 elected Councillors and a Mayor.

The Mayor is elected by the city’s residents. The Mayor’s responsibilities include:

promoting a vision for Wellington

providing leadership to achieve that vision

leading the development of city-wide Council plans, policies and budgets

ensuring effective engagement with all Wellingtonians.

The Councillors are elected by voters from the wards they represent. The wards and number of elected Councillors for each are:

Northern Ward – three Councillors

Onslow-Western Ward – three Councillors

Lambton Ward – three Councillors

Eastern Ward – three Councillors

Southern Ward – two Councillors

Your Mayor and Councillors

Citywide
Justin Lester (Mayor)

Portfolio Leader:
Arts and Culture, Major City Projects, Governance

Southern Ward
Paul Eagle (Deputy Mayor)

Chair:
Long-term and Annual Plan Committee, CEO Performance Review Committee

Portfolio Leader:
Housing, Recreation, Events

Onslow-Western Ward
Diane Calvert

Portfolio Leader:
Community Planning and Engagement

Eastern Ward
Chris Calvi-Freeman

Portfolio Leader:
Transport Strategy and Operations

Lambton Ward
Brian Dawson

Portfolio Leader:
Social Development, Living Wage

Northern Ward
Jill Day

Portfolio Leader:
Partnerships, Children and Young People

Eastern Ward
Sarah Free

Portfolio Leader:
Public Transport, Cycling and Walking

Onslow-Western Ward
Andy Foster

Chair:
Finance, Audit and Risk Management Subcommittee

Portfolio Leader:
Finance, Urban Development, Karori Framework, Predator Free Wellington

Northern Ward
Peter Gilberd

Portfolio Leader:
Natural Environment, City Scientist

Southern Ward
David Lee

Portfolio Leader:
Technology, Innovation & Enterprise, Climate Change

Eastern Ward
Simon Marsh

Portfolio Leader:
Economic Development, Small Business (joint)

Lambton Ward
Iona Pannett

Chair:
City Strategy Committee

Portfolio Leader:
Infrastructure, Sustainability

Northern Ward
Malcolm Sparrow

Chair:
Regulatory Process Committee

Portfolio Leader:
Community Resilience

Onslow-Western Ward
Simon Woolf

Chair:
Council Controlled Organisations Subcommittee

Portfolio Leader:
Wellington Ambassador, Tourism, Small Business (joint), Sport

Lambton Ward
Nicola Young

Portfolio Leader:
Central City Projects, Education Partnerships

Executive team and structure

The Chief Executive leads the implementation of Council decisions and effective delivery of Council services, activities and key projects.

The Chief Executive is supported by more than 1500 staff members. See page 12 for a breakdown of personnel.

The skills required to manage a city are hugely varied. The Council employs policy advisers and park rangers, architects and business analysts, among others. They all help ensure Wellington is a good place to visit, live, and work.

Community engagement

Wellington City Council works for the city and its people. We need to understand the needs and aspirations of the people we represent. This is why we seek input from everyone affected by the decisions we make. The feedback we get from Wellingtonians informs our decisions on plans, policies, and budgets.

Active and ongoing engagement helps the Council make better decisions that reflect the needs and expectations of the community.

The way we consult depends on the decision being made. All Wellingtonians can have input on our budgets and priorities for each year, decisions about bylaws, and other significant decisions that affect the city and its people.

In 2016/17, we consulted and engaged with others on a number of plans and initiatives. The following are examples:

We worked collaboratively with the business owners and residents in Tory Street following the demolition of the Reading Cinema car park to co-create a street installation that will be delivered over summer.

Love the Bay is a collaborative Island Bay project, of which a significant part was taking another look at the Island Bay Cycle Way. There has been extensive engagement aimed at getting local communities involved.

In April 2017, we sought the public’s views on Predator Free Wellington, a plan to eradicate rats, possums, and other predators that threaten native wildlife.

In April and May 2017, we consulted Wellingtonians on the Annual Plan 2017/18, which provides an overview of all the proposals and the budget for this year.

In the same period, we also consulted the public on the Draft Wellington Region Waste Management and Minimisation Plan, which aims to help Wellingtonians reduce the amount of waste produced, better reuse resources, and recycle more.

The Council aims to do more in this area and has committed to an additional $75,000 in funding for engagement in the Annual Plan 2017/18.

Partnership with Māori and mana whenua

The Council works to ensure the role of Māori in the city is valued and reflected in all aspects of our work, from resource management and economic development to social wellbeing and the arts.

The Council is subject to a range of legal obligations and Te Tiriti o Waitangi considerations. On 29 March 2017, the Council and its iwi partners signed a Memorandum of Understanding (MoU) that replaced previous MoUs and acknowledged the partnership between the two groups.

The new MoU reinforces the relationship with iwi and further acknowledges the leading role Māori have to play in Wellington’s development. It reflects a joint commitment to work closely together on decisions relating to the city’s economic growth and prosperity.

As part of the MoU, a senior leaders’ forum was formed between the Council and its iwi partners that consists of both elected members and senior Council managers, and iwi mandated entities. (See the Governance section for more information).

Council Controlled Organisations (CCOs)

These are organisations that undertake activities on behalf of the Council and are managed by an independent board. CCOs enable the Council to manage Council assets or deliver Council services, using specialist expertise.

There are eight CCOs:

Wellington Water, which manages all Wellington, Hutt, Upper Hutt, and Porirua councils’ drainage and water services

Basin Reserve Trust, which manages, develops, and promotes the Basin Reserve for recreation, leisure, and cricket games

Wellington Regional Economic Development Agency (WREDA), which is the city’s official economic development organisation

Wellington Regional Stadium Trust, which operates and maintains the Stadium as a high-quality multi-purpose sporting venue

Wellington Cable Car Ltd, which maintains and operates the Cable Car, and maintains the trolley-bus overhead electrical system

Wellington Museums Trust, which provides seven educational and cultural facilities

Wellington Zoo Trust, which manages the zoo, educates the community about zoology, and supports conservation initiatives

Karori Sanctuary Trust, which manages ongoing conservation and restoration work at Zealandia

Reporting our performance

We make ourselves accountable in many ways, including elections, reports, and plans. This Annual Report is one.

We also produce quarterly reports. All these reports are available to the public and provide detailed accounts of the Council’s work and objectives.

Long-term Plan 2015–2025

In this Annual Report, we are reporting against year two of the Long-term Plan 2015–25. This Long-term Plan is based on a strong investment programme to rejuvenate the economy and transform Wellington to achieve its vision. The next Long-term Plan update will be in 2018.

Overview of our performance

Our long-term approach to developing the city

2012

We adopted a long-term strategic vision for the city

In 2012, we worked extensively with the community and set in place a clear overarching long-term strategic vision for the city called Wellington Towards 2040: Smart Capital. The vision is supported by four broad goals:

Connected city – Improve the city’s physical and virtual connections nationally and globally to unleash the potential of Wellington’s people and businesses.

People-centred city – Ensure the city is highly people-focused, open to new ideas, welcoming, vibrant and embraces diversity. This improves quality of life for residents and attracts new skilled migrants.

Eco-city – Transition to a low-carbon future and achieve high standards of environmental performance in everything we do.

Dynamic central city – Enhance the central city as a hub of creative enterprise to lead the region to the next level in economic performance and transformation.

We have a number of plans, strategies and policies that guide us in delivering our vision for the city.

2015

We invested to grow with our 10-year plan

The Long-term Plan 2015–25 was based on a strong investment programme to stimulate the economy and transform Wellington to achieve its vision. Without a growing rating base and strong economy, it would be difficult to make the necessary investments to achieve the vision outlined in 2012.

In the preceding years, the global financial crisis muted economic confidence, inward migration and new business formation. And for cities like Wellington, which compete on the global stage for smart businesses, students, jobs, and trade and investment, it was important to lead the way.

The 10-year plan ensured core services were delivered to a high standard and included investment in economic stimulus projects such as a tech centre and the Movie Museum and Convention Centre to position Wellington and its communities for a stronger and more prosperous future.

2016/17

Annual Plan 2016/17 and Triennium Plan

The Annual Plan 2016/17 continued the pathway outlined in the Long-term Plan 2015–25. The plan focused on economic stimulus projects and delivering essential services to a high standard. In addition to doing the basics well, areas of focus for year two of the Long-term Plan included:

making the city more resilient and better able to cope with environmental shocks, such as earthquakes and climate change

continuing our investment for economic growth by delivering on major catalyst projects and improving our connections to the world

working with others to make the city’s transport system more efficient by prioritising public transport, investing in new cycleways and walkways, and reducing bottlenecks on the road network, as well as continuing to focus on reducing resource use, waste, and pollution.

Shortly after the election and induction process, the Mayor and Councillors met with over 200 key city stakeholders, and identified goals and a draft work programme for the remainder of the three-year period. The Triennium Plan will be used to guide the development of the Long-term Plan 2018–28 and budgets.

Making the city more resilient and better able to cope with environmental shocks, such as earthquakes and climate change was an area of focus for year two of the Long-term Plan

Overview of our performance – the money

The Council has performed well financially over the past year. Our financial position remains healthy. The Council has maintained its AA credit rating with Standard & Poor’s, the highest for a public sector entity. Our debt position is very conservative and we work with other Councils to reduce costs wherever possible.

$494.5

million

cost of running the city for the year 2016/17

Our total expenses for the year were $494.5 million ($453 million 2015/16), which represents the cost of running the city during the year. Of the $494.5 million, $15.5 million relates to the November earthquake.

$7

billion

of assets

The Council provides a broad range of services to the city through a range of infrastructure networks and facilities (the Council’s assets). These have been built up over many generations and assets support services that provide both social and economic benefits for Wellington. Seven billion dollars worth of assets equates to around $33,000 net worth of value for every person in the city.

$10.6

million

underlying net surplus for 2016/17,
2.1% of operating expenditure

The underlying surplus is the reported net surplus ($31.7 million) less any government funding for capital projects ($30.3 million), plus items either not required to be funded by ratepayers or the difference between actual items budgeted for this year ($7.1 million) and other adjustments ($2.1 million) that do not affect the rating requirements of the Council.

$6.52

cost of delivering all Council services per resident per day

Our services include managing and maintaining facilities like libraries, swimming pools, sportsfields, community centres and parks, as well as keeping our roads and footpaths at a high standard, making sure we all have safe water to drink, and supporting arts, cultural and sporting events.

$137.2

million

of capital spend for 2016/17

We spent $137.2 million on building new assets for the city. This was lower than our planned $204.9 million. This is as a result of the November earthquake disruptions and the re-phasing of some projects over a longer period of time.

$419

million

borrowing position for 2016/17

This is an increase of $22.4 million from last year. This equates to $2,015 per person in Wellington. We use borrowing to spread the cost of new facilities or infrastructure over the multiple generations that will benefit from that facility or infrastructure. We believe this is the fairest way to do things.

$1:1.20

debt servicing costs to investment returns

For every $1 the Council incurs on paying interest on debt, it receives $1.20 from its investments.

AA

credit rating

The Council is in good financial health and has an AA credit rating with Standard & Poor’s.

Sources of revenue $m

Rates are our main source of funding, with revenue from operating activities (including user fees) the next largest source. We also receive revenue from other external sources (mainly government) to fund capital expenditure, revenue from interest, and dividends.

Operating expenditure (gross) by area $m

Our activities and their related expenditure are divided into seven strategic areas of focus, as shown in the graph. During the year we delivered a wide range of services, from resurfacing roads and managing the water network to providing parks, pools, sportfields and libraries, at a cost of $6.52 per day per resident.

Capital expenditure by area $m

We have a comprehensive renewal programme for our assets and have completed $137.2 million of capital expenditure, which equates to 67 percent of our capital expenditure plan for the year. Delays in a number of projects occurred during the year due to changes in design, negotiations or consultation and consent requirements and will be proceeding in the next financial year.

For details on the capital expenditure underspend, please see the table on pages 20 and 21.

Underlying surplus $m

The underlying surplus

The underlying surplus provides a comparison with the rates requirement we budgeted for in our Annual Plan to achieve a balanced budget. It shows how closely our annual income matches how much we spend in any given year. A balanced budget helps ensure that we are not passing the costs of running the city today onto future generations and imposing future costs on current generations. Our goal is therefore to have an underlying surplus or deficit close to zero.

This year we had an underlying surplus of $10.6 million, mainly due to lower debt servicing costs as a result of deferred capital expenditure, and higher than budgeted revenue from dividends and from our landfill.

To get from net surplus to underlying surplus, the following is excluded:

Revenue received for capital items – for example, the funding we receive from NZTA for roading

Non-funded transactions – either where, through the Annual Plan, it is deemed appropriate that future ratepayers share the costs incurred in a particular year, or where another organisation is liable for the funding

Other minor adjustments

These items are excluded because they generally don’t affect rates and were excluded from our Annual Plan balanced budget calculation.

The table below summarises the capital and non-funded adjustments made to the net surplus to arrive at the underlying surplus.

Net underlying surplus
Actual
$M
Budget
$M
Variance
$M

Reported net surplus
31.7
12.8
18.9

Exclude items or budgeted differences not required to be funded
7.1
11.2
(4.1)

Exclude government funding for capital projects
(30.3)
(35.0)
4.7

Other adjustments
2.1
11.0
(8.9)

Underlying surplus
10.6
0.0
10.6

Capital underspend

Many of our significant capital projects involve collaborative partnerships with community, suppliers and other stakeholders. We also want to ensure projects are fit for purpose as circumstances or requirements change. The timing of these projects therefore needs to be flexible. In addition, the November 2016 earthquake led to an increased focus on the city's resilience and contributed to the delay or rephasing of some projects, which resulted in a capital underspend at the end of the 2016/17 year.

Project
$m

Comments

Movie Museum and Convention Centre
13.3

Project delayed – we are working with The Movie Museum Limited (TMML) to formalise terms. Once this is complete detailed designs and construction will commence. This is expected in 2018.

Branch library upgrades
6.3

Delays to the start of the upgrade of the Johnsonville Library due to a change in the project brief and design. The project will now be completed by mid-2019.

Housing upgrades
5.4

Arlington Site 1 has been delayed, with procurement still in progress. The start of the Arlington Site 2 project was delayed, with completion now expected by mid-2018.

Office resilience and efficiencies
4.7

The Workplace project was put on hold following the November 2016 earthquake. The project will be reassessed once the future of the Council office buildings is determined.

Waterfront developments
3.7

Work on Frank Kitts Park and North Kumutoto public space projects was delayed due to a prolonged consents and approval process. The Frank Kitts Park project is unlikely to start before April 2018, while the North Kumutoto project has started and is due to be completed by July 2018.

Cycling improvements
3.6

The revised cycling programme was approved in August 2016. This resulted in significant rephasing of the cycling budgets in 2016/17 and beyond. The revised programme will be delivered in upcoming years.

Central City Framework
3.2

Largely due to the delay in the start of the Lombard Lane upgrade project caused by additional project scope. This project is now due to be completed by February 2018.

Suburban centres upgrades
1.1

The delivery of the Tawa Town Centre upgrade was delayed due to additional consultation required to ensure that the project met the needs of the community. The upgrade is now due to be completed by February 2018.

Safer roads projects
1.1

The focus in 2016/17 was on planning and engagement for the long-term work programme for safer speed limits in residential areas. The actual work programme will be completed in upcoming years.

Venues renewals
1.6

Work at the St James, Opera House and Town Hall was deferred to align with the earthquake strengthening projects for the St James and Town Hall.

Civic property renewals
2.6

Planned work for the Civic Administration Building (CAB), Municipal Office Building (MOB), and Central Library was delayed due to the uncertain future of these buildings. The work programme will be reviewed when the future of these buildings is clearer.

Housing renewals
2.3

The 2016/17 work programme was reviewed, with some scheduled work delayed until 2017/18 or deferred indefinitely.

Aquatic facility renewals
1.2

Under budget mainly due to changes in the Freyberg Pool renewals programme, where some components (roof renewal, carpeting and lighting) were able to be delayed until the next pool closure in 2017/18 or later when earthquake strengthening is planned.

Basin Reserve
1.8

Delayed start to the contract including work on the RA Vance Stand. This work will be completed in the first half of 2017/18.

Building resilience
1.2

Under budget due to delays in the earthquake strengthening programme, in particular the Town Hall and St James Theatre projects.

Other

14.6

Smaller miscellaneous delays in a number of projects.

2016/17 Underspend
67.7

Highlights for the year

Financial Summary – overview of all activity areas

Details of the financial performance against budget for each activity can be found in the “Our Performance in Detail” section, under “What it cost”. Included are: figures for the gross operating expenditure, revenue, net operating position, capital expenditure and details for any unspent portion of capital to be carried forward to future years, and explanations for net variances over $500,000.

Here is a summary of all activity areas’ net operating expenses and capital expenditure against budget.

Performance summary – overview of all activity areas

We use outcome indicators to monitor our city over time which provide information on trends that may influence our performance, including those things outside our control. We use performance measures to track how well we are delivering services against targets that are set out in the Long-term Plan and Annual Plans.

Full details of outcome indicators and performance measures for each activity can be found in the “Our Performance in Detail” section.

The following key is used to summarise our performance results against target:

Achieved
Target has been met or exceeded

Substantially achieved
Performance within 5 percent of target

Not achieved
Target not achieved by greater than 5 percent

No result
The measure was not surveyed, no result or no target

The overall number of performance measure results against target were:

75
21
37
5

In summary:

Of the 138 performance measures we report against, 55 percent improved or were maintained and 41 percent were lower than last year (4 percent is not applicable as measures were changed or not recorded).

Of the outcome indicators we monitor, 40 percent improved or were maintained in the 2016/17 year and 36 percent were lower than last year’s result, 23 percent of results were non-comparable.

Governance

We ran the 2016 local Council election for Wellington. Shortly afterwards, the new Mayor and Councillors met with over 200 key city stakeholders to identify goals and create a draft programme of work for the remainder of their 3-year term. This helped shape the Annual Plan 2017/18 and will guide the Long-term Plan 2018–28. A new Memorandum of Understanding with our iwi partners was also signed to strengthen the partnership.

Performance summary

4
2
4
-

Financial summary

Compared to last year, eight performance measures improved or were maintained and two dropped.

The areas of underperformance relate to timeliness of Council agendas, website navigation, Contact Centre response times, and low levels of Māori satisfaction in relation to their involvement in decision-making. For further details of what we did, what it cost, and how we performed, see the “Governance” chapter on page 36.

Environment

We worked hard to repair damage to the three waters network from the November earthquake, and put in place a water resilience strategy for the city and region. We also adopted a waste minimisation plan for the city and wider region, continued to work with communities to look after the environment and eradicate pests, and to support environmental attractions like the Wellington Zoo and Zealandia.

Performance summary

27
7
7
2

Financial summary

Compared to last year, 22 performance measures improved or were maintained, 19 dropped and two were not applicable.

The areas of underperformance relate to satisfaction with the quality of street cleaning, with waste collection services and stormwater management, response times for non-urgent call-outs relating to water, as well as a drop in visitors to the Botanic Garden. For further details of what we did, what it cost, and how we performed, see the “Environment” chapter on page 44.

Economic development

We worked closely with the Government to provide business support after the earthquake, continued to deliver a broad range of major events including the World of WearableArt show, and the first flight on Singapore Airlines’ new “Capital Express” route arrived in Wellington on 21 September 2016. We also continued to market Wellington abroad through campaigns like LookSee, and to support business growth.

Performance summary

3
-
1
-

Financial summary

Compared to last year, one performance measure improved or was maintained and three dropped.

The area of underperformance relates to maintaining WREDA funding targets. For further details of what we did, what it cost, and how we performed, see the “Economic development” chapter on page 60.

Cultural wellbeing

Toi Pōneke Arts Centre continued to deliver a broad range of exhibitions during the year, and to support Wellington’s emerging artists. We delivered a range of cultural festivals and events such as Diwali, A Very Welly Christmas, and New Zealand’s largest annual fireworks display. We also had high visitor numbers across the city’s many museums and galleries.

Performance summary

2
-
4
1

Financial summary

Compared to last year, three performance measures improved or were maintained, three dropped and one was not applicable.

The areas of underperformance relate to grants funds, outcomes delivered, and the percentage of successful first-time applicants. For further details of what we did, what it cost, and how we performed, see the “Cultural wellbeing” chapter on page 70.

Social and recreation

We opened a number of emergency activation centres (welfare centres) in response to both the November earthquake and floods. We continued to deliver high-quality core services to the community – everything from sportsfields, libraries, and social housing to swimming pools – and established a Housing Taskforce with key city stakeholders to identify the city’s future housing needs.

Performance summary

23
7
9
-

Financial summary

Compared to last year, 21 performance measures improved or were maintained and 18 dropped.

The areas of underperformance relate to sportsfields satisfaction and utilisation, as well as alcohol inspections at premises. For further details of what we did, what it cost, and how we performed, see the “Social and recreation” chapter on page 80.

Urban development

The primary focus at the start of the year was responding to the earthquake. The Council sought emergency powers under the Civil Defence and Emergency Management Act 2002, and identified 80 buildings that needed detailed assessments. Repair work continues on many of these buildings. We also continued to deliver core services like building and resource consents, and carried out a programme of urban activation initiatives and laneway improvements.

Performance summary

12
3
3
-

Financial summary

Compared to last year, 12 performance measures improved or were maintained and six dropped.

The underperformance relates to the percentage of residents who agree that their local suburban centres are lively and attractive, and the timeliness of building consents. For further details of what we did, what it cost, and how we performed, see the “Urban development” chapter on page 96.

Transport

A strong focus for the year was reactive maintenance due to natural hazard events, including the November earthquake and several storm events. This work included clearing over 1260 slips. The Council’s cycleways programme was reviewed by the Transport Agency in mid-2016. We’ve continued to update our technology in car parking areas, and to roll out our new pay-by-space system.

Performance summary

4
2
9
2

Financial summary

Compared to last year, nine performance measures improved or were maintained, six dropped and two were not applicable.

The areas of underperformance relate to the rating of roads and footpaths, resurfacing, street lighting in suburbs, and response rates for urgent service requests. For further details of what we did, what it cost, and how we performed, see the “Transport” chapter on page 108.

Our changing city and challenges for the future

To be effective as a Council, we need to understand Wellington – not just its current make-up but the changes it experiences and how these and their associated challenges will shape the city’s future.

Three years ago, Wellington’s economy was underperforming and our rating base was flat. In response, as part of developing our Long-term Plan 2015–25, we agreed to invest in a range of economic stimulus and quality of life projects. Some, like the tech hub, have now been completed. Others, like the Movie Museum and Convention Centre, are still in progress.

The situation is now different. New Zealand’s economy is much stronger, and Wellington’s economic growth – while still behind the national average – is also far healthier.

Our economy grew by 2.5 percent last year, there are more jobs in the city, student numbers have grown and more people than ever before are calling Wellington home.

The focus has turned from stimulating growth to managing its impact – things like housing affordability and traffic congestion. Higher construction costs are also a reflection of a stronger economy, and this will have an impact on our renewal and upgrade programmes in future years.

We also experienced a significant natural disaster in November with the Kaikoura earthquake, and while the city responded well, there is a need to make it more resilient to future shocks.

Despite the earthquake, Wellingtonians continue to rate their overall quality of life highly

Quality of life relies on many factors, including wellbeing, work opportunities, culture, access to health care, safety, pollution, and commute times, as well as the quality of the built and natural environments.

Despite the earthquake, Wellingtonians continue to rate their overall quality of life very highly at 93 percent.

We also consistently place among the world’s top 20 to 30 cities in international surveys that measure liveability and quality of life.

#1st Best place to live 2017
Deutsche Bank

In recent years, Lonely Planet labelled Wellington as “the coolest little capital”, and in the last year Deutsche Bank ranked the city number one in the world for liveability.

We led the earthquake response and recovery phases, and continued to deliver core services to a high standard

In November 2016, Wellington experienced the 7.8 magnitude Kaikoura earthquake. The effects of the earthquake were exacerbated by significant storm events in the days following the earthquake.

Despite the severity of the event, Wellington held up well – although the port area sustained more significant damage than other parts of the city. Our underground infrastructure network (water, waste water and storm water) sustained some damage but this was repaired relatively quickly. Our buildings have also largely fared well, although the Council’s Civic Administration Building sustained damage to a point where it cannot currently be occupied. We are working through options with insurers for its future.

While overall the city responded well to the earthquake, this event further focused our attention on improving the resilience of the city’s buildings and its roading and water infrastructure. This will be an area of focus for the Long-term Plan 2018–28.

The Council led the initial response and subsequent recovery phase. It is noteworthy that we were able to redirect a significant number of staff to lead the response and recovery phases, while continuing to deliver all core services to a high standard.

Our economy has continued to grow

While the earthquake had a small impact on the economy, these were largely localised around cordon areas. The overall economic performance of the city has been strong for the last 12 months, with GDP growth of 2.5 percent. The employment rate is also up, population growth is strong, and the tourism sector is doing increasingly well, making Wellington one of the better performing regions in the country.

There are over 2000 more jobs in the city than last year

Job growth has been particularly strong. According to Infometrics, in the past 12 months an additional 2084 people in Wellington City reported they were employed – an equivalent growth rate of 1.3 percent.

Population growth has also been very strong – we expect about 2500 additional people to call Wellington home between 2016 and 2017 – and visitor numbers are recovering after the November earthquake.

While the city has performed well, the future holds more challenges

The earthquake, a growing population, a buoyant outlook, economic growth, and a strong construction market have created challenges:

Making the city more resilient. Elements of the city’s core infrastructure and key Council buildings need to be earthquake-strengthened in the coming years. The broader programme required to make the city and its communities resilient to climate change and sea level rise is also significant.

Transport congestion. The city gained 10,400 new residents over the last 3 years. This has resulted in more traffic. Commercial vehicle registrations have increased by 16 percent over the last 12 months on the back of stronger economic growth, and private vehicle registrations have also grown by 11 percent. Residents’ perception that peak traffic volumes are acceptable has decreased from 53 percent 5 years ago to 42 percent this year. While the Let’s Get Wellington Moving programme will provide options for a way forward for the central city, there is more work to do to improve and promote public transport services and active transport modes.

The cost of construction. Rising construction costs have outstripped inflation in recent years, with the cost of construction increasing 10.8 percent since March 2015 in comparison with inflation at 2.6 percent. With major capital programmes in the region like Transmission Gully, rebuild and strengthening work resulting from the earthquake, and near record consent numbers to deal with a housing shortage, the cost of construction will likely continue to increase above inflation levels.

This will add significant costs to the Council which looks after more than $7 billion of assets in the city, from roads and sportsgrounds to libraries and pipelines. Aside from maintenance and earthquake-strengthening initiatives, the Council also has a strong upgrade programme planned. This includes the Movie Museum and Convention Centre, the Prince of Wales/Omāroro Reservoir, a new library in Johnsonville and a raft of other projects. A tight construction market will place pressures on our budgets for these projects.

Housing affordability and standards. A growing economy and growing population affect the housing market. Wellington City house prices have increased an average 16.2 percent over the last 12 months, and 33 percent since 2015. The Mayor’s Housing Taskforce has estimated that Wellington is short of 3590 houses currently. While consent numbers for new dwellings have doubled on previous years, and we have committed to 750 new social housing units over the next 10 years, it will take time for the market to catch up to meet demand.

Social inequality. While the Council has taken a leadership position in this area through social housing and a broad range of social support services, homelessness and street begging appear to be on the rise. The Council has agreed to play a role in providing supported living facilities, but there is more work to do.

The Council is in a strong financial position to deal with these challenges

The Council is in good financial health to deal with these challenges. This is reflected in our AA credit rating with Standard & Poor’s. We have assets worth over $7 billion and liabilities of $676 million.

We have assets worth over $7 billion and liabilities of $676 million

Our debt position is very conservative and we work with other councils to reduce costs wherever possible. We also have far less debt than many local authorities. High-yielding investments, such as our ground lease portfolio in the central city and our shares in Wellington International Airport Limited and the Kiwi Point quarry, help offset rates requirements.

The Council also has strong fiscal management in place, highlighted by the underlying surplus, which reflects the Council’s ability to manage its operational funding requirements to meet its operational expenditure needs. The Council strives to achieve a position where operational revenue equals operational expenditure. This is called a balanced budget and is linked to the principle of intergenerational equity, where each generation of ratepayers pays their fair share for the goods and services that they use. The Council achieved an underlying surplus of $10.6 million, equal to 2.1 percent of operational expenditure.

This is an excellent result and reflects our conservative approach to spending. Our debt levels are currently less than our annual income, and we have investments that are almost equal to our debt.

Put more simply, our position is comparable to that of a household with a property value of $592,000 earning $70,000 a year, and having a mortgage of less than $56,000.

We have to be smart about how we address these issues and prioritise our spending effectively

While we are in a healthy financial position, the challenges ahead are not insubstantial and we will need to invest. As responsible stewards of the city, we also have to meet current challenges while providing sufficient financial headroom for future generations. This means we have to be smart and make choices about where to invest, focus on delivering services in more efficient ways, and manage demand more effectively than we have in the past.

We need to:

Deliver services in smarter and more efficient ways. The way people access information and services is changing. Recent upgrades to the Council’s IT systems have put us in a better position, but there is still work to do to re-design services so they are more efficient and more customer focused. Last year, we agreed to develop a one-stop shop for building and resource consents. An active programme of work is under way and the benefit will be seen in the coming years.

Manage demand. For every service we provide, there will be a group of residents or city stakeholders who want to see that service improved or expanded, but we can’t do everything. To meet every demand would significantly increase rates. We need to be smart and focus on delivering excellent core services and prioritise funding. We do this by making decisions about what is most beneficial to the city and its residents, and setting clear performance measures and levels of services that are monitored and reported, and reviewed every 3 years as part of our Long-term Plan process.

Invest in the right areas and value capture. Part of managing demand is ensuring we’re investing in the right areas, at the right level, and ensuring there is a return on that investment. One practical example is swimming pools. Despite increased investment in pools over a number of years, and a growing population, visitor numbers have remained relatively static over that time. Consequently, the ratepayer subsidy per attendee has increased. We will be looking to maximise the social return on community assets through making them multi-purpose where possible (for example, the proposed Johnsonville community hub).

Similarly, we also need to do more to capture some of the value where public investment in core infrastructure results in private gain.

Have better conversations with our communities. In our Triennium Plan, we committed to expanding our community engagement on significant projects and undertaking more community-led planning exercises. There are urgent and important discussions to be had with our communities. We need to respond to the pressures of a growing city on housing and transport while maintaining a strong focus on resilience. Prioritisation of spending is becoming increasingly important. We can’t take on every project; we have to make choices about what we do and when. We are building on co-design opportunities to further empower communities in decision-making processes. We also have to maximise the use of the assets and facilities we already have. This will all require more active engagement and more detailed discussions with our communities in the future. The Long-term Plan 2018–28 is the next significant step in putting in place a comprehensive 10-year plan and set of priorities for the city.

We need to be smart and focus on delivering excellent core services and prioritising funding

Independent auditor’s report

To the readers of Wellington City Council’s annual report for the year ended 30 June 2017

The Auditor-General is the auditor of Wellington City Council (the City Council) and its subsidiaries and controlled entities (the Group). The Auditor-General has appointed me, Bede Kearney, using the staff and resources of Audit New Zealand, to report on the information in the City Council’s annual report that we are required to audit under the Local Government Act 2002 (the Act). We refer to this information as “the audited information” in our report.

We are also required to report on:

whether the City Council has complied with the requirements of Schedule 10 of the Act that apply to the annual report; and

the completeness and accuracy of the City Council’s disclosures about its performance against benchmarks that are required by the Local Government (Financial Reporting and Prudence) Regulations 2014.

We refer to this information as “the disclosure requirements” in our report.

We completed our work on 27 September 2017. This is the date on which we give our report.

Opinion on the audited information

In our opinion:

the financial statements on pages 128 to 220:

present fairly, in all material respects:

the City Council and Group’s financial position as at 30 June 2017;

the results of the operations and cash flows for the year ended on that date; and

comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Entity Reporting Standards;

the funding impact statement on page 228, 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 City Council’s annual plan;

the section entitled ‘Our performance in detail’ on pages 35 to 117:

presents fairly, in all material respects, the levels of service for each group of activities for the year ended 30 June 2017, 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

complies with generally accepted accounting practice in New Zealand;

the statement about capital expenditure for each group of activities on pages 229 to 246, presents fairly, in all material respects, actual capital expenditure as compared to the budgeted capital expenditure included in the City Council’s Long-term plan; and

the funding impact statement for each group of activities on pages 229 to 245, 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 City Council’s Long-term plan.

Report on the disclosure requirements

We report that the City Council has:

complied with the requirements of Schedule 10 of the Act that apply to the annual report; and

made the disclosures about its performance against benchmarks that are required by the Local Government (Financial Reporting and Prudence Regulations 2014) on pages 221 to 227, which represent a complete list of required disclosures and accurately reflects the information drawn from the City Council and Group’s audited information and, where applicable, the City Council’s Long-term Plan and Annual Plans.

Basis for opinion on the audited information

We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. We describe our responsibilities under those standards further in the “Responsibilities of the auditor for the audited information” section of this report.

We have fulfilled our responsibilities in accordance with the Auditor-General’s Auditing Standards.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the audited information.

Responsibilities of the Council for the audited information

The Council is responsible for meeting all legal requirements that apply to its annual report.

The Council’s responsibilities arise under the Local Government Act 2002 and the Local Government (Financial Reporting and Prudence) Regulations 2014.

The Council is responsible for such internal control as it determines is necessary to enable it to prepare the information we audit that is free from material misstatement, whether due to fraud or error.

In preparing the information we audit the Council is responsible for assessing its ability to continue as a going concern. The Council is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to amalgamate or cease all of the functions of the City Council and the Group or there is no realistic alternative but to do so.

Responsibilities of the auditor for the audited information

Our objectives are to obtain reasonable assurance about whether the audited information, as a whole, is free from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor General’s Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers taken on the basis of this audited information.

For the budget information reported in the audited information, our procedures were limited to checking that the budget information agreed to the City Council’s annual plan.

We did not evaluate the security and controls over the electronic publication of the audited information.

As part of an audit in accordance with the Auditor-General’s Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:

We identify and assess the risks of material misstatement of the audited information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City Council and Group’s internal control.

We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Council.

We determine the appropriateness of the reported intended levels of service in the section entitled ‘Our performance in detail’, as a reasonable basis for assessing the levels of service achieved and reported by the City Council.

We conclude on the appropriateness of the use of the going concern basis of accounting by the Council and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast a significant doubt on the City Council and Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our audit report to the related disclosures in the audited information or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our audit report. However, future events or conditions may cause the City Council and the Group to cease to continue as a going concern.

We evaluate the overall presentation, structure and content of the audited information, including the disclosures, and whether the audited information represents, where applicable, the underlying transactions and events in a manner that achieves fair presentation.

We obtain sufficient appropriate audit evidence regarding the entities or business activities within the Group to express an opinion on the consolidated audited information.

We communicate with the Council regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Other Information

The Council is responsible for the other information included in the annual report. The other information comprises the information included on pages 2 to 30 and 118 to 124 and 127, but does not include the audited information and the disclosure requirements.

Our opinion on the audited information and our report on the disclosure requirements do not cover the other information.

Our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the audited information and the disclosure requirements, or our knowledge obtained during our work, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Independence

We are independent of the City Council and Group in accordance with the independence requirements of the Auditor-General’s Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1 (Revised): Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board.

Other than the audit, our report on the disclosure requirements, an audit of the City Council and Group’s LTP amendment, an independent assurance review under the City Council and Group's Debenture Trust Deed, and a review of the revenue and expenditure of the Clifton Terrace car park managed by the City Council and Group on behalf of the New Zealand Transport Agency, we have no relationship with or interests in the City Council or its subsidiaries and controlled entities.

Bede Kearney
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand

Our performance in detail

1

Pārongo ā-tāone

Governance

We aim to build trust and confidence by being open, transparent, and accountable

The challenges we face

Improving on the low levels of participation in local elections (compared to national level)

Consulting and engaging in ways that residents find meaningful and convenient

Ensuring that all voices are heard, especially as the city becomes more diverse

Raising understanding of Council decision-making processes and opportunities for input

Demonstrating that decisions are made in the city’s wider interests

Our strategic approach

Building public confidence in our decisions and services by being transparent

Better communicating the reasons for our decisions and budgetary choices

Improving public participation in consultation through better engagement

In this section

1.1 Governance, information and engagement

1.2 Māori and mana whenua partnerships

1.1 Governance, information and engagement

What we did:

Information. We released a pre-election report before the 2016 local elections. The report provided a “plain English” overview of the Council’s budget position and key challenges facing both the Council and the city in the coming years.

Local body elections. We ran the October 2016 local body election for Wellington.

The promotional campaign sought to raise awareness of the election and encourage members of the public to stand for Mayor, Councillor, or community board member (Wellington has two community boards). Wellington elected a new Mayor and five new Councillors, as well as a number of new community board members. Voter turnout in the 2016 election was 45.6 percent, up from 41.1 percent in the 2013 election. For information on our elected representatives, see the “How we govern and engage with the community” section.

Three-year work programme (Triennium Plan). Shortly after the election and induction process, the Mayor and Councillors held the Wellington Summit. Here they met with over 200 key city stakeholders, and identified goals and a draft work programme for the remainder of the 3 year period. The Triennium Plan will be used to guide the development of the Long-term Plan 2018–28 and budgets.

Contact Centre. The Contact Centre responded to 292,222 calls, 26,631 emails, and 14,814 FIXiT texts. Altogether, 71 percent of all calls were answered within 30 seconds, 98 percent of emails within 24 hours, and 93 percent of FIXiT texts were responded to within 30 minutes. Staff shortages during the year had some impact on performance. The Contact Centre staff worked off-site for 3 days following the November earthquake and the number of calls during this period could not be recorded.

Digitisation of information. We’ve continued with our programme of digitising information for the public, with a particular focus on property information to support Council work relating to building assessments. We have also put a large number of digitised photographs online to improve customer access, and sent selected archives to off-site storage to make space.

How we performed

Residents who are satisfied with the level of consultation (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target met – consultation will continue to play a large role as we prepare the Long-term Plan 2018–28.

Residents who agree that decisions are made in the best interests of the city (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Strong improvement in decision-making indicators from last year has led to an increase in resident satisfaction.

Residents who are satisfied or neutral with regard to their involvement with decision-making (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target exceeded by 5% – there was a marked improvement in residents’ satisfaction with their involvement in decision making and our Customer Strategy work will continue to drive this.
* Measure reported incorrectly in 2015/16 Annual Report.

Finances

How it was funded

Services in this activity area are funded mostly through general rates, with a small portion funded through fees and user charges for Civic Information and City Archives.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

1.1.1 City governance and engagement

Expenditure
9,181
9,433
9,921
10,909
988

Revenue
(106)
(29)
(464)
(385)
79

Net Expenditure
9,075
9,404
9,457
10,524
1,067¹

1.1.2 Civic information

Expenditure
5,364
5,334
5,072
5,542
470

Revenue
(387)
(569)
(383)
(319)
64

Net Expenditure
4,977
4,765
4,689
5,223
534²

1.1.3 City Archives

Expenditure
1,194
1,207
1,885
1,967
82

Revenue
(162)
(153)
(158)
(186)
(28)

Net Expenditure
1,032
1,054
1,727
1,781
54

1.1 Total Governance, information and engagement

Expenditure
15,739
15,974
16,877
18,418
1,540

Revenue
(655)
(751)
(1,005)
(890)
115

Net Expenditure
15,084
15,223
15,873
17,528
1,655

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to staff vacancies and lower than budgeted organisational overhead costs.

2. Under budget due to lower than planned labour and organisational overhead costs.

Capital Expenditure
($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

1.1.1 City governance and engagement

Expenditure
-
-
-
116
116

Unspent portion of budget to be carried forward to future years

30

How we performed

Contact Centre response times – calls answered within 30 seconds (%)

Source: Wellington City Council

Target nearly met (-9%) – resourcing and responding to the November 2016 events have made it a challenging year for the Contact Centre.

Residents who agree that Council information is easy to access (for example, from the website, libraries, or newspapers) (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target met – the number of residents who agree our information is easy to access has improved over the year and our digitisation of information continues to improve accessibility.

1.2 Māori and mana whenua
partnerships

What we did:

Local body elections. We included extensive use of te reo Māori as part of our election campaign to encourage Māori enrolment and voting. The campaign featured local stories of the taniwha Ngake and the explorer Kupe, highlighting the richness of our cultural history and the forming of Wellington many centuries ago.

New Memorandum of Understanding (MoU). The Council signed a new MoU with its iwi partners. As part of this agreement, a senior leaders’ forum was created that consists of both elected members and senior Council managers, and iwi mandated entities. (See the case study at the end of the “Governance” section for more information).

Māori language. Initial planning and development of a Māori language plan was started shortly after the signing of the new MoU. The Māori language plan sits within the He Waka Eke Noa – Effectiveness for Māori Framework. This establishes the principles of how the Council will work more effectively with and for iwi partners and Māori within the city.

Engagement. We issued monthly editions of Nōna te Ao, the Council’s enewsletter to promote Māori news, information, and events. Through this channel, we encouraged the Māori community to have their say on decisions impacting the city.

Finances

How it was funded

Services in this activity area are funded through general rates.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

1.2.1 Māori and mana whenua partnerships

Expenditure
202
274
279
295
16

Revenue
(10)
-
1
-
(1)

Net Expenditure
192
274
280
295
15

Total costs

Net Operating Expenditure
($000)
2014/15
Actual
2015/16
Actual
2016/17
Actual
2016/17
Budget
2016/17
Variance

GOVERNANCE
15,276
15,497
16,153
17,823
1,671

Capital Expenditure
($000)
2014/15
Actual
2015/16
Actual
2016/17
Actual
2016/17
Budget
2016/17
Variance

Unspent portion of budget brought forward from prior years

Annual Plan budget amount 2016/17

116

GOVERNANCE
-
-
-
116
116

How we performed

Māori residents who are satisfied or neutral with regard to their involvement with decision-making (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target nearly met (-9%) -improvements have been made since last year and continued Māori involvement will feature as we prepare the Long-term Plan in 2018.

Residents who believe they have the opportunity to participate in city life (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Agreement that residents have the opportunity to participate in city life is trending down – see also updates on key projects in the “Social and recreation” and “Cultural wellbeing” sections.

Performance data

The following section outlines our performance data: outcome indicators, performance measures and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data – outcome indicators

The following section outlines outcome indicators for the Governance area of activity. Outcome indicators do not have targets – only trend data.

COUNCIL OUTCOME INDICATOR
SOURCE
2014/15
2015/16
2016/17

Residents (%) who agree that decisions are made in the best interests of the city
WCC RMS 2017
36%
36%
51%

Residents (%) who state that they understand how the Council makes decisions
WCC RMS 2017
35%
33%
39%

Residents (%) who understand how they can have input into Council decision-making
WCC RMS 2017

46%
43%

Mana whenua partners agree that the use and protection of the city's resources for the future is appropriate
WCC Strategy and Research
Both Agree
1 Agreed and
1 Partner was not sure
Both partners
were not sure

Residents (%) who believe they have the opportunity to participate in city life
WCC RMS 2017
78%
74%
69%

Voter turnout in local elections, referendums, and polls
WCC Democratic Services
2013
41.1%

2017
45.6%

Performance data – Council performance measures

The following section outlines Council performance measures for our Governance services. It includes data for the last 3 years to show trends, and includes variances explanations for relevant areas.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17
Actual
2016/17
Target
% Variance

1.1 Governance, information and engagement

To measure the quality of the public’s involvement in Council decision-making

Residents (%) who are satisfied with the level of consultation (ie the right amount)
53%
54%
55%
55%
0%

Residents (%) who are satisfied or neutral (neither satisfied nor dissatisfied) with regard to their involvement with decision-making
74%
70%*
79%
75%
5%

To measure the quality and timeliness of residents’ access to information

Council and committee agendas (%) are made available to the public within statutory timeframes (2 working days prior to the meeting)
100%
94%
95%
100%
-5%

Council and committee agendas (%) that are made available to elected members 5 days prior to the meeting and to the public 4 days prior to the meeting
65%
91%
79%
80%
-1%

Residents (%) who agree that Council information is easy to access (eg from the website, libraries, newspapers, etc)
48%
49%
55%
55%
0%

Residents (%) who agree that the Council website is easy to navigate and get information from
62%
61%
64%
70%
-9%

Although behind target, the “Agree and Strongly Agree” % increased to 64% while the “Disagree and Strongly Disagree” dropped from 15% to 11%. The result is combination of two questions – Do you agree or disagree with the statements: Wellington City Council’s website (www.wellington.govt.nz) is easy to navigate, and Wellington City Council’s website (www.wellington.govt.nz) is easy to get information from.

Contact Centre response times – calls (%) answered within 30 seconds
84%
80%
73%
80%
-9%

Contact Centre response times – emails (%) responded to within 24 hours
100%
93%
98%
100%
-2%

* Previously reported result for 2015/16 of 59% was incorrect due to a calculation error.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17
Actual
2016/17
Target
% Variance

1.2 Māori and mana whenua partnerships

To measure the health of our relationship with mana whenua

Mana whenua partner satisfaction with Council relationship (satisfied and very satisfied)
satisfied
satisfied
satisfied
satisfied
met

To measure the engagement of the city's Māori residents

Māori residents (%) who are satisfied or neutral (neither satisfied nor dissatisfied) with regard to their involvement with decision-making
69%
65%
68%
75%
-9%

Case study
Memorandum of Understanding between the Council and iwi

On 29 March 2017, Mayor Justin Lester led Wellington City Council in its first ever meeting at Pipitea Marae. During the meeting, the Council signed a new Memorandum of Understanding (MoU) with its iwi partners, Taranaki Whānui ki te Upoko o te Ika and Te Rūnanga o Toa Rangatira Inc for Ngāti Toa Rangatira.

The MoU replaces previous agreements and takes the iwi–Council relationship to a new level. Previous agreements with local iwi acknowledged the special relationship of Māori with the natural environment and were focused on the detail of the Resource Management Act. Now, there is an added dimension to the relationship, with a focus on strategic planning at a leadership level – standing side by side, looking to the future together.

As part of the MoU, a senior leaders’ forum was formed between the Council and iwi partners that consists of both elected members and senior Council managers, and iwi mandated entities. The leaders’ forum has met a number of times to co-design the structure of the forum. In November, the forum aims to sign off the terms of reference and begin discussions on long-term planning.

“We’re taking the relationship between the Council and iwi to a more meaningful and constructive level, for the benefit of the city and its people.” Nicky Karu, WCC Manager Tira Poutama, Iwi Partnerships

This is a new stage in the Council’s relationship with mana whenua, in which we and our iwi partners will work closely together to decide what steps need to be taken for the city to grow and prosper.

2

Taiao

Environment

We aim to protect and enhance Wellington’s natural environment

The challenges we face

Meeting the additional costs of making core infrastructure more resilient

Reducing or offsetting greenhouse gas emissions

Encouraging more efficient use of resources such as water or energy

Reducing the amount of solid waste the city produces

Improving biodiversity and habitat restoration

Our strategic approach

Protecting natural areas and resources

Disposing of waste in sustainable ways

Reducing the city’s and organisations’ greenhouse gas emissions

Providing high-quality, accessible green spaces

In this section

2.1 Gardens, beaches and green open spaces

2.2 Waste reduction and energy conservation

2.3 Water

2.4 Wastewater

2.5 Stormwater

2.6 Conservation attractions

2.1 Gardens, beaches and green open spaces

What we did:

Harbour Escarpment Walkway. We completed stage one of the Harbour Escarpment Walkway from Waihinahina Park through Gilberd Bush Reserve to the south end of Tamworth Crescent in Newlands. This was identified as a key initiative as part of the Northern Reserves Management Plan.

Reserve land. Reserves agreements that were negotiated with developers in the northern suburbs resulted in 43 hectares of new public reserve land last year, all with landscape, ecological and recreation value. The Churton Park reserve (6 hectares) includes a walking track between Melksham Drive and Foxham Terrace that will, in time, connect up with further reserves and track networks. The Council also purchased the Forest of Tane – a new, 32-hectare reserve in Tawa.

The Discovery Garden. Construction and development continued on our children’s garden at the Wellington Botanic Garden. The garden was due to open on 30 September 2017.

Predator Free Wellington Project. We launched the project, undertook monitoring on the Miramar Peninsula, and began planning for the first stage, which will see the removal of rats, possums, and other predators from the peninsula. Community backyard trapping efforts continued to grow. We ran a survey in early 2017 that showed 86 percent of Wellingtonians support the project.

Biodiversity. We partnered with Zealandia, Pukaha-Mt Bruce, community groups and the science community to run a Bio Blitz event in February. Altogether, 150 members of the public and 120 students from 15 schools participated in the 2-day event, making 2432 species observations.

Tree planting. Around 120 children planted 1500 trees at Paekawakawa Reserve, Island Bay, for Arbor Day. We planted over 50,000 trees ourselves, and gave more than 42,000 to our community. We partnered with “Trees that Count” to produce the instructional “Plant like a Ninja” video, which was used in schools to prepare for Arbor Day, and shared online by organisations across the country. We also began a project mapping the city’s tree population. This will provide valuable information on how best to maintain the city’s tree assets, and can be used to show the value the tree network has to the city. To date, we have captured information on over 13,000 trees.

Lyall Bay resilience. We extended the block wall along the middle section of the beach that was previously fenced with wire mesh. We carried out work along Queens Drive to regrade the edge of the park and armour it with rock. This work will protect Dorrie Leslie Park from future coastal erosion. We have been talking to the community about changes to the Surfer’s Corner car park area.

How we performed

Hours worked by recognised environmental volunteer groups and botanic garden volunteers

Source: Wellington City Council

High value biodiversity sites covered by integrated animal pest control or weed control (%)

Source: Wellington City Council Residents’ Monitoring Survey 2017

Target exceeded by 5%. This year we reached 62% as a result of new volunteers undertaking trapping in our reserves, and our work to integrate rodents and other small mammal into our animal pest control programme.

Progress made on our plan to plant 2 million trees by 2020

Source: Wellington City Council

Target exceeded by 2%. The community continues to plant large areas of reserve with support from the Council’s Berhampore Nursery and community nurseries. An estimated 20,000 plants were grown by the community this year, and the figure is predicted to increase with the Wellington Rotary project Forest at the Heart of Wellington, which was launched in 2016 and continues to gain momentum in 2017.

Finances

How it was funded

Services in this activity are funded through a mixture of general rates and user charges.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.1.1 Local parks and open spaces

Expenditure
8,497
7,851
8,799
8,791
(8)

Revenue
(608)
(501)
(961)
(422)
539

Net Expenditure
7,889
7,350
7,838
8,369
531¹

2.1.2 Botanic Gardens

-

Expenditure
4,883
4,852
4,942
4,724
(218)

Revenue
(417)
(408)
(498)
(394)
104

Net Expenditure
4,466
4,444
4,444
4,330
(114)

2.1.3 Beaches and coast operations

Expenditure
996
1,023
1,636
1,283
(353)

Revenue
(50)
(53)
(60)
(52)
8

Net Expenditure
946
970
1,577
1,231
(346)

2.1.4 Roads open spaces

Expenditure
8,204
8,044
8,229
8,712
483

Revenue
(614)
(634)
(833)
(632)
201

Net Expenditure
7,590
7,410
7,395
8,079
684²

2.1.5 Town belts

-

Expenditure
4,283
4,491
4,513
4,722
209

Revenue
(1,425)
(358)
(1,226)
(255)
972

Net Expenditure
2,858
4,133
3,287
4,467
1,180³

2.1.6 Community environmental initiatives

Expenditure
634
739
719
757
38

Revenue
(1)
(18)
(13)
-
13

Net Expenditure
633
721
706
757
51

2.1.7 Walkways

Expenditure
569
532
586
604
18

Revenue
-
-
(120)
-
120

Net Expenditure
569
532
466
604
138

2.1.8 Biodiversity (pest management)

Expenditure
1,663
1,673
2,214
1,824
(390)

Revenue
(76)
(32)
(43)
(39)
4

Net Expenditure
1,587
1,641
2,171
1,785
(387)

2.1.9 Waterfront public space

Expenditure
7,726
5,404
6,001
4,856
(1,145)

Revenue
(6,932)
(6,325)
(563)
(307)
257

Net Expenditure
794
(921)
5,438
4,549
(888)⁴

2.1 Total Gardens, beaches and green open spaces

Expenditure
37,455
34,609
37,640
36,273
(1,368)

Revenue
(10,123)
(8,329)
(4,317)
(2,101)
2,217

Net Expenditure
27,332
26,280
33,323
34,172
849

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to lower depreciation costs.

2. Programme impacted by retendering of the Southern Roading Corridor Contract, as well as earthquake and storm events.

3. Under budget due to unbudgeted vested asset income.

4. Interest allocation costs higher than budget, offset by savings in other Waterfront related activities (including Parking and organisational).

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.1.1 Local parks and open spaces

Expenditure
1,116
1,368
2,385
705
(979)¹

Unspent portion of budget brought forward from prior years

702

Unspent portion of budget to be carried forward to future years

154

2.1.2 Botanic Gardens

Expenditure
681
405
2,059
530
(1,501)²

Unspent portion of budget brought forward from prior years

28

Unspent portion of budget to be carried forward to future years

-

2.1.3 Beaches and coast operations

Expenditure
613
242
566
1,176
610³

Unspent portion of budget to be carried forward to future years

610

2.1.5 Town belts

Expenditure
106
197
142
248
125

Unspent portion of budget brought forward from prior years

20

Unspent portion of budget to be carried forward to future years

82

2.1.7 Walkways

Expenditure
624
565
949
1,014
64

Unspent portion of budget to be carried forward to future years

40

2.1 Total Gardens, beaches and green open spaces

Expenditure
3,140
2,777
6,102
3,672
(1,680)

Unspent portion of budget brought forward from prior years

750

Unspent portion of budget to be carried forward to future years

886

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Over budget due to the unbudgeted purchase of the Forest Of Tane. This was purchase was approved by Council in February 2017.

2. Over budget due to additional costs for the Discovery Garden offset by external fundraising income.

3. Under budget due to delays in the upgrade work to improve resilience at Lyall Bay.

2.2 Waste reduction and energy conservation

What we did:

Waste and recycling. Recycling collection volumes are the same as last year’s. We continued to educate and inform residents on what can go in their wheelie bins or bags and glass recycling bins, and what to do with items that are recyclable or able to be diverted from landfill that aren’t included in the kerbside collection. We diverted 18,000 tonnes of waste from the landfill, which was above target. This included green waste and food waste recovery, which was diverted to our compost operations, as well as increased volumes of scrap metal.

Regional Waste Management and Minimisation Plan (WMMP). Councils in the region adopted a joint Waste Management and Minimisation Plan. All district councils of the region formally committed to working together to promote effective and efficient waste management and minimisation. A significant amount of time was spent on reviewing the WMMP and putting together a new action plan for the next 6 years and beyond.

Climate change. We ran the Low Carbon Challenge. Six teams completed the challenge and three qualified for $15,000 of match-funding from the Council. Five of the teams set crowdfunding or investment targets, and all five met their targets. This year’s Low Carbon Challenge resulted in a total of $115,000 being raised to support these five start-up companies, of which $90,000 was raised privately. In-kind contributions from project sponsors and delivery teams represented nearly $50,000 in additional support per year. Including past years, total match funding from the Council represented $93,000.

Electric Vehicle (EV) charging infrastructure. We continued to work with a range of private sector partners to install EV chargers across Wellington in order to facilitate uptake of EVs. We partnered with Zealandia and Wellington Electricity to install three free public EV charging stations in the Zealandia car park.

Home energy saver. The Sustainability Trust completed 489 home energy assessments. Following these assessments, homeowners accessed subsidies for 377 energy efficiency products.

Warm up Wellington. We insulated 50 homes in partnership with EECA, Hutt Mana Charitable Trust and the Sustainability Trust.

How we performed

Waste diverted from the landfill (tonnes of recyclable material)

Source: Wellington City Council

Target exceeded by 10% due to increased green waste and food waste recovery, both of which are diverted to our compost operations, as well as increased volumes of scrap metal diverted from landfill.

Residents who are satisfied with waste collection services (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target not met (-13%). The timeliness of collections has affected satisfaction. To address this we have provided an additional vehicle to meet demand in northern area, recruited more staff, improved training, and adjusted routes to improve efficiency.

Residents who are satisfied with recycling collection services (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target nearly met (-9%) but trending downwards. However satisfaction level relatively good as % uptake of recycling services continues to grow.

Energy use. There was an overall increase in the Council’s energy use of 4.7 percent, mainly driven by a hike in gas usage. Factors included heat pump related issues at Wellington Regional Aquatic Centre and Karori Pool, as well as a hot water leak at Freyberg Pool. These issues have now been addressed.

Council-Controlled Organisations’ (CCO) gas use. The increase in CCO gas use is partly driven by higher usage at the St James Theatre, which experienced a hot water issue, and the Michael Fowler Centre, which experienced a power measuring issue. Overall, CCO venues saw higher attendance numbers, with bigger events across fewer days. Another reason for the higher gas use could be that, for the first time last year, the World of WearableArts Awards Show (WOW) used the TSB Bank Arena every day from 1 August to 12 October. Previously, WOW rehearsed elsewhere and only moved into the arena in mid-September.

Finances

How it was funded

Services in this activity are funded through a mixture of general rates, user charges, and other income.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
budget
2016/17
Variance*
2016/17

2.2.1 Waste minimisation, disposal and recycling management

Expenditure
12,663
12,869
15,066
13,267
(1,799)

Revenue
(13,308)
(14,309)
(19,896)
(13,259)
6,636

Net Revenue
(645)
(1,440)
(4,830)
8
4,837¹

2.2.2 Closed landfills aftercare

Expenditure
368
477
43
414
371

Revenue
-
-
-
-
-

Net Expenditure
368
477
43
414
371

2.2.3 Energy efficiency and conservation

Expenditure
-
315
477
416
(61)

Revenue
-
(82)
(165)
(60)
105

Net Expenditure
-
233
312
356
44

2.2 Total Waste reduction and energy conservation

Expenditure
13,031
13,661
15,586
14,097
(1,489)

Revenue
(13,308)
(14,391)
(20,060)
(13,319)
6,741

Net Revenue
(277)
(730)
(4,475)
777
5,252

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to revenue for contaminated soil and special waste to the landfill, as well as other landfill levies being well in excess of budget.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.2.1 Waste minimisation, disposal and recycling management

Expenditure
781
723
541
673
677¹

Unspent portion of budget brought forward from prior years

545

Unspent portion of budget to be carried forward to future years

609

2.2.3 Energy efficiency and conservation

Expenditure

65
65
-

Unspent portion of budget to be carried forward to future years

38

2.2 Total Waste reduction and energy conservation

Expenditure
781
723
606
738
677

Unspent portion of budget brought forward from prior years

545
-

Unspent portion of budget to be carried forward to future years

647

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to delays on the Stage 4 landfill development, weighbridge replacement and transfer station refurbishment.

How we performed

Corporate greenhouse gas emissions – reduce emissions by 80% by 2050 (tonnes)

Source: Wellington City Council

Compared with 2003 reduce by 40% by 2020, 80% reduction by 2050. On track – as agreed by Council with the passing of the Low Carbon Capital Plan we have adjusted the 2003 baseline. Our only target is now 80% reduction by 2050 with 2015/16 as the new baseline.

Corporate energy use (including WCC general, pools and recreation centres, and CCOs)

Source: Wellington City Council

Decrease from previous year. Target to decrease energy use each year was not met. Following last year’s record hot summer, most of this increase was due to the considerably colder equivalent period this year. This meant we had to heat offices, pools, and other high-use sites much more than last year during the months of January–March 2017.

Energy use per capita (MWh/person)

Source: Wellington Electricity

2.3 Water / 2.4 Wastewater / 2.5 Stormwater

What we did:

Network performance. The three-water network performed well during the November earthquake. While some parts of the network did require repairs, these were localised and there was no widespread or significant damage. The earthquake event was a timely reminder of the importance of the current programme of work to make the network more resilient.

Water Supply Resilience Strategy. The strategy was approved by all councils in the Wellington region and will inform a 30-year investment strategy to make the network more resilient. Priority work and key investment decisions will be made as part of the Long-term Plan 2018-28 process.

Reservoirs. The Tawa Reservoir seismic strengthening project was restarted with modified designs following the recent earthquake and physical work is in progress. Initial investigation for the renewal of the Bell Road and Brooklyn No.2 reservoirs are also continuing. Prince of Wales/Omāroro Reservoir is an important part of the Water Supply Resilience Strategy and contributes to the day-to-day operational resilience of the water supply for the low-level zone. Initial planning and community engagement was completed during the year.

Delivering core services. We delivered 13,924 million litres of safe drinking water to 144,000 connections.

Cost of construction challenges. We have delivered the majority of our planned programme for the year. However, we did have to manage our construction outputs to stay within budgets, due to higher-than-budgeted tender prices. This had an impact on our planned stormwater and wastewater programmes, with some work being moved into the 2017/18 year.

Hydraulic modelling. Hydraulic modelling provides a powerful tool to quantify flood risk, assess the capacity of the drainage networks, help Wellington grow sustainably, prioritise and design upgrades and understand the impacts of our changing climate. We are now 2 years into a 4-year plan to model all stormwater pipe networks in the city. We have built hydraulic models of over half the city’s stormwater networks. Over the last year, we have completed models in Tawa, Kilbirnie, Miramar, Lyall Bay, Island Bay and the catchments surrounding the central city.

Stormwater upgrades. The Kilbirnie stormwater upgrade project continued with the completion of preliminary design for a new pumpstation and pipeline along Evans Bay Road. Detailed design of the pipeline section is currently under way, with construction planned for early 2018. To reduce flooding in Mt Cook, rock armouring of the Papawai Stream channel was completed along with upgrades to the Salisbury Terrace stormwater system.

How we performed

Residents satisfied with the wastewater service (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target exceeded by 9%.

Residents satisfied with stormwater management (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target not met (-17%). The high incidence of flooding events in the last 3 years is believed to be an influencing factor in the low rating. Future upgrades are being planned but the scale of the problems requires significant ongoing investigation and catchment modelling to identify long term risk profiles.

Median response time for attendance for urgent call-outs

Source: Wellington City Council

Target of less than 60 minutes out performed by 15%. This indicator has been mandated by the Department of Internal Affairs (DIA), with data collection having started in the 2015/16 financial year. We are successfully meeting the target response time.

Finances

How it was funded

Services in this activity are funded through a mixture of general and targeted rates.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.3.1 Water network

Expenditure
22,798
23,511
24,889
24,358
(532)

Revenue
(1,012)
(1,709)
(1,624)
(35)
1,588

Net Expenditure
21,786
21,802
23,265
24,322
1,057¹

2.3.2 Water collection and treatment

Expenditure
14,318
14,922
15,809
15,934
124

Revenue
(3)
(3)
18
-
(18)

Net Expenditure
14,315
14,919
15,827
15,934
106

2.3 Total Water network

Expenditure
37,116
38,433
40,698
40,291
(407)

Revenue
(1,015)
(1,712)
(1,606)
(35)
1,570

Net Expenditure
36,101
36,721
39,093
40,256
1,163

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to savings on some projects through contract prices being favourable to budget, unspent contingencies as well as some project delays. This was partially offset by bringing forward work on the Prince of Wales/Omāroro Reservoir and work on the Community Infrastructure Resilience projects.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

2.3.1 Water network

Expenditure
13,266
14,927
14,431
14,915
484

Unspent portion of budget to be carried forward to future years

-

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.4.1 Sewage collection and disposal network

Expenditure
19,348
18,833
19,908
20,058
150

Revenue
(986)
(1,911)
(456)
(627)
(171)

Net Expenditure
18,362
16,922
19,452
19,431
(20)

2.4.2 Sewage treatment

Expenditure
21,333
22,599
22,667
23,540
873

Revenue
(1,833)
(1,583)
(530)
(618)
(88)

Net Expenditure
19,500
21,016
22,137
22,922
785¹

2.4 Total Wastewater

Expenditure
40,681
41,432
42,575
43,598
1,024

Revenue
(2,819)
(3,494)
(986)
(1,245)
(259)

Net Expenditure
37,862
37,938
41,589
42,354
765

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to lower than planned wastewater treatment plant management costs and sewage disposal fees.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.4.1 Sewage collection and disposal network

Expenditure
7,959
10,872
10,671
11,236
565¹

Unspent portion of budget to be carried forward to future years

-

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to delays in flow monitoring and the level of unplanned maintenance related work being lower than expected.

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.5.1 Stormwater management

Expenditure
16,526
16,936
17,023
18,147
1,124

Revenue
(922)
(3,137)
(762)
(135)
628

Net Expenditure
15,604
13,799
16,260
18,013
1,752¹

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to vested asset income of $0.660m, insurance and interest costs. Contract costs for sump maintenance were also favourable.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Actual
2016/17
Actual
2016/17

2.5.1 Stormwater management

Expenditure
4,821
4,877
7,217
7,020
403

Unspent portion of budget brought forward from prior years

600

Unspent portion of budget to be carried forward to future years

-

How we performed

Median response time for resolution for urgent call-outs

Source: Wellington City Council

Target out performed by 19%.

Median response time for attendance for non-urgent call-outs

Source: Wellington City Council

Target not met (-24%). This indicator is mandated by the DIA, with data collection commencing in the 2015/16 financial year. The water supply non-urgent call out target was not met as a result of the November earthquake and storm event call outs. Our focus was on high priority, urgent jobs across the region, which therefore increased the median response time to lower priority, non- urgent works.

Median response time for resolution for non-urgent call-outs

Source: Wellington City Council

Target out performed by 80%.

2.6 Conservation attractions

What we did:

Wellington Zoo. The total number of visitors to the Zoo was 230,632. The Zoo met or exceeded 17 of the 21 measures it set for 2016/17, and achieved carboNZero certification for the fifth year in a row. Chief Executive Karen Fifield was made a member of the New Zealand Order of Merit for services to business and animal welfare in the New Year Honours. The Zoo’s walk-through kea aviary was opened, signalling the completion of the 10-year Zoo Capital Programme.

Zealandia. Total visitors to Zealandia for the year remained relatively unchanged at 125,179. The Karori Sanctuary Trust recorded its first operating surplus after depreciation and before the loss on the Visitor Centre of $87,670. During the year, Zealandia launched the new Sanctuary to Sea project to restore the water catchment from Zealandia’s dams down the length of the Kaiwharawhara stream to the harbour. Other highlights of the year were the release of captive juvenile tuatara into the wider sanctuary, and the translocation of the tree daisy Brachyglottis kirkii into the sanctuary from Otari-Wilton’s Bush. Refer to the “Statement of Financial Position, Note 14: Other financial assets, Karori Sanctuary Trust” for details relating to the purchase of the Zealandia visitor centre building.

Finances

How it was funded

Services in this activity are funded through general rates.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

2.6.1 Conservation visitor attractions

Expenditure
6,104
6,384
6,755
6,989
234

Revenue
-
-
-
-
-

Net Expenditure
6,104
6,384
6,755
6,989
234

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

2.6.1 Conservation visitor attractions

Expenditure
2,677
2,725
1,956
817
(998)¹

Unspent portion of budget brought forward from prior years

140

Unspent portion of budget to be carried forward to future years

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Overspends for Zoo upgrades and renewals projects have been funded by unbudgeted external revenue from Wellington Zoo.

Total costs

Net Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

ENVIRONMENT
122,726
120,392
132,545
142,560
10,015

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

Unspent portion of budget brought forward from prior years

2,035

Annual Plan budget amount 2016/17

38,398

ENVIRONMENT
32,644
36,901
40,982
40,433
(549)

How we performed

Wellington Zoo – visitors

Source: Wellington Zoo

Target nearly met (-4%). Zoo visitor numbers were slightly behind target and down on last year (- 12%) mainly due to earthquake impacts and poor weather.

Zealandia – visitors

Source: Zealandia

Target exceeded by 26%. Visitor numbers held up well (only slightly down by 0.6% on last year) despite earthquake impacts and poor weather.

Number of visitors to the Botanic Gardens (including Otari-Wilton’s Bush)

Source: Wellington City Council

Target not met (-19%) and volumes trending down. Wet weather over the spring to autumn seasons have contributed to visitor numbers being down. The accuracy of the people counters has resulted in a trial of a new type of counter this year.

Performance data

The following section outlines our performance data: outcome indicators, performance measures, and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data – outcome indicators

The following section outlines outcome indicators for the Environment area of activity. Outcome indicators do not have targets – only trend data.

Council outcome indicator
Source

2014/15
2015/16
2016/17

Open space land owned or maintained by the Council – square metres per capita and total hectares
WCC Parks, Sport and Recreation
Sqm Per Capita
198.4sqm
188.1sqm
194.32sqm

Hectares
3,967
3,833
4,040

Residents’ usage of the city's open spaces – local parks and reserves, botanic gardens, beaches and coastal areas, and walkways
WCC RMS 2017

See supplementary tables

94% Parks
& Reserves

Residents (%) who agree that the natural environment is appropriately managed and protected
WCC RMS 2017

78%
79%
78%

Hours worked by recognised environmental volunteer groups and botanic garden volunteers
WCC Parks, Sport and Recreation

43,880
45,009
53,839

Water consumption (commercial and residential combined) – billion litres
Wellington Water

26.6b litres
24.5b litres
25.1b litres

Freshwater biological health (macro invertebrates) – Makara, Karori, Kaiwharawhara and Porirua streams
Greater Wellington Regional Council

See supplementary tables

Freshwater quality – Makara, Karori, Kaiwharawhara and Porirua streams (note data for Owhiro Stream not available)
Greater Wellington Regional Council

See supplementary tables

All streams returned "Fair" result

Energy use per capita (MWh)
Wellington Electricity

6.60
6.67
6.29

Number/sqm of ‘green star’ buildings/space in the city
NZ Green Building Council

141,365 m²
204,577 m2*
215,115 m²

Total kerbside recycling collected per capita (kilograms per person)
WCC Waste Operations

59.16 kg
54.6 kg
53.8 kg

Total waste to the landfill per capita (tonnes per person)
WCC Waste Operations

0.406 tonnes
0.411 tonnes
0.447 tonnes

Selected indicators from the City Biodiversity Index (specific indicators to be confirmed)
WCC Parks, Sport and Recreation

New biodiversity index indicators are to be confirmed.

* Measure was reported incorrectly in 2015/16 Annual Report

Performance data – Council performance measures

The following section outlines Council performance measures for our Environment services. It includes data for the last 3 years to show trends and includes variances explanations for relevant areas.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17
Target
%
Variance

2.1 Gardens, beaches and green open spaces

To measure the quality of the open spaces we provide

Residents (%) who are satisfied with the quality and maintenance of green open spaces – local parks, playgrounds and reserves; botanic gardens; beaches and coastal areas; and walkways
87%
85%
86%
90%
-4%

Number of visitors to the Botanic Gardens (including Otari-Wilton’s Bush)
1,354,681
1,147,067
1,042,044
1,280,000
-19%

To measure the quality of street cleaning services

Residents (%) who are satisfied with the quality of street cleaning
75%
76%
74%
85%
-13%

Street cleaning (%) compliance with quality performance standards
97%
97%
97%
98%
-1%

To measure the quality and quantity of work we undertake to protect biodiversity

We will plant 2 million trees by 2020

1,345,773
1,571,370
1,539,927
(77% of 2020 target)
2%

High value biodiversity sites (%) covered by integrated animal pest control or weed control
67%
52%
62%
59%
5%

Proportion of grant funds successfully allocated (through milestones being met)
100%
100%
100%
95%
5%

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17
Target
%
Variance

2.2 Waste reduction and energy conservation

To measure the quality of waste reduction and recycling services

Residents (%) who are satisfied with recycling collection services
86%
84%
77%
85%
-9%

Waste diverted from the landfill (tonnes)
18,048 tonnes
17,431 tonnes
18,078 tonnes
at least 16,500 tonnes of recyclable material
10%

Residents (%) who regularly use recycling (including weekly, fortnightly or monthly use)
61%
96%
98%
90%
9%

To measure the quality of our waste disposal services

Residents (%) who are satisfied with waste collection services
85%
85%
78%
90%
-13%

Energy sourced from the Southern Landfill (GWh)
7.6GWh
7.65GWh
7.44GWh
8 GWh
-7%

To measure the amount (quantity) of the Council's energy consumption and emissions

WCC corporate energy use (including WCC general, pools and recreation centres, and CCOs) – Decrease in energy use from previous year (kWh)
47,185,050 kWh
48,828,889 kWh
51,102,651 kWh
Decrease in energy in use from previous year
Not met, increased 4.7%

WCC corporate greenhouse gas emissions – reduce emissions by 80% by 2050 (tonnes)
N/A
92,832 tonnes
92,681 tonnes
80% reduction by 2050

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17 Target
%
Variance

2.3 Water

To measure the quality of water supplied to residents and the services that ensure security of supply

Compliance with Drinking Water Standards for NZ 2005 (revised 2008) (Part 4 bacterial compliance criteria) and (Part 5 protozoal compliance criteria)
100% Achieved
100% Achieved
100% Achieved
100% Achieved
0%

Part 5 - Testing for Part 5 is taken at the water treatment plants. These treatment plants are all operated by GWRC. Water is supplied to the WCC zone from these treatment plants and is therefore compliant for three of the four treatment plants (Te Marau, Wainuiomata and Gear Island). Waterloo treatment plant has been assessed as non-compliant. Water from the bores at Waterloo treatment plant continues to be chlorinated, which ensures the provision of acceptable quality water to customers

Maintenance of water supply quality gradings from Ministry of Health
Maintained
Maintained
Maintained
Maintain
Met

Customer satisfaction with water supply
97%
91%
90%
90%
0%

Number of complaints about:
(a) drinking water clarity
(b) drinking water taste
(c) drinking water odour;
(d) drinking water pressure or flow;
(e) drinking water continuity of supply;
(f) responsiveness to drinking water complaints;
per 1000 connections:
DIA
13
13.84
<2015/2016 baseline
Not met

Median response time for:

a) attendance for urgent call outs
DIA
50 min
51 min
60 min
15%

b) resolution for urgent call out
DIA
2.8 hours
3.23 hours
4 hours
19%

c) attendance for non-urgent call outs
DIA
28.7 hours
44.80 hours
36 hours
-24%

d) resolution for non-urgent call outs
DIA
46.35 hours (1.93 days)
2.93 days
15 days
80%

Percentage of real water loss from networked reticulation system
13%
12%
8%
<14%
41%

Percentage of real water loss from water supply reticulation system for YE is less than the target. This is mainly due to the water conservation measures carried out in the city and quickly repairing major leaks/breaks in the water network.

Average drinking water consumption/resident/day
273 litres per resident per day
369 litres per resident per day
364 litres per resident per day
375 litres per resident per day
-3%

Number of unplanned supply cuts per 1000 connections
nil
1.2
0.71
<4
82%

Year End figure is less than the target due to the low number of unplanned supply cuts in the network. The result for this KPI depends on the amount of reactive work on the water network, the level of which is subject to many variables such as pipe materials & age, ground movement, traffic loading, soil condition etc.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17
Target
%
Variance

2.4 Wastewater

To measure the quality and timeliness of the wastewater service

Number of wastewater reticulation incidents per km of reticulation pipeline (blockages)
New
0.57
0.64
<=1.2
47%

Year end figure is less than the target due to the low number of pipeline (blockages) in the network. Results for this KPI depend on pipe blockages in the wastewater network, which cannot be easily predicted.

Dry weather wastewater overflows/1000 connections
DIA
0.55
0.46
0
Not met, but Improved by 16.4%

Customer satisfaction with the wastewater service
97%
84%
82%
75%
9%

Number of complaints about:
(a) wastewater odour
(b) wastewater system faults
(c) wasterwater system blockages
(d) responsiveness to wastewater issues
per 1000 connections
DIA
22
19.72
<2015/2016 baseline
Met

Median response time for wastewater overflows - attendance time
DIA
0.73 hours
0.77 hours
(~46 min)
<= 1 hour
23%

Median response time for wastewater overflows - resolution time
DIA
2.35 hours
2.68 hours
<= 6 hours
55%

To measure the impact of wastewater on the environment

Breaches of resource consents for discharges from wastewater system. Number of:
- abatement notices
- infringement notices
- enforcement orders
- convictions
for discharges from wastewater system.
New
1
0
0
0

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17 Target
% Variance

2.5 Stormwater

To measure the quality and timeliness of the stormwater service

Number of pipeline blockages per km of pipeline
New
0.04
0.04
<=0.5
92%

Customer satisfaction with stormwater management
95%
68%
62%
75%
-17%

The high incidence of flooding events in the last 3 years is believed to be an influencing factor in the low rating. Future upgrades are being planned but the scale of the problems requires significant ongoing investigation and catchment modelling to identify long-term risk profiles.

Number of complaints about stormwater system performance per 1000 connections
new
12
10.45
<2015/2016 baseline
Met

Median response time to attend a flooding event
new
49 min
57 min
<= 60 min
5%

To measure the impact of stormwater on the environment

Breaches of resource consents for discharges from stormwater system. Number of:
– abatement notices
– infringement notices
– enforcement orders
– convictions
for discharges from stormwater system.
new
0
0
0
0%

Number of flooding events
DIA
1
6
trend only

Number of habitable floors per 1000 connected homes per flooding event
DIA
0.14*
0.11
trend only

Percentage of days during the bathing season (1 November to 31 March) that the monitored beaches are suitable for recreational use
93%
100%
99.9%
90%
10%

The beach “suitability for use” measure is based on how many times the monitored beaches had information signs erected due to water quality criteria triggering a public health risk warning. Warning signs were erected for one day at the Taranaki St at Jumping Platform on 2nd of March following the protocol from MfE/MoH Microbiological Guidelines for Marine and Freshwater Recreational Areas. Warnings were issued over Waitangi weekend in response to a wasterwater event at Moa Point.

Percentage of monitored sites that have a rolling 12-month median value for E.coli (dry weather samples) that do not exceed 1000 cfu/100ml
new
93%
96%
90%
7%

* Measure was reported incorrectly in 2015/16 Annual Report

PERFORMANCE MEASURES | 2014/15 | 2015/16 | 2016/17 Actual | 2016/17 Target | % Variance
2.6 Conservation attractions |  |  |  |  |
To measure the success of our investments in conservation attractions |  |  |  |  |
Wellington Zoo – visitors | 225,927 | 260,809 | 230,632 | 239,408 | -4%
Zealandia – visitors | 97,421 | 125,849 | 125,179 | 99,300 | 26%

Performance data – supplementary tables

Residents' usage of the city's open spaces - local parks and reserves, botanic gardens, beaches and coastal areas, and walkways | Weekly
2014/15 | 2015/16 | 2016/17
Coastal areas or beaches | 22% | 21% | 21%
Botanic gardens | 6% | 4% | 5%
Parks and reserves | 21% | 22% | 20%
Town Belt or Outer Green Belt | 11% | 12% | 15%
Walking tracks | 17% | 16% | 17%
Sportsfields | 13% | 11% | 11%

Source: Wellington City Council Residents' Monitoring Survey 2017

Residents' usage of the city's open spaces - local parks and reserves, botanic gardens, beaches and coastal areas, and walkways | At least Yearly
2014/15 | 2015/16 | 2016/17
Coastal areas or beaches | 96% | 95% | 95%
Botanic gardens | 87% | 86% | 86%
Parks and reserves | 96% | 95% | 94%
Town Belt or Outer Green Belt | 78% | 78% | 80%
Walking tracks | 82% | 80% | 81%
Sportsfields | 60% | 60% | 59%

Source: Wellington City Council Residents' Monitoring Survey 2017

Freshwater biological health (macro invertebrates) - Makara, Karori, Kaiwharawhara and Porirua streams | 2013/14 | 2014/15 | 2015/16
Makara Stream | 107 | 114 | not measured
Karori Stream | 92 | 85 | 85
Kaiwharawhara Stream | 96 | 82 | 71
Porirua Stream (Wall Park) (new in 2014/15) | - | 81 | 81
Porirua Stream (Glenside) (new in 2014/15) | - | 94 | 100

Data for 2016/17 will be available in 2018

Source: Greater Wellington Regional Council

Freshwater quality - Makara, Karori, Kaiwharawhara | 2013/14 | 2014/15 | 2015/16
Makara Stream | Poor | Fair | Fair
Karori Stream | Poor | Fair | Fair
Kaiwharawhara Stream | Fair | Fair | Fair
Porirua Stream (Wall Park) (new in 2014/15) |  | Poor | Fair

Data for 2016/17 will be available in 2018

Source: Greater Wellington Regional Council

Case study
Alternative water supply

Following the November earthquake, Wellington Water began researching alternative sources of water to reduce its dependence on current supply lines. Wellington Water is now leading a world-first operation to drill for fresh water under the sea. If successful, this would mean the city has another source of water supply, in the event that the existing water pipeline from the Hutt Valley is damaged in another quake. Currently, most of the city's water is carried by pipes along the Hutt Road, crossing an identified fault line.

Exploratory drilling of Wellington Harbour started in late June 2017. The rig drills test bores into the Waiwhetu aquifer, which extends underneath the harbour floor, to see if it is a viable alternative water source for the city. The Waiwhetu aquifer, which fills a depression underneath the Hutt Valley, already supplies much of the drinking water for the Wellington region.

“We aim to provide emergency water supplies from day 8 after a major event, enough to meet the basic water needs of 20 litres per person per day.”
Mark Kinvig

Mark Kinvig, Wellington Water Group Manager Network Strategy & Planning, says the project is part of wider community water infrastructure resilience initiatives.

“But resilience starts at home. For the first 7 days, each household should have enough stored water for 20 litres per person, per day.”

3

Whanaketanga ōhanga

Economic development

We aim to support economic growth to enhance quality of life

The challenges we face

Diversifying Wellington’s economy to make it more resilient

Delivering economic stimulus capital projects in a tight construction market

Harnessing the economic opportunities presented by new technologies

Our strategic approach

Supporting high-quality events and promoting tourism

Attracting and supporting business activity

Improving the city’s national and international connections

Exploring major economic development initiatives

In this section

3.1 City promotions and business support

3.1 City promotions and business support

What we did:

Post-earthquake business support. We worked closely with Government in response to the November earthquake, and secured a support package that gave businesses $500 per full-time employee, and $300 per part-time employee per week. This made a considerable difference in helping businesses retain staff. We worked closely with other agencies including Greater Wellington Regional Council to demolish the building located at 61 Molesworth Street, which was damaged during the quake. In partnership with demolition company CERES, we also developed and implemented a management plan for the removal of all waste created as result of the deconstruction.

Major events. An estimated 15,000 visitors from outside the region came to Wellington for the 2017 DHL New Zealand Lions Series, providing a great boost to Wellington’s retail and hospitality sector (for more information, refer to the case study at the end of this chapter).

The World of WearableArts Awards Show (WOW) was again a great success and, with an extra show in this season’s run, attracted record audiences, selling out shows. Out-of-region visitation was again very strong; 71 percent of the total audience came from outside the Wellington region. This equated to about 41,000 visitors, and an estimated economic contribution of $25.2 million.

The Keith Urban and Carrie Underwood concert at Westpac Stadium attracted considerable number of visitors from outside the region (6000) with hotels reporting 97 percent capacity on the Saturday night. We also hosted the sold out Bledisloe Cup match against Australia at the Westpac Stadium. The annual Visa Wellington on a Plate sold 9070 tickets, up 5.2 percent from last year, and the Beervana beer festival sold 9529 tickets, up 15 percent from 2015.

Other notable events run during the year included the Homegrown music festival; the Twenty20, One Day International and Test cricket programme which attracted more than 25,500 attendees; and the Guns N’ Roses concert at Westpac Stadium, attended by 31,634 people, including an estimated 12,500 visitors from outside the region. There was also the Pinot Noir NZ 2017 conference, which showcased the region’s wine and beer industries and hosted 98 percent out-of-region participants. Other events hosted included the Cindy Sherman exhibition, the HSBC Sevens Series Wellington, CubaDupa, and an international FIFA Oceania pool play match.

How we performed

Wellington Regional Economic Development Agency – Positively Wellington Tourism partnership funding (%)

Source: WREDA

Target to maintain funding at <50% of total income not met (-26%). Percentage of funding to income (target <50%) was impacted by revenue drop due to the November earthquake: $1m drop in “i-SITE” revenue and by closure of two hotels – Sofitel and Amora.

Events Development Fund – ratio of direct spend to economic impact

Source: Wellington City Council

Target met. However, ratio decreased by 16%.

Number of A-level events held in Wellington – economic contribution

Source: WREDA

City promotion. Destination marketing was run in Australia supporting airline routes to Wellington from Melbourne, Brisbane and the Gold Coast. The first flight on Singapore Airlines’ new “Capital Express” route arrived in Wellington on 21 September 2016 from Singapore, with representatives from both Singapore and Canberra in Wellington to welcome the arrival. On 1 September, Air New Zealand and Singapore Airlines announced the extension of their alliance to include travel between Wellington and Singapore. Singapore Airlines further cemented their commitment by opening a Wellington office.

Business Improvement Districts (BIDs). The Miramar BID endeavoured to expand its boundary to incorporate the wider Miramar Peninsula including the airport. Poll results did not support expanding the boundary, with a response rate of only 20 percent (the required minimum rate was 25 percent). An initiative to establish a BID in Tawa resulted in a 33 percent voter response and of those 71 percent were in support. The result has seen Tawa established as the fourth BID established in Wellington under the Council’s BID policy. A review of the BID programme began in May 2017, and recommendations arising from the review are being considered.

LookSee Wellington. WREDA’s LookSee programme, a worldwide talent search initiative, attracted 48,500 applications from around the world, and brought almost 100 tech sector job-seekers to Wellington. A vast number of the thousands of candidates remain interested in Wellington as a place to live and work, as evidenced through a recent survey of that candidate database. Nine new international tech sector leads for business attraction have been generated by LookSee Wellington coverage. Enquiries came from Israel, Brazil, Argentina, USA, India, and Yemen.

Business growth. Our support of growth and innovation-oriented businesses continues, including access to mentorship, capability development, research and development support services and funding under the Regional Business Partner Programme. The successful Summer of Tech programme has seen 117 tech interns placed (including 104 from Wellington City) in 42 Wellington businesses. Around 80 percent of interns were retained after the summer programme. This initiative is invaluable to help grow our tech workforce and alleviate skill shortages.

Conventions and events. Wellington’s national market share of business events continues to grow, increasing 3 percent in the financial year. Wellington now hosts 22 percent of New Zealand’s multi-day business events. In 2016/17, 563 large multi-day convention events were held, with over 156,000 attendees in total. This included over 21,000 delegates from outside the Wellington region (these statistics take into account all multi-day convention events with over 60 delegates).

How we performed

Number of international visitors (guest nights) – international

Source: Statistics NZ

Number of domestic visitors (guest nights) – domestic

Source: Statistics NZ

Domestic airline passengers entering Wellington Airport

Source: Wellington International Airport Limited

Finances

How it was funded

The majority of the economic development activities are paid for by commercial ratepayers, as this covers the cost of tourism promotion, economic grants, and other activities that directly benefit the sector.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

3.1.1 WREDA

Expenditure
23,385
18,574
30,245
30,822
577

Revenue
(915)
(738)
(13,546)
(14,369)
(823)

Net Expenditure
22,470
17,836
16,699
16,453
(246)

3.1.2 Wellington convention centre

-

Expenditure
14,031
14,269
931
1,051
120

Revenue
(14,483)
(14,371)
(930)
(1,051)
(121)

Net Expenditure
(452)
(102)
1
-
(1)

3.1.3 Retail support (free weekend parking)

Expenditure
1,355
1,356
1,357
1,357
-

Revenue
-
-
-
-
-

Net Expenditure
1,355
1,356
1,357
1,357
-

3.1.4 City Growth Fund

Expenditure
2,409
3,798
4,003
3,001
(1,002)

Revenue
-
-
(1)
-
1

Net Expenditure
2,409
3,798
4,001
3,001
(1,000)¹

3.1.5 Major economic projects

-

Expenditure
-
-
5,048
5,077
29

Revenue
-
-
(47)
(77)
(30)

Net Expenditure
-
-
5,001
5,000
(1)

3.1.6 Regional and external relations

Expenditure
583
677
696
661
(35)

Revenue
(8)
(24)
(37)
-
37

Net Expenditure
575
653
659
661
2

3.1.7 Business improvement districts

Expenditure
97
114
154
194
40

Revenue
-

20
-
(20)

Net Expenditure
97
114
174
194
20

3.1 Total City promotions and business support

Expenditure
41,860
38,788
42,434
42,163
(271)

Revenue
(15,406)
(15,133)
(14,541)
(15,497)
(956)

Net Expenditure
26,454
23,655
27,892
26,666
(1,226)

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Over budget due to the City Growth Fund payments exceeding reduced budget. The variance is funded from prior year surpluses.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

3.1.2 Wellington convention centre

Expenditure
2,268
1,669
886
7,011
6,874¹

Unspent portion of budget brought forward from prior years

749

Budget reallocated from 4.1.2

3,995

Unspent portion of budget to be carried forward to future years

1,621

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to the delays in the Convention Centre project and Venues Renewals (St James, TSB and Town Hall)

Total costs

Net Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

ECONOMIC DEVELOPMENT
26,454
23,655
27,892
26,666
(1,226)

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

Unspent portion of budget brought forward from prior years

749

Annual Plan budget amount 2016/17

7,011

Budget reallocation 2016/17

3,995

ECONOMIC DEVELOPMENT
2,268
1,669
886
11,755
10,869

How we performed

International airline passengers entering Wellington Airport

Source: Wellington International Airport Limited

Performance data

The following section outlines our performance data: outcome indicators, performance measures and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data - outcome indicators

The following section outlines outcome indicators for the Economic development area of activity. Outcome indicators do not have targets – only trend data.

Council outcome indicator | Source |  | 2014/15 | 2015/16 | 2016/17
Number of domestic and international visitors (guest nights) | Statistics NZ | Domestic | 1,426,141 | 1,542,892 | 1,471,999
|  | International | 769,714 | 743,203 | 782,079
Average length of stay – international and domestic* | Statistics NZ |  | 2.16* | 2.10* | 2.12
Number of major conferences | WREDA |  | 633 | 599 | 563
Number of A-level¹ events held in Wellington and their economic contribution | WREDA | Events | 12 | 11 | 9
| WREDA | Contribution | $29.9m | $36.5m | $43.5m
New Zealand's top 200 companies based in Wellington | Deloitte Top 200 Businesses |  | 22 | 22 | 21
Business enterprises - births and growths (net growth in business)* | Statistics NZ |  | 3.6% | 0.1%* | 1.0%
Domestic and international airline passengers entering Wellington Airport | Wellington International Airport Limited | Domestic | 4,682,000 | 4,899,000 | 5,076,000
|  | International | 775,000 | 897,000 | 889,000
Free wifi usage (logons/day) – central city and waterfront | Citylink | Central City | 18,676 | 49,289 | 74,366
| TradeMe | Waterfront | 390 | 821 | 714
Pedestrian counts – average of various Lambton Quay sites | WCC Golden Mile Pedestrian Survey 2017 |  | 1,971 | 2,052 | 2,153
Businesses and employees in research and development sector* | Statistics NZ | Businesses | 162* | 165 | 162
|  | Employees | 5,000* | 5,460* | 5,670
Secondary (international) and Tertiary (international and domestic) students enrolled per 1,000 residents | WREDA | Secondary International Students | 363 | 1,080 | 1,285
|  | Tertiary measure under review | 3 | 7 | NA
Events/activities held with international cities (in Wellington and overseas) | WCC International Relations |  | new measure | 58 | 58
* Result reporting in 2015/16 Annual Report revised by Statistics NZ
1. An A Level event is a major event with an investment greater than $50,000, excluding the NZ Festival, World of WearableArt Awards Show and Wellington Sevens.

Performance data – Council performance measures

The following section outlines Council performance measures for our Economic development services. It includes data for the last 3 years to show trends and includes variances explanations for relevant areas.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17
Target
%
Variance

3.1 City promotions and business support

To measure the quality of our investments in promoting the city

WREDA – Positively Wellington Tourism partnership funding
46%
48%
63%
Maintain the Council's funding at less than 50% of total income
Missed target by 26.0%

To measure the usage of the Council supported events

Estimated attendance at Council-supported events
898,968
978,188
657,743
500,000
32%

The favourable variance is most notably attributed to the success of rugby events, with the Hurricanes securing three playoff matches in 2016 and attracting greater audiences to their 2017 seasonal fixtures. The extended capacity and tickets sold to the Hurricanes v British and Irish Lions match, World of WearableArt show, Guns N’ Roses concert and Homegrown music festival, as well as the addition of an All Whites v Fiji match have all contributed to the increase in attendance.

To measure the quality of our investments in economic development

Events Development Fund – ratio of direct spend to economic impact
1:23
1:25
1:21
1:20
Met, however ratio decreased by 16%

The proportion of grant funds successfully allocated (through milestones being met)
100%
not reported
100%
95%
5%

Grant funds are allocated for various community and arts projects, applicants set out the outcomes they hope to achieve, these milestones are moderated based on the funding allocated and the Council’s own priorities and outcomes. Our role is to advise and support applicants through the process and closely monitor successful applicants performance against the agreed outcomes.
The result of the performance measure this year more closely reflects the efforts to improve monitoring and reporting of progress against outcomes.

Case study
The Lions tour

A significant number of visitors from outside the region came to Wellington for the 2017 DHL New Zealand Lions Series, providing a great boost to Wellington’s retail and hospitality sector. In the same week, the Lions played two sold-out matches at Westpac Stadium against the Hurricanes and the All Blacks. There were an estimated 15,000 visitors for the Hurricanes match and that number gradually rose over the next days to reach 26,000 by the time of the All Blacks match*.

The tour helped drive international visitor spending in Wellington up by more than 43 percent in June, according to Monthly Regional Tourism Estimates (MRTE) released by the Ministry of Business, Innovation and Employment (MBIE). A total of $55.6 million was spent in Wellington by international visitors in June 2017 – a net gain of $16.7 million on June 2016. Over the year, international visitor spending rose by 9.8 percent, surpassing $800 million for the first time on record.

“From increased orders for regional food and beverage suppliers, to delivery drivers, retail workers, transport workers, tourism operators, cleaners and much more, this event put money in the pockets of many Wellingtonians.” Derek Fry, Interim WREDA CEO

International visitors were treated to a range of events and attractions during the week the Lions played in Wellington. In partnership with the Wellington Regional Economic Development Agency (WREDA), we carried out a highly successful “city activation campaign”, which included free events that were enjoyed by thousands of people.

*Note: the All Blacks match was played on day one of the 2017/18 financial year.

4

Oranga ahurea

Cultural wellbeing

We aim to strengthen and promote Wellington’s unique cultural identity

The challenges we face

Enhancing Wellington’s ‘edge’ as New Zealand’s arts and culture capital in the face of increasing competition

Securing additional large-scale cultural events to refresh the city’s cultural offering

Providing accessible venues for the arts in the city that are safe and fit for purpose

Our strategic approach

Contributing to a vibrant central city and providing opportunities for cultural expression

Building a sense of place and identity

Providing a welcoming environment for the city’s increasingly diverse population

Growing visitation and exposure to creativity and innovation

In this section

4.1 Arts and cultural activities

4.1 Arts and cultural activities

What we did:

The Wellington Museums Trust (trading as Experience Wellington). Experience Wellington manages most of the Council’s arts and cultural assets, which this year achieved record aggregate visitation of 780,414, an increase of 13.4 percent on last year. It also raised $4.8 million, or 40.7 percent of the revenue required to deliver its visitor experiences. This is $1.2 million more than in 2015/16 because of the impact of the Cindy Sherman exhibition, the 2017 Capital E National Arts Festival, and an increase in trading revenue. A further $300,000 of funding was also secured from the Lottery WWI, Environment and Heritage Committee for the refurbishment of the City Gallery’s entrance and foyer which will be completed in 2017–18.

Key highlights at City Gallery Wellington included a major exhibition of photography by Cindy Sherman, one of the world’s most influential artists, and the first significant exhibition of Colin McCahon’s work in 15 years. Colin McCahon: On Going Out with the Tide brought together a body of work that had never been shown together and which examined the Māori content in his work.

At Capital E, the 8th biennial National Arts Festival attracted 47,783 visitors, including more than 13,000 children from 167 schools. The festival programme included New Zealand and international artists presenting 16 works of physical theatre, opera, dance, and film including the winning films from the 2016 Roxy5 Short Film Competition. For the first time, a festival fun zone in the form of Odd Lands brought this part of the waterfront to life for Wellingtonians enjoying a lunch-time stroll.

Ngā Heke, showing different perspectives of Wellington’s colourful history including the stories of Māori migration, and Flux, a new co-operative community space for, by and with young people to share their stories through art, photography, performance and more, opened at Wellington Museum.

The Cable Car Museum’s attraction for tourists is as strong as ever and Space Place continues to build a loyal following from Wellingtonians, with regular star gazing, family-friendly planetarium shows, and quirky space-themed events. The Nairn Street Preservation Society continues to build community connections to the Nairn Street Cottage with its home craft activities.

City cultural events. More than 12,000 people attended the Diwali Festival at TSB Bank Arena. This was a strong representation of Wellington’s Indian community. The event featured local and international artists, food stalls, and craftspeople. The Sky Show, New Zealand’s largest annual fireworks display, was viewed by an estimated 100,000 people from across the Wellington region, and the new Christmas festival A Very Welly Christmas was successfully staged on the weekend of 10/11 December. Lambton Quay became a festival zone, with a mainstage in Midland Park, a large “snowdome” in Panama Street, an aerial circus, a skating rink, a Christmas labyrinth, Nick Tansley’s carol caravan, and much more. ReCut, the capital’s new outdoor arts events series, took free public outdoor event experiences to a new level, with spectacular shows celebrating the reopening of Tory Street, and a combined celebration of Matariki and the DHL Lions tour.

How we performed

Attendees who are satisfied with Council-supported arts and cultural festivals (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target not met (-10%)

New Zealanders and residents who agree that Wellington has a culturally rich and diverse arts scene (%)

Source: National Wellington Reputation Survey Results 2017

Residents who agree that Wellington's local identity (sense of place) is appropriately valued and protected (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Public art. The Courtney Place Light Boxes featured the exhibition We Don’t Have to be the Building by artist Sian Torrington. In Masons Lane, in partnership with CIRCUIT Artist Film and Video Aotearoa, we presented three artist videos on Mason Screen – our outdoor 24-hour public screen.

Toi Pōneke Arts Centre. Toi Pōneke Gallery delivered a range of exhibitions during the year including James Gilbert Milne’s The Four Fingered Fandango, Petra Stueben’s The Hereafter and the Here Now Part II, Caroline Earley and Kate Walker’s Certain Ways, and Justine Walker’s For Sale: Baby Shoes, Never Worn.

Creative New Zealand and the Akina Foundation. Toi Pōneke partnered with these two organisations to deliver workshops and mentored a range of arts organisations through the ‘Growing Income Streams’ programme.

Te Papa. The Council provides funding support to Te Papa, which recorded 1,578,292 visits in the 12-month period. The numbers were driven both by the Gallipoli exhibition and Bug Lab, both collaborations between Te Papa and Weta Workshop. By the end of its first year (the end of 2016), more than a million people had experienced Gallipoli: The scale of our war, making it the most visited exhibition in Te Papa’s history. Bug Lab, an immersive science exhibition, which closed on 17 April 2017, welcomed over 130,000 visitors.

The Council provides funding support to Te Papa, which recorded 1,578,292 visits in the 12-month period

How we performed

New Zealanders who agree that Wellington is the arts capital of New Zealand (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Residents who agree that Wellington is the arts capital of New Zealand (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Total visits to museums and galleries (including Carter Observatory)

Source: Wellington Museums Trust

13% increase on last year.

Finances

How it was funded

Services in this activity area are funded through a mixture of general and targeted rates and external grants and subsidies from non-Council sources.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

4.1.1 City galleries and museums

Expenditure
8,379
9,094
9,288
9,585
220

Revenue
-
-
-
(77)
-

Net Expenditure
8,379
9,094
9,288
9,508
220

4.1.2 Visitor attractions (Te Papa/Carter Observatory)

-

Expenditure
3,033
3,121
3,084
2,917
(167)

Revenue
-
-
-
-
-

Net Expenditure
3,033
3,121
3,084
2,917
(167)

4.1.3 Arts and cultural festivals

Expenditure
3,569
2,601
3,146
3,233
87

Revenue
(441)
(263)
(191)
(417)
(226)

Net Expenditure
3,128
2,338
2,955
2,815
(140)

4.1.4 Cultural grants

Expenditure
1,037
856
1,169
1,161
(8)

Revenue
-
-
-
-
-

Net Expenditure
1,037
856
1,169
1,161
(8)

4.1.5 Access and support for community arts

-

Expenditure
569
659
768
767
(1)

Revenue
(63)
(74)
(61)
(63)
(3)

Net Expenditure
506
585
708
704
(4)

4.1.6 Arts partnerships

Expenditure
1,834
2,271
2,540
2,481
(59)

Revenue
(482)
(507)
(480)
(525)
(45)

Net Expenditure
1,352
1,764
2,060
1,956
(104)

4.1.7 Regional Amenities Fund

Expenditure
656
641
630
609
(21)

Revenue
(34)
(32)
(17)
-
17

Net Expenditure
622
609
613
609
(4)

4.1 Total Arts and cultural activities

Expenditure
19,077
19,243
20,625
20,753
50

Revenue
(1,020)
(876)
(749)
(1,082)
(257)

Net Expenditure
18,057
18,367
19,877
19,670
(207)

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

4.1.1 City galleries and museums

Expenditure
1,807
1,644
-
-
-

Unspent portion of budget to be carried forward to future years

4.1.2 Visitor attractions (Te Papa/Carter Observatory)

Expenditure
554
268
1,231
9,248
12,055¹

Unspent portion of budget brought forward from prior years

43

Budget reallocated from 3.1.2

(3,995)

Unspent portion of budget to be carried forward to future years

43

4.1.4 Cultural grants

Expenditure

40
40
-
20

Unspent portion of budget brought forward from prior years

60

Unspent portion of budget to be carried forward to future years

20

4.1.5 Access and support for community arts

Expenditure
10
16
15
27
12

Unspent portion of budget to be carried forward to future years

12

4.1 Total Arts and cultural activities

Expenditure
2,371
1,968
1,286
9,275
4,096

Unspent portion of budget brought forward from prior years

103

Budget reallocation 2016/17

(3,995)

Unspent portion of budget to be carried forward to future years

75

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to the Movie Museum project delays – we continue to work with The Movie Museum Ltd to finalise the design of the museum and the building. Construction is expected to commence in 2018 following the completion of the legal agreements and detail designs.

Total costs

Net Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

CULTURAL WELLBEING
18,057
18,367
19,877
19,670
(207)

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

Unspent portion of budget brought forward from prior years

103

Annual Plan budget amount 2016/17

9,275

Budget reallocation 2016/17

(3,995)

CULTURAL WELLBEING
2,371
1,968
1,286
5,382
4,096

Performance data

The following section outlines our performance data: outcome indicators, performance measures and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data – outcome indicators

The following section outlines outcome indicators for the Cultural wellbeing area of activity. Outcome indicators do not have targets – only trend data.

Council outcome indicator | Source |  | 2014/15 | 2015/16 | 2016/17
Residents' frequency of engagement in cultural and arts activities | WCC RMS 2017 |  | See supplementary tables |  |
New Zealanders and residents who agree that Wellington has a rich and culturally diverse arts scene | National Wellington Reputation Survey Results 2017 | New Zealanders | 84% | 81% | 79%
|  | Residents | 90% | 92% | 90%
Residents who agree that Wellington's local identity (sense of place) is appropriately valued and protected | WCC RMS 2017 |  | 76% | 78% | 73%
Events held at key city venues | Positively Wellington Venues |  | 1,647 | 958 | 951
New Zealanders and residents who agree that Wellington is the arts capital of New Zealand | National Wellington Reputation Survey Results 2017 | New Zealanders | 57% | 58% | 58%
|  | Residents | 63% | 66% | 64%
Residents who agree that Wellington is an easy place to get involved in the arts | WCC RMS 2017 |  | 85% | 86% | 85%
Te Papa visitors - total visitors, overseas visitors and New Zealand visitors from outside the region | Te Papa | Total | 1,556,164 | 1,784,939 | 1,578,292
|  | Overseas | 766,725 | 708,371 | 718,081
|  | NZ outside region | 316,377 | 581,986 | 483,995
Customer (%) satisfaction with the New Zealand Festival | Nielsen - 2016 New Zealand International Arts Festival Review |  | 2014 87% | 2016 91% | No festival
Total tickets sold (#) to the New Zealand Festival and the proportion sold to customers outside the region | New Zealand International Arts Festival |  |  | 2016 179,455 40% (71,651) | No festival
Total visits to museums and galleries (including Carter Observatory/Space Place) | Wellington Museums Trust |  | 689,414 | 688,169 | 780,414

Performance data – Council performance measures

The following section outlines Council performance measures for our Cultural wellbeing services. It includes data for the last 3 years to show trends and includes variances explanations for relevant areas.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17 Target
%
Variance

4.1 Arts and cultural activities

To measure the quality and usage of our arts and culture support activities

Attendee satisfaction with Council-supported arts and cultural festivals
84%
85%
81%
90%
-10%

Users (%) who are satisfied with Toi Pōneke facilities and services
91%
89%
90%
90%
0%

The proportion of grants funds successfully allocated (through milestones being met)
96%
98%
73%
95%
-23%

Grant funds are allocated for various community and arts projects, applicants set out the outcomes they hope to achieve, these milestones are moderated based on the funding allocated and Council’s own priorities and outcomes. Our role is to advise and support applicants through the process and closely monitor successful applicants performance against the agreed outcomes.
The result of the performance measure this year more closely reflects the efforts to improve monitoring and reporting of progress against outcomes.

Proportion of outcomes delivered (previous projects – weighted by $ value)
95%
98%
75%
90%
-17%

Venues Subsidy – total number of performers and attendees at supported events
12,564
113,390
163,202
Increase on previous year
Met, increase of 43.9%

It should be noted that the numbers relating to both performers and attendance include a number of large-scale community events, which include vast crowds. This includes (for 16/17) Diwali and Chinese New Year as well as mass performance events like The Big Sing and Artsplash with large groups of performers. The numbers may vary greatly from year to year.

Economic contribution ($) the New Zealand Festival makes to the city’s economy (direct new spend)
not measured
$32.093m
not measured
$40m every 2nd year
-

Cultural grants – % first-time applicants who are successful
43%
38%
38%
50%
-24%

Funding is highly contested, the success of applications coming through, is affected by many factors including availability of funding from other trusts, foundations and philanthropists.
There was an increase in the numbers of previous applicants also applying, which would add pressure to the funding rounds generally.

Performance data – supplementary tables 

Residents’ frequency of engagement in cultural and arts activities | 2014/15 | 2015/16 | 2016/17
At least once a week | 9% | 6% | 8%
At least once a month | 34% | 32% | 35%
At least every 6 months | 33% | 35% | 32%
At least once a year | 11% | 15% | 13%
Less often | 9% | 9% | 9%

Source: Wellington City Council Residents’ Monitoring Survey 2017

Case study
Creating a world-class music centre by Civic Square

The Council, Victoria University and the New Zealand Symphony Orchestra (NZSO) are working together to establish a vibrant, world-class music centre, with the Wellington Town Hall as its focal point.

This year, the NZSO confirmed its support for the venture and Victoria University approved initial funding of $10 million for its contribution to the first stage of the project. This involves the redevelopment and fit-out of the Town Hall’s main auditorium and performance areas to provide central city rehearsal and performance spaces for the NZSO and Victoria University’s New Zealand School of Music (NZSM).

The Council has sought public feedback on the project, which includes $89 million of ratepayer funding to earthquake strengthen the Town Hall ahead of the internal redevelopment. Work on the strengthening project is expected to start in August 2018, and the aim is to complete it in 2021.

“This school of music will reinforce Wellington’s rightful position as a centre of musical, cultural and educational excellence.” Ian Pike, Manager City Shaper, City Growth & Partnerships

The second stage of the project will create a nationally significant centre of musical excellence taking in adjoining buildings to provide central city teaching and administrative spaces for the NZSM and NZSO.

5

Pāpori me te hākinakina

Social and recreation

We aim for strong, healthy communities

The challenges we face

Balancing rising community demand and expectations of services against pressure on costs to ratepayers

Managing our recreation asset/facility portfolio in a time where there are changing patterns of recreation

Reducing rising inequality, homelessness and street begging

Enhancing household and community resilience, while maintaining the city’s existing strengths such as safety, open and tolerant attitudes, and high quality of life

Our strategic approach

Promoting and facilitating strong, safe, heathy communities by ensuring infrastructure is in place to meet community needs

Maximising the social return on community assets and facilities through making them multi-purpose where possible, for example the proposed Johnsonville community hub

Contributing to residents’ health and safety by supporting and facilitating the work of organisations that operate in this space, and providing facilities and services where the market and Central Government do not meet community needs

Promoting social cohesion by supporting and partnering with organisations that work on reducing marginalisation, discrimination, inequality and exclusion

In this section

5.1 Recreation promotion and support

5.2 Community support

5.3 Public health and safety

5.1 Recreation promotion and support

What we did:

Swimming pools. A total of 1,318,555 swimming pool visits were recorded during the year. This is 17,855 or 1.4 percent more than in the previous 12 months. During the year, Freyberg Pool was also closed for maintenance. Post-closure feedback has been very positive about changes made to the changing rooms and sauna spaces.

Recreation centres. A total of 1,223,588 people used our recreation facilities during the year. This is 146,015 or 13.6 percent more than the previous year. Wellington also hosted a number of national and international events at the ASB Sports Centre and Wellington Regional Aquatic Centre, including a 4-day NZ Basketball Association Camp, 6-day Women’s International Floorball World Cup Qualifier event, Ashy Bines Booty Tour, NZ Women’s National Futsal Tournament, Kapahaka Festival, Special Olympics Bocce, NZ Secondary Schools Junior Futsal Champs, NZ Swimming Junior Festival, Weetbix Triathlon and the NZ Age Group Swimming Champs.

Stakeholder engagement. We undertook formal consultation on the Makara Peak Mountain Bike Park masterplan and the Wellington Play Space Policy. We also continued discussions with the Alex Moore Park Sport and Community Inc. The group is focusing on fundraising and completing of the building design process. We continue to work closely with the clubs that are part of Hataitai Park Community Sports Hub.

Basin Reserve. The external works to the RA Vance Stand deferred maintenance programme were completed during the year. Work on the internal maintenance programme has begun and will be completed before the 2017/18 cricket season. The Basin Reserve also hosted two international cricket tests. The playing surface continued to receive very favourable reviews by New Zealand Cricket and the International Cricket Council. The Basin Reserve continues to be one of the most highly used first class cricket grounds in New Zealand. The New Zealand Herald once again rated the Basin Reserve as the best cricket ground in the country.

Sportsfields. We constructed a third artificial hockey turf at Mount Albert in Melrose and a multi-sport artificial training turf at Terawhiti next to Karori Park. The conversion of Martin Luckie Park grass sportsfield to a sand carpet surface was also completed during the year. The wet summer and autumn impacted on the use of grass sportsfields. While targets for the number of scheduled games played were met, a higher than usual number of summer games were cancelled, which impacted some sporting events and decreased overall user satisfaction for both grass and artificial turf.

Recreation support. We ran sport and physical activity sessions for over 3000 young women through the Shift programme and partnered with organisations in Upper Hutt, Hutt City, and Porirua City to expand the programme regionally. We also partnered with Primary Sport Wellington and Regional Sports Organisations to run the Wellington Regional SportsFest. Altogether 2600 students in Years 5-8 from 50 schools participated in 10 different sports during the 2-day event.

How we performed

Users who are satisfied with ASB Sports Centre (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target exceeded by 6% and increasing trend. Attendance at ASB Sports Centre has increased by more than 110,000 from last year. Key to this success has been securing a number of major national and international events, as well as improving and increasing the number of programmes for children.

Users who are satisfied with our grass sportsfields (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target not met (-15%). The wet summer and autumn has had an impact on the use of grass sportsfields. While targets for the number of scheduled games played were met, there were a higher than usual number of games cancelled, which has affected some sporting codes and decreased overall user satisfaction.

Users who are satisfied with our artificial sportsfields (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target not met (-8%) and declining trend. Although there has been some increase in utilisation during winter months, satisfaction may be affected by the cost and unpredictable weather.

Finances

How it was funded

Services in this activity area are funded through a mixture of general rates and user charges.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

5.1.1 Swimming pools

Expenditure
20,520
21,138
21,008
20,924
(84)

Revenue
(6,806)
(7,017)
(7,100)
(7,551)
(451)

Net Expenditure
13,714
14,121
13,907
13,373
(534)¹

5.1.2 Sportsfields

-

Expenditure
3,417
3,272
3,615
3,514
(100)

Revenue
(319)
(273)
(292)
(301)
(9)

Net Expenditure
3,098
2,999
3,322
3,213
(109)

5.1.3 Sportsfields (synthetic)

Expenditure
1,237
1,258
1,401
1,353
(48)

Revenue
(418)
(473)
(544)
(534)
10

Net Expenditure
819
785
857
819
(38)

5.1.4 Recreation centres

Expenditure
9,705
9,425
9,253
9,998
745

Revenue
(2,653)
(2,754)
(2,995)
(2,707)
288

Net Expenditure
7,052
6,671
6,257
7,290
1,033²

5.1.5 Recreation partnerships

-

Expenditure
1,049
992
1,115
1,107
(8)

Revenue
-
-
-
-
-

Net Expenditure
1,049
992
1,115
1,107
(8)

5.1.6 Playgrounds

Expenditure
746
759
816
795
(22)

Revenue
-
-
-
-
-

Net Expenditure
746
759
816
795
(22)

5.1.7 Marinas

Expenditure
511
565
609
673
65

Revenue
(582)
(596)
(596)
(603)
(7)

Net Expenditure
(71)
(31)
12
70
58

5.1.8 Golf course

Expenditure
221
225
208
260
53

Revenue
(58)
(60)
(55)
(92)
(36)

Net Expenditure
163
165
152
169
17

5.1.9 Recreation programmes

Expenditure
345
252
470
280
(191)

Revenue
(59)
(128)
(247)
(15)
232

Net Expenditure
286
124
223
264
41

5.1 Total Recreation promotion and support

Expenditure
37,751
37,886
38,493
38,904
412

Revenue
(10,895)
(11,301)
(11,831)
(11,803)
28

Net Expenditure
26,856
26,585
26,662
27,101
439

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Over budget due to lower revenue from user charges and higher depreciation costs.

2. Under budget due to lower interest costs and higher revenue from user charges.

How we performed

Visits to swimming pools

Source: Wellington City Council

Target exceeded by 5% and visitor numbers up slightly on last year.

Visits to recreation centres and ASB Sports Centre

Source: Wellington City Council

Target exceeded by 15%. Attendance at all recreation centres and the ASB Sports Centre has increased this year. There has been a focus on the programmes we are delivering, which has seen an overall increase in attendance numbers, and the ASB Sports Centre hosted a number of key national and international events.

Tenants who are satisfied with services and facilities (%)

Source: 2017 Tenant Survey

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

5.1.1 Swimming pools

Expenditure
5,185
2,535
686
1,853
1,167¹

Unspent portion of budget to be carried forward to future years

1,166

5.1.2 Sportsfields

Expenditure
517
1,125
849
905
56

Unspent portion of budget brought forward from prior years

75

Unspent portion of budget to be carried forward to future years

5.1.3 Sportsfields (synthetic)

Expenditure
47
223
3,678
1,789
(1,552)²

Unspent portion of budget brought forward from prior years

337

Unspent portion of budget to be carried forward to future years

184

5.1.4 Recreation centres

Expenditure
27
112
88
77
(11)

Unspent portion of budget brought forward from prior years

14

Unspent portion of budget to be carried forward to future years

5.1.5 Recreation partnerships

Expenditure
234
857
2,938
1,597
1,759³

Unspent portion of budget brought forward from prior years

3,100

Unspent portion of budget to be carried forward to future years

1,759

5.1.6 Playgrounds

Expenditure
602
429
304
455
151

Unspent portion of budget to be carried forward to future years

5.1.7 Marinas

Expenditure
92
524
165
141
12

Unspent portion of budget brought forward from prior years

36

Unspent portion of budget to be carried forward to future years

12

5.1 Total Recreation promotion and support

Expenditure
6,704
5,805
8,708
6,817
1,671

Unspent portion of budget brought forward from prior years

3,562

Unspent portion of budget to be carried forward to future years

3,121

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to changes in the Freyberg Pool maintenance closure, where some components were able to be delayed until the next pool closure allowing parts of the facility to remain open throughout the work.

2. Over budget due to approved changes in the budget available. The Council approved an additional $1.4 million for this project in August 2016, $0.8 million of this funded by sports groups. Also an addition $0.2 million of unbudgeted external revenue has been received from sports groups.

3. Under budget largely due to the delay in the work on the RA Vance Stand at the Basin Reserve.

How we performed

Tenants who rate the overall condition of their house/apartment as good or very good (%)

Source: 2017 Tenant Survey

Users who are satisfied with library services and facilities (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Satisfaction remains high at 92%.

Users who are satisfied with the online library collection (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target exceeded by 15%. New interfaces for PressReader (online newspapers) and RBdigital (downloadable e-magazines) were introduced this year, with positive feedback from – and increased use by – library customers.

5.2 Community support

What we did

Earthquake response. The November earthquake was a significant event affecting residents and businesses across Wellington. Key work delivered included opening a number of emergency activation centres (welfare centres) both in response to the November flood and the earthquake. Victoria University assisted us in providing access to student accommodation, for short and longer-term accommodation. After the earthquake, 186 organisations were closed, of which 65 are within the cordons and 150 operate outside the public administration sector. It is estimated that there were approximately 5000 displaced workers across the city, 850 from within the cordons. We worked closely with Government in response to the earthquake and secured a support package that gave businesses $500 per full-time employee and $300 per part-time employee per week. This made a considerable difference in supporting businesses to be able to retain staff.

Resilience Strategy. We launched our Resilience Strategy, which includes key projects that we are working to deliver in partnership with WREMO. These include preparing for an ageing population, building on the Council-funded Te Whakamura partnership to address homelessness, developing sustainable food networks, and building community resilience.

Earthquake Recovery Information Centre (ERIC). We formally established ERIC in partnership with community partners, Victim Support, the Ministry of Social Development, WREDA, the Insurance Council, Inland Revenue Department, the Earthquake Commission, Tenancy Advice, Citizens Advice Bureau, and Wellington Community Law. It provided a platform to connect with the businesses and individuals inside and near the cordons and those affected by the earthquake.

Libraries. A total of 2,159,555 physical library visits were made during the year and 2,811,921 items were issued. Altogether, there were 3,939,631 visits to our library website. Ebooks and eMagazines are regularly added to the collection, and as a result customer satisfaction with online library resources has climbed to 85 percent. A wide range of events continue to be held to connect both children and adults to new ideas and knowledge, such as robots, language learning, and story-times.

During November and December, the Tawa Community Centre and the second floor of the Central Library provided temporary accommodation space for Council staff following the earthquake. Despite the added pressure, all library services continued during this period. The new Johnsonville Library building project reached a milestone with the completion of the revised developed design, and detailed design is under way.

How we performed

Residents who are registered members of Wellington City Libraries (%)

Source: Wellington City Council

Target exceeded by 12% due to a softening in approach to closing long-dormant membership accounts. Performance objectives will be set to reflect current customer membership environment targets.

Visits to libraries

Source: Wellington City Council

Target nearly met (-8%). Physical visitor numbers are slightly down on the last 2 years (-4%).

Library items issued

Source: Wellington City Council

Target nearly met (-7%). The number of items issued was slightly down on last year (-4%).

Housing Taskforce. A housing taskforce made up of the Mayor, Deputy Mayor, Council officers and industry experts was established to provide options to increase Wellington’s housing supply, deliver more affordable housing, resolve planning issues, and improve housing quality and options for emergency housing. The Taskforce largely completed its work during the 2016/17 year and has made a series of recommendations to the Council. The Council will consider these recommendations to determine its next steps as part of the Long-term Plan 2018-28 process.

Housing upgrade programme. Work continued on Arlington site 2, with earthworks and ground preparations completed. Construction of the 10 buildings is advanced and roof structures are in place across several blocks, giving a view to the final design height of the site. The works to install stormwater, drainage and potable water supplies are also under way. The work is due to be finished in June 2018.

Finances

How it was funded

Services in this activity area are funded through a mixture of general rates and user charges.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

5.2.1 Libraries

Expenditure
20,635
21,129
22,273
22,495
222

Revenue
(1,542)
(1,452)
(1,361)
(1,484)
(123)

Net Expenditure
19,093
19,677
20,911
21,010
99

5.2.2 Access support (Leisure Card)

Expenditure
56
102
112
102
(10)

Revenue
-
-
-
-
-

Net Expenditure
56
102
112
102
(10)

5.2.3 Community advocacy

Expenditure
1,487
1,329
1,431
1,219
(212)

Revenue
(11)
(9)
(19)
-
19

Net Expenditure
1,476
1,320
1,412
1,219
(193)

5.2.4 Grants (Social and Recreation)

Expenditure
2,749
3,643
4,440
4,224
(216)

Revenue
(19)
(23)
(19)
-
19

Net Expenditure
2,730
3,620
4,421
4,224
(197)¹

5.2.5 Housing

Expenditure
24,500
22,294
23,886
25,105
1,220

Revenue
(35,866)
(34,256)
(35,582)
(37,278)
(1,696)

Net Revenue
(11,366)
(11,962)
(11,697)
(12,173)
(476)²

5.2.6 Community centres and halls

Expenditure
3,010
3,248
3,868
3,473
(395)

Revenue
(281)
(364)
(333)
(235)
98

Net Expenditure
2,729
2,884
3,535
3,238
(297)

5.2 Total Community support

Expenditure
52,437
51,745
56,009
56,618
609

Revenue
(37,719)
(36,104)
(37,315)
(38,997)
(1,683)

Net Expenditure
14,718
15,641
18,694
17,620
(1,074)

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Over budget on grant spend due to payment of expenses allocated (and expected to be incurred) against the 2017/18 budget.

2. Over budget due to the timing of the recognition of the Crown funding for the Housing Upgrade Programme. This is partly offset by lower depreciation costs and higher housing rental income, where some sites expected to be offline due to the upgrade programme are still being tenanted.

How we performed

Visits to the library website

Source: Wellington City Council

Target exceeded by 58%. The performance measure for total number of visitor sessions was set before our adoption of the “WCL Mini” app. While the overall website usage increase is modest, the number of active WCL Mini users increased by 25%, and app downloads increased by 61%.

Number of uses of the Leisure Card

Source: Recreation Wellington

Upward trend.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

5.2.1 Libraries

Expenditure
2,255
4,566
3,474
9,521
6,998¹

Unspent portion of budget brought forward from prior years

950

Unspent portion of budget to be carried forward to future years

6,674

5.2.5 Housing

Expenditure
19,167
14,940
15,090
23,861
10,476²

Unspent portion of budget brought forward from prior years

1,706

Unspent portion of budget to be carried forward to future years

9,558

5.2.6 Community centres and halls

Expenditure
19
146
192
262
70

Unspent portion of budget to be carried forward to future years

70

5.2 Total Community support

Expenditure
21,441
19,652
18,756
33,644
17,544

Unspent portion of budget brought forward from prior years

2,656

Unspent portion of budget to be carried forward to future years

16,302

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget mainly due to delays in the upgrade of the Johnsonville Library.

2. Under budget mainly due to delays in the Housing Upgrade Programme work at the Arlington complex.

5.3 Public health and safety

What we did:

City safety. We put community and neighbourhood safety and resilience programmes in place at Strathmore Park, and carried out projects that will help Wellington become a UNICEF child and youth friendly city. We also supported social enterprise start-up Pomegranate Kitchen, a catering business that employs people with a refugee background, and funded organisations including Victim Support, the Sexual Abuse Prevention Network, Te Whare Rokiroki (Māori Women's Refuge) and Shakti. These organisations carry out vital services that contribute to our status as a safe city, and help with preparations for emergency welfare delivery.

Local Hosts. Wellington’s Local Hosts continued to strengthen relationships with central city retailers, takeaways, cafes and bars. Their presence and data intelligence gathering in areas such as Pukeahu War Memorial Park, the waterfront, and Allen and Blair streets have assisted emerging place-based initiatives. As well as being based in the central city, the Hosts have maintained a presence in suburbs including Kilbirnie, Newtown, Strathmore and Miramar, and built relationships in these areas with local businesses, community centres, City Housing communities, and vulnerable people.

Public health. We have continued to make sure the requirements of the new Food Act are understood and met by our customers. This has included running a Facebook question-and-answer session and presenting to a number of industry groups.

Wellington Region Emergency Management Office (WREMO). As a result of the November earthquake, WREMO saw an increase in demand for Community Response Planning across the region. Within Wellington City, WREMO has completed five Community Response Plans, with a further seven in the early stages of development. It has also been working on staff preparedness with some Wellington-based embassies, and helping them identify what they can do to assist their foreign nationals. WREMO finished the development of the Community Emergency Hub concept, and has been contacting all hub facility owners about the change in name from “Civil Defence Centres”, and the clarification of the roles and responsibilities associated with the concept.

The Kaikoura After Action Review report was completed and signed off at the Joint Committee. WREMO is now developing the Wellington Earthquake Response Plan (WREP), which will link Central Government plans to regional and local planning requirements. To date, the strategic level of the WREP has been produced and progress made towards developing plans regarding situational awareness, evacuation, supply chain, emergency assistance centres, needs assessment and communications.

Finances

How it was funded

Services in this activity are funded through a mixture of general rates and user charges.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

5.3.1 Burials and cremations

Expenditure
2,310
1,626
1,608
1,655
47

Revenue
(816)
(764)
(807)
(858)
(51)

Net Expenditure
1,494
862
801
797
(4)

5.3.2 Public toilets

Expenditure
2,614
3,048
2,986
2,962
(24)

Revenue
-
-
-
-
-

Net Expenditure
2,614
3,048
2,986
2,962
(24)

5.3.3 Public Health Regulations

Expenditure
4,675
5,188
5,449
5,253
(196)

Revenue
(3,089)
(3,266)
(3,370)
(3,245)
126

Net Expenditure
1,586
1,922
2,079
2,009
(70)

5.3.4 City safety

Expenditure
2,234
2,791
3,203
2,815
(388)

Revenue
(46)
(51)
(31)
-
31

Net Expenditure
2,188
2,740
3,172
2,815
(357)

5.3.5 WREMO

Expenditure
1,322
1,394
4,909
1,534
(3,375)

Revenue
(34)
(20)
(2,245)
(18)
2,227

Net Expenditure
1,288
1,374
2,664
1,517
(1,148)¹

5.3 Total Public health and safety

Expenditure
13,155
14,047
18,155
14,220
(3,935)

Revenue
(3,985)
(4,101)
(6,453)
(4,120)
2,333

Net Expenditure
9,170
9,946
11,702
10,099
(1,603)

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Over budget due to unbudgeted emergency management costs as a result of the November earthquake.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

5.3.1 Burials and cremations

Expenditure
176
445
576
316
40

Unspent portion of budget brought forward from prior years

300

Unspent portion of budget to be carried forward to future years

84

5.3.2 Public toilets

Expenditure
865
295
2,102
1,622
209

Unspent portion of budget brought forward from prior years

689

Unspent portion of budget to be carried forward to future years

5.3.5 WREMO

Expenditure
-
72
43
73
30

Unspent portion of budget to be carried forward to future years

30

5.3 Total Public health and safety

Expenditure
1,041
812
2,721
2,011
279

Unspent portion of budget brought forward from prior years

989

Unspent portion of budget to be carried forward to future years

114

Total costs

Net Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

SOCIAL AND RECREATION
50,744
52,172
57,058
54,820
(2,238)

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

Unspent portion of budget brought forward from prior years

7,207

Annual Plan budget amount 2016/17

42,471

SOCIAL AND RECREATION
29,186
26,269
30,186
49,679
19,493

Performance data

The following section outlines our performance data: outcome indicators, performance measures, and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data – outcome indicators

The following section outlines outcome indicators for the Social and Recreation area of activity. Outcome indicators do not have targets – only trend data.

Council outcome indicator
Source

2014/15
2015/16
2016/17

Residents’ usage of City Council community and recreation facilities
WCC RMS 2017
Community Centre
22%
20%
23%

Community Hall
19%
21%
19%

Residents who agree that Wellington offers a wide range of recreation activities
WCC RMS 2017

85%
82%
85%

Residents’ frequency of physical activity
WCC RMS 2017

71%
74%
73%

Residents who perceive there to be barriers to participating in recreation activities
WCC RMS 2017

See supplementary tables

Residents’ importance of sense of community in local neighbourhood
WCC RMS 2017
Biennial Result
75% 2014

Residents’ usage of libraries and frequency of use
WCC RMS 2017

See supplementary tables

Residents who engage in neighbourly actions
WCC RMS 2017

See supplementary tables

Housing Services tenants who report positive social contact
2017 Tenant Survey

94%
94%
93%

Residents’ perceptions – city and community safety issues of most concern
WCC RMS 2017

See supplementary tables

Recorded crime and resolution rates – by categories
NZ Police

*Police changed the way they report crime statistics

Number of notifications of the most prevalent food and water-borne diseases
WCC Public Health

207
197
207

Residents’ life expectancy
Statistics NZ

2012-14
Male 80.9
Female 84.2

Food premises – number of cleaning notices and closures per year
WCC Public Health
Cleaning notices
17
8
10

Closures
1
2
-

Percentage of food premises with an inspection rating of excellent or very good that maintain or improve their inspection rating
WCC Public Health

99%
93%
96%

Number of uses of Leisure Card
Recreation Wellington

126,316
138,447
141,763

Dog control – complaints received (% of registered dogs)
WCC Public Health

22%
24%
21%

Performance data – Council performance measures

The following section outlines Council performance measures for our Social and Recreation services. It includes data for the last 3 years to show trends and includes variances explanations for relevant areas.

PERFORMANCE MEASURES

2014/15
2015/16
2016/17 Actual
2016/17 Target
%
Variance

5.1 Recreation promotion and support

To measure the quality and usage (quantity) of the recreation facilities we provide

User (%) satisfaction – swimming pools

85%
88%
87%
90%
-3%

User (%) satisfaction
Recreation Centres
85%
87%
88%
90%
-2%

ASB Sports Centre
86%
91%
95%
90%
6%

User (%) satisfaction – sportsfields
Grass
78%
73%*
72%
85%
-15%

* Previously reported in 2015/16 Annual Report as 42% incorrectly due to a calculation error.
Artificial turf
89%
84%
78%
85%
-8%

Visits to facilities – swimming pools

1,234,238
1,300,700
1,318,555
1,260,000
5%

Visits to facilities – recreation centres and ASB Sports Centre

324,878
1,077,573
1,223,588
1,060,000
15%

ASB Sports Centre courts utilisation (%)

46%
50%
56%
45%
24%

Sportsfields – % of scheduled sports games and training that take place
Winter
88%
79%
84%
80%
5%

Summer
99%
99%
92%
90%
2%

Marinas occupancy

98%
96%
98%
96%
2%

Artificial sportsfields % utilisation
Peak Winter
68%
68%
79%
80%
-1%

Peak Summer
32%
36%
34%
40%
-15%

Off-peak Winter
25%
15%
19%
25%
-24%

Off-peak Summer
11%
10%
8%
20%
-60%

During the summer months the level of interest from customers to use the artificial turf is lower as the weather enables schools to utilise their own fields. With the addition of Alex Moore Park, there are now more hours available for use, which also has impacted on the measure reported.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17 Actual
2016/17 Target
%
Variance

5.2 Community support

To measure the quality and usage (quantity) of the housing services we provide

Tenant satisfaction (%) with services and facilities
94%
94%
96%
90%
7%

Tenant rating (%) of the overall condition of their house/apartment (average, good and very good)
95%
96%
94%
90%
4%

Tenant (%) sense of safety in their complex at night
78%
75%
78%
75%
1%

Occupancy rate of available housing facilities
95%
94%
97%
90%
8%

All tenants (existing and new) housed within policy
99%
99%
97%
98%
-1%

To measure the progress of the Housing Upgrade Project

Agreed milestones, design standards and budgets are met in accordance with the agreed works programme and Deed of Grant between the Crown and the Council
Achieved
Achieved
Achieved
To Achieve
Met

To measure the quality and usage (quantity) of our community and recreation support services (including libraries)

Libraries – user (%) satisfaction with services and facilities
87%
93%
92%
90%
2%

E-library – user satisfaction (%) with the online library collection
84%
85%
86%
75%
15%

Accessible Wellington Action Plan initiatives planned for next year
77%
85%
NA
90%
NA

No initiaitives were planned for the 2016/17.

The proportion of grants fund successfully allocated (through milestones being met)
100%
100%
92%
95%
-3%

Proportion of outcomes delivered (previous projects) – weighted by $ value
100%
100%
94%
90%
4%

Libraries – residents (%) who are registered members
77%
79%
84%
75%
12%

Libraries – physical visits
2,276,034
2,248,409
2,159,555
2,400,000
-8%

Libraries – website visits
3,630,775
3,809,967
3,939,631
2,500,000
58%

Library items issued
2,902,402
2,923,042
2,811,921
3,000,000
-7%

Occupancy rates (%) of Wellington City Council Community Centres and Halls
34%
39%
45%
45%
0%

PERFORMANCE MEASURES

2014/15
2015/16
2016/17 Actual
2016/17 Target
%
Variance

5.3 Public health and safety

To measure the quality of our public health and safety services and programmes and our timeliness in responding to service requests

Dog control – urgent requests responded to within 1 hour and non-urgent requests responded to within 24 hours
Urgent
100%
100%
91%
100%
-9%

Non-urgent
99%
100%
97%
99%
-2%

WCC public toilets – urgent requests responded to within 4 hours and non-urgent requestes responded to within 3 days
Urgent
99%
100%
100%
100%
0%

Non-urgent
99%
100%
98%
95%
3%

WCC public toilets (%) that meet required cleanliness and maintenance performance standards

100%
100%
98%
95%
3%

Percentage of alcohol inspections carried out for medium to very high-risk premises

100%
100%
100%
100%
0%

Percentage of alcohol inspections carried out for medium to very high-risk premises during high trading hours

35%
28%
17%
25%
-34%

This result reflects the number of inspections carried out rather than the number of premises visited. As some premises are visited multiple times, the measure does not accurately demonstrate the effectiveness of performance and will be adjusted for next financial year

Graffiti removal – response timeframes met

new
85%
83%
80%
4%

Performance data – supplementary tables

Residents’ perceptions that there are barriers to participating in recreation activities | 2014/15 | 2015/16 | 2016/17
Too busy | 47% | 43% | 49%
Poor health | 6% | 8% | 7%
Activity costs too much | 26% | 29% | 26%
Activity too far away | 19% | 23% | 21%
No facilities for child care | 5% | 5% | 5%
Weather | 34% | 29% | 28%
Not at a convenient time | 21% | 20% | 23%
Shift work | 6% | 6% | 5%
Lack of motivation | 22% | 22% | 25%
No facilities exist | 1% | 2% | 2%
Tiredness | 20%* | 23% | 23%
Lack of knowledge about how to do it | 15% | 12% | 13%
Environmental factors (eg road conditions) | 3% | 3% | 3%
Lack of parking or transport | 20% | 22% | 20%
Nothing or not interested | 10% | 12% | 14%
Other (specify) | 8% | 6% | 7%
Don't know | 1% | 0% | 0%

* Reported incorrectly in 2015/16 Annual Report as 30%

Source: Wellington City Council Residents’ Monitoring Survey 2017

Residents’ usage (%) of libraries and frequency of use | 2014/15 | 2015/16 | 2016/17
More than once a week | 4% | 5% | 6%
Once a week | 15% | 15% | 14%
Once every 2-3 weeks | 24% | 20% | 25%
Once a month | 19% | 20% | 20%
Once every 2-3 months | 21% | 19% | 19%
Once every 4-6 months | 7% | 12% | 8%
Less often than once every 6 months | 8% | 9% | 8%
Don't know | 1% | 1% | 0%

Source: Wellington City Council Residents’ Monitoring Survey 2017

Residents who engage in neighbourly actions | 2014/15 | 2015/16 | 2016/17
Spoken to a neighbour | 92% | 91% | 89%
Given help to a neighbour | 58% | 62% | 55%
Received help from a neighbour | 47% | 49% | 46%
Participated in an activity with a neighbour | 38% | 36% | 33%
Discussed emergency preparedness with a neighbour | 16% | 14% | 21%
None of the above | 7% | 7% | 10%

Source: Wellington City Council Residents’ Monitoring Survey 2017

Residents’ perceptions of city safety issues of most concern | 2014/15 | 2015/16 | 2016/17
Which of the following, if any, are particularly concerning in Wellington at present? |  |  |
Poorly lit or dark public areas such as streets, paths and parks | 61% | 63% | 59%
Vandalism such as broken windows in shops and public buildings | 26% | 27% | 17%
Graffiti | 34% | 32% | 16%
Poorly maintained or dangerous public areas such as streets, paths and parks | 34% | 37% | 32%
Traffic, including busy roads and lack of pedestrian facilities | 34% | 33% | 33%
Dangerous driving including speeding, drunk drivers and so on | 29% | 30% | 33%
Alcohol and drug problems | 51% | 49% | 46%
Car theft or vandalism, and theft from cars | 36% | 32% | 29%
Threatening people and/or people behaving dangerously | 48% | 51% | 46%
Other (specify) | 11% | 10% | 6%
Nothing | 5% | 5% | 3%
Don't know | 1% | 2% | 1%

Source: Wellington City Council Residents’ Monitoring Survey 2017

Case study
Reducing homelessness/Te Mahana

The Council has been involved in responding to homelessness for many years. In 2003, we set up a Homeless Taskforce, which led to the creation of our first homeless strategy the following year. In 2013, the Taskforce came up with a citywide strategy, Te Mahana, to end homelessness by 2020.

The Council funds Te Whakamura Ai Te Ahi, which means “to keep the home fires burning”. This is a partnership between three community agencies – Downtown Community Ministry (DCM), Ngati Kahungunu ki Poneke Community Services Inc., and the Compassion Soup Kitchen – that delivers a range of services for the homeless, with a particular focus on a “housing first” approach. The Council has committed ongoing funding to this partnership, and in the past 12 months has supported it through combined contract funding of $458,000.

“Homelessness is a highly complex issue and there is no easy fix. The emphasis has to be on connecting people with the right services, and finding long-term housing solutions.” Jenny Rains, WCC Community Services Manager

We also approved $137,668 in community grants for DCM, $72,666 for the Compassion Soup Kitchen, and $100,016 for Ngati Kahungunu ki Poneke Community Services.

6

Tāone tupu ora

Urban development

We aim for a compact, resilient, and attractive city

The challenges we face

Increasing housing supply (and housing standards) in the city to avoid an Auckland-style housing crisis

Balancing the benefits of looking after our heritage against the need to earthquake-strengthen the city

Meeting changing demands such as smaller households and more inner city living

Supporting more sustainable land use and transport options to accommodate the growing population, pressure on land and environmental concerns

Our strategic approach

Maintaining the city’s liveability by ensuring housing remains affordable despite population growth

Simplifying and streamlining the consenting processes

Improving the quality of urban design and public open spaces

Maintaining the city’s unique and compact character

Improving the city’s resilience

In this section

6.1 Urban planning, heritage and public spaces development (including waterfront development)

6.2 Building and development control

6.1 Urban planning, heritage and public spaces development

What we did:

Earthquake response. The response to the November earthquake was the main focus at the start of the year. Initial engineering reports showed a theme of concern around buildings within a certain criteria1 . Based on this intelligence, along with concern from tenants across the city, the Council sought emergency powers under the Civil Defence and Emergency Management Act 2002. This gave the Council the ability to compel building owners to conduct inspections of their buildings and share their results. In total, 80 buildings were identified, with repair work and/or demolition continuing for many of them.

Unreinforced masonry. The unreinforced masonry buildings initiative began at the start of the year, involving 113 buildings in the city. Significant effort is currently focused on demolitions in Thorndon. Ongoing demolition and reconstruction work is likely to last for several years.

Urban activation. Lombard Lane work was significantly advanced during the year and the Cable Car laneway improvements were completed. We also installed pedestrian crossing lights commemorating local war hero Captain Alfred Shout (VC, MC) at four junctions surrounding the Pukeahu National War Memorial Park. The launch of these lights was timed to coincide with a visit by the Australian Capital Territory Chief Minister Andrew Barr and a wreath-laying at the park to celebrate our sister-city relationship with Canberra. We also installed Carmen Rupe pedestrian crossing lights at four junctions on Cuba Street. We completed installation of Commonwealth Walkway plaques and developed interpretative material highlighting 32 sites of historic, social, and cultural significance across Wellington. We developed conceptual designs for Holland Street, and initial community engagement is under way for the upgrade of the street and connecting lanes. We also completed installation of five murals depicting “urban legends” of Egmont Street on garage doorways. Overhead catenary lighting has also been installed to highlight the Dixon Street entrance to the lane. Concept designs for the Tawa Town Centre upgrade were developed with key community stakeholders across a series of meetings. Concepts for the Tawa mural and pedestrian crossing improvements were also developed.

How we performed

Residents who agree the city is developing in a way that maintains high-quality design (%)

Source: Wellington City Council

Increase from previous year. Target to increase level of agreement year on year not achieved (-7.3%).

Residents who agree their local suburban centre is lively and attractive (%)

Source: Wellington City Council

Target not met (-17%). Even though the survey result has improved from last year, it is well below target. Unfortunately we don't currently ask why residents feel this way in the monitoring survey. Further investigation is required to identify underlying concerns so that improvements can continue.

Residents who rate their waterfront experience as good or very good (%)

Source: Wellington City Council

Ahead of target and increased from last year.

Waterfront. There was significant progress on the proposed redevelopment of north Kumutoto on the waterfront. Developer Willis Bond & Co commenced construction of the new five-level commercial office building to be known as the PWC Centre, and the Council commenced construction on the north Kumutoto public space. Both projects are due for simultaneous completion in mid-2018 and will transform the waterfront.

Willis Bond & Co exercised its first right of refusal for the potential redevelopment of site 9 at north Kumutoto. Negotiations between the Council and Willis Bond will be finalised before a Council decision in 2017/18.

A proposal to re-establish the motor home park on adjacent CentrePort land did not proceed due to a combination of proposed development cost and seismic damage to the site. The Council advanced design and planning for the proposed redevelopment of Frank Kitts Park. A resource consent granted by independent planning commissioners in late 2016 has been appealed and will be heard in the Environment Court in early 2018.

There has throughout the year been an ongoing programme of repairs and maintenance, capital expenditure and renewals relating mainly to addressing seismic and resilience issues, public space lighting, bridge painting and historic wharf crane repainting in accordance with the Waterfront Operations Asset Management Plan.

How we performed

Building consents issued within 20 working days (%)

Source: Wellington City Council

Target not met (-13%). It has been a challenging year with building consents. The November earthquake temporarily lowered commercial work volumes but increased demand for structural engineers to assess both residential and commercial building consents. This led to reduced compliance to the 20 working days time frame. High local work volumes have continued the national trend, continuing the challenge of recruitment and retention of qualified staff.

Residents who agree that Wellington is a great place to live, work, and play (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Value of residential building consents

Source: Statistics NZ

Value increased by 41% compared to last year.

Finances

How it was funded

Services in this activity area are funded through a mixture of general rates, fees and charges, and grants and subsidies.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

6.1.1 Urban planning and policy

Expenditure
1,667
2,089
1,903
2,094
191

Revenue
(13)
(25)
(89)
(20)
69

Net Expenditure
1,654
2,064
1,814
2,074
260

6.1.2 Waterfront development

-

Expenditure
-
1,618
1,240
1,326
86

Revenue
-
(299)
(230)

230

Net Expenditure
-
1,319
1,010
1,326
316

6.1.3 Public spaces and centres development

Expenditure
2,437
2,136
2,087
2,224
137

Revenue
(167)
2
(14)
-
14

Net Expenditure
2,270
2,138
2,073
2,224
151

6.1.4 Built heritage development

Expenditure
863
1,264
2,215
1,998
(218)

Revenue
-
-
1
-
(1)

Net Expenditure
863
1,264
2,216
1,998
(219)

6.1 Total Urban planning, heritage and public spaces development

Expenditure
4,967
7,107
7,445
7,641
196

Revenue
(180)
(322)
(332)
(20)
312

Net Expenditure
4,787
6,785
7,113
7,621
508

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget

2016/17
Variance*
2016/17

6.1.1 Urban planning and policy

Expenditure
-
-
-
-
-

Unspent portion of budget to be carried forward to future years

6.1.2 Waterfront development

Expenditure
2,466
3,348
3,404
6,390
4,597¹

Unspent portion of budget brought forward from prior years

1,611

Unspent portion of budget to be carried forward to future years

4,210

6.1.3 Public spaces and centres development

Expenditure
16,466
2,049
1,989
4,162
3,193²

Unspent portion of budget brought forward from prior years

1,020

Unspent portion of budget to be carried forward to future years

4,732

6.1 Total Urban planning, heritage and public spaces development

Expenditure
18,932
5,397
5,393
10,552
7,790

Unspent portion of budget brought forward from prior years

2,631

Unspent portion of budget to be carried forward to future years

8,943

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Underspend due to delays in the work programmes for Frank Kitts Park and Kumutoto Precinct projects.

2. Under budget due to a delay in the timing of the delivery of Lombard Lane and the Tawa Town Centre upgrade. Other delays with the Holland Street and Garrett Street/Swan Lane redesigns were also factors.

How we performed

Value of commercial building consents

Source: Statistics NZ

Value increased 33% and trending upwards.

New Zealanders who agree that Wellington is an attractive destination (%)

Source: National Wellington Reputation Survey Results 2017

6.2 Building and development control

What we did:

Building consents. A total of 2596 building consents were issued by the Council over the last 12 months. This is an 8.5 percent increase from 2392 last year and is a positive sign that the market is responding to the city’s strong growth and need for more housing in the city.

Simplified consenting process. At the end of 2016, we agreed to develop a “one-stop shop” for consents. The delivery of the Council’s land use, land development, consenting, food, entertainment, and beverage regulatory processes can be complex to navigate – particularly when a customer needs a number of consents from different areas of the Council. To make this easier, we agreed to progressively introduce a streamlined case management approach for services where the customer will only need to supply one application per project to a single case manager. In support of that work, we are progressing GoShift – a cross-Council standardised building consent application programme.

Finances

How it was funded

Services in this activity are funded through a mixture of general rates and fees and charges.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

6.2.1 Building control and facilitation

Expenditure
12,542
13,570
14,430
13,624
(807)

Revenue
(8,972)
(9,251)
(9,977)
(9,067)
910

Net Expenditure
3,570
4,319
4,453
4,556
103

6.2.2 Development control and facilitation

Expenditure
5,685
5,807
6,433
5,971
(462)

Revenue
(2,367)
(2,552)
(3,316)
(2,899)
417

Net Expenditure
3,318
3,255
3,117
3,072
(45)

6.2.3 Earthquake risk mitigation - built environment

Expenditure
1,823
1,323
1,199
1,056
(143)

Revenue
-
-
-
-
-

Net Expenditure
1,823
1,323
1,199
1,056
(143)

6.2 Total Building and development control

Expenditure
20,051
20,700
22,062
20,651
(1,412)

Revenue
(11,339)
(11,803)
(13,293)
(11,966)
1,327

Net Expenditure
8,712
8,897
8,769
8,684
(85)

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

6.2.3 Earthquake risk mitigation - built environment

Expenditure
4,036
2,224
4,391
3,041
1,174¹

Unspent portion of budget brought forward from prior years

2,524

Unspent portion of budget to be carried forward to future years

1,174

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to delays in the earthquake strengthening programme, the key variances relate to the Town Hall and St James Theatre projects.

Total costs

Net Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

URBAN DEVELOPMENT
13,499
15,682
15,882
16,305
423

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

Unspent portion of budget brought forward from prior years

5,154

Annual Plan budget amount 2016/17

13,594

URBAN DEVELOPMENT
22,968
7,621
9,784
18,748
8,964

Performance data

The following section outlines our performance data: outcome indicators, performance measures and supplementary tables.

We use outcome indicators to monitor our city over time which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data – outcome indicators

The following section outlines outcome indicators for the Urban development area of activity. Outcome indicators do not have targets – only trend data.

Council outcome indicator
Source

2014/15
2015/16
2016/17

Residents who agree that Wellington is a great place to live, work, and play
WCC RMS 2017
New measure for 2017

95%

Value of residential and commercial building consents
Statistics NZ
Residential
$246m
$233m
$329m

Commercial
$302m
$359m
$477m

Population – growth and density (central city, growth spine)
WCC GIS
As at census 2013 same data
See supplementary tables

no census data

Residents who agree the city centre is an easy place to get to, use, and enjoy
WCC RMS 2017
Easy to get around
82.9%
82.0%*
76.0%

Easy to access leisure activities
80.2%
79.7%
82.0%

Residents who think there are urban design/urban form safety issues (eg graffiti, vandalism, poorly lit public spaces etc)
WCC RMS 2017
See supplementary tables

Building density throughout the city
WCC GIS
See supplementary tables
7.58 for Central City
8.05 for Central City

Proportion of houses within 100 metres of a public transport stop
WCC GIS

45%
45%
45%

Residents who agree that heritage items contribute to the city and local communities’ unique character
WCC RMS 2017
to the city
92%
92%
91%

to local community
71%
72%
71%

New Zealanders who agree that Wellington is an attractive destination
National Wellington Reputation Survey Results 2017

78%
81%
78%

* Measure reported incorrectly as 72% in 2015/16 Annual Report

Performance data – Council performance measures

The following section outlines Council performance measures for our Cultural Wellbeing services. It includes data for the last 3 years to show trends and includes variances explanations for relevant areas.

PERFORMANCE MEASURES
2014/15
2015/16
2016/17
Actual
2016/17
Target
%
Variance

6.1 Urban planning, heritage and public spaces development (including waterfront development)

To measure the quality of our urban planning, heritage protection and development work

Residents (%) who agree the city is developing in a way that maintains high quality design
new in LTP
55%
51%
Increase from previous year
Decrease -7.3%

District Plan listed items that are removed or demolished
Nil
Nil
Nil
Nil
Nil

Residents (%) who agree the central city is lively and attractive
86%
85%
87%
87%
0%

Residents (%) who agree their local suburban centre is lively and attractive
48%
47%
50%
60%
-17%

Even though the survey result has improved from last year, it is well below target. Unfortunately we don’t ask why residents feel this way in the monitoring survey – further investigation is required to identify underlying concerns so that improvements can continue.

Residents (%) who rate their waterfront experience as good or very good
94%
92%
95%
90%
6%

Proportion of grants funds successfully allocated (through milestones being met)
100%
64%
93%
95%
-2%

Residents (%) who agree heritage items are appropriately valued and protected (in the central city)
64%
69%
66%
65%
2%

6.2 Building and development control

To measure the timeliness of our building and development control services

Building consents issued within 20 working days
98%
92%
87%
100%
-13%

Code of Compliance Certificates issued within 20 working days
96%
96%
96%
100%
-4%

Land Information Memorandums (LIMs) issued within 10 working days
81%
99%
96%
100%
-4%

Resource consents (non-notified) issued within statutory timeframes
100%
100%
100%
100%
0%

Resource consents that are monitored within 3 months of project commencement
99%
97%
94%
90%
4%

Subdivision certificates – Section 223 certificates issued within statutory timeframes
100%
100%
100%
100%
0%

Noise control (excessive noise) complaints investigated within 1 hour
98%
96%
97%
90%
7%

Environmental complaints investigated within 48 hours
99%
98%
98%
98%
-1%

To measure the quality of our building and development control services

Customers (%) who rate building control services as good or very good
76%
79%
74%
70%
6%

Building Consent authority (BCA) accreditation retention (2-yearly)
Retained
Retained
Retained
To Retain
Retained

To measure our progress on earthquake risk mitigation

Earthquake-prone building notifications (section 124) (%) that are issued without successful challenge
99%
100%
100%
95%
5%

Performance data – supplementary tables

Residents who agree that Wellington is a great place to live, work, and play | 2014/15 | 2015/16 | 2016/17
Great place to… |  |  |
...live | 96% | 95% |
…work | 63% | 66% | 95%
…play | 93% | 90% |

Survey question merged in 2016/17 “live, work and play”

Source: Wellington City Council Residents’ Monitoring Survey 2017

Residents who think there are urban design/urban form safety issues | 2014/15 | 2015/16 | 2016/17
Poorly lit public areas | 61% | 63% | 59%
Vandalism | 26% | 27% | 17%
Graffiti | 34% | 32% | 16%
Poorly maintained public areas | 34% | 37% | 32%

Source: Wellington City Council Residents’ Monitoring Survey 2017

Building density throughout the city
2014/15
2016/17

number of buildings
building density
(buildings/hectare)
number of buildings
building density
(buildings/hectare)

Central city
1,825
7.58
1,948
8.05

Inner residential
10,485
34.7
10,437
34.27

Outer residential
75,499
21.91
77,559
22.38

Business 1 & 2, Centres and Medium Density Residential Area
3,640
10.98
3,842
11.51

Source: WCC GIS and Statistics NZ

Proportion of houses within 100m of a public transport stop | 2012/13
| 45%

Note: Updated stats will only be provided by Census data

Source: WCC GIS

Case study
Our resilience story

“Resilience is an investment in the future.” Stephen Cody, WCC Manager Building Resilience

Strengthening earthquake-prone buildings

Following the 2011 Christchurch earthquake, the government implemented changes to the Building Act for earthquake-prone buildings. The Building (Earthquake-prone Buildings) Amendment Act 2016, which took effect on 1 July 2017, has a major impact on the way these buildings are identified.

Well before the amendment took effect, Wellington City Council was proactive in managing earthquake-related risks. Over the past 8 years, the Council has evaluated the vast majority of pre-1976 buildings – a total of around 5000 buildings. Of the 5000, about 700 buildings are currently identified as being earthquake-prone.

More than 90 buildings have been taken off the list in 2016/17. The Council is also working closely with Central Government to develop regulation that supports the new policy.

More recently, in the wake of the November earthquake, the government made changes to the Civil Defence Emergency Management (CDEM) Act.

The Council has directed the owners of 72 buildings to do targeted assessments. The Council has been working with GNS Science and Auckland University and, as a result of this partnership and the work being done around building assessments, has a much better understanding of the city’s geology.

“We’re learning a lot about the sub-soil structure of the city.” Derek Baxter, WCC Building Intelligence Manager

Unreinforced masonry buildings

On 28 February 2017, Central Government introduced a new requirement to secure unreinforced masonry (URM) parapets and facades on buildings in certain areas of Wellington City, Hutt City, Marlborough District and Hurunui District Councils, in response to the November earthquake. As part of the new legislation, owners of URM buildings facing busy thoroughfares are required to secure the street-facing parapets and facades on their buildings within 12 months of the date of a Council notice. We have been working with other agencies and with owners that need to undertake strengthening works. As of 31 March, 98 sites remain on that list, down from an initial 113. The Council has partnered with agencies such as the Ministry of Business, Innovation and Employment (MBIE) and the Building Heritage Fund to provide funding for part of the strengthening works.

“GIS enhances our understanding of what’s going on in the city, and our ability to respond.” Alex Robertson, WCC Intelligence Operator

Geographic information system (GIS) technology

The Council has been doing a lot of work around preparedness in the event of future natural events, and this includes a better use of GIS technology for 3D mapping. GIS allows the Council to have a much better understanding of the city, analyse situations, make decisions, and respond to emergencies like earthquakes by showing where damage has occurred. The technology was already there but is being used in a more targeted way around emergency preparedness. It gives the Council a platform to look at data and tell a story in a way that people can relate to, by making it simpler.

1 These criteria are: Buildings four to 15 storeys high, containing reinforced concrete (a focus on precast floors), built on soft soils with ductile (flexible) design.

7

Waka

Transport

Connecting people and places

The challenges we face

Reducing congestion at peak times to improve travel times to and across the city

Increasing uptake of alternative transport modes to private motor vehicles that are healthier, and more sustainable

A lack of land to develop transport networks to meet increased demand and modal changes

Finding effective ways of engaging communities about transport choices for suburbs and the city

Our strategic approach

Ensuring the transport network works as efficiently as possible

Encouraging more sustainable and cost-effective transport options such as walking, cycling and public transport

Maintaining, developing and improving infrastructure to support different forms of transport – for example cycleways, footpaths and bus routes

In this section

7.1 Transport

7.2 Parking

7.1 Transport

What we did:

Reactive maintenance. Significant additional reactive maintenance work was carried out during the year as part of the emergency response resulting from natural hazard events. This included the November 2016 Kaikoura earthquake and several storm events, and clearance of over 1260 slips.

Let’s Get Wellington Moving. The Council has been working collaboratively with the NZ Transport Agency (NZTA) and Greater Wellington Regional Council (GWRC) to develop a whole-of-system approach to address the challenges in the transport network between Ngauranga and Wellington Airport. It includes consideration of how the transport network interacts with land use activities, especially in the central city.

Cycleways. The Wellington City Cycleways Programme aims to create a sustainable, liveable, and attractive city, offering choices about how to travel, with an appealing cycle network that encourages people of all ages and abilities to cycle. This programme was reviewed by NZTA in mid-2016. A refreshed programme was developed within the context of what’s practical and achievable, and as part of an integrated and connected transport network for Wellington City. We started work on the Hutt cycleway, and stakeholder engagement on the eastern suburbs projects, and we re-engaged with local communities on the Island Bay Cycle Way.

Network maintenance/renewal. We completed 21 kilometres of footpath renewals, and nearly 10 kilometres of kerb and channel renewals. We repaired or replaced nearly 13 kilometres of handrails, and installed and repaired 106 seats, 234 litter bins, 80 bollards and 32 cycle racks.

Network improvements. Various pedestrian safety improvements were carried out, including at kerb extensions on Adelaide Road to improve pedestrian access to Wakefield Park, and Wallace Street where an existing pedestrian crossing was converted to pedestrian-activated traffic signals. We also installed new lighting to improve safety on three walkways near Crawford Road (Kilbirnie), Dixon Street (central city), and Hosking Lane (Wadestown).

Cable Car. The company successfully delivered the electric drive replacement, though slightly above budget due to the discovery of additional corrosion to the car bodies that had to be fixed urgently. Commercial negotiations with Greater Wellington Regional Council and plans to decommission the overhead trolley bus network were concluded satisfactorily. Physical works will begin in October 2017.

How we performed

Residents who rate the condition of the road network as good or very good (%)

Source: Wellington City Council

Target not met (-13%). Action is under way to reduce service delivery delays and to improve customer service training.

Percentage of the sealed local road network that is resurfaced

Source: Wellington City Council

Target not met (-41%). There were additional challenges to completing the resurfacing work programme this year due to the November 2016 events (earthquake and storms). We continue to work to deliver appropriate response times.

Public transport. We are working with GWRC on physical street changes for the introduction of double-decker buses into the city fleet and the design of a number of bus passenger transfer points, which will be needed for the new Wellington City Bus Network in 2018.

Miramar parking scheme. Councillors approved a 24-hour time-restricted parking scheme in Miramar South on 8 June 2017. It was considered the most effective and fair way of mitigating issues caused by non-residents parking for extended periods in local residential streets. The scheme design was finalised and scheduled to come into force on 14 August. The results of the time restriction and how it affects parking in Miramar South will be monitored for a period of 6 months, to see if any further changes are needed.

Safer speeds. We have undertaken schemes focusing on reducing speeds and improving pedestrian and cycling safety. This includes the introduction of speed humps in a number of locations; pedestrian crossings; roundabouts; and central pedestrian refuge islands to facilitate a two-stage crossing. We are looking at developing intersection improvements in the central city and suburban shopping centres where there is high pedestrian and cycle interaction with vehicles. Other areas of consideration to reduce speed and improve safety include platform zebra crossings, widened footpaths in areas of high pedestrian demand, and new footpaths to facilitate measures to improve safety for pedestrians.

The local roll-out of the national speed campaign “Thank you for your speed” was delivered in conjunction with the NZTA national advertising campaign. We are also actively promoting and installing driver speed feedback signs and active school warning signs outside schools.

How we performed

Residents who are satisfied with street lighting in suburban areas (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Target not met (-20%). However, this result has improved from last year. We continue to balance immediate demands for funding and/or resources to address failure of lights, and our commitment to renewing old technology with LED lights.

Vehicle users who agree the transport system allows easy movement around the city (%)

Source: Wellington City Council Residents' Monitoring Survey 2017

Finances

How it was funded

Services in this activity are funded through a mixture of general rates, fees and charges and grants and subsidies received from NZTA for transport related activities

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance*
2016/17

7.1.1 Transport planning

Expenditure
1,309
1,412
2,074
2,651
577

Revenue
(132)
(153)
(9)
-
9

Net Expenditure
1,177
1,259
2,065
2,651
586¹

7.1.2 Vehicle network

-

Expenditure
21,579
22,408
22,733
24,101
1,369

Revenue
(3,594)
(4,830)
(4,213)
(1,482)
2,731

Net Expenditure
17,985
17,578
18,520
22,619
4,100²

7.1.3 Cycle network

Expenditure
705
1,291
2,379
1,376
(1,003)

Revenue
(8)
(263)
(11)
(47)
(36)

Net Expenditure
697
1,028
2,368
1,329
(1,039)³

7.1.4 Passenger transport network

Expenditure
1,260
2,632
2,113
2,450
337

Revenue
(1,057)
(922)
(1,666)
(856)
810

Net Expenditure
203
1,710
447
1,594
1,147⁴

7.1.5 Pedestrian network

Expenditure
6,027
6,303
6,519
7,061
542

Revenue
(57)
(144)
(48)
(40)
8

Net Expenditure
5,970
6,159
6,471
7,021
550⁵

7.1.6 Network-wide control and management

Expenditure
6,356
6,658
7,988
7,525
(463)

Revenue
(2,057)
(2,346)
(2,130)
(2,324)
(194)

Net Expenditure
4,299
4,312
5,858
5,201
(657)⁶

7.1.7 Road safety

Expenditure
6,303
5,924
6,053
6,353
300

Revenue
(1,747)
(1,671)
(1,629)
(1,654)
(25)

Net Expenditure
4,556
4,253
4,424
4,699
275

7.1 Total Transport

Expenditure
43,539
46,628
49,859
51,517
1,658

Revenue
(8,652)
(10,329)
(9,706)
(6,403)
3,303

Net Expenditure
34,887
36,299
40,152
45,114
4,961

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget in professional costs due to delays in studies and planning pending outcomes from Let’s Get Wellington Moving.

2. Under budget due to vested asset income and lower than planned depreciation.

3. Over budget due to higher than planned depreciation offset in part by delays in planning.

4. Under budget due to higher than budgeted Adshell revenues as well as higher recoveries from GWRC for Lambton Quay Bus Interchange and Bus Rapid Transit civil works

5. Under budget due to lower than planned depreciation and reductions in the programme of work that was delivered.

6. Over budget due to higher than planned depreciation offset in part by lower labour costs.

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Actual
2016/17

7.1.2 Vehicle network

Expenditure
29,895
22,319
20,716
21,558
2,046¹

Unspent portion of budget brought forward from prior years

1,204

Unspent portion of budget to be carried forward to future years

2,178

7.1.3 Cycle network

Expenditure
2,428
3,288
3,923
7,522
3,599²

Unspent portion of budget to be carried forward to future years

3,599

7.1.4 Passenger transport network

Expenditure
123
368
641
888
761³

Unspent portion of budget brought forward from prior years

514

Unspent portion of budget to be carried forward to future years

780

7.1.5 Pedestrian network

Expenditure
3,746
3,966
4,066
4,671
914⁴

Unspent portion of budget brought forward from prior years

309

Unspent portion of budget to be carried forward to future years

150

7.1.6 Network-wide control and management

Expenditure
2,397
2,536
2,233
2,380
147

Unspent portion of budget to be carried forward to future years

601

7.1.7 Road safety

Expenditure
2,803
2,715
2,258
3,538
1,280⁵

Unspent portion of budget to be carried forward to future years

853

7.1 Total Transport

Expenditure
41,392
35,192
33,837
40,557
8,747

Unspent portion of budget brought forward from prior years

2,027

Unspent portion of budget to be carried forward to future years

-

8,161

*Variance explanations to finances – why our actual spend differs from what was budgeted.

1. Under budget due to a number of the renewals programmes not being fully delivered due to contractor resourcing issues and various project delays.

2. Under budget as the cycling programme has been reprioritised and rephased across three years.

3. Under budget due to delays associated with the Lets Get Wellington Moving and Bus Rapid Transit projects.

4. Under budget due to a number of the renewals programmes not being fully delivered due to contractor resourcing issues and delays on the Queens Drive (Lyall Bay) project.

5. Under budget due to the limited availability of traffic engineering resources who were involved in other planning and design work.

7.2 Parking

What we did:

Parking. We provide around 10 percent of the parking in central Wellington. This consists mainly of 12,000 on-street parking spaces of which 3400 are metered in the central city, along with some street spaces for taxis, couriers, people with disabilities, bus stops, and the diplomatic corps. We manage off-street parking as well as parking spaces on Clifton Terrace, the Michael Fowler Centre, and beneath Civic Square. We’ve continued to update our technology with the roll-out of the new Pay by Space system, which allows us to gather real-time information on vehicles arriving and leaving any metered space. This information, which fits well with our “smart city” projects, can be used to help with future policy and decision-making.

Finances

How it was funded

Services in this activity area are funded through a mixture of general rates, fees and user charges.

What it cost

Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

7.2.1 Parking

Expenditure
11,218
12,262
12,542
13,925
1,383

Revenue
(25,642)
(26,442)
(26,858)
(28,295)
(1,437)

Net Revenue
(14,424)
(14,180)
(14,316)
(14,370)
(54)

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

7.2.1 Parking

Expenditure
89
1,342
481
496
75

Unspent portion of budget brought forward from prior years

60

Unspent portion of budget to be carried forward to future years

67

Total cost

Net Operating Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

TRANSPORT
20,463
22,119
25,836
30,744
4,907

Capital Expenditure ($000)
Actual
2014/15
Actual
2015/16
Actual
2016/17
Budget
2016/17
Variance
2016/17

Unspent portion of budget brought forward from prior years

2,087

Annual Plan budget amount 2016/17

41,052

TRANSPORT
41,481
36,534
34,318
43,139
8,821

Performance data

The following section outlines our performance data: outcome indicators, performance measures and supplementary tables.

We use outcome indicators to monitor our city over time, which provides information on trends that may influence our performance including those outside our control. We use performance measures to track how well we are delivering services against targets as set out in the Long-term Plan and Annual Plans.

Performance data – outcome indicators

The following section outlines outcome indicators for the Transport area of activity. Outcome indicators do not have targets – only trend data.

Council outcome indicator | Source |  | 2014/15 | 2015/16 | 2016/17
Residents (%) who agree that peak traffic volumes are acceptable | WCC RMS 2017 |  | 47% | 43% | 42%
Residents (%) who agree that the transport system allows easy access to the city | WCC RMS 2017 |  | 65% | 63% | 62%
Residents (%) who agree that public transport services are high quality and affordable | WCC RMS 2017 | Convenient | 69% | 69% | 72%
|  | Affordable | 46% | 41% | 45%
Air quality monitoring (i.e. nitrogen dioxide, carbon monoxide, and particulate matter peaks) | Greater Wellington Regional Council | See supplementary tables |  |  |
Change from previous year in the number of road crashes resulting in fatalities and serious injury. (2016/17 = YTD result) | WCC City Networks |  | Down 11 | Up 15 | YTD (7 months) down 19 against 2016 total
Social cost of crashes. (2016/17 = YTD result) | WCC City Networks | Calendar year | $96.97m | $111.67m | YTD (7 mths) $67m
Residents’ perceptions of transport related safety issues (i.e. issues of most concern) | WCC RMS 2017 | See supplementary tables |  |  |
Number of cyclists and pedestrians entering the Central Business District (weekdays) | WCC Transport - Cycle Cordon Survey | Cyclists | 10,515 | 9,621 | 8,063
| WCC Transport - Pedestrian Cordon Survey | Pedestrians | 54,319 | 55,120 | 55,128
Residents (%) who agree the transport system allows easy movement around the city – vehicle users and pedestrians | WCC RMS 2017 | Vehicle users | 51% | 45% | 45%
| New for 2016/17 | Bike users |  |  | 37%
|  | Pedestrians | 87% | 91% | 93%

Performance data – Council performance measures

The following section outlines Council performance measures for our Transport services. It includes data for the last 3 years to show trends and includes variances explanations for relevant areas.

PERFORMANCE MEASURES |  | 2014/15 | 2015/16 | 2016/17 Actual | 2016/17 Target | % Variance
7.1 Transport |  |  |  |  |  |
To measure the quality and timeliness of the transport infrastructure and service |  |  |  |  |  |
Residents (%) who agree the condition of the road and footpath network is good or very good | Roads | 66% | 66% | 65% | 75% | -13%
| Footpaths | 71% | 67% | 67% | 75% | -11%
Requests for service response rate – urgent (within 2 hours) and non-urgent (within 15 days) | Urgent | 96% | 96% | 89% | 100% | -11%
| Non-urgent | 97% | 98% | 94% | 100% | -6%
Roads (%) that meet smooth roads standards (smooth roads – measured by Smooth Travel Exposure based on NAASRA counts) |  | 77% | 75% | 74% | 70% | 6%
Footpath (%) condition rating (measured against the Council condition standards) | DIA | new | 97% | 96% | 97% | -1%
Street lighting (%) for major roads (arterial, principal and collector roads) meets national standards |  | 97% | 97% | 97% | 100% | -3%
Residents (%) who are satisfied with street lighting | Central city | 80% | 78% | 81% | 85% | -5%
| Suburban area | 55% | 54% | 60% | 75% | -20%
We continue to balance immediate demands for funding and/or resources to address the failure of lights, and our commitment to renewing old technology with LED lights. |  |  |
Sea wall and retaining wall condition rating – walls (%) rated 3 or better (1 very good, 5 very bad) |  | 91% | 91% | 93% | 90% | 3%
Percentage of the sealed local road network that is resurfaced | DIA | new | 9% | 6% | 10% | -41%
There were additional challenges to completing the resurfacing work programme this year due to the November 2016 events (earthquake and storms). We continue to deliver appropriate response times. |  |  |

PERFORMANCE MEASURES |  | 2014/15 | 2015/16 | 2016/17 Actual | 2016/17 Target | % Variance
7.2 Parking |  |  |  |  |  |
To measure the quality of our parking provision |  |  |  |  |  |
On-street car park turn-over rates | Weekdays | 6.3 | 6.1 | 6.1 | 6.8 | -10%
| Weekends | 4.8 | 4.7 | 4.9 | 5.3 | -7%
As pressure on parking spaces increases we will see a lower turnover particularly during peak periods in high demand areas. |  |  |  |  |  |
On-street car park average occupancy |  | 80% | 78% | 83% | 75% | 14%
This movement is considered positive in that internationally 85% is considered the ideal occupancy rate. This allows for good utilisation and reasonable expectation that a parking space can be found. |  |  |  |  |  |
On-street car park compliance - time restrictions and payment | Time | 93% reported in 13/14 | N/A | N/A | 95% | N/A
| Payment | 85% reported in 13/14 | N/A | N/A | 90% | N/A
Measure is no longer collected due to the piloting and subsequent installation of parking sensors. Going forward new measure(s) will be developed relating to the parking sensors. |  |  |  |  |  |
Residents (%) who agree that parking enforcement is fair |  | 50% | 48% | 50% | Increase from previous year | Met, increase of 4%
Increase from previous year. Parking Officers continue to provide ambassadorial and public education services to customers. |  |  |  |  |  |

Performance data – supplementary tables

Air quality monitoring (ie nitrogen dioxide, carbon monoxide and particulate matter peaks) |  | 2014 | 2015 | 2016
Data taken for NO2 and CO was for 1 hour |  |  |  |
NO2 (µg/m3) | max | 86.6 | 66 | 61.5
| mean | 19.7 | N/A | 14
CO (mg/m3) | max | 1.5 | 1 | 1.78
| mean | 0.4 | N/A | 0.22
Particulate matter (PM10) (µg/m3) | max | 32 | 32 | 26
| mean | 13 | N/A | 11.3

Source: Greater Wellington Regional Council, Air quality state of the environment monitoring programme, Annual data report 2016

Residents (%) who perceive there to be transport-related safety issues | 2014/15 | 2015/16 | 2016/17
Traffic or busy roads | 34% | 33% | 33%
Car theft or vandalism | 36% | 32% | 29%
Poorly lit or dark public areas | 61% | 63% | 59%
Dangerous driving | 29% | 30% | 33%

Wellington City Council Residents’ Monitoring Survey 2017

Case study
Let’s Get Wellington Moving

Let’s Get Wellington Moving is a joint initiative between Wellington City Council, NZ Transport Agency, and Greater Wellington Regional Council to develop a whole-of-system approach to address transport network challenges between Ngauranga and Wellington Airport.

In the past 12 months, we’ve engaged extensively with members of the public to find out what matters to them and how they move around. We heard back from over 10,000 people. This consultation process led to the development of a set of urban design and transport principles.

Between November 2016 and March 2017 we developed and tested a range of different scenarios against programme objectives and assessment criteria. There has been ongoing stakeholder engagement to assist in the development of a short-list of scenarios for public consultation, which is planned for November 2017. Scenarios will include different combinations of interventions for public transport, roading, walking, cycling, and travel demand management.

“We want a safe, efficient, and reliable transport system that interacts well with our natural and built environment and supports the aspirations of Wellingtonians” David Chick, WCC Chief City Planner

We have also developed new transport modelling tools that will be used to support future decisions on network interventions.

As part of shorter-term successes, we installed nine new pedestrian countdown timers throughout the city centre; seven new CCTV cameras; and a new, signalised pedestrian crossing on Cable Street where it meets Oriental Parade.

8

Ngā rōpū e here ana ki te Kaunihera

Council-Controlled Organisations (CCOs)

To achieve our objectives for Wellington, we have established several companies and trusts. These were set up to independently manage Council facilities, or to deliver significant services and undertake development on behalf of the Wellington community.

Where necessary, we provide funding to support their operations and capital investment requirements.

The following pages explain what the organisations do, how their performance is measured, and how they performed in 2016/17.

Selected performance measures for these CCOs are shown in this section and additional information is contained in specific chapters of this Annual Report, referenced below. For further details on their performance, refer to their individual annual reports.

Wellington Regional Stadium Trust

The Trust owns, operates and maintains the Stadium as a high-quality multi-purpose sporting venue. All of its trustees are jointly appointed by the Council and Greater Wellington Regional Council (GWRC).

Its main activities include:

managing events

seeking opportunities to provide regular quality events

ensuring the Stadium is provided to the community for appropriate usage

administering Trust assets and the Stadium on a prudent commercial basis.

For information on how the Wellington Regional Stadium Trust performed in 2016/17, see page 63.

Wellington Museums Trust

The Trust, which trades as Experience Wellington, operates six institutions on behalf of Wellington City Council. These are Capital E, Space Place at Carter Observatory, City Gallery Wellington, Nairn Street Cottage, Wellington Museum and the Cable Car Museum. All trustees are appointed by the Council.

The Trust’s main activities include:

delivering events and exhibitions

conserving and caring for the objects of its collections

delivering education experiences for children and young people

protecting heritage of venues

working with national and international artists

operating the Soundhouse Studio.

For information on how the Wellington Museums Trust performed in 2016/17, see page 73.

Wellington Zoo Trust

The Trust manages the Zoo’s assets and operations. All trustees are appointed by the Council.

Its main activities include:

caring for resident animals

educating the community about zoology

supporting conservation initiatives and research

acquiring additional plant and animal species.

For information on how the Wellington Zoo Trust performed, see page 53.

Wellington Regional Economic Development Agency (WREDA)

WREDA combines the economic development activities of Wellington City Council and Greater Wellington Regional Council into one organisation. Wellington City Council is an 80 percent shareholder.

Its main activities include:

marketing Wellington as a destination for migrants, visitors and investors

helping businesses grow and innovate

advocating for Wellington’s economy

attracting and promoting major events and running civic venues.

For information on how WREDA performed, see pages 64, 66 and 67.

Basin Reserve Trust

The Trust has four trustees. Two are appointed by the Council and two by Cricket Wellington.

The Trust’s main activities are:

managing the Basin Reserve for recreational and cricket activities for residents

contributing to the events programme for Wellington

preserving and enhancing the site’s heritage value.

For more information, see page 83.

Karori Sanctuary Trust

The Trust became a CCO on 1 October 2016. The Council has the overall responsibility to appoint members to the Trust board.

Its main activities are:

managing ongoing conservation and restoration work in the sanctuary

working with organisations and community groups to support local biodiversity

providing educational experiences

connecting people to New Zealand’s unique heritage.

For information on the Karori Sanctuary Trust, see page 53.

Wellington Cable Car Limited

The Council is the 100 percent shareholder and appoints all the directors.

The Trust’s main activities are:

maintaining the cable car and associated infrastructure

managing the cable car passenger service operation

marketing the cable car

managing the trolley bus overhead wiring system.

For information on how Wellington Cable Car Ltd performed, see page 111.

Wellington Water

Wellington Water is owned by the Hutt, Porirua, Upper Hutt and Wellington City councils and Greater Wellington Regional Council. The councils are all equal shareholders.

Its main activities are:

managing water treatment and supply

managing stormwater and wastewater service delivery in the Wellington region

promoting water conservation and sustainability.

For information on how Wellington Water performed, see page 51.

Performance data

PERFORMANCE MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Wellington Regional Stadium Trust |  |  |  |
Total revenue (000) | $17,298 | $15,852 | $14,832 | $14,320
Net surplus (000) | $2,093 | $2,081 | $1,701 | $1,380
Number of events | 61 | 70 | 65 | 49
Attendance | 531,861 | 571,034 | 480,413 | n/a

PERFORMANCE MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Wellington Museums Trust |  |  |  |
Non-council revenue (000) | $3,790 | $3,049 | $4,847 | $4,144
Cash subsidy (grant) per visit | $9.36 | $9.85 | $8.89 | $10.45
Full cost to Council per visitor | $14.03 | $13.69 | $12.28 | n/a
Average revenue per visit | $2.83 | $2.51 | $3.07 | $3.52
Total visitors | 689,414 | 688,169 | 780,414 | 659,000
City Gallery | 169,943 | 178,228 | 180,616 | 150,000
Wellington Museum | 124,955 | 133,470 | 138,956 | 134,000
Capital E | 111,273 | 79,120 | 161,869 | 105,000
Cable Car Museum | 237,099 | 241,638 | 242,250 | 220,000
Space Place | 42,633 | 52,838 | 54,109 | 46,800
Nairn St. Cottage | 3,511 | 2,875 | 2,614 | 3,200

FUNDING MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual |
Wellington Museums Trust |  |  |  |
Council operating grants & underwrites (000) | $7,153 | $7,236 | $7,467 |
Total Revenue Earned (000)^ | $10,943 | $10,285 | $12,314 |
Council’s property ownership costs (000)^^ | $2,155 | $2,343 | $2,114 |
Total cost to Council incl. grant + property costs (000) | $9,669 | $9,579 | $9,581 |
^ excluding rental grants for Council owned properties |  |  |  |
^^ includes rental grant for Capital E |  |  |  |

PERFORMANCE MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Wellington Zoo Trust |  |  |  |
Visitors | 225,927 | 260,809 | 230,632 | 239,408
Education visits | 12,380 | 11,413 | 10,754 | 10,000
Cash subsidy (grant) per visit | $12.20 | $10.79 | $12.86 | $13.05
Full cost to Council per visitor | $20.54 | $19.01 | $23.20 | $21.22
Average revenue per visit | $15.37 | $14.90 | $16.86 | $15.94

FUNDING MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual |
Wellington Zoo Trust |  |  |  |
Non-council revenue earned (000) | $4,999 | $4,307 | $4,300 |
Council operating grant (000) | $2,757 | $2,894 | $3,125 |
Total revenue earned (000) | $7,756 | $7,201 | $7,425 |
Council’s property ownership costs (000) | $4,640 | $4,957 | $5,349 |
Total cost to Council incl. grant + property costs (000) | $7,397 | $7,851 | $8,474 |

PERFORMANCE MEASURES |  | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Wellington Regional Economic Development Agency LTD (WREDA) |  |  |  |
Maintain Wellington’s share of the convention market |  | 16% | 18% | 17%
Venues utilisation |  | 56.3% | 54.2% | 65%
Net permanent and long term arrivals |  |  | 3800 | 2000
Australian visitor spend |  |  | $243m | $195m
Lightning Lab participant investment raised |  |  | $5.7m | $3.5m
Return On Investment via out of Wellington spend |  |  | 21:01 | 20:01
Total event attendance |  |  | 657,743 | 600,000

FUNDING MEASURES |  | 2015/16 Actual | 2016/17 Actual |
Wellington Regional Economic Development Agency LTD (WREDA) |  |  |  |
Non-council revenue (000) |  | $8,203 | $14,229 |
WCC operating grants (excl. Venues) (000) |  | $12,039 | $12,235 |
GWRC grants (000) |  | $4,300 | $4,160 |
Total revenue (000) |  | $24,542 | $30,624 |
Operating costs (000) |  | $24,544 | $30,207 |
Net surplus /loss (000) |  | -$2 | $417 |

PERFORMANCE MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Basin Reserve Trust |  |  |  |
Attendance at all events | 22,506 | 49,778 | 38,007 | 31,000
Event income | $127,250 | $196,500 | $206,600 | $149,000
Operational grant per attendance | $16.00 | $7.00 | $10.08 | $12.27
Event days (incl. community events) | 67 | 110 | 59 | 72
Practice facility usage | 71 | 101 | 147 | 85
Functions | 18 | 18 | 8 | 15

FUNDING MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual |
Basin Reserve Trust |  |  |  |
Non-council revenue earned (000) | $152 | $267 | $356 |
Council operating grant (000) | $557 | $593 | $633 |
Total revenue earned (000) | $709 | $860 | $989 |

PERFORMANCE MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Karori Sanctuary Trust |  |  |  |
Visitors | 97,543 | 125,849 | 125,179 | 93,600
Education visits | 6,890 | 9,478 | 11,621 | 8,500
Individual memberships | 9,680 | 10,572 | 10,944 | 11,110
Cash subsidy (grant) per visit | $8.97 | $6.95 | $6.99 | $9.35
Full cost to Council per visitor |  | $11.34 | $14.40 | $16.91
Average revenue per visitor | $25.52 | $26.03 | $27.76 | $25.96
Non-Council donations & funding | $291,545 | $402,608 | $376,644 | $250,000
Membership subscription revenue | n/a | n/a | $342,999 | $300,000

FUNDING MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual |
Karori Sanctuary Trust |  |  |  |
Non-council revenue earned (000) | $2,499 | $3,348 | $3,559 |
Council operating grant (000) | $875 | $875 | $875 |
Total revenue earned (000) | $3,374 | $4,223 | $4,434 |
Council’s property ownership costs (000) | $1,464 | $1,427 | $1,406 |
Total cost to Council incl. grant + property costs (000) | $2,339 | $2,302 | $2,281 |

PERFORMANCE MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual | 2016/17 Target
Wellington Cable Car Ltd |  |  |  |
Total Passengers | 976,416 | 1,010,905 | 970,336 | 997,511
Fare income | $2,399,000 | $2,731,000 | $2,475,085 | $2,626,000
Cable Car reliability | <99.0% | <99.0% | <99.0% | 99.0%

FUNDING MEASURES | 2014/15 Actual | 2015/16 Actual | 2016/17 Actual |
Wellington Cable Car Ltd |  |  |  |
Non-council revenue earned (000) | $10,009 | $6,896 | $6,831 |
Council capital grant (000) | Nil | $2,057 | $443 |
Total revenue earned (000) | $10,009 | $8,953 | $7,274 |
Total cost to Council incl. grant + property costs (000) | Nil | $2,057 | $443 |

Financial Statements

Wellington City Council and Group
Consolidated Financial Statements
For the year ended 30 June 2017

|  |  | Page
|  | Statement of Compliance and Responsibility | XX
|  | Council and Group structure | XX
|  | Basis of Consolidation | XX
|  |  | Statement of Comprehensive Revenue and Expense | XX
| – Major budget variations | XX
Note |  |
1 | Rates revenue | XX
2 | Revenue from operating activities | XX
3 | Investments revenue | XX
4 | Vested assets and other revenue | XX
5 | Fair value gains | XX
6 | Finance expense | XX
7 | Expenditure on operating activities | XX
8 | Depreciation and amortisation | XX
9 | Share of associates’ and jointly controlled entity’s surplus or deficit | XX
10 | Income tax expense | XX
|  |  | Statement of Financial Position | XX
| – Major budget variations | XX
11 | Cash and cash equivalents | XX
12 | Derivative financial instruments | XX
13 | Receivables and recoverables | XX
14 | Other financial assets | XX
15 | Non-current assets classified as held for sale | XX
16 | Intangibles | XX
17 | Investment properties | XX
18 | Property, plant and equipment | XX
19 | Investment in controlled entities | XX
20 | Investment in associates and jointly controlled entity | XX
21 | Exchange transactions, taxes and transfers payable | XX
22 | Revenue in advance | XX
23 | Borrowings | XX
24 | Employee benefit liabilities and provisions | XX
25 | Provisions for other liabilities | XX
26 | Deferred tax | XX
|  |  | Statement of Changes in Equity | XX
| – Major budget variations | XX
27 | Revaluation reserves | XX
28 | Hedging reserve | XX
29 | Fair value through other comprehensive revenue and expense reserve | XX
30 | Restricted funds | XX
|  |  | Statement of Cash Flows | XX
|  | 31 | Reconciliation of net surplus to net operating cash flows | XX
| Other disclosures |
32 | Financial instruments | XX
33 | Commitments | XX
34 | Contingencies | XX
35 | Jointly controlled assets | XX
36 | Related party disclosures | XX
37 | Remuneration and staffing levels | XX
38 | Financial impacts of the Kaikoura earthquake | XX
39 | Events after the end of the reporting period | XX
| Other significant accounting policies | XX

Statement of Compliance and Responsibility

Reporting entity

Wellington City Council is a territorial local authority governed by the Local Government Act 2002.

The primary purpose of the Council and Group is to provide goods or services for community or social benefits rather than making a financial return. As a defined public entity under the Public Audit Act 2001, the Council is audited by the Office of the Auditor General and is classed as a Public Sector Public Benefit Entity for financial reporting purposes.

The reported Council figures include the results and operations of Wellington City Council and the Council’s interests in the joint ventures as disclosed in Note 35: Jointly controlled assets (page 207).

The reported Group figures include the Council (as defined above), its controlled entities as disclosed in Note 19 (page 169) and the Council’s equity accounted interest in the associates and a jointly controlled entity as disclosed in Note 20 (page 170). A structural diagram of the Council and Group is included on the following page.

Compliance

The Council and management of Wellington City Council confirm that all the statutory requirements in relation to the Annual Report, as outlined in Schedule 10 of the Local Government Act 2002, including the requirement to comply with New Zealand Generally Accepted Accounting Practice (NZ GAAP) have been complied with.

The financial statements have been prepared to comply with Public Sector Public Benefit Entity Accounting Standards (PBE accounting standards) for a Tier 1 entity1 and were authorised for issue by the Council on 27 September 2017.

Responsibility

The Council and management accept responsibility for the preparation of the annual financial statements and judgements used in them. They also accept responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting.

In the opinion of the Council and management, the Annual Report for the year ended 30 June 2017 fairly reflects the financial position, results of operations and service performance achievements of Wellington City Council and Group.

Justin Lester
Mayor
Kevin Lavery
Chief Executive
Andy Matthews
Chief Financial Officer

27 September 2017
27 September 2017
27 September 2017

¹ A Tier 1 entity is defined as being either publicly accountable or large (ie. expenses over $30m). Council exceeds the expenses threshold.

Council and Group Structure

Wellington City Council Reporting Entity (Council)

Wellington City Council Group Reporting Entity (Group)

All entities included within the Group are domiciled in Wellington, New Zealand.

The percentages above represent the Council’s interest and/or ownership (for accounting purposes) in each of the entities in the Group. Refer to Notes 19 and 20 (pages 169 to 172) for more information.

² The Karori Sanctuary Trust (trading as Zealandia) became a Council controlled organisation on 30 September 2016 following the signing of a variation to the original Deed of trust.

Basis of Consolidation

Joint ventures

Joint ventures are binding contractual arrangements with other parties to jointly control an undertaken activity. The accounting treatment can vary according to the structure of the venture concerned. The two structure types are either a jointly controlled asset or a jointly controlled entity.

For a jointly controlled asset the Council has a liability in respect of its share of joint ventures’ operational deficits and liabilities, and shares in any operational surpluses and assets. The Council’s proportionate interest (ie 21.5 percent of the Spicer Valley landfill) in the assets, liabilities, revenue, and expenditure is included in the financial statements of the Council and Group on a line-by-line basis.

For a jointly controlled entity the Council chooses to use the equity accounting treatment option available as it better reflects its investment in the joint venture. The investment is initially recognised at cost, and adjusted thereafter for the post-acquisition changes in the Council’s share of net assets/equity of the entity. The Council’s share of the surplus or deficit of the entity is included in the Group’s surplus or deficit on a single line.

Controlled entities

Controlled entities are entities that are controlled by the Council. In the Council financial statements, the investment in controlled entities are carried at cost. In the Group financial statements, controlled entities are accounted for using the purchase method where assets, liabilities, revenue, and expenditure are added on a line-by-line basis. Where a non-controlling interest is held by another party in a Council controlled entity, the controlled entity is consolidated as if it was fully controlled and the share of any surplus or deficit attributable to the non-controlling interest is disclosed within the Statement of Comprehensive Revenue and Expense.

All significant transactions between Group entities, other than rates, are eliminated on consolidation. Rates are charged on an arm’s length basis and are not eliminated to ensure that reported costs and revenues are consistent with the Council’s Annual Plan.

Associates

Associates are entities where the Council has significant influence over their operating and financial policies but they are not controlled entities or joint ventures. In the Council financial statements, the investments in associates are carried at cost. In the Group financial statements, the Council’s share of the assets, liabilities, revenue and expenditure of associates is included on an equity accounting basis as a single line.

Council Controlled Organisations

The Council has established several Council Controlled Organisations (CCOs) and Council Controlled Trading Organisations (CCTOs) to help it achieve its goals for Wellington. These organisations were set up to independently manage Council facilities, or deliver specific services and developments on behalf of Wellington residents. A report on these organisations is found on page 119. Council has made appointments to other organisations, which make them Council Organisations (as defined in the Local Government Act 2002) but they are not Council controlled or part of the Group.

Statement of Comprehensive Revenue and Expense

For the year ended 30 June 2017

Council
Group

Note
Actual
2017
$000
Budget
2017
$000
Actual
2016
$000
Actual
2017
$000
Actual
2016
$000

Revenue

Rates
1
286,015
284,138
272,127
286,015
272,127

Revenue from operating activities

Development contributions
2
3,025
2,000
2,747
3,025
2,747

Grants, subsidies and reimbursements
2
33,881
41,037
33,083
46,538
44,383

Other operating activities
2
144,215
121,965
124,926
162,461
135,235

Investments revenue
3
24,585
20,447
23,204
12,648
11,145

Vested assets and other revenue
4
8,565
1,050
13,732
12,652
13,732

Fair value gains
5
23,500
3,989
14,173
23,404
14,177

Finance revenue

2,367
650
3,103
2,601
3,407

Total revenue

526,153
475,276
487,095
549,344
496,953

Expense

Finance expense
6
(23,960)
(25,617)
(24,223)
(23,970)
(24,223)

Expenditure on operating activities
7
(368,625)
(334,923)
(329,583)
(398,986)
(347,721)

Depreciation and amortisation expense
8
(101,889)
(101,975)
(99,183)
(103,653)
(100,970)

Total expense

(494,474)
(462,515)
(452,989)
(526,609)
(472,914)

Share of equity accounted surplus from associates and jointly controlled entity
9
-
-
-
13,313
12,811

Net surplus before taxation

31,679
12,761
34,106
36,048
36,850

Income tax credit/(expense)
10
-
-
-
102
(240)

NET SURPLUS for the year

31,679
12,761
34,106
36,150
36,610

Net surplus attributable to:

Wellington City Council and Group

31,679
12,761
34,106
35,866
36,326

Non-controlling interest

-
-
-
284
284

31,679
12,761
34,106
36,150
36,610

The notes on pages 132 to 220 form part of and should be read in conjunction with the financial statements

Statement of Comprehensive Revenue and Expense – continued

For the year ended 30 June 2017

Council
Group

Refer
Actual
2017
$000
Budget
2017
$000
Actual
2016
$000
Actual
2017
$000
Actual
2016
$000

Net surplus for the year

31,679
12,761
34,106
36,150
36,610

Other comprehensive revenue and expense 1

Items that will be reclassified to surplus/(deficit)

Cash flow hedges:

Fair value movement - net
SCIE 2
17,447
-
(21,268)
17,447
(21,268)

Fair value through other comprehensive revenue and expense

Fair value movement - net
SCIE
1,240
-
1,542
1,195
1,521

Items that will not be reclassified to surplus/(deficit)

Non-contolling interest:

Movement in non-controlling interest

-
-
-
-
(32)

Revaluations:

Fair value movement - property, plant and equipment - net
SCIE
295,254
106,241
(211)
295,254
(211)

Share of other comprehensive revenue and expense of associates and jointly controlled entity:

Fair value movement - property, plant and equipment - net
SCIE
-
-
-
24,165
-

Total other comprehensive revenue and expense

313,941
106,241
(19,937)
338,061
(19,990)

TOTAL COMPREHENSIVE REVENUE and EXPENSE for the year

345,620
119,002
14,169
374,211
16,620

Total comprehensive revenue and expense attributable to:

Wellington City Council and Group

345,620
119,002
14,169
373,927
16,336

Non-controlling interest

-
-
-
284
284

345,620
119,002
14,169
374,211
16,620

Other comprehensive revenue or expense is non-cash in nature and only reflects changes in equity.

Statement of Changes in Equity – see page 184

The notes on pages 132 to 220 form part of and should be read in conjunction with the financial statements

Statement of Comprehensive Revenue and Expense – Major budget variations

Significant variations from budgeted revenues and expenses are as follows.

Revenues were $50.877m higher than budgeted primarily due to:

$6.416m of storm and earthquake-related insurance recoveries

$4.633m of additional landfill charges for contaminated and special waste

$4.019m of additional social housing rent due to upgrade delays resulting in higher than expected occupancy

$6.250m of vested assets from developments

$18.222m of investment property revaluations

$5.275m for a fair value write-up of the loan to the Karori Sanctuary Trust prior to its early repayment.

These higher revenues were offset by $7.683m of the lower than expected recognition of capital grants primarily relating to the social housing upgrade ($5.900m) and NZTA funded projects ($1.783m).

Expenses were $31.959m higher than budgeted primarily due to:

$11.446m for the impairment of the Council-owned Civic Administration Building in Civic Square due to earthquake damage

$5.410m of other earthquake-related costs not covered by insurance

$2.752m of other earthquake-related costs incurred, but largely recoverable

$4.429m for the increase in the Weathertight homes provision.

Net finance expense was $3.374m lower than budgeted reflecting the lower than planned capital expenditure, which is debt funded, resulting in lower interest charges.

Note 1: Rates revenue

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

General rates

Base sector
88,448
83,317
88,448
83,317

Commercial, industrial and business sector
72,758
68,315
72,758
68,315

Targeted rates

All (excluding water rates by meter)
110,232
105,897
110,232
105,897

Total rates revenue (excluding water rates by meter)
271,438
257,529
271,438
257,529

Water rates by meter revenue
14,577
14,598
14,577
14,598

TOTAL RATES REVENUE
286,015
272,127
286,015
272,127

The total amount of rates charged on Council-owned properties that have not been eliminated from revenue and expenditure is $13.258m (2016: $12.752m). For the Group, rates of $13.298m (2016: $12.787m) have not been eliminated.

The revenue from rates for Wellington City Council was billed on the following rating information held as at 30 June 2016.

The number of rating units: 77,802 (30 June 2015: 77,271).

2017
$000
2016
$000

Total capital value of rating units
55,116,216
51,685,784

Total land value of rating units
23,300,843
22,326,668

Relevant significant accounting policies

Rates are set annually by resolution from the Council and relate to a particular financial year. All ratepayers are invoiced within the financial year for which the rates have been set. Rates revenue is recognised in full as at the date when rate assessment notices are sent to the ratepayers. Rates are a tax as they are payable under the Local Government Ratings Act 2002 and therefore meet the definition of non-exchange.

Water rates by meter are regulated in the same way as other rates and are taxes that use a specific charging mechanism to collect the rate. However, as the rates charged are primarily based on a per unit of consumption basis, water rates by meter are considered to be more in the nature of an exchange transaction. Revenue from water rates by meter is recognised on an accrual basis based on usage.

Rates remissions

Revenue from rates and levies is shown net of rates remissions. The Council’s Rates Remission and Postponement Policies provide for general rates to be partially remitted for rural open space; land used principally for games or sport and in special circumstances (where the rating policy is deemed to unfairly disadvantage an individual ratepayer). A remission of the Downtown levy targeted rate may also be granted to provide rates relief for downtown commercial property temporarily not fit for the purpose due to the property undergoing development and therefore not receiving the benefits derived by contributing to the Downtown levy targeted rate. The Council committed itself at the start of the year to certain remissions, which for the reporting period ended 30 June 2017 totalled $0.751m (2016: $0.407m).

Non-rateable land

Under the Local Government (Rating) Act 2002 certain properties are non-rateable. This includes schools, churches, public gardens, and certain land vested in the Crown. This land is non-rateable in respect of general rates but, where applicable, is rateable in respect of sewerage and water. Non-rateable land does not constitute a remission under the Council’s Rates Remission and Postponement Policies.

Note 2: Revenue from operating activities

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Development contributions
3,025
2,747
3,025
2,747

Grants, subsidies and reimbursements

Operating
6,606
7,107
18,961
17,610

Capital
27,275
25,976
27,577
26,773

Total grants, subsidies and reimbursements
33,881
33,083
46,538
44,383

Other operating activities

Fines and penalties
8,350
6,968
8,350
6,968

Rendering of services
129,415
111,268
143,504
120,294

Sale of goods
6,450
6,690
10,607
7,973

Total other operating activities
144,215
124,926
162,461
135,235

TOTAL REVENUE FROM OPERATING ACTIVITIES
181,121
160,756
212,024
182,365

For the Council, the principal grants and reimbursements are from the following sources:

The New Zealand Transport Agency (NZTA), which reimburses part of the Council’s costs for maintaining the local roading infrastructure. The capital reimbursements from NZTA of $11.473m (2016: $12.855m) and operating reimbursements of $5.349m (2016: $4.768m) are for costs already incurred and there are no unfulfilled conditions or other contingencies relating to the reimbursements.

The Crown, for the upgrade of the Council’s social housing stock. The capital grant and operating grant recognised in the current year being $12.182m (2016: $11.254m) and $1.122m (2016: $1.233m) respectively, are part of a 10-year work programme that commenced in 2008 and the revenue is recognised in accordance with that agreed work programme. There are no unfulfilled conditions or other contingencies relating to this utilised grant revenue apart from the overarching requirement for the Council to maintain its investment and provision of social housing until 2037.

For the Group, the additional principal subsidy was $3.616m (2016: $3.718m) from Greater Wellington Regional Council to Wellington Cable Car Limited for the maintenance and upgrade of the overhead wire trolley system.

For other operating activities of Council, the principal services rendered (provided) were:

community housing – $22.280m (2016: $21.769m)

parking fees and permits – $18.287m (2016: $18.597m)

convention and conferences centres – $13.165m (2016: $15.076m)

building consents and licensing services – $15.319m (2016: $13.823m)

landfill operations and recycling – $15.636m (2016: $11.138m) – including unbudgeted revenue from the joint ventures with Porirua City Council $1.259m (2016: $0.993m).

Relevant significant accounting policies

Revenue from operating activities is generally measured at the fair value of consideration received or receivable.

The Council undertakes various activities as part of its normal operations. This generates revenue, but generally at below market prices or with fees and user charges subsidised by rates. The following categories (except where noted) are classified as transfers, which are non-exchange transactions other than taxes.

See Note 13: Receivables and recoverables (page 150), for an explanation of exchange and non-exchange transactions, transfers and taxes.

Development contributions

Development contributions are recognised as revenue when the Council provides, or is able to provide, the service for which the contribution was charged. Until such time as the Council provides, or is able to provide the service, development contributions are recognised as liabilities.

Grants, subsidies, and reimbursements

Grants, subsidies, and reimbursements are initially recognised at their fair value where there is reasonable assurance that the monies will be received and all attaching conditions will be complied with. Grants and subsidies received in relation to the provision of services are recognised on a percentage of completion basis. Reimbursements (eg NZ Transport Agency roading claim payments) are recognised upon entitlement, which is when conditions pertaining to eligible expenditure have been fulfilled.

Fines and penalties

Revenue from fines and penalties (eg traffic and parking infringements, library overdue book fines, overdue rates penalties) is recognised when infringement notices are issued or when the fines/penalties are otherwise imposed. In particular the fair value of parking related fines is determined based on the probability of collecting fines considering previous collection history and a discount for the time value of money.

Rendering of services

Revenue from the rendering of services (eg building consent fees) is recognised by reference to the stage of completion of the transaction, based on the actual service provided as a percentage of the total services to be provided. Under this method, revenue is recognised in the accounting periods in which the services are provided. Some rendering of services are provided at a market rate or on a full cost recovery basis (eg parking fees) and these are classified as exchange.

Sale of goods

The sale of goods is classified as exchange revenue. Sale of goods is recognised when products are sold to the customer and all risks and rewards of ownership have transferred to the customer.

Note 3: Investments revenue

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Dividend from investment in associates
11,937
12,059
-
-

Dividend from investment in other entities
104
120
104
120

Investment property lease rentals
12,544
11,025
12,544
11,025

TOTAL INVESTMENTS REVENUE
24,585
23,204
12,648
11,145

The primary investment dividend was from the Council’s 34% holding in Wellington International Airport Limited.

The Council continues to maintain its current level of investment as it considers the dividend stream adds diversity to normal rates revenue. The investment holding is presently maintained as it is strategically, financially, and economically prudent to do so.

For further information refer to Note 20: Investment in associates and jointly controlled entity (page 170).

The rentals from investment property leases are primarily from ground leases around the central city and on the waterfront. The Council periodically reviews its continued ownership of investment properties by assessing the benefits against other arrangements that could deliver similar benefits. Any assessment is based on both the strategic benefit of the investment/ownership and in terms of the most financially viable method of achieving the delivery of Council services.

For further information refer to Note 17: Investment properties (page 157 ).

Relevant significant accounting policies

Dividends

Dividends from equity investments are recognised when the Council’s right to receive payment has been established.

Investment property lease rentals

Lease rentals (net of any incentives given) are recognised on a straight line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which benefits derived from the leased asset is diminished.

Note 4: Vested assets and other revenue

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Vested assets
6,250
10,181
6,250
10,181

Gain on business combination
-
-
4,072
-

Other revenue
2,315
3,551
2,330
3,551

TOTAL VESTED ASSETS AND OTHER REVENUE
8,565
13,732
12,652
13,732

Vested assets are principally infrastructural assets such as roading, drainage, waste, and water assets that have been constructed by developers. As part of the consents process, ownership of these assets is transferred to the Council, and on completion they become part of the city’s network. Vested assets are non-cash in nature and represent a future obligation to the Council, as the Council will have the ongoing costs associated with maintaining the assets.

The values of principal vested assets received were:

roading – $2.526m (2016: $3.737m)

drainage, waste, and water – $2.645m (2016: $5.982m)

Other revenue is principally Fuel Tax – $1.120m (2016: $1.096m)

For the group the $4.072m gain on business combination relates to the Council acquiring control of the Karori Sanctuary Trust. For more information refer to Note 19 – Investment in controlled entities (page 169).

Relevant significant accounting policies

Donated, subsidised or vested assets

Where a physical asset is acquired for nil or nominal consideration, with no conditions attached, the fair value of the asset received, as determined by active market prices, is recognised as non-exchange revenue when the control of the asset is transferred to the Council.

Gains

Gains include additional earnings (ie sale proceeds in excess of the book value) on the disposal of property, plant, and equipment.

Donated services

The Council benefits from the voluntary service of many Wellingtonians in the delivery of its activities and services (eg beach cleaning and Otari-Wilton’s Bush guiding and planting). Due to the difficulty in determining the precise value of these donated services with sufficient reliability, donated services are not recognised in these financial statements.

Note 5: Fair value gains

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Investment property revaluation
18,222
13,773
18,222
13,773

Amortisation of loans to related parties
3
400
8
404

Fair value adjustment on loans to related parties
5,275
-
5,174
-

TOTAL FAIR VALUE GAINS
23,500
14,173
23,404
14,177

Investment properties, which are revalued annually, are held primarily to earn rental revenue and/or for capital growth. These properties include the Council’s ground leases and certain lands and buildings, including the waterfront’s investment properties. For more information refer to Note 17: Investment properties (page 157).

The $5.275m adjustment to the related party loan was due to the early repayment of the loan the Council made to the Karori Sanctuary Trust. This loan had previously been reduced to its fair value to reflect the time value of money and the expected repayment schedule and was being amortised back up over time to its original full value. The early full repayment required the fair value to be adjusted up to the full value of $10.347m. For more information refer to Note 14: Other financial assets (page 152 ).

Relevant significant accounting policies

Gains

Gains include increases on the revaluation of investment property and in the fair value of financial assets and liabilities.

Investment properties

Investment properties are measured initially at cost and subsequently measured at fair value, determined annually by an independent registered valuer. Any gain or loss arising is recognised within surplus or deficit. Investment properties are not depreciated.

Derivatives

Movements on derivatives at fair value through surplus or deficit represents the fair value movements on interest rate swaps that do not meet the criteria for hedge accounting. Movements in the Group's other derivatives that meet the criteria for hedge accounting are taken to the cash flow hedge reserve and have no impact on the net surplus for the year.

Note 6: Finance expense

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Interest on borrowings
22,956
23,219
22,966
23,219

Interest on finance leases
2
14
2
14

Re-discounting of interest on provisions
1,002
990
1,002
990

TOTAL FINANCE EXPENSE
23,960
24,223
23,970
24,223

Less

Finance revenue - interest earned
2,367
3,103
2,601
3,407

NET FINANCE COST
21,593
21,120
21,369
20,816

Relevant significant accounting policies

Interest on borrowings

Interest expense is recognised using the effective interest rate method. All borrowing costs are expensed in the period in which they are incurred.

Re-discounting of interest

Re-discounting of interest on provisions is the Council’s funding cost for non-current provisions (where the cash flows will not occur until a future date). For further information refer to Note 24: Employee benefit liabilities and provisions (page 177) and Note 25: Provision for other liabilities (page 179).

Interest earned

Interest earned is recognised using the effective interest rate method.

Note 7: Expenditure on operating activities

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Auditor's remuneration:

Audit services - Audit New Zealand - Financial Statements
297
282
471
410

Audit services - Audit New Zealand - Long-Term Plan
-
45
-
45

Audit services - Audit New Zealand - other
11
11
11
11

Audit services - Other Auditors
-
-
73
35

Impairments

Bad debts written off not previously provided for
123
282
123
282

Increase in provision for impairment of receivables and recoverables
896
437
896
437

Impairment loss from property, plant and equipment
11,446
132
11,446
581

Impairment loss on shares
-
-
27
18

Governance and employment

Elected member remuneration
1,550
1,526
1,550
1,526

Independent directors/trustees fees for controlled entities
-
-
489
354

Employee benefits expense:

- Remuneration
83,879
79,343
109,180
101,994

- Superannuation contributions (including Kiwisaver)
2,336
2,253
2,884
2,767

- Termination benefits (including severances)
943
924
1,278
924

Other personnel costs
3,666
3,657
4,140
4,362

Insurance

Insurance premiums
9,671
9,465
10,149
9,866

Insurance reserve costs - net
6,910
545
6,910
545

General

Administration costs
6,467
6,244
18,334
13,384

Contractors
4,846
3,083
7,629
5,046

Contracts, services and materials
131,212
115,481
135,541
114,465

Grants - general
22,363
18,542
19,098
17,924

Grants to controlled entities
21,032
19,842
-
-

Information and communication technology
12,119
9,273
13,147
10,235

Loss on disposal of property, plant and equipment
542
1,827
886
2,174

Operating lease - minimum lease payments
1,737
1,313
4,734
2,613

Other general costs
620
1,449
2,959
2,190

Professional costs
14,406
14,573
16,216
15,540

Reassessment of weathertight provision
4,429
12,079
4,429
12,079

Utility costs
27,124
26,975
26,386
27,914

TOTAL EXPENDITURE ON OPERATING ACTIVITIES
368,625
329,583
398,986
347,721

Auditor’s remuneration

During the period, Audit New Zealand provided other services to the Council, namely assurance services relating to the Clifton Terrace Carpark managed by the Council on behalf of the New Zealand Transport Agency and assurance services relating to Council’s debenture trust deed compliance.

Impairments

The impairment loss from property, plant and equipment in 2016/17 relates to the Civic Administration Building due to the damage sustained from the November 2016 Kaikoura earthquake. For more detailed information refer to Note 38: Financial impacts of the Kaikoura Earthquake (page 216).

Governance and employment

Governance costs relate to the remuneration made to all elected members, comprising the Mayor, Councillors and Community Board members and also to directors appointed to boards of Controlled entities.

Employment costs relate to the remuneration paid directly to staff, other employee benefits such as Kiwisaver and other associated costs such as recruitment and training.

For further information refer to Note 37: Remuneration and staffing levels (page 212).

General

Direct costs are costs directly attributable to the rendering of Council services, including contracts, maintenance, management fees, materials, and services.

Grants – general, include $2.250m (2016: $2.250m) towards the funding of the Museum of New Zealand, Te Papa Tongarewa.

Grants to controlled entities such as the Wellington Zoo Trust are for operational funding purposes. For details of the funding to these entities refer to Note 36: Related party disclosures (page 208).

Operating lease minimum lease payments are for non-cancellable agreements for the use of assets such as buildings and specialised computer equipment.

Reassessment of provisions primarily relates to the Weathertight homes provision. Refer to Note 25: Provisions for other liabilities (page 179) for more detailed information.

Utility costs are those relating to the use of electricity, gas, and water. It also includes the payment of rates and water meter charges of $13.250m (2016: $12.824m) on Council-owned properties.

Relevant significant accounting policies

Grants and sponsorships

Expenditure is classified as a grant or sponsorship if it results in a transfer of resources (eg cash or physical assets) to another entity or individual in return for compliance with certain conditions relating to the operating activities of that entity. It includes any expenditure arising from a funding arrangement with another entity that has been entered into to achieve the objectives of the Council. Grants and sponsorships are distinct from donations, which are discretionary or charitable gifts. Where grants and sponsorships are discretionary until payment, the expense is recognised when the payment is made. Otherwise, the expense is recognised when the specified criteria have been fulfilled.

Cost allocation

The Council has derived the cost of service for each significant activity (as reported within the Statements of Service Performance). Direct costs are expensed directly to the activity. Indirect costs relate to the overall costs of running the organisation and include staff time, office space, and information technology costs. These indirect costs are allocated as overheads across all activities

Research and development

Research costs are expensed as incurred. Development expenditure on individual projects is capitalised and recognised as an asset when it meets the definition and criteria for capitalisation as an asset and it is probable that the Council will receive future economic benefits from the asset. Assets that have finite lives are stated at cost less accumulated amortisation and are amortised on a straight-line basis over their useful lives.

Note 8: Depreciation and amortisation

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Depreciation

Buildings
21,784
20,348
22,199
20,348

Civic Centre complex
2,592
2,739
2,592
2,739

Restricted buildings
1,577
1,521
1,577
1,521

Drainage, waste and water infrastructure
27,475
27,586
27,475
27,586

Service concession assets
4,911
4,969
4,911
4,969

Landfill post closure
132
145
132
145

Library collections
2,352
2,165
2,352
2,165

Plant and equipment
11,106
11,890
12,386
13,621

Roading infrastructure
25,039
23,341
25,039
23,341

Total depreciation
96,968
94,704
98,663
96,435

Amortisation

Computer software
4,921
4,479
4,990
4,535

Total amortisation
4,921
4,479
4,990
4,535

TOTAL DEPRECIATION AND AMORTISATION
101,889
99,183
103,653
100,970

Depreciation (amortisation) is an expense charged each year to reflect the estimated cost of using our assets over their lives. Amortisation relates to ‘intangible’ assets such as software (as distinct from physical assets, which are covered by the term depreciation).

Relevant significant accounting policies

Depreciation

Depreciation is provided on all property, plant, and equipment, with certain exceptions. The exceptions are land, restricted assets other than buildings, and assets under construction (work in progress). Depreciation is calculated on a straight-line basis, to allocate the cost or value of the asset (less any assessed residual value) over its estimated useful life.

The landfill post closure asset is depreciated over the life of the landfill based on the capacity of the landfill.

Amortisation

The amortisation of intangible assets is charged on a straight-line basis over the estimated useful life of the associated assets.

The estimated useful lives and depreciation rate ranges of the major classes of property, plant, and equipment are as follows:

Asset Category | 2017
| Useful Life (years) | Depreciation Rate
Land | unlimited | not depreciated
Buildings | 1 - 75 | 1.33 - 100%
Civic Centre Complex | 10 - 78 | 1.28 - 10%
Plant and equipment | 3 - 100 | 1 - 33.3%
Library collection | 3 -11 | 9.1 - 33.3%
Restricted assets (excluding buildings) | unlimited | not depreciated
Infrastructure assets: |  |
Land (including land under roads) | unlimited | not depreciated
Roading | 3 - 175 | 0.57 - 33.3%
Drainage, waste and water | 3 - 175 | 0.57 - 33.3%
Service concession arrangements | 3 - 100 | 1 - 33.3%

The variation in the range of lives for infrastructural assets is due to these assets being managed and depreciated by individual component rather than as a whole asset.

Computer software has a finite economic life and amortisation is charged to surplus or deficit on a straight-line basis over the estimated useful life of the asset. Typically, the estimated useful lives and amortisation rate range of these assets are as follows:

Asset Category | 2017
| Useful Life (years) | Amortisation Rate
Computer software | 2 - 10 | 10 - 50%

Note 9: Share of associates and jointly controlled entity’s surplus or deficit

The Council’s share of the results of the Chaffers Marina Holdings Limited, Wellington International Airport Limited and Wellington Water Limited is as follows:

Group

2017
$000
2016
$000

Associates

Chaffers Marina Holdings Limited
(31)
(36)

Wellington International Airport Limited
13,432
12,805

Jointly controlled entity

Wellington Water Limited
(88)
42

TOTAL SHARE OF ASSOCIATES’ AND JOINTLY CONTROLLED ENTITY’S SURPLUS OR (DEFICIT)
13,313
12,811

Further information on the cost and value of the above investments is found in Note 20: Investments in Associates and Jointly Controlled Entity (page 170).

Relevant significant accounting policies

Associates are entities where the Council has significant influence over their operating and financial policies but they are not controlled entities or joint ventures. In the Council financial statements, the investments in associates are carried at cost. In the Group financial statements, the Council’s share of the assets, liabilities, revenue and expenditure of associates is included on an equity accounting basis as a single line.

For a jointly controlled entity the Council chooses to use the equity accounting treatment option available as it better reflects its investment in the joint venture. The investment is initially recognised at cost, and adjusted thereafter for the post-acquisition changes in the Council’s share of net assets/equity of the entity. The Council’s share of the surplus or deficit of the entity is included in the Group’s surplus or deficit on a single line.

Note 10: Income tax expense

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current tax expense

Current year
-
-
293
(216)

Prior period adjustment
-
-
1
-

Total current tax expense
-
-
294
(216)

Deferred tax expense

Origination and reversal of temporary differences
(73)
(100)
-
-

Change in unrecognised temporary differences
-
-
(396)
456

Recognition of previously unrecognised tax losses
73
100
-
-

Total deferred tax expense
-
-
(396)
456

TOTAL INCOME TAX EXPENSE / (CREDIT)
-
-
(102)
240

Reconciliation of tax on the surplus and tax expense
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Surplus for the period before taxation
31,679
34,106
36,048
36,850

Prima facie income tax based on domestic tax rate - 28%
8,870
9,550
10,093
10,318

Effect of non-deductible expenses and tax exempt income
(8,897)
(9,590)
(10,321)
(10,720)

Effect of tax losses utilised
73
100
-
-

Current years loss for which no deferred tax asset was recognised
27
40
27
40

Recognition of prior year loss
(73)
(100)
(134)
(100)

Previously unreognised tax losses now utilised
-
-
-
(41)

Change in unrecognised temporary differences
-
-
208
738

Prior period adjustment
-
-
(407)
(205)

Share of income tax of equity accounted associates
-
-
385
211

Under / (over) provision of income tax in previous period
-
-
47
-

TOTAL INCOME TAX EXPENSE / (CREDIT)
-
-
(102)
240

Imputation credits
Group

2017
$000
2016
$000

Imputation credits available in subsequent periods
99
87

Relevant significant accounting policies

The Council, as a local authority, is only liable for income tax on the surplus or deficit for the year derived from any council controlled trading organisations and comprises current and deferred tax. Other members of the Group are subject to normal taxation unless they have tax exempt status as charitable trusts.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of the reporting period, plus any adjustment to tax payable in respect of previous periods.

Statement of Financial Position

As at 30 June 2017

Council
Group

Note
Actual
2017
$000
Budget
2017
$000
Actual
2016
$000
Actual
2017
$000
Actual
2016
$000

ASSETS

Current assets

Cash and cash equivalents
11
76,907
1,714
94,009
85,366
103,623

Receivables and recoverables
13
45,179
42,834
46,140
46,515
47,613

Other financial assets
14
263
-
315
304
315

Prepayments

14,012
13,433
11,500
14,303
11,962

Inventories

1,149
906
1,101
1,503
1,915

Non-current assets classified as held for sale
15
-
-
1,504
-
1,504

Total current assets

137,510
58,887
154,569
147,991
166,932

Non-current assets

Derivative financial assets
12
1,283
-
-
1,283
-

Receivables and recoverables
13
4,185
-
4,185
4,185
4,186

Other financial assets
14
9,996
11,954
12,865
11,337
14,343

Intangibles
16
26,528
28,578
26,737
26,613
26,815

Investment properties
17
230,194
213,931
211,237
230,194
211,237

Property, plant and equipment
18
6,972,168
6,771,399
6,645,975
6,988,405
6,659,487

Investment in controlled entities
19
5,071
5,071
5,071
-
-

Investment in associates and jointly controlled entity
20
19,465
19,465
19,465
163,960
138,419

Total non-current assets

7,268,890
7,050,398
6,925,535
7,425,977
7,054,487

TOTAL ASSETS

7,406,400
7,109,285
7,080,104
7,573,968
7,221,419

LIABILITIES

Current liabilities

Derivative financial liabilities
12
975
-
522
975
522

Exchange transactions and transfers payable
21
58,155
62,477
50,422
59,639
53,934

Taxes payable
21
3,498
-
2,852
3,627
3,068

Revenue in advance
22
28,922
16,717
43,098
30,717
45,193

Borrowings
23
100,096
267,279
140,077
100,196
140,077

Employee benefit liabilities and provisions
24
7,811
7,180
7,189
9,808
8,707

Provision for other liabilities
25
13,584
7,972
10,953
13,584
10,953

Total current liabilities

213,041
361,625
255,113
218,546
262,454

Non-current liabilities

Derivative financial liabilities
12
21,591
-
38,208
21,591
38,208

Exchange transactions and transfers payable
21
630
630
630
630
630

Borrowings
23
395,724
211,766
350,407
395,792
350,407

Employee benefit liabilities and provisions
24
889
1,593
995
924
1,056

Provision for other liabilities
25
44,404
18,231
50,250
44,404
50,250

Deferred tax
26
-
-
-
938
1,482

Total non-current liabilities

463,238
232,220
440,490
464,279
442,033

TOTAL LIABILITIES

676,279
593,845
695,603
682,825
704,487

EQUITY

Accumulated funds

1,269,134
1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

3,793,827
3,741,957
3,756,048
3,788,286
3,745,251

Revaluation reserves
27
1,677,312
1,489,442
1,382,337
1,815,338
1,496,198

Hedging reserve
28
(21,283)
-
(38,730)
(21,283)
(38,730)

Fair value through other comprehensive revenue and expense reserve
29
2,888
106
1,648
3,221
2,026

Non-controlling interest

-
-
-
284
284

Restricted funds
30
8,243
14,801
14,064
12,135
18,741

TOTAL EQUITY

6,730,121
6,515,440
6,384,501
6,891,143
6,516,932

TOTAL EQUITY AND LIABILITIES

7,406,400
7,109,285
7,080,104
7,573,968
7,221,419

The notes on pages 132 to 220 form part of and should be read in conjunction with the financial statements

Statement of Financial Position – Major budget variations

Significant variations from budget are as follows:

Current assets are $78.623m higher than budgeted primarily due to:

$72.000m of short-term deposits are held due to certain favourable interest rates and liquidity requirements.

Non-current assets are $218.492m higher than budgeted primarily due to:

$18.222m of revaluation increase in investment properties reflecting commercial market returns

$189.013m of additional revaluation increases in property, plant and equipment, primarily being infrastructure assets. The increase above budget reflects the better information available, the resulting changes in remaining assets lives and increases used in costing models

$4.185m for a long-term receivable.

Total liabilities are $82.434m higher than budget primarily due to:

$12.205m of revenue in advance due to the delays in utilising the Housing Upgrade grant monies from the Crown

$22.566m of derivative financial liabilities

$31.785m of provision for other liabilities, with $4.429m due to the increase in the weathertight homes provision and $0.840m due to a new provision for unreinforced masonry grants

$16.775m of borrowings including $4.320m of loans relating to the joint ventures with Porirua City Council and to meet liquidity ratio requirements.

Note 11: Cash and cash equivalents

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Cash at bank
4,886
7,986
10,978
13,711

Cash on hand
21
23
39
35

Short term bank deposits up to 3 months
72,000
86,000
74,349
89,877

TOTAL CASH AND CASH EQUIVALENTS
76,907
94,009
85,366
103,623

Bank balances that are interest bearing earn interest based on current floating bank deposit rates.

Short-term deposits are made with a registered bank, with a credit rating of at least A, for varying periods of up to 3 months depending on the immediate cash requirements and short-term borrowings of the Group, and earn interest at the applicable short-term deposit rates.

The Council holds short-term deposits as part of its overall liquidity risk management programme. This programme enables the Council to maintain its regular commercial paper programme and to pre-fund upcoming debt maturities. The combination of the commercial paper programme and holding short-term deposits reduces the Council’s cost of funds.

Note 12: Derivative financial instruments

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Assets

Non-current assets

Interest rate swaps - cash flow hedges
1,283
-
1,283
-

Total non-current assets
1,283
-
1,283
-

TOTAL DERIVATIVE FINANCIAL INSTRUMENT ASSETS
1,283
-
1,283
-

Liabilities

Current liabilities

Interest rate swaps - cash flow hedges
975
522
975
522

Total current liabilities
975
522
975
522

Non-current liabilities

Interest rate swaps - cash flow hedges
21,591
38,208
21,591
38,208

Total non-current liabilities
21,591
38,208
21,591
38,208

TOTAL DERIVATIVE FINANCIAL INSTRUMENT LIABILITIES
22,566
38,730
22,566
38,730

Derivative financial instruments are used by the Group in the normal course of business to hedge exposure to cash flow and fair value interest rate risk. The amounts shown above represent the fair values of these derivative financial instruments. Although these are managed as a portfolio, the Group has no rights to offset assets and liabilities and must present these figures separately.

Cash flow hedges are used to fix interest rates on floating rate debt (floating rate notes or commercial paper) or bank borrowings. Fair value hedges are used to convert interest rates on some fixed rate debt (bonds) to floating rates.

For further information on the Council’s interest rate swaps please refer to Note 28: Hedging Reserve (page 188) and Note 32: Financial instruments (page 195).

Relevant significant accounting policies

Derivative financial instruments include interest rate swaps used to hedge exposure to interest rate risk on borrowings. Derivatives are initially recognised at fair value, based on quoted market prices, and subsequently remeasured to fair value at the end of each reporting period. Fair value is determined by reference to quoted prices for similar instruments in active markets. Derivatives that do not qualify for hedge accounting are classified as non-hedged and fair value gains or losses are recognised within surplus or deficit.

Recognition of fair value gains or losses on derivatives that qualify for hedge accounting depends on the nature of the item being hedged. Where a derivative is used to hedge variability of cash flows (cash flow hedge), the effective part of any gain or loss is recognised within other comprehensive revenue and expense while the ineffective part is recognised within surplus or deficit. Gains or losses recognised in other comprehensive revenue and expense transfer to surplus or deficit in the same periods as when the hedged item affects the surplus or deficit.

As per the International Swap Dealers’ Association (ISDA) master agreements, all swap payments or receipts are settled net.

Note 13: Receivables and recoverables

Receivables and recoverables
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current
45,179
46,140
46,515
47,613

Non-Current
4,185
4,185
4,185
4,186

TOTAL RECEIVABLES AND RECOVERABLES - NET
49,364
50,325
50,700
51,799

Receivables and recoverables
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Trade receivables - debtors - net
18,119
13,769
17,394
13,674

Trade recoverables - fines - net
3,439
3,593
3,439
3,593

Accrued income
8,058
8,539
8,094
8,539

Sundry receivables
7,617
8,734
9,779
10,390

GST recoverable
2,803
5,709
2,666
5,622

Rates recoverable
9,328
9,981
9,328
9,981

TOTAL RECEIVABLES AND RECOVERABLES - NET
49,364
50,325
50,700
51,799

Current trade, rates and sundry receivables and recoverables are non-interest bearing and receipt is generally on 30 day terms, therefore the carrying value approximates their fair value.

Receivables and recoverables
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Receivables and recoverables from related parties

- Controlled entities
1,294
380
-
-

- Associates and jointly controlled entity
187
-
187
-

Total receivables and recoverables from related parties
1,481
380
187
-

The movement in the provision for impairment of total receivables and recoverables is analysed as follows:

Provision for impairment of total receivables and recoverables
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
6,183
6,030
6,183
6,030

New provisions made
896
437
896
437

Release of unused provision
(91)
(166)
(91)
(166)

Amount of provision utilised
(28)
(118)
(28)
(118)

Provision for impairment of total receivables and recoverables - closing balance
6,960
6,183
6,960
6,183

The ageing profile of total net receivables and recoverables at the reporting date is as follows:

Council
2017
2016

Gross
$000
Impaired
$000
Net
$000
Gross
$000
Impaired
$000
Net
$000

Trade and other receivables and recoverables

Not past due
29,904
(179)
29,725
31,868
-
31,868

Past due 0-3 months
7,947
(57)
7,890
9,229
(82)
9,147

Past due 3-6 months
4,209
(227)
3,982
2,538
(38)
2,500

Past due more than 6 months
14,264
(6,497)
7,767
12,873
(6,063)
6,810

TOTAL RECEIVABLES AND RECOVERABLES
56,324
(6,960)
49,364
56,508
(6,183)
50,325

Group
2017
2016

Gross
$000
Impaired
$000
Net
$000
Gross
$000
Impaired
$000
Net
$000

Trade and other receivables and recoverables

Not past due
30,852
(179)
30,673
33,142
-
33,142

Past due 0-3 months
8,224
(57)
8,167
9,352
(82)
9,270

Past due 3-6 months
4,240
(227)
4,013
2,567
(38)
2,529

Past due more than 6 months
14,344
(6,497)
7,847
12,921
(6,063)
6,858

TOTAL RECEIVABLES AND RECOVERABLES
57,660
(6,960)
50,700
57,982
(6,183)
51,799

The net receivables and recoverables past due for more than 6 months primarily relates to fines. Due to their nature, the collection pattern for fines is longer than that of trade debtors.

Relevant significant accounting policies

Receivables from exchange transactions

Receivables from exchange transactions arise when the Council is owed by another entity or individual for goods or services provided directly by Council and will receive approximately equal value in a willing arm’s length transaction (primarily in the form of cash in exchange). Examples of exchange transactions include parking services and metered water rates.

Recoverables from non-exchange transactions

Recoverables from non-exchange transactions arise when the Council is owed value from another party without giving approximately equal value directly in exchange for the value received. Most of the goods or services that Council provide are subsidised by rates revenue and therefore the exchange is unequal. Examples of non-exchange transactions include social housing rentals, parking fines and recreational centre activities. Non-exchange transactions are comprised of either taxes or transfers. Transfers also include grants that do not have specific conditions attached which require return of the grant for non-performance.

An inflow of resources from a non-exchange transaction recognised as an asset is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow. As Council satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

Note 14: Other financial assets

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current
263
315
304
315

Non-current
9,996
12,865
11,337
14,343

TOTAL OTHER FINANCIAL ASSETS
10,259
13,180
11,641
14,658

Comprised of:

Financial assets at fair value through other comprehensive revenue and expense

Equity investments:

- Civic Financial Services Ltd
806
766
806
766

- NZ Local Government Funding Agency (LGFA)
4,475
3,275
4,475
3,275

- Creative HQ incubator/accelerator shareholdings
-
-
1,341
1,427

Loans and deposits

LGFA - borrower notes
4,688
3,728
4,688
3,728

Loans to related parties - other organisations
27
5,096
27
5,096

Loans to external organisations
263
315
304
366

TOTAL OTHER FINANCIAL ASSETS
10,259
13,180
11,641
14,658

Equity investments

Civic Financial Services Limited (formerly Civic Assurance) is the trading name for the New Zealand Local Government Insurance Corporation Limited. The Council holds a 4.78% (2016: 4.78%) shareholding in this entity with no present intention to sell.

The New Zealand Local Government Funding Agency Limited (LGFA), which commenced in December 2011 is an alternative debt provider majority owned by and operated for local authorities. The Council holds an 8% shareholding of the paid-up capital and as a shareholder will benefit from a return on its investment and as a borrower from lower borrowing costs. The LGFA has an AA+ (domestic long term) credit rating from Standard and Poors.

Creative HQ, a controlled entity of Wellington Regional Economic Development Agency Limited (WREDA), has small shareholdings in various incubator and accelerator programme companies. These shares are held until the companies mature or cease operations.

Loans

The loans to related parties are concessionary in nature, since the loans have been granted on interest free terms. The movements in the loans are as follows:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Loans to related parties - other organisations

Wellington Regional Stadium Trust

(nominal value $15,394,893)

Opening balance
24
21
24
21

Amortisation of fair value adjustment
3
3
3
3

Closing balance at fair value
27
24
27
24

Karori Sanctuary Trust

(nominal value $10,346,689)

Opening balance
5,072
4,675
5,072
4,675

Amortisation of fair value adjustment
-
397
-
397

Movement in fair value
5,275
-
5,275
-

Loan repayment received
(10,347)
-
(10,347)
-

Closing balance at fair value
-
5,072
-
5,072

Loans to other external organisations

Opening balance
315
150
366
197

New loan advances
-
442
-
442

Loan repayments received
(13)
(9)
(28)
(9)

Loan forgiveness
(39)
(118)
(39)
(118)

Loan write-off
-
(150)
-
(150)

Amortisation of fair value adjustment
-
-
5
4

Closing balance at fair value
263
315
304
366

TOTAL LOANS
290
5,411
331
5,462

The fair value movement on loans reflects the timing of their expected repayments and the interest-free or other nature of the loan. Over the remaining life of the loans their fair value will be amortised back up to their full nominal value.

Wellington Regional Stadium Trust

The Council holds a $15m limited recourse loan to WRST, which is unsecured, with no specified maturity and at no interest. The loan is not repayable until all other debts are extinguished

The amortisation rate applicable to the Wellington Regional Stadium Trust loan is 12.710%.

On maturity of the initial WRST membership underwrite, the unpaid interest was converted to a $0.395m advance repayable after all other advances made by the Council and Greater Wellington Regional Council. The current expected repayment of the loan and the advance back to the Council as advised by WRST is in 2070.

Karori Sanctuary Trust

During the adoption of the 2016/17 Annual Plan, the Council agreed to the purchase of the Zealandia visitor centre building for $10.347m. Following this purchase, the Council loan to the Karori Sanctuary Trust was fully repaid. The $5.275m adjustment to the related party loan was due to the early repayment of the loan Council made to the Karori Sanctuary Trust. This loan had previously been reduced to its fair value to reflect the term of the loan and expected repayment schedule. It was being amortised back up over time to its original value. The early full repayment required the fair value to be adjusted up to its full value.

Loans to other external organisations are generally suspensory loan arrangements associated with economic development grants provided by the Council to achieve defined outcomes.  The loans are repayable in the event that the economic development outcomes agreed in providing the grant are not delivered. As agreed outcomes for the grants are met the loans are reduced accordingly.

Further information on the related parties is disclosed in Note 36: Related party disclosures (page 208).

Note 15: Non-current assets classified as held for sale

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
1,504
1,668
1,504
1,668

Disposals
-
(949)
-
(949)

Transfers from property, plant and equipment
-
1,504
-
1,504

Transfers to property, plant and equipment
(1,504)
(719)
(1,504)
(719)

TOTAL NON-CURRENT ASSETS CLASSFIED AS HELD FOR SALE
-
1,504
-
1,504

Relevant significant accounting policies

Non-current assets held for sale are valued at the lower of the carrying amount and fair value less costs to sell at the time of reclassification.

Non-current assets held for sale are separately classified as their carrying amount will be recovered through a sale transaction rather than through continuing use. A non-current asset is classified as held for sale where:

the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets

a plan to sell the asset is in place and an active programme to locate a buyer has been initiated

the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value

the sale is expected to occur within 1 year or beyond 1 year where a delay has occurred that is caused by events beyond the Group’s control and there is sufficient evidence the Group remains committed to sell the asset, and

actions required to complete the sale indicate it is unlikely that significant changes to the plan will be made or the plan will be withdrawn.

A non-current asset classified as held for sale is recognised at the lower of its carrying amount or fair value less costs to sell. Impairment losses on initial classification are included within surplus or deficit.

Note 16: Intangibles

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Computer software

Cost - opening balance
66,989
49,256
67,730
49,965

Accumulated amortisation
(44,304)
(39,537)
(44,967)
(40,143)

Computer software opening balance
22,685
9,719
22,763
9,822

Acquired by direct purchase
6,281
17,445
6,357
17,476

Amortisation
(4,921)
(4,479)
(4,990)
(4,535)

Transfer to property, plant and equipment
(140)
-
(140)
-

Total computer software - closing balance
23,905
22,685
23,990
22,763

Cost
73,340
66,989
74,210
67,730

Accumulated amortisation
(49,435)
(44,304)
(50,220)
(44,967)

Total computer software - closing balance
23,905
22,685
23,990
22,763

Work in progress

Computer software
640
2,261
640
2,261

Total work in progress
640
2,261
640
2,261

Carbon credits

Cost - Opening Balance
1,791
1,311
1,791
1,311

Additions
369
672
369
672

Net disposals
(177)
(192)
(177)
(192)

Total Carbon credits - closing balance
1,983
1,791
1,983
1,791

TOTAL INTANGIBLES
26,528
26,737
26,613
26,815

Disposals and transfers are reported net of accumulated amortisation.

The decrease in work in progress for computer software reflects the implementation of phase one of the OneCouncil system on 1 July 2016 and the resulting decrease in project implementation costs to be capitalised.

Carbon credits

As part of the Emissions Trading Scheme (ETS) the Council received carbon credits from Central Government in recognition of the carbon absorbed by a portion of the Council’s green belt. For the year ending 30 June 2017 the Council received 1,094 credits (2016: 37,954). The Council purchased 21,473 credits (2016: 25,641) in the market to cover the expected liabilities associated with landfill operations. During the year, 32,425 credits (2016: 34,078) were surrendered to meet the Council’s ETS obligations for the 2016 calendar year. At 30 June 2017 the total number of credits held is 347,731 (2016: 357,589).

At 30 June 2017 the liability relating to landfill carbon emissions is $0.173m (2016: $0.0765m).

More information on carbon credits can be found in the Statements of Service Provision under activity 2.2: Waste reduction and energy conservation (page 49).

Relevant significant accounting policies

Computer software

Acquired computer software is measured on initial recognition at the costs to acquire and bring to use and subsequently less any amortisation and impairment losses.

Typically, the estimated useful lives and amortisation rate range of these assets are as follows:

Asset Category
2017

Useful Life
(years)
Amortisation
Rate

Computer software
2 - 10
10 - 50%

Carbon Credits

Carbon credits comprise either allocations of emission allowances granted by the Government related to forestry assets or units purchased in the market to cover liabilities associated with landfill operations. Carbon credits allocated as a non-exchange transaction are initially recognised at fair value, which then becomes the deemed cost. Carbon credits that are purchased are recognised at cost.

Gains and losses arising from disposal of intangible assets are recognised within surplus or deficit in the period in which the transaction occurs. Intangible assets are reviewed at least annually to determine if there is any indication of impairment. Where an intangible asset’s recoverable amount is less than its carrying amount, it will be reported at its recoverable amount and an impairment loss will be recognised. Losses resulting from impairment are reported within surplus or deficit.

Note 17: Investment properties

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
211,237
201,557
211,237
201,557

Additions by acquisition
153
1,862
153
1,862

Adjustment
(269)
-
(269)
-

Disposals
-
(5,955)
-
(5,955)

Fair value revaluation movements taken to surplus/(deficit)
18,222
13,773
18,222
13,773

Transfer to property, plant and equipment
(37)
-
(37)
-

Invvestment property - WIP
888
-
888
-

TOTAL INVESTMENT PROPERTIES
230,194
211,237
230,194
211,237

Wellington City Council’s investment properties including the waterfront investment properties were valued as at 30 June 2017 by an independent valuer, William Bunt (FNZIV, FPINZ), registered valuer and Director of Valuation Services for CBRE Limited.

The Council’s total investment properties comprise ground leases of $185.208m (2016: $168.753m) and land and buildings (including work in progress) of $44.986m (2016: $42.215m) held for investment purposes.

Investment properties are properties that are held primarily to earn rental revenue and/or for capital growth. These properties include the Council’s ground leases and certain land and buildings.

Ground leases are parcels of land owned by the Council in the central city or on the waterfront that are leased to other parties who own the buildings situated on the land. The leases are generally based on 21-year perpetually renewable terms. As these parcels of land are held for investment purposes the rentals are charged on a commercial market basis.

Investment properties exclude those properties held for strategic purposes or to provide a social service. This includes properties that generate cash inflows as the rental revenue is incidental to the purpose for holding the property. Such properties include the Council’s social housing assets, which are held within operational assets in property, plant, and equipment.

Relevant significant accounting policies

The basis of valuation varies depending on the nature of the lease. For sites that are subject to a terminating lease the approach is to assess the value of the rental revenue over the remaining term of the lease and add the residual value of the land at lease expiry. For sites subject to perpetually renewable leases values have been assessed utilising a discounted cash flow and arriving at a net present value of all future anticipated gross rental payments.

Borrowing costs incurred during the construction of investment property are not capitalised.

Investment properties are measured initially at cost and subsequently measured at fair value, determined annually by an independent registered valuer. Any gain or loss arising is recognised within surplus or deficit. Investment properties are not depreciated.

Note 18: Property, plant and equipment

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Property, plant and equipment - Opening balance
6,645,975
6,595,900
6,659,487
6,608,226

Additions
83,497
166,311
87,774
169,524

Disposals
(1,094)
(1,515)
(2,151)
(1,849)

Depreciation expense
(96,968)
(94,704)
(98,663)
(96,436)

Impairment losses
(11,446)
(133)
(11,446)
(582)

Revaluation movement
295,254
(211)
295,254
(211)

Transfer between asset classes
179
-
178
-

Transfer to non-current assets held for sale
-
(1,504)
-
(1,504)

Transfer from non-current assets held for sale
1,504
719
1,504
719

Movement in work in progress
55,267
(18,888)
52,819
(18,400)

Acquistion of controlled entity
-
-
3,649
-

TOTAL PROPERTY, PLANT AND EQUIPMENT
6,972,168
6,645,975
6,988,405
6,659,487

Relevant significant accounting policies

Property, plant, and equipment consists of operational assets, restricted assets, and infrastructure assets.

Operational assets include land, the landfill post-closure asset, buildings, the Civic Centre complex, the library collection, and plant and equipment.

Restricted assets include art and cultural assets, zoo animals, restricted buildings, parks and reserves and the Town Belt. These assets provide a benefit or service to the community and in most cases cannot be disposed of because of legal or other restrictions (for example, land declared as a reserve under the Reserves Act 1977.) The use of the asset may also be restricted such as the donated Basin Reserve land, which must be retained for the purposes of providing a cricket and recreation ground with no permitted thoroughfare.

Infrastructure assets include the roading network, water, waste and drainage reticulation networks, service concession arrangement assets, and infrastructure land (including land under roads). Each asset type includes all items that are required for the network to function.

Vested assets are those assets where ownership and control is transferred to the Council from a third party (eg infrastructure assets constructed by developers and transferred to the Council on completion of a subdivision). Vested assets are recognised within their respective asset classes as above.

Heritage assets are tangible assets with historical, artistic, scientific, technological, geophysical, or environmental qualities that are held and maintained principally for their contribution to knowledge and culture. The Council and Group recognises these assets within these financial statements to the extent their value can be reliably measured.

Recognition

Expenditure is capitalised as property, plant, and equipment when it creates a new asset or increases the economic benefits of an existing asset. Costs that do not meet the criteria for capitalisation are expensed.

Measurement

Property, plant and equipment is recognised initially at cost, unless acquired for nil or nominal cost (eg vested assets), in which case the asset is recognised at fair value at the date of transfer. The initial cost of property, plant, and equipment includes the purchase consideration (or the fair value in the case of vested assets), and those costs that are directly attributable to bringing the asset into the location and condition necessary for its intended purpose. Subsequent expenditure that extends or expands the asset’s service potential is capitalised.

Borrowing costs incurred during the construction of property, plant, and equipment are not capitalised.

After initial recognition, certain classes of property, plant, and equipment are revalued to fair value. Where there is no active market for an asset, fair value is determined by optimised depreciated replacement cost.

Optimised depreciated replacement cost is a valuation methodology where the value of an asset is based on the cost of replacement with an efficient modern equivalent making allowance for obsolesce or surplus capacity. The remaining life is of the asset is estimated and straight line depreciation applied to bring the replacement cost to a fair value.

Specific measurement policies for categories of property, plant and equipment are shown below:

Library collections

Library collections are valued at depreciated replacement cost on a 3-year cycle by the Council’s library staff in accordance with guidelines outlined in Valuation Guidance for Cultural and Heritage Assets, published by the Treasury Accounting Team, November 2002.

Operational land and buildings

Operational land and buildings are valued at fair value on a regular basis or, whenever the carrying amount differs materially to fair value, by independent registered valuers. Where the information is available, land and buildings are valued based on market evidence. The majority of Council land and buildings are of a ‘non-tradeable’ or specialist nature and the value is based on the fair value of the land plus the optimised depreciated replacement cost of the buildings.

For earthquake-prone buildings that are expected to be strengthened, the estimated cost to strengthen the building has been deducted from the optimised depreciated replacement cost.

The buildings that comprise the Social Housing portfolio have been valued on market-based approach with the associated land value being established through analysis of sales and market evidence.

Restricted assets

Art and cultural assets (artworks, sculptures, and statues) are valued at historical cost. Zoo animals are stated at estimated replacement cost. All other restricted assets (buildings, parks and reserves and the Town Belt) were valued at fair value as at 30 June 2005 by independent registered valuers. The Council has elected to use the fair value of other restricted assets at 30 June 2005 as the deemed cost of the assets. These assets are no longer revalued. Subsequent additions have been recorded at cost.

Infrastructure assets

Infrastructure assets (the roading network, water, waste and drainage reticulation networks and service concession assets) are valued at optimised depreciated replacement cost on a regular basis or, whenever the carrying amount differs materially to fair value, by independent registered valuers. Infrastructure valuations are based on the physical attributes of the assets, their condition, and their remaining lives based on the Council’s best information reflected in its assets management plans. The costs are based on current quotes from actual suppliers. As such, they include ancillary costs such as breaking through seal, traffic control, and rehabilitation. Between valuations, expenditure on asset improvements is capitalised at cost.

Infrastructure land (excluding land under roads) is valued on a regular basis or, whenever the carrying amount differs materially to fair value, by independent registered valuers

Land under roads, which represents the corridor of land directly under and adjacent to the Council’s roading network, was valued as at 30 June 2005 at the average value of surrounding adjacent land discounted by 50% to reflect its restricted nature. The Council elected to use the fair value of land under roads at 30 June 2005 as the deemed cost of the asset. Land under roads is no longer revalued. Subsequent additions have been recorded at cost.

The carrying values of revalued property, plant, and equipment are reviewed at the end of each reporting period to ensure that those values are not materially different to fair value.

Other assets

Plant and equipment and the Civic Centre complex are measured at historical cost and not revalued.

Impairment

The Council’s assets are defined as cash generating if the primary purpose of the asset is to provide a commercial return. Non-cash generating assets are assets other than cash generating assets. Property, plant, and equipment assets, measured at fair value, are not required to be reviewed and tested for impairment.

The carrying amounts of cash generating property, plant, and equipment assets are reviewed at least annually to determine if there is any indication of impairment. Where an asset’s, or class of assets’, recoverable amount is less than its carrying amount it will be reported at its recoverable amount and an impairment loss will be recognised. The recoverable amount is the higher of an item’s fair value less costs to sell and value in use. Losses resulting from impairment are reported within surplus or deficit, unless the asset is carried at a revalued amount in which case any impairment loss is treated as a revaluation decrease and recorded within other comprehensive revenue and expense.

The carrying amounts of non-cash generating property, plant, and equipment assets are reviewed at least annually to determine if there is any indication of impairment. Where an asset’s, or class of assets’, recoverable service amount is less than its carrying amount it will be reported at its recoverable service amount and an impairment loss will be recognised. The recoverable service amount is the higher of an item’s fair value less costs to sell and value in use. A non-cash generating asset’s value in use is the present value of the asset’s remaining service potential. Losses resulting from impairment are reported within surplus or deficit, unless the asset is carried at a revalued amount in which case any impairment loss is treated as a revaluation decrease and recorded within other comprehensive revenue and expense.

Disposal

Gains and losses arising from the disposal of property, plant, and equipment are recognised within surplus or deficit in the period in which the transaction occurs. Any balance attributable to the disposed asset in the asset revaluation reserve is transferred to retained earnings.

Work in progress

The cost of projects within work in progress is transferred to the relevant asset class when the project is completed and then depreciated.

The movements according to the individual classes of assets are as follows:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Operational assets

Land

Land - at cost - opening balance
21,741
-
21,741
-

Land - at valuation - opening balance
222,907
222,908
222,907
222,908

Total land - opening balance
244,648
222,908
244,648
222,908

Additions
120
21,741
120
21,741

Disposals
-
(1)
-
(1)

Transfer between asset classes
(663)
-
(663)
-

Total land - closing balance
244,105
244,648
244,105
244,648

Land - at cost - closing balance
21,862
21,741
21,862
21,741

Land - at valuation - closing balance
222,243
222,907
222,243
222,907

Total land - closing balance
244,105
244,648
244,105
244,648

Buildings

Buildings - at cost - opening balance
25,906
-
25,906
-

Buildings - at valuation - opening balance
556,802
556,025
556,802
556,025

Total cost/valuation
582,708
556,025
582,708
556,025

Accumulated depreciation
(20,199)
-
(20,199)
-

Total buildings - opening balance
562,509
556,025
562,509
556,025

Additions
18,613
26,380
19,091
26,380

Disposals
(419)
(1,017)
(419)
(1,017)

Depreciation expense
(21,784)
(20,348)
(22,199)
(20,348)

Revaluation adjustment
-
(211)
-
(211)

Transfer between asset classes
5,837
1,680
8,770
1,680

Acquisition of controlled entity
-
-
1,500
-

Total buildings - closing balance
564,756
562,509
569,252
562,509

Buildings - at cost - closing balance
46,914
25,906
55,457
25,906

Buildings - at valuation - closing balance
561,635
556,802
561,635
556,802

Total cost/valuation
608,549
582,708
617,092
582,708

Accumulated depreciation
(43,793)
(20,199)
(47,840)
(20,199)

Total buildings - closing balance
564,756
562,509
569,252
562,509

Landfill post closure costs ¹

Landfill post closure - at cost - opening balance
3,265
3,040
3,265
3,040

Accumulated depreciation
(2,333)
(2,437)
(2,333)
(2,437)

Total landfill post closure costs - opening balance
932
603
932
603

Depreciation expense
(132)
(145)
(132)
(145)

Movement in post closure costs
927
474
927
474

Total landfill post closure costs - closing balance
1,727
932
1,727
932

Landfill post closure - at cost - closing balance
4,561
3,265
4,561
3,265

Accumulated depreciation
(2,834)
(2,333)
(2,834)
(2,333)

Total landfill post closure costs - closing balance
1,727
932
1,727
932

The Council’s share of the joint venture with Porirua City Council relating to the Spicer Valley landfill is included in this asset class.

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Civic Centre complex

Civic Centre complex - at cost - opening balance
173,965
176,562
173,965
176,562

Accumulated depreciation
(61,443)
(60,954)
(61,443)
(60,954)

Total Civic Centre complex - opening balance
112,522
115,608
112,522
115,608

Additions
767
2,387
767
2,387

Depreciation expense
(2,592)
(2,739)
(2,592)
(2,739)

Impairment
(11,446)
-
(11,446)
-

Transfer between asset classes
(2,631)
(1,680)
(2,631)
(1,680)

Transfer from Non-Current Assets Held for Sale
1,054
-
1,054
-

Transfer to non-current assets held for sale
-
(1,054)
-
(1,054)

Total Civic Centre complex- closing balance
97,674
112,522
97,674
112,522

Civic Centre complex - at cost - closing balance
161,576
173,965
161,576
173,965

Accumulated depreciation
(63,902)
(61,443)
(63,902)
(61,443)

Total Civic Centre complex- closing balance
97,674
112,522
97,674
112,522

Plant and equipment

Plant and equipment - at cost - opening balance
216,102
213,057
231,319
225,843

Accumulated depreciation
(100,714)
(92,456)
(109,808)
(99,817)

Total plant and equipment - opening balance
115,388
120,601
121,511
126,026

Additions
7,535
7,049
11,334
10,262

Depreciation expense
(11,106)
(11,890)
(12,386)
(13,622)

Disposals
(29)
(239)
(1,086)
(573)

Impairment
-
(133)
-
(582)

Transfer between asset classes
18,321
-
15,388
-

Acquisition of controlled entity
-
-
2,149
-

Total plant and equipment - closing balance
130,109
115,388
136,910
121,511

Plant and equipment - at cost
239,658
216,102
257,450
231,319

Accumulated depreciation
(109,549)
(100,714)
(120,540)
(109,808)

Total plant and equipment - closing balance
130,109
115,388
136,910
121,511

Library collections

Library collections - at cost - opening balance
3,545
1,664
3,545
1,664

Library collections - at valuation - opening balance
14,818
14,817
14,818
14,817

Total cost/valuation
18,363
16,481
18,363
16,481

Accumulated depreciation
(4,256)
(2,096)
(4,256)
(2,096)

Total library collections - opening balance
14,107
14,385
14,107
14,385

Additions
1,709
1,887
1,709
1,887

Depreciation expense
(2,352)
(2,165)
(2,352)
(2,165)

Revaluation movement
1,377
-
1,377
-

Total library collections - closing balance
14,841
14,107
14,841
14,107

Library collections - at cost - closing balance
-
3,545
-
3,545

Library collections - at valuation - closing balance
14,841
14,818
14,841
14,818

Total cost/valuation
14,841
18,363
14,841
18,363

Accumulated depreciation
-
(4,256)
-
(4,256)

Total library collections - closing balance
14,841
14,107
14,841
14,107

Total operational assets
1,053,212
1,050,106
1,064,509
1,056,229

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Infrastructure assets

Drainage, waste and water

Drainage, waste and water - at cost - opening balance
63,847
25,215
63,847
25,215

Drainage, waste and water - at valuation - opening balance
1,197,319
1,196,804
1,197,319
1,196,804

Total cost/valuation
1,261,166
1,222,019
1,261,166
1,222,019

Accumulated depreciation
(54,076)
(26,877)
(54,076)
(26,877)

Total drainage, water and waste - opening balance
1,207,090
1,195,142
1,207,090
1,195,142

Additions
22,995
39,538
22,995
39,538

Depreciation expense
(27,475)
(27,586)
(27,475)
(27,586)

Revaluation movement
132,146
-
132,146
-

Transfer between asset classes
(22,195)
(4)
(22,195)
(4)

Total drainage, water and waste - closing balance
1,312,561
1,207,090
1,312,561
1,207,090

Drainage, waste and water - at cost - closing balance
-
63,847
-
63,847

Drainage, waste and water - at valuation - closing balance
1,312,561
1,197,319
1,312,561
1,197,319

Total cost/valuation
1,312,561
1,261,166
1,312,561
1,261,166

Accumulated depreciation
-
(54,076)
-
(54,076)

Total drainage, water and waste - closing balance
1,312,561
1,207,090
1,312,561
1,207,090

Service concession assets

Service concession assets - at cost - opening balance
-
-
-
-

Service concession assets - at valuation - opening balance
154,767
154,767
154,767
154,767

Total cost/valuation
154,767
154,767
154,767
154,767

Accumulated depreciation
(9,938)
(4,969)
(9,938)
(4,969)

Total service concession assets - opening balance
144,829
149,798
144,829
149,798

Depreciation expense
(4,911)
(4,969)
(4,911)
(4,969)

Revaluation movement
14,312
-
14,312
-

Total service concession assets - closing balance
154,231
144,829
154,231
144,829

Service concession assets - at cost - closing balance
-
-
-
-

Service concession assets - at valuation - closing balance
154,231
154,767
154,231
154,767

Total cost/valuation
154,231
154,767
154,231
154,767

Accumulated depreciation
-
(9,938)
-
(9,938)

Total service concession assets - closing balance
154,231
144,829
154,231
144,829

Roading

Roading - at cost - opening balance
88,659
29,927
88,659
29,927

Roading - at valuation - opening balance
824,639
824,103
827,239
826,703

Total cost/valuation
913,298
854,030
915,898
856,630

Accumulated depreciation
(45,197)
(21,857)
(45,197)
(21,857)

Total roading - opening balance
868,101
832,173
870,701
834,773

Additions
26,867
58,732
26,867
58,732

Depreciation expense
(25,039)
(23,341)
(25,039)
(23,341)

Revaluation movement
144,434
-
144,434
-

Transfer between asset classes
(29)
537
(29)
537

Total roading - closing balance
1,014,334
868,101
1,016,934
870,701

Roading - at cost - closing balance
-
88,659
-
88,659

Roading - at valuation - closing balance
1,014,334
824,639
1,016,934
827,239

Total cost/valuation
1,014,334
913,298
1,016,934
915,898

Accumulated depreciation
-
(45,197)
-
(45,197)

Total roading - closing balance
1,014,334
868,101
1,016,934
870,701

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Infrastructure land

Infrastructure land - at cost - opening balance
3,720
192
3,720
192

Infrastructure land - at valuation - opening balance
35,818
35,818
35,818
35,818

Total infrastructure land - opening balance
39,538
36,010
39,538
36,010

Additions
-
3,208
-
3,208

Revaluation movement
2,985
-
2,985
-

Transfer between asset classes
(3,730)
-
(3,730)
-

Transfer from non-current assets held for sale
-
320
-
320

Total infrastructure land - closing balance
38,793
39,538
38,793
39,538

Infrastructure land - at cost - closing balance
-
3,720
-
3,720

Infrastructure land - at valuation - closing balance
38,793
35,818
38,793
35,818

Total infrastructure land - closing balance
38,793
39,538
38,793
39,538

Land under roads

Land under roads - at cost - opening balance
2,950,144
2,950,197
2,950,144
2,950,197

Additions
1,833
224
1,833
224

Disposals
(506)
(258)
(506)
(258)

Transfer between asset classes
4,413
-
4,413
-

Transfer from non-current assets held for sale
377
358
377
358

Transfer to non-current assets held for sale
-
(377)
-
(377)

Land under roads - closing balance
2,956,261
2,950,144
2,956,261
2,950,144

Total infrastructure assets
5,476,180
5,209,702
5,478,781
5,212,302

Restricted assets ²

Art and cultural assets

Art and cultural assets - at cost - opening balance
8,667
8,927
11,006
11,266

Additions
19
21
19
21

Transfer between asset classes
44
(281)
44
(281)

Art and cultural assets - closing balance
8,730
8,667
11,069
11,006

Restricted buildings

Restricted buildings - at cost - opening balance
40,865
36,627
40,865
36,627

Accumulated depreciation
(10,870)
(9,497)
(10,870)
(9,497)

Total restricted buildings - opening balance
29,995
27,130
29,995
27,130

Additions
1,168
4,386
1,168
4,386

Depreciation expense
(1,577)
(1,521)
(1,577)
(1,521)

Transfer between asset classes
300
-
300
-

Restricted buildings - closing balance
29,886
29,995
29,886
29,995

Restricted buildings - at cost - closing balance
42,294
40,865
42,294
40,865

Accumulated depreciation
(12,408)
(10,870)
(12,408)
(10,870)

Total restricted buildings - closing balance
29,886
29,995
29,886
29,995

For restricted assets, valuation at cost means they are not subject to revaluation. Please refer to the relevant significant accounting policies above for a more detailed explanation.

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Parks and reserves

Parks and reserves - at cost - opening balance
211,888
211,888
211,888
211,888

Additions
943
284
943
284

Disposals
(140)
-
(140)
-

Transfer between asset classes
3,569
(252)
3,569
(252)

Transfer from non-current assets held for sale
73
41
73
41

Transfer to non-current assets held for sale
-
(73)
-
(73)

Parks and reserves - closing balance
216,333
211,888
216,333
211,888

Town Belt

Town Belt - at cost - opening balance
84,544
84,544
84,544
84,544

Transfer between asset classes
(3,058)
-
(3,058)
-

Town Belt - at cost
81,486
84,544
81,486
84,544

Zoo animals - at cost
500
500
500
500

Total restricted assets
336,935
335,594
339,274
337,933

Work in progress

Land
3,155
143
3,155
143

Buildings
50,573
23,569
50,573
23,569

Civic Centre complex
1,227
4,639
1,227
4,639

Plant and equipment
17,149
10,238
17,149
12,688

Library
781
474
781
474

Drainage, waste and water
18,261
5,038
18,261
5,038

Roading
14,517
6,173
14,517
6,173

Art and cultural
179
181
179
181

Restricted buildings
-
118
-
118

Total work in progress
105,842
50,573
105,842
53,023

TOTAL PROPERTY, PLANT AND EQUIPMENT
6,972,168
6,645,975
6,988,405
6,659,487

Disposals and transfers are reported net of accumulated depreciation.

Revaluation of property, plant, and equipment

The Council’s operational land and buildings were valued as at 30 June 2015, and infrastructural land as at 30 June 2017 by William Bunt (FNZIV, FPINZI), registered valuer and Director of Valuation Services for CBRE Limited.

Library collections were valued as at 30 June 2017 by the Council’s library staff. The revaluation was carried out in accordance with guidelines outlined in Valuation Guidance for Cultural and Heritage Assets published by the Treasury Accounting Team, November 2002.

The drainage, waste and water infrastructure and roading networks and the service concession assets were valued as at 30 June 2017 by John Vessey (MIPENZ), Partner of Opus International Consultants Limited.

Assets are valued at regular intervals by independent registered valuers or whenever the carrying amount differs materially to fair value. In the years which an asset class is not revalued, the Group assesses whether there has been any material change in the value of that asset class. The movement in asset values between 30 June 2015 and 30 June 2017 for the land and building assets were assessed using appropriate indices. The increase in asset value of 0.5% of Total Assets was not considered material by management and accordingly the assets were not revalued at 30 June 2017.

Further information on revaluation reserves and movements is contained in Note 27: Revaluation reserves on page 186.

Finance leases

The net carrying amount of plant and equipment assets held by the Council under finance leases is nil (2016: $0.216m) as all finance leases have ended.

Significant acquisitions and replacements of assets

In accordance with the provisions of Schedule 10 of the Local Government Act 2002, information in respect of significant acquisitions and replacements of assets is reported within the Statements of Service Provision.

Core Assets

Included within the infrastructure assets above are the following core Council assets:

Council
2017

Closing book
value
Additions
Replacement
Cost

Constructed
Vested

$000
$000
$000
$000

Water supply

- treatment plants and facilities
-
-
-
-

- other assets
386,880
14,431
1,554
878,743

Sewerage

- treatment plants and facilities
171,176
-
431
230,000

- other assets
463,665
10,672
-
1,018,655

Stormwater drainage
419,210
7,217
660
817,747

Flood protection and control works
-
-
-
-

Roads and footpaths
722,067
33,837
-
944,597

TOTAL CORE ASSETS
2,162,998
66,157
2,645
3,889,742

Council
2016

Closing book
value  
Additions
Replacement
Cost  

Constructed
Vested

$000
$000
$000
$000

Water supply

- treatment plants and facilities
-
-
-
-

- other assets
340,231
15,033
1,644
778,239

Sewerage

- treatment plants and facilities
166,979
-
-
222,587

- other assets
437,986
10,852
1,296
913,422

Stormwater drainage
415,480
4,867
3,042
683,418

Flood protection and control works
-
-
-
-

Roads and footpaths
624,743
34,444
502
850,940

TOTAL CORE ASSETS
1,985,419
65,196
6,484
3,448,605

Drainage, waste, water and roads assets were revalued for the year ending 30 June 2017 by Opus International Limited as part of the normal revaluation cycle.

The core value of roads and footpaths shown above excludes the value of retaining walls, street lighting, sumps and leads and other related assets totalling $292m (2016: $243.4m) that are included in the value of roading assets under infrastructure assets as disclosed above.

Service concession arrangements

The service concession arrangement asset class consists of the Moa Point, Western (Karori) and Carey’s Gulley waste water treatment plants, which are owned by the Council but operated by Veolia Water under agreement. The assets are valued consistently with waste infrastructure network assets.

The Moa Point sewerage treatment plant is owned by the Council and operated by Veolia Water under a design, build and operate contract. Veolia Water also operates the Council-owned Western (Karori) and Carey’s Gully treatment plants. The plants and building assets are included in the service concession arrangement assets above.

Veolia Water is required to fund all renewals and repairs and return the plants to the Council in 2020 with a future life expectancy of at least 25 years.

As asset owner, the Council incurs all associated operating expenses, namely management fees, depreciation and finance costs. In accordance with section 100 of the Local Government Act 2002, the Council does not fully rates fund the plant’s depreciation expenditure.

Veolia’s monthly management fee is determined in accordance with annually adjusted tariffs. The contract terminates either on the expiry of the 25-year term (2020) or on the occurrence of a contract default event by either party. The contract’s right of renewal resides with the Council.

Insurance of assets

Council

2017
$000
2016
$000

Total value of property, plant and equipment
6,972,168
6,645,975

less assets (primarily land) excluded from insurance contracts
(3,642,819)
(3,581,335)

Value of assets covered by insurance contracts
3,329,349
3,064,640

The maximum amount to which assets are insured under Council insurance policies
1,293,000
1,305,000

In addition to the Council’s insurance, in the event of natural disaster it is assumed that Central Government will contribute 60% towards the restoration of Council-owned underground drainage, waste and water assets and the New Zealand Transport agency will contribute between 44-54% towards the restoration of roading assets.

The Council is not covered by any financial risk sharing arrangements in relation to its assets.

An insurance reserve of $4.156m (2016: $9.566m) exists to meet the cost of claims that fall below deductible limits under Council insurance policies. The reserve is funded annually through rates by $1.500m (2016: $1.500m). The net cost of claims applied to the reserve during the year amounted to $6.910m (2016: $0.661m). The majority of this cost related to the Kaikoura earthquake in November 2016. The Council will look to return the reserve back to required levels.

For more information on the claims applied against the reserve refer to Note 38: Financial impacts of the Kaikoura earthquake (page 216).

Note 19: Investment in controlled entities

The cost of the Council’s investment in controlled entities is reflected in the Council’s financial statements as follows:

Investment in controlled entities
2017
$000
2016
$000

Wellington Cable Car Limited
3,809
3,809

Wellington Regional Economic Development Agency Limited (WREDA)
1,262
1,262

TOTAL INVESTMENT IN CONTROLLED ENTITIES
5,071
5,071

The equity investment represents the cost of the investment to the Council and includes all capital contributions made by the Council to controlled entities. The Council has only made equity investments as shareholders as noted in the table above. Nominal settlement amounts (ie $100) made in respect of Trusts, for which the Council is the settlor, have not been recognised due to their materiality or are considered as equity investments.

Information on inter-company transactions is included in the Note 36: Related party disclosures (page 208).

The following entities are controlled entities of the Council:

Controlled entities
Accounting Interest
2017
Accounting Interest
2016
Nature of business

Karori Sanctuary Trust (Trading as Zealandia)
100%
0%
Owns and manages the activities of the urban eco-sanctuary in Karori.

Wellington Cable Car Limited
100%
100%
Owns and manages the trolley bus overhead wiring system and the Cable Car.

Wellington Museums Trust
100%
100%
Administers the Cable Car Museum, Capital E, City Gallery, Nairn Street Cottage, Space Place at Carter Observatory, Wellington Museum and the NZ Cricket Museum

Wellington Regional Economic Development Agency Limited (WREDA)
80%
80%
Manages the Wellington Venues Project and creates economic and social benefit by marketing the city with the private sector as a tourism destination.

- Creative HQ Limited
80%
80%
Business incubators

Wellington Waterfront Limited
100%
100%
Acts as bare trustee for the Waterfront project

Wellington Zoo Trust
100%
100%
Manages and guides the future direction of the Wellington Zoo.

The reporting period end date for all controlled entities is 30 June. Full copies of their financial statements can be obtained directly from their offices. Further information on the structure, objectives, the nature and scope of activities, and the performance measures and targets of the entities can be found in the relevant sections of the Statements of Service Provision.

Karori Sanctuary Trust

The Karori Sanctuary Trust (trading as Zealandia) became a Council controlled organisation on 30 September 2016 following the signing of a variation to the original Deed of trust. By virtue of now being able to appoint five to six members of the seven member board, the Council effectively has control and will consolidate the Trust’s financial statements into the Group.

Note 20: Investment in associates and jointly controlled entity

The cost of the Council’s investment in associates and a jointly controlled entity is reflected in the Council financial statements as follows:

Investment in associates and jointly controlled entity
2017
$000
2016
$000

Chaffers Marina Holdings Limited
1,290
1,290

Wellington International Airport Limited
17,775
17,775

Wellington Water Limited
400
400

TOTAL INVESTMENT IN ASSOCIATES AND JOINTLY CONTROLLED ENTITY
19,465
19,465

The Council has a significant interest in the following:

Associates and Jointly controlled entities
Accounting Interest
2017
Accounting Interest
2016
Nature of business

Chaffers Marina Holdings Limited
10.52%
10.52%
Holding company for Chaffers Marina Limited.

- Chaffers Marina Limited
10.52%
10.52%
Owns and manages the marina.

Wellington International Airport Limited
34%
34%
Owns and manages Wellington International Airport facilities and services.

Wellington Water Limited
(Previously Capacity Infrastructure Services Limited)
42.11%
42.11%
Manages all water services for Wellington, Lower Hutt, Upper Hutt and Porirua City Councils and Greater Wellington Regional Council.

Basin Reserve Trust
0%
(see below)
0%
Manages, operates and maintains the Basin Reserve

Wellington Regional Stadium Trust
0%
(see below)
0%
Owns and manages the Westpac Stadium.

Full copies of the separately prepared financial statements can be obtained directly from their respective offices.

Associates

Chaffers Marina

Chaffers Marina Holdings Limited and Chaffers Marina Limited have a reporting period end date of 30 June. The shares in Chaffers Marina Holdings Limited are held by Wellington Waterfront Limited in a fiduciary capacity. As at 30 June 2017, the Council held a 10.52% interest in Chaffers Marina Holdings Limited (2016:10.52%), which has been recognised in the Group financial statements on an equity accounting basis reflecting the special rights (as set out in Chaffers Marina Limited’s Constitution), which attach to the golden share that it holds in Chaffers Marina Limited.

Wellington International Airport Limited

Wellington International Airport Limited has a reporting period end date of 31 March. The ultimate majority owner, Infratil Limited, has determined a different end of reporting period to Council, which is legislatively required to use 30 June. The Council owns 34% of the company, with the remaining 66% owned by NZ Airports Limited (which is wholly owned by Infratil Limited).

Basin Reserve Trust

The Basin Reserve Trust was established on 24 February 2005 to manage, operate and maintain the Basin Reserve. The Trust was jointly created with Cricket Wellington Incorporated (CWI). Wellington City Council and CWI each appoint two of the four trustees. Wellington City Council has significant influence over the Trust through the appointment of trustees, and receives benefits from the complementary activities of the Trust.

The Council no longer considers the Trust meets the requirements of PBE IPSAS 7 Investments in Associates to enable continued consolidation on an equity accounted basis. The Trust is still identified as an associate given the Council’s level of influence and financial support but due to the lack of an equity investment the Council believes it is no longer appropriate to include the Trust in the Group financial statements.

Wellington Regional Stadium Trust

Wellington Regional Stadium Trust was jointly created with Greater Wellington Regional Council and Wellington City Council has significant influence over the Wellington Regional Stadium Trust through the appointment of trustees and receives benefits from the complementary activities of the Trust.

The Council no longer considers the Trust meets the requirements of PBE IPSAS 7 Investments in Associates to enable continued consolidation on an equity accounted basis. The Trust is still identified as an associate given the Council’s level of influence and financial support but due to the lack of an equity investment the Council believes it is no longer appropriate to include the Trust in the Group financial statements.

Jointly controlled entity

Wellington Water Limited

Formerly trading as Capacity (Capacity Infrastructure Services Limited) and jointly created with Hutt City Council on 9 July 2003 the company has expanded its operations and ownership to include Upper Hutt and Porirua City councils from 1 November 2013 and Greater Wellington Regional Council from 16 September 2014.

The company has a reporting period ending 30 June and has a dual share structure comprising A class shares (voting rights) and B Class shares (financial entitlements). The structure is as follows:

Class A shares
(voting rights)
Class B Shares
(financial entitlements)
Ownership
interest

Wellington City Council
150
200
42%

Hutt City Council
150
100
21%

Upper Hutt City Council
150
40
8%

Porirua City Council
150
60
13%

Greater Wellington Regional Council
150
75
16%

Total shares on issue
750
475
100%

The Class A shares represent voting rights and are split evenly between the five councils. The Class B shares confer the level of contributions and ownership benefits of each council. Wellington City Council classifies this entity as jointly controlled because of the equal sharing of voting rights conferred through the Class A shares and the shareholder’s agreement, which constitutes a binding arrangement.

Wellington City Council chooses to use equity accounting to recognise its 42.11% ownership interest as determined by the proportionate value of Class B shares held.

Summary of Financial Position and Performance of associates and jointly controlled entity

The Council’s share of the assets, liabilities, revenues and surpluses or deficits of its associates and jointly controlled entity are as follows:

Assets
2017
$000
Liabilities
2017
$000
Revenues
2017
$000
Surplus/(Deficit)
2017
$000

Associates

Chaffers Marina Holdings Limited
596
172
114
(31)

Wellington International Airport Limited
369,134
194,761
40,651
13,432

Jointly controlled entity

Wellington Water Limited
5,067
4,345
24,050
(88)

Assets
2016
$000
Liabilities
2016
$000
Revenues
2016
$000
Surplus/(Deficit)
2017
$000

Associates

Chaffers Marina Holdings Limited
626
171
105
(36)

Wellington International Airport Limited
326,110
153,852
38,593
12,805

Jointly controlled entity

Wellington Water Limited
4,248
3,438
19,499
42

Value of the investments

The investment in associates and the jointly controlled entity in the Group financial statements represents the Council’s share of the net assets of the associates and the jointly controlled entity. This is reflected in the Group financial statements as follows:

Investment in associates and jointly controlled entity
Group

2017
$000
2016
$000

Chaffers Marina Holdings Limited

Opening balance
903
939

Change in shares during the year
-
-

Change in equity due to changed shareholding
-
-

Equity accounted earnings of associate
(31)
(36)

Closing balance - investment in Chaffers Marina Holdings Limited
872
903

Wellington International Airport Limited

Opening balance
136,706
135,960

Dividends
(11,937)
(12,059)

Equity accounted earnings of associate
13,432
12,805

Share of net revaluation of property, plant and equipment - movement
24,165
-

Closing balance - investment in Wellington International Airport Limited
162,366
136,706

Wellington Water Limited

Opening balance
810
768

Change in equity due to changed shareholding
-
-

Equity accounted earnings of jointly controlled entity
(88)
42

Closing balance - investment in Wellington Water Limited
722
810

TOTAL INVESTMENT IN ASSOCIATES AND JOINTLY CONTROLLED ENTITY
163,960
138,419

The Council’s share of the operating surplus or deficit results of the Chaffers Marina Holdings Limited, Wellington International Airport Limited and Wellington Water Limited is outlined in Note 9: Share of Associates’ and Jointly Controlled Entity’s surplus or deficit (page 144).

Note 21: Exchange transaction, transfers and taxes payable

Exchange transactions, transfers and taxes payable
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current

Exchange transactions and transfers payable
58,155
50,422
59,639
53,934

Taxes payable
3,498
2,852
3,627
3,068

Non-current

Exchange transactions and transfers payable
630
630
630
630

TOTAL EXCHANGE TRANSACTIONS, TRANSFERS AND TAXES PAYABLE
62,283
53,904
63,896
57,632

Comprised of:

Exchange transactions and transfers payable
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Trade payables and accruals
51,293
43,872
52,780
47,350

Interest payable
3,113
3,059
3,113
3,059

Sundry payables
4,379
4,121
4,376
4,155

Total exchange transactions and transfers payable
58,785
51,052
60,269
54,564

Taxes payable
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

GWRC rates
3,207
1,861
3,207
1,861

Other
291
991
420
1,207

Total taxes payable
3,498
2,852
3,627
3,068

TOTAL EXCHANGE TRANSACTIONS, TRANSFERS AND TAXES PAYABLE
62,283
53,904
63,896
57,632

Exchange transactions, transfers and payable to related parties
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Controlled entities
2,354
1,515
-
-

Associates and jointly controlled entity
-
2,078
-
2,078

Total exchange transactions, transfers and payable to related parties
2,354
3,593
-
2,078

Payables under exchange transactions, transfers and taxes payable are non-interest bearing and are normally settled on terms varying between 7 days and the 20th of the month following the invoice date. Most of Council’s payables are exchange transactions as they are directly with another party on an arm’s length basis and are of approximately equal value. Non-exchange payables are classified as either taxes (eg PAYE) or transfers payable (eg Council grants).

Note 22: Revenue in advance

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Exchange

Lease rentals
2,910
3,416
2,910
3,416

Other
-
-
250
366

Taxes

Rates
1,345
1,350
1,345
1,350

Transfers

Wellington Venues operations
1,048
1,256
1,048
1,256

Inspection and licensing fees
3,639
3,393
3,639
3,393

Other
1,202
1,042
1,876
1,818

Liabilities recognised under conditional transfer agreements
18,778
32,641
19,649
33,594

TOTAL REVENUE IN ADVANCE
28,922
43,098
30,717
45,193

Relevant significant accounting policies

Liabilities recognised under conditional transfer agreements

The Council and the Group have received non-exchange transfer monies for specific purposes, which apply to periods beyond the current year, with conditions that would require the return of the monies if they are not able to fulfil the agreement. The revenue from these agreements will only be recognised as the conditionals are fulfilled over time.

The primary liability recognised as being under a conditional transfer agreement is $15.172m relating to the capital grant received from the Crown for the housing upgrade project (2016: $28.474m)

Note 23: Borrowings

The Council maintains a prudent borrowings position in relation to our equity and annual revenue. Borrowings are primarily used to fund the purchase of new assets or upgrades to existing assets that are approved through the Annual Plan and Long-Term Plan processes.

Gross Borrowings

The gross borrowings are comprised as follows:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current

Bank loans - term
96
22
196
22

Commercial paper
85,000
100,000
85,000
100,000

Debt securities - fixed rate bonds
-
-
-
-

Debt securities - floating rate notes
15,000
40,000
15,000
40,000

Finance leases
-
55
-
55

Total current
100,096
140,077
100,196
140,077

Non-current

Bank loans - term
4,224
3,907
4,292
3,907

Debt securities - fixed rate bonds
20,000
20,000
20,000
20,000

Debt securities - floating rate notes
371,500
326,500
371,500
326,500

Total non-current
395,724
350,407
395,792
350,407

TOTAL GROSS BORROWINGS
495,820
490,484
495,988
490,484

Net Borrowings

When the cash position of Council and the Group is taken into account the net borrowings position is comprised as follows:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Total gross borrowings
495,820
490,484
495,988
490,484

Less

Cash and cash equivalents (see Note 11)
(76,907)
(94,009)
(85,366)
(103,623)

TOTAL NET BORROWINGS
418,913
396,475
410,622
386,861

The Council’s borrowing strategy is to minimise liquidity risk by avoiding concentration of debt maturity dates and to ensure there is long-term access to funds. Further information on the liquidity and market risks associated with borrowings is contained in Note 32: Financial instruments (page 195).

The following table shows the utilisation of the borrowing facilities available to the Group at the end of the reporting period. The table also indicates the current applicable maturity and interest rate ranges.

Group
Available
$000
Utilised
$000
Maturities
Rates
%

Bank overdraft - committed
1,500
-
-
-

Bank facilities - short term - uncommitted
5,000
-
-
-

Bank facilities - long term - committed
120,000
-
-
-

Bank loans - term
4,488
4,488
2018 - 2041
7.00

Commercial paper
100,000
85,000
2017
1.99 - 2.04

Debt securities - fixed rate bonds
20,000
20,000
2018 - 2023
4.06 - 5.48

Debt securities - floating rate notes
386,500
386,500
2017 - 2033
3.10 - 5.37

Total
637,488
495,988

Security

Borrowings are secured by way of a Debenture Trust Deed over the Council’s rates revenue.

Internal Borrowings

The Council borrows on a consolidated level and as such does not use internal borrowing and therefore does not prepare internal borrowing statements.

Ring-fenced funds

The Council holds $61.135m (2016: $62.906m) of funds that may only be used for a specified purpose. These funds are not held in cash but are utilised against borrowings until required. The specified uses for these funds are as follows:

Housing upgrade project

As part of the agreement with the Crown for the Housing Upgrade Project an amount of $51.175m (2016: $57.578m), representing any as yet unused grant funding from the Crown plus the accumulated surpluses and deficits from the Housing activity, has been ring fenced for future investment in the Council's social housing assets.

Waste reduction and energy

An amount of $9.960m (2016: $5.328m) related to accumulated surpluses and deficits from the Waste Reduction and Energy Conservation activity which, under the Waste Minimisation Act 2008, must be ring fenced for future investment in waste activities. The Council is committed to a number of waste minimisation projects that will utilise these funds.

Note 24: Employee benefits and liabilities provision

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current

Short-term benefits

Payroll accruals
2,213
1,878
2,922
2,267

Holiday leave
5,324
5,256
6,612
6,385

Total short-term benefits
7,537
7,134
9,534
8,652

Termination benefits

Other contractual provisions
274
55
274
55

Total termination benefits
274
55
274
55

Total current
7,811
7,189
9,808
8,707

Non-current

Long-term benefits

Long service leave provision
-
-
35
49

Retirement gratuities provision
889
995
889
1,007

Total long-term benefits
889
995
924
1,056

TOTAL EMPLOYEE BENEFIT LIABILITIES AND PROVISIONS
8,700
8,184
10,732
9,763

Relevant significant accounting policies – general

A provision for employee benefit liabilities (holiday leave, long-service leave and retirement gratuities) is recognised as a liability when benefits are earned but not paid.

Holiday leave

Holiday leave includes: annual leave, long-service leave, statutory time off in lieu and ordinary time off in lieu. Annual leave is calculated on an actual entitlement basis in accordance with section 21(2) of the Holidays Act 2003.

Movements in material employee benefit provisions above are analysed as follows:

Retirement gratuities provision
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
995
1,096
1,007
1,108

Movement in required provision
9
(32)
9
(32)

Release of unused provision
(49)
(7)
(49)
(7)

Rediscounting of interest
27
59
27
59

Amount utilised
(93)
(121)
(105)
(121)

Retirement gratuities - closing balance
889
995
889
1,007

Background

The Council’s retirement gratuities provision is a contractual entitlement for a reducing number of employees who, having qualified with 10 years’ service will, on retirement, be entitled to a payment based on years of service and current salary. This entitlement has not been offered to Council employees since 1991. Based on the age of remaining participants the provision may not be extinguished until 2037, assuming retirement at age 65.

Relevant significant accounting policies – specific

Retirement gratuities are calculated on an actuarial basis based on the likely future entitlements accruing to employees, after taking into account years of service, years to entitlement, the likelihood that employees will reach the point of entitlement, and other contractual entitlements information.

Estimation

The gross retirement gratuities provision (inflation adjusted at 1.56%) as at 30 June 2017, before discounting, is $1.088m (2016: $1.262m). The discount rate used is 6.10%.

Other contractual provisions
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
55
112
55
112

New provision
274
55
274
55

Release of unused provision
-
-
-
-

Amount utilised
(55)
(112)
(55)
(112)

Other contractual provisions - closing balance
274
55
274
55

Background

The above provision is to cover estimated redundancy costs as at 30 June 2017 resulting from current restructuring within the Council.

Relevant significant accounting policies – specific

Other contractual provisions include termination benefits, which are recognised within surplus or deficit only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits settled within 12 months are reported at the amount expected to be paid, otherwise they are reported as the present value of the estimated future cash outflows.

Note 25: Provisions for other liabilities

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Current

ACC Partnership programme
-
12
-
12

Landfill post closure costs
1,508
1,441
1,508
1,441

Weathertight homes
11,236
9,500
11,236
9,500

Unreinforced masonary grants
840
-
840
-

Total current
13,584
10,953
13,584
10,953

Non-current

Landfill post closure costs
16,205
15,330
16,205
15,330

Weathertight homes
28,199
34,920
28,199
34,920

Total non-current
44,404
50,250
44,404
50,250

TOTAL PROVISIONS FOR OTHER LIABILITIES
57,988
61,203
57,988
61,203

Relevant significant accounting policies – general

Provisions are recognised for future liabilities of uncertain timing or amount when there is a present obligation as a result of a past event, it is probable that expenditure will be required to settle the obligation and a reliable estimate of the obligation can be made. Provisions are measured at the expenditure expected to be required to settle the obligation. Liabilities and provisions to be settled beyond 12 months are recorded at their present value.

Movements in material provisions above are analysed as follows:

Landfill post closure costs
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
16,771
15,820
16,771
15,820

Movement in provision
491
479
491
479

Re-discounting of interest
627
932
627
932

Amount utilised
(176)
(460)
(176)
(460)

Landfill post closure costs - closing balance
17,713
16,771
17,713
16,771

Current
1,508
1,441
1,508
1,441

Non-current
16,205
15,330
16,205
15,330

Landfill post closure costs - closing balance
17,713
16,771
17,713
16,771

Background

The Council operates the Southern Landfill (Stage 3) and has a 21.5% joint venture interest in the Spicer Valley Landfill. It also manages a number of closed landfill sites around Wellington. The Council has responsibility for the closure of its landfills and to provide ongoing maintenance and monitoring of the landfills after they are closed.

As part of the closure of landfills, or landfill stages, the Council’s responsibilities include:

final cover application and vegetation

incremental drainage control features, and

completing facilities for post closure responsibilities.

Post-closure responsibilities include:

treatment and monitoring of leachate

ground water and surface monitoring

gas monitoring and recovery

implementation of remedial measures such as needed for cover and control systems, and

ongoing site maintenance for drainage systems, final cover and vegetation.

The management of the landfill will influence the timing of recognition of some liabilities – for example, the Southern Landfill operates in stages. A liability relating to any future stages will only be created when the stage is commissioned and when refuse begins to accumulate in this stage.

The Council, as operator of the Southern Landfill, has a legal obligation to apply for resource consents when the landfill or landfill stages reach the end of their operating life and are to be closed. These resource consents will set out the closure requirements and the requirements for ongoing maintenance and monitoring services at the landfill site after closure.

Relevant significant accounting policies – specific

A provision for post-closure costs is recognised as a liability when the obligation for post-closure arises, which is when each stage of the landfill is commissioned and refuse begins to accumulate.

The provision is measured based on the present value of future cash flows expected to be incurred, taking into account future events including known changes to legal requirements and known improvements in technology. The provision includes all costs associated with landfill post-closure including final cover application and vegetation; incremental drainage control features; completing facilities for leachate collection and monitoring; completing facilities for water quality monitoring; completing facilities for monitoring and recovery of gas.

Amounts provided for landfill post-closure are capitalised to the landfill asset. The capitalised landfill asset is depreciated over the life of the landfill based on the capacity used.

The Council’s provision for landfill post-closure costs includes the Council’s 21.5% proportionate share of the Spicer Valley landfill provision for post-closure costs.

Estimations

The long-term nature of the liability means there are inherent uncertainties in estimating costs that will be incurred. The provision has been estimated using known improvements in technology and known changes to legal requirements. Future cash flows are discounted using the rate of 6.10%. The gross provision (inflation adjusted at 3.25%), before discounting, is $23.152m as at 30 June 2017 (2016: $23.576m). This represents the Council’s projection of the amount required to settle the obligation at the estimated time of the cash outflow.

Stage 3 of the Southern Landfill has an estimated remaining capacity of 545,530m³ (2016: 664,018m³) and is expected to close in 2021. These estimates have been made by the Council’s engineers based on expected future and historical volume information.

The Council’s provision includes a proportionate share of the Spicer Valley Landfill provision for post closure costs. The Spicer Valley Landfill has a remaining life out to 2030 to coincide with the end of its resource consent.

Weathertight homes
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
44,420
41,200
44,420
41,200

Additional or increased provision made
4,429
12,006
4,429
12,006

Amount utilised
(9,414)
(8,786)
(9,414)
(8,786)

Weathertight homes - closing balance
39,435
44,420
39,435
44,420

Current
11,236
9,500
11,236
9,500

Non-current
28,199
34,920
28,199
34,920

Weathertight homes - closing balance
39,435
44,420
39,435
44,420

Background

This provision represents the Council’s estimated liability relating to the settlement of claims arising in relation to the Weathertight Homes Resolution Services (WHRS) Act 2006 and civil proceedings for weathertightness.

A provision has been recognised for the potential net settlement of all known claims, including those claims that are being actively managed by the Council as well as claims lodged with WHRS but not yet being actively managed. The provision also includes an amount of $5.377m (2016: $2.056m) as a provision for future claims relating to weathertightness issues not yet identified or not yet reported.

Movement in the provision

During the year $9.414m was paid as either part or full settlement of claims. An additional $4.429m was added to the provision after an actuarial re-assessment of the likely future costs to be incurred as explained below. The current/non-current split above reflects the expected timing of payments but is reassessed each year to take account of delays in claim negotiations and any mediation outcomes.

Estimation

The Council has provided for the expected future costs of reported claims. The provision for active claims is based on the best estimate of the Council’s expected future costs to settle these claims and is reviewed on a case by case basis. The estimate for claims that have been notified and are not yet actively managed and unreported claims is based on actuarial assessments and other information on these claims. The nature of the liability means there are significant inherent uncertainties in estimating the likely costs that will be incurred in the future. This represents the Council’s best estimate of the amount required to settle the obligation at the estimated time of the cash outflow. Future cash flows are inflation adjusted and discounted using an applicable discount rate. For 2016/17 this applicable discount rate has changed from the Council’s cost of borrowing to the Treasury’s risk-free rate, which is considerably lower. The effect has been to increase the provision by $2.600m. The provision is net of any third-party contributions including insurance, where applicable.

The provision is based on best estimates and actuarial assessments and therefore actual costs incurred may vary significantly from those included in this provision, especially for future claims relating to weathertightness issues not yet identified or not yet reported.

The significant assumptions used in the calculation of the weathertight homes provision are as follows:

Amount claimed

Represents the expected amount claimed by the homeowner and is based on the actual amounts for claims already settled.

Settlement amount

Represents the expected amount of awarded settlement and is based on the actual amounts for claims already settled.

Amount expected to be paid by the Council

Represents the amount expected to be paid by the Council out of any awarded settlement amount and is based on the actual amounts for claims already settled. This figure has been increasing over the last few years as it is becoming more common for the other parties involved in a claim to be either in liquidation or bankrupt, or have limited funds and be unable to contribute to settlement.

Percentage of homeowners who will make a successful claim

Historical data collected on the number of claims lodged has enabled assumptions to be made on the percentage of homes built in the last 10 years which may experience weathertightness problems and therefore the percentage of homeowner who may make a successful claim.

Sensitivity

The table below illustrates the potential impact on surplus or deficit of changes in some of the assumptions listed above.

Council and Group
2017
$000

+10%
-10%

Assumption
Effect on Surplus
or Deficit

Amount claimed
3,943
(3,943)

Settlement level award
3,943
(3,943)

Council contibution to settlement
3,943
(3,943)

Change in percentage of homeowners who will make a successful claim
537
(537)

+2%
-2%

Assumption
Effect on Surplus
or Deficit

Discount rate
(1,523)
1,642

Funding of weathertight homes settlements

The Council uses borrowings in the first instance to meet the cost of settlements with the associated borrowings subsequently being repaid through rates funding. To ensure that the funding of weathertight homes is fully transparent the associated settlement costs, borrowings and rates funding is reported annually.

Funding for weathertight homes liability
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
(26,883)
(23,207)
(26,883)
(23,207)

Rates funding for weathertight homes liability
7,227
6,661
7,227
6,661

Total amounts paid
(9,414)
(8,786)
(9,414)
(8,786)

Interest allocation
(1,896)
(1,551)
(1,896)
(1,551)

Closing balance funded through borrowings
(30,966)
(26,883)
(30,966)
(26,883)

Note 26: Deferred tax

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Deductible temporary differences
-
-
852
559

Tax losses
394
1,037
394
1,165

TOTAL DEFERRED TAX
394
1,037
1,246
1,724

Unrecognised temporary differences and tax losses

Deferred tax assets have not been recognised in respect of the following items:

Under current income tax legislation, the tax losses and deductible temporary differences referred to above do not expire.

The unrecognised deferred tax asset in respect of the above items for the Council is $0.110m (2016: $0.290m) and for the Group $0.349m (2016: $0.483m).

Deferred tax assets have not been recognised in respect of these items as it is not probable that future taxable profits will be available against which the benefit of the losses can be utilised.

In 2017 $0.260m (2016: $0.357m) previously unrecognised tax losses, with a tax effect of $0.073m (2016: $0.100m) were recognised by the Group by way of a loss transfer arrangement.

As at 30 June 2017, the Group has a deferred tax liability of $0.938m (2016: $1.482m).

Relevant significant accounting policies

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the assets and liabilities, and the unused tax losses using tax rates enacted or substantively enacted at the end of the reporting period.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which they can be utilised.

Statement of changes in equity

For the year ending 30 June 2017

Council
Group

 Note
Actual
2017
$000
Budget
2017
$000
Actual
2016
$000
Actual
2017
$000
Actual
2016
$000

EQUITY - Opening balances

Accumulated funds

1,269,134
1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

3,756,048
3,730,334
3,722,229
3,745,251
3,709,806

Revaluation reserves

1,382,337
1,383,201
1,383,201
1,496,198
1,497,062

Hedging reserve

(38,730)
-
(17,462)
(38,730)
(17,462)

Fair value through other comprehensive revenue and expense reserve

1,648
106
106
2,026
505

Non-controlling interest

-
-
-
284
316

Restricted funds

14,064
13,663
13,124
18,741
16,923

TOTAL EQUITY - Opening balance

6,384,501
6,396,438
6,370,332
6,516,932
6,500,312

CHANGES IN EQUITY

Retained earnings

Net surplus for the year

31,679
12,761
34,106
36,150
36,610

Transfer to restricted funds

(4,518)
(4,518)
(5,118)
(5,147)
(6,367)

Transfer from restricted funds

10,339
3,380
4,178
11,753
4,549

Transfer from revaluation reserves

279
-
653
279
653

Revaluation reserves
27

Fair value movement - property, plant and equipment - net

295,254
106,241
(211)
319,419
(211)

Transfer to retained earnings

(279)
-
(653)
(279)
(653)

Hedging reserve
28

Movement in hedging reserve

17,447
-
(21,268)
17,447
(21,268)

Fair value through other comprehensive revenue and expense reserve
29

Movement in fair value - Equity investments

1,240
-
1,542
1,240
1,542

Movement in fair value - Available for sale equities

-
-
-
(45)
(21)

Non-controlling interest

Movement of non-controlling interest

-
-
-
-
(32)

Restricted funds
30

Transfer to retained earnings

(10,339)
(3,380)
(4,178)
(11,753)
(4,549)

Transfer from retained earnings

4,518
4,518
5,118
5,147
6,367

Total comprehensive revenue and expense

345,620
119,002
14,169
374,211
16,620

EQUITY - Closing balances

Accumulated funds

1,269,134
1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

3,793,827
3,741,957
3,756,048
3,788,286
3,745,251

Revaluation reserves

1,677,312
1,489,442
1,382,337
1,815,338
1,496,198

Hedging reserve

(21,283)
-
(38,730)
(21,283)
(38,730)

Fair value through other comprehensive revenue and expense reserve

2,888
106
1,648
3,221
2,026

Non-controlling interest

-
-
-
284
284

Restricted funds

8,243
14,801
14,064
12,135
18,741

TOTAL EQUITY - Closing balance

6,730,121
6,515,440
6,384,501
6,891,143
6,516,932

Total comprehensive revenue and expense attributable to:

Wellington City Council and Group

345,620
119,002
14,169
373,927
16,336

Non-controlling interest

-
-
-
284
284

345,620
119,002
14,169
374,211
16,620

The notes on pages 132 to 220 form part of and should be read in conjunction with the financial statements

Statement of changes in equity – Major budget variations

Significant variations from budgeted changes in equity are as follows:

Total closing equity is $214.681m higher than budget primarily due to:

$18.918m of higher net surplus

$189.013m of additional revaluation increases relating to infrastructure assets. This increase above budget reflects the better asset information available, the resulting changes in remaining assets lives and the increases used in costing models

$17.447m of movement in the hedging reserve due to favourable increases in swap interest rates.

The above movements reflect the primary changes in total comprehensive revenue and expense of $226.618m offset by an opening balance budget variance for total equity of $11.937m.

Equity

Equity is the community’s interest in the Council and Group and is measured as the difference between total assets and total liabilities. Equity is broken down and classified into a number of components to enable clearer identification of the specified uses of equity within the Council and the Group.

The components of equity are accumulated funds and retained earnings, revaluation reserves, a hedging reserve, a fair value through other comprehensive revenue and expense reserve and restricted funds which comprise special funds, reserve funds and trusts and bequests.

Restricted funds are those reserves that are subject to specific conditions of use, whether under statute or accepted as binding by the Council, and that may not be revised without reference to the Courts or third parties. Transfers from these reserves may be made only for specified purposes or when certain specified conditions are met.

Equity management

The Local Government Act 2002 (the Act) requires the 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. Ratepayer funds are largely managed as a by-product of managing revenues, expenses, 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 Act and applied by the Council. Intergenerational equity requires today’s ratepayers to meet the costs of utilising the Council’s assets but does not expect them to meet the full cost of long term assets that will benefit ratepayers in future generations. Additionally, the Council has asset management plans in place for major classes of assets, detailing renewal and programmed maintenance. These plans ensure ratepayers in future generations are not required to meet the costs of deferred renewals and maintenance.

The Act requires the Council to make adequate and effective provision in its Long-Term Plan (LTP) and in its Annual Plan (where applicable) to meet the expenditure needs identified in those plans. The Act sets out the factors that the 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 the Council’s LTP.

Note 27: Revaluations

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Land - opening and closing balance
155,091
155,091
155,091
155,091

Buildings - opening balance
230,634
231,498
230,634
231,498

Revaluation adjustment
-
(211)
-
(211)

Transfer to retained earnings on disposal of assets
(279)
(653)
(279)
(653)

Buildings - closing balance
230,355
230,634
230,355
230,634

Library collections - opening balance
7,015
7,015
7,015
7,015

Revaluation recognised in other comprehensive revenue and expense
1,377
-
1,377
-

Library collections - closing balance
8,392
7,015
8,392
7,015

Drainage, waste and water - opening balance
547,533
547,533
547,533
547,533

Revaluation recognised in other comprehensive revenue and expense
132,146
-
132,146
-

Transfer between asset classes
27,824
-
27,824
-

Drainage, waste and water - closing balance
707,503
547,533
707,503
547,533

Service concession assets - opening balance
70,619
70,619
70,619
70,619

Revaluation recognised in other comprehensive revenue and expense
14,312
-
14,312
-

Transfer between asset classes
(27,824)
-
(27,824)
-

Service concession assets - closing balance
57,107
70,619
57,107
70,619

Infrastructure land - opening balance
15,410
15,410
15,410
15,410

Revaluation recognised in other comprehensive revenue and expense
2,985
-
2,985
-

Infrastructure land - closing balance
18,395
15,410
18,395
15,410

Roading - opening balance
356,035
356,035
356,035
356,035

Revaluation recognised in other comprehensive revenue and expense
144,434
-
144,434
-

Roading - closing balance
500,469
356,035
500,469
356,035

Associates' revaluation reserves - opening balance
-
-
113,861
113,861

Revaluation recognised in other comprehensive revenue and expense
-
-
24,165
-

Associates' revaluation reserves - closing balance
-
-
138,026
113,861

Total revaluation reserves - closing balance
1,677,312
1,382,337
1,815,338
1,496,198

These revaluation reserves are represented by:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
1,382,337
1,383,201
1,496,198
1,497,062

Revaluation recognised in other comprehensive revenue and expense
295,254
(211)
319,419
(211)

Transfer to retained earnings on disposal of assets
(279)
(653)
(279)
(653)

TOTAL REVALUATION RESERVES
1,677,312
1,382,337
1,815,338
1,496,198

The revaluation reserves are used to record accumulated increases and decreases in the fair value of certain asset classes.

For the period ending 30 June 2017 Council has revalued its investment properties, which are revalued annually. Council has also revalued its infrastructure land, infrastructure network assets (Drainage, waste, water, service concession and roading), and the Library collection as per the normal 3-yearly cycle. Operational land and buildings are due for revaluation in 2017/18.

Revaluation movements are non-cash in nature and represent the restating of the Council’s assets, subject to revaluation, into current dollar values after taking into account the condition and remaining lives of the assets.

Relevant significant accounting policies

The result of any revaluation of the Group’s property, plant and equipment is recognised within other comprehensive revenue and expense and taken to the asset revaluation reserve. Where this results in a debit balance in the reserve for a class of property, plant and equipment, the balance is included in the surplus or deficit. Any subsequent increase on revaluation that offsets a previous decrease in value recognised within surplus or deficit will be recognised firstly, within surplus or deficit up to the amount previously expensed, and with any remaining increase recognised within other comprehensive revenue and expense and in the revaluation reserve for that class of property, plant and equipment.

Accumulated depreciation at the revaluation date is eliminated so that the carrying amount after revaluation equals the revalued amount.

While assumptions are used in all revaluations, the most significant of these are in infrastructure. For example where stormwater, wastewater and water supply pipes are underground, the physical deterioration and condition of assets are not visible and must therefore be estimated. Any revaluation risk is minimised by performing a combination of physical inspections and condition modelling assessments

Note 28: Hedging reserve

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
(38,730)
(17,462)
(38,730)
(17,462)

Cash flow hedge net movement recognised in other comprehensive revenue and expenses
17,447
(21,268)
17,447
(21,268)

TOTAL HEDGING RESERVE
(21,283)
(38,730)
(21,283)
(38,730)

The hedging reserve shows accumulated fair value changes for interest rate swaps which satisfy the criteria for hedge accounting and have operated as effective hedges during the period.

The Council uses interest rate swaps to fix interest rates on floating rate debt (floating rate notes and commercial paper) to give it certainty over interest costs.

The Council uses hedge accounting to recognise any fair value fluctuations in these swaps through this reserve within equity. Using hedge accounting prevents any significant movement in interest rate exposure significantly affecting the Council’s ability to meet its balanced budget requirements.

Note 29: Fair value through other comprehensive revenue and expense reserve

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Opening balance
1,648
106
2,026
505

Movements:

Civic Financial Services Limited
40
133
40
133

Local Government Funding Agency
1,200
1,409
1,200
1,409

Creative HQ shareholdings - available for sale
-
-
(45)
(21)

TOTAL FAIR VALUE THROUGH OTHER COMPREHENSIVE REVENUE AND EXPENSE RESERVE
2,888
1,648
3,221
2,026

This reserve reflects the accumulated fair value movement in the Council’s investment in Civic Financial Services Limited and the Local Government Funding Agency, for which there is no intention to sell. For further information refer to Note 14: Other financial assets (page 52).

In the Group, Creative HQ, a controlled entity of WREDA, has small shareholdings in incubator and accelerator programme companies. These shareholdings are fair valued annually and any movement is held within this reserve until the shares are disposed.

Note 30: Restricted funds

Restricted funds are comprised of special reserves and funds that the Council holds for specific purposes and trusts and bequests that have been bestowed upon the the Council for the benefit of all Wellingtonians.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Special reserves and funds
7,800
13,639
11,115
17,094

Trusts and bequests
443
425
1,020
1,647

TOTAL RESTRICTED FUNDS
8,243
14,064
12,135
18,741

Special reserves and funds
Opening
Balance
2017
$000
Additional
Funds
2017
$000
Funds
Utilised
2017
$000
Closing
Balance
2017
$000

Council

City growth fund
3,291
3,000
(3,429)
2,862

Reserve purchase and development fund
782
-
-
782

Insurance reserve
9,566
1,500
(6,910)
4,156

Total Council
13,639
4,500
(10,339)
7,800

Controlled entities' reserve funds
3,455
-
(140)
3,315

Total Group - Special reserves and funds
17,094
4,500
(10,479)
11,115

Nature and purpose, funding and utilisation

City growth fund

This fund is part of an integrated approach to fostering growth in the economy. Funding of $3m was provided from previous surpluses and $3.429m was utilised during the year.

Reserve purchase and development fund

This fund is used to purchase and develop reserve areas within the city. During the year no purchases were made.

Insurance reserve

This reserve came into effect in 2001 and allows the Council to meet the cost of claims that fall below deductible limits under the Council’s insurance policies. Annual additions to the reserve of $1.500m (2016: $1.500m) are funded through rates as identified in the Annual Plan. During the year $6.910m (2016: $0.661m) was used to meet under-excess insurance costs. For more information on the cost of claims refer to Note 38 - Financial impacts of the Kaikoura earthquake (page 216).

Controlled entities’ reserve funds

The restricted funds of the controlled entities relate to the Wellington Museums Trust and the Wellington Zoo Trust:

The Wellington Museums Trust has three reserves; a Capital Reserve, a Colonial Cottage Museum Collection reserve and a City and Sea Collection reserve. The two collection reserves are for the purpose of future museum acquisitions.

The Wellington Zoo Trust has two reserves; an Animal Transfer Fund specifically for the transfer of animals and a Conservation Fund to specifically support field conservation.

Trust and bequests
Opening
Balance
2017
$000
Additional
Funds
2017
$000
Funds
Utilised
2017
$000
Closing
Balance
2017
$000

Council

A Graham Trust
3
-
-
3

A W Newton Bequest
318
15
-
333

E A McMillan Estate
6
-
-
6

E Pengelly Bequest
14
1
-
15

F L Irvine Smith Memorial
7

-
7

Greek NZ Memorial Association
5
-
-
5

Kidsarus 2 Donation
3
1
-
4

Kirkcaldie and Stains Donation
17
-
-
17

QEII Memorial Book Fund
20
1
-
21

Schola Cantorum Trust
8

-
8

Terawhiti Grant
10
-
-
10

Wellington Beautifying Society Bequest
14
-
-
14

Total Council - Trusts and bequests
425
18
-
443

Controlled entities' trusts and bequests
1,222
629
(1,274)
577

Total Group - Trusts and bequests
1,647
647
(1,274)
1,020

Analysis of movements in trusts and bequests

Additional funds

Trusts and bequests receiving additional funds during the year were those where interest has been applied in accordance with the original terms and conditions.

Nature and purpose

Other than specific trusts and bequests discussed above, the other Council bequests and trusts are generally provided for library, educational or environmental purposes.

The Wellington Zoo Trust has a number of bequests, trusts and capital grants made to it for specific purposes, which are held as restricted funds until utilised. Further information on these can be found in the Wellington Zoo Trust annual report published on their website – https://wellingtonzoo.com/about-us/about-our-zoo/

Charles Plimmer Bequest

The bequest is held and administered by the Public Trust for the benefit of Wellington City Council. Funds available for distribution are requested for particular projects after consultation with the Plimmer family. The receipt and use of these funds is shown outside of the table above to record the generous contribution the bequest makes to the benefit of the city.

Distributions recognised as revenue - $0.635m

Funds utilised for the Discovery Garden at Wellington Botanic Garden - $0.635m

Statement of cash flows

For the year ending 30 June 2017

Council
Group

Actual
2017
$000
Budget
2017
$000
Actual
2016
$000
Actual
2017
$000
Actual
2016
$000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from rates - Council

286,658
292,828
272,802
286,658
272,802

Receipts from rates- Greater Wellington Reginal Council

60,589
56,838
55,622
60,589
55,622

Receipts from activities and other revenue

145,185
100,082
119,920
160,648
131,199

Receipts from grants and subsidies - Operating

7,994
8,020
7,108
22,797
15,839

Receipts from grants and subsidies - Capital

12,899
33,017
38,918
13,347
39,679

Receipts from investment property lease rentals

12,038
9,335
11,025
12,038
11,025

Cash paid to suppliers and employees

(312,227)
(298,973)
(288,166)
(367,290)
(324,047)

Rates paid to GWRC

(59,324)
(56,838)
(56,288)
(59,324)
(56,288)

Grants paid

(43,395)
(42,672)
(38,384)
(17,388)
(18,543)

Income tax paid

-
-
-
(165)
(244)

Net GST (paid) / received

2,753
-
(925)
2,202
(2,329)

NET CASH FLOWS FROM OPERATING ACTIVITIES

113,170
101,637
121,632
114,112
124,715

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received

12,041
11,112
12,179
12,041
12,218

Interest received

2,367
650
3,103
2,579
3,311

Loan repayments

10,399
-
277
10,414
277

Proceeds from sale of property, plant and equipment

1,248
4,600
592
1,248
1,023

Proceeds from sale of Investment property

-
-
6,843
-
6,843

Loan advance made

-
-
(442)
-
(442)

Increase in investments

(960)
-
(1,520)
(856)
(1,520)

Cash from aquisition of controlled entity

-
-
-
941
-

Purchase of investment properties

(153)
-
(1,862)
(153)
(1,862)

Purchase of intangibles

(5,029)
(5,102)
(9,521)
(5,057)
(9,521)

Purchase of property, plant and equipment

(132,617)
(165,583)
(136,816)
(135,841)
(140,648)

NET CASH FLOWS FROM INVESTING ACTIVITIES

(112,704)
(154,323)
(127,167)
(114,684)
(130,321)

CASH FLOWS FROM FINANCING ACTIVITIES

New borrowings

85,659
298,783
148,855
85,659
148,855

Repayment of borrowings

(80,323)
(227,516)
(92,099)
(80,431)
(92,099)

Interest paid on borrowings

(22,904)
(26,690)
(23,125)
(22,913)
(23,125)

NET CASH FLOWS FROM FINANCING ACTIVITIES

(17,568)
44,577
33,631
(17,685)
33,631

Net increase/(decrease) in cash and cash equivalents

(17,102)
(8,109)
28,096
(18,257)
28,025

Cash and cash equivalents at beginning of year

94,009
9,823
65,913
103,623
75,598

CASH AND CASH EQUIVALENTS AT END OF YEAR

76,907
1,714
94,009
85,366
103,623

The cash and cash equivalents balance above equates to the cash and cash equivalents balance in the Statement of Financial Position.

The notes on pages 132 to 220 form part of and should be read in conjunction with the financial statements

Wellington City Council acts as a collection agency for Greater Wellington Regional Council (GWRC) by including additional rates and levies in its own billing process. Once collected, the monies are passed to GWRC. The budget assumes that the inflows and outflows will offset each other and are shown as nil accordingly.

The Council has ring fenced funds of $61.135m (2016: $62.906m) relating to the housing upgrade project and waste activities. For more information see Note 23: Borrowings (page 175).

Cash and cash equivalents for the purposes of the cash flow statement comprises bank balances, cash on hand and short term deposits with a maturity of three months or less. The statement of cash flows has been prepared using the direct approach subject to the netting of certain cash flows. Cash flows in respect of investments and borrowings that have been rolled-over under arranged finance facilities have been netted in order to provide more meaningful disclosures.

Operating activities include cash received from all non-financial revenue sources of the Council and Group and record the cash payments made for the supply of goods and services.

Investing activities relate to the acquisition and disposal of assets and investment revenue.

Financing activities relate to activities that change the equity and debt capital structure of the Council and Group and financing costs.

Statement of cash flows – Major budget variations

Cash flow budgeting is performed using various assumptions around the timing of events and any departure from these timings will affect the outcome against budget.

Significant variations from the cash flow budgets are as follows:

Net cash flows from operating activities were $11.533m higher than budgeted primarily due to:

$45.103m of additional revenue including earthquake and storm insurance recoveries ($6.416m) and landfill charges for contaminated and special waste ($4.633m)

Offset by both additional expenditure ($13.255m) including earthquake related costs and lower than planned expected capital grant receipts ($20.118m) mainly due to early funding of the Housing upgrade grants in 2015/16

Net cash flows from investing activities were $41.619m lower than budget primarily due to:

$10.347m of loan repayment from the Karori Sanctuary Trust

$32.966m of lower capital expenditure

Net cash flows from financing activities were $62.145m lower than budget primarily due to:

$65.931m decrease in gross borrowings due to lower than expected capital expenditure

Offset by lower interest costs on borrowings ($3.786m)

Note 31: Reconciliation of net surplus to net cash flows from operating activities

The net surplus from the Statement of Comprehensive Revenue and Expense is reconciled to the net cash flows from operating activities in the Statement of Cash Flows as follows:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Net surplus for the period
31,679
34,106
36,150
36,610

Add/(deduct) non-cash items:

Vested assets
(6,250)
(10,181)
(6,250)
(10,181)

Bad debts written off not prevously provided for
151
282
151
282

Depreciation and amortisation
101,889
99,183
103,623
100,971

Impairment of property, plant and equipment
11,446
132
11,446
581

Fair value changes in investment properties
(18,222)
(13,773)
(18,222)
(13,773)

Other fair value changes
(5,278)
(400)
(5,278)
(400)

Movement in provision for impairments of doubtful debts
777
153
777
153

Tax expense
-
-
(22)
-

Gain on business combination
-
-
(4,072)
-

Non-cash movement in provisions
4,440
12,079
4,596
12,550

Total non-cash items
88,953
87,475
86,749
90,183

Add/(deduct) movement in working capital: ¹

Exchange receivables and non-exchange recoverables
537
(10,826)
3,677
(6,962)

Prepayments
(2,512)
953
(2,019)
572

Inventories
(48)
(202)
205
(123)

Exchange transactions, taxes and transfers payables
7,852
(4,623)
4,855
(8,555)

Revenue in advance
(14,176)
13,805
(14,604)
12,837

Employee benefit liabilities
516
782
219
879

Provision for other liabilities
(7,632)
(7,908)
(7,809)
(7,908)

Total working capital movement
(15,463)
(8,019)
(15,476)
(9,260)

Add/(deduct) investing and financing activities:

Net (gain)/loss on disposal of property, plant and equipment
(495)
1,115
(153)
1,461

Net (gain)/loss on disposal of investment property
-
(888)
-
(888)

Dividends received
(12,041)
(12,179)
(104)
(160)

Interest received
(2,367)
(3,103)
(2,442)
(3,334)

Tax paid and subvention receipts
-
-
(213)
(205)

Interest paid on borrowings
22,904
23,125
22,914
23,119

Share of equity accounted surplus in associates
-
-
(13,313)
(12,811)

Total investing and financing activities
8,001
8,070
6,689
7,182

NET CASH FLOWS FROM OPERATING ACTIVITIES
113,170
121,632
114,112
124,715

Excluding non-cash items

Note 32: Financial instruments

Financial instruments include financial assets (loans and receivables or recoverables and financial assets at fair value through other comprehensive revenue and expense), financial liabilities (payables and borrowings) and derivative financial instruments. Financial instruments are classified into the categories outlined below based on the purpose for which they were acquired. The classification is determined at initial recognition and re-evaluated at the end of each reporting period.

Relevant significant accounting policies

Financial instruments are initially recognised on trade-date at their fair value plus transaction costs. Subsequent measurement of financial instruments depends on the classification determined by the Council.

Financial assets

Financial assets are classified as loans and receivables or financial assets at fair value through other comprehensive revenue and expense.

Loans and receivables comprise cash and cash equivalents, receivables or recoverables and loans and deposits.

Cash and cash equivalents comprise cash balances and bank deposits with maturity dates of three months or less.

Receivables and recoverables have fixed or determinable payments. They arise when the Group provides money, goods or services directly to a debtor, and has no intention of trading the receivable or recoverable.

Loans and deposits include loans to other entities (including controlled entities and associates), and bank deposits with maturity dates of more than three months.

Financial assets in this category are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate method. Fair value is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date for assets of a similar maturity and credit risk. Receivables or recoverables due in less than 12 months are recognised at their nominal value. A provision for impairment is recognised when there is objective evidence that the asset is impaired. As there are statutory remedies to recover unpaid rates, rates penalties and water meter charges, no provision has been made for impairment in respect of these receivables or recoverables.

Financial assets at fair value through other comprehensive revenue and expense primarily relate to equity investments that are held by the Council for long-term strategic purposes and therefore are not intended to be sold. Within the Group, small shareholdings are held in start-up companies, which are available for sale, until the companies mature or cease operations. Financial assets at fair value through other comprehensive revenue and expense are initially recorded at fair value plus transaction costs. They are subsequently measured at fair value and changes, other than impairment losses, are recognised directly in a reserve within equity. On disposal, the cumulative fair value gain or loss previously recognised directly in other comprehensive revenue and expense is recognised within surplus or deficit.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all of the risks and rewards of ownership.

Financial liabilities

Financial liabilities include payables under exchange transactions, taxes, transfers and borrowings. Financial liabilities with duration of more than 12 months are recognised initially at fair value plus transaction costs and subsequently measured at amortised cost using the effective interest rate method. Amortisation is recognised within surplus or deficit. Financial liabilities with duration of less than 12 months are recognised at their nominal value.

On disposal any gains or losses are recognised within surplus or deficit.

The following tables provide an analysis of the Council’s financial assets and financial liabilities by reporting category as described in the accounting policies:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Financial assets

Loans and receivables

Cash and cash equivalents
76,907
94,009
85,366
103,623

Receivables and recoverables
49,364
50,325
50,700
51,799

Other financial assets
4,978
9,139
5,019
9,190

Total loans and receivables
131,249
153,473
141,085
164,612

Financial assets at fair value through other comprehensive revenue and expense

Other financial assets
5,281
4,041
6,622
5,468

Total financial assets at fair value through other comprehensive revenue and expense
5,281
4,041
6,622
5,468

Hedged derivative financial instruments

Derivatives designated as cash flow hedges
1,283
-
1,283
-

Total hedged derivative financial instruments
1,283
-
1,283
-

Total financial assets
137,813
157,514
148,990
170,080

Total non-financial assets
7,268,587
6,922,590
7,424,978
7,051,339

TOTAL ASSETS
7,406,400
7,080,104
7,573,968
7,221,419

Financial liabilities

Financial liabilities at amortised cost

Exchange transactions and transfers payable
58,785
51,052
60,269
54,564

Taxes payable
3,498
2,852
3,627
3,068

Borrowings
495,820
490,484
495,988
490,484

Total financial liabilities at amortised cost
558,103
544,388
559,884
548,116

Derivative financial instruments

Derivatives designated as cash flow hedges
22,566
38,730
22,566
38,730

Total derivative financial instruments
22,566
38,730
22,566
38,730

Total financial liabilities
580,669
583,118
582,450
586,846

Total non-financial liabilities
95,610
112,485
100,375
117,641

TOTAL LIABILITIES
676,279
695,603
682,825
704,487

Fair value

The fair values of all financial instruments equate or are approximate to the carrying amount recognised in the Statement of Financial Position.

Fair value hierarchy

For those financial instruments recognised at fair value in the Statement of Financial Position, the fair values are determined according to the following hierarchy:

Level 1 - Quoted market price - Financial instruments with quoted prices for identical instruments in active markets.

Level 2 - Valuation technique using observable inputs – Financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.

Level 3 - Valuation techniques with significant non-observable inputs – Financial instruments valued using models where one or more significant inputs are not observable.

Group
2017
2016

Level 1
$000
Level 2
$000
Level 3
$000
Level 1
$000
Level 2
$000
Level 3
$000

Financial assets

Financial assets at fair value through other comprehensive revenue and expense
-
-
6,622
-
-
5,468

Derivative financial instruments

- Cash flow hedges
-
1,283
-
-
-
-

Financial liabilities

Derivative financial instruments

- Cash flow hedges
-
22,566
-
-
38,730
-

Reconciliation of fair value movements in Level 3
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Financial assets at fair value through other comprehensive revenue and expense

- Equity investments

Opening balance - 1 July
4,041
2,499
5,468
3,900

Purchases
-
-
-
65

Disposals
-
-
(11)
-

Impairment
-
-
(27)
(18)

Gains or losses recognised in other comprehensive revenue and expense
1,240
1,542
1,192
1,521

Closing balance - 30 June
5,281
4,041
6,622
5,468

The level 3 equity investments comprise the Council’s shareholdings in the Local Government Funding Agency $4.475m (2016: $3.275m) and Civic Assurance $0.806m (2016:$0.766m). Refer to Note 14: Other financial assets (page 152) for more details.

Financial risk management

As part of its normal operations, the Group is exposed to a number of risks. The most significant are credit risk, liquidity risk and market risk, which includes interest rate risk. The Group’s exposure to these risks and the action that the Group has taken to minimise the impact of these risks is outlined below:

Credit risk

Credit risk is the risk that a third party will default on its obligations to the Group, thereby causing a financial loss. The Group is not exposed to any material concentrations of credit risk other than its exposure within the Wellington region. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the Statement of Financial Position and the face value of financial guarantees to related parties (refer Note 34: Contingencies (page 205)). There is currently no liability recognised for these guarantees as the Group does not expect to be called upon for payment.

The Group’s maximum exposure to credit risk at the end of the reporting period is:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Financial instruments with credit risk

Cash and cash equivalents
76,907
94,009
85,366
103,623

Derivative financial instrument assets
1,283
-
1,283
-

Receivables and recoverables
49,364
50,325
50,700
47,035

Other financial assets

- Bank deposits - term
-
-
-
-

- LGFA borrower notes
4,688
3,728
4,688
3,728

- Loans to related parties - other organisations
27
5,096
27
5,096

- Loans to external organisations
263
315
304
366

Financial guarantees to related parties
168
278
168
278

Total financial instruments with credit risk
132,700
153,751
142,536
160,126

Receivables and recoverables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

The Council is exposed to credit risk as a guarantor of the LGFA’s borrowings. Further information about this exposure is explained in Note 34: Contingencies (page 205).

Credit quality of financial assets

The credit quality of financial assets that are neither past due or impaired can be assessed by reference to Standard and Poor’s credit ratings.

Counterparties with credit ratings
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Cash - registered banks

AA-
4,886
7,986
10,978
13,711

Short term deposits - registered banks

AA-
66,000
84,500
68,349
88,377

A
6,000
1,500
6,000
1,500

Term deposits (greater than 3 months) - registered banks

AA-
-
-
-
-

Term deposits - borrower notes - NZ LGFA

AA+
4,688
3,728
4,688
3,728

Derivative financial instrument assets

AA-
1,283
-
1,283
-

Liquidity risk

Liquidity risk refers to the situation where the Group may encounter difficulty in meeting obligations associated with financial liabilities. The Group maintains sufficient funds to cover all obligations as they fall due. Facilities are maintained in accordance with the Council’s Liability Management Policy to ensure the Group is able to access required funds.

Contractual maturity

The following maturity analysis sets out the contractual cash flows for all financial liabilities that are settled on a gross cash flow basis. Contractual cash flows for financial liabilities include the nominal amount and interest payable.

The following maturity analysis sets out the contractual cash flows for all financial liabilities that are settled on a net cash flow basis. Contractual cash flows for derivative financial liabilities are the future interest payable.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Contractual cash flows of financial liabilities excluding derivatives

0-12 months
173,575
205,279
175,288
209,010

1-2 years
58,193
49,843
58,261
49,843

2-5 years
158,914
162,570
158,914
162,570

More than 5 years
257,441
186,650
257,441
186,650

Total contractual cash flows of financial liabilities excluding derivatives
648,123
604,342
649,904
608,073

Represented by:

Carrying amount as per the Statement of Financial Position
557,973
544,388
559,754
548,119

Future interest payable
90,150
59,954
90,150
59,954

Total contractual cash flows of financial liabilities excluding derivatives
648,123
604,342
649,904
608,073

The following maturity analysis sets out the contractual cash flows for all financial liabilities that are settled on a net cash flow basis. Contractual cash flows for derivative financial liabilities are the future interest payable.

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Contractual cash flows of derivative financial liabilities

0-12 months
8,719
8,532
8,719
8,532

1-2 years
6,321
8,268
6,321
8,268

2-5 years
8,510
16,795
8,510
16,795

More than 5 years
1,690
9,372
1,690
9,372

Total contractual cashflow of derivative financial liabilities
25,240
42,967
25,240
42,967

Represented by:

Future interest payable
25,240
42,967
25,240
42,967

Total contractual cash flows of derivative financial liabilities
25,240
42,967
25,240
42,967

In addition to cash to be received in 2017/18 the Council currently has $121.500m in unused committed bank facilities available to settle obligations as well as $122.756m of cash, cash equivalents and receivables and is expected to have sufficient cash to meet all contractual liabilities as they fall due.

The Council is exposed to liquidity risk as a guarantor of all of LGFA’s borrowings. This guarantee becomes callable in the event of the LGFA failing to pay its obligations when they fall due. Information about this exposure is explained in Note 34: Contingencies (page 205).

The Council mitigates exposure to liquidity risk by managing the maturity of its borrowings programme within the following maturity limits:

Period | Minimum | Maximum | Actual
0 - 3 years | 20% | 60% | 31%
3 - 5 years | 20% | 60% | 27%
More than 5 years | 15% | 60% | 42%

Market risk

Market risk is the risk that the value of an investment will decrease or a liability will increase due to changes in market conditions. The Group uses interest rate swaps in the ordinary course of business to manage interest rate risks. A Treasury Committee, headed by senior management personnel and the Council’s treasury management advisors (presently PwC), provides oversight for financial risk management and derivative activities and ensures any activities are in line with the Liability Management Policy which is formally approved by the Council as part of the Long-Term Plan (LTP).

Cash flow and fair value interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will decrease due to changes in market interest rates. The Group is exposed to interest rate risk from its interest-earning financial assets and interest-bearing financial liabilities. The Group is risk averse and seeks to minimise exposure arising from its borrowing activities primarily by entering into interest rate swap arrangements to fix interest rates on its borrowings.

The Group manages its cash flow interest rate risk by using interest rate swaps. These have the economic effect of converting borrowings from floating rates to fixed rates. The Council uses interest rate swaps to maintain a required ratio of borrowing between fixed and floating interest rates as specified in the liability management policy:

Minimum fixed rate
Maximum fixed rate
Actual % of fixed net debt
before interest rate swaps
Actual % of fixed net debt
after interest rate swaps

50%
95%
6%
95%

The table below shows the effect of the interest rate swaps at reducing the Council’s exposure to interest rate risk:

Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Financial instruments subject to interest rate volatility - before effect of interest rate swaps

Cash and cash equivalents
76,907
94,009
85,366
103,623

Bank loans
(4,320)
(3,929)
(4,488)
(3,929)

Commercial paper
(85,000)
(100,000)
(85,000)
(100,000)

Debt securities - floating rate notes
(386,500)
(366,500)
(386,500)
(366,500)

Total financial instruments subject to interest rate volatility - before effect of interest rate swaps
(398,913)
(376,420)
(390,622)
(366,806)

Effect of interest rate swaps in reducing interest rate volatility

Effect of Cash flow interest rate swaps - hedged
372,500
367,500
372,500
367,500

Total effect of interest rate swaps in reducing interest rate volatility
372,500
367,500
372,500
367,500

Total financial instruments subject to interest rate volatility - after effect of interest rate swaps
(26,413)
(8,920)
(18,122)
694

These interest rate swaps have a nominal value which represents the value of the debt that they are covering (included above). This amount is not recorded in the financial statements; instead the fair value of these interest rate swaps is recognised. This represents the difference between the current floating interest rate and the fixed swap interest rate. At 30 June 2017 the fair value of the interest rate swaps was -$21.283m (2016: -$38.730m). This liability will reduce to zero as the swaps reach the end of their lives, and therefore do not represent a liability that the Council will be required to pay cash to settle.

Given that the interest rate swaps have terms that match with the borrowings (short term bank facilities, commercial paper and debt securities), it is appropriate to include the effect of the interest rate swaps on the borrowings interest rate and present the net effective interest rates for the underlying borrowings:

Weighted effective interest rates
Council
Group

2017
%
2016
%
2017
%
2016
%

Investments

Cash and cash equivalents
2.54
2.99
2.40
2.89

Bank deposits - term
-
-
-
-

LGFA - borrower notes
2.47
2.80
2.47
2.80

Loans to related parties
-
-
-
-

Loans to external organisations
-
-
-
-

Borrowings

Bank facilities - short term
-
-
-
-

Bank loans
7.00
7.00
7.00
7.00

Commercial paper
2.02
2.41
2.02
2.41

Debt securities - fixed
4.84
4.84
4.84
4.84

Debt securities - floating
2.59
2.96
2.59
2.96

Derivative financial instruments - hedged
4.52
4.63
4.52
4.63

Finance leases
-
10.22
-
10.24

The related party loan to the Wellington Regional Stadium Trust is on interest free terms.

Sensitivity analysis

While the Council has significantly reduced the impact of short-term fluctuations on the Group’s earnings through interest rate swap arrangements, there is still some exposure to changes in interest rates.

The tables below illustrate the potential surplus and deficit impact of a 1% change in interest rates based on the Council’s exposures at the end of the reporting period:

Council

2017
$000

+1%
-1%
+1%
-1%

Interest rate risk
Note
Effect on Surplus
or Deficit
Effect on Other
Comprehensive Revenue
and Expense

Financial assets

Cash and cash equivalents
a
769
(769)
-
-

LGFA - borrower notes

47
(47)
-
-

Derivatives - Interest rate swaps - hedged
b
-
-
2,606
(2,971)

Financial liabilities

Derivatives - interest rate swaps - hedged
b
-
-
17,614
(18,803)

Debt securities - floating rate notes
c
(710)
710
-
-

Debt securities - fixed rate bonds
d
-
-
-
-

Bank term loans
e
-
-
-
-

Commercial paper
f
(280)
280
-
-

Total sensitivity to interest rate risk

(174)
174
20,220
(21,774)

a. Cash and cash equivalents

Council funds are in a number of different registered bank accounts with interest payable on the aggregation of all accounts. A movement in interest rates of plus or minus 1% has an effect on interest revenue of $0.769m accordingly.

b. Derivatives – hedged interest rate swaps

Derivatives include interest rate swaps with a fair value totalling -$21.283m. A movement in interest rates of plus 1% has an effect on increasing the unrealised value of the hedged interest rate swap assets by $2.606m. A movement in interest rates of minus 1% has an effect on reducing the unrealised value of the hedged interest rate swap assets by $2.971m. A movement in interest rates of plus 1% has an effect on increasing the unrealised value of the hedged interest rate swap liabilities by $17.614m. A movement in interest rates of minus 1% has an effect on reducing the unrealised value of the hedged interest rate swap liabilities by $18.803m.

c. Debt securities – floating rate notes

Debt securities at floating rates total $386.5m. The full exposure to changes in interest rates has been reduced because the Council has $315.5m of this debt at fixed rates through interest rate swaps. A movement in interest rates of plus or minus 1% has an effect on the interest expense of $0.710m accordingly.

d. Debt Securities – fixed rate bonds

The Council has $20m of fixed rate bonds which are not exposed to interest rate changes.

e. Bank Loan

The Council, through its joint venture with Porirua City Council, has a bank term loan of $4.320m. This loan consists of various loans provided to the joint venture through Porirua City Council borrowing. The interest rate applied is fixed at 7% for the joint venture partners and is not subject to interest rate risk.

f. Commercial paper

The Council has a Commercial Paper programme, which is subject to floating rates and totals $100m, of which only $85m is presently utilised. The full exposure to changes in interest rates has been reduced because the Council has $57m of this debt at fixed rates through interest rate swaps. A movement in interest rates of plus or minus 1% has an effect on the interest expense of $0.280m accordingly.

Note 33: Commitments

Capital commitments
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Approved and contracted - property, plant and equipment
36,519
9,771
36,519
9,771

Approved and contracted - investment properties
-
130
-
130

Approved and contracted - intangibles
80
461
80
461

Approved and contracted - share of associates
-
-
10,958
20,190

Approved and contracted - share of joint ventures
-
-
-
-

TOTAL CAPITAL COMMITMENTS
36,599
10,362
47,557
30,552

The capital commitments above represents signed contracts in place at the end of the reporting period.

The contracts will often span more than one financial year and may include capital expenditure carried forward from 2016/17 to future years.

Lease commitments

Operating leases – Group as lessee

The Group leases certain items of plant, equipment, land and buildings under various non-cancellable operating lease agreements.

The lease terms are between 2 and 21 years and the majority of the lease agreements are generally renewable at the end of the lease period at market rates.

The amount of minimum payments for non-cancellable operating leases is recognised as an expense in Note 7: Expenditure on operating activities (page 140).

Relevant significant accounting policies

Leases where the lessor retains substantially all the risks and rewards of ownership of the leased items are classified as operating leases. Payments made under operating leases are recognised within surplus or deficit on a straight-line basis over the term of the lease. Lease incentives received are recognised within surplus or deficit over the term of the lease as they form an integral part of the total lease payment.

The future expenditure committed by these leases is analysed as follows:

Non-cancellable operating lease commitments as lessee
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Plant and equipment

Not later than one year
43
21
397
281

Later than one year and not later than five years
25
2
288
311

Later than five years
-
-
-
-

Land and buildings

Not later than one year
1,982
1,246
3,525
3,453

Later than one year and not later than five years
5,644
4,121
10,213
8,449

Later than five years
4,922
2,213
6,626
4,695

TOTAL NON-CANCELLABLE OPERATING LEASE COMMITMENTS AS LESSEE
12,616
7,603
21,049
17,189

Operating leases – Group as lessor

The Group has also entered into commercial property leases of its investment property portfolio and other land and buildings.

The land and buildings held for investment purposes are properties which are not held for operational purposes and are leased to external parties.

Ground leases are parcels of land owned by the Group in the central city or on the waterfront that are leased to other parties who own the buildings situated on the land. The leases are generally based on 21-year perpetually renewable terms. As these parcels of land are held for investment purposes the rentals are charged on a commercial market basis.

The land and buildings not held for investment purposes are either used to accommodate the Group’s operational activities or are held for purposes such as road widening, heritage, or are being monitored for compliance reasons. In some cases, parts of these assets are leased to external parties on a commercial basis. The terms of these commercial leases generally range from 1 to 15 years.

Relevant significant accounting policies

Rental revenue is recognised on a straight-line basis over the lease term.

The committed revenues expected from these lease portfolios are analysed as follows:

Non-cancellable operating lease commitments as lessor
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Investment properties

Not later than one year
9,972
9,605
9,972
9,605

Later than one year and not later than five years
37,499
37,258
37,499
37,258

Later than five years
64,280
69,521
64,280
69,521

Land and buildings

Not later than one year
2,405
2,986
2,425
3,033

Later than one year and not later than five years
6,996
8,383
6,996
8,402

Later than five years
8,100
10,657
8,100
10,657

TOTAL NON-CANCELLABLE OPERATING LEASE COMMITMENTS AS LESSOR
129,252
138,410
129,272
138,476

Commitments to related parties

The Council and Group have no commitments to key management personnel beyond normal employment obligations.

Note 34: Contingencies

Contingent liabilities
Council
Group

2017
$000
2016
$000
2017
$000
2016
$000

Financial guarantees to community groups
168
278
168
278

Uncalled capital - LGFA
1,866
1,866
1,866
1,866

Other legal proceedings
393
268
393
268

Share of associates' contingent liabilities
-
-
-
-

Share of joint ventures' contingent liabilities
-
-
-
-

TOTAL CONTINGENT LIABILITIES
2,427
2,412
2,427
2,412

Contingent assets

The Council and Group have no contingent assets that can be quantified as at 30 June 2017 (2016: $Nil)

Relevant significant accounting policies

Contingent liabilities and contingent assets

Contingent liabilities and contingent assets are disclosed at the point at which the contingency is evident. Contingent liabilities are disclosed if the possibility they will crystallise is not remote. Contingent assets are disclosed if it is probable the benefits will be realised.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the Group to make specified payments to reimburse the contract holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are initially recognised at fair value. The Group measures the fair value of a financial guarantee by determining the probability of the guarantee being called by the holder. The probability factor is then applied to the principal and the outcome discounted to present value.

Financial guarantees are subsequently measured at the higher of the Group’s best estimate of the obligation or the amount initially recognised less any amortisation.

Karori Sanctuary Trust (Zealandia)

The Council has provided a guarantee over a term loan facility to a maximum limit of $1.550m plus any outstanding interest and enforcement costs. The loan matures 30 June 2020 and repayments are being made ahead of schedule.

NZ Local Government Funding Agency Limited (LGFA)

The Council is one of 30 local authority shareholders and 8 local authority guarantors of the LGFA. In that regard the Council has uncalled capital of $1.866m. When aggregated with the uncalled capital of other shareholders, $20m is available in the event that an imminent default is identified. Also, together with the other shareholders and guarantors, the Council is a guarantor of all of LGFA’s borrowings. At 30 June 2017, LGFA had borrowings totalling $7,945m (2016: $6,220m).

Financial reporting standards require the Council to recognise the guarantee liability at fair value. However, the Council has been unable to determine a sufficiently reliable fair value for the guarantee, and therefore has not recognised a liability. The 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, which is a member of the LGFA, that has had 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. The Council considers that even if it was called upon to contribute the cost would not be material.

Other legal proceedings

Other legal proceedings are current claims against the Council and Group as a result of past events which are currently being contested. The amounts shown reflect potential liability for financial reporting purposes only and do not represent an admission that any claim is valid. The outcome of these remains uncertain at the end of the reporting period. The maximum exposure to the Council is anticipated to be less than $0.393m.

Unquantified contingent liabilities

Weathertight Homes

The Government’s Weathertight Homes Financial Assistance Package aims to help people get their non-weathertight homes fixed faster, and centres on the Government and local authorities each contributing 25% of agreed repair costs and affected homeowners funding the remaining 50% backed by a Government loan guarantee. A provision for known claims and future claims has been made (refer to Note 25: Provisions for other liabilities (page 179)). The impact and cost of future and unknown claims cannot be measured reliably and therefore the Council and Group have an unquantified contingent liability.

On 11 October 2012 the Supreme Court of New Zealand released a decision clarifying that councils owe a duty of care when approving plans and inspecting construction of a building which was not purely a residential building. The Court held that there was no principled basis for distinguishing between the liability of those who played a role in the construction of residential buildings as against the construction of non-residential buildings. This extends the scope of the potential liability for the Council to include non-residential buildings consented under the Building Act 1991.

Through the process of working with our actuaries, it has been identified that due to a lack of historical and current information relating to non-residential building claims, a reliable estimate of any potential liability cannot be quantified at this time.

Defective product

In April 2013, the Ministry of Education (MOE) initiated High Court proceedings against Carter Holt Harvey (CHH) and others alleging inherent defects in the cladding sheets and cladding systems manufactured and prepared by CHH. Subsequently, in December 2016, CHH commenced third party proceedings against 48 Councils, including Wellington City Council alleging a breach of duty in the processing of building consents, undertaking building inspections and issuing Code Compliance Certificates. The Councils have applied for orders setting aside and striking out CHH’s claims against them. The MOE’s claim against CHH is for 833 school buildings, 27 of which are located within Wellington City. At present there is insufficient information to conclude on potential liability and claim quantum, if any.

There are various other claims that the Council and Group are currently contesting which have not been quantified due to the nature of the issues, the uncertainty of the outcome and/or the extent to which the Council and Group have a responsibility to the claimant. The possibility of any outflow in settlement in these cases is assessed as remote.

Unquantified contingent asset

At as 30 June 2017 the Council has a contingent asset for the insurance recoveries. The insurance claim related to the Civic Administration Building (CAB), which covers both the repair costs and the relocation costs, is still in progress. The Council’s preliminary assessment of earthquake repairs is in the region of $33.0 million. The indemnity value of CAB under Council’s insurance value is $48.7 million. The insurance policy has a deductible of $5.0 million. While an estimate of the repair and relocation costs has been obtained by the Council and provided to the insurer there are still a significant number of uncertainties in the numbers and it is still subject to discussion and agreement with the insurer. This means that the amount that the Council will receive cannot be reliably measured.

For further information please refer to Note 38: Financial impacts of the Kaikoura earthquake (page 216).

Note 35: Jointly controlled assets

The Council has significant interests in the following joint ventures:

Joint Venture
Interest
2017
Interest
2016
Nature of business

Wastewater treatment plant – Porirua City Council
27.60%
27.60%
Owns and operates a wastewater treatment plant and associated trunk sewers and pumping stations that provide services to Wellington City’s northern suburbs.

Spicer Valley Landfill – Porirua City Council
21.50%
21.50%
Owns and operates a sanitary landfill that provides services to Wellington City’s northern suburbs.

The end of the reporting period for the joint ventures is 30 June. Included in the financial statements are the following items that represent the Council’s and Group’s interest in the assets and liabilities of the joint ventures.

Relevant significant accounting policies

For a jointly controlled asset the Council has a liability in respect of its share of joint ventures’ operational deficits and liabilities, and shares in any operational surpluses and assets. The Council’s proportionate interest (ie. 21.5% of the Spicer Valley landfill) in the assets, liabilities, revenue and expenditure is included in the financial statements of the Council and Group on a line-by-line basis.

Share of Net Assets - Porirua City Council Joint Ventures (PCCJV)
2017
$000
2016
$000

ASSETS

Current

Inventory
22
42

Receivables and recoverables
2,045
1,420

Non-current

Property, plant and equipment
23,882
22,249

Share of total assets
25,949
23,711

LIABILITIES

Non-current

Borrowings
4,320
3,929

Provisions for other liabilities
2,340
2,029

Share of total liabilities
6,660
5,958

SHARE OF NET ASSETS
19,289
17,753

The Council’s and Group’s share of the joint ventures’ current year net surplus and revaluation movements (after elimination) included in the financial statements are shown below.

Share of Net Surplus and Revaluation Movements – PCCJV
2017
$000
2016
$000

Operating revenue
1,279
993

Operating expenditure
(1,081)
(967)

Share of net surplus or (deficit)
198
26

Share of current year revaluation movement
1,338
-

The Council’s and Group’s share of the joint ventures’ capital commitments is $Nil (2016: $Nil) and contingent liabilities is $Nil (2016: $Nil).

Note 36: Related party disclosures

Relevant significant accounting policies

Related parties arise where one entity has the ability to affect the financial and operating policies of another through the presence of control or significant influence. Related parties include all members of the Group (controlled entities, associates and joint ventures) and key management personnel.

Key management personnel include the Mayor and Councillors as elected members of the governing body of the Council reporting entity, the Chief Executive and all members of the Executive Leadership Team, being key advisors to the Council and Chief Executive.

Key management personnel

In this section, the Council discloses the remuneration and related party transactions of key management personnel. The remuneration payable to key management personnel of the Group’s other entities is disclosed separately within their individual financial statements and is not included in the following table

Remuneration paid to key management personnel
Council

2017
$
2016
$

Council Members

Short-term benefits
1,492,887
1,464,085

Chief Executive and Executive Leadership Team

Short-term employee benefits
2,490,472
2,335,591

Post employment benefits
41,272
48,109

TOTAL REMUNERATION PAID TO KEY MANAGEMENT PERSONNEL
4,024,631
3,847,785

As at 30 June 2017 key management personnel comprised of 23 individuals: 15 elected members or 15 fulltime equivalents and 8 executive leaders or 8 fulltime equivalents.

For further disclosure of the remuneration payable to the Mayor, Councillors and the Chief Executive refer to Note 37: Remuneration and staffing (page 212).

Material related party transactions – key management personnel

During the year key management personnel, as part of normal local authority relationships, were involved in transactions with the Council such as payment of rates and purchases of rubbish bags or other Council services.

These transactions were on normal commercial terms. Except for these transactions no key management personnel have entered into related party transactions with the Group.

The Mayor and Councillors disclose their personal interests in a register available on the Council website.

There are no commitments from the Council to key management personnel.

Material related party transactions – other organisations

Basin Reserve Trust (BRT)

The Basin Reserve Trust was established on 24 February 2005 to manage, operate and maintain the Basin Reserve. The Trust was jointly created with Cricket Wellington Incorporated (CWI). Wellington City Council and CWI each appoint two of the four trustees. Wellington City Council has significant influence over the Trust through the appointment of trustees, and receives benefits from the complementary activities of the Trust.

The Council considers the Trust does not meet the requirements of PBE IPSAS 7 Investments in Associates to enable continued consolidation on an equity accounted basis. The Trust is still identified as an associate given the Council’s level of influence and financial support but due to the lack of an equity investment the Council believes it is not appropriate to include the Trust in the Group financial statements.

During the year ending 30 June 2017 Council contributed $0.383m (2016: $0.368m) to fund the core operations of the Trust.

NZ Local Government Funding Agency Limited (LGFA)

The LGFA was incorporated on 1 December 2011 and was established to facilitate the efficient, and cost effective, raising of debt funding for local government authorities. There are currently 30 regional, district and city councils throughout New Zealand that own 80% of the issued capital, with the Government holding the remaining 20%. The Council became an establishment shareholder in this Council Controlled Trading Organisation (CCTO) and currently has an investment of $1.866m representing 8.3% of paid-up capital.

Wellington Regional Stadium Trust (WRST)

Wellington Regional Stadium Trust was jointly created with Greater Wellington Regional Council and Wellington City Council has significant influence over the Wellington Regional Stadium Trust through the appointment of trustees and receives benefits from the complementary activities of the Trust.

The Council considers the Trust does not meet the requirements of PBE IPSAS 7 Investments in Associates to enable continued consolidation on an equity accounted basis. The Trust is still identified as an associate given the Council’s level of influence and financial support but due to the lack of an equity investment the Council believes it is not appropriate to include the Trust in the Group financial statements.

Council holds a $15m limited recourse loan to WRST which, is unsecured, with no specified maturity and at no interest. The loan is not repayable until all other debts are extinguished.

On maturity of the initial WRST membership underwrite, the unpaid interest was converted to a $0.395m advance repayable after all other advances made by the Council and Greater Wellington Regional Council.

During the year ending 30 June 2017 Council transacted directly with WRST to the amount of $0.500m in relation to the upgrade of the concourse. The remaining $4.500m of the $5.000m that Council has committed to fund was also recognised in the period. In 2015/16 $0.275m was contributed in support of major events.

Intra group transactions and balances

During the year the Council has entered into transactions with its joint venture partner Porirua City Council. These transactions disclosed are within the normal course of business. The nature of these intra-group transactions and the outstanding balances at the year-end are as follows:

Intra group transactions and balances - Jointly controlled assets
2017
$000
2016
$000

Expenditure incurred by the Council to fund the operation and management of:

Porirua - waste water treatment plant
2,011
2,023

During the year the Council has entered into transactions with its controlled entities. These transactions disclosed are within the normal course of business. The nature of these intra-group transactions and the outstanding balances at the year-end are as follows:

Intra group transactions and balances - Controlled entities
2017
$000
2016
$000

Revenue for services provided by the Council to:

Karori Sanctuary Trust
43
-

Positively Wellington Tourism
-
24

Wellington Cable Car Limited
48
309

Wellington Museums Trust
1,469
1,436

Wellington Regional Economic Development Agency
166
306

Wellington Zoo Trust
1,054
841

2,780
2,916

Grant funding by Council for the operations and management of:

Karori Sanctuary Trust
875
-

Wellington Cable Car Limited
1,000
1,500

Wellington Museums Trust
8,628
8,313

Wellington Regional Economic Development Agency
7,404
7,135

Wellington Zoo Trust
3,125
2,894

21,032
19,842

Expenditure for services provided to the Council by:

Karori Sanctuary Trust
11
-

Wellington Cable Car Limited
37
32

Wellington Museums Trust
313
2,476

Wellington Regional Economic Development Agency
10,044
6,013

Wellington Zoo Trust
1,967
2,749

12,372
11,270

Expenditure for the purchase of assets by the Council from:¹

Karori Sanctuary Trust
10,347
-

Loan repayment to the Council by:²

Karori Sanctuary Trust
10,347
-

Current receivables and recoverables owing to the Council from:

Karori Sanctuary Trust
2
-

Wellington Museums Trust
40
161

Wellington Regional Economic Development Agency
63
6

Wellington Zoo Trust
1,189
213

1,294
380

Current payables owed by the Council to:

Karori Sanctuary Trust
1
-

Wellington Cable Car Limited
5
419

Wellington Museums Trust
251
171

Wellington Regional Economic Development Agency
366
729

Wellington Zoo Trust
1,731
196

2,354
1,515

The Council purchased the Karori Sanctuary Trust visitor centre building on 7 October 2016.

The Karori Sanctuary Trust repaid its loan from the Council on 7 October 2016.

Current receivables, recoverables and payables

The receivable, recoverable and payable balances are non-interest bearing and are to be settled with the relevant entities on normal trading terms and conditions.

Payments to controlled entities

The total payments to controlled entities are $33.404m (2016: $31.112m) when the grant funding of $21.032m (2016: $19.842m) and expenditure for services provided to the Council of $12.372m (2016: $11.270m) are combined.

During the year the Council has entered into several transactions with its associates and jointly controlled entity. These transactions disclosed are within the normal course of business. The nature of these intra-group transactions and the outstanding balances at the year-end are as follows:

Intra group transactions and balances - Associates and jointly controlled entity
2017
$000
2016
$000

Dividend received from:

Wellington International Airport Limited
11,937
12,059

Revenue for services provided by the Council to:

Wellington International Airport Limited
61
-

Wellington Water Limited
517
-

578
-

Expenditure for services provided to the Council from:

Wellington International Airport Limited
1,132
2,179

Wellington Water Limited
26,995
22,348

28,127
24,527

Current receivables and recoverables owing to the Council from:

Wellington Water Limited
187
-

Current payables owed by the Council to:

Wellington Water Limited
4,333
2,078

Current receivables, recoverables and payables:

The receivable, recoverable and payable balances are non-interest bearing and are to be settled with the relevant entities on normal trading terms and conditions.

Note 37: Remuneration and staffing

Mayoral and Councillor remuneration

Relevant significant accounting policies

Remuneration of elected members comprises any money, consideration or benefit received or receivable or otherwise made available, directly or indirectly, during the reporting period but does not include reimbursement of authorised work expenses or the provision of work-related equipment such as cell phones and laptops.

Remuneration

The following people held office as elected members of the Council’s governing body during the reporting period. The total remuneration attributed to the Mayor and Councillors during the year from 1 July 2016 to 30 June 2017 was $1,492,887 (2016: $1,464,085) and is broken down and classified as follows:

Council Member
Monetary
Remuneration
Non-monetary
Remuneration

Salary
$
Allowances
$

$
Total
$

Current Council

Lester, Justin (Mayor)
151,797
120
2,200
154,117

Calvert, Diane
63,652
283
1,555
65,490

Calvi-Freeman, Chris
63,652
283
1,555
65,490

Dawson, Brian
63,652
283
1,555
65,490

Day, Jill
63,652
283
1,555
65,490

Eagle, Paul
105,435
388
2,200
108,023

Foster, Andy
91,756
388
2,200
94,344

Free, Sarah
89,040
388
2,200
91,628

Gilberd, Peter
63,652
283
1,555
65,490

David, Lee
89,040
388
2,200
91,628

Marsh, Simon
90,130
388
2,200
92,718

Pannett, Iona
96,635
388
2,200
99,223

Sparrow, Malcolm
89,040
388
2,200
91,628

Woolf, Simon
89,040
388
2,200
91,628

Young, Nicola
89,040
388
2,200
91,628

Previous Council

Wade-Brown, Celia (Mayor)
49,929
-
645
50,573

Ahipene-Mercer, Ray
26,478
120
645
27,243

Coughlan, Jo
28,104
-
645
28,749

Peck, Mark
25,388
120
645
26,153

Ritchie, Helene
25,388
120
645
26,153

TOTAL REMUNERATION PAID TO COUNCIL MEMBERS
1,454,500
5,387
33,000
1,492,887

Total monetary remuneration
1,459,887

Total non- monetary remuneration
33,000

Salary

The Remuneration Authority is responsible for setting the remuneration levels for elected members (Clause 6, Schedule 7 of the Local Government Act 2002). The Council’s monetary remuneration (salary) detailed above was determined by the Remuneration Authority. As permitted under the Authority’s guidelines the Council has chosen for its elected members to receive an annual salary for the 2016/17 financial year rather than the alternative option of a combination of meeting fee payments and annual salary.

Taxable and non-taxable allowances – broadband services and mobile phones

Councillors are able to choose either of the following two options:

The payment of a communication allowance of $400 per annum (applicable from the start of the new triennium) or the reimbursement of any Council related communication costs, over and above any communication costs they would normally incur, payable on receipt of the appropriate documentation required under the provisions of the Remuneration Authority’s determination. Both the allowance and reimbursement options are non-taxable. Only the payments under the allowance option have been included as remuneration in the schedule above.

The level of all allowances payable to the Council’s elected members has been approved by the Remuneration Authority and is reviewed by the Authority on an annual basis. The Remuneration Authority does permit Council to provide the Mayor with a vehicle for full private use, which would be a taxable benefit; however the current Mayor has declined to take up this option.

Non-monetary

In addition, the Mayor and Councillors receive non-monetary remuneration in relation to car parking space provided. The Councillors have shared office and working space available for use, and access to phones and computers. Professional indemnity and trustee liability insurance is also provided to Councillors against any potential legal litigation which may occur while undertaking Council business.

Community Boards

The Council has two community boards – the Tawa Community Board and the Makara/Ohariu Community Board. Remuneration paid to the elected members of these boards is as follows:

Community Board Member

Salary
$

Allowances
$

Other
$
Total
2017
$

TAWA COMMUNITY BOARD

Current Board

Herbert, Richard (Chair)
15,246
405
-
15,651

Lucas, Margaret (Deputy Chair)
8,932
-
-
8,932

Hansen, Graeme
8,932
-
-
8,932

Langham, Liz
3,108
-
-
3,108

Marshall, Jack (includes Youth Council attendance fee)
8,932
-
510
9,442

Parkinson, Robyn
4,992
-
-
4,992

Day, Jill (see Councillor remuneration above)

Sparrow, Malcolm (see Councillor remuneration above)

Previous Board

Tredger, Robert (Chair)
5,237
180
-
5,417

Sutton, Alistair
2,618
-
-
2,618

MAKARA-OHARIU COMMUNITY BOARD

Current Board

Grace, Christine (Chair)
9,135
585
-
9,720

Apanowicz, John (Deputy Chair)
2,553
-
-
2,553

Liddell, Judy
4,568
-
-
4,568

Renner, Chris
2,553
-
-
2,553

Rudd, Wayne
4,568
-
-
4,568

Todd, Hamish
4,568
-
-
4,568

Previous Board

Burden, Murray
1,339
-
-
1,339

Scotts, Margie
1,339
-
-
1,339

TOTAL REMUNERATION TO COMMUNITY BOARD MEMBERS
88,620
1,170
510
90,300

A technology allowance of $45 per month is available to the chair of both the Tawa and Makara/Ohariu Community Boards. This allowance can be taken as either an allowance or as an actual expense reimbursement. Both options are non-taxable but only payments under the allowance option are included in the above remuneration table.

Chief Executive’s remuneration

The Chief Executive of the Council was appointed in accordance with section 42 of the Local Government Act 2002.

The table below shows the total remuneration of the Chief Executive paid or payable for the year ended 30 June 2017.

Under the terms of his agreement, the Chief Executive of the Council chooses how he wishes to take his remuneration package (salary only or a combination of salary and benefits).

Remuneration of the Chief Executive
Council

2017
$
2016
$

Short-term employee benefits

Kevin Lavery

Salary
413,160
413,160

Motor vehicle park
3,000
3,000

TOTAL REMUNERATION OF THE CHIEF EXECUTIVE
416,160
416,160

Severances

In accordance with Schedule 10, section 33 of the Local Government Act 2002, the Council is required to disclose the number of employees who received severance payments during the year and the amount of each severance payment made.

Severance payments include any consideration (monetary and non-monetary) provided to any employee in respect of the employee’s agreement to the termination of their employment with the Council. Severance payments exclude any final payment of salary, holiday pay and superannuation contributions or other contractual entitlement.

For the year ending 30 June 2017 the Council made severance payments to 15 employees totalling $261,259 (2016: 18 employees, $226,458).

The individual values of each of these severance payments are: $3,232; $5,000; $5,500; $5,617; $6,329; $6,588; $10,537; $10,974, $11,529; $15,469; $15,604; $19,737; $35,000; $40,358; $69,785.

Employee numbers and remuneration bands

The following table identifies the number of full-time employees as at the of the reporting period and the full-time equivalent number of all other part-time, fixed-term and casual employees. The table further identifies the breakdown of remuneration levels of those employees into various bands.

| Council
| 2017 | 2016
Full-time and full-time equivalent employee numbers |  |
Full-time employees (based on a 40 hour week) as at 30 June | 1,037 | 1,059
Full-time equivalents for all other non full-time employees | 265 | 237
Remuneration bands |  |
The number of employees receiving total annual remuneration of less than $60,000 | 1,115 | 1,105
The number of employees receiving total annual remuneration of more than $60,000 in bands of $20,000 |  |
$60,000 - $79,999.99 | 269 | 274
$80,000 - $99,999.99 | 175 | 178
$100,000 - $119,999.99 | 80 | 78
$120,000 - $139,999.99 | 56 | 43
$140,000 - $159,999.99 | 30 | 35
$160,000 - $179,999.99 | 12 | 13
$180,000 - $199,999.99 | 8 |
$180,000 - $219,999.99* |  | 10
$200,000 - $239,999.99* | 6 |
$220,000 - $299,999.99* |  | 7
$240,000 - $299,999.99* | 6 |
$300,000 - $419,999.99* | 5 | 5
TOTAL EMPLOYEES | 1,762 | 1,748

Of the 1,762 (2016: 1,748) individual employees, 725 (2016: 685) work part-time or casually.

Total annual remuneration has been calculated to include any non-financial benefits and other payments in excess of normal remuneration such as the employer Kiwisaver contribution.

*If the number of employees for any band was five or less then we are legally required to combine it with the next highest band. This means that some rows span different bands across the 2 years shown.

The Council has resolved that in addition to legislative requirements to disclose the above bandings it has also included the two lowest remuneration grades.

Grade | Salary Range | 2017 | 2016
B1 | $33,030 - $44,687 |  150 | 152
B2 | $38,858 - $52,573 |  662 | 627

The current living wage rate for Wellington City Council is $18.63. Each year the living wage rate for Wellington City Council is reviewed in accordance with the Consumer Price Index rate for salary and wages.

Note 38: Financial impacts of the Kaikoura earthquake

Background

The devastating 14 November 2016 earthquake, while centred in the upper South Island also impacted on the Wellington region and particularly certain buildings in Wellington City including the Council’s own Civic Administration Building (CAB) in Civic Square.

Assets affected

Buildings

CAB suffered significant damage during the 14 November 2016 earthquake. The building was immediately closed and has remained closed since the event. This building is subject to an insurance claim, which covers both the repair costs and the relocation costs.

Two other buildings: 221 Wakefield Street and St John's Hall in Karori; both of which were already scheduled for demolition, were also damaged during the earthquake and have since been demolished.

Some other buildings suffered minor cosmetic damage and have since either been repaired or are scheduled for repair.

Other assets

All plant and equipment assets within CAB were recovered with no significant write offs.

Some other Council assets suffered minor cosmetic damage and have since either been repaired or are scheduled for repair.

Estimated costs to repair damage and impairment of CAB

In the 2016/17 year a total of $4.143m was paid out of the Council’s insurance reserve fund related to earthquake repairs and relocation costs. This includes some items related to CAB which will be paid out of the fund until the excess level for the claim has been reached.

As a result of the damage suffered to CAB, the building was assessed for impairment as at 30 June 2017 and it was concluded that there should be an impairment loss recognised of $11.446m. CAB is not a revalued asset therefore the loss has been included within Expenditure on operating activities in the Statement of Comprehensive Revenue and Expense.

The impairment of CAB has been calculated by comparing the carrying value of CAB to its recoverable amount. The recoverable amount is based on the building’s value in use using the restoration cost approach which uses an estimate of the expected cost of repairs.

Due to the uncertainty around repair costs estimates the Council has performed the following sensitivity analysis to the estimated building impairment.

Council and Group
2017
$000

+10%
-10%

Effect on Surplus or Deficit

Impairment - repair cost estimate
 (1,111)
 3,257

Contingent Asset – Insurance recoveries

At as 30 June 2017 the Council has a contingent asset for the insurance recoveries. The insurance claim related to CAB, which covers both the repair costs and the relocation costs, is still in progress. The Council’s preliminary assessment of earthquake repairs is in the region of $33.0 million. The indemnity value of CAB under Council’s insurance value is $48.7 million. The insurance policy has a deductible of $5.0 million. While an estimate of the repair and relocation costs has been obtained by the Council and provided to the insurer there are still a significant number of uncertainties in the numbers and it is still subject to discussion and agreement with the insurer. This means that the amount that the Council will receive cannot be reliably measured.

Note 39: Events after the end of the reporting period

There are no events after the end of the reporting period that require adjustment to the financial statements or the notes to the financial statements.

Other Significant Accounting Policies

The following accounting policies are additional to the disclosures and accounting policies that are included within the relevant specific Notes forming part of the financial statements.

Basis of preparation

Measurement base

The measurement basis applied is historical cost, modified by the revaluation of certain assets and liabilities as identified in the accounting policies. The accrual basis of accounting has been used unless otherwise stated.

For the assets and liabilities recorded at fair value, fair value is defined as the amount for which an item could be exchanged, or a liability settled, between knowledgeable and willing parties in an arm’s-length transaction. For investment property, non-current assets classified as held for sale and items of property, plant and equipment which are revalued, the fair value is determined by reference to market value. The market value of a property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction.

Amounts expected to be recovered or settled more than one year after the end of the reporting period are recognised at their present value. The present value of the estimated future cash flows is calculated using applicable inflation factors and a discount rate.

The financial statements are presented in New Zealand dollars, rounded to the nearest thousand ($000), unless otherwise stated.

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

Exchange and non-exchange transactions

Revenue from exchange transactions

Revenue from exchange transactions arises where the Council provides goods or services to another entity or individual and directly receives approximately equal value in a willing arm’s length transaction (primarily in the form of cash in exchange).

Revenue from non-exchange transactions

Revenue from non-exchange transactions arises from transactions that are not exchange transactions. Revenue from non-exchange transaction arises when the Council receives value from another party without giving approximately equal value directly in exchange for the value received.

An inflow of resources from a non-exchange transaction recognised as an asset, is recognised as revenue, except to the extent that a liability is also recognised in respect of the same inflow.

As the Council satisfies a present obligation recognised as a liability in respect of an inflow of resources from a non-exchange transaction recognised as an asset, it reduces the carrying amount of the liability recognised and recognises an amount of revenue equal to that reduction.

Approximately equal value

Approximately equal value is considered to reflect a fair or market value, which is normally considered as an arm’s length commercial transaction between a willing buyer and willing seller. Some goods or services that the Council provides (eg the sale of goods at market rates) are defined as being exchange transactions. Only a few services provided by the Council operate on a full user pays (eg parking), cost recovery or breakeven basis and these are considered to be exchange transactions unless they are provided at less than active and open market prices.

Most of the services that the Council provides, for a fee, are subsidised by rates (eg the cost to swim in a Council pool) and therefore do not constitute an approximately equal exchange. Accordingly most of the Council’s revenue is categorised as non-exchange.

Change of accounting policies

There have been no elected changes in accounting policies during the financial period.

Changes to PBE accounting standards

There have been no new accounting standards issued with mandatory effect for the accounting period. However a number of amendments to standards have been made with effect for periods beginning after 1 January 2016.

PBE IPSAS 1: Presentation of financial statements;

Disclosure initiative (amendments to PBE IPSAS 1) - This amendment giving more weight to materiality and less restriction over the order of notes and accounting policies was early adopted by the Group for the year ending 30 June 2016.

2015 Omnibus Amendments to PBE standards – These annual improvement amendments were also early adopted by the Group for the year ending 30 June 2016.

Standards, amendments and interpretations issued but not yet effective and not early adopted

Standards, amendments and interpretations issued but not yet effective and not early adopted which are relevant to the Group are:

2016 Omnibus amendments to PBE standards – These amendments issued in parts in January 2017 are effective for periods beginning on or after 1 January 2017 or 1 January 2018 but not all parts can be early adopted. A relevant amendment for the Council is to PBE IPSAS 32 Service Concession Arrangements: Grantor. This amendment requires that service concession assets are grouped with similar property, plant and equipment assets for the purpose of subsequent measurement and disclosure under PBE IPSAS 17 Property, Plant and Equipment.

In April 2017, the XRB issued Impairment of Revalued Assets, which now scopes in revalued property, plant and equipment into the impairment accounting standards, which will require Council to assess at each reporting date whether there is any indication that an asset may be impaired.

In January 2017, the XRB issued new standards for interest in other entities (PBE IPSAS 34 - 38). These new standards will replace the existing applicable standards (PBE IPSAS 6 - 8) and are effective for periods beginning on or after 1 January 2019.

In January 2017, the XRB also issued PBE IFRS 9 Financial Instruments to replace PBE IPSAS 29 Financial Instruments: Recognition and Measurement. With an effective date for annual periods beginning on or after 1 January 2021, but with early adoption permitted, the intention is not to adopt at this stage while the effects on Council and the Group are more thoroughly assessed. The main changes under PBE IFRS 9 are:

i.New financial asset classifications requirements for determining whether an asset is measured at fair value or amortised cost.

ii.A new impairment model for financial assets based on expected losses, which may result in the earlier recognition of impairment losses.

iii.Revised hedge accounting requirements to better reflect the management of risks.

Judgements and estimations

The preparation of financial statements using PBE accounting standards requires the use of judgements, estimates and assumptions. Where material, information on the main assumptions is provided in the relevant accounting policy or in the relevant note.

The estimates and assumptions are based on historical experience as well as other factors that are believed to be reasonable under the circumstances. Subsequent actual results may differ from these estimates.

The estimates and assumptions are reviewed on an ongoing basis and adjustments are made where necessary.

Judgements that have a significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year are discussed in the relevant notes. Significant judgements and estimations include landfill post-closure costs, asset revaluations, impairments, certain fair value calculations and provisions.

Goods and Services Tax (GST)

All items in the financial statements are exclusive of GST, with the exception of receivables, recoverables and payables, which are stated as GST inclusive. Where GST is not recoverable as an input tax, it is recognised as part of the related asset or expense.

Budget figures

The Annual Plan budget figures included in these financial statements are for the Council as a separate entity. The Annual Plan figures do not include budget information relating to controlled entities or associates. These figures are those approved by the Council at the beginning of each financial year following a period of consultation with the public as part of the Annual Plan process. These figures do not include any additional expenditure subsequently approved by the Council outside the Annual Plan process. The Annual Plan figures have been prepared in accordance with GAAP and are consistent with the accounting policies adopted by the Council for the preparation of these financial statements.

Comparatives

To ensure consistency with the current year, certain comparative information has been reclassified where appropriate. This has occurred:

where classifications have changed between periods

where the Council has made additional disclosure in the current year, and where a greater degree of disaggregation of prior year amounts and balances is therefore required, and

where there has been a change of accounting policy (there has been no change in the 2016/17 year).

Financial Prudence

The government has introduced the Local Government (Financial Reporting and Prudence) Regulations 2014 which has a series of measures and benchmarks, disclosed in the following pages.

Readers are urged to read the commentary and explanations provided to give context to the information, as it is not always possible to compare Wellington City Council’s results with other councils due to their size, location and provision of services.

During the 2015-25 Long-Term Plan process and with consultation with ratepayers, the Council revised the number of benchmarks and removed measures that were similar in nature and added no value in understanding of the measures to readers.

Annual report disclosure statement for year ending 30 June 2017

What is the purpose of this statement?

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 prudently managing its revenues, expenses, assets, liabilities, and general financial dealings.

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.

Unless prescribed by the regulations the quantified limit for each benchmark is calculated using the financial information from the Council’s 2015-25 LTP.

Rates affordability benchmark

The Council meets the rates affordability benchmark if—

its actual rates revenue 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.

Rates (revenue) affordability

The following graph compares the Council's actual rates increases with a quantified dollar limit on rates increases included in the financial strategy included in the Council's long-term plan. The quantified limit for the first 3 years of the 2015-25 LTP, which encompasses the financial years 2015/16; 2016/17 and 2017/18 is $301.552m. This means rates revenue should remain below this limit for each of these years.

NOTE: the qualified limit was set at $301.552m for the first three years of the 2015-25 Long-Term Plan on the basis that this would equate to an average annual rates increase of 4.5% (after growth) over this three period.

Rates (increases) affordability

The following graph compares the Council's actual rates increases with a quantified limit on rates increases included in the financial strategy in the Council's long-term plan. The quantified limit for 2016/17 is 5.7% before growth and 4.5% after growth.

This 4.5% limit is an average for the first 3 years of the 2015-25 LTP encompassing the following financial years 2015/16; 2016/17 and 2017/18. This means the average rate increase over these years should be 4.5% or less.

The forecasted actual average for these years is 5.4% before growth and 4.2% after growth. Therefore the Council is on track to meet this benchmark overall for the 3 years applicable to this measure.

Debt affordability benchmark

The Council meets the debt affordability benchmark if its actual borrowing is within each quantified limit on borrowing. The Council has seven measures for debt affordability and these are set out below. The suitability of these measures has been assessed by Council’s professional advisers, PwC Wellington.

Net borrowing as a percentage of revenue2

The following graph compares the Council's actual borrowing with a quantified limit on borrowing stated in the financial strategy included in the Council's long-term plan. The quantified limit is net borrowings, comprised of borrowings less cash and cash equivalents, being less than or equal to 175% of revenue. For this measure revenue is defined as total revenue less vested assets and development contribution revenue.

Net interest as a percentage of revenue3

The following graph compares the Council's actual borrowing with a quantified limit on borrowing stated in the financial strategy included in the Council's long-term plan. The quantified limit is net interest, defined as interest expense less interest revenue, being less than or equal to 15% of revenue. For this measure revenue is defined as total revenue less vested assets and development contribution revenue.

Net interest as a percentage of annual rates revenue

The following graph compares the Council's actual borrowing with a quantified limit on borrowing stated in the financial strategy included in the Council's long-term plan. The quantified limit is net interest, defined as interest expense less interest revenue, being less than or equal to 20% of annual rates revenue.

Liquidity (term borrowing + committed loan facilities to existing external net debt)

The following graph compares the Council’s actual borrowing with a quantified limit on borrowing stated in the financial strategy included in the Council’s long-term plan. The quantified limit is liquidity being greater than or equal to 115%. For debt affordability, liquidity is the total of the Council’s existing external net debt. Net borrowings for debt affordability are defined as borrowings less cash and cash equivalents.

NOTE: this measure is was introduced in the 2015/16 financial year.

Balanced budget benchmark

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.

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.

Although for 2013/14 it appears to show that the Council has “not met” the benchmark, included within the depreciation figure, there is a depreciation amount for Moa Point Treatment Plant which is under an arrangement where the assets are managed by a third party who will return the assets to the Council in the same condition that they were at the start of the arrangement. Therefore there will be no capital expenditure undertaken by the Council in relation to those assets. If the depreciation attributable to those assets were excluded from the calculation, then the benchmark measure would show that the Council had “met” the target by achieving 104% for 2013/14.

Debt servicing benchmark

The following graph displays the Council's borrowing costs as a proportion of revenue (excluding development contributions, financial contributions, vested assets, gains on derivative financial instruments, and revaluations of property, plant, or equipment).

Because Statistics New Zealand projects the Council's population will grow as fast as the national population growth rate, it meets the debt servicing benchmark if its borrowing costs equal or are less than 10% of its revenue.

Debt control benchmark

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).

The Council meets the debt control benchmark if its actual net debt equals or is less than its planned net debt.

The calculation of net debt includes derivative (non-cash) financial instruments, predominantly cash flow hedges. The 2015/16 net debt was impacted by the valuation of the Council’s cash flow hedge liabilities being higher than planned as a result of interest rate volatility during the financial year. Actual net borrowings at $396.5m were lower than planned net borrowings of $415.0m and well below other benchmarks.

Operations control benchmark

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.

A number of assumptions are made around the timing of events. Any departure from these assumptions can affect the outcome of this measure. The Council is satisfied that it is prudently managing operational cash flow, with variances in the 2012/13 and 2014/15 years explained by the timing difference in the receipt of revenues compared to budget that lead to the “not met” outcome for this measure.

2 The revenue figure used for this calculation of Net Borrowing as percentage of Revenue and Net Interest as a percentage of Revenue is Total Revenue less Vested Assets and Development Contribution Revenue. The Council has also deducted variable capital grants it receives for social housing from these calculations.

3 The revenue figure used for this calculation of Net Borrowing as percentage of Revenue and Net Interest as a percentage of Revenue is Total Revenue less Vested Assets and Development Contribution Revenue. The Council has also deducted variable capital grants it receives for social housing from these calculations.

Funding Impact Statements

Funding impact statement for 1 July 2016 to 30 June 2017
Whole of Council

2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
152,004
152,200
161,126
160,913
161,708

Targeted rates
118,903
119,927
122,801
123,231
124,308

Subsidies and grants for operating purposes
6,485
7,117
6,684
8,086
8,995

Fees and charges
122,218
113,117
125,481
123,171
130,802

Interest and dividends from investments
11,013
15,288
11,013
11,125
20,632

Local authorities fuel tax, fines, infringement fees, and other receipts
9,255
8,064
9,517
9,178
7,777

Total operating funding (A)
419,878
415,713
436,622
435,704
454,222

Applications of operating funding

Payments to staff and suppliers
280,484
261,895
285,730
291,914
294,995

Finance costs
22,961
23,948
26,498
25,617
23,644

Other operating funding applications
35,850
53,129
44,114
43,007
48,970

Total applications of operating funding (B)
339,295
338,972
356,342
360,538
367,609

Surplus (deficit) of operating funding (A - B)
80,583
76,741
80,280
75,166
86,613

Sources of capital funding

Subsidies and grants for capital expenditure
36,026
27,044
35,376
32,950
29,872

Development and financial contributions
2,000
2,749
2,000
2,000
3,026

Increase (decrease) in debt
41,399
49,604
75,701
71,263
7,668

Gross proceeds from sales of assets
2,650
-
7,600
4,600
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
82,075
79,397
120,677
110,813
40,566

Applications of capital funding

Capital expenditure

- to meet additional demand
2,597
1,076
1,909
1,922
1,168

- to improve the level of service
62,680
42,704
89,000
87,124
48,232

- to replace existing assets
93,169
102,157
81,613
91,736
87,823

Increase (decrease) in reserves
4,212
10,201
28,435
5,197
(10,044)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
162,658
156,138
200,957
185,979
127,179

Surplus (deficit) of capital funding (C - D)
(80,583)
(76,741)
(80,280)
(75,166)
(86,613)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
102,165
98,356
102,250
101,975
101,109

Funding impact statement for 1 July 2016 to 30 June 2017
for Governance, information and engagement

1.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
16,587
16,587
17,417
17,528
17,528

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
508
750
889
889
1,005

Internal charges and overheads recovered
-
605
-
-
605

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
17,095
17,942
18,306
18,417
19,138

Applications of operating funding

Payments to staff and suppliers
9,713
9,353
10,758
11,170
10,471

Finance costs
16
15
18
16
13

Internal charges and overheads applied
7,308
7,140
7,481
7,179
6,922

Other operating funding applications
10
12
10
10
29

Total applications of operating funding (B)
17,047
16,520
18,267
18,375
17,435

Surplus (deficit) of operating funding (A - B)
48
1,422
39
42
1,703

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(48)
(58)
77
74
(46)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(48)
(58)
77
74
(46)

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
-
-

- to replace existing assets
-
-
116
116
-

Increase (decrease) in reserves
-
1,364
-
-
1,657

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
-
1,364
116
116
1,657

Surplus (deficit) of capital funding (C - D)
(48)
(1,422)
(39)
(42)
(1,703)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
48
58
39
42
46

Funding impact statement for 1 July 2016 to 30 June 2017
for Māori and Mana Whenua partnerships

1.2
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
281
281
288
295
295

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
-
-
-
-
(1)

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
281
281
288
295
294

Applications of operating funding

Payments to staff and suppliers
267
255
274
267
256

Finance costs
1
1
1
1
1

Internal charges and overheads applied
11
8
11
15
8

Other operating funding applications
-
8
-
10
13

Total applications of operating funding (B)
279
272
286
293
278

Surplus (deficit) of operating funding (A - B)
2
9
2
2
16

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(2)
(2)
(2)
(2)
(2)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(2)
(2)
(2)
(2)
(2)

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
-
-

- to replace existing assets
-
-
-
-
-

Increase (decrease) in reserves
-
7
-
-
14

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
-
7
-
-
14

Surplus (deficit) of capital funding (C - D)
(2)
(9)
(2)
(2)
(16)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
2
2
2
2
2

Funding impact statement for 1 July 2016 to 30 June 2017
for Gardens, beaches and green open spaces

2.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
30,360
30,360
31,414
33,822
33,822

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
699
669
731
636
837

Fees and charges
1,437
1,899
1,465
1,465
3,480

Internal charges and overheads recovered
5,111
5,146
5,203
5,203
4,584

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-

-

Total operating funding (A)
37,607
38,074
38,813
41,126
42,723

Applications of operating funding

Payments to staff and suppliers
19,285
18,839
20,088
19,718
20,497

Finance costs
1,993
1,794
2,250
1,984
2,480

Internal charges and overheads applied
12,281
12,067
12,438
12,410
11,999

Other operating funding applications
120
121
121
100
599

Total applications of operating funding (B)
33,679
32,821
34,897
34,212
35,575

Surplus (deficit) of operating funding (A - B)
3,928
5,253
3,916
6,914
7,149

Sources of capital funding

Subsidies and grants for capital expenditure
650
568
-
-
289

Development and financial contributions
183
363
183
183
376

Increase (decrease) in debt
(2,129)
(5,089)
(1,432)
(3,426)
(861)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(1,296)
(4,158)
(1,249)
(3,243)
(196)

Applications of capital funding

Capital expenditure

- to meet additional demand
70
-
82
-
-

- to improve the level of service
1,121
1,137
878
1,959
605

- to replace existing assets
1,441
1,639
1,707
1,712
5,497

Increase (decrease) in reserves
-
(1,681)
-
-
851

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
2,632
1,095
2,667
3,671
6,953

Surplus (deficit) of capital funding (C - D)
(3,928)
(5,253)
(3,916)
(6,914)
(7,149)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
3,928
6,934
3,916
7,264
6,648

Funding impact statement for 1 July 2016 to 30 June 2017
for Waste reduction and energy conservation

2.2
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
764
764
729
778
778

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
29

Fees and charges
12,876
14,387
13,353
13,320
18,751

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
4
-
-
1

Total operating funding (A)
13,640
15,155
14,082
14,098
19,559

Applications of operating funding

Payments to staff and suppliers
12,126
12,368
12,552
12,492
12,762

Finance costs
877
915
774
751
943

Internal charges and overheads applied
56
(36)
42
78
108

Other operating funding applications
255
93
255
383
353

Total applications of operating funding (B)
13,314
13,340
13,623
13,704
14,166

Surplus (deficit) of operating funding (A - B)
326
1,815
459
394
5,393

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
912
402
773
344
267

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
912
402
773
344
267

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
65
65

- to replace existing assets
1,238
723
1,232
673
541

Increase (decrease) in reserves
-
1,494
-
-
5,054

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,238
2,217
1,232
738
5,660

Surplus (deficit) of capital funding (C - D)
(326)
(1,815)
(459)
(394)
(5,393)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
326
321
459
394
339

Funding impact statement for 1 July 2016 to 30 June 2017
for Water

2.3
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates
38,291
38,291
39,932
40,257
40,257

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
35
68
35
35
1,606

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
38,326
38,359
39,967
40,292
41,863

Applications of operating funding

Payments to staff and suppliers
22,501
22,517
23,971
23,369
23,835

Finance costs
2,100
2,052
2,310
2,104
1,847

Internal charges and overheads applied
1,443
1,618
1,386
1,952
1,899

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
26,044
26,187
27,667
27,425
27,581

Surplus (deficit) of operating funding (A - B)
12,282
12,172
12,300
12,867
14,282

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
671
591
671
671
792

Increase (decrease) in debt
3,999
2,091
1,964
1,377
519

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
4,670
2,682
2,635
2,048
1,311

Applications of capital funding

Capital expenditure

- to meet additional demand
563
570
538
538
544

- to improve the level of service
3,038
2,356
4,206
3,375
4,370

- to replace existing assets
13,351
12,000
10,191
11,002
9,515

Increase (decrease) in reserves
-
(72)
-
-
1,164

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
16,952
14,854
14,935
14,915
15,593

Surplus (deficit) of capital funding (C - D)
(12,282)
(12,172)
(12,300)
(12,867)
(14,282)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
12,282
12,244
12,300
12,867
13,118

Funding impact statement for 1 July 2016 to 30 June 2017
for Wastewater

2.4
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates
37,425
37,425
38,694
39,112
39,112

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
1,233
1,204
1,256
1,244
985

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
38,658
38,629
39,950
40,356
40,097

Applications of operating funding

Payments to staff and suppliers
21,117
18,676
22,158
20,623
20,333

Finance costs
3,741
3,635
4,033
3,833
3,563

Internal charges and overheads applied
3,525
4,585
3,473
5,254
4,949

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
28,383
26,896
29,664
29,710
28,845

Surplus (deficit) of operating funding (A - B)
10,275
11,733
10,286
10,646
11,252

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
549
688
549
549
880

Increase (decrease) in debt
(343)
(250)
491
40
(566)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
206
438
1,040
589
314

Applications of capital funding

Capital expenditure

- to meet additional demand
223
221
230
228
256

- to improve the level of service
-
-
316
316
303

- to replace existing assets
10,258
10,634
10,780
10,691
10,113

Increase (decrease) in reserves
-
1,316
-
-
894

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
10,481
12,171
11,326
11,235
11,566

Surplus (deficit) of capital funding (C - D)
(10,275)
(11,733)
(10,286)
(10,646)
(11,252)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
13,428
13,570
13,439
13,887
13,599

Funding impact statement for 1 July 2016 to 30 June 2017
for Stormwater

2.5
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates
17,442
17,442
17,902
18,012
18,012

Subsidies and grants for operating purposes
136
69
142
125
99

Fees and charges
10
26
10
10
665

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
17,588
17,537
18,054
18,147
18,776

Applications of operating funding

Payments to staff and suppliers
7,131
6,603
7,303
7,018
6,487

Finance costs
2,904
2,712
3,268
2,890
2,453

Internal charges and overheads applied
1,501
1,487
1,452
2,000
1,894

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
11,536
10,802
12,023
11,908
10,834

Surplus (deficit) of operating funding (A - B)
6,052
6,735
6,031
6,239
7,942

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
58
68
58
58
43

Increase (decrease) in debt
(1,654)
(1,335)
931
723
985

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(1,596)
(1,267)
989
781
1,028

Applications of capital funding

Capital expenditure

- to meet additional demand
161
202
237
237
233

- to improve the level of service
1,501
1,716
4,550
4,550
4,235

- to replace existing assets
2,794
2,949
2,233
2,233
2,749

Increase (decrease) in reserves
-
601
-
-
1,753

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
4,456
5,468
7,020
7,020
8,970

Surplus (deficit) of capital funding (C - D)
(6,052)
(6,735)
(6,031)
(6,239)
(7,942)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
6,052
6,134
6,031
6,239
6,189

Funding impact statement for 1 July 2016 to 30 June 2017
for Conservation attractions

2.6
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
6,459
6,459
6,625
6,989
6,989

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 (A)
6,459
6,459
6,625
6,989
6,989

Applications of operating funding

Payments to staff and suppliers
214
119
219
216
236

Finance costs
748
694
804
787
645

Internal charges and overheads applied
286
284
288
275
300

Other operating funding applications
3,689
3,769
3,759
3,919
3,919

Total applications of operating funding (B)
4,937
4,866
5,070
5,197
5,100

Surplus (deficit) of operating funding (A - B)
1,522
1,593
1,555
1,792
1,889

Sources of capital funding

Subsidies and grants for capital expenditure
126
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(332)
1,207
(738)
(975)
301

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(206)
1,207
(738)
(975)
301

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
516
1,859
-
-
901

- to replace existing assets
800
866
817
817
1,055

Increase (decrease) in reserves
-
75
-
-
234

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,316
2,800
817
817
2,190

Surplus (deficit) of capital funding (C - D)
(1,522)
(1,593)
(1,555)
(1,792)
(1,889)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
1,522
1,518
1,555
1,792
1,655

Funding impact statement for 1 July 2016 to 30 June 2017
for City promotions and business support

3.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
4,610
4,610
5,104
4,377
4,377

Targeted rates
15,226
15,226
15,172
14,713
14,713

Subsidies and grants for operating purposes
-
-
-
1,051
957

Fees and charges
14,365
762
14,638
14,369
348

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
34,201
20,598
34,914
34,510
20,395

Applications of operating funding

Payments to staff and suppliers
21,483
7,357
21,861
21,216
8,786

Finance costs
736
682
791
1,565
1,378

Internal charges and overheads applied
939
603
949
754
850

Other operating funding applications
12,248
14,122
17,048
16,763
16,734

Total applications of operating funding (B)
35,406
22,764
40,649
40,298
27,748

Surplus (deficit) of operating funding (A - B)
(1,205)
(2,166)
(5,735)
(5,788)
(7,353)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
1,619

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
3,420
(87)
7,477
12,799
5,116

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
3,420
(87)
7,477
12,799
6,735

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
5,252
-

- to replace existing assets
2,215
1,669
1,742
1,759
886

Increase (decrease) in reserves
-
(3,922)
-
-
(1,504)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
2,215
(2,253)
1,742
7,011
(618)

Surplus (deficit) of capital funding (C - D)
1,205
2,166
5,735
5,788
7,353

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
1,795
1,756
1,840
1,787
1,726

Funding impact statement for 1 July 2016 to 30 June 2017
for Arts and culture activities

4.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
13,008
13,008
13,325
14,090
14,090

Targeted rates
5,148
5,148
5,335
5,540
5,540

Subsidies and grants for operating purposes
410
171
417
494
148

Fees and charges
577
704
588
588
599

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
19,143
19,031
19,665
20,712
20,377

Applications of operating funding

Payments to staff and suppliers
4,072
3,993
4,162
4,723
4,721

Finance costs
276
170
289
368
149

Internal charges and overheads applied
1,024
980
1,057
1,180
1,145

Other operating funding applications
13,101
13,211
13,440
13,607
13,854

Total applications of operating funding (B)
18,473
18,354
18,948
19,878
19,869

Surplus (deficit) of operating funding (A - B)
670
677
717
834
508

Sources of capital funding

Subsidies and grants for capital expenditure
1,914
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(363)
1,195
(690)
8,440
531

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
1,551
1,195
(690)
8,440
531

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
2,119
1,927
25
9,272
1,244

- to replace existing assets
102
41
2
2
42

Increase (decrease) in reserves
-
(96)
-
-
(247)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
2,221
1,872
27
9,274
1,039

Surplus (deficit) of capital funding (C - D)
(670)
(677)
(717)
(834)
(508)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
670
773
717
834
755

Funding impact statement for 1 July 2016 to 30 June 2017
for Recreation promotion and support

5.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
25,083
25,083
25,575
25,994
25,994

Targeted rates
1,088
1,088
1,214
1,107
1,107

Subsidies and grants for operating purposes
200
332
204
204
381

Fees and charges
11,547
10,971
11,847
11,599
11,450

Internal charges and overheads recovered
1,116
1,088
1,136
1,136
923

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
39,034
38,562
39,976
40,040
39,855

Applications of operating funding

Payments to staff and suppliers
17,953
18,459
18,456
18,870
18,896

Finance costs
3,615
3,310
3,795
3,795
2,947

Internal charges and overheads applied
9,214
8,966
9,293
9,058
8,956

Other operating funding applications
663
589
678
678
701

Total applications of operating funding (B)
31,445
31,324
32,222
32,401
31,500

Surplus (deficit) of operating funding (A - B)
7,589
7,238
7,754
7,639
8,355

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
1,006

Development and financial contributions
-
203
-
-
-

Increase (decrease) in debt
736
(2,027)
(340)
(822)
(213)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
736
(1,824)
(340)
(822)
793

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
1,476
2,123
1,651
2,541
4,648

- to replace existing assets
6,849
3,681
5,763
4,276
4,061

Increase (decrease) in reserves
-
(390)
-
-
439

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
8,325
5,414
7,414
6,817
9,148

Surplus (deficit) of capital funding (C - D)
(7,589)
(7,238)
(7,754)
(7,639)
(8,355)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
7,589
7,628
7,754
7,639
7,916

Funding impact statement for 1 July 2016 to 30 June 2017
for Community support

5.2
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
22,792
22,792
24,366
24,737
24,737

Targeted rates
4,250
4,250
4,519
4,457
4,457

Subsidies and grants for operating purposes
969
1,240
934
934
1,122

Fees and charges
22,869
23,112
23,557
19,432
23,478

Internal charges and overheads recovered
1,171
1,231
820
1,125
722

Local authorities fuel tax, fines, infringement fees, and other receipts
586
498
551
547
534

Total operating funding (A)
52,637
53,123
54,747
51,232
55,050

Applications of operating funding

Payments to staff and suppliers
26,470
26,185
26,304
26,236
26,269

Finance costs
(1,632)
(2,468)
(1,561)
(1,600)
(2,136)

Internal charges and overheads applied
11,542
11,701
11,968
12,967
13,323

Other operating funding applications
4,084
3,911
4,376
4,632
4,761

Total applications of operating funding (B)
40,464
39,329
41,087
42,235
42,217

Surplus (deficit) of operating funding (A - B)
12,173
13,794
13,660
8,997
12,833

Sources of capital funding

Subsidies and grants for capital expenditure
20,668
11,254
17,777
18,082
12,219

Development and financial contributions
-
38
-
-
129

Increase (decrease) in debt
(3,771)
3,239
18,931
24,647
(1,599)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
16,897
14,531
36,708
42,729
10,749

Applications of capital funding

Capital expenditure

- to meet additional demand
-
83
822
919
135

- to improve the level of service
26,139
12,142
25,050
25,706
13,463

- to replace existing assets
8,763
7,427
6,719
7,019
5,158

Increase (decrease) in reserves
(5,832)
8,673
17,777
18,082
4,826

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
29,070
28,325
50,368
51,726
23,582

Surplus (deficit) of capital funding (C - D)
(12,173)
(13,794)
(13,660)
(8,997)
(12,833)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
15,318
13,646
16,409
15,504
14,514

Funding impact statement for 1 July 2016 to 30 June 2017
for Public health and safety

5.3
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
9,540
9,540
9,674
10,099
10,099

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
25
17
25
-
11

Fees and charges
3,993
4,053
4,109
4,082
6,414

Internal charges and overheads recovered
664
692
676
676
604

Local authorities fuel tax, fines, infringement fees, and other receipts
39
30
39
39
28

Total operating funding (A)
14,261
14,332
14,523
14,896
17,156

Applications of operating funding

Payments to staff and suppliers
9,012
8,971
9,098
9,011
12,053

Finance costs
91
131
100
93
115

Internal charges and overheads applied
4,386
4,529
4,479
4,988
5,400

Other operating funding applications
129
45
130
109
178

Total applications of operating funding (B)
13,618
13,676
13,807
14,201
17,746

Surplus (deficit) of operating funding (A - B)
643
656
716
695
(590)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
6
-
-
-

Increase (decrease) in debt
1,028
(255)
964
1,315
1,709

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
1,028
(249)
964
1,315
1,709

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
110
78
489
739
25

- to replace existing assets
1,561
736
1,191
1,271
2,696

Increase (decrease) in reserves
-
(407)
-
-
(1,602)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,671
407
1,680
2,010
1,119

Surplus (deficit) of capital funding (C - D)
(643)
(656)
(716)
(695)
590

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
643
1,063
716
695
1,012

Funding impact statement for 1 July 2016 to 30 June 2017
for Urban planning, heritage and public spaces development

6.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
6,896
6,896
7,343
7,622
7,622

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
20
323
20
20
333

Internal charges and overheads recovered
-
384
-
408
546

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
6,916
7,603
7,363
8,050
8,501

Applications of operating funding

Payments to staff and suppliers
2,857
4,416
2,639
4,524
4,409

Finance costs
15
13
17
14
13

Internal charges and overheads applied
3,233
2,192
3,396
2,201
1,865

Other operating funding applications
800
842
1,300
1,300
1,664

Total applications of operating funding (B)
6,905
7,463
7,352
8,039
7,951

Surplus (deficit) of operating funding (A - B)
11
140
11
11
550

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
7,607
5,370
6,949
7,942
5,352

Gross proceeds from sales of assets
650
-
2,600
2,600
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
8,257
5,370
9,549
10,542
5,352

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
5,702
4,630
8,581
9,349
3,443

- to replace existing assets
2,566
768
979
1,204
1,950

Increase (decrease) in reserves
-
112
-
-
509

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
8,268
5,510
9,560
10,553
5,902

Surplus (deficit) of capital funding (C - D)
(11)
(140)
(11)
(11)
(550)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
11
28
11
11
41

Funding impact statement for 1 July 2016 to 30 June 2017
for Building and development control

6.2
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
9,449
9,449
9,538
8,685
8,685

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
12,027
11,739
12,159
11,942
13,280

Internal charges and overheads recovered
224
-
228
342
-

Local authorities fuel tax, fines, infringement fees, and other receipts
24
65
24
24
13

Total operating funding (A)
21,724
21,253
21,949
20,993
21,978

Applications of operating funding

Payments to staff and suppliers
12,655
12,508
12,700
12,481
13,546

Finance costs
3
3
3
3
1

Internal charges and overheads applied
8,761
7,979
8,939
8,224
8,342

Other operating funding applications
135
57
136
135
26

Total applications of operating funding (B)
21,554
20,547
21,778
20,843
21,915

Surplus (deficit) of operating funding (A - B)
170
706
171
150
63

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
5,770
2,070
6,331
2,891
4,244

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
5,770
2,070
6,331
2,891
4,244

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
5,940
2,224
6,502
3,041
4,391

- to replace existing assets
-
-
-
-
-

Increase (decrease) in reserves
-
552
-
-
(84)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
5,940
2,776
6,502
3,041
4,307

Surplus (deficit) of capital funding (C - D)
(170)
(706)
(171)
(150)
(63)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
170
154
171
150
147

Funding impact statement for 1 July 2016 to 30 June 2017
for Transport

7.1
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
32,648
32,648
33,495
35,761
35,761

Targeted rates
33
-
33
33
33

Subsidies and grants for operating purposes
4,046
4,076
4,231
4,442
4,668

Fees and charges
2,042
2,520
2,080
1,960
5,036

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
1

Total operating funding (A)
38,769
39,244
39,839
42,196
45,499

Applications of operating funding

Payments to staff and suppliers
12,189
11,659
11,919
13,409
12,652

Finance costs
5,169
5,055
5,771
5,288
4,606

Internal charges and overheads applied
6,093
5,085
6,260
7,106
6,248

Other operating funding applications
515
1,859
2,760
1,260
1,236

Total applications of operating funding (B)
23,966
23,658
26,710
27,063
24,742

Surplus (deficit) of operating funding (A - B)
14,803
15,586
13,129
15,133
20,757

Sources of capital funding

Subsidies and grants for capital expenditure
12,668
12,765
17,599
14,868
13,869

Development and financial contributions
539
792
539
539
806

Increase (decrease) in debt
10,563
6,507
9,557
10,017
3,363

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
23,770
20,064
27,695
25,424
18,038

Applications of capital funding

Capital expenditure

- to meet additional demand
1,580
-
-
-
-

- to improve the level of service
11,199
11,077
19,952
15,602
8,650

- to replace existing assets
25,794
24,114
20,872
24,955
25,187

Increase (decrease) in reserves
-
459
-
-
4,958

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
38,573
35,650
40,824
40,557
38,795

Surplus (deficit) of capital funding (C - D)
(14,803)
(15,586)
(13,129)
(15,133)
(20,757)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
22,646
22,970
23,012
24,453
25,119

Funding impact statement for 1 July 2016 to 30 June 2017
for Parking

7.2
2015/16
LTP
$000
2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
(14,051)
(14,051)
(15,056)
(14,370)
(14,370)

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
19,899
20,568
20,561
20,777
20,778

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
7,556
5,875
7,853
7,518
6,080

Total operating funding (A)
13,404
12,392
13,358
13,925
12,488

Applications of operating funding

Payments to staff and suppliers
10,346
9,017
10,589
10,765
9,759

Finance costs
479
347
581
584
334

Internal charges and overheads applied
1,987
1,949
2,003
2,523
2,439

Other operating funding applications
1
281
1
1
(121)

Total applications of operating funding (B)
12,813
11,594
13,174
13,873
12,411

Surplus (deficit) of operating funding (A - B)
591
798
184
52
77

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
858
675
312
444
350

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
858
675
312
444
350

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
1,449
1,342
496
496
481

- to replace existing assets
-
-
-
-
-

Increase (decrease) in reserves
-
131
-
-
(54)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,449
1,473
496
496
427

Surplus (deficit) of capital funding (C - D)
(591)
(798)
(184)
(52)
(77)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
591
667
184
52
131

Capital expenditure by strategy

2015/16
Actual
$000
2016/17
LTP
$000
2016/17
AP
$000
2016/17
Actual
$000

Governance:

- to meet additional demand
-
-
-
-

- to improve the level of service
-
-
-
-

- to replace existing assets
-
-
116
-

Governance Total
-
-
116
-

Environment:

- to meet additional demand
993
1,596
1,003
1,033

- to improve the level of service
7,068
12,549
10,265
10,479

- to replace existing assets
28,811
32,834
27,128
29,470

Environment Total
36,872
46,979
38,396
40,982

Economic Development:

- to meet additional demand
-
-
-
-

- to improve the level of service
-
-
5,252
-

- to replace existing assets
1,669
1,353
1,759
886

Economic Development Total
1,669
1,353
7,011
886

Cultural Wellbeing

- to meet additional demand
-
-
-
-

- to improve the level of service
1,927
10,024
9,272
1,244

- to replace existing assets
41
11
2
42

Cultural Wellbeing Total
1,968
10,035
9,274
1,286

Social and Recreation:

- to meet additional demand
83
1,270
919
135

- to improve the level of service
14,343
11,390
28,986
18,136

- to replace existing assets
11,844
15,970
12,566
11,915

Social and Recreation Total
26,270
28,630
42,471
30,186

Urban Development:

- to meet additional demand
-
-
-
-

- to improve the level of service
6,854
29,532
12,390
7,834

- to replace existing assets
768
1,687
1,204
1,950

Urban Development Total
7,622
31,219
13,594
9,784

Transport:

- to meet additional demand
-
5,260
-
-

- to improve the level of service
12,419
24,686
16,098
9,131

- to replace existing assets
24,114
23,380
24,955
25,187

Transport Total
36,533
53,326
41,053
34,318

Council Organisation:

- to meet additional demand
-
-
-
-

- to improve the level of service
93
16,113
4,861
1,408

- to replace existing assets
34,910
18,641
24,006
18,373

Council Organisation Total
35,003
34,754
28,867
19,781

Total Council:

- to meet additional demand
1,076
8,126
1,922
1,168

- to improve the level of service
42,704
104,294
87,124
48,232

- to replace existing assets
102,157
93,876
91,736
87,823

TOTAL COUNCIL
145,937
206,296
180,782
137,223

Appendices

Glossary

Annual Plan. Our Annual Plan is our budget, showing the expected cost of running the city for the financial year, and how the costs will be funded. An Annual Plan is not prepared in years when a Long-term Plan is prepared (see Long-term Plan).

Capital expenditure. Capital expenditure, also referred to as CAPEX, is the money that we spend to buy, maintain, or improve our fixed assets, such as buildings, vehicles, equipment, or land.

Cash and cash equivalents. This includes cash as well as deposits which mature in 3 months or less.

Council-Controlled Organisations (CCOs). These organisations were set up to independently manage Council facilities, or to deliver significant services and undertake developments on behalf of the Wellington community.

Current asset. This is an asset that can be readily converted to cash or will be used to repay a liability within 12 months of balance date.

Current liability. This is a liability that is required to be discharged within 12 months of balance date.

Depreciation (amortisation). This is an expense charged each year to reflect the estimated cost of using our assets over their lives. Depreciation relates to physical assets such as buildings and amortisation relates to intangible assets such as software.

External funding for capital expenditure. This is funding recorded as revenue, but used to fund capital expenditure projects.

Fair value. Fair value essentially reflects the market value of assets or liabilities.

Investment properties. These are properties primarily held by the Council to earn rental revenue.

Liquidity/funding risk. This is the risk that the Council will not have access to the required funds to meet its present obligations.

Long-term Plan. This 10-year plan, revised every 3 years, shows the expected cost of running the city for the following 10 years, and how the costs will be funded.

Net borrowings. These are total borrowings, less any funds held on deposit.

Net surplus/deficit. This is the difference between total revenue and total expenses. It includes both operating revenue and operating expenditure, as well as other non-funded items of revenue and expenditure such as capital funding, vested asset revenue and fair value movements.

Operational expenditure. This is expenditure that is not capital expenditure (see capital expenditure).

% (percentage) variance. The difference between the actual performance measure result and the target result is reported as the result’s percentage above or below target. For example, the difference between an actual performance result of 20 percent and the target result of 40 percent is -50 percent. This is because the result is 50 percent less than the target. While the numerical difference between the two figures is 20 percentage points, we do not report percentage point results unless otherwise stated.

Prudential limits. These are limits applied to the level of borrowings to ensure we are managing the Council’s assets and liabilities prudently. These limits are outlined in the Investment and Liability Management Policy in the Long-term Plan.

Ring-fenced funds. These are funds that can only be used for a specific purpose.

Total comprehensive revenue and expense. This is the net surplus/deficit adjusted for fair value movements of some of our assets including property, plant and equipment, and financial instruments such as cash flow hedges. These movements are non-cash in nature and reflect the changing fair value of assets owned by the Council.

Underlying funding surplus/deficit. The underlying surplus is the reported net surplus, less any government funding for capital projects, plus items not required to be funded by ratepayers this year and other adjustements that do not affect the rating requirements of the Council.

Unfunded depreciation. This is the amount of depreciation not funded by rates. This relates mainly to roading assets funded by NZTA and waste water treatment assets where the operator has responsibility for asset renewal.

Vested assets. These are assets created by others and passed into Council ownership (for example, roads built by a developer as part of a subdivision).