Introduction

Mayor’s introduction

E koke whakamua
ana a Pōneke

Koromatua Justin Lester

Mai rā anō tētahi wā nui te mahi me te pārekareka hoki mō Pōneke. Ko tā mātou mahi i te tau kua hori nei, ko te whakatakoto tūāpapa kia puta he taone kaha ake, pakari ake hoki. Nā runga i te mahi e mahitia nei e mātou i nāianei, e āhei ana mātou ki te whakaū i tō tātou tipu, tō tātou rekareka me te āhua o tā tātou noho pai, i a mātou e tauaro nei ki ngā matataki kei mua i te aroaro. Me whakarite tātou mō te tipu haere o te taupori, mō te putanga o ngā tauira huarere horehore nā runga i te huri o te āhuarangi, me te tūpono mai anō o te rūwhenua.

Me pupuri tātou i te āhuatanga ahurei o tō tātou taone. I tēnei tau, whakahirahira rawa tā mātou huri kia noho te reo Māori hei wāhanga o ā mātou rā, mā te whai tohutohu mai i te tūmatanui mō te kaupapahere reo Māori hukihuki. Noho pū anō te ahurea Māori ki roto i tō mātou hōtaka toi, ka haere tonu hei wāhanga nui o tērā e āhei ai tō tātou taone auaha ki te whakarato. Hei te Hui-tanguru e tū mai nei, ka tū a Pōneke hei kaihautū i Te Matatini ki te Ao, te ahurei ā-motu, tērā ka uru ko ngā rōpū kapa haka kua eke ki te taumata, ā. ka huihui mō te whakataetae te take. E tūmanakohia ana, e 50,000 te hunga ka tae ki tēnei kaupapa, neke atu rānei.

He wāhanga nui nō te tū motuhake o Pōneke tō tātou taiao taketake, kei te mahi mātou i ētahi momo kaupapa kōkiri hei whakaiti ake i ō tātou tukunga para, me tā mātou haere tonu i runga i ngā mātāpono kia noho konihi-kore a Pōneke.

He tau kaha te whakawhitiwhiti kōrero ki te hapori whānui. I whakaputaina e mātou ā mātou tauira e whā e pā ana ki te āhuatanga waka ki Pōneke i ngā rā ki mua, me tā mātou tono kōrero whakahoki, tae atu ki te whiwhi kōrero pono me te whai kiko hoki mai i te hunga taiohi e tipu tere nei.

I kaha tonu mātou ki te whakapiki ake i tō mātou kahapupuri ki te kukume manuhiri ki te taone matua mō te pakihi me te ahurea, me te whai i te maha o ngā kaupapa tākaro, kaupapa ōhanga, ā-ahurea hoki, me te tata ki te 500 hui wānanga matua. I tipu te tatauranga o ngā manuhiri o te motu, o tāwāhi hoki mō te wā tuatahi, i roto i te 12 marama, i neke atu te whakapaunga moni a ngā manuhiri ki Pōneke mā te $2.5 piriona tāra. Kei te kaha tonu mātou ki te tautoko i te tini o ngā kaupapa-kōkiri pāpori hei āwhina i te hunga e tino pōhara ana, me te tautoko i ngā hapori kia hono tahi ai, tae noa ki te taone pū.

Kei te pūtake o ngā mea katoa, ko tō mātou whai kia manahau ake a Pōneke. I te whakapakari mātou i te taone mai i ngā hihi tumeke i ngā rā ki mua. Ka whai wāhi ngā whakawhanaketanga i te ākau kia whakaiti ake ai i tōna whakaraerae ki ngā putanga rū, me te piki o ngā kōeke moana. Kei te haere tonu ā mātou whiriwhiringa me ngā rangatira o ngā whare o te taone e noho mōrearea ana kia whakatikatikaina ō rātou mata parau me ō rātou pātaratara. I kauneke anōtia e mātou ngā whakaritenga kia tū manahau ai te ratonga wai.

He wā hurihanga tēnei mō Pōneke, ā, ko te tikanga, tērā tonu pea ka pā he raruraru ki ngā tāngata o Pōneke. Kia manawanui mai rā. Kua whakapau werawera mātou ki te whakarite kia noho tonu ngā rēti ki tērā e taea ai te utu. He Kaunihera pakari ā-pūtea mātou, e whakahaere ana i tētahi hōtaka hao nui. Otirā, kei te noho pai te taha pūtea, mā tō tautoko ka āhei rawa mātou ki te whakarato hua, painga anō hoki.

Nā Justin Lester

It’s full steam ahead
for Wellington

Mayor Justin Lester

It’s hard to remember a busier and more exciting time for Wellington. We’ve spent the past year laying down the foundations for a better, stronger version of our city. The work we’re doing now means we can maintain our growth, attractiveness and liveability, while facing the challenges ahead. We need to be prepared for population growth, more erratic weather patterns due to climate change, and the likelihood of another earthquake.

We also need to preserve our city’s unique character. This year, we took an important step towards making te reo Māori a part of our everyday lives by consulting the public on a draft te reo Māori policy. Māori culture has also been central to our arts programme and will continue to be an integral part of what our creative city has to offer. Next February, Wellington will host Te Matatini ki te Ao, the national kapa haka festival in which top performers from all over New Zealand come together to compete. The event is expected to attract at least 50,000 people.

Our natural environment is a big part of what makes Wellington special. We’ve been working on a range of initiatives to reduce our emissions and have continued with our efforts to make Wellington predator-free.

It was a year of extensive public engagement. We released four scenarios for Wellington’s transport future and asked for your feedback, consulted widely on our 10-year plan for the city, and received honest and useful feedback from an increasing number of young people.

We continued to improve our capacity to draw visitors to the capital for business and culture, with a range of sports, economic and cultural events taking place, and nearly 500 major conferences. Domestic and international visitor numbers grew and, for the first time in a 12-month period, visitor spending in Wellington exceeded $2.5 billion. We’ve also continued to support those who need it most through social initiatives, and to help communities connect, particularly in the inner city.

At the heart of it all is our drive to make Wellington more resilient. We’ve been strengthening the city against future shocks. This includes work on our waterfront to reduce its vulnerability to seismic events and the rise in sea levels. And we’ve continued to work with owners of at-risk buildings to secure facades and parapets. We’ve also made real progress on making our water supply more resilient.

It’s a period of change for Wellington and what that means is Wellingtonians can expect a degree of disruption. We ask for your patience.

We’ve done our utmost to keep rates affordable. We’re a financially sound Council, undertaking an ambitious programme of work. But our books are in good order and with your support, we can deliver.

Justin Lester

Chief Executive’s introduction

Kei te whakapau kaha mātou
i nāianei ki te whakamaru i ō
tātou rā ki mua

Tumuaki Matua Kevin Lavery

He tau nui tēnei. Ahakoa ko te manahau tonu te kaupapa nui kei mua i ō mātou aroaro, I tino kaha rawa tā mātou mahi ki te whakapakari ake i ake i te taone, mai i te waihanga pūnaha rokiroki mō te wai, te whakakaha i ō tātou whare, tae noa ki te tautoko i ngā hapori kia hono tahi ai tēnā ki tēnā.

I te tīmatanga, he tauhohe te piki o te arotahi ki ngā mahi manahau, ki ngā papātanga o te rūwhenua o Kaikōura i te tau 2016. Heoi anō, kua huri kē mātou mai i te tauhohe ki te kaikaha. I nāianei kua whai hōtaka titiro whakamua mātou e pā katoa ana ki te whakapūmau i tētahi ao pai ake mō ngā ra ki mua. E waihanga ana mātou i tētahi taone pakari ake hei urupare ki te tipu o te taupori, me te tuma o tētahi rūwhenua, me ngā panonitanga nā runga i te āhua o ngā rangi. Nā ēnei kaupapa rūrua nei, nā te Mahere ā-Tau 2017/18 me te Mahere ā-Toru Tau a te Kaunihera, kua takoto te ahunga mō tēnei tau.

He nui ngā kaupapa i whakawhitiwhiti kōrero mātou me ngā tāngata o Pōneke, tae noa ki te Island Bay Parade me te arapahikara, tae atu ki tō mātou Mahere ā-Tekau Tau 2018-2028. I whai tohutohu mātou e pā ana ki te mahere Let’s Get Wellington Moving, tō mātou ahunga whakahoahoa mō te kotuinga waka o Pōneke. I puta ngā tautohetohe riri e pā ana ki ētahi kaupapa, pērā ki te arapahikara. I whakamaheretia i roto i tō mātou Mahere ā-Tekau Tau 2018-28, tō mātou mahere titiro whakamua mō te taone me tā mātou whiwhi i te maha o ngā whakawhitiwhitinga kōrero i te wā o ngā whai tohutohu, he mea pai tēnei. E hiahia ana mātou ki te mōhio, he aha rā ngā whakaaro o ngā tāngata o Pōneke, he aha rā ā rātou kōrero mō te taone i ngā rā ki mua.

I tēnei tau, i whakarato mātou i te hōtaka haupū rawa nui rawa atu – $35 miriona te nui ake i te tau 2016/17.

Ahakoa tā mātou kauneke i ētahi kaupapa kōkiri nui tonu, ko te nuinga o ā mātou mahi, ko te whai i ngā mahi o ia rā, o ia ra – ngā mahi matawaenga e haruru ai te taone. Ki te pohewa koe he motu huka te Kaunihera, ka tohu te wāhanga kei runga ake i te mata o te wai ki ā mātou mahi e kitea ana. Ko te 90 ōrau e toe ana, te wāhanga kāore i te kitea – ko ngā ratonga mahi e tukunga ana ki ngā tāngata o Pōneke ia rā, ia rā, mai i te putunga wai, ngā kohikohinga para, ngā wharepukapuka, me ngā papatākaro. Ka whakaatu tēnei pūrongo i te 12 mārama kua hipa, e kaha ana te haere o ā mātou whakatutukinga ki ia o ngā wāhanga mahi, me tā mātou kaha urupare ki ngā wero o ia rā, o ia rā.

Ka tuku mātou i te 400 ratonga, neke atu, ki te 212,700 tāngata ia rā, mō te iti ake i te whitu tāra mō ia tangata, mō ia rā. E pūmau ana mātou ki te pupuri i te utu o ngā rēti kia āta taea.

Arā tonu ngā wero. Kua mate mātou ki te whakariterite mō te poto o ngā ō hei whakarato i ngā taumahi heipū rawa, te nui o te pikinga utu, me ngā pēhitanga kei roto i te mākete mahi. Heoi anō, ka taea noa iho e mātou.

He hao nui ō mātou mahere engari, kei te pai te taha pūtea. 1785 ā mātou kaimahi ngākau nui, e aro atawhai ana ki te taone nei. Kua whakaatu mai te tau kua hori, kei runga mātou i te ara tōtika. Kia eke panuku tonu tātou i roto i ā tātou mahi.

Nā Kevin Lavery

We’re doing the hard work now to safeguard our future

Chief Executive Kevin Lavery

It’s been a big year. While resilience has always been at the forefront of our minds, we’ve been working harder than ever on strengthening the city, from building better storage systems for water and strengthening our buildings to helping communities connect more with each other.

Initially, the increased focus on resilience work was a reaction to the effects of the 2016 Kaikoura earthquake. But we’ve gone from reactive to proactive and now have a forward-looking programme that is all about securing a better future. We’re building a resilient city that can respond to population growth, the threat of another earthquake and climate-change related events. Together, our Annual Plan 2017/18 and the Council’s Triennium Plan set the direction for the year.

We engaged with Wellingtonians on a number of issues, including the Island Bay Parade and cycleway, and Our 10-Year Plan 2018-28. We consulted on Let’s Get Wellington Moving, our partnered approach to the future of Wellington’s transport network. Some topics like the cycleway generated heated debate. Our 10-Year Plan 2018-28 mapped out our long-term plans for the city and received high levels of engagement during consultation, which was encouraging. We want to know what people think and Wellingtonians to have their say about their city’s future.

This year we also delivered a substantial capital programme – $35 million more than in 2016/17.

While we progressed a number of high-profile initiatives, the bulk of what we did, as always, was business as usual – the crucial, everyday work that keeps the city humming. If you picture the Council as an iceberg, the part that is above the water line represents our visible work. The remaining 90 percent is what you don’t see – the day-to-day delivery of services to Wellingtonians, from water supply and waste collection to libraries and sportsfields. This report shows that in the last 12 months our performance in each of the activity areas remains strong while at the same time responding constructively to day-to-day challenges.

We deliver more than 400 services to around 212,700 people for less than seven dollars per day per person. We’re committed to keeping rates manageable.

There are challenges. We have to contend with a shortage of supplies to deliver capital projects, high inflation, and pressures in the labour and construction markets. But we’re up to the task.

Our plans are ambitious but our finances are in good order. We also have 1785 dedicated employees who care about this city. The past year has shown we’re on the right track. Let’s keep building on the good work.

Kevin Lavery

Our city

Our services

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 the effective administration of regulations, plans and bylaws.

The Council manages many services and assets – from parks and cemeteries to parking and pools, from water supply and waste management to cycleways and animal control. We also have projects and initiatives that actively support the city’s economic growth and cultural development.

We group our work into seven activity 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 provide water, stormwater and wastewater services and look after waste reduction and disposal. We fund conservation attractions, look after parks, reserves, 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 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 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 roads, bridges, tunnels, walls, cycleways, and pedestrian paths. We also provide bus shelters, bus stops, and bus lanes, and signs and traffic signals.

Strategic direction

In 2012, we adopted our ‘Smart City’ vision. This vision is supported by four pillars that are the Council’s long-term aspirations for the city.

People-centred - a city that is healthy, vibrant, affordable, accessible and resilient, with a strong sense of identity and place

An eco-city – a city where natural resources are proactively protected, where environmental challenges are addressed and the transition to becoming a low-carbon city is managed

Connected – a city with easy access to regional, national and global networks that allows people and goods to move freely, with a world-class infrastructure that enables people to connect with each other and their communities

Dynamic central city – a place of creativity, exploration and innovation that offers the lifestyle, entertainment options and amenities of a much bigger city and where the city centre drives the regional economy.

Progress towards these aspirations is monitored by following the trends in 95 high-level outcome indicators both for our activity areas and in aggregate. By the end of the year, the majority 29 percent (28 out of 95) of our outcome indicators were trending in the desired direction. A further 41 percent (39 out of 95) maintained their direction from the previous year. This suggests that overall the city is making progress towards its aspirations – but not on all fronts.

The 18 indicators that are not trending in the desired direction – notably some indicators in arts and culture, economic development, social and recreation and transport – are subject to on-going monitoring. In addition, our 10-year plan signals investment that is likely to enable improved outcome trends over time, for example our continued investment in arts and culture.

In 2017/18, 11 indicators were not tracked due to legislative changes, census data availability or measurement changes. Section 3 of this report provides information on outcome indicator trends over the past 3 years.

Triennium work programme

In 2016, following the local authority elections, the Mayor and Councillors developed their 3-year work programme (or Triennium Plan) which included goals supporting the aspirations for the city and focus areas with project proposals for implementation through successive annual plans, through the relevant key activity areas. Details on the Triennium PlanTriennium Plan can be found on the Council’s web site at https://wellington.govt.nz/your-council/plans-policies-and-bylaws/plans-and-reports/triennium-plan.

Our Mayor and Councillors

Wellington City Council is made up of 14 elected Councillors and a Mayor. The Council is elected, along with all other local authority elected members in New Zealand, every 3 years.

Wellington City Council is made up of 14 elected Councillors and a Mayor. The Council is elected, along with all other local authority elected members in New Zealand, every 3 years. The Mayor is elected by the city’s residents. The Councillors are elected by voters from their respective wards as their city representatives. The wards and numbers of elected Councillors for each are:

Northern Ward (48,030)
3 Councillors

Onslow-Western Ward (44,590)
3 Councillors

Lambton Ward (46,160)
3 Councillors

Eastern Ward (39,210)
3 Councillors

Southern Ward (34,710)
2 Councillors

* Population numbers are as of 30 June 2017.

Citywide

Justin Lester 
Mayor

Chair: Council

Portfolio Leader:
Arts and Culture,
Major City Projects

Meeting attendance:

Meetings held: 79
Meetings attended: 66
Attendance: 84%

Contact 04 499 4444
mayor@wcc.govt.nz

Southern Ward

Paul Eagle*
Deputy Mayor (former)

Chair: Long-term and Annual Plan Committee

Portfolio Leader: Housing,
Recreation, Events

Meeting attendance:

Meetings held: 14
Meetings attended: 14
Attendance: 100%

Contact 04 499 4444
paul.eagle@wcc.govt.nz

Onslow-Western Ward

Diane Calvert

Portfolio Leader: Community Planning and Community Engagement

Meeting attendance:

Meetings held: 67
Meetings attended: 65
Attendance: 97%

Contact 029 971 8944
diane.calvert@wcc.govt.nz

Eastern Ward

Chris Calvi-Freeman

Portfolio Leader: Transport Strategy
and Operation

Meeting attendance:

Meetings held: 54
Meetings attended: 53
Attendance: 98%

Contact 027 803 0015
chris.calvi-freeman@wcc.govt.nz

The meetings referenced are only those of which each Councillor is a member. For details on Councillor meeting attendance for the year see page 275

* Paul Eagle Southern Ward Councillor and Deputy Mayor resigned in September 2017 to take up his position as MP for Rongotai, following the general election. Fleur Fitzsimons was elected as the new Councillor in December 2017 and takes the vacant seat in Wellington City Council’s Southern Ward.

Northern Ward

Jill Day
Deputy Mayor

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

Portfolio Leader: Children and Young People, Governance, Māori Partnerships

Meeting attendance:

Meetings held: 57
Meetings attended: 57
Attendance: 100%

Contact 04 801 3102
jill.day@wcc.govt.nz

Southern Ward

Fleur Fitzsimons

Portfolio Leader: Living Wage, Recreation, City Safety, Community Facilities

Meeting attendance:

Meetings held: 30
Meetings attended: 29
Attendance: 97%

Contact 027 803 0515
fleur.fitzsimons@wcc.govt.nz

Onslow-Western Ward

Andy Foster

Chair: Finance, Audit and Risk Management Subcommittee

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

Meeting attendance:

Meetings held: 63
Meetings attended: 59
Attendance: 94%

Contact 021 227 8537
andy.foster@wcc.govt.nz

Lambton Ward

Brian Dawson

Portfolio Leader:
Housing, Social
Development
(excluding City Safety)

Meeting attendance:

Meetings held: 50
Meetings attended: 49
Attendance: 98%

Contact 027 413 5809
brian.dawson@wcc.govt.nz

Northern Ward

Peter Gilberd

Portfolio Leader:
City Scientist,
Natural Environment

Meeting attendance:

Meetings held: 50
Meetings attended: 48
Attendance: 96%

Contact 027 614 1416
peter.gilberd@wcc.govt.nz

Southern Ward

David Lee

Portfolio Leader:
Technology, Innovation & Enterprise, Climate Change

Meeting attendance:

Meetings held: 57
Meetings attended: 52
Attendance: 91%

Contact 021 220 2357
david.lee@wcc.govt.nz

Eastern Ward

Sarah Free

Chair: Grants Subcommittee

Portfolio Leader:
Public Transport, Cycling
and Walking

Meeting attendance:

Meetings held: 51
Meetings attended: 50
Attendance: 98%

Contact 022 121 6412
sarah.free@wcc.govt.nz

Lambton Ward

Iona Pannett

Chair: City Strategy Committee

Portfolio Leader: Infrastructure,
Sustainability

Meeting attendance:

Meetings held: 57
Meetings attended: 56
Attendance: 98%

Contact 021 227 8509
iona.pannett@wcc.govt.nz

Northern Ward

Malcolm Sparrow

Chair: Regulatory Process Committee

Portfolio Leader: Community
Resilience

Meeting attendance:

Meetings held: 54
Meetings attended: 50
Attendance: 93%

Contact 027 232 2320
malcolm.sparrow@wcc.govt.nz

Eastern Ward

Simon Marsh

Portfolio Leader:
Economic Development, Events, Small Business (joint)

Meeting attendance:

Meetings held: 47
Meetings attended: 41
Attendance: 87%

Contact 021 922 196
simon.marsh@wcc.govt.nz

Onslow-Western Ward

Simon Woolf

Chair: Council Controlled Organisations Subcommittee

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

Meeting attendance:

Meetings held: 47
Meetings attended: 42
Attendance: 89%

Contact 027 975 3163
simon.woolf@wcc.govt.nz

Lambton Ward

Nicola Young

Portfolio Leader:
Arts and Culture (associate), Central City Projects, Education Partnerships

Meeting attendance:

Meetings held: 56
Meetings attended: 53
Attendance: 95%

Contact 021 654 844
nicola.young@wcc.govt.nz

The meetings referenced are only those of which each Councillor is a member. For details on Councillor meeting attendance for the year see page 275

* Paul Eagle Southern Ward Councillor and Deputy Mayor resigned in September 2017 to take up his position as MP for Rongotai, following the general election. Fleur Fitzsimons was elected as the new Councillor in December 2017 and takes the vacant seat in Wellington City Council’s Southern Ward.

Standing committees and subcommittees

The Council conducts its business at open and publicly-advertised meetings. Additional meetings may be held throughout the year to consider specific issues.

The Mayor (as required by section 41A of the Local Government Act 2002) put in place the structure of committees and subcommittees following the 2016 election. The Council retains the power to revisit the structure.

The structure adopted for the 2016-2019 triennium is based on two committees of the whole – City Strategy and Long-term Plan and Annual Plan. The membership comprises the Mayor and all Councillors. The City Strategy Committee meets three times a month and is chaired by Councillor Iona Pannett. The Long-term Plan and Annual Plan Committee is chaired by the Deputy Mayor. The Council meets monthly. There are also a number of other committees and subcommittees. Examples include the District Licensing Committee, the Finance, Audit & Risk Subcommittee and the Grants Subcommittee.

At 30 June 2018, there were five committees, two joint committees and three subcommittees. The Mayor is an ex-officio member of all committees. Figure two shows the 2018/19 Council Committee structure.

Community boards

Community boards have responsibility for the overview of matters within the board’s boundary.

Tawa Community Board normally meets monthly. Makara/Ohariu Community Board normally meets every 6 weeks.

Council structure

as at 30 May 2018

Executive team

Kevin Lavery

Chief Executive

CCOs
Economic development

David Chick

Chief City Planner

Transport and Infrastructure
Quarry
Transport assets and maintenance
Street lighting
Kiwi Point Quarry

City Design & Place Planning
Urban design
Heritage
Place planning
Transport strategy
Network improvements
District Plan

Building Compliance
and Consents
Building inspections and
consents
Resource consent & compliance Public health

City Resilience and Sustainability
Earthquake-prone buildings
Weathertight buildings
Waste operations
City engineer
Sustainability
Unreinforced masonry buildings

Build Wellington
Urban regeneration projects
– Shelly Bay
Waterfront, Civic precinct
Housing development
Business engagement

Barbara McKerrow

Chief Operations Officer

Parks, Sport and Recreation
Botanic gardens, Berhampore nursery and cemeteries
Playgrounds, sportsfields and tracks
Town Belt and reserves,
Parks operations
Pools and recreation centres
Marinas, beaches and boatramps
Public toilets and sculptures

Community Networks
Libraries and community spaces
Parking services
Community services
Support services

City Arts and Events
Arts and Culture Strategy
Public Arts Policy
Arts partnerships
Arts programmes
City events
Regional Amenities Fund
Collection
Events Policy

Business Information and Technology (BIT) & Shared Services Office
ICT service delivery
Solutions delivery and OneCouncil
Support
Enterprise applications support
Information centre
Project management and
land information
Shared Services Office

City Housing
Social housing and housing upgrade Tenant engagement,
community development

Smart Council
Contact and Service Centre
Service development and improvement
Digital innovation

Kane Patena

Director Strategy and Governance

Assurance
Customer complaints
LGOIMA requests and advice
Ombudsman and OAG Investigation
Privacy
Internal audit

Legal & Risk
Legal services
Risk management
Civil defence and emergency management
Business improvement & business continuity

Governance
International relations
Democracy services and elected members support
Mayor’s Office

Tira Poutama – Iwi Partnerships
Effectiveness for Māori
Iwi mana whenua relationship management
Iwi investment for city growth

Strategy, Policy & Research
Strategy, Policy, Research and Evaluation
Planning and reporting

Communications and Engagement
Marketing and communications
Internal communications
Media/PR
Creative and Brand
Engagement

Andy Matthews

Chief Financial Officer

Financial Strategy and Treasury
Financial Strategy
Rating policy and setting
Funding and financial policies
Budgeting Capital planning
Treasury & insurance
Strategic Asset Management

Financial Accounting and Transactional Services
Accounts receivable
Payment services
Rates billing and administration
Fixed assets
Taxation
Financial reporting

Financial Reporting Analysis and Performance
Procurement
Business financial Reporting
Contract management
Budgeting, Financial forecasting analysis and advice

Property
Energy management
Council property, assets management, leasing, sales
and acquisitions
Facilities maintenance contract

Nicola Brown

Director Human Resources

HR Services
Human resources advice
Recruitment
Payroll
Remuneration
Analysis and reporting
Change management
HR policy

Organisational Development
Culture
Leadership development
Training and development

Safety, Security and Wellbeing
Hazard/risk management
Incident/investigation
Wellness programmes
Injury prevention/management
Security

Our staff

Wellington’s economy is growing and unemployment is low. In this climate, staff retention becomes more challenging. The job market is tight and there is more competition among employers for qualified people.

We’ve taken steps to make the Council a more attractive place to work and reduce our staff turnover. As part of this, we’re implementing an organisation development programme focusing on building a constructive culture. We’ve workshopped and developed new values for the Council and are looking at how we can put these into practice. We’re also implementing a diversity and inclusion programme of work that acknowledges the rich mix of people who work at the Council and the positive impact this has on our work culture and productivity.

The graphs in this section show which areas our staff work in, their gender and type of employment.

The biggest division of our organisation structure is Customer and Community, which includes all our parks and recreation staff. Women make up 55 percent of our workforce, 86 percent of our staff are permanent employees and 14 percent are on other contract types.

Figure 7 contains details on Council employee numbers by gender. Between 1 July 2017 and 30 June 2018, there were in general, a similar number of females and males in tiers 1 to 4 of the organisation (tier 1 is the chief executive, tier 4 in general covers team leader roles). When all 1,785 employees across the organisation are taken into account, there are 163 more females than males. This is the first year that we have reported employee gender information in this way.

Staff numbers and turnover

From 1 July 2017 to 30 June 2018, the Council’s average permanent staff was 1,496. This was a 2 percent increase on last year.

In the last year, 319 (21.3 percent) people left the organisation.

Summary of our year

General overview

Three years ago, as part of the 2015-25 10-year plan, our economy was underperforming and we had to invest in projects that would help rejuvenate the city.

Today, we have strong economic growth and a different set of challenges. Increasing population growth on the back of a stronger economy has exacerbated housing issues, and transport congestion has also become more acute.

While we’ve always been conscious of the city’s vulnerabilities, the 2016 Kaikoura earthquake emphasised the need to invest more into making the city’s infrastructure and communities more resilient.

These are difficult challenges to resolve for any city, and the focus for the last year has been on addressing these issues while also continuing to deliver the broad range of essential services that keep the city running.

Delivering the essential services well

Wellington City Council offers over 400 different services that are delivered to a high standard and support Wellingtonians to live-high quality lives.

Many factors go into determining people’s overall quality of life. The core services we provide as a Council, and how we shape the city to make it a good place to live, work and play in, are a big part of that.

Wellington is often recognised – both nationally and internationally – for its liveability, and over the last 2 years Wellington has topped Deutsche Bank’s list of 50 cities for the best quality of life, beating Zurich, Copenhagen and Vienna.

We closely monitor how well we are delivering our services, and how satisfied our residents are with the services we provide and how the city is developing.

Over the last year, we achieved or substantially achieved 75 percent of the 192 performance measures that we use to monitor our services. This is on par with previous years and reflects the Council’s consistent and strong performance. 

Twenty-one percent of the targets we set were not achieved for the year. Where there is a significant variance in performance, the document provides an explanation for that variance. The remaining four percent could not be measured this year.

We are constantly looking at how we can improve services for our customers. A key area of focus this year has been to better understand how people use our services, and to map those ‘customer journeys’.  This programme of work will help us redesign and improve our services.

Making the city more resilient

The 2016 Kaikoura earthquake tested Wellington’s infrastructure, buildings and community resilience. While generally the city performed well, the focus over the last year has been on improving the city’s overall resilience.

This has involved the continuation of a long-term investment programme in cycleways, major water infrastructure such as the Prince of Wales/Omāroro Reservoir, and improving community resilience infrastructure through the distribution of alternative water supply bladders in key parts of the city that can be used in an emergency.

Following the 2011 Christchurch earthquake, the government implemented changes to the Building Act for earthquake-prone buildings, creating a nationally consistent approach to the assessment and management of earthquake-prone buildings, along with a standardised notice and national public register of these buildings. The Council has been proactive in managing seismic risks well before the changes took effect. Over the past 12 years, we’ve evaluated the vast majority of Wellington’s pre-1976 buildings – a total of around 5300 buildings. Of these, 666 buildings have now been put into the national earthquake-prone building register.

In the past 18 months, we’ve also been working with central government to identify buildings with unreinforced masonry (URM) elements that required urgent remediation. We supported 113 building owners to undertake the urgent work on URM elements of their buildings that could fall and injure or cause a fatality in the event of an earthquake. Most of these have now been addressed or are near completion, with only 35 remaining.

The year culminated with an in-depth discussion with the community through Our 10-Year Plan 2018-28 for significant additional investment in the coming years to make the city more resilient. This was strongly supported by the community, and approved by the Council in June. The plan included a suite of revised performance measures.

Planning for the future

The city has always had sustained, moderate population growth, but with a stronger economy in recent years, population growth has accelerated. Housing affordability and transport congestion issues have become accentuated, and over the last year the Council spent a significant proportion of its time planning for a future city where there are better housing and transport choices for residents.

Up to 280,000 people are expected to call Wellington home by 2043 (currently 212,000) and this will require better transport choices and an estimated 20,000–30,000 new housing units in what is a constrained urban setting.

A significant area of focus for last year was finalising the city’s housing strategy – adopting a housing investment programme that will see the Council more actively use its existing housing portfolio to accommodate more people. The strategy and investment plan provide a clear blueprint for how the Council will invest to improve housing choices for Wellingtonians in the future.

Transport was also a key area of focus during the year. The Let’s Get Wellington Moving programme of work – a partnership approach to resolving inner-city transport congestion with Greater Wellington Regional Council and the NZ Transport Agency – was advanced.

These two substantial planning exercises, and the preparation and adoption of Our 10-Year Plan 2018-28, map out how a significant investment will be spent in the coming years to make the city more resilient, provide housing choices for all, improve transport, and make sure we maintain our high living standards.

Delivering the Annual Plan 2017/18

The Annual Plan 2017/18 was the first plan for the new Council after the 2016 elections. It included projects that continued the work from the 2015-25 10-year plan and initiatives from the Mayor and Councillors’ Triennium Plan. Projects in the Annual Plan included major capital projects like the earthquake strengthening of the Town Hall, the roll-out of LED lighting and the cycleway programme, through to the implementation of the Living Wage and removing spectator fees at swimming pools.

Overall, 2017/18 was a busy year with a substantial ongoing work programme. Against the Annual Plan we:

met a majority of our KPI targets

continued to improve (through the Smart Council programme) the delivery of essential services, such as consenting systems and a full review of our key performance measures

updated Our 10-Year Plan 2018–28 including a major capital programme to address key strategic priorities.

Financially we remained in a healthy financial position. We achieved a net surplus in our budget and a near break-even underlying result. Our debt equals less than a year of our revenue, and we maintained our AA credit rating.

Summary of activity area performance

During the year we made progress on improving the city’s resilience, continued to deliver the essential services well, progressed a number of high-profile future-focused citywide initiatives and performed strongly financially (achieving budgeted net surplus and a near break-even underlying result). This overall performance and the challenges we've had to address are reflected in our achievement against performance measures for the year.

Our key performance measures (KPIs) and their targets are how we track and assess the delivery of Council services. They are set out in our long-term and annual plans and cover the performance of all Council business units along with Council-Controlled Organisations.

Performance measures

Table 1 summarises our key performance measure results for the year. Further details of our 2017/18 performance measure results for each activity area are in the section “Our performance in detail” on pages 37 to 144.

TABLE 1: OVERVIEW OF KPI PERFORMANCE AGAINST 2017/18 TARGETS

Positive Result
86 (62%) of our 138 activity area performance measures met or exceeded targets

Within 5% or no change
19 (14%) were within 5 percent of meeting target

Not met or decreased
28 (20%) did not meet target (by more than 5 percent)

Not measured or not comparable
5 (4%) of 138 were unable to be measured

Comparison to 2016/17 results

In comparison to the previous year our overall KPI performance for 2017/18 was that almost twice as many activities improved as compared to those that did poorly. Table 2 provides details on the comparison to last year.

Table 2: Overview of KPI performance against previous year’s (2016/17) RESULTS

Positive Result
29 (21%) of 138 measures improved

Within 5% or no change
90 (65%) were maintained

Not met or decreased
14 (10%) measures were lower than last year

Not measured or not comparable
5 (4%) of 138 measures could not be compared to previous year

Our activity areas – summary of what we did, how we performed

Governance

We consulted on a range of projects, initiatives, policies and plans, including our new te reo Māori policy, Let’s Get Wellington Moving, and Our 10-Year Plan 2018-28. We ran a by-election in the Southern Ward and inducted a new Councillor. We completed the representation review for the 2019 and 2022 Council local elections and will be trialling a new online voting system ahead of the 2019 local elections. We implemented the NZ Living Wage for all Council staff, all of our wholly-owned Council Controlled Organisations and our office cleaning and security contracts. This increased the Council’s minimum wage hourly rate to $20.20, effective from 1 July 2018.

Overall, in 2017/18 we improved the way we engage with the public, but we can do more to make our information clear and accessible.

Table 3: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
6
5

Within 5% or no change
Within 5% or no change
3
4

Not met or decreased
Not met or decreased
1
1

Not measured or not comparable
Not measured or not comparable
-
-

Financial summary

Net operating expenditure | Capital expenditure
$17m | $0.01m
92% of budget | 100% of budget

Environment

We carried out upgrade and resilience work around Lyall Bay to address coastal erosion issues. At Makara Peak, we built two new trails and provided support to the Makara Peak Supporters Group to build an additional trail. We broke ground for the installation of three EV fast charging stations in Wellington and enabled the launch of the first free-floating car share in Australasia. We conducted another 500 annual Home Energy Saver evaluations with the Sustainability Trust. We completed a number of projects aimed at improving quality and resilience in our drinking water, stormwater and wastewater infrastructure. We continued to investigate alternative water sources and supply options.

Overall, in 2017/18 we made progress in water quality, energy saving measures, and resident recycling volumes, but there’s room for improvement.

Table 4: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
30
8

Within 5% or no change
Within 5% or no change
4
30

Not met or decreased
Not met or decreased
8
4

Not measured or not comparable
Not measured or not comparable
1
1

Financial summary

Net operating expenditure | Capital expenditure
$140m | $45.4m
96% of budget | 99% of budget

Economic development

We held a wide range of sports and cultural events. Highlights included All Black matches against the British and Irish Lions and France, the Asia-Pacific amateur golf championship and the All Whites versus Peru FIFA World Cup Intercontinental Play Off, as well as the World of WearableArt, the Jim Henson Retrospectacle and Beervana. Domestic and international visitor numbers grew and for the first time in a 12-month period visitor spending in Wellington exceeded $2.5 billion. Work on assessing the feasibility of developing an indoor arena for the city and region advanced, culminating in the publication of a strategic assessment by WREDA.

Overall, in 2017/18 visitor numbers grew and visitor spending reached record levels. But the number of major conferences held here continues to decline.

Table 5: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
2
2

Within 5% or no change
Within 5% or no change
1
1

Not met or decreased
Not met or decreased
-
-

Not measured or not comparable
Not measured or not comparable
1
1

Financial summary

Net operating expenditure | Capital expenditure
$23m | $0.6m
83% of budget | 12% of budget

Cultural wellbeing

We delivered a diverse range of events and festivals including a A Very Welly Christmas and Mataraki. We also delivered a number of projects under the pakiTara-Toi art on walls programme. Experience Wellington exceeded its total annual visitor target for its six venues, with a total of 725,214 visitors. Te Papa exceeded its target for the year, with key highlights including the new Toi Art Gallery, the LEGO exhibition, strong local support during school holiday periods, and high numbers of international visitors during the summer cruising season.

Overall, in 2017/18 residents continued to engage actively and to be satisfied with the city’s arts and culture scene, but fewer people attended the NZ Festival and Council-subsidised events.

Table 6: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
2
-

Within 5% or no change
Within 5% or no change
1
3

Not met or decreased
Not met or decreased
4
4

Not measured or not comparable
Not measured or not comparable
-
-

Financial summary

Net operating expenditure | Capital expenditure
$20.5m | $0.4m
102% of budget | 35% of budget

Social and recreation

We continued work on the Waitohi Johnsonville Community Hub, which is on track to be completed in September 2019. We contributed $750,000 to the establishment of a new sports hub in Kilbirnie and developed two new artificial sportsfields. We started developing a work programme that will ensure Wellington has a sustainable local food network. We supported 45 organisations with ongoing contract funding, totalling $2,734,205. We continued to support organisations that help refugees and homeless people. We also increased funding for organisations delivering programmes and services that prevent sexual and gender violence. Finally, we completed and implemented our Domestic Animal Policy.

Overall, in 2017/18 fewer people were satisfied with the range of recreation activities on offer. We continued to support a range of community groups helping the city’s most vulnerable people.

Table 7: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
24
5

Within 5% or no change
Within 5% or no change
6
29

Not met or decreased
Not met or decreased
8
4

Not measured or not comparable
Not measured or not comparable
1
1

Financial summary

Net operating expenditure | Capital expenditure
$61.2m | $40.3m
100% of budget | 87% of budget

Urban development

We completed our Lombard Lane and Bond Street upgrade project. We also advanced our building-strengthening work, which required the owners of 113 at-risk buildings to secure their facades and parapets by 30 September 2018. The majority of the work has been completed or is near completion. We received the resource consent for strengthening work at the Town Hall in May 2018. We issued 2605 building consents, which is slightly more than in the previous year, and 80 percent of applications are now being lodged through GoShift, a portal for the electronic lodgement of building consent applications.

Overall, in 2017/18 we carried out a range of strengthening works across the city and improved our consenting processes. Resident satisfaction with their local suburban centre dropped significantly.

Table 8: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
15
4

Within 5% or no change
Within 5% or no change
1
14

Not met or decreased
Not met or decreased
2
-

Not measured or not comparable
Not measured or not comparable
-
-

Financial summary

Net operating expenditure | Capital expenditure
$15.8m | $19.5m
97% of budget | 66% of budget

Transport

All urban cycleway projects were successfully approved and funded. We carried out a wide range of transport network operational tasks including maintenance, renewal and strengthening work. We implemented a 24-hour time restricted parking scheme in Miramar South to mitigate parking pressure in local streets resulting from airport-related non-resident parking. In partnership with Greater Wellington Regional Council and the NZ Transport Agency, we ran a public engagement programme for Let’s Get Wellington Moving and developed a draft recommended programme of investment based on the feedback we and our partners received.

Overall, in 2017/18 resident satisfaction with traffic volumes and public transport declined slightly, but we progressed plans to upgrade and improve the city’s transport network.

Table 9: Performance summary

KPI compared to target
KPI compared to last year

Positive Result
Positive result
7
5

Within 5% or no change
Within 5% or no change
3
9

Not met or decreased
Not met or decreased
5
1

Not measured or not comparable
Not measured or not comparable
2
2

Financial summary

Net operating expenditure | Capital expenditure
$32.5m | $55.5m
104% of budget | 88% of budget

Overview of our performance –
the numbers

The Council performed strongly financially over the past year by achieving a budgeted net surplus and achieving a near break-even underlying result, within 0.1% of total budgeted operating expenditure. Our financial position remains healthy. Council debt is equivalent to less than one year’s revenue and we have investments that provide returns exceeding debt servicing costs. Accordingly, we have maintained our AA credit rating with Standard & Poor’s, the highest for a public sector entity.

$(0.6)

million

Underlying result for 2017/18, 0.1% of operating expenditure

The underlying deficit is the reported net surplus ($32.2 million,) excluding non-funded ($15.3 million) and capital ($48.5 million) transactions and other adjustments ($0.4 million) that do not affect the Council’s rating requirements. (Council budgets are set to have a nil underlying net result).

$6.48

The operational 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.

$503

million

Cost of running the city for the year 2017/18

Our total operating expenses for the year were $503.2 million (compared to $494.5 million in 2016/17), which represents the cost of running the city during the year.

$172.9

million

Capital spend for 2017/18

We spent $172.9 million on building new assets for the city. This was lower than our planned $182.5 million. This was as a result of the re-phasing of some projects over a longer period of time.

$476

million

Borrowing position for 2017/18

This is an increase of $57.2 million from last year, which equates to $2,239 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:$1.10

Debt servicing costs to investment returns

For every $1 the Council incurs on paying interest on debt, it receives $1.10 from its investments.

$7.2

billion

Assets

The Council provides a broad range of services to the city through a range of infrastructure networks and facilities (Council assets). These have been built up over many generations and equate to around $34,000 net worth of value for every person in the city.

AA

Credit rating

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

Key influences on our overall financial performance and position were:

the revaluation of assets, which increased the value of our assets by $180.4 million

increased renewal of earthquake insurance costs

uncertainty about weathertight homes costs, which resulted in an increase in provision for claims costs by $12.5 million.

Our underlying operating result

The underlying operating result 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 revenue 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. On the other hand, we also need to ensure that the current generation pay their fair share and to not pass on current costs to future generations. Our goal is therefore to have an underlying surplus or deficit close to zero.

This year we got very close to a breakeven result, with an underlying deficit of $0.6 million, within 0.1% of our planned balanced budget.

To get from net surplus to underlying result, 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. Table 10 summarises the capital and non-funded adjustments made to the net surplus to arrive at the underlying result.

Table 10: Summary of the underlying result

Underlying result
Actual
$M
Budget
$M
Variance
$M

Reported net surplus
32.2
32.4
(0.2)

Add items or budgeted differences not required to be rates funded
15.3
12.0
3.3

Exclude government funding for capital projects
(48.5)
(48.4)
(0.1)

Other adjustments
0.4
4.0
(3.6)

Underlying deficit
(0.6)
0.0
(0.6)

Figure 9 shows the Council’s performance over the past 5 years. Zero on the graph represents a balanced budget. For 2017/18 we achieved our lowest underlying result in recent years and this reflects the careful stewardship of revenue and expenditure against budget.

*Refer to Table 10 for explanation of movement from reported net surplus to underlying deficit.

Where our money comes from

Rates are our main source of funding (55% of $535 million) with revenue from operating activities (including user fees) the next largest source (29%). We also receive revenue from other external sources (mainly government) to fund capital expenditure, revenue from interest, and dividends. Figure 10 shows the overall sources of revenue for the past 3 years.

Figure 11 shows the sources of the Council’s revenue for the year. The majority of the Council’s $296 million of rates revenue received during the year was from general rates. Other sources were sewerage and stormwater targeted rates, with the fresh water provision making up most of the balance.

In 2017/18, the Council received higher cash revenues than budgeted from:

landfill fees due to increased waste volumes ($3.8 million)

higher-than-anticipated dividends from our investment in Wellington International Airport Ltd ($1.5 million)

an increase in central government subsidies for transport ($1.5 million).

The Council also received higher non-cash revenues than budgeted for vested assets ($8.1 million) and an increase in investment property valuations, which is recognised as revenue ($6.9 million).

Where the money goes

The following graph summarises the difference between the actual and budgeted net expenditure for each strategy area. They show how the Council has prioritised its spending to support the operational and strategic direction that has been set during the Annual Plan process. Net expenditure is calculated by offsetting activity expenditure, with user charges and other direct activity income. This is the amount that is funded by rates and other corporate revenue such as dividends and rental income.

Details of the financial performance against budget for each activity can be found in the “Our performance in detail” section on pages 37 to 144.

Figure 12 illustrates the difference between the actual and budgeted net expenditure for each strategy area. They show how the Council has prioritised its spending to support the operational and strategic direction that has been set during the annual plan process. Net expenditure is calculated by offsetting activity expenditure, with user charges and other direct activity revenue. This is the amount that is funded by rates and other corporate revenue such as dividends and rental revenue.

Summary of capital expenditure

We have a comprehensive renewal and upgrade programme for our assets and have completed $172.9 million of capital expenditure during the 2017/18 year. This equates to 95% of the annual budget or 80% once utilisation of budgets brought forward from prior years is included. Delays in a number of projects occurred during the year due to changes in design, negotiations or consultation and consents requirements. Budgets to complete these projects have been included in Our 10-Year Plan 2018-2028.

Figure 13 shows budget versus actual capital expenditure for each activity area.

Table 11: Capital expenditure by activity area ($000)

| 2015/16 | 2016/17 |  | 2017/18 Actual  | Budget Brought forward  | 2017/18 Budget | Variance
Strategic area
Governance | - | - |  | 8 | 8 | - | -
Environment | 36,901 | 40,982 |  | 45,428 | 455 | 45,491 | 518¹
Economic development | 1,669 | 886 |  | 599 | - | 5,016 | 4,417²
Cultural wellbeing | 1,968 | 1,286 |  | 443 | - | 1,258 | 815³
Social and recreation | 26,269 | 30,186 |  | 40,253 | 21,647 | 24,684 | 6,079⁴
Urban development | 7,621 | 9,784 |  | 19,504 | 8,886 | 20,773 | 10,15⁵
Transport | 36,534 | 34,318 |  | 55,465 | 2,624 | 60,247 | 7,406⁶
Total strategic areas
| 110,962 | 117,442 |  | 161,699 | 33,620 | 157,470 | 29,391

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

1 Under budget due to lower personnel costs and professional fees.

2 Under budget due to delays in the Wellington Venues renewals programme ($1.640m) and the deferred decision on the Movie Museum project ($2.777m) component of the combined Convention Centre project.

3 Under budget due to the deferred decision on the Movie Museum component of the Convention Centre project.

4 Under budget due to timing of work in the completion of the Basin Reserve Master Plan; with the Johnsonville Library development project and with several of the community centre upgrades - Aro Valley, Kilbirnie, Newtown and Strathmore. As well as with the public conveniences and pavilions work programme (Alex Moore Park, Ben Burn Park and Island Bay).

5 Under budget due to timing of work undertaken with the Town Hall and St James earthquake strengthening projects.

6 Under budget due to timing of work undertaken for the cycling programme and the completion of the LED street light transition project, which has been delayed until 2018/19.

In addition to the above, the Council spent $11.2 million of a budgeted $25 million on corporate Council projects, which include buildings, equipment replacement and IT projects. The unspent portion relates to deferred building projects.

Cost of Council services

The Council provides over 400 services for Wellington residents.
The following shows the annual gross operational spend on Council services for 2017/18.

Our performance in detail

1

Mana Whakahaere Governance

This chapter profiles our strategic approach, challenges and what we delivered in the governance area, which includes governance, information and engagement work, and Māori and mana whenua partnerships.

Snapshot of the city

1 Mana Whakahaere
Governance

Introduction

As part of our strategic approach towards governance, we seek to build public confidence in our decisions by being as transparent as possible, clearly communicating the reasons for the things we do and encouraging public participation in the decision-making process. This is because high levels of public involvement in what we do make for better and more enduring decisions.

A key challenge is to continue to improve on the levels of engagement and participation in our decision-making processes, and events like local elections.

This year’s highlight was the record turnout we obtained during the consultation on Our 10-Year Plan 2018-28, which saw around 2000 people submitting feedback, including a significant proportion of young people. We will look at what we did well and apply it to future consultations to further improve how we communicate and engage with Wellingtonians.

Our governance portfolio includes the work we do 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. This year we took the significant step of implementing a te reo Māori policy to make the language more visible in our everyday lives.

Governance performance story:

We’re improving but there’s work to be done

We’ve made progress in the way we engage with the public on decisions about Wellington. A significant highlight this year was the high level of feedback we received on Our 10-Year Plan 2018-28. We also engaged more actively with residents, communities and stakeholders on other topics, including our te reo Māori policy and Let’s Get Wellington Moving.

We need to do more to make our information clear and accessible, and to make it easy for people to engage with our decision-making processes.

Source: Wellington City Council Residents monitoring survey 2018

48%

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

51% in 2016/17

40%

Residents (%) who state that they understand how the Council makes decisions

39% in 2016/17

59%

Target 55%

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

55% in 2016/17

72%

Target 75%

Residents (%) who are satisfied or neutral (neither satisfied nor dissatisfied) with regard to their involvement with decision-making

79% in 2016/17

76%

Target 75%

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

68% in 2016/17

1.1 Mana Whakahaere, Pārongo me ngā mahi whai wāhi Governance, information and engagement

What we did:

Community engagement. This was a busy year for engagement during which we looked at connecting more closely with communities to encourage greater participation in plans for the city. We made significant improvements in terms of drawing more people into a conversation about the work we do, and getting them involved earlier in the conversations.

We consulted on a range of projects, initiatives, policies and plans, including:

Te reo policy. In February and March, we consulted the public on a draft te reo Māori policy to ensure te reo Māori is more visible in the everyday lives of Wellingtonians. We received 589 submissions.

Let’s Get Wellington Moving. This is a partnership with Greater Wellington Regional Council and the NZ Transport Agency. In November and December 2017 we released four scenarios for Wellington’s transport future and asked people to give us their feedback. More than 2000 people and 50 stakeholder groups took the time to respond.

Cycleways. The Council sought the public’s view on four design options for the Island Bay Parade and cycleway, a project that has generated heated debate. A total 3763 people submitted their feedback. We also engaged with Wellingtonians on a number of cycling lane initiatives in the eastern suburbs, including Evans Bay, Cobham Drive and Kilbirnie.

Our City Tomorrow. In 2017, we started a conversation with Wellingtonians about the future of our central city. We established a forum for Wellingtonians to discuss the challenges and opportunities facing the city – including population growth, climate change, and earthquakes. We ran a series of workshops where participants from a range of sectors were able to discuss and exchange ideas on the future of the city. This work to map out the future of Wellington is ongoing. While Our City Tomorrow was at first specifically about the central city, it ties in with Our 10-Year Plan 2018-28, which looks at the city as a whole.

Governance performance story:

We’re improving but there’s work to be done

We’ve made progress in the way we engage with the public on decisions about Wellington. A significant highlight this year was the high level of feedback we received on Our 10-Year Plan 2018-28. We also engaged more actively with residents, communities and stakeholders on other topics, including our te reo Māori policy and Let’s Get Wellington Moving.

We need to do more to make our information clear and accessible, and to make it easy for people to engage with our decision-making processes.

Source: Wellington City Council Residents monitoring survey 2018

Our 10-Year Plan 2018-28. We consulted the public on a draft 10-year plan for the city. We received 2051 submissions. One notable aspect of this consultation was the high level of feedback from young people, with 19 to 30-year-olds accounting for 25 percent of submissions.

Karori Project. In 2017, we supported the people of Karori to guide future planning and development for the area to make it a more attractive and appealing place for local businesses, residents and visitors. The Karori Project was a collaboration between the Council and the people of Karori, involving an innovative partnership with the community through workshops and engagement with local leaders, groups, schools and businesses.

By-elections and electoral processes. We ran a by-election in the Southern Ward and inducted a new Councillor. We completed the representation review for the 2019 and 2022 Council local elections, which resulted in minor boundary changes and an introduction of dual naming of wards incorporating te reo Māori.

City Archives. We replaced two kilometres of our shelving and installed additional mobile shelving to ensure we have room for archive transfers through to 2025. We started using a mobile app that lets us share our digitised collections on mobile devices, which has had a positive response from customers.

Contact centre. The contact centre responded to 78 percent of received calls within 30 seconds, which was slightly below its 80 percent target but 5 percent better than the previous year. It responded to 100 percent of emails within 24 hours.

Living Wage. The Living Wage provides workers and their families with the basic necessities of life that will allow them to participate actively in the community. In 2017/18, the Council paid the Living Wage Aotearoa rate of $20.20 to its staff and expanded this to wholly-owned Council-Controlled Organisations (CCOs) and core contractors who work on Council sites as they come up for renewal. These steps move the Council towards becoming an accredited Living Wage Aotearoa employer – a goal for the 2016–19 triennium. The Council was set to raise the minimum hourly rate paid to $20.55, the Living Wage Aotearoa rate announced in April 2018, from 1 July 2018.

1.2 Rangapū Māori/mana whenua Māori and mana whenua partnerships

What we did:

Working with our Treaty partners. The Council signed a Memorandum of Understanding (MoU) with its iwi partners on 29 March 2017. As part of this MoU, senior leaders from Council and iwi meet quarterly to ensure Māori and mana whenua are closely involved in the work we’re doing, and play an active and collaborative part in defining our strategic approach and shaping Wellington’s future.

Engagement. We continued to work with Te Taura Whiri i te Reo Māori (the Māori Language Commission) on the Māori Language Week street parade on 11 September 2017. This was attended by about 5000 people.

Te reo policy. We consulted the public on a draft te reo Māori policy to ensure te reo Māori is more visible in the everyday lives of Wellingtonians. On 27 June, the Council adopted Te Tauihu, our te reo policy (at the same time adopting the name Te Ngākau Civic Square – a gift from iwi mana whenua entities). 

Cultural events. We worked with iwi mana whenua advisors and the Council’s events team to bring a new event, Ahi Kā, to the Matariki ki Pōneke programme. This was well supported by the public on Friday 29 June on the waterfront at Odlins Plaza and Whairepo Lagoon.

We worked with iwi mana whenua advisors and the Council’s events team to bring a new event, Ahi Kā, to the Matariki ki Pōneke programme.

Governance finances

How it was funded

Services in this activity area are mostly funded 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)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

1.1 Governance, information and engagement

Expenditure
15,974
16,877

17,214
18,660
1,446

Revenue
(751)
(1,005)

(498)
(537)
(39)

Net Expenditure
15,223
15,873

16,716
18,123
1,407¹

1.2 Māori and mana whenua partnerships

Expenditure
274
279

305
300
(5)

Revenue
-
1

(4)
-
4

Net Expenditure
274
280

301
300
(1)

Governance total

Expenditure
16,248
17,157

17,519
18,960
1,441

Revenue
(751)
(1,004)

(502)
(537)
(35)

Net Expenditure
15,497
16,153

17,017
18,423
1,406

Variance explanations

1 Under budget due to lower personnel costs and professional fees

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

1.1 Governance, information and engagement

Expenditure
-
-

8

-
(8)

Governance total

Expenditure
-
-

8
8
-
(0)

Governance performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared
to target
KPI compared to last year

Positive Result
Positive result
-
6
5

Within 5% or no change
Within 5% or no change
5
3
4

Not met or decreased
Not met or decreased
-
1
1

Not measured or not comparable
Not measured or not comparable
1
-
-

Performance data – outcome indicators

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

Council outcome indicator
Source

2015/16
2016/17

2017/18

Residents (%) who agree that decisions are made in the best interests of the city
WCC RMS 2018

36%
51%

48%
Within 5% or no change

Residents (%) who state that they understand how the Council makes decisions
WCC RMS 2018

33%
39%

40%
Within 5% or no change

Residents (%) who understand how they can have input into Council decision-making
WCC RMS 2018

46%
43%

46%
Within 5% or no change

Mana whenua partners agree that the use and protection of the city's resources for the future is appropriate
WCC Strategy and Research

1 Agreed and
1 Partner was not sure
Both partners were not sure

Both partners were not sure
Within 5% or no change

Residents (%) who believe they have the opportunity to participate in city life
WCC RMS 2018

74%
69%

70%
Within 5% or no change

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

2016
45.6%

NA
Not measured or not comparable

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 
2015/16
2016/17

2017/18 Actual
2017/18 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)
54%
55%

59%
55%
7%
Positive Result

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

72%
75%
-4%
Within 5% or no change

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

Council and committee agendas (%) are made available to the public within statutory time frames (2 working days prior to the meeting)
94%
95%

100%
100%
0%
Positive Result

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
91%
79%

88%
80%
11%
Positive Result

Sound decision-making relies on the timely delivery of meeting papers. Councillors and the public need time to consider agenda material and prepare for meetings. There have been improvements in this area and Council officers will endeavour to maintain this trend.

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

58%
60%
-3%
Within 5% or no change

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

63%
75%
-16%
Not met or decreased

Our result is in line with previous years. However, we fell short of the increased target.
The Council is working on a ‘News and Information’ feature for the website and will continue to improve search functions for common service queries.

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

78%
80%
-3%
Within 5% or no change

We improved our level of service after implementing a new automated phone system.

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

100%
100%
0%
Positive Result

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
Positive Result

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 in decision-making 
65%
68%

76%
75%
1%
Positive Result

Case study Te Tauihu, our te reo Māori policy

Watene Campbell and Rāhiri Wharerau are both 17 years old. They have known each other since they were 4 years old. Rāhiri, who has a wicked sense of humour, has his own version of the first time the two boys met, which Watene disputes.

“It was circa 2006,” Rāhiri muses. “I bowled him over on the rugby field.”

They are both smart, funny boys, who are committed to promoting the Māori language and culture.

“Having a sense of belonging helps us carry on in our everyday lives,” says Watene.

“I’ve been raised in a Māori environment and I want to do more for my people and culture.”

Rāhiri feels the same. He sees it as a ‘duty’ to do everything he can to promote Māori culture.

The boys were the young ambassadors of the Council’s te reo Māori policy, which came into effect on 27 June 2018. They helped launch the policy and promote its importance through a series of videos, an appearance at the City Strategy Committee and stage presence at the Newtown Festival.

“It was really fun,” says Rāhiri.

In February and March 2018, the Council consulted the public on the draft policy and received 589 submissions. The policy reflects a commitment to make Māori culture and language an integral part of everyday life.

“Māori culture and language matters. We want to keep it alive for future generations.” Watene Campbell

“It’s definitely going to make a difference. To understand the culture, you first need to understand the language,” says Rāhiri.

The boys lead busy lives. Rāhiri is into basketball and drama while Watene paddles and plays rugby. They both attend Te Kura Kaupapa Māori o Ngā Mokopuna, a Māori school in Seatoun.

They are focused on their studies and thinking about the next stage in their lives. Rāhiri aspires to be ‘the Māori Leonardo di Caprio’ while Watene says he hasn’t made his mind up yet. He thinks he may become a lawyer because he’s always enjoyed arguing and debating issues.

Whatever they do next, it will be infused with a strong sense of culture and identity.

“Māori culture and language matters. We want to keep it alive for future generations,” says Watene.

Rāhiri Wharerau, left, and Watene Campbell, right

2

Taiao Environment

This chapter profiles our strategic approach, challenges and what we delivered in the environment area, which includes open spaces, waste reduction and energy conservation, water, wastewater and stormwater, and conservation attractions.

Snapshot of the city

2 Taiao
Environment

Introduction

The Council’s environment portfolio is large and diverse, encompassing green spaces, waste reduction and energy conservation, as well as water (potable, wastewater and stormwater) and conservation attractions.

Our strategic approach is guided by our drive for sustainability, our commitment to reducing the impact of climate change and our increased focus on resilience. We work to continuously improve and restore our natural areas and resources. This includes providing quality and accessible green spaces, reducing the city’s emissions, disposing of waste in sustainable ways, and supplying Wellingtonians with good-quality drinking water as well as managing the city’s wastewater and stormwater.

Some of the challenges we face are associated with maintaining and upgrading our infrastructure – our business-as-usual activities – while also undertaking work to cope with rising demand and be better prepared for unforeseen future events. Our resilience work over the past 12 months has included strengthening infrastructure like pipes and reservoirs, addressing issues like coastal erosion and looking at ways to save energy and reduce waste. This resilience work is ongoing.

Another significant highlight for this activity area is our commitment to working in partnership with government and the private sector on initiatives to reduce the impact of carbon. As part of this, we’re reviewing our Low Carbon Capital Plan in the next 10 months.

Environment performance story:

Less resident recycling, but more construction waste

Over the last 5 years, recycling rates have slightly decreased. While the exact reasons for this are unclear, they are likely to include factors such as a reduction in the use of recyclable products such as plastic and newspaper and a better understanding of what can and can’t be recycled. The Council continues to identify opportunities for improvement.

In terms of landfill tonnages, there has been a significant increase in special waste tonnages over the past few years, which includes hazardous substances like asbestos. This has been driven by significant construction and demolition work.

Source: WCC Waste Operations Source: Wellington City Council Residents monitoring survey 2018

97%

Target 90%

Residents (%) who regularly use Council recycling (including weekly, fortnightly or monthly use)

98% in 2016/17

76%

Target 85%

Users (%) who are satisfied with the Council’s recycling collection services

77% in 2016/17

52kg

Total kerbside recycling collected (kilograms per person)

54kg in 2016/17

478kg

Total waste to the landfill (kilograms per person)

447kg in 2016/17

79%

Target 90%

Users (%) who are satisfied with waste collection services

78% in 2016/17

18,174 tonnes

Target more than 16,500 tonnes

Recyclable waste diverted from the landfill

18,078 in 2016/17

2.1 Ngā māra, tātahi,
whenua pārae, ngahere Gardens, beaches and green open spaces

Environment performance story:

Less resident recycling, but more construction waste

Over the last 5 years, recycling rates have slightly decreased. While the exact reasons for this are unclear, they are likely to include factors such as a reduction in the use of recyclable products such as plastic and newspaper and a better understanding of what can and can’t be recycled. The Council continues to identify opportunities for improvement.

In terms of landfill tonnages, there has been a significant increase in special waste tonnages over the past few years, which includes hazardous substances like asbestos. This has been driven by significant construction and demolition work.

Source: WCC Waste Operations Source: Wellington City Council Residents monitoring survey 2018

What we did:

Lyall Bay resilience. We carried out upgrade work around Lyall Bay to improve resilience issues with coastal erosion. This is a staged project, carried out over 4 years. The work arose from a succession of high-intensity storm surges, which caused serious erosion around the bay. It will help rehabilitate and protect the natural and built coastal infrastructure, addressing erosion issues and reinstating the ecosystems services delivered by a healthy functioning sand dune.

Predator Free. This project between the Council, Greater Wellington Regional Council and the NEXT Foundation aims to progressively eradicate predators across the city and create the world’s first predator-free capital city. It was launched in 2016/17 and started with monitoring on the Miramar Peninsula and planning for the first stage – the removal of rats, possums and other predators from the peninsula. We will continue to fund the project with several partners through the Predator Free 2050 Fund. Our contribution will be $2.6 million over the next 10 years. As part of Predator Free, we’ve allocated funding to support community-led trapping efforts in reserves.

In July 2018, we received the ‘LENZ Excellence Award for Environmental Impact’ for Our Natural Capital programme to protect and restore Wellington’s indigenous biodiversity, through predator control, threatened species protection, community engagement, and cutting edge research. The Predator Free programme is part of a bigger programme of work that the Council carries out across its reserves and parks to remove pests.

Regional Trails Framework (including Makara Peak). The Wellington Regional Trails Framework has been developed to drive a coordinated approach to planning, development, management, marketing and promotion of the regional trails network. The project was led by us and supported by the Department of Conservation, WREDA, Greater Wellington Regional Council and other councils in the region.

At Makara Peak, we built two new trails and provided support to the Makara Peak Supporters Group to build an additional trail.

Addition of land to the Town Belt. In 2017, the Council acquired a 4221-square-metre piece of land in Aro Valley (legally described as Section 1226 Town of Wellington) from the Crown. The land comprises a vegetated gully between Aro Street, Devon Street and Victoria University. It has ecological connections to nearby Zealandia and provides habitat for native birds, including kererū (wood pigeon), kākā, tūī, and tauhou (silvereye), among others.

The Discovery Garden (Wellington Botanic Garden). The garden, largely funded through the Plimmer Bequest Fund, opened on 30 September 2017 and is designed to show young people how important plants are. Construction for the project started in 2016 and proved more challenging than expected. The Friends of the Wellington Botanic Garden raised $235,000 for the project, and we have been successful in securing grant funding for 3 years through the Ministry of Education for Learning and Education Outside the Classroom (LEOTC) to support the delivery of education programmes.

Our Natural Capital and the Natural Environment Fund. The Natural Environment Fund helps community groups to protect the city’s indigenous biodiversity, restore riparian and coastal ecosystems and connect people to nature. Seven applications were supported during the year with grants totalling $39,000. These ranged from  $11,250 for the Whitebait Connection project run by the Mountains and Sea Trust, which engages local local community groups and schools with our freshwater catchments, to the Vogelmorn Community Group who were granted $1,500 to develop community gardens in the neighbourhood. Local delivery of the Enviroschools programme and the work led by the Sustainability Trust on urban agriculture were also supported.

2.2 Whakaheke para, Tiaki pūngao Waste reduction and energy conservation

What we did:

Electric vehicles (EVs) and car share car parks. We broke ground for the installation of three EV fast charging stations in Wellington. This work, which we’re carrying out in partnership with Contact Energy and ChargeNet New Zealand, will see four EV fast-charging stations in Wellington’s city centre upon completion. There are over 600 EVs in Wellington City and over 1200 across the region. The numbers have increased by more than 50 percent in the last year. There are 24 car sharing vehicles around the city.

Home Energy Saver. We conducted another 500 annual Home Energy Saver evaluations with the Sustainability Trust. This project has been part of the sustainability package since 2010, a mainstay of improving sustainability for our residents.

Waste and recycling. In June 2017, we were successful in gaining funding to carry out a Public Place Recycling trial from the joint Love NZ/Be a Tidy Kiwi “Litter Less Recycle More” project delivered by The Packaging Forum. The trial will last 12 months and will help us assess the practicality and cost of implementing public place recycling in Wellington. The Mayor and Councillors also advocated strongly to ban or impose a levy on single-use plastic bags. Over the last 5 years recycling rates have slightly decreased. While the exact reasons for this are unclear, they are likely to include factors such as a reduction in the use of recyclable products such as plastic and newspaper, and a better understanding of what can and can’t be recycled. The Council continues to monitor this trend and to identify opportunities for greater education around recycling.

Landfill emissions. In February 2018, we were successful in having our application for a unique emissions factor (UEF) for our landfill emissions approved. The UEF for the 2017 calendar year is 0.52 – a reduction of 56 percent from the default emissions factor, and a decrease in liabilities of 27 percent from 2016. This is a positive result that will help reduce our overall carbon liabilities (note this is carbon unit market price dependent).

2.3 Waimāori Water supply

What we did:

This activity is focused on drinking water supply and storage. Wellington Water supplies drinking water to Wellingtonians and also manages wastewater and stormwater services, while the Council owns the infrastructure. Water in Wellington is treated in one of four treatment plants in the region owned by Greater Wellington Regional Council. The Ministry of Health has established guidelines for safe drinking water: the Drinking Water Standards for New Zealand 2005 (revised 2008). The treatment methods – which include chlorination – are designed to produce water that meets these standards and satisfies the needs of our customers.

We completed 93 percent of planned projects within the drinking water portfolio, with three projects carrying over into the coming financial year. They are Community Infrastructure Resilience (a project for 22 water stations), the Harbourview Road and Wadestown Road watermain, and the Satara Cresent pump station upgrade. Carry forwards have been approved and work will be completed in the first quarter of 2018/19.

Water leaks. Leaks reported were up across the region for December and January but tracked back down to usual peak summer levels for February and March. Costs associated with the additional leaks reported were able to be managed within budget.

Network renewals. These projects provide network reliability and reduce water supply disruption. This programme is made up of numerous business-as-usual watermain and pump station renewals. All programmed projects were completed except for Wadestown Road which will be completed in the first quarter of 2018/19.

Network upgrades. These projects are primarily focused on increasing fire main capacity across the network, and enabling growth. Hydraulic modelling of catchments will continue in order to identify network growth restrictions and upgrade requirements. All projects were completed except for Harbourview Road watermain upgrades and the Satara Crescent pump station, which will be completed in the first quarter of 2018/19.

Reservoirs. Designs for seismic strengthening of the Ngaio, Grenada North and Wrights Hill reservoirs is continuing into the first and second quarters of 2018/19 and will be constructed in years 2-3 of Our 10-Year Plan 2018-28. These projects will improve the operational resilience of the network and storage. All planned projects were completed.

Investigations. We completed health and safety assessments for all storage reservoirs, the regional water loss and leak detection strategy and fireflow availability methodology, including a pilot study.

Major upgrades:

Prince of Wales/Omāroro Reservoir. This project is a key element of the Water Supply Resilience Strategy, and contributes to the day-to-day operational resilience of the water supply for the low-level zone. Resource consent has been granted and we are working through the consent conditions in relation to the design. Detailed design of the reservoir has started, with a construction estimate to follow.

Final design for the Wallace Street corridor. (enabling works and inlet/outlet mains) is expected in the first quarter of 2018/19, with construction to start in the second quarter.

Moe I te Ra (Bell Road Reservoir). Inlet and outlet pipe designs are continuing along with preliminary design of the reservoir. Town Belt Act and Resource Management Consent applications are expected to be lodged in September/October 2018. Public engagement has started with stakeholders.

Community infrastructure resilience. Work begun in July 2017 will be completed in the first quarter of 2018/19. This involves completion of alternative water supply stations and acceptance of procured materials such as water storage and distribution bladders and tap stands. This project will achieve its outcome of providing emergency water supply to Council customers.

Alternative supply/harbour bores. Investigation and options analysis of the alternative water sources and supply options will be completed early in the first quarter of 2018/19.

2.4 Waipara Wastewater

What we did:

We completed 92 percent of planned projects within the wastewater portfolio, with two projects carrying over into the coming financial year. They are Crawford Road sewer renewal and Dixon Street pump station. Carry forwards have been approved and work will be completed in the first quarter of 2018/19.

Network renewals. These projects are aimed at improving water quality and maintaining a reliable network for customers. All projects were completed except for Crawford Road, which will be completed in the first quarter of 2018/19.

In addition to our business-as-usual pipeline renewals based on condition assessments, we are replacing several rising mains (vertical pipes) within the city centre and carrying out further investigations and condition assessments in order to determine a rising main replacement programme. Work to date has included collection and analysis of core samples. Further work will occur through 2018/19 to inform the next long-term plan cycle. Condition assessments of the sewer interceptor, which helps control the flow, will continue, with the last 5.5 kilometres to be completed by 2018/19.

Network upgrades. These projects are primarily aimed at enabling growth. Major projects within Our 10-Year Plan 2018-28 include the Dixon Street pumping station, Taranaki sewer capacity upgrade and Miramar peninsula upgrade.

Investigations and modelling. Investigations will be targeting the network’s condition in order to inform future renewals projects. Significant investigation projects involve completion of the catchment assessment for Lambton Harbour, Evans Bay and Lyall Bay catchments and identification of capital works, as well as inflow and infiltration assessments. Hydraulic modelling of catchments will continue in order to identify network growth restrictions and upgrade requirements. A feasibility study will be completed for future replacement of the wastewater rising mains from pump stations 5, 6 and 7 to Dixon Street.

Karori Outfall pipeline. Wellington Water was successful in identifying alternative solutions which resulted in the deletion of a consent condition which would have required the Council to build a new outfall pipeline from the Western Wellington Wastewater Treatment Plant to the coast by 2023. This is a significant achievement, as the building of a new pipeline was costed at more than $35 million and the current pipeline has a lot of life left in it. More detailed assessments of the pipeline need to be undertaken by July 2019 to better understand the condition and rectify any faults. A Monitoring and Technological Review Report (MTRR) that assesses options and sets out a plan for addressing wastewater overflows into the Karori Stream is also due to be implemented by July 2020. The discharge consents to the Karori Stream also expire in 2023 and this will provide an opportunity to develop an ‘all of catchment’ approach to wastewater overflows and discharges in the Karori Catchment.

2.5 Waiāwhā Stormwater

What we did:

We completed 86 percent of planned work within the stormwater portfolio, with work on Apuka Street, Aro Street, Hunter Street and Kingsbridge being deferred until the coming financial year, and work on Kilbirnie stage 1 (pipeline) behind schedule. Carry forward of funds has been approved for stormwater upgrade work in Kilbirnie and Aro Street, and work has been reprogrammed within Our 10-Year Plan 2018-28. In Aro Street, we’ll be carrying out seismic upgrade work on an underground stormwater chamber. In Kilbirnie, the work involves laying pipes to improve stormwater flow and reduce the risk of flooding.

Network renewals and upgrades. These projects are aimed at public safety and containment of flooding. Significant projects completed include the Karori Culvert renewal and an upgrade of the Kent Terrace sumps to reduce flooding at this location and the central fire station. Work on replacing the pipes affected by the land slip at Priscilla Crescent was completed in the fourth quarter.

Investigations and modelling. Lambton ICMP study and flood modelling has been completed with initial findings presented to the Council and Greater Wellington Regional Council in the fourth quarter. Climate change modelling of the southern suburbs has been completed. Results from the modelling are being converted into usable information, and to inform options and feasibility analysis of catchment planning studies. Modelling of the northern and western suburbs will occur through the next financial year.

Major upgrades:

Kilbirnie flooding. The frequent flooding issues in Kilbirnie have caused a number of complaints. Work is progressing on Kilbirnie Stage 1 and 2 with completed construction of the pipeline (Stage 1) scheduled for October. There is a delivery risk from consenting delays, which is being managed by consulting with stakeholders. There remains a small residual risk that delays to this process may impact the delivery time frame. The pump station is currently being designed through an Early Contractor Involvement (ECI) process, with detailed design and cost estimates expected in September. Scope and design changes from concept stage are likely to have a negative cost impact.

Tawa flooding. The Tawa flooding problems are being investigated, with options and detailed design to be progressed in the coming financial year.

Proposed Natural Resource Plan. Hearing streams 1-6 for Greater Wellington Regional Council’s Proposed Natural Resource Plan, which we participate in, have now been completed. These covered the overall policy framework, beneficial use and development, mana whenua values, water allocation, water quality, wastewater, stormwater, activities in the beds of lakes and rivers and groundwater protection. Opportunities for multi-party conferencing and pre-hearing meetings to help resolve issues are being taken up, the most recent of which was in relation to the protection of drinking water sources.

2.6 Ngā painga kukume whāomoomo Conservation attractions

What we did:

Wellington Zoo. There were 249,701 visitors to the Zoo, which is 19,000 people more or an 8 percent increase from last year (230,632) and 4 percent ahead of target. This can be attributed to both weather and an effective advertising strategy. We reached our second highest visitation (the highest was when we opened Meet The Locals He Tuku Aroha) even without a major exhibit opening.

The Zoo has completed stage 1 of its upgrade programme over the last few years. In the next stages, which were approved as part of Our 10-Year Plan 2018-28, we intend to further improve facilities to house snow leopards and cheetahs.

Zealandia. The number of visitors to Zealandia was 132,288, which is 5.7 percent up from last year’s figure (125,179) and 37 percent ahead of target. A leading factor is the growing popularity of guided tours, which grew 50 percent from the previous year and attracted 18,000 people.

Environment finances

How it was funded

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

What it cost (operating expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

2.1 Gardens, beaches and green open spaces

Expenditure
34,609
37,640

39,088
38,662
(426)

Revenue
(8,329)
(4,317)

(3,980)
(2,496)
1,484¹

Net Expenditure
26,280
33,323

35,108
36,166
1,058

2.2 Waste reduction and energy conservation

Expenditure
13,661
15,586

19,329
14,614
(4,715)²

Revenue
(14,391)
(20,060)

(19,163)
(13,632)
5,531³

Net Revenue
(730)
(4,475)

166
982
816

2.3 Water network

Expenditure
38,433
40,698

42,224
41,748
(476)

Revenue
(1,712)
(1,606)

(1,843)
(35)
1,808⁴

Net Expenditure
36,721
39,093

40,381
41,713
1,332

2.4 Wastewater

Expenditure
41,432
42,575

43,283
44,186
903⁵

Revenue
(3,494)
(986)

(1,986)
(1,293)
693⁶

Net Expenditure
37,938
41,589

41,297
42,893
1,596

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

2.5 Stormwater

Expenditure
16,936
17,023

18,634
18,127
(507)⁷

Revenue
(3,137)
(762)

(2,164)
(141)
2,023⁸

Net Expenditure
13,799
16,260

16,471
17,986
1,516

2.6 Conservation attractions

Expenditure
6,384
6,755

6,695
6,970
274

Revenue
-
-

-
-
-

Net Expenditure
6,384
6,755

6,695
6,970
274

Environment total

Expenditure
151,455
160,277

169,253
164,307
(4,946)

Revenue
(31,063)
(27,732)

(29,136)
(17,597)
11,539

Net Expenditure
120,392
132,545

140,117
146,710
6,593

Variance explanations

1 Accounting for unbudgeted vested assets led to higher revenue

2 Additional volumes of waste to landfill led to higher operating costs, an increase to the closed landfill provision and higher carbon credit purchase price

3 Higher levels of contaminated and general waste resulted in revenue being ahead of budget

4 Accounting for unbudgeted vested assets led to higher revenue

5 Lower plant management costs due to reduced flows and lower disposal fees

6 Accounting for unbudgeted vested assets led to higher revenue

7 Higher depreciation and insurance costs than budgeted

8 Accounting for unbudgeted vested assets led to higher revenue

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

2.1 Gardens, beaches and green open spaces

Expenditure
2,777
6,102

4,136
82
4,137
83

2.2 Waste reduction and energy conservation

Expenditure
723
606

2,443
373
2,071
0

2.3 Water network

Expenditure
14,927
14,431

14,982
-
15,530
547¹

2.4 Sewage collection and disposal network

Expenditure
10,872
10,671

13,898
-
15,492
1,594¹

Variance explanations

1 The planned capital works programme was reprioritised during the year from Water (2.3) and Sewage collection and disposal network (2.4) to Stormwater (2.5).

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

2.5 Stormwater management

Expenditure
4,877
7,217

9,248
-
7,420
(1,828)¹

2.6 Conservation visitor attractions

Expenditure
2,725
1,956

720
 -
841
121

Environment total

Expenditure
36,901
40,982

45,428
455
45,491
518

Environment performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared to target
KPI compared to last year

Positive Result
Positive result
5
30
8

Within 5% or no change
Within 5% or no change
4
4
30

Not met or decreased
Not met or decreased
3
8
4

Not measured or not comparable
Not measured or not comparable
1
1
1

Performance data – outcome indicators

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

Council outcome indicator
Source

2015/16
2016/17

2017/18

Open space land owned or maintained by the Council - square metres per capita and total hectares
WCC Parks, Sport and Recreation
Sqm Per Capita
188.1sqm
194.3sqm

191.5 sqm
Not met or decreased

Open space land owned or maintained by the Council- total hectares

Hectares
3,833
4,040

4,073
Within 5% or no change

Residents' usage of the city's open spaces - local parks and reserves, botanic gardens, beaches and coastal areas, and walkways
WCC RMS 2018
See supplementary tables
95% Parks & Reserves

94% Parks & Reserves

95%
Within 5% or no change

Residents (%) who agree that the natural environment is appropriately managed and protected
WCC RMS 2018

79%
78%

78%
Within 5% or no change

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

45,009
53,839

59,531
Positive Result

Water consumption (commercial and residential combined) - billion litres (downward trend is favourable)
Wellington Water

24.5b
25.1b

23.1b
Positive Result

Freshwater biological health (macro invertebrates) - Makara, Karori, Kaiwharawhara and Porirua streams
Greater Wellington Regional Council
See supplementary tables

96.6 MCIIdeal is >100
Positive Result

Karori Stream increased from 85 to 93 macro invertebrates (MCI); the desired result is over 100.

Freshwater quality - Makara, Karori, Kaiwharawhara and Porirua streams (note data from Makara stream not available)
Greater Wellington Regional Council
See supplementary tables

Fair

2018 result reported in 2019
Within 5% or no change

River water quality has improved in the last year, but still falls short of optimal levels. We achieved a fair rating, which means we met four out of six guidelines. We can do more to influence practices that impact on stream and freshwater quality levels.

Energy use per capita (MWh, downward trend is favourable)
Wellington Electricity

6.67
6.29

6.01*
Positive Result

*The total energy measure used in this calculation includes the Takapu Road Grid Exit Point (GXP), which includes supply to Porirua substations. The total has been adjusted to allow for this.

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

204,577 m2
215,115 m2

245,467 m2
Positive Result

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

54.6 kg
53.8 kg

52.1 kg
Not met or decreased

Total waste to the landfill per capita (kilograms per person, downward trend is favourable)
WCC Waste Operations

411
447

478
Not met or decreased

Selected indicator from the City Biodiversity Index
WCC Parks, Sport and Recreation
Number of birds species observed at each monitoring station

13 bird species counted
Not measured or not comparable

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 
2015/16
2016/17

2017/18 Actual
2017/18 Target
% Variance

2.1 Gardens, beaches and green open spaces

To measure the quality of the open spaces we provide

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

86%
90%
-4%
Within 5% or no change

Number of visitors to the Botanic Gardens (including Otari-Wilton’s Bush)
1,147,067
1,042,044

1,324,892
1,280,000
4%
Positive Result

Warmer temperatures and the opening of the Discovery Garden on 30 September 2017 may have contributed to an increase in visitor numbers to the Botanic Gardens.

To measure the quality of street cleaning services

Residents (%) who are satistfied with the quality of street cleaning
76%
74%

76%
85%
-11%
Not met or decreased

Measure has not changed substantially since last year, dissatisfaction comments relate to complaints around rubbish and recycling blowing around the streets.

Street cleaning (%) compliance with quality performance standards
97%
97%

97%
98%
-1%
Within 5% or no change

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

1,691,656
1,690,127
(85% of 2020 target)
0.1%
Positive Result

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

63%
63%
0%
Positive Result

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

NA
95%
NA
Not measured or not comparable 

For the seven grants awards during 2017/18, no milestone reporting was due within the Annual Report reporting period.

PERFORMANCE MEASURES 
2015/16
2016/17

2017/18 Actual
2017/18 Target
% Variance

2.2 Waste reduction and energy conservation

To measure the quality of waste reduction and recycling services

Users (%) who are satisfied with the Council's recycling collection services
84%
77%

76%
85%
-11%
Not met or decreased

Increases in developments in the northern suburbs have continued to put pressure on services throughout the city. We are working with our contractor to review collection routes to improve efficiency and address the growth in demand. Negative media around the ban of imported recycling to China may have contributed to residents’ satisfaction, but we continue to recycle 85% of our kerbside recycling on-shore in New Zealand and have found alternative South East Asian markets for mixed plastic.

Waste diverted from the landfill (tonnes of recyclable material)
17,431 tonnes
18,078 tonnes

18,174 tonnes
at least 16,500 tonnes
10%
Positive Result 

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

97%
90%
8%
Positive Result

To measure the quality of our waste disposal services

Users (%) who are satisfied with waste collection services
85%
78%

79%
90%
-12%
Not met or decreased

Increases in developments in the northern suburbs have continued to put pressure on services throughout the city. We are working with our contractor to review collection routes to improve efficiency and address the growth in demand.

Energy sourced from the Southern Landfill (GWh) 
7.65GWh
7.44GWh

5.496GWh
8 GWh
-31%
Not met or decreased

The generator at the Southern Landfill reached the end of its life, which meant that in April and May 2018 it could not fulfil its normal function of generating energy through the destruction of gas emitted from the landfill. This accounts for 20 percent of the variance.

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 (1 GWh gigawatt hour = 1,000,000 kWh kilowatt hours)
48.828 GWh
50.926 GWh*

46.952 GWh*
Decrease in energy in use from previous year
Met 8% decrease
Positive Result

The year-end figure from 2016/17 has been adjusted to 50.9 GWh (down from 51.1) to reflect actual year-end result. Some of the readings contributing to the 2017/18 results are an estimate at time of publication.

WCC corporate greenhouse gas emissions - reduce emissions by 80% by 2050 (tonnes).
92,832
92,681

90,076
80% reduction by 2050
Met
Positive Result

PERFORMANCE MEASURES 
2015/16
2016/17

2017/18 Actual
2017/18 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%
Positive Result

A boil water notice was issued for PCC’s Pukerua Bay drinking water network after E. coli was found following third-party damage to the wastewater and drinking-water networks. However, the positive E. coli results were within the acceptable Drinking-water Standards for New Zealand compliance tolerance. The Drinking Water Assessor has confirmed that Wellington Water has achieved full (100%) compliance with the Drinking-water Standards.

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

Maintained
Maintain
0%
Positive Result

Customer satisfaction with water supply
91%
90%

89%
90%
-1%
Within 5% or no change 

Number of complaints, per 1000 connections, 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
13
13.84

13.35
<2015/2016 baseline
-3%
Within 5% or no change

Median response time for:

a) attendance for urgent call-outs
50
minutes
51
minutes

46
minutes
60 minutes
23%
Positive Result

b) resolution for urgent call-outs
2.8 hours
3.23 hours

3.77 hours
4 hours
6%
Positive Result

c) attendance for non-urgent call-outs
28.7 hours
44.8 hours

52.8 hours
36 hours
-47%
Not met or decreased

d) resolution for non-urgent call-outs
46.35 hours (1.93 days)
2.93 days

3.72 days
15 days
75%
Positive Result 

The number of water network bursts and leaks has been significantly higher than normal during this year’s extended summer period. This is evident across the region and has meant that the initial response to lower priority (non‐urgent) jobs has been slower, as more urgent jobs take precedence. The number of reported leaks is dropping and contractors are working to clear the backlog of non‐urgent jobs.

Percentage of real water loss from networked reticulation system
12%
8%

17%
<14%
-21%
Not met or decreased

The water loss estimate is higher than desired level and is likely to include high levels of water loss due to outdoor water use during the extended summer period. Responses to urgent leaks may have been slower during the dry December-January period, leading to more waste. Reported water leaks came back down to normal levels in March. Work is ongoing to find and fix network leaks.

Average drinking water consumption per resident per day
369 litres
364 litres

361 litres
375 litres
4%
Positive Result

Number of unplanned supply cuts per 1000 connections
1.20
0.71

0.67
<4
83%
Positive Result 

The year-end figure has met 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, which itself is subject to variables such as pipe materials and age, ground movement, traffic loading and soil condition.

PERFORMANCE MEASURES 
2015/16
2016/17

2017/18 Actual
2017/18 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) 
0.57
0.64

0.47
<=1.2
61%
Positive Result

The year-end figure has met the target and is lower than in previous years 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
0.55
0.46

0.17
0
not met
Not met or decreased

There were 12 dry weather network overflows, which is less than half as many as last year. Eight were due to blockages, three were due to main faults and one was due to a broken air valve. All of these have been investigated and fixed.

Customers (%) who were satisfied with the wastewater service
84%
82%

82%
75%
9%
Positive Result

Number of complaints, per 1000 connections, about:
(a) wastewater odour
(b) wastewater system faults
(c) wasterwater system blockages
(d) responsiveness to wastewater issues
22
19.72

16.5
<2015/2016 baseline
met
Positive Result

Median response time for wastewater overflows – attendance time
0.73 hours
0.77 hours
(~46 minutes)

0.72 hours (~43 minutes)
<= 1 hour
28%
Positive Result 

Median response time for wastewater overflows – resolution time
2.35 hours
2.68 hours

2.9 hours
<= 6 hours
52%
Positive Result

Wellington Water continue to deliver well within the target times.

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.
1
0

0
0
met
Positive Result

PERFORMANCE MEASURES 
2015/16
2016/17

2017/18 Actual
2017/18 Target
% Variance

2.5 Stormwater

To measure the quality and timeliness of the stormwater service

Number of pipeline blockages per km of pipeline
0.04
0.04

0.03
<=0.5
94%
Positive Result

Customers (%) who were satisfied with stormwater management
68%
62%

62%
75%
-17%
Not met or decreased

The survey result is comparable to the previous year and remains below target. Comments from respondents reflected concerns with flooding and blockages after heavy rain. Our 10-Year Plan 2018-28 includes funding to improve stormwater performance.

Number of complaints about stormwater system performance per 1000 connections
12
10.45

7.65
<2015/2016 baseline
Met
Positive Result 

Median response time to attend a flooding event
49 min
57 min

45 min
<= 60 min
25%
Positive Result

Wellington Water continue to deliver well within the target times.

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.
0
0

0
0
Met
Positive Result

Number of flooding events
1
6

2
trend only
Met
Positive Result

Number of habitable floors per 1000 connected homes per flooding event
0.14
0.11

0.013
trend only
Met
Positive Result

Habitable floor refers to a floor of a building (including a basement) but does not include ancillary structures such as stand-alone garden sheds or garages.
There were two confirmed habitable floors affected in two flooding events in July 2017. Both events affected the same property, causing the lower floor to be flooded as minor slips caused by rainfall blocked a nearby culvert. We have cleared the slips as well as secondary flow paths to avoid further flooding in case of another slip.

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

100%
90%
11%
Positive Result

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. Only one health notice was issued and this was outside the bathing season.

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
93%
96%

93%
90%
3%
Positive Result

PERFORMANCE MEASURES 
2015/16
2016/17

2017/18 Actual
2017/18 Target
% Variance

2.6 Conservation attractions

To measure the success of our investments in conservation attractions

Wellington Zoo – visitors
260,809
230,632

249,701
240,854
4%
Positive Result

Zealandia – visitors
125,849
125,179

132,288
96,500
37%
Positive Result

Visitor numbers for 2017/18 were a record 132,288, up 5.7 percent from the previous year. Guided tours are becoming an increasingly popular way for visitors to experience Zealandia. Over the year, 18,000 people experienced Zealandia via a tour, which represents a 50 percent increase from the previous year.

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 |  |
2015 | 2016 | 2017 |  | 2018
Coastal areas or beaches | 22% | 21% | 21% |  | 21%
Botanic gardens | 6% | 4% | 5% |  | 5%
Parks and Reserves | 21% | 22% | 20% |  | 22%
Town Belt or Outer Green Belt | 11% | 12% | 15% |  | 13%
Walking tracks | 17% | 16% | 17% |  | 19%
Sportsfields | 13% | 11% | 11% |  | 13%

Source: Wellington City Council Residents' Monitoring Survey 2018

Residents' usage of the city's open spaces - local parks and reserves, botanic gardens, beaches and coastal areas, and walkways | At least Yearly |  |
2015 | 2016 | 2017 |  | 2018
Coastal areas or beaches | 96% | 95% | 95% |  | 95%
Botanic gardens | 87% | 86% | 86% |  | 87%
Parks and Reserves | 96% | 95% | 94% |  | 95%
Town Belt or Outer Green Belt | 78% | 78% | 80% |  | 78%
Walking tracks | 82% | 80% | 81% |  | 82%
Sportsfields | 60% | 60% | 59% |  | 61%

Source: Wellington City Council Residents' Monitoring Survey 2018

Freshwater biological health (macro invertebrates) – Makara, Karori, Kaiwharawhara and Porirua streams
2013/14
2014/15
2015/16
2016/17

Makara Stream
107
114
not sampled
not sampled

Karori Stream
92
85
85
93.1

Kaiwharawhara Stream
96
82
71
98.6

Porirua Stream (at milk depot)

98.1

Location of measure changes

Porirua Stream (Wall park)

81
81

Porirua Stream (Glenside)

94
100

Data for 2017/18 will be available in 2019

Average 96.6

The Macroinvertebrate Community Index (MCI), an index of sensitivity to a wide range of environmental variables, is used to assess stream health. As shown in the next table, the desired values vary depending on the river class. We aim to achieve levels greater than 100 MCI. Increases in biological health were recorded for the three streams above, however overall water quality was still only fair.

Source: Greater Wellington Regional Council

River class
MCI quality class (2016/17 MCI score)
Plan outcomes
(MCI scores based on three year rolling mean)

Poor
Fair
Good
Excellent
All rivers
Significant rivers

1
Steep, hard sedimentary
<110
110-120
120-130
≥130
≥120
≥130

2
Mid-gradient, coastal and hard sedimentary
<80
80-105
105-130
≥130
≥105
≥130

3
Mid-gradient, soft sedimentary
<80
80-105
105-130
≥130
≥105
≥130

4
Lowland, draining ranges
<90
90-110
110-130
≥130
≥110
≥130

5
Lowland, large, draining plains and eastern Wairarapa
<80
80-105
100-120
≥120
≥100
≥130

6
Lowland, small
<80
80-105
100-120
≥120
≥100
≥130

Freshwater quality – Makara, Karori, Kaiwharawhara and Porirua streams | 2013/14 | 2014/15 | 2015/16 | 2016/17
Makara Stream | Poor | Fair | Fair | Not sampled
Karori Stream | Poor | Fair | Fair | Fair
Kaiwharawhara Stream | Fair | Fair | Fair | Fair
Porirua Stream | NA | Poor | Fair | Fair
Fair equals three or four out of six variables (one of which must be dissolved oxygen) to meet guideline values. More information on river health monitoring can be found at http://www.gw.govt.nz/Annual-monitoring-reports

Source: Greater Wellington Regional Council

Case study Virtual grid programme

Tom Pettit moved from Baltimore to Wellington in 2012 to attend Victoria University, where his wife had won a scholarship to study. Tom took the opportunity to complete a Master’s degree in public policy.

Since he joined the Council over 4 years ago, Tom has worked in research, strategy and sustainability. He currently holds the title of Sustainability Manager.

“Sustainability is something I’m really passionate about,” he says. And he believes he’s not alone.

“Wellingtonians are far-sighted and they care a lot about the future,” he says.

The areas he works on range from electric vehicle charging to home energy efficiency. A highlight this year has been the implementation of a neighbourhood power grid programme carried out in partnership with Contact Energy and Wellington Electricity. Tom worked on the project alongside Donna Wilson and Mark Noyes in the Council’s community services team.

The aim is to make houses not just lower their carbon emissions but be more resilient in the event of an earthquake. As part of this pilot, the Council invested $72,000 to help equip 24 Wellington households with a battery backup system and a 200L water tank after purchasing a solar roof array.

“It can be challenging to immediately see the long-term value of changing ingrained habits – even when the rewards are significant.” Tom Pettit

The programme involves homeowners willing to invest $15,000 in the initiative. These households are using their new systems to connect with and support their neighbours, inviting them to share their electricity backup in the case of a power outage. This means a more efficient and sustainable energy infrastructure and better neighbourhood connectedness.

The idea that sustainability begins at home is one that Tom practises in his own life. “I have a compost bin in my backyard and I bike to work every day,” he says.

Change won’t happen overnight, he says.

“For most of us, it can be challenging to immediately see the long-term value of changing ingrained habits – even when the rewards are significant.”

“Our job at the Council is to communicate that.”

Sustainability Manager Tom Pettit

3

Whanaketanga ōhanga Economic development

This chapter profiles our strategic approach, challenges and what we delivered in the economic development area, which includes city promotions and business support.

Snapshot of the city

3 Whanaketanga ōhanga
Economic development

Introduction

Our strategic approach is to support Wellington’s economic growth by supporting high-quality events and promoting tourism, attracting and supporting business activity, and exploring major economic development initiatives. Economic growth means Wellingtonians can continue to enjoy a high quality of life.

The challenges we face include the need to diversify our economy to make it more resilient, the delivery of capital projects in a tight construction market, and making the most of the opportunities presented by new technologies. We also continue to compete with other cities around the world for skills, and as a destination for business, cultural and sports events.

In the past 12 months, the city hosted a range of cultural and sports events and attracted growing numbers of visitors, particularly from overseas. We continued to market Wellington as a destination and to support Wellington businesses and organisations like Creative HQ, which actively promotes and support local entrepreneurship and innovation.

We continued discussions with The Movie Museum Limited (TMML) on a joint project to build a Movie Museum and Convention Centre. But in August 2018, we agreed to part ways. The decision was mutual and the Council will continue to work on building a convention centre. The convention and conference business is currently worth over $140 million a year to the Wellington economy and a new convention centre would mean more events are held here, which in turn benefits the hospitality, accommodation and retail sectors.

Visitor spending exceeded $2.5 billion for the first time, aided by WREDA’s strong visitor marketing campaigns and partnerships with other key players in the culture, transport and hospitality sectors. In 2018, a Deutsche Bank study ranked Wellington the world’s most liveable city for the second year running. Wellington is an international destination, with Singapore Airlines now operating daily direct flights to and from here.

Some of our cultural and environmental attractions like Te Papa and Zealandia also contribute towards the delivery of our economic goals.

Economic development performance story:

Visitor spending
gets a boost from international
tourism

WREDA’s efforts to draw visitors to Wellington are paying off, thanks to digital marketing and partnerships with cultural, transport and hospitality organisations. In 2017/18, visitor spending exceeded $2.5 billion for the first time. International visitor numbers grew by 19 percent to 903,000 over 5 years, and guest nights were up 22 percent over the same period. Domestic visitors also increased 15 percent to 5.3 million over 5 years, with guest nights rising 7 percent over the same period.

1.49m

The number of domestic visitors, measured in guest nights, is up 7% over 5 years

1.47m in 2016/17

5.31m

The number of domestic visitors, measured by passengers entering Wellington airport, is up 15% over 5 years

5.1m in 2016/17

902,622

The number of international visitors, measured by passengers entering Wellington airport, is up 19% over 5 years

901,373 in 2016/17

839,699

The number of international visitors measured in guest nights is up 22% over 5 years

782,079 in 2016/17

493

The total number of major conferences per year has dropped

569 in 2016/17

733,962

Target 500,000

Estimated attendance at Council-supported events and a number of major sports and cultural events contributed to the increase in 2017/18

657,743 in 2016/17

$55.6m

Economic contribution of A-level* events held in Wellington is up $12.1 million on $43.5 in 2016/17

*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.

12

A-level* events were held in Wellington in 2017/18, this is three more than the previous year

3.1 Whakatairanga tāone /
tautoko ā pākihi City promotions and business support

What we did:

Economic development performance story:

Visitor spending
gets a boost from international
tourism

WREDA’s efforts to draw visitors to Wellington are paying off, thanks to digital marketing and partnerships with cultural, transport and hospitality organisations. In 2017/18, visitor spending exceeded $2.5 billion for the first time. International visitor numbers grew by 19 percent to 903,000 over 5 years, and guest nights were up 22 percent over the same period. Domestic visitors also increased 15 percent to 5.3 million over 5 years, with guest nights rising 7 percent over the same period.

Movie Museum and Convention Centre. While we continued to discuss the possibility of this project during the year with our potential partner The Movie Museum Limited (TMML), in August 2018 we agreed to part ways.

Indoor arena. Work on assessing the feasibility of developing an indoor arena for the city and region advanced during the year, culminating in the publication of a strategic assessment by WREDA, which identified the benefits of having one.  The study showed that the region is being by-passed for major touring musical acts and other entertainment events due to the TSB Arena’s limitations in terms of size, capability and availability. The feasibility assessment is due to be completed in 2018/19 for consideration by the Council and the region.

Business Improvement Districts (BIDs). Through the Karori Project, it was recommended Karori establish a BID.  Following growing interest from Karori businesses and discussions with Marsden Village Association, the Association has commissioned a report to ascertain the viability of a combined Marsden Village and Karori BID. Separately, Tawa BID completed a report to develop their strategic plan and define their economic growth opportunities. In 2017, the BID policy was reviewed and updated, a Council BID support role was established and a BID Chairs Forum formed.

City promotion and events. We provided funding support for a range of events, from the World of WearableArt and the NZ Festival to the Jim Henson Retrospectacle and Beervana. Domestic and international visitor numbers grew in the past year and for the first time in a 12-month period visitor spending in Wellington exceeded $2.5 billion. There were 487 major conferences (major conferences are defined as conferences lasting a minimum of 2 days and with 61 or more delegates). WREDA delivered 58 events in Wellington as part of New Zealand’s TechWeek, an event held annually since 2012 to build enthusiasm around new technologies being developed in New Zealand.

Sports events. It was a big year for sports events in the capital. We supported a range of events, including two One Day Internationals (ODI) against Pakistan at the Basin, as well as an ODI against England and 20/20 against Pakistan and England at Westpac Stadium. We hosted All Black test matches in the year against the British and Irish Lions and France at Westpac Stadium. We also hosted the All Whites versus Peru FIFA World Cup Intercontinental Play Off at the Westpac Stadium in front of a record crowd of more than 37,000. We hosted the Special Olympics New Zealand National Summer Games late in November, with more than 1300 athletes participating.

City Growth Fund. The City Growth Fund has supported 29 initiatives totalling $3.6 million in 2017/18.  Highlights for the year include the final year of the Collider programme, supporting events such as the Jim Henson Retrospectacle, the Lions tour, the All Whites’ FIFA World Cup qualifying match to a record football crowd, the Asia Pacific Amateur Golf Championship, Beervana and Wellington on a Plate, Doc Edge Festival and the Pride Parade. Other initiatives include the WOW Hub and planning for their 30th Anniversary event in 2018, the establishment of Creative HQ’s GovTech Lightning Lab programme, the Roxy5 short film completion and Miramar Creative’s short course programme, and the resource consent process for the Ocean Exploration Centre.  These events and initiatives have added significantly to Wellington’s economy, reputation and liveability.

Additional grants. A range of community groups were supported with subsidies for the use of venues managed by WREDA through venue subsidies. These included events like the Chinese New Year and Diwali festivals, as well as other cultural celebrations including the Japan and Korean festivals, the Big Sing and Sweet Adelines Barber Shop events.

Economic development 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)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

3.1 City promotions and business support

Expenditure
38,788
42,434

37,051
43,511
6,460¹

Revenue
(15,133)
(14,541)

(14,040)
(15,676)
(1,636)²

Net Expenditure
23,655
27,892

23,011
27,835
4,824

Economic development total

Expenditure
38,788
42,434

37,051
43,511
6,460

Revenue
(15,133)
(14,541)

(14,040)
(15,676)
(1,636)

Net Expenditure
23,655
27,892

23,011
27,835
4,824

Variance explanations

1 Under budget due to planned grant to Wellington Stadium Trust being incurred in previous year

2 Decreased rental and fee revenue, including lost revenue as a result of the closure of St James Theatre for earthquake strengthening

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

3.1 Wellington convention centre

Expenditure
1,669
886

599
-
5,016
4,417¹

Economic development total

Expenditure
1,669
886

599
-
5,016
4,417

Variance explanations

1 Under budget due to delays in the Wellington Venues renewals programme ($1.640m) and the deferred decision on the combined Convention Centre project ($2.777m)

Economic development performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared to target
KPI compared to last year

Positive Result
Positive result
11
2
2

Within 5% or no change
Within 5% or no change
4
1
1

Not met or decreased
Not met or decreased
2
-
-

Not measured or not comparable
Not measured or not comparable
 1
1
1

Performance data – outcome indicators

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

Council outcome indicator | Source |  | 2015/16 | 2016/17 |  | 2017/18 |
Number of domestic and international visitors (guest nights - data to April year-end) | Statistics NZ | Domestic | 1,542,892 | 1,471,999 |  | 1,490,177 | Within 5% or no change
|  | International | 743,203 | 782,079 |  | 839,699 | Positive Result 
Average length of stay – international and domestic | Statistics NZ |  | 2.10 | 2.12 |  | 2.13 | Within 5% or no change
Number of major conferences | WREDA |  | 418 | 569 |  | 493 | Not met or decreased
Number of A-level* events held in Wellington and their economic contribution | WREDA | Events | 11 | 9 |  | 12 | Positive Result 
|  | Contribution | $36.5m | $43.5m |  | $55.6m | Positive Result
*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. |
New Zealand's top 200 companies based in Wellington | Deloitte Top 200 Businesses |  | 22 | 21 |  | 22 | Positive Result
Business enterprises – births and growths (net growth in business) | Statistics NZ |  | 0.1% | 1.0% |  | 1.7% | Positive Result
Domestic and international airline passengers entering Wellington Airport | Wellington International Airport Limited | Domestic | 4,957,898 | 5,121,757 |  | 5,310,967 | Positive Result
|  | International | 890,897 | 901,373 |  | 902,622 | Within 5% or no change
Free wifi usage (logons/day) – central city and waterfront | Citylink | Central City | 49,289 | 74,366 |  | 78,329 | Positive Result
| TradeMe | Waterfront | 821 | 714 |  | 723 | Positive Result
Pedestrian counts – average of various Lambton Quay sites | WCC Golden Mile Pedestrian Survey 2017 |  | 2,052 | 2,153 |  | 2,039 | Not met or decreased
Businesses and employees in research and development sector | Statistics NZ | Businesses | 165 | 162 |  | 162 | Within 5% or no change
|  | Employees | 5,460 | 5,670 |  | 5,780 | Positive Result
Secondary (international) students enrolled in Wellington. | Education New Zealand |  | 1,157 | 1,287 |  | 1,314 | Positive Result
The count of tertiary students (international and domestic) enrolled in Wellington is under review and not available for this report. | Not measured or not comparable
Events/activities held with international cities (in Wellington and overseas) | WCC International Relations |  | 58 | 58 |  | 65 | Positive Result

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 
2015/16
2016/17

2017/18 Actual
2017/18 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. Target is to maintain the Council's funding at less than 50% of total revenue
48%
63%

52%
<50%
-4%
Within 5% or no change

To measure attendance of Council-supported events

Estimated attendance at Council-supported events
978,188
657,743

733,962
500,000
47%
Positive Result 

A number of major sports and cultural events contributed to an increase in attendance at Council-supported events. These included major sporting events such as the All Blacks versus British & Irish Lions match, the FIFA World Cup Intercontinental Qualifier, and the NZ Asia Pacific Amateur Golf Champs. In addition to the NZ Festival, notable events included Homegrown, the LUX Festival, the Wellington Jazz Festival, Beervana and Wellington on a Plate, and the Jim Henson Retrospectacle.

To measure the quality of our investments in economic development

Events Development Fund – ratio of direct spend to economic impact
1:25
1:21

1:21
1:20
met
Positive Result 

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

not reported
95%
NA
Not measured or not comparable

Grants were allocated at end of the financial year to five Business Improvement Districts. This grant fund has been removed from our 10-year plan for 2018–2028

Case study Visitor marketing campaigns

David Perks might have been born and raised in the UK, but he’s now a Wellingtonian through and through.

“I wouldn’t live anywhere else. It’s been a wonderful place to raise my family.’

“We’re part of an interesting, friendly community and we spend lots of time outdoors exploring the region from Makara to the Wairarapa on various trails.”

David, WREDA's General Manager for Regional Development, Destination and Attraction, has been involved in Wellington’s tourism industry for more than a decade, including 7 years heading up Positively Wellington Tourism.

David’s first job in the capital in the late 1990s was managing a hotel in downtown Wellington. In those days many Wellington hotels used to close on Sundays and school holidays because there weren’t enough visitors to justify keeping them open. Now the city’s hotels are effectively at full capacity from Monday to Friday most of the year, and weekends are much busier.

He says two big changes have driven Wellington’s visitor economy over the past decade.

One is the length of time visitors spend in Wellington.

“It used to be that people would come and maybe spend one night here. Now Wellington has the longest visitor stays in an urban centre in New Zealand.”

“We push ourselves to keep reinventing how we share our story.” David Perks

The way WREDA markets the city has changed enormously too.

“Ten years ago, we relied mainly on TV and newspaper ads to tell our story to the world. Today, digital media has become our main marketing tool and we push ourselves to keep reinventing how we share our story.”

Efforts to draw visitors to Wellington have paid off. For the first time in a 12-month period, visitor spend in the Wellington economy in 2017/18 exceeded $2.5 billion.

Challenges remain. At the moment, one area of focus is getting growing numbers of visitors from China to choose Wellington. To achieve this, WREDA has partnered with Wellington airport, Weta Workshop, Te Papa and Kiwi Rail on several initiatives.

“What we do in the tourism space is very much based on a partnership model,” he says.

David Perks, WREDA’s GM, Regional Development, Destination and Attraction

4

Oranga ahurea Cultural wellbeing

This chapter profiles our strategic approach, challenges and what we delivered in the cultural wellbeing area, which includes arts and cultural activities.

Snapshot of the city

4 Oranga ahurea
Cultural wellbeing

Introduction

In its 2017 triennial survey on ‘New Zealanders and the Arts’, Creative New Zealand interviewed 6101 New Zealanders to measure their engagement with the arts. The survey found this engagement was higher in Wellington than the national average (87 percent versus 80 percent) and that the city’s residents are generally more positive about the arts than all New Zealanders.

Our strategic approach in this activity area is to provide opportunities for cultural expression, as well as expand people’s minds and build engaged, curious communities. Research shows creativity promotes wellbeing. A culturally vibrant city where artists and cultural organisations are actively supported and that is attractive to visitors also has economic benefits. Challenges include enhancing Wellington’s edge as New Zealand’s cultural capital in the face of increasing competition, securing additional large-scale events to refresh the city’s cultural offering, and providing accessible, safe and fit-for-purpose venues for the arts.

Over the past year, we focused on raising the profile of local artists and events, and of te reo. Attendance at events like ReCut and A Very Welly Christmas has been high and feedback from Wellingtonians has been positive.

There were challenges, most notably the need to strengthen cultural venues such as the St James Theatre and the Town Hall, both costly exercises. Both will take time to complete and necessarily cause disruption to tenants of the St James Theatre – the Royal New Zealand Ballet (RNZB) and the NZ Festival – as well as regular users of both venues. The strengthening of institutions like the St James Theatre and the Town Hall has both cultural and economic benefits.

Efforts will continue in the current financial year to carry the works through and continue to invest in and promote Wellington’s arts and events.

Cultural wellbeing performance story:

Modest gains – challenges still being addressed

Residents continued to engage actively with the arts, with the frequency of engagement rising 2 percent to 90 percent from the previous year. The Council supported a range of events, including the NZ Festival. The number of residents who agree that Wellington has “a culturally rich and diverse arts scene” was the highest since 2012, rising 3 percent to 93 percent.

Challenges remain. The number of performers and attendees at Council-supported events dropped to 94,000 from 163,000 in the previous year. Another long-term challenge is the necessary and costly strengthening of the Town Hall and St James Theatre.

Source: Wellington City Council Residents’ Monitoring survey 2018 and National Wellington Reputation Survey Results 2018

90%

of survey respondents who state that they engage in cultural and arts activities at least once a year

88% in 2016/17

93%

of survey respondents who agree that “Wellington has a culturally rich and diverse arts scene”

90% in 2016/17

77%

of survey respondents who agree that Wellington’s local identity (sense of place) is appropriately valued and protected

73% in 2016/17

88%

of survey respondents who agree with the statement that "Wellington is an easy place to get involved in the arts"

85% in 2016/17

82%

Target 90%

attendee satisfaction with Council-supported arts and cultural festivals

81% in 2016/17

94,202

total number of performers and attendees at Council supported venue events

Attendance can vary greatly, depending on the type of events that are supported.

163,202 in 2016/17

4.1 Ngohe toi, ahurea hoki Arts and cultural activities

Cultural wellbeing performance story:

Modest gains – challenges still being addressed

Residents continued to engage actively with the arts, with the frequency of engagement rising 2 percent to 90 percent from the previous year. The Council supported a range of events, including the NZ Festival. The number of residents who agree that Wellington has “a culturally rich and diverse arts scene” was the highest since 2012, rising 3 percent to 93 percent.

Challenges remain. The number of performers and attendees at Council-supported events dropped to 94,000 from 163,000 in the previous year. Another long-term challenge is the necessary and costly strengthening of the Town Hall and St James Theatre.

Source: Wellington City Council Residents’ Monitoring survey 2018 and National Wellington Reputation Survey Results 2018

What we did:

Wellington Museums Trust (trading as Experience Wellington). Experience Wellington exceeded its total annual visitor target for four of its six venues - City Gallery, Capital E, Cable Car Museum and Space Place. Both Wellington Museum and Nairn Street Cottage fell short of target. Altogether, the six venues greeted 725,214 visitors. Challenges include the long-term financial pressure created by the loss of a major sponsor of City Gallery’s exhibition programme as well as a jump in freight costs and steady increase in insurance costs. Successes include exceeding our aggregate visitation target by 10 percent despite City Gallery being closed for 15 weeks, and increasing our engagement with communities through innovation and outreach.

Cultural events. We delivered a diverse range of events and festivals including A Very Welly Christmas and a new annual Mataraki festival. The Council’s Ngā Wai Pīata (Streams of Light) parade opened this event, which included a month-long series of events kicking off with a Matariki-themed ReCut in a completely full Civic Square on 15 June 2018.

Public art. This year has seen a number of projects delivered under the pakiTara-Toi art on walls programme, including Johnson Witehira’s Ngā Kākano: The Seeds, which was installed on the hoardings around the Council’s Civic Administration Building (CAB) near Civic Square in November 2017. Working with the artist Neil Dawson, the Wellington Sculpture Trust installed the new Ferns in time to coincide with Matariki celebrations.

Toi Pōneke Arts Centre. The programmes we supported covered visual art, dance, sound art and playwriting residencies. In partnership with Urban Dreams Monthly, we hosted talks on a range of subjects including one with Hon Grant Robertson and Luit Bieringa on the PACE scheme and with Mayor Justin Lester on his Decade of Culture programme and the issues facing practitioners in the city.

Te Papa. The Council provides funding support to Te Papa. A total of 1,514,896 people visited the museum, with 50 percent of visitors coming from overseas. Peak periods included December 2017 and January 2018, driven by a LEGO exhibition and high numbers of international visitors during the summer cruising period, as well as March, when the new Toi Art Gallery opened along with a number of associated public and education programmes. There was also strong local support during school holiday periods. The Gallipoli exhibition has drawn more than two million visitors since it opened 3 years ago.

Capital of Culture. We confirmed our support for a Capital of Culture programme through our 10-year plan process, which will see Wellington enjoy a reinvigorated arts, events and culture scene as a result of a $127 million investment over the next 10 years. In addition to the capital works, it will support local arts events such as World of WearableArt, Visa Wellington on a Plate and the NZ Festival.

St James Theatre and the Royal New Zealand Ballet (RNZB). We had originally projected that $13 million earthquake strengthening works on the capital’s historic St James Theatre would be completed by late 2019. Detailed engineering assessments have revealed that the complexity of the work required to secure the long-term future of the theatre and associated buildings means it is likely to take significantly longer and cost more than originally estimated. This will be confirmed in November 2018. The longer closure means we will also upgrade some internal aspects of the building and further consider how we can maximise its utilisation once it is strengthened. We will also be working to ensure the delivery of the 2020 NZ Festival is not compromised by the unavailability of the St James Theatre. While the work is being undertaken, the Royal New Zealand Ballet will train and rehearse  in a ‘pop-up’ building in the Michael Fowler Centre car park. Following RNZB’s return to the St James Theatre, the Council has the option of repurposing this structure for community or commercial use, including at other sites.

Cultural wellbeing. Through the three funding rounds of the Arts and Culture Fund, 101 applications were supported with funding. A total of $368,710 was allocated during the year. The average grant size was $3,651. Grants ranged from $20,000 to $600. Eighteen organisations were supported with ongoing multi-year partnership funding. In 2017/18, this totalled $1,176,543 and included major arts organisations based in the city like the Royal New Zealand Ballet, Orchestra Wellington and the Katherine Mansfield Birthplace as well as dance,  theatre companies and producers including Footnote, BATS, Circa, Taki Rua and Tawata Productions. We consolidated support in the application process for the annual Litcrawl and Performance Arcade festivals, Chamber Music New Zealand and for the annual Theatre Awards Trust from 2018/19, along with annual contract funding for key arts institutions based in the city.

Wellington Regional Amenities Fund. Seven regionally significant projects were supported in the 2017/18 year through the region’s Joint Committee of Mayors that represents the five councils that contribute to this regional fund. Kupe, the high profile opening of the NZ Festival, involved communities across the region through events, education programmes and social media. Other support was for CubaDupa, the LUX light festival and the Kia Mau Festival of contemporary Māori and Pacific theatre.

Cultural wellbeing 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)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

4.1 Arts and cultural activities

Expenditure
19,243
20,625

21,256
21,560
304

Revenue
(876)
(749)

(746)
(1,523)
(777)¹

Net Expenditure
18,367
19,877

20,510
20,037
(473)

Cultural wellbeing total

Expenditure
19,243
20,625

21,256
21,560
304

Revenue
(876)
(749)

(746)
(1,523)
(777)

Net Expenditure
18,367
19,877

20,510
20,037
(473)

Variance explanations

1 Challenging revenue targets for attractions partially offset by savings in expenditure

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

4.1 Arts and cultural activities

Expenditure
1,968
1,286

443

1,258
815¹

Cultural wellbeing total

Expenditure
1,968
1,286

443
-
1,258
815

Variance explanations

1 Under budget due to deferred decisions on the Movie Museum component of the Convention Centre project

Cultural wellbeing performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared to target
KPI compared to last year

Positive Result
Positive result
2
2
-

Within 5% or no change
Within 5% or no change
7
1
3

Not met or decreased
Not met or decreased
5
4
4

Not measured or not comparable
Not measured or not comparable
 -
-
-

Performance data – outcome indicators

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

Council outcome indicator
Source

2015/16
2016/17

2017/18

Residents’ frequency of engagement in cultural and arts activities
WCC RMS 2018
See supplementary tables

90%
Within 5% or no change

New Zealanders and residents who agree that Wellington has a culturally rich and diverse arts scene
National Wellington Reputation Survey Results 2017
New Zealanders
81%
79%

79%
Within 5% or no change

Residents
92%
90%

93%
Within 5% or no change

Residents who agree that Wellington's local identity (sense of place) is appropriately valued and protected
WCC RMS 2018

78%
73%

77%
Positive Result 

Events held at key city venues
WREDA

558
624

594
Not met or decreased

New Zealanders and residents who agree that Wellington is the arts capital of New Zealand
National Wellington Reputation Survey Results 2017
New Zealanders
58%
58%

61%
Within 5% or no change

Residents
66%
64%

65%
Within 5% or no change

Residents (%) who agree with the statement that Wellington is an easy place to get involved in the arts
WCC RMS 2018

86%
85%

88%
Within 5% or no change

Te Papa visitors – total visitors, overseas visitors and New Zealand visitors from outside the region
Te Papa
Total
1,784,939
1,578,292

1,514,896
Not met or decreased

Overseas
708,371
718,081

758,695
Positive Result

NZ outside region
581,986
483,995

420,195
Not met or decreased

Customer (%) satisfaction with the New Zealand Festival
Nielsen – 2018 New Zealand International Arts Festival Review

91%
No festival

88%
Within 5% or no change

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

2018 76,599
16% (12,256)*
Not met or decreased

*The 2015/16 total figure included the Royal Edinburgh Military Tattoo of around 85,000 attendees including 54,000 from outside the region.

Total visits to museums and galleries (including Carter Observatory/Space Place)
Wellington Museums Trust
See supplementary tables
688,169
780,414

752,214
Not met or decreased

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 
2015/16
2016/17

2017/18 Actual
2017/18 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 
85%
81%

82%
90%
-9%
Not met or decreased

User (%) satisfaction with Toi Pōneke facilities and services
89%
90%

86%
90%
-4%
Within 5% or no change

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

96%
95%
1%
Positive Result

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

92%
90%
2%
Positive Result

30 grants acquitted from the fund in 2017/18, 116 of the 125 proposed outcomes were achieved across this reporting, KPI met as a % is 92.
Increase in outcomes met during previous year was because of the work we did with the assurance team around specifying SMART outcomes when we approve grants.

Venues Subsidy – total number of performers and attendees at supported events
113,390
163,202

94,202
Increase on previous year
Not met
Not met or decreased

Attendance at Council-supported venues can vary greatly from year to year, depending on the type of events that are supported each year through the Venues Subsidy.

Economic contribution ($) the New Zealand Festival makes to the city’s economy (direct new spend) 
$32.1m
not measured

$25.1m
$40m every 2nd year
Not met
Not met or decreased

Variance is attributed to comparatively lower ticket sales to previous years and consequently lower out of region visitation to drive economic impact.

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

26%
50%
-48%
Not met or decreased 

Twenty-six percent of first-time applicants were successful in obtaining cultural grants, which represented a decrease from the previous year. The fund is hotly contested by high-calibre applicants who have fewer funding options from community and gaming trusts. This is mitigated by the Creative Communities Funding scheme, which we (along with other Territorial Local Authorities) administer on behalf of Creative New Zealand. This fund enables non-legal entities and individuals to apply for and secure funding for small-scale projects.

Performance data – supplementary tables

Residents' frequency of engagement in cultural and arts activities | 2014/15 | 2015/16 | 2016/17 |  | 2017/18
At least once a week | 9% | 6% | 8% |  | 9%
At least once a month | 34% | 32% | 35% |  | 40%
At least every 6 month | 33% | 35% | 32% |  | 31%
At least once a year | 11% | 15% | 13% |  | 10%
| 87% | 88% | 88% |  | 90%
Less often | 9% | 9% | 9% |  | 6%

Source: Wellington City Council Residents' Monitoring Survey 2018

Case study The NZ Festival

The NZ Festival in Wellington is a long-running cultural event, drawing visitors from across the region and nationally. The festival is held once every 2 years. The last one was held from 23 February to 18 March 2018. The festival showcases international and homegrown music, theatre, dance, artists and writers.

More than 76,000 tickets were sold to the 2018 festival, and more than 230,000 attended the free events during the festival. While these numbers were lower than in the previous year, it has brought a wide range of cultural experiences to Wellington’s doorstep and enriched the local arts and culture scene.

“Our partnership with the NZ Festival is one that enables Wellington to bring art to the masses,” says Warrick Dent, General Manager Partnerships & Events at the Wellington Regional Economic Development Agency (WREDA).

“For 3 weeks this year, the festival splattered the region with colour and creativity, bringing world-class culture to Wellington and giving visitors from New Zealand and around the world a thrilling taste of our vibrant capital.”

The festival owes a great deal to the woman who headed it for 8 years until she had to step down due to ill health.

“The Festival splattered the region with colour and creativity, bringing world-class culture to Wellington.” Warwick Dent

Sue Paterson was the executive director of the NZ Festival and the Wellington Jazz Festival from 2009 to 2017.

She was responsible for bringing the Royal Edinburgh Military Tattoo to Wellington in 2016. Sue was also the festival’s marketing director from 1994 to 1998. She passed away in July 2018.

“Sue was a passionate lover and supporter of the arts and artists in Wellington. Her contribution to the cultural life of the city and advocacy for the arts will be missed by all of us who worked with her,” says Natasha Petkovic-Jeremic, Manager City Arts & Events.

In 2017, Sue was named Metlifecare Senior New Zealander of the Year in recognition of her 40 years of service to arts and culture. She was made an officer of the New Zealand Order of Merit in 2004.

The NZ Festival is supported via WREDA and the Wellington Regional Amenities Fund.

NZ Festival – Le Grand Continental
Photo: Matt Grace

5

Kaupapa Pāpori me ngā Mahi a Rēhia Social and recreation

This chapter profiles our strategic approach, challenges and what we delivered in the social and recreation area, which includes recreation promotion and support, community support, and public health and safety.

Snapshot of the city

5 Kaupapa Pāpori me ngā Mahi a Rēhia
Social and recreation

Introduction

Our focus in this area is on recreation provision, social initiatives and community support, and public health and safety. People are at the heart of everything we do, from providing shelter and support to our most vulnerable residents to investing in infrastructure such as halls and sportsgrounds to meet community needs. We try to make sure people have access to services and activities that help them lead healthy, connected lives.

Our strategic approach to securing a highly liveable, safe and inclusive community is to encourage active and healthy lifestyles, enable participation in sporting and other group activities, deliver quality recreation and social services, provide access to housing for those in need, and carry out our public health functions.

Many organisations contribute to residents’ health and safety, and to community strength. The Council’s approach includes supporting those organisations by playing a facilitation and funding role. We manage and maintain swimming pools, sportsgrounds and playgrounds, and community halls and centres.

Some of the challenges we face include addressing changing recreational patterns and balancing rising community demand and expectations of services against the pressure on costs to ratepayers. We also need to address a rise in street begging and homelessness and the needs of an ageing and increasingly diverse population.

Social and recreation performance story:

Drop in recreation satisfaction, begging a concern

The number of residents who agree that Wellington offers a wide range of recreation activities dropped 6 percent to 79 percent. Among the top reasons people gave for this was lack of time, cost of activities and lack of motivation. The number of people using libraries rose 8 percent to 82 percent. There was a notable increase in the number of people who are satisfied with the online library collection – this rose 16 percent to 87 percent.

In a survey measuring residents’ perception of city and community safety issues, 56 percent noted begging was a concern. There is no comparative figure for this particular measure as this is a new survey category.

Source: Wellington City Council Residents monitoring survey 2018

79%

of survey respondents agree that Wellington offers a wide range of recreation activities

Among the top reasons people gave for this was lack of time, cost of activities and lack of motivation.

85% in 2016/17

19%

of survey respondents agree that there are barriers to participating in recreation activities

Refer supplementary tables – questions and categories changed this year.

56%

of survey respondents identified “begging” as particularly concerning in Wellington

“Begging” was a new survey category under city and community safety issues of most concern, added this year.

82%

Residents (%) who use our libraries

74% in 2016/17

71%

of survey respondents who state they use Wellington libraries more than once a month

65% in 2016/17

86%

Target 75%

E-library users (%) who are satisfied with the online library collection

86% in 2016/17

3.89m

Target 2.5 million

Library website visits.
Target was exceeded due to the including usage counts of the Wellington Central Library mini app as visits to the Library website

3.94m in 2016/17

5.1 Whakatairanga mahi ā rēhia Recreation promotion and support

Social and recreation performance story:

Drop in recreation satisfaction, begging a concern

The number of residents who agree that Wellington offers a wide range of recreation activities dropped 6 percent to 79 percent. Among the top reasons people gave for this was lack of time, cost of activities and lack of motivation. The number of people using libraries rose 8 percent to 82 percent. There was a notable increase in the number of people who are satisfied with the online library collection – this rose 16 percent to 87 percent.

In a survey measuring residents’ perception of city and community safety issues, 56 percent noted begging was a concern. There is no comparative figure for this particular measure as this is a new survey category.

Source: Wellington City Council Residents monitoring survey 2018

What we did:

Sportsfields. We contributed $750,000 to the establishment of the new Toitu Poneke Community and Sports Hub in Kilbirnie. The new hub will service seven local sports clubs, including the Poneke Football Club. It also offers opportunities for conferences, business meetings, celebrations and community gatherings. The hub will help local sporting clubs become more financially sustainable, while also providing good facilities for the public. New service drainage was also installed on two fields in Kilbirnie Park.

Artificial turf. We developed two new artificial sportsfields. The Terawhiti-Wilf Glover artificial in Karori was formerly a bowling green and is now used for junior and youth football. We built a third artificial field at the National Hockey Stadium in Mt Albert. As well as the new turf, the upgrade included adding LED floodlights, expanding and improving car parking, and adding new player shelters and changing rooms. The number of hockey players in the region has grown by 35 per cent over the past 7 years. Both the National Hockey Stadium Trust and Waterside Karori Association Football Club contributed financially to the new fields.

ASB Sports Centre. Since it opened in 2011, the centre has drawn an increasing number of people. Attendance in 2013/14 was 606,000 and it has continued to increase year on year, reaching 866,000 in 2017/18. The centre has hosted many national and international events including the NZ Special Olympics and Women’s International Floorball World Cup Qualifier event. The centre won the overall top award at the 2017 New Zealand Recreation Association awards.

Shift. Shift was launched as a pilot project at the Council in March 2016 with funding from Sport Wellington and the Ministry of Social Development. It takes a holistic approach to improving the wellbeing of young women by increasing awareness through education and reducing barriers to participation. Shift won the Outstanding Recreation Programme Award in the 2017 New Zealand Recreation Association awards. It now operates as a Charitable Trust across Wellington.

Basin Reserve. Work was completed on refurbishing the exterior and interior of the RA Vance Stand and the scoreboards as part of the Basin’s redevelopment programme. In May, the Council made the decision to strengthen and upgrade the Museum Stand. When completed, the Museum Stand will provide a home to the New Zealand Cricket Museum and office accommodation for Cricket Wellington, with the former Cricket Wellington offices being relocated to Zealandia to provide them with much needed space for staff.

Swimming pools. A total of 1,236,169 swimming pool visits were recorded during the year. This is 6 percent lower than in the previous year (1,318,555). The decline is partly due to the closure of Karori Pool in July and August for its 5-yearly maintenance. As part of the maintenance closure, we completed a refurbishment of the pool, upgraded the changing room and installed new facility signage. Separately, we also launched the website for SwimWell, our swim programme for children. This included the launch of a new brand. Visits to the summer pools in Thorndon and Khandallah rose due to good weather. The increase was particularly significant at Khandallah Pool, where visits rose 162 percent to 19,467 from 7444 in the previous year. A provisional capital budget of $1.1 million has been included in Our 10-Year Plan 2018-28 to make improvements to Khandallah Pool, with a number of options being explored.

Aquadome. The Council provided funding support of $650,000 to Wellington East Girls College as part of the Council’s School Pool Partnership fund. The funding was used to reopen the school pool, which is used by the college during the day and by the community for learn to swim programmes outside school hours.

5.2 Tautoko hāpori Community support

What we did:

Libraries. We welcomed 2,440,718 visitors to our libraries, which is an increase of 4 percent over 2015/16 (2016/17 was impacted by some closures).  While there have been some delays, construction for the Waitohi Johnsonville Community Hub is on track with completion still due in December 2019. Planning for operations is underway including library services, collections, events, the cafe, and commissioning the design of iwi art telling the story of Waitohi. There were over 260,000 online visits to the Wellington heritage images database Recollect, which is developed and maintained by the library.

City Housing. We signed off on a comprehensive housing strategy for the city that provides a clear blueprint for how the Council will invest to improve housing choices for Wellingtonians in the future. During the year, we continued our social housing upgrade programme and development of Arlington site 2, which was completed in September. Discussions were undertaken during the year on options for Arlington sites 1 and 3, and these are ongoing. We also sought expressions of interest to work in partnership with building owners and developers to retrofit office buildings and turn them into affordable accommodation. Shortly after the end of the financial year, Council support in principle for retrofitting one office building was approved.

We also successfully relocated 77 families from some of our older or earthquake-prone buildings to other units in our portfolio. One of our commitments through the Deed of Grant with government is that we support our tenant communities to be cohesive and resilient. This year we supported our tenants to deliver two large events, Chinese New Year and Matariki. Attendance was about 250 people for Chinese New Year and about 80 for Matariki. Both of these events were tenant led with support from staff.

Community grants. We supported 45 organisations with ongoing contract funding, totalling $2,734,205. This includes a citywide network of community centres, local youth development and for organisations providing advice and specialist support to vulnerable people in our community.

Rental Warrant of Fitness. We rolled out New Zealand’s first Rental Warrant of Fitness in August 2017 in partnership with the University of Otago, Wellington and the Sustainability Trust.  Our rollout generated a lot of interest and the free self-assessment app had over 1,100 downloads. Three properties have passed the Rental WoF. The government has subsequently passed the Healthy Homes Guarantee Act, which will establish a Healthy Homes Standard for all rentals across the country.  We are now waiting to see the detail of that standard.

Assisting refugees. We provided ‘Welcome to Wellington’ information packs with translated material to refugees arriving into Wellington from  Syria, Palestine, Iraq, Ecuador, Somalia, Ethiopia, Colombia, Jordan, Iran, Sri Lanka and Afghanistan.

Homelessness. In collaboration with community organisations and central government, we are identifying and countering the conditions that are causing Wellingtonians to become homeless and using the Housing First principle as a first step towards helping those in need. People who have been homeless for a long time often have complex needs, so we have also been helping to develop more intensively supported accommodation opportunities that will meet their unique needs. 

Social grants. We support community wellbeing through the provision of community grants. We funded 45 organisations for multi-year contracts. This includes a citywide network of community centres, local youth development and organisations providing advice and support to vulnerable people in our community. We increased funding for  programmes and services that prevent sexual and gender violence.  We also helped fund 33 projects that support community safety, wellbeing and connectedness. For example, we funded a youth safety initiative, TakeTen, and the Soup Kitchen’s garden project, He Rākau Koikoi.

5.3 Hauora/haumaru tūmatanui Public health and safety

What we did:

Harm reduction. We have consolidated and increased funding for key organisations delivering programmes and services that prevent sexual and gender violence. These include Wellington Sexual Abuse HELP and the Sexual Abuse Prevention Network who have been put onto a 3-year contract. In partnership with NZ Police, Victoria University of Wellington Students’ Association (VUWSA), Massey Wellington Students’ Association (MAWSA), and the Sexual Abuse Prevention Network, we have launched the Don’t Guess the Yes Campaign. The campaign is designed to raise awareness about consent through videos, collateral, and includes a social media campaign to encourage open discussion.

CCTV. This year we celebrated five years of Camera Base Operations with a social event for all the volunteers and stakeholders. The MOU between the police and Wellington City Council has been reviewed and agreed for the next 2 years, re-establishing both parties’ firm commitment to the project. There are five new cameras in locations to improve safety and data collection. We also now have a te reo name ‘Wāhi whakaahua ō Pōneke’.

Emergency welfare response. We provided an effective, citywide welfare response for people and animals for a large number of localised emergencies in Wellington including slips, floods and storms. Our initial response was rapid and effective and done in conjunction with social services, community-based organisations, non-government organisations and government departments. We are working closely with other councils to ensure a more consistent welfare response across the region is achieved.

Domestic Animal Policy. We have developed a policy for cats, poultry, bees and other domestic animals to complement the dog policy. The Domestic Animal Policy has been developed to support the responsible care of animals and promote animal welfare, minimise harm and nuisance, and aid implementation of the Animal Bylaw. It takes an educative and supportive approach.

Social and recreation 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)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

5.1 Recreation promotion and support

Expenditure
37,886
38,493

42,069
40,998
(1,071)¹

Revenue
(11,301)
(11,831)

(11,710)
(11,710)
-

Net Expenditure
26,585
26,662

30,359
29,288
(1,071)

5.2 Community support

Expenditure
51,745
56,009

56,751
57,674
923²

Revenue
(36,104)
(37,315)

(38,087)
(37,285)
802³

Net Expenditure
15,641
18,694

18,664
20,389
1,725

5.3 Public health and safety

Expenditure
14,047
18,155

16,538
15,955
(583)

Revenue
(4,101)
(6,453)

(4,339)
(4,190)
149

Net Expenditure
9,946
11,702

12,199
11,765
(434)

Social and recreation total

Expenditure
103,678
112,657

115,358
114,627
(731)

Revenue
(51,506)
(55,599)

(54,136)
(53,185)
951

Net Expenditure
52,172
57,058

61,222
61,442
220

Variance explanations

1 Higher labour and professional costs along with greater depreciation expenditure than budgeted

2 Lower depreciation expenditure than budgeted

3 Timing of recognition of Crown funding for Housing Upgrade Programme partially offset by lower rental revenue from vacated social housing, pending upgrade

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

5.1 Recreation promotion and support

Expenditure
5,805
8,708

6,529
184
8,595
2,250¹

5.2 Community support

Expenditure
19,652
18,756

32,725
21,463
13,960
2,698²

5.3 Public health and safety

Expenditure
812
2,721

999
-
2,129
1,130³

Social and recreation total

Expenditure
26,269
30,186

40,253
21,647
24,684
6,079

Variance explanations

1 Under budget due to timing of work on the completion of the Basin Reserve Master Plan

2 Under budget due to timing of work undertaken on the Johnsonville Library development project and with several of the community centre upgrades – Aro Valley, Kilbirnie, Newtown and Strathmore

3 Under budget due to timing of work undertaken on the public conveniences and pavilions work programme (Alex Moore Park, Ben Burn Park and Island Bay)

Social and recreation performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared to target
KPI compared to last year

Positive Result
Positive result
3
24
5

Within 5% or no change
Within 5% or no change
7
6
29

Not met or decreased
Not met or decreased
2
8
4

Not measured or not comparable
Not measured or not comparable
 7
1
1

Performance data – outcome indicators

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

Council outcome indicator
Source

2015/16
2016/17

2017/18

Residents' usage of City Council community and recreation facilities
WCC RMS 2018 
Community Centre
20%
23%

23%
Within 5% or no change

Community Hall
21%
19%

18%
Within 5% or no change

Residents who agree that Wellington offers a wide range of recreation activities
WCC RMS 2018

82%
85%

79%
Not met or decreased

Residents' frequency of physical activity
WCC RMS 2018

74%
73%

74%
Within 5% or no change

Residents who perceive there to be barriers to participating in recreation activities
WCC RMS 2018
See supplementary tables

19% say no barrier
Not measured or not comparable

The survey question this measure was based upon has changed to "What, if anything, makes it difficult for you to take part in these recreational activities?" The five top answers are lack of time, too busy, activity costs too much, nothing or not interested, and lack of motivation. Refer to supplementary table for breakdown. Not all of the categories of answers are comparable to previous years data but we have aligned answers where possible alignments exist.

Residents' importance of sense of community in local neighbourhood
Quality of Life 2018

Biennial Result

75%
-

68%
Not met or decreased

Residents' usage of libraries and frequency of use
WCC RMS 2018
Usage
73%
74%

82%
Positive Result

Frequency of use

71% more than once a month
Positive Result

Residents who engage in neighbourly actions
WCC RMS 2018
See supplementary tables
Given help to a neighbour

58%
Within 5% or no change

Housing Services tenants who report positive social contact
2018 Tenant Survey

94%
93%

94%
Within 5% or no change

Residents' life expectancy
Statistics NZ 
Male

82.3
Not measured or not comparable

 Female

85.6
Not measured or not comparable

Residents' perception – city and community safety issues of most concern (downward trend is favourable)
WCC RMS 2018
See supplementary tables

56% say begging of concern
Within 5% or no change

Number of notifications of the most prevalent food and water-borne diseases (downward trend is favourable)
WCC Public Health

197
207

175 to end February.
Not measured or not comparable

Variance commentary: We ceased receiving notifications at end of February 2018 and no longer carry out investigations on behalf of Regional Public Health

Food premises – number of cleaning notices and closures per year (downward trend is favourable)
WCC Public Health
Cleaning notices
8
10

NA
Not measured or not comparable

Closures
2
-

NA
Not measured or not comparable

Food premises (%) with an inspection rating of excellent or very good that maintain or improve their inspection rating
WCC Public Health

93%
96%

No longer applies due to transition to Food Act 2014
Not measured or not comparable

Changes to the Public Health (Food) Act 2014 mean that we will be introducing new KPIs in the next year. We ceased receiving notifications at the end of February 2018 and no longer carry out investigations on behalf of Regional Public Health.

Number of uses of Leisure Card
Recreation Wellington

138,447
141,763

150,166
Positive Result

Dog control – complaints received (% of registered dogs, downward trend is favourable)
WCC Public Health

24%
21%

21%
Within 5% or no change

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  | 2015/16 | 2016/17 |  | 2017/18 Actual | 2017/18 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  |  | 88% | 87% |  | 90% | 90% | 0% | Positive Result
User (%) satisfaction  | Recreation Centres | 87% | 88% |  | 86% | 90% | -4% | Within 5% or no change
User (%) satisfaction – sportsfields | ASB Sports Centre | 91% | 95% |  | 95% | 90% | 6% | Positive Result
| Grass | 73% | 72% |  | 73% | 85% | -14% | Not met or decreased
| Artificial turf | 84% | 78% |  | 81% | 85% | -5% | Within 5% or no change
The great summer weather meant we did not have to close many grounds and cancel sport. However the very wet winter saw increased cancellations.
Visits to facilities – swimming pools |  | 1,300,700 | 1,318,555 |  | 1,236,169 | 1,260,000 | -2% | Within 5% or no change
Visits to facilities – recreation centres and ASB Sports Centre |  | 1,077,573 | 1,223,588 |  | 1,206,688 | 1,060,000 | 14% | Positive Result
ASB Sports Centre courts utilisation (%)  |  | 50% | 56% |  | 58% | 45% | 29% | Positive Result
Sportsfields – % of scheduled sports games and training that take place | Winter | 79% | 84% |  | 71% | 80% | -11% | Not met or decreased
| Summer | 99% | 92% |  | 97% | 90% | 8% | Positive Result
Artificial sportsfields % utilisation | Peak Winter | 68% | 79% |  | 79% | 80% | -1% | Within 5% or no change
| Peak Summer | 36% | 34% |  | 39% | 40% | -3% | Within 5% or no change
| Off-peak Winter | 15% | 19% |  | 16% | 25% | -36% | Not met or decreased
| Off-peak Summer | 10% | 8% |  | 9% | 20% | -55% | Not met or decreased
The great summer weather meant there was less demand for use of artificial sportfields and very wet winter saw increased sports cancellations. |
Marinas occupancy |  | 96% | 98% |  | 98% | 96% | 2% | Positive Result

PERFORMANCE MEASURES  | 2015/16 | 2016/17 |  | 2017/18 Actual | 2017/18 Target | % Variance |
5.2 Community support
To measure the quality and usage (quantity) of the housing services we provide
Tenants (%) who were satisfied with services and facilities | 94% | 96% |  | 94% | 90% | 4% | Positive Result
Tenant rating (%) of the overall condition of their house/apartment (average, good and very good) | 96% | 94% |  | 93% | 90% | 3% | Positive Result
Tenants (%) who felt safe in their complex at night | 75% | 78% |  | 75% | 75% | 0% | Positive Result
Occupancy rate of available housing facilities | 94% | 97% |  | 96% | 90% | 6% | Positive Result
All tenants (existing and new) housed within policy | 99% | 97% |  | 98% | 98% | -1% | Within 5% or no change
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 | Positive Result
To measure the quality and usage (quantity) of our community and recreation support services (including libraries)
Libraries – users (%) satisfied with services and facilities | 93% | 92% |  | 92% | 90% | 2% | Positive Result
E-library – users (%) satisfied with the online library collection | 85% | 86% |  | 86% | 75% | 15% | Positive Result
Consistent with previous results. |
Accessible Wellington Action Plan initiatives planned for next year | 85% | - |  | NA | 90% | met | Within 5% or no change
As part of its commitment to improving accessibility in the city, the Council has developed a draft Accessible Wellington Action Plan. The plan is currently being considered before it can be taken to the next stage.
The proportion of grants fund successfully allocated (through milestones being met) | 100% | 92% |  | 100% | 95% | 5% | Positive Result
Proportion of outcomes delivered (previous projects) – weighted by $ value | 100% | 94% |  | NA | 90% | NA | Not measured or not comparable
The outcomes are based on accountability reports submitted for grants approved during the financial year. Under our policy we give grantees 12 months from the grant decision to submit a report.
Libraries – residents (%) who are registered members | 79% | 84% |  | 89% | 75% | 19% | Positive Result
Targets have been recalibrated for next year as membership does not expire unless requested by the customer or next of kin |
Libraries – physical visits | 2,248,409 | 2,159,555 |  | 2,440,718 | 2,400,000 | 2% | Positive Result
Libraries – website visits | 3,809,967 | 3,939,631 |  | 3,887,484 | 2,500,000 | 55% | Positive Result 
Target was exceeded due to the including usage counts of the Wellington Central Library mini app as visits to the Library website. |
Library items issued | 2,923,042 | 2,811,921 |  | 2,815,744 | 3,000,000 | -6% | Not met or decreased 
Occupancy rates (%) of Wellington City Council Community Centres and Halls | 39% | 45% |  | 42% | 45% | -6% | Not met or decreased 

PERFORMANCE MEASURE

2015/16
2016/17

2017/18 Actual
2017/18 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%
91%

93%
100%
-7%
Not met or decreased

Non-urgent
100%
97%

96%
99%
-3%
Within 5% or no change

WCC public toilets – urgent requests responded to within 4 hours and non-urgent requests responded to within 3 days
Urgent
100%
100%

98%
100%
-2%
Within 5% or no change

Non-urgent
100%
98%

98%
95%
3%
Positive Result

WCC public toilets (%) that meet required cleanliness and maintenance performance standards

100%
98%

96%
95%
1%
Positive Result

Alcohol inspections (%) carried out for medium to very high-risk premises

100%
100%

88%
100%
-13%
Not met or decreased

Alcohol inspections (%) carried out for medium to very high-risk premises during trading hours

28%
17%

36%
25%
44%
Positive Result

These two results for alcohol inspectations reflect 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 time frames met 

85%
83%

85%
80%
6%
Positive Result

Performance data – supplementary tables

Residents' perceptions that there are barriers to participating in recreation activities | 2014 | 2015 | 2016 | 2017 |  | 2018
|  | Org | Participant
Lack of time due to commitments, childcare duties, other interests etc. |  |  |  |  |  | 39% | 34%
Too busy | 45% | 47% | 43% | 49% |  | 29% | 26%
Activity costs too much | 36% | 26% | 29% | 26% |  | 25% | 16%
Not interested | 13% | 10% | 12% | 14% |  | 23% | 14%
Nothing |  |  |  |  |  | 16% | 19%
Lack of motivation | 23% | 22% | 22% | 25% |  | 20% | 22%
Lack of knowledge about how to do it | 13% | 15% | 12% | 13% |  | 14% | 9%
Lack of transport |  | 20% | 22% | 20% |  | 11% | 9%
Lack of parking |  |  |  |  |  | 11% | 9%
No easy access to facilities or parks nearby |  | 1% | 2% | 2% |  | 7% | 6%
Poor health | 9% | 6% | 8% | 7% |  | 6% | 6%
Injury of disability |  |  |  |  |  | 8% | 8%
Cultural/language barriers |  |  |  |  |  | 2% | 2%
Don’t feel welcome |  |  |  |  |  | 7% | 3%
Safety concerns |  |  |  |  |  | 2% | 3%
Other (specify) | 8% | 8% | 6% | 7% |  | 3% | 3%
Don’t know |  | 1% | 0% | 0% |  |  |

Organisation-led opportunities: These are formally organised with participation facilitated by a club or group and usually involving membership or subscription fees with participation opportunities provided via regular competition and events. Examples include playing competitive or social sport eg hockey, belonging to a tramping club or participating in a fun run series.

Participant-led opportunities: These are more informal and flexible allowing place and time to be determined by the participant. Maybe a pay for play component with costs to access a place or purchase equipment. Examples include swimming at a Council pool, shooting hoops at a local park, going for a walk along the waterfront.

Source: Wellington City Council Residents' Monitoring Survey 2018

Residents' usage (%) of libraries and frequency of use | 2015 | 2016 | 2017 |  | 2018
More than once a week | 4% | 5% | 6% |  | 8%
Once a week | 15% | 15% | 14% |  | 16%
Once every 2–3 weeks | 24% | 20% | 25% |  | 28%
Once a month | 19% | 20% | 20% |  | 19%
Subtotal more than once a month | 62% | 60% | 65% |  | 71%
Once every 2–3 months | 21% | 19% | 19% |  | 16%
Once every 4–6 months | 7% | 12% | 8% |  | 7%
Less often than once every 6 months | 8% | 9% | 8% |  | 6%
Don’t know | 1% | 1% | 0% |  | 1%

Source: Wellington City Council Residents' Monitoring Survey 2018

Residents engaging in neighbourly actions | 2015 | 2016 | 2017 |  | 2018
Spoken to a neighbour | 92% | 91% | 89% |  | 89%
Given help to a neighbour | 58% | 62% | 55% |  | 58%
Received help from a neighbour | 47% | 49% | 46% |  | 47%
Participated in an activity with a neighbour | 38% | 36% | 33% |  | 33%
Discussed emergency preparedness with a neighbour | 16% | 14% | 21% |  | 15%
None of the above | 7% | 7% | 10% |  | 9%

Source: Wellington City Council Residents' Monitoring Survey 2018

Residents' perceptions of city safety issues of most concern | 2015 | 2016 | 2017 |  | 2018
Which of the following, if any, are particularly concerning in Wellington at present?
Begging (new in 2018) |  |  |  |  | 56%
Poorly lit or dark public areas such as streets, paths and parks | 61% | 63% | 59% |  | 55%
Vandalism such as broken windows in shops and public buildings | 26% | 27% | 17% |  | 17%
Graffiti | 34% | 32% | 16% |  | 16%
Poorly maintained or dangerous public areas such as streets, paths and parks | 34% | 37% | 32% |  | 26%
Traffic, including busy roads and lack of pedestrian facilities | 34% | 33% | 33% |  | 36%
Dangerous driving including speeding, drunk drivers and so on | 29% | 30% | 33% |  | 33%
Alcohol and drug problems | 51% | 49% | 46% |  | 46%
Car theft or vandalism, and theft from cars | 36% | 32% | 29% |  | 27%
Threatening people and/or people behaving dangerously | 48% | 51% | 46% |  | 35%
Other (specify) | 11% | 10% | 6% |  | 8%
Nothing | 5% | 5% | 3% |  | 4%
Don’t know | 1% | 2% | 1% |  | 2%

Source: Wellington City Council Residents' Monitoring Survey 2018

Case study Connecting city communities

Helping neighbours get to know each other and live well is the focus of the Community Services' Resilience team.

“Our goal is to help people connect in their communities and live well through normal times but also through shocks and stresses,” says Jenny Rains, manager of Community Services.

Jenny grew up in Canada, where she worked with migrant and homeless communities in Vancouver, co-designed support programmes with Canada's northern and isolated communities, and supported volunteer programmes in the Maritime Provinces. Before joining the Council, Jenny also worked with the deaf and wider disability community in Wellington.

The Council’s role is one of facilitator, providing people with community resources and information on the spaces and activities that are available to them, and on emergency preparation.

“There are a lot of resources in the community. It’s about connecting those resources,” she says.

“A lot of people in the city centre move to be around other people, but have difficulty making those connections. Our role is to help people create an environment where they do interact and get to know each other,” Jenny says.

“There are a lot of resources in the community. It’s about connecting those resources.” Jenny Rains

This work was prompted by feedback from city centre residents following the 2016 Kaikoura earthquake and during the Council’s emergency work. There was a real sense of vulnerability in central Wellington.

The initiative Connecting City Communities came out of a series of workshops and working groups with central city residents in 2017. It is a collaborative project with city residents and community groups that fosters neighbourhood connections in central city apartment buildings. This includes fresh takes on communal meals, re-imagining public spaces, group recreational activities, or community art exhibitions.

Mark Noyes, who is leading this work in Jenny’s team, cites the example of a Chilean apartment dweller who wanted to organise a communal meal for the building’s residents after tensions arose. This approach was something of a tradition in his home country.

“You don’t have to be good friends with the people around you. But it’s important for you to know something about them and for them to know something about you,” Mark says.

6

Tāone tupu ora Urban development

This chapter profiles our strategic approach, challenges and what we delivered in the urban development area, which includes urban planning, heritage and public spaces development, and building and development control.

Snapshot of the city

6 Tāone tupu ora
Urban development

Introduction

Our strategic approach is to make sure the city remains liveable even as our population grows and challenges around seismic risk and climate change increase. We want housing to remain affordable. We also want to maintain the city’s unique character, protect heritage, and to improve its resilience so it is better able to withstand future shocks and stresses.

Key challenges include increasing housing supply amid rising construction costs, making our inner city resilient and liveable as population density grows, and supporting more sustainable land use and transport options to accommodate more people in the city.

Significant highlights this year included public space improvements on the waterfront and the upgrade of Lombard Lane, and our continued efforts to simplify and streamline the building consenting process. Now 80 percent of building consents are lodged via GoShift, our electronic portal for building consent applications that allows customers to track progress. We are exploring how this might be rolled out across other consenting processes.

We’ve carried out strengthening works around the city. That includes work around the waterfront and the facades and parapets of 59 at-risk buildings. The resource consent for the strengthening of the Town Hall has been approved and building consent has been lodged. The resilience work will continue over the next years as part of our commitments in Our 10-Year Plan 2018-28.

Urban development performance story:

Heading in the right direction

The number of residents who agree their local suburban centre is lively and attractive dropped 20 percent, failing to meet the 60 percent target for the financial year. The 2018 Residents’ Monitoring Survey shows that people are much happier in the city centre than in the suburbs. Eighty-six percent of residents found the city centre lively and attractive while only 48 percent thought that about their suburban centre.

The value of residential building consents rose 34 percent to $440 million. Eighty percent of all building consent applications are now being lodged via GoShift, the Council’s electronic portal.

48%

Target 60%

Residents (%) who agree their local suburban centre is lively and attractive

50% in 2016/17

More than 50% of residents do not feel that their local suburban centre is lively and attractive. For more details refer to Performance data – Council performance measures.

$440m

Value of residential building consents

$329m in 2016/17

$272m

Value of non-residential building consents

$477m in 2016/17

91%

Target 100%

Building consents issued within 20 working days

87% in 2016/17

26%

Residents (%) who state there are urban design/urban form safety issues (poorly maintained or dangerous public areas such as streets, paths and parks)

32% in 2016/17

55%

Residents (%) who state there are urban design/urban form safety issues (poorly lit or dark public areas such as streets, paths and parks)

59% in 2016/17

6.1 Whakamahere tāone / whakawhanake wāhi tuku
iho tūmatanui Urban planning, heritage and public spaces development

Urban development performance story:

Heading in the right direction

The number of residents who agree their local suburban centre is lively and attractive dropped 20 percent, failing to meet the 60 percent target for the financial year. The 2018 Residents’ Monitoring Survey shows that people are much happier in the city centre than in the suburbs. Eighty-six percent of residents found the city centre lively and attractive while only 48 percent thought that about their suburban centre.

The value of residential building consents rose 34 percent to $440 million. Eighty percent of all building consent applications are now being lodged via GoShift, the Council’s electronic portal.

What we did:

Urban activation. Lombard Lane and the Bond Street upgrade project was 90 percent completed. This included underground services upgrades to sewer, stormwater and new electrical ducting. A launch event was held at the completion of stage 1 in November 2017. The final stage was completed in September 2018. Holland Street works were put on hold following a second traffic resolution process. Minor footpath, kerb and parking improvements will be implemented in 2018 while the wider precinct project including York Street and St James Laneway is reconsidered. A temporary activation in lower Tory Street was carried out over a 3-month period as part of the Reimagine Tory Street initiative between Wellington City Council and Victoria University of Wellington. Mixed feedback was received during and following the trial and was being reviewed at the time of writing this report.

Suburban activation. Two pedestrian crossings on Main Road in Tawa were completed and a new mural was installed as part of the Tawa Town Centre upgrade project. Detailed designs for the Tawa plaza upgrade were completed and procurement for a main contractor began. Workshops were run to develop the Karori Project.

Planning for growth. In 2017, we started a conversation with Wellingtonians about the future of our central city and how we should accommodate a population of up to 280,000 by 2043. While the focus was on the central city because it’s where we anticipate the majority of the growth to occur, the implications for that also covered the rest of the city. The results from engagement will feed into a broader urban growth plan for the city that is scheduled for the coming years. Towards the end of the year, we also started a conversation on a high-level plan for the future of the Upper Stebbings Valley and Glenside West area, both of which have been identified for potential development.

Earthquake strengthening. Many buildings were earthquake strengthened in the city during the year or had their unreinforced masonry elements removed to make the city safer. Much of this work related to the Hurunui/Kaikoura Earthquakes Recovery (Unreinforced Masonry) Order 2017 that was made under the Building Act.  This Order in Council (OIC) provided the Council with powers, supplemented by some funding, to require the owners of 113 at-risk buildings to secure their facades and parapets by 30 September 2018. The majority of building owners have completed work or have work under way.

Council building earthquake strengthening. We are progressing work on a number of Council buildings, including the Town Hall, the St James Theatre and the Opera House. These all support the city’s cultural events and activities and are important facilities. Construction work on the Town Hall started during the year. The unreinforced masonry facades and parapets on Wakefield Street are being strengthened and are due to be completed by October 2018. Design for the seismic strengthening is complete and the tender for the main construction contract has been issued to three contractors to respond. The contract is expected to be let and construction due to start in early 2019.

The Town Hall is expected to re-open to the public in 2021 and will become part of a national centre for musical excellence in Civic Square.

The Council’s Civic Administrative Building remains closed and a decision on its future will be made once discussions with Council insurers are concluded.

Accelerometers. Accelerometers are already on the market in Wellington, and have been installed in several high-rise buildings.  With supporting analysis, these devices can quickly provide building owners and occupants with information on how their building has performed in an earthquake. We have installed devices in the Central Library building.

The next step is to co-ordinate the intelligence from these devices so that we can obtain a citywide picture of our building stock’s performance. Before an earthquake, this intelligence will allow us to undertake sensitivity and scenario modelling for different types of shocks. After a quake, it will enable us to better allocate resources and make quicker decisions.

We’ve recognised the value this co-ordination can bring to the city and next year a project has been funded to bring together the various data sets to provide a citywide picture using accelerometers.

Waterfront development.

The PwC centre (on site 10 at north Kumutoto) – The building was completed and occupied by tenants in early July 2018. The PwC Centre will eventually accommodate over 700 office workers and the ground floor will include food and beverage outlets. The building is base-isolated and the equivalent of 180 percent of NBS.

Site 9 (at north Kumutoto) – We are in discussions about a new five-level commercial office development.

North Kumutoto public space – Construction of the majority of the public space around sites 9 and 10 is expected to be complete in October 2018.

Frank Kitts Park – The resource consent has been appealed to the High Court and will be heard by the Court in September 2018.

Shed 1 – Initial planning has started for the proposed re-cladding of the exterior of the building and internal re-modelling by tenant Wellington Helicopters Ltd.

Waterfront resilience. The Council’s Waterfront Operations continues to plan for and implement measures to address its main resilience challenges – seismic events and climate change (predicted sea-level rise):

All new building developments are required to be designed to be seismically resilient and to accommodate sea-level rise predictions for the next 100 years.

All structures such as decks, pontoons, rip rap edge protection and infrastructure (mainly electrical) across the waterfront that could be vulnerable to sea level rise or storm surge will, over the medium term, be progressively raised, relocated, protected, reinforced or removed as deemed appropriate.

Seismic resilience of the waterfront (which in the event of a major seismic event could act as an alternative thoroughfare around the edge of the central city for emergency vehicles) is progressively being improved with seismic separation gaps being formed between wharves and adjacent structures or between wharves and land (examples include Taranaki Street Wharf and Queens Wharf inner-T, outer-T and stem).

Shelly Bay. We consulted the community on the divestment and lease of Council land in Shelly Bay to allow for the redevelopment of the site.  While Council land only made up a small portion of the planned development, the proposal was controversial and over 1100 submissions were received from the community. The proposal on the former Defence site includes a boutique hotel with about 50 rooms, 280 apartments, 58 townhouses and 14 standalone houses.

The developers - Shelly Bay Limited (SBL), a company set up by property developer The Wellington Company and Taranaki Whānui /Port Nicholson Block Settlement Trust (PNBST) – received resource consent for the project and the Council agreed to enter into an agreement to sell and lease land to Shelly Bay Limited so the planned development of housing and public space could proceed. The resource consent has been the subject of judicial review proceedings, which are currently before the Court of Appeal.

6.2 Whakahaere hanga whare Building and development control

What we did:

Building consents. Altogether, 2605 building consents were issued by the Council over the last 12 months. This is a slight increase from 2596 last year, which itself was an 8.5 percent increase on the year before that (2392). Growth in the number of new dwelling consents rose 30.7 percent for the year in response to a tight housing market in the city. The number of consents in New Zealand increased by 7.9 percent over the same period (Infometrics). While residential consents increased, the annual value of commercial consents decreased by 41.3 percent in Wellington from a peak in 2017. These figures are detailed in the outcome measures for the Urban Development chapter.

Simplified consenting process. The Council’s consenting, food, and liquor regulatory processes can be complex to navigate. In 2017/18, we introduced GoShift, a portal for the electronic lodgement of building consent applications. Eighty percent of building applications are now being lodged through the portal. We’ve also introduced a case management approach to facilitate the process for certain types of consent applications. A number of other consenting business improvements are also currently under development. 

Urban development 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)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

6.1 Urban planning, heritage and public spaces development

Expenditure
7,107
7,445

8,338
7,653
(686)¹

Revenue
(322)
(332)

(59)
(21)
38

Net Expenditure
6,785
7,113

8,280
7,632
(648)

6.2 Building and development control

Expenditure
20,700
22,062

21,064
21,651
587²

Revenue
(11,803)
(13,293)

(13,523)
(12,946)
577³

Net Expenditure
8,897
8,769

7,541
8,705
1,164

Urban development total

Expenditure
27,807
29,507

29,403
29,304
(99)

Revenue
(12,125)
(13,625)

(13,582)
(12,967)
615

Net Expenditure
15,682
15,882

15,821
16,337
516

Variance explanations

1 Over budget due to additional costs incurred for contaminated waste clearance on the North Kumototo Waterfront site

2 Lower costs incurred supporting resolution of weathertight homes claim resolution

3 Additional building consent revenue through greater volumes of consent applications and higher than planned volumes of consensus processed on behalf of other councils

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

6.1 Urban planning, heritage and public spaces development

Expenditure
5,397
5,393

12,287
8,886
3,401
(0)

6.2 Building and development control

Expenditure
2,224
4,391

7,216
-
17,372
10,156¹

Urban development total

Expenditure
7,621
9,784

19,504
8,886
20,773
10,156

Variance explanations

1 Under budget due to timing of work undertaken with the Town Hall and St James earthquake strengthening projects

Urban development performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared to target
KPI compared to last year

Positive Result
Positive result
3
15
4

Within 5% or no change
Within 5% or no change
7
1
14

Not met or decreased
Not met or decreased
1
2
-

Not measured or not comparable
Not measured or not comparable
 1
-
-

Performance data – outcome indicators

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

Council outcome indicator | Source |  | 2015/16 | 2016/17 |  | 2017/18 |
Residents (%) who agree that Wellington is a great place to live, work and play | WCC RMS 2018 | See supplementary tables |  | 95% |  | 92% | Within 5% or no change
Value of residential and commercial building consents | Statistics NZ | Residential | $233m | $329m |  | $440m | Positive Result
|  | Non-residential | $359m | $477m |  | $272m | Not met or decreased
Population – growth and density (city and suburban area) | Statistics NZ | Census data not available during report time frame, previous result reported in 2013/14 |  |  |  |  | Not measured or not comparable
Residents (%) who agree the city centre is an easy place to get to, use and enjoy | WCC RMS 2018  | Easy to get around | 82% | 76% |  | 75% | Within 5% or no change
|  | Easy to access leisure activities | 80% | 82% |  | 82% | Within 5% or no change
Residents (%) who think there are urban design/urban form safety issues (eg graffiti, vandalism, poorly lit public spaces etc, downward trend is favourable) | WCC RMS 2018 | See supplementary tables |  |  |  | Improvements made against public area maintenance and lighting. | Positive Result
Building density throughout the city | WCC GIS | See supplementary tables | 7.58 for Central City | 8.05 for Central City |  | 8.01 for Central City | Within 5% or no change
The density numbers for 2017/18 are non-comparable to previous year due to reclassification of buildings. |
Proportion of houses within 100 metres of a public transport stop | WCC GIS | Census data not available during report time frame. 2013 result previously reported result 45% |  |  |  |  | Within 5% or no change
Residents (%) who agree that heritage items contribute to the city and local communities’ unique character | WCC RMS 2018  | to the city | 92% | 91% |  | 93% | Within 5% or no change
|  | to local communities | 72% | 71% |  | 75% | Positive Result
New Zealanders (%) who agree that Wellington is an attractive destination | National Wellington Reputation Survey Results 2017 |  | 81% | 78% |  | 80% | Within 5% or no change

Performance data – Council performance measures

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

PERFORMANCE MEASURES 
2015/16
2016/17

2017/18 Actual
2017/18 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
55%
51%

53%
Increase from previous year
4%
Positive Result

District Plan listed items that are removed or demolished 
Nil
Nil

Nil
Nil
-
Positive Result

Residents (%) who agree the central city is lively and attractive
85%
87%

86%
87%
-1%
Within 5% or no change

Residents (%) who agree their local suburban centre is lively and attractive
47%
50%

48%
60%
-20%
Not met or decreased

Improvements from previous period have not been maintained and more than 50% of residents do not feel that their local suburban centre is lively and attractive.
The level of agreement about a lively city centre is fairly consistent across the wards. Agreement about a lively suburban centre is lower in the Northern and Onslow-Western wards but increasing; it has decreased most significantly in the Eastern Ward and slightly in the Lambton and Southern wards.

Residents (%) who rate their waterfront experience as good or very good
92%
95%

93%
90%
3%
Positive Result

Proportion of grants funds successfully allocated (through milestones being met)
64%
93%

97%
95%
2%
Positive Result

Residents (%) who agree heritage items are appropriately valued and protected (in the central city)
69%
66%

70%
65%
8%
Positive Result

PERFORMANCE MEASURES  | 2015/16 | 2016/17 |  | 2017/18 Actual | 2017/18 Target | % Variance |
6.2 Building and development control
To measure the timeliness of our building and development control services
Building consents (%) issued within 20 working days | 92% | 87% |  | 91% | 100% | -9% | Not met or decreased
Code of Compliance Certificates (%) issued within 20 working days | 96% | 96% |  | 96% | 100% | -4% | Positive Result
Land Information Memorandums (LIMs) (%) issued within 10 working days | 99% | 96% |  | 100% | 100% | 0% | Positive Result
Resource consents (non-notified) (%) issued within statutory time frames | 100% | 99.8% |  | 99.2% | 100% | -1% | Positive Result
Resource consents (%) that are monitored within 3 months of project commencement | 97% | 93.5% |  | 94.5% | 90% | 5% | Positive Result
Subdivision certificates – Section 223 certificates (%) issued within statutory time frames | 100% | 100% |  | 100% | 100% | 0% | Positive Result
Noise control (excessive noise) complaints (%) investigated within 1 hour | 96% | 96.7% |  | 95% | 90% | 6% | Positive Result
Environmental complaints (%) investigated within 48 hours | 98% | 97.5% |  | 98.8% | 98% | 1% | Positive Result
To measure the quality of our building and development control services
Customers (%) who rate building control services as good or very good | 79% | 74% |  | 74% | 70% | 6% | Positive Result
Building Consent authority (BCA) accreditation retention (2-yearly) | Retained | Retained |  | Retained | To Retain | Met | Positive Result
To measure our progress on earthquake risk mitigation
Earthquake-prone building notifications (section 124) (%) that are issued without successful challenge | 100% | 100% |  | 100% | 95% | 5% | Positive Result

Performance data – supplementary tables

Residents' perceptions that Wellington is a great place to live, work and play | 2015 | 2016 | 2017 |  | 2018
Great place to… |  |
...live | 96% | 95% |  |  |
…work | 63% | 66% | 95% |  | 92%
…play | 93% | 90% |  |  |
Survey question merged in 2016/17 "live, work and play" |

Source: Wellington City Council Residents' Monitoring Survey 2018

Residents' perceptions of urban design/urban form safety issues (ie graffiti, vandalism, poorly lit public spaces, etc) | 2015 | 2016 | 2017 |  | 2018
Poorly lit public areas | 55% | 61% | 63% |  | 59%
a significant improvement is noted in this area |
Vandalism | 26% | 27% | 17% |  | 17%
previous gains have been maintained |
Graffiti | 34% | 32% | 16% |  | 16%
previous gains have been maintained |
Poorly maintained public areas | 34% | 37% | 32% |  | 26%
a significant improvement is noted in this area |

Source: Wellington City Council Residents' Monitoring Survey 2018

Building density throughout the city
2014/15
2015/16
2016/17

2017/18

number of buildings
building density (buildings/
hectare)
number of buildings
building density (buildings/
hectare)
number of buildings
building density (buildings/
hectare)

number of buildings
building density (buildings/
hectare)

Central city
1,825
7.58
na
na
1,948
8.05

1,938
8.01

Inner residential
10,485
34.7
na
na
10,437
34.27

10,402
34.24

Outer residential
75,499
21.91
na
na
77,559
22.38

77,488
22.36

Business 1 & 2, Centres and Medium Density Residential Area
3,640
10.98
na
na
3,842
11.51

3,835
11.49

The density numbers for 2017/18 are non-comparable to previous year due to reclassification of buildings.

Source: WCC GIS and Statistics NZ

Case study Resilience

The 2016 Kaikoura earthquake was a wake-up call for Wellingtonians, reminding us of our need to make resilience a priority.

Resilience cuts across all sectors. Over the past year, the Council has been working with the owners of at-risk buildings to strengthen facades and parapets. We have been strengthening existing reservoirs, pipes and roads, scoping new sources of water, and addressing coastal challenges along our south and west coasts. We have also been working with apartment dwellers to help build stronger communities, another important aspect of resilience.

“As a result of the quake, we’ve been working more closely with other organisations,” says Chief Resilience Officer Mike Mendonça. These include Wellington Electricity, Wellington Water Limited, the New Zealand Transport Agency, the telecommunications sector, universities and Crown research institutes that are also actively involved in developing solutions for the city.

“Interdependencies are crucial. Everyone’s coming together,” he says.

An ex-army man, Mike has worked many years in government, including an 11-year stint in the Council’s works department. He is Wellington’s first chief resilience officer, a symbol of what is now at the forefront of people’s minds.

“Resilience is now in our consciousness. It’s infused in how we think as Wellingtonians.” Mike Mendonça

“Wellingtonians have always been aware of the city’s vulnerability. But it’s been pushed to the back of our minds for a long time,” he says. “Kaikoura made us more aware. Resilience is now in our consciousness. It’s infused in how we think as Wellingtonians.”

Wellington is part of 100 Resilient Cities, an initiative pioneered by the Rockefeller Foundation in 2013. The project, known as 100RC, helps cities to improve their resilience to address current and future physical, social and economic challenges. 

Recently, representatives from 100RC’s regional headquarters in Singapore visited to document the resilience work the Council is leading.

“Wellington has become something of a model for other similar cities around the world,” says Mike.

He says current resilience efforts are all about improving our knowledge and being better prepared.

“Each time we have a big quake, we learn a lot. The work we’re doing now is our generation’s chance to leave a meaningful resilience legacy for our children.”

170 Cuba Street building owner William Broadmore

7

Waka Transport

This chapter profiles our strategic approach, challenges and what we delivered in the transport area, which includes transport and parking.

Snapshot of the city

7 Waka
Transport

Introduction

We manage, maintain and improve the city’s transport network so that people can access places easily and safely. We look after hundreds of kilometres of city accessways, footpaths, cycleways and roads, including parking facilities, traffic signs and signals, street lighting and pedestrian crossings.

Our strategic approach is to invest in a high-quality and resilient transport network that helps reduce congestion and pollution, makes commuting easier, and encourages active and public modes of transport.

One of the biggest challenges we currently face is to make sure our transport network can cater to Wellington’s rapidly growing population. Managing morning and evening peak demand and encouraging a greater take-up of active and public transport modes that are healthier and more sustainable.

A significant highlight was the public engagement on Let’s Get Wellington Moving. This is our joined-up approach to delivering better city outcomes through a modern integrated transport network for Wellington with partners Greater Wellington Regional Council and the NZ Transport Agency (NZTA). Progress was also made on the cycleways programme and we installed 6000 LED street lights out of a total of 14,500 older lights.

Transport performance story:

More commuter unhappiness, but transport plans under way

As Wellington’s population grows, so do congestion issues. Resident satisfaction with traffic volumes and convenience of public transport services declined slightly. The numbers of residents who agreed that peak traffic volumes are acceptable fell 4 percent to 38 percent, and residents who agreed on the quality and affordability of public transport services was also down 4 percent to 68 percent.

As part of Our 10-Year Plan 2018-28, the Council identified transport as one of the top five priority areas for the next decade. Residents were consulted on four transport scenarios as part of Let’s Get Wellington Moving and solutions are being actively developed for delivery over the next years.

Source: Statistics NZ, Wellington City Council Residents’ Monitoring Survey 2018

38%

Residents (%) who agree that peak traffic volumes are acceptable

42% in 2016/17

68%

Residents (%) who agree that public transport services are convenient and affordable

72% in 2016/17

31%

Residents (%) who agree the transport system allows easy movement around the city

37% in 2016/17

55%

Residents (%) who perceive there to be transport-related safety issues (issues of most concern)

Residents (%) concerned with poorly lit or dark public areas

59% in 2016/17

100%

Target 100%

Street lighting (%) for major roads (arterial, principal and collector roads) meets national standards

97% in 2016/17

7%

Target 10%

Percentage of the sealed local road network that is resurfaced. Target not met but improved from last year

6% in 2016/17

7.1 Waka Transport

Transport performance story:

More commuter unhappiness, but transport plans under way

As Wellington’s population grows, so do congestion issues. Resident satisfaction with traffic volumes and convenience of public transport services declined slightly. The numbers of residents who agreed that peak traffic volumes are acceptable fell 4 percent to 38 percent, and residents who agreed on the quality and affordability of public transport services was also down 4 percent to 68 percent.

As part of Our 10-Year Plan 2018-28, the Council identified transport as one of the top five priority areas for the next decade. Residents were consulted on four transport scenarios as part of Let’s Get Wellington Moving and solutions are being actively developed for delivery over the next years.

Source: Statistics NZ, Wellington City Council Residents’ Monitoring Survey 2018

What we did:

Let’s Get Wellington Moving. This is a joint initiative by Wellington City Council, the New Zealand Transport Agency and Greater Wellington Regional Council to support the city’s growth and deliver better city and regional outcomes through investment in a modern integrated transport network. Progress in 2017/18 has included:

a public engagement programme in November and December, seeking feedback on four scenarios for Wellington’s future. More than 2000 people and 50 stakeholder groups responded, with most supporting option D followed by option A. Further details on these options and the feedback themes from consultation can be found on the Let’s Get Wellington Moving website http://getwellymoving.co.nz/

a published analysis of the public engagement feedback and the results of a public opinion survey

development and assessment of a shortlist of programmes (packages of interventions) using the public’s feedback and our ongoing technical work

development of a draft recommended programme of investment for review and approval by the programme partners in early 2018/19.

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. Much of the work in 2017/18 focused on community engagement, Council approvals and securing NZTA funding. This was achieved in March 2018 with all Urban Cycleway Projects successfully approved and funded.

Construction continued on Hutt Road with the original scheme practically complete. However, the project has been extended to include a section towards Tinakori Road. The Cobham Drive upgrade started with the first section between Calabar Road and Miramar Avenue completed in December 2017.

A range of smaller low-cost projects have been implemented in the city centre along with a rollout of bike stands, fix-it stands and permanent cycle counters. Following extensive community engagement, the Council agreed to a redesign of The Parade in Island Bay. Detailed design is under way.

Slips. Heavy rains caused a number of slips on Wellington’s roads, with the biggest one at Ngaio Gorge closing the road for several weeks. Strengthening work was carried out on the downhill side of the road. There were 230 slips in the 1 January to June 30 2018 period. This compares to 279 in the same period in 2017, and 168 in 2016. In response to the slips, we constructed a number of retaining walls to support embankments. We also started an investigation into design options for Ngaio Gorge.

LED street lighting. To date, over 6000 LED lights have been installed out of a total of 14,500 older lights, and the programme is scheduled for completion later this year. The lights are being installed, suburb by suburb, at 50 percent brightness to avoid issues with glare. A small number of people, mainly from the Eastern Suburbs who were the first to get the LEDs, are telling the Council that the lights are not bright enough on some streets, which is causing safety concerns. In these cases, the lights can be adjusted remotely by the Council via its Central Management System. The LED lighting programme is being prioritised to take advantage of 85 percent funding from NZTA.

Public transport. We delivered a number of roading and traffic changes requested by Greater Wellington Regional Council, to provide for the new bus route network that came into operation at the start of July 2018.

Bus stops. During the year, we also provided seven new bus shelters as part of the Council’s ongoing programme with the objective of providing a shelter at each inbound bus stop. We continued to maintain the Lambton Bus Interchange.

Cable car. Wellington Cable Car Limited (WCCL) operates the Cable Car and manages the bus electrical network.

Bus electrical network: WCCL started decommissioning the trolley bus electrical network in October 2017 after operational services ceased, and the project is 70 percent complete as of July 2018. Progress has been excellent, meeting and exceeding original estimates for time and cost, and practical project completion should occur by October 2018. Ownership of the remaining poles and building anchors network infrastructure will transfer to Council ownership by December 2018.

Cable Car operations: WCCL had a strong year in terms of passenger numbers and revenue, buoyed by the continuing growth in international visitor numbers to Wellington. The number of passenger trips was at its highest for more than 20 years (1,145,000) and passenger revenue exceeded $3 million for the first time ever. Student passenger trips for Victoria University of Wellington have also been buoyant, exceeding 183,000 in number. For 2017/18, the breakdown between visitors and local users was approximately 57 percent (visitors) to 43 percent (local users). The Cable Car has also been awarded a platinum rating (the highest level of award) by Be Accessible to denote excellence and continuous improvement in meeting passenger accessibility requirement.

Network maintenance/renewal. We resurfaced 396,884 square metres of road carriageway with a variety of surfacing materials. We also replaced 54 metres of sump leads, 9 metres of culvert pipe, and 3 culvert head walls. We renewed 22.57 kilometres of footpaths and 11,128 metres of kerb and channel. We installed 15 pedestrian barriers, 40 metres of guardrail, 11,528 metres of handrails, 612 metres of sight rails, 197 litter bins, 90 cycle stands, 113 bollards, and 2948 signs. We renewed 1044 kilometres of road markings, 6994 symbols/letters/arrows, and 15,656 reflective raised pavement markers. We installed/refurbished or relocated 73 seats. We also cleaned 22,651 sumps and swept 38,936 kilometres of roadway.

Network operations. We carried out a wide range of transport network operational tasks. These included:

4248 traffic management plans (TMPs) required for contractors to carry out work on our roads, approved by our traffic management coordinator

5930 corridor access requests (CARS) to work on our roads. Of these, 2490 were inspected by the compliance officers and signed into warranty

Processing 1950 confirm enquiries for works on the road corridor

Managing the city’s 137 traffic lights and 49 CCTV cameras to ensure road users are able to move safely and conveniently around the city

Providing attendance at major events like the Wellington Marathon, the NZ Lions Series, Cuba Dupa and A Very Welly Christmas that required monitoring from the Council’s Traffic Operations Centre (WCCTOC).

7.2 Tūnga waka Parking

Parking:

Parking enforcement fairer, residents say

The introduction of parking sensors has allowed for more accurate measurements of occupancy of parking spaces. Parking officers now have access to live data on vehicle arrival and departure times. What this also means is that previous years’ values are not comparable and targets will have to be reset. The new sensors may in part explain why the number of residents who agree that parking enforcement is fair has increased 6 percent to 53 percent.

What we did:

Miramar parking scheme. In June 2017, we introduced a 24-hour time restricted parking scheme in Miramar south designed to mitigate parking pressure in local residential streets resulting from airport-related non-resident parking. The scheme was implemented in September 2017 and monitored during the first 6 months of operation. It resulted in considerably fewer vehicles being parked both during daytime and at night in the restricted area.

City centre parking. We consulted the community through Our 10-Year Plan 2018-28 on introducing metered parking charges in the central city. This was recommended to increase turnover and encourage more people to use active and public transport modes. This has subsequently been approved and will become active later in 2018. The impact of introducing weekend parking will be reviewed as part of a broader parking review in 2019.

Transport 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 received from NZTA for transport related activities.

What it cost (operating expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Budget
2017/18
Variance

7.1 Transport

Expenditure
46,628
49,859

55,186
52,674
(2,512)¹

Revenue
(10,329)
(9,706)

(9,974)
(6,571)
3,403²

Net Expenditure
36,299
40,152

45,212
46,103
891

7.2 Parking

Expenditure
12,262
12,542

14,294
13,844
(450)

Revenue
(26,442)
(26,858)

(26,992)
(28,719)
(1,727)³

Net Revenue
(14,180)
(14,316)

(12,698)
(14,875)
(2,176)

Transport total

Expenditure
58,890
62,401

69,480
66,518
(2,962)

Revenue
(36,771)
(36,564)

(36,966)
(35,290)
1,676

Net Expenditure
22,119
25,836

32,514
31,227
(1,286)

Variance explanations

1 Higher storm clean up costs and depreciation expenditure than budgeted

2 Additional revenue from bus shelter signage, bus priority planning and NZTA funding, along with unbudgeted vested assets

3 Parking meter revenue lower than budgeted

What it cost (capital expenditure $000)

2015/16
Actual
2016/17
Actual

2017/18
Actual
Brought forward from prior year
2017/18
Budget
2017/18
Variance

7.1 Transport

Expenditure
35,192
33,837

55,166
2,621
59,950
7,405¹

7.2 Parking

Expenditure
1,342
481

299
2
297
1

Transport total

Expenditure
36,534
34,318

55,465
2,624
60,247
7,406

Variance explanations

1 Under budget due to timing of work undertaken for the cycling programme and the completion of the LED street light transition project which will be completed in 2018/19

Transport performance

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 10-year and annual plans.

The Council undertakes the Residents’ Monitoring Survey (RMS) on an annual basis. The survey has a margin of error of +/- 3.1 percent.

Performance summary

The following table is a summary of how well we performed against our agreed outcome indicators and key performance measures for this activity area.

Outcome indicator trends
KPI compared to target
KPI compared to last year

Positive Result
Positive result
3
7
5

Within 5% or no change
Within 5% or no change
5
3
9

Not met or decreased
Not met or decreased
5
5
1

Not measured or not comparable
Not measured or not comparable
 -
2
2

Performance data – outcome indicators

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

Council outcome indicator
Source

2015/16
2016/17

2017/18

Residents (%) who agree that peak traffic volumes are acceptable
WCC RMS 2018

43%
42%

38%
Not met or decreased

Residents (%) who agree that the transport system allows easy access to the city
WCC RMS 2018

63%
62%

64%
Within 5% or no change

Residents (%) who agree that public transport services are convenient and affordable
WCC RMS 2018 
Convenient
69%
72%

68%
Not met or decreased

Affordable
41%
45%

45%
Within 5% or no change

Air quality monitoring (i.e. nitrogen dioxide, carbon monoxide, and particulate matter peaks, downward trend is favourable)
Greater Wellington Regional Council – 2017 report
See supplementary tables

Zero days in excess of monitoring guidelines
Within 5% or no change

Change from previous year in the number of road crashes resulting in fatalities and serious injury. (2017/18 = YTD result for 7 months up to July, downward trend is favourable)
WCC City Networks
 Calendar year
Up 15
Total 64
Up 16
Total 80

YTD (7mths)down 51
Total 29
Not met or decreased

The outcome has been trending unfavourably since 2015 which had a total of 49 crashes reported. The year to date figure for 2018 of 29 is favourable compared to 45 for the same period last year.

Social cost of crashes. (2017/18 = YTD result for 7 months up to July, downward trend is favourable)
WCC City Networks
Calendar year
$109m
$124.7m

YTD (7mths) $48m
Not met or decreased

The outcome has been trending unfavourably since 2015 which had a total cost of $95m reported. The year to date figure for 2018 of $48m is favourable compared to $67m for the same period last year.

Residents (%) who perceive there to be transport-related safety issues (i.e. issues of most concern, downward trend is favourable)
WCC RMS 2018
See supplementary tables
Improvement for poorly lit or dark public areas
63%
59%

55%
Positive Result 

Number of cyclists and pedestrians entering the Central Business District (average weekday*)
WCC Transport – Cycle Cordon Survey
Cyclists
1,924
1,846

1,914
Positive Result

WCC Transport – Pedestrian Cordon Survey
Pedestrians
11,024
10,226

10,952
Positive Result

* these measures were reported in previous Annual Reports as “weekdays” being the total for one week" rather than “average per weekday”.

Residents (%) who agree the transport system allows easy movement around the city – vehicle users and pedestrians
WCC RMS 2018 
Vehicle users
45%
45%

43%
Within 5% or no change

Bike users
new
37%

31%
Not met or decreased

Pedestrians
91%
93%

93%
Within 5% or no change

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  |  | 2015/16 | 2016/17 |  | 2017/18 Actual | 2017/18 Target | % Variance |
7.1 Transport
To measure the quality and timeliness of the transport infrastructure and service
Residents (%) who rate the road and footpath network good or very good | Roads | 66% | 65% |  | 73% | 75% | -3% | Within 5% or no change
| Footpaths | 67% | 67% |  | 72% | 75% | -4% | Within 5% or no change
Requests for service response rate – urgent (within 2 hours) and non-urgent (within 15 days) | Urgent | 96% | 89% |  | 89%* | 100% | -11% | Not met or decreased
| Non-urgent | 98% | 94% |  | 94%* | 100% | -6% | Not met or decreased
During the year a change was made to the methodology to calculate the result. This means there is now a wider gap to achieve target.
Roads (%) that meet smooth roads standards (smooth roads – measured by Smooth Travel Exposure based on NAASRA counts) | DIA | 75% | 74% |  | 74% | 70% | 6% | Positive Result
Footpath (%) condition rating (measured against the Council condition standards) | DIA | 97% | 96% |  | 98% | 97% | 1% | Positive Result
Street lighting (%) for major roads (arterial, principal and collector roads) meets national standards |  | 97% | 97% |  | 100% | 100% | 0% | Positive Result
Residents (%) who are satisfied with street lighting | Central city | 78% | 81% |  | 84% | 85% | -1% | Within 5% or no change
| Suburban area | 54% | 60% |  | 62% | 75% | -17% | Not met or decreased
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.
Sea wall and retaining wall condition rating – walls (%) rated 3 or better (1 very good, 5 very bad) |  | 91% | 93% |  | 81% | 90% | -10% | Not met or decreased
Targets were based on information that has since been updated. The 2017/18 rating measure is a better reflection of the situation.
Percentage of the sealed local road network that is resurfaced | DIA | 9% | 6% |  | 7% | 10% | -30% | Not met or decreased
There was a greater emphasis than usual on higher quality seals, and waterproofing seals related to asphalt, both of which are costly.

PERFORMANCE MEASURES

2015/16
2016/17

2017/18 Actual
2017/18 Target
% Variance

7.2 Parking

To measure the quality of our parking provision

On-street car park turnover rates
Weekdays
6.1
6.1

7.3
6.8
7%
Positive Result

Weekends
4.7
4.9

6.2
5.3
18%
Positive Result

Parking turnover is the rate of use of a parking space. It is calculated as the number of vehicles parked in a space over the course of the day. For the last 3 years the turnover rate has not met the target of 5.3. In 2017/18 it has now exceeded target, which is consistent with our aim of increasing turnover.

On-street car park average occupancy

78%*
83%*

68% weekends 58% weekday
75%
NA
Not measured or not comparable

With the introduction of parking sensors, data sampling has allowed a more accurate measurement of occupancy. Previous years' values are non-comparable and targets will be reset at Annual Plan.

On-street car park compliance – time restrictions and payment
Time

96%
95%
1%
Positive Result

Payment

NA
90%
NA
Not measured or not comparable

With the introduction of parking sensors, parking officers have access to live data on vehicle arrival and departure times. This allows for more efficient enforcement. Work is under way to integrate payment methods with the Council’s pay by space system. This will enable accurate reporting on payment compliance in future.

Residents (%) who perceive parking enforcement to be fair - Increase from previous year

48%
50%

53%
Increase
6%
Positive Result 

Performance data – supplementary tables

Air quality monitoring (ie nitrogen dioxide, carbon monoxide and particulate matter peaks) |  | 2014 | 2015 | 2016 | 2017
Data result for NO2 and CO is 1-hour average
NO2 (µg/m3) | max | 86.6 | 66 | 61.5 | 67.9
NES-AQ threshold <200 | mean | 19.7 | N/A | 14 | 14.1
CO (mg/m3) | max | 1.5 | 1 | 1.78 | 1.49
NES-AQ threshold <10 | mean | 0.4 | N/A | 0.22 | 0.19
Particulate matter (PM10) (µg/m3) | max | 32 | 32 | 26 | 25
NES-AQ threshold <50 | mean | 13 | N/A | 11.3 | 11.3

Source: Greater Wellington Regional Council, Air quality monitoring programme annual data report 2017(2018 report at available at time of publication)

We use air quality standards and guidelines sourced from Greater Wellington Regional Council’s - Air quality monitoring programme annual data report 2017. Thresholds are set to monitor quality against each of the indicators for example nitrogen dioxide. These thresholds are included in the data result table above and for further information refer to air quality standards and guidelines below.

Indicator | Standard or Guideline | Threshold concentration | Averaging period | Permissible exceedances per year
PM₁₀ | NES-AQ | 50 μg/m³ | 24-hour | 1
NAAQG | 20 μg/m³ | Annual | NA
PM2.5 | WHO Guideline | 25 μg/m³ | 24-hour | 3
WHO Guideline | 10 μg/m³ | Annual | NA
Carbon monoxide (CO) | NES-AQ | 10 μg/m³ | 8-hour moving | 6
NAAQG | 30 μg/m³ | 1-hour | 0
Nitrogen Dioxide (NO₂) | NES-AQ | 200 μg/m³ | 1-hour | 9
NAAQG | 100 μg/m³ | 24-hour | 0
WHO Guideline | 40 μg/m³ | Annual | NA

Residents' perceptions of transport related safety issues (ie issues of particular concern) | 2015 | 2016 | 2017 |  | 2018
Traffic or busy roads | 34% | 33% | 33% |  | 36%
Car theft or vandalism | 36% | 32% | 29% |  | 27%
Poorly lit or dark public areas | 61% | 63% | 59% |  | 55%
Dangerous driving | 29% | 30% | 33% |  | 33%

Source: Wellington City Council Residents' Monitoring Survey 2018

Case study Let’s Get Wellington Moving

Lucie Desrosiers is part of a multi-agency team that is working hard on improving Wellington’s transport. Let’s Get Wellington Moving, a joint initiative between the Council, the NZ Transport Agency and Greater Wellington Regional Council, aims to prepare for future growth while building on what makes Wellington a great place to be.

“We want to make the most of the city’s qualities. For example, Wellington is a compact, walkable city. So we want to enhance those attributes. We’re setting the bar really high,” says Lucie, who grew up in Quebec and has a background in urban design and architecture. After completing her studies, she worked in Singapore and London before settling in Wellington 10 years ago.

“The idea of Let’s Get Wellington Moving is to develop a programme that supports sustainable development with a transport system that moves more people with fewer vehicles.”

Let’s Get Wellington Moving’s main focus is on the area between Ngauranga and Wellington Airport, including the urban motorway and connections to the central city, hospital, and eastern and southern suburbs in order to deliver city and regional benefits. The partnered approach is one of its greatest strengths.

“We have staff and resources from the three organisations coming together. This is a much more collaborative way of planning than ever before,” Lucie says.

“We’re now looking at the whole picture. What we call place-making has become a core component of transport planning – to contribute to great cities and good places for people to work, live and play.” Lucie Desrosiers

There has been extensive public engagement. In November and December 2017, LGWM sought feedback on four scenarios for Wellington’s future. The feedback is helping to shape a recommended programme of investment, which will lay out transport and urban development changes over the next decade or more.

A sustainable transport network is one that provides more travel choice, and encourages walking, cycling and public transport, while ensuring better access for people to get to important destinations such as the hospital and airport. Let’s Get Wellington Moving is also about delivering a network that is accessible to all, with attractive spaces, shared streets and efficient local and regional journeys.

“We’re now looking at the whole picture,” Lucie says. “What we call place-making has become a core component of transport planning – to contribute to great cities and good places for people to work, live and play.”

8

Ngā rōpū e here ana ki te Kaunihera Council-Controlled Organisations (CCOs)

8 Ngā rōpū e here ana ki te Kaunihera
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

The following pages explain what the organisations do. For further details on their budgets and performance, refer to their individual annual reports.

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 the Environment section.

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 2017/18, see the Economic development section.

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 2017/18, see the Cultural wellbeing section.

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 the Environment section. 

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 the Economic development section.

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 information on how the Basin Reserve Trust performed, see the Economic development section.

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 the Environment section.

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 the Transport section.

CCO performance

Performance data – Council-controlled organisation performance measures

PERFORMANCE MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Regional Stadium Trust

Total revenue (000)
$17,298
$15,852
$14,837

$15,425
$15,762

Net surplus (000)
$2,093
$2,081
$1,701

$1,269
$1,441

Number of events
61
70
65

50
49

Attendance
531,861
571,034
480,413

424,546
n/a

PERFORMANCE MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Museums Trust

Non-council revenue (000)
$3,790
$3,049
$4,847

$3,834
$3,516

Cash subsidy (grant) per visit
$9.36
$9.85
$8.89

$10.11
$10.85

Full cost to Council per visitor
$14.03
$13.69
$12.28

$13.33
$13.74

Average revenue per visit
$2.83
$2.51
$3.07

$3.19
$3.32

Total visitors
689,414
688,169
780,414

725,214
661,500

City Gallery
169,943
178,228
180,616

153,194
143,000

Wellington Museum
124,955
133,470
138,956

127,413
137,000

Capital E
111,273
79,120
161,869

113,414
90,000

Cable Car Museum
237,099
241,638
242,250

269,028
237,000

Space Place
42,633
52,838
54,109

60,441
52,000

Nairn St. Cottage
3,511
2,875
2,614

1,724
2,500

FUNDING MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Museums Trust

Council operating grants & underwrites (000)
$7,153
$7,236
$7,467

$7,334
$6,988

Total Revenue Earned (000)^
$10,943
$10,285
$13,595

$12,891
$11,846

Council’s property ownership costs (000)^^
$2,155
$2,343
$2,114

$2,227
n/a

Total cost to Council incl. grant + property costs (000)
$9,669
$9,579
$9,581

$9,561
n/a

^ excluding rental grants for Council owned properties

^^ includes rental grant for Capital E

PERFORMANCE MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Zoo Trust

Visitors
225,927
260,809
230,632

249,701
242,000

Education visits
12,380
11,413
10,754

10,414
10,500

Cash subsidy (grant) per visit
$12.20
$10.79
$12.86

$12.98
$13.57

Full cost to Council per visitor
$20.54
$19.01
$23.20

$20.71
$21.21

Average revenue per visit
$15.37
$14.90
$16.86

$16.77
$16.26

FUNDING MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Zoo Trust

Non-council revenue earned (000)
$4,999
$4,307
$4,300

$4,553
$3,934

Council operating grant (000)
$2,757
$2,894
$3,125

$3,241
$3,284

Total revenue earned (000)
$7,756
$7,201
$7,425

$7,794
$7,218

Council’s property ownership costs (000)
$4,640
$4,957
$5,349

$5,171
$5,133

Total cost to Council incl. grant + property costs (000)
$7,397
$7,851
$8,474

$8,412
$8,417

PERFORMANCE MEASURES

2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Regional Economic Development Agency LTD (WREDA)

Maintain Wellington’s share of the convention market

16%
18%

20%
18%

Venues utilisation

56.30%
54.20%

n/a

Net permanent and long term arrivals

3,800

3,409
3,600

Australian visitor spend

$243m

$230m
$240m

Lightning Lab participant investment raised

$5.7m

n/a

Return On Investment via out of Wellington spend

21:01

21:01
20:01

Number of events

594
624

Total event attendance

657,743

733,962
700,000

FUNDING MEASURES

2015/16
Actual
2016/17
Actual

2017/18
Actual

Wellington Regional Economic Development Agency LTD (WREDA)

Non-council revenue (000)

$8,203
$14,229

$14,045

WCC operating grants (excl. Venues) (000)

$12,039
$12,235

$12,783

GWRC grants (000)

$4,300
$4,160

$4,225

Total revenue (000)

$24,542
$31,781

$31,053

Operating costs (000)

$24,556
$30,731

$30,664

Net surplus /loss (000)

-$14
-$24

$389

PERFORMANCE MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Basin Reserve Trust

Attendance at all events
22,506
49,778
37,336

37,362
40,000

Event revenue
$127,250
$196,500
$206,600

$290,250
$272,000

Operational grant per attendance
$16.00
$7.00
$10.26

$10.68
$9.47

Event days (incl. community events)
67
110
59

87
71

Practice facility usage
71
101
147

95
100

Number of functions
18
18
8

20
n/a

FUNDING MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Basin Reserve Trust

Non-council revenue earned (000)
$152
$267
$356

$316
$282

Council operating grant (000)
$557
$593
$633

$649
$629

Total revenue earned (000)
$709
$860
$989

$965
$910

PERFORMANCE MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Karori Sanctuary Trust

Visitors
97,543
125,849
125,179

132,337
96,500

Education visits
6,890
9,478
11,621

9,316
8,650

Individual memberships
9,680
10,572
10,944

10,886
10,600

Cash subsidy (grant) per visit
$8.97
$6.95
$6.99

$6.31
$9.07

Full cost to Council per visitor

$11.34
$11.23

$13.71
$16.51

Average revenue per visitor
$25.52
$26.03
$28.01

$31.44
$26.22

Non-Council donations & funding
$291,545
$402,608
$419,000

$461,000
$265,000

Membership subscription revenue
n/a
n/a
$342,999

$329,264
$306,000

FUNDING MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Karori Sanctuary Trust

Non-council revenue earned (000)
$2,499
$3,348
$3,559

$4,221
$2,808

Council operating grant (000)
$875
$875
$875

$980
$980

Total revenue earned (000)
$3,374
$4,223
$4,465

$5,201
$3,788

Council’s property ownership costs (000)
$1,464
$1,427
$1,406

$1,525
$1,814

Total cost to Council incl. grant + property costs (000)
$2,339
$2,302
$2,281

$2,505
$2,794

PERFORMANCE MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Cable Car Ltd

Total Passengers
976,416
1,010,905
970,336

1,145,278
1,091,925

Fare revenue
$2,399,000
$2,731,000
$2,481,000

$3,034,707
$2,890,000

Cable Car reliability
>99.0%
>99.0%
>99.0%

99.83%
>99.0%

FUNDING MEASURES
2014/15
Actual
2015/16
Actual
2016/17
Actual

2017/18
Actual
2017/18
Target

Wellington Cable Car Ltd

Non-council revenue earned (000)
$10,009
$6,896
$6,831

$4,445
$6,250

Council capital grant (000)
Nil
$2,057
$443

$4,178
n/a

Total revenue earned (000)
$10,009
$8,953
$7,274

$8,623
$9,072

Total cost to Council incl. grant + property costs (000)
Nil
$2,057
$443

n/a
n/a

Financial Statements

Wellington City Council and Group
Consolidated Financial Statements
For the year ended 30 June 2018

|  |  | 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 | 160
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 | 168
8 | Depreciation and amortisation | XX
9 | Share of associates’ and jointly controlled entity’s surplus or deficit | 171
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 | 177
14 | Other financial assets | 179
15 | Non-current assets classified as held for sale | XX
16 | Intangibles | XX
17 | Investment properties | 177
18 | Property, plant and equipment | XX
19 | Investment in controlled entities | 195
20 | Investment in associates and jointly controlled entity | 196
21 | Exchange transaction, transfers and taxes payable | XX
22 | Revenue in advance | XX
23 | Borrowings | 201
24 | Employee benefits and liabilities provision | 203
25 | Provisions for other liabilities | 205
26 | Deferred tax | XX
|  |  | Statement of Changes in Equity | 210
| – Major budget variations | XX
27 | Revaluations | XX
28 | Hedging reserve | 214
29 | Fair value through other comprehensive revenue and expense reserve | XX
30 | Restricted funds | XX
|  |  | Statement of Cash Flows | XX
| – Major budget variations | XX
31 | Reconciliation of net surplus to net cash flows from operating activities | XX
| Other disclosures |
32 | Financial instruments | 221
33 | Commitments | XX
34 | Contingencies | 231
35 | Jointly controlled assets | 233
36 | Related party disclosures | 234
37 | Remuneration and staffing | 238
38 | Financial impacts of the Kaikoura earthquake | 242
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 includes 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 233).

The reported Group figures includes the Council (as defined above), its controlled entities as disclosed in Note 19 (page 195) and the Council’s equity accounted interest in the associates and a jointly controlled entity as disclosed in Note 20 (page 196). 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 26 September 2018.

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 2018 fairly reflect 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

26 September 2018
26 September 2018
26 September 2018

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 195 to 196) for more information

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% 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 (CCO’s) and Council Controlled Trading Organisations (CCTO’s) 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 144. 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 2018

Council
Group

Note
Actual
2018
$000
Budget
2018
$000
Actual
2017
$000
Actual
2018
$000
Actual
2017
$000

Revenue

Rates
1
296,409
296,806
286,015
296,409
286,015

Revenue from operating activities

Development contributions
2
3,305
2,000
3,025
3,305
3,025

Grants, subsidies and reimbursements
2
50,643
55,913
33,881
64,501
46,538

Other operating activities
2
142,450
130,702
144,215
162,266
162,461

Investments revenue
3
24,362
22,454
24,585
11,752
12,648

Vested assets and other revenue
4
9,740
1,050
8,565
9,741
12,652

Fair value gains
5
6,941
3,058
23,500
6,947
23,404

Finance revenue

1,603
704
2,367
1,864
2,601

Total revenue

535,453
512,687
526,153
556,785
549,344

Expense

Finance expense
6
(24,082)
(25,420)
(23,960)
(24,094)
(23,970)

Expenditure on operating activities
7
(371,749)
(348,489)
(368,625)
(402,525)
(398,986)

Depreciation and amortisation expense
8
(107,415)
(106,417)
(101,889)
(109,048)
(103,653)

Total expense

(503,246)
(480,326)
(494,474)
(535,667)
(526,609)

Share of equity accounted surplus/(deficit) from associates and jointly controlled entity
9
-
-
-
16,243
13,313

Net surplus before taxation

32,207
32,361
31,679
37,361
36,048

Income tax credit/(expense)
10
-
-
-
(429)
102

NET SURPLUS for the year

32,207
32,361
31,679
36,932
36,150

Net surplus attributable to:

Wellington City Council and Group

32,207
32,361
31,679
36,648
35,866

Non-controlling interest

-
-
-
284
284

32,207
32,361
31,679
36,932
36,150

The notes on pages 160 to 246 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 2018

Council
Group

Refer
Actual
2018
$000
Budget
2018
$000
Actual
2017
$000
Actual
2018
$000
Actual
2017
$000

Net surplus for the year

32,207
32,361
31,679
36,932
36,150

Other comprehensive revenue and expense ¹

Items that will be reclassified to surplus/(deficit)

Cash flow hedges:

Fair value movement - net
SCIE ²
(4,079)
-
17,447
(4,380)
17,447

Fair value through other comprehensive revenue and expense

Fair value movement - net
SCIE
856
-
1,240
1,615
1,195

Items that will not be reclassified to surplus/(deficit)

Non-contolling interest:

Movement in non-controlling interest

-
-
-
-
-

Revaluations:

Fair value movement - property, plant and equipment - net
SCIE
180,413
122,876
295,254
180,413
295,254

Share of other comprehensive revenue and expense of associates and jointly controlled entity:

Fair value movement - property, plant and equipment - net
SCIE
-
-
-
20,588
24,165

Total other comprehensive revenue and expense

177,190
122,876
313,941
198,236
338,061

TOTAL COMPREHENSIVE REVENUE and EXPENSE for the year

209,397
155,237
345,620
235,168
374,211

Total comprehensive revenue and expense attributable to:

Wellington City Council and Group

209,397
155,237
345,620
234,884
373,927

Non-controlling interest

-
-
-
284
284

209,397
155,237
345,620
235,168
374,211

Other comprehensive revenue or expense is non-cash in nature and only reflects changes in equity.

Statement of Changes in Equity – see page 210

The notes on pages 160 to 246 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 $22.766m higher than budgeted primarily due to:

$3.806m of additional landfill charges for contaminated and special waste

$1.516m of additional transport and infrastructure revenue due to a number of factors including higher than expected bus shelter advertising revenue

$1.467m of additional dividend revenue largely from the Council’s investment in Wellington International Airport Limited

$1.305m of additional development contribution revenue

$8.087m of vested assets from developments

$6.937m of investment property revaluations

Expenses were $22.920m higher than budgeted primarily due to:

$5.000m of grants were budgeted in 2017/18 but actually incurred in 2016/17

$3.349m higher than budgeted IT and telecommunication costs

$12.523m for the increase in the Weathertight homes provision

$1.381m for the increase in insurance premiums

Net finance expense was $2.237m lower than budgeted principally reflecting the lower than planned capital expenditure, which is debt funded, resulting in lower interest charges.

Note 1: Rates revenue

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

General rates
169,409
160,558
169,409
160,558

Targeted rates
111,151
109,788
111,151
109,788

Metered water supply
14,782
14,519
14,782
14,519

Penalties and adjustments
1,067
1,150
1,067
1,150

TOTAL RATES REVENUE
296,409
286,015
296,409
286,015

The total amount of rates charged on Council owned properties that have not been eliminated from revenue and expenditure is $13.915m (2017: $13.258m). For the Group, rates of $13.981m (2017: $13.298m) have not been eliminated.

The revenue from rates for Wellington City Council was billed on the following rating information held as at 30 June 2017.

The number of rating units: 78,192 (30 June 2016: 77,802).

2018
$000
2017
$000

Total capital value of rating units
55,577,812
55,116,216

Total land value of rating units
23,373,780
23,300,843

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 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 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 targeted rate. The Council committed itself at the start of the year to certain remissions, which for the reporting period ended 30 June 2018 totalled $0.888m (2017: $0.751m).

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

2018
$000
2017
$000
2018
$000
2017
$000

Development contributions
3,305
3,025
3,305
3,025

Grants, subsidies and reimbursements

Operating
7,614
6,606
21,253
18,961

Capital
43,029
27,275
43,248
27,577

Total grants, subsidies and reimbursements
50,643
33,881
64,501
46,538

Other operating activities

Fines and penalties
6,176
7,196
6,176
7,196

Rendering of services
129,686
130,569
144,969
144,658

Sale of goods
6,588
6,450
11,121
10,607

Total other operating activities
142,450
144,215
162,266
162,461

TOTAL REVENUE FROM OPERATING ACTIVITIES
196,398
181,121
230,072
212,024

For the Council, the principal grants and reimbursements are from:

The New Zealand Transport Agency (NZTA), which reimburses part of the Council’s costs for maintaining the local roading infrastructure. The capital reimbursements recognised from NZTA of $27.835m (2017: $11.473m) and operating reimbursements of $6.005m (2017: $5.349m) 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, $14.616m (2017: $12.182m) and $0.555m (2017: $1.122m) respectively, are part of a 10 year work programme that commenced in 2008. All of the grant revenue has now been 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 Council to maintain its investment and provision of social housing until 2037.

For the Group, the additional principal subsidy was $4.194m (2017: $3.616m) from Greater Wellington Regional Council to Wellington Cable Car Limited for the maintenance of the overhead wire trolley system up to 31 October 2017 when the power was switched off and decommissioning of the system commenced on 1 November 2017. The higher subsidy compared to the previous period reflects decommissioning costs reimbursed.

For other operating activities of Council, the principal services rendered (provided) were:

Community housing – $21.261m (2017: $22.280m)

Parking fees and permits – $20.386m (2017: $18.287m)

Building consents and licensing services – $14.670m (2017: $15.319m)

Landfill operations and recycling – $14.645m (2017: $15.636m) – including unbudgeted revenue from the joint ventures with Porirua City Council $1.601m (2017: $1.259m)

Convention and conferences centres – $12.723m (2017: $13.165m)

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 which generates revenue, but generally at below market prices or at 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 177), 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 and library overdue book fines) 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

2018
$000
2017
$000
2018
$000
2017
$000

Dividend from associates
12,610
11,937
-
-

Dividend from equity investments
104
104
104
104

Investment property revenues
11,648
12,544
11,648
12,544

TOTAL INVESTMENTS REVENUE
24,362
24,585
11,752
12,648

The primary investment dividend was from 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 196).

The revenues from investment properties are primarily from ground leases around the CBD 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 177).

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

2018
$000
2017
$000
2018
$000
2017
$000

Vested assets
8,087
6,250
8,087
6,250

Gain on business combination
-
-
-
4,072

Other revenue
1,653
2,315
1,654
2,330

TOTAL VESTED ASSETS AND OTHER REVENUE
9,740
8,565
9,741
12,652

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. Although vested assets are non-cash in nature and represent a future obligation to the Council, as the Council will have the on-going costs associated with maintaining the assets, they are recognised as revenue in accordance with the applicable accounting standard.

The values of principal vested assets received were:

Drainage, waste and water – $4.950m (2017: $2.645m)

Roading – $2.102m (2017: $2.526m)

Other revenue is principally Fuel Tax – $1.132m (2017: $1.120m)

For the group, the $4.072m gain on business combination in 2017 related to the Council acquiring control of the Karori Sanctuary Trust. For more information refer to Note 19 – Investment in Controlled entities (page 195).

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

2018
$000
2017
$000
2018
$000
2017
$000

Investment property revaluation
6,937
18,222
6,937
18,222

Amortisation of loans to related parties
4
3
10
8

Fair value adjustment on loans to related parties
-
5,275
-
5,174

TOTAL FAIR VALUE GAINS
6,941
23,500
6,947
23,404

Investment properties, which are revalued annually, are held primarily to earn lease 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 177).

The $5.275m adjustment to the related party loan in 2017 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 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 179).

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

2018
$000
2017
$000
2018
$000
2017
$000

Interest on borrowings
23,062
22,956
23,074
22,966

Interest on finance leases
-
2
-
2

Re-discounting of interest on provisions
1,020
1,002
1,020
1,002

TOTAL FINANCE EXPENSE
24,082
23,960
24,094
23,970

Less

Finance revenue – interest earned
1,603
2,367
1,864
2,601

NET FINANCE COST
22,479
21,593
22,230
21,369

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 203) and Note 25: Provision for other liabilities (page 205).

Interest earned

Interest earned is recognised using the effective interest rate method.

Note 7: Expenditure on operating activities

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Governance and employment

Elected member remuneration
1,559
1,550
1,559
1,550

Independent directors/trustees fees for controlled entities
-
-
437
489

Employee benefits expense:

– Remuneration
86,778
84,822
113,945
110,458

– Superannuation contributions (including Kiwisaver)
2,505
2,336
3,059
2,884

Other personnel costs
4,025
3,666
4,981
4,140

Impairments

Bad debts written off not previously provided for
175
123
175
123

Increase in provision for impairment of receivables and recoverables
167
896
167
896

Impairment loss from property, plant and equipment
4
11,446
4
11,446

Impairment loss on shares
-
-
153
27

Insurance

Insurance premiums
12,181
9,671
12,609
10,149

Insurance reserve costs – net
2,750
6,910
2,750
6,910

General

Administration Costs
6,477
6,467
20,600
18,334

Auditor's remuneration
454
308
626
555

Contractors
5,267
4,846
8,209
7,629

Contracts, services and materials
134,741
131,212
139,289
135,541

Grants – general
12,161
22,363
11,881
19,098

Grants to controlled entities
24,907
21,032
-
-

Information and communication technology
16,342
12,119
17,326
13,147

Loss on disposal of intangibles
35
-
35
-

Loss on disposal of property, plant and equipment
1,573
542
1,576
886

Operating lease – minimum lease payments
2,043
1,737
3,208
4,734

Other general costs
425
620
1,149
2,959

Professional costs
16,250
14,406
16,855
16,216

Reassessment of weathertight provision
12,523
4,429
12,523
4,429

Utility costs
28,407
27,124
29,409
26,386

TOTAL EXPENDITURE ON OPERATING ACTIVITIES
371,749
368,625
402,525
398,986

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.

During the year $0.907m (2017: $0.943m) of termination benefits were incurred by the Council and $1.077m (2017: $1.278m) by the Group. Termination benefits include all payments relating to the end of employment other than unpaid salary and leave entitlements. Termination benefits include both contractual (eg redundancy, in lieu of notice) and non-contractual (eg severance) payments.

For further information refer to Note 37: Remuneration and staffing levels (page 238)

Impairments

The $11.446m 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.

General

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Auditor's remuneration

Audit services – Audit New Zealand – Financial Statements
300
297
406
471

Audit services – Audit New Zealand – Long-Term Plan
143
-
143
-

Audit services – Audit New Zealand – other
11
11
11
11

Audit services – Other Auditors
-
-
66
73

454
308
626
555

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.

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 (2017: $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 234).

Operating lease minimum lease payments are for non-cancellable agreements for the use of assets such as buildings and specialised computer equipment.

The reassessment of provisions primarily relates to the Weathertight homes provision. Refer to Note 25: Provisions for other liabilities (page 205) 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 $13.872m (2017: $13.250m) 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 which 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

2018
$000
2017
$000
2018
$000
2017
$000

Depreciation

Buildings
21,490
21,784
21,861
22,199

Civic Centre complex
2,675
2,592
2,675
2,592

Restricted buildings
1,621
1,577
1,621
1,577

Drainage, waste and water infrastructure
35,309
32,386
35,309
32,386

Landfill post closure
283
132
283
132

Library collections
1,767
2,352
1,767
2,352

Plant and equipment
11,178
11,106
12,352
12,387

Roading infrastructure
28,786
25,039
28,786
25,039

Total depreciation
103,109
96,968
104,654
98,664

Amortisation

Computer software
4,306
4,921
4,394
4,989

Total amortisation
4,306
4,921
4,394
4,989

TOTAL DEPRECIATION AND AMORTISATION
107,415
101,889
109,048
103,653

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 of the major classes of property, plant and equipment are as follows:

| 2018
Asset Category | Useful Life (years)
Land | unlimited
Buildings | 2 - 150
Civic Centre Complex | 2 - 67
Plant and equipment | 1 - 296
Library collection | 4 - 11
Restricted assets (excluding buildings) | unlimited
Infrastructure assets: |
Land (including land under roads) | unlimited
Roading | 2 - 266
Drainage, waste and water | 7 - 402

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 of these assets are as follows:

| 2018
Asset Category | Useful Life (years)
Computer software | 2 - 11

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

2018
$000
2017
$000

Associates

Chaffers Marina Holdings Limited
(17)
(31)

Wellington International Airport Limited
16,270
13,432

Jointly controlled entity

Wellington Water Limited
(10)
(88)

TOTAL SHARE OF ASSOCIATES' AND JOINTLY CONTROLLED ENTITY'S SURPLUS OR (DEFICIT)
16,243
13,313

Further information on the cost and value of the above investments is found in Note 20: Investments in Associates and Jointly Controlled Entity (page 196).

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

2018
$000
2017
$000
2018
$000
2017
$000

Current tax expense

Current year
-
-
144
293

Prior period adjustment
-
-
183
1

Total current tax expense
-
-
327
294

Deferred tax expense

Origination and reversal of temporary differences
(6)
(73)
-
-

Change in unrecognised temporary differences
-
-
102
(396)

Recognition of previously unrecognised tax losses
6
73
-
-

Total deferred tax expense
-
-
102
(396)

TOTAL INCOME TAX EXPENSE / (CREDIT)
-
-
429
(102)

Reconciliation of tax on the surplus and tax expense
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Surplus for the period before taxation
32,207
31,679
37,361
36,048

Prima facie income tax based on domestic tax rate – 28%
9,018
8,870
10,461
10,093

Effect of non-deductible expenses and tax exempt income
(9,024)
(8,897)
(11,491)
(10,321)

Effect of tax losses utilised
-
73
-
-

Current years loss for which no deferred tax asset was recognised
6
27
6
27

Recognition of prior year loss
-
(73)
-
(134)

Previously unreognised tax losses now utilised
-
-
22
-

Change in unrecognised temporary differences
-
-
42
208

Prior period adjustment
-
-
88
(407)

Share of income tax of equity accounted associates
-
-
1,206
385

Under / (over) provision of income tax in previous period
-
-
95
47

TOTAL INCOME TAX EXPENSE / (CREDIT)
-
-
429
(102)

Imputation credits
Group

2018
$000
2017
$000

Imputation credits available in subsequent periods
154
99

Relevant significant accounting policies

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 2018

Council
Group

Note
Actual
2018
$000
Budget
2018
$000
Actual
2017
$000
Actual
2018
$000
Actual
2017
$000

ASSETS

Current assets

Cash and cash equivalents
11
95,996
1,144
76,907
106,856
85,366

Receivables and recoverables
13
55,815
48,542
45,179
58,049
46,515

Other financial assets
14
10,515
-
263
11,948
304

Prepayments

15,221
13,414
14,012
15,518
14,303

Inventories

1,285
932
1,149
1,601
1,503

Non-current assets classified as held for sale
15
-
-
-
-
-

Total current assets

178,832
64,032
137,510
193,972
147,991

Non-current assets

Derivative financial assets
12
381
-
1,283
381
1,283

Receivables and recoverables
13
-
-
4,185
-
4,185

Other financial assets
14
12,201
17,016
9,996
14,231
11,337

Intangibles
16
25,678
28,306
26,528
25,800
26,613

Investment properties
17
236,905
221,512
230,194
236,905
230,194

Property, plant and equipment
18
7,226,974
7,004,869
6,972,168
7,242,418
6,988,405

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
187,880
163,960

Total non-current assets

7,526,675
7,296,239
7,268,890
7,707,615
7,425,977

TOTAL ASSETS

7,705,507
7,360,271
7,406,400
7,901,587
7,573,968

LIABILITIES

Current liabilities

Derivative financial liabilities
12
659
-
975
659
975

Exchange transactions and transfers payable
21
60,686
62,060
58,155
64,620
59,639

Taxes payable
21
6,113
-
3,498
6,375
3,627

Revenue in advance
22
16,184
13,132
28,922
18,511
30,717

Borrowings
23
131,058
269,984
100,096
131,058
100,196

Employee benefit liabilities and provisions
24
7,731
7,807
7,811
9,559
9,808

Provision for other liabilities
25
15,743
12,028
13,584
15,743
13,584

Total current liabilities

238,174
365,011
213,041
246,525
218,546

Non-current liabilities

Derivative financial liabilities
12
25,083
-
21,591
25,083
21,591

Exchange transactions and transfers payable
21
630
630
630
630
630

Borrowings
23
451,086
258,167
395,724
451,086
395,792

Employee benefit liabilities and provisions
24
772
1,467
889
826
924

Provision for other liabilities
25
50,244
28,110
44,404
50,244
44,404

Deferred tax
26
-
-
-
882
938

Total non-current liabilities

527,815
288,374
463,238
528,751
464,279

TOTAL LIABILITIES

765,989
653,385
676,279
775,276
682,825

EQUITY

Accumulated funds

1,269,134
1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

3,819,629
3,808,695
3,793,827
3,818,478
3,788,286

Revaluation reserves
27
1,857,464
1,611,454
1,677,312
2,016,078
1,815,338

Hedging reserve
28
(25,362)
-
(21,283)
(25,663)
(21,283)

Fair value through other comprehensive revenue and expense reserve
29
3,744
1,648
2,888
4,836
3,221

Non-controlling interest

-
-
-
284
284

Restricted funds
30
14,909
15,955
8,243
19,136
12,135

TOTAL EQUITY

6,939,518
6,706,886
6,730,121
7,126,311
6,891,143

TOTAL EQUITY AND LIABILITIES

7,705,507
7,360,271
7,406,400
7,901,587
7,573,968

The notes on pages 160 to 246 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 $114.800m higher than budgeted primarily due to:

$94.000m of short-term deposits are held due to certain favourable interest rates and liquidity requirements.

Non-current assets are $230.436m higher than budgeted primarily due to:

$6.937m of revaluation increase in investment properties reflecting commercial market returns

$181.384m of additional revaluation increases in property, plant and equipment over and above what was budgeted. The current year has a $57.537m variance for the operational land and buildings revaluation. The increase above budget reflects the better information available on asset values and lives. The budget figures also don’t fully reflect the 2016/17 revaluations for infrastructural assets which were much higher than budget as these were only finalised after the Annual Plan budget for 2017/18 was approved by Council.

Total liabilities are $112.604m higher than budget primarily due to:

$25.083m relating to derivative financial liabilities which are not budgeted for.

$25.849m relating to provision for other liabilities, with $12.523m due to the increase in the weathertight homes provision.

$53.993m of borrowings including $4.644m of loans relating to the joint ventures with Porirua City Council and to meet liquidity ratio requirements.

$6.113m tax timing variances mainly related to PAYE payable to the IRD and amounts due to GWRC for rates collected on their behalf.

Note 11: Cash and cash equivalents

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Cash at bank
1,976
4,886
11,288
10,978

Cash on hand
20
21
39
39

Short term bank deposits up to 3 months
94,000
72,000
95,529
74,349

TOTAL CASH AND CASH EQUIVALENTS
95,996
76,907
106,856
85,366

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 three months depending on the immediate cash requirements and short term borrowings of the Group, and earn interest at the applicable short term deposit rates.

Council holds short term deposits as part of its overall liquidity risk management programme. This programme enables 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 Council’s cost of funds.

Note 12: Derivative financial instruments

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Assets

Non-current assets

Interest rate swaps - cash flow hedges
380
1,283
380
1,283

Interest rate cap
1
-
1
-

Total non-current assets
381
1,283
381
1,283

TOTAL DERIVATIVE FINANCIAL INSTRUMENT ASSETS
381
1,283
381
1,283

Liabilities

Current liabilities

Interest rate swaps - cash flow hedges
659
975
659
975

Total current liabilities
659
975
659
975

Non-current liabilities

Interest rate swaps - cash flow hedges
25,083
21,591
25,083
21,591

Total non-current liabilities
25,083
21,591
25,083
21,591

TOTAL DERIVATIVE FINANCIAL INSTRUMENT LIABILITIES
25,742
22,566
25,742
22,566

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 214) and Note 32: Financial instruments (page 221).

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

2018
$000
2017
$000
2018
$000
2017
$000

Current
55,815
45,179
58,049
46,515

Non-Current
-
4,185
-
4,185

TOTAL RECEIVABLES AND RECOVERABLES – NET
55,815
49,364
58,049
50,700

Receivables and recoverables
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Trade receivables and recoverables – debtors – net
16,753
18,119
18,300
17,394

Trade recoverables – fines – net
3,630
3,439
3,630
3,439

Accrued revenue
12,287
8,058
12,352
8,094

Sundry receivables
6,365
7,617
6,987
9,779

GST recoverable
6,314
2,803
6,314
2,666

Rates recoverable
10,466
9,328
10,466
9,328

TOTAL RECEIVABLES AND RECOVERABLES – NET
55,815
49,364
58,049
50,700

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

2018
$000
2017
$000
2018
$000
2017
$000

Receivables and recoverables from related parties

– Controlled entities
210
1,294
-
-

– Associates and jointly controlled entity
308
187
308
187

Total receivables and recoverables from related parties
518
1,481
308
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

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
6,960
6,183
6,960
6,183

New provisions made
165
896
165
896

Release of unused provision
(142)
(91)
(142)
(91)

Amount of provision utilised
(31)
(28)
(31)
(28)

Provision for impairment of total receivables and recoverables – closing balance
6,952
6,960
6,952
6,960

The ageing profile of total net receivables and recoverables at the reporting date is as follows:

Council
2018
2017

Gross
$000
Impaired
$000
Net
$000
Gross
$000
Impaired
$000
Net
$000

Trade and other receivables and recoverables

Not past due
38,414
(183)
38,231
29,904
(179)
29,725

Past due 0–3 months
6,857
(55)
6,802
7,947
(57)
7,890

Past due 3–6 months
3,654
(193)
3,461
4,209
(227)
3,982

Past due more than 6 months
13,842
(6,521)
7,321
14,264
(6,497)
7,767

TOTAL RECEIVABLES AND RECOVERABLES
62,767
(6,952)
55,815
56,324
(6,960)
49,364

Group
2018
2017

Gross
$000
Impaired
$000
Net
$000
Gross
$000
Impaired
$000
Net
$000

Trade and other receivables and recoverables

Not past due
40,225
(183)
40,042
30,852
(179)
30,673

Past due 0-3 months
7,271
(55)
7,216
8,224
(57)
8,167

Past due 3-6 months
3,655
(193)
3,462
4,240
(227)
4,013

Past due more than 6 months
13,850
(6,521)
7,329
14,344
(6,497)
7,847

TOTAL RECEIVABLES AND RECOVERABLES
65,001
(6,952)
58,049
57,660
(6,960)
50,700

The net receivables and recoverables past due for more than six months primarily relates to fines. Due to their nature, the collection pattern for fines is longer than for 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

2018
$000
2017
$000
2018
$000
2017
$000

Represented by:

Current
10,515
263
11,948
304

Non-current
12,201
9,996
14,231
11,337

TOTAL OTHER FINANCIAL ASSETS
22,716
10,259
26,179
11,641

Comprised of:

Financial assets at fair value through other comprehensive revenue and expense

Equity investments:

– Civic Financial Services Ltd
798
806
798
806

– NZ Local Government Funding Agency (LGFA)
5,339
4,475
5,339
4,475

– Creative HQ incubator/accelerator shareholdings
-
-
2,030
1,341

Loans and deposits

Bank deposits – term greater than 3 months
10,000
-
11,401
-

LGFA – borrower notes
6,304
4,688
6,304
4,688

Loans to related parties – other organisations
31
27
31
27

Loans to external organisations
244
263
276
304

TOTAL OTHER FINANCIAL ASSETS
22,716
10,259
26,179
11,641

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% (2017: 4.78%) shareholding in this entity and has 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

2018
$000
2017
$000
2018
$000
2017
$000

Loans to related parties – other organisations

Wellington Regional Stadium Trust

(nominal value $15,394,893)

Opening balance
27
24
27
24

Amortisation of fair value adjustment
4
3
4
3

Closing balance at fair value
31
27
31
27

Karori Sanctuary Trust

(nominal value was $10,346,689 – repaid 2016/17)

Opening balance
-
5,072
-
5,072

Movement in fair value
-
5,275
-
5,275

Loan repayment received
-
(10,347)
-
(10,347)

Closing balance at fair value
-
-
-
-

Loans to other external organisations

Opening balance
263
315
304
366

Loan repayments received
(19)
(13)
(34)
(28)

Loan forgiveness
-
(39)
-
(39)

Amortisation of fair value adjustment
-
-
6
5

Closing balance at fair value
244
263
276
304

TOTAL LOANS
275
290
307
331

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

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 in 2017 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 external organisations

Loans to other external organisations are generally suspensory loan arrangements associated with economic development grants provided by 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 234).

Note 15: Non-current assets classified as held for sale

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
-
1,504
-
1,504

Disposals
-
-
-
-

Transfers to property, plant and equipment
-
(1,504)
-
(1,504)

TOTAL NON-CURRENT ASSETS CLASSFIED AS HELD FOR SALE
-
-
-
-

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 one year or beyond one year where a delay has occurred which 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

2018
$000
2017
$000
2018
$000
2017
$000

Computer software

Cost – opening balance
73,340
66,989
74,210
67,730

Accumulated amortisation
(49,435)
(44,304)
(50,220)
(44,967)

Computer software opening balance
23,905
22,685
23,990
22,763

Acquired by direct purchase
1,545
6,281
1,670
6,357

Amortisation
(4,306)
(4,921)
(4,394)
(4,990)

Net disposals
(60)
-
(60)
-

Transfer to property, plant and equipment
-
(140)
-
(140)

Transfer between classes
7
-
7
-

Total computer software – closing balance
21,091
23,905
21,213
23,990

Cost
59,625
73,340
60,808
74,210

Accumulated amortisation
(38,534)
(49,435)
(39,595)
(50,220)

Total computer software – closing balance
21,091
23,905
21,213
23,990

Work in progress

Computer software
1,723
640
1,723
640

Total work in progress
1,723
640
1,723
640

Carbon credits

Cost – Opening Balance
1,983
1,791
1,983
1,791

Additions
1,231
369
1,231
369

Net disposals
(350)
(177)
(350)
(177)

Total Carbon credits – closing balance
2,864
1,983
2,864
1,983

TOTAL INTANGIBLES
25,678
26,528
25,800
26,613

Disposals and transfers are reported net of accumulated amortisation.

Carbon credits

As part of the Emissions Trading Scheme (ETS) the Council receives 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 2018 the Council received 1,044 credits (2017: 1,094).

The Council purchased 62,507 credits (2017: 21,473) in the market to cover the expected liabilities associated with landfill operations. During the year, 32,715 credits (2017: 32,425) were surrendered to meet the Council’s ETS obligations for the 2017 calendar year.

A further 3,900 credits were purchased to offset sales made to Air New Zealand for them to offer as credits to offset air miles.

At 30 June 2018 the total number of credits held is 382,017 (2017: 347,731).

At 30 June 2018 the liability relating to landfill carbon emissions is $0.359m (2017: $0.173m).

More information on carbon credits can be found in the Statements of Service Provision under activity 2.2: Waste reduction and energy conservation (page 56).

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 of these assets are as follows:

Asset Category | 2018
| Useful Life (years)
Computer software | 2 - 11

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

2018
$000
2017
$000
2018
$000
2017
$000

Ground leases, other land and buildings

Opening balance
229,306
211,237
229,306
211,237

Additions by acquisition
201
153
201
153

Adjustment
-
(269)
-
(269)

Disposals
-
-
-
-

Fair value revaluation movements taken to surplus/(deficit)
6,937
18,222
6,937
18,222

Transfer to property, plant and equipment
41
(37)
41
(37)

Total ground leases, other land and buildings
236,485
229,306
236,485
229,306

Work in progress

Other land and buidings
420
888
420
888

Total work in progress
420
888
420
888

TOTAL INVESTMENT PROPERTIES
236,905
230,194
236,905
230,194

Wellington City Council’s investment properties including the waterfront investment properties were valued as at 30 June 2018 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 $192.693m (2017: $185.208m) and land and buildings (including work in progress) of $44.212m (2017: $44.986m) held for investment purposes.

Investment properties are properties which are held primarily to earn lease 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 leases 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 which generate cash inflows as the lease 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 lease 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 lease 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

Summary
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Property, plant and equipment – Opening balance
6,972,168
6,645,975
6,988,405
6,659,487

Additions
87,742
83,497
88,270
87,774

Disposals
(876)
(1,094)
(877)
(2,151)

Depreciation expense
(103,109)
(96,968)
(104,654)
(98,663)

Impairment losses
(4)
(11,446)
(4)
(11,446)

Revaluation adjustment
(413)
-
(413)
-

Revaluation movement
181,386
295,254
181,386
295,254

Transfer between asset classes
(48)
179
(48)
178

Transfer from non-current assets held for sale
-
1,504
-
1,504

Movement in work in progress
90,128
55,267
90,353
52,819

Acquistion of controlled entity
-
-
-
3,649

TOTAL PROPERTY, PLANT AND EQUIPMENT
7,226,974
6,972,168
7,242,418
6,988,405

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 three-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 & 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 Councils 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.

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 including service concession arrangement assets (waste water treatment plants)) 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 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

Work in progress represents the cost of capital expenditure projects that are not financially complete. The cost of projects within work in progress is transferred to the relevant asset class when the project is completed and is then subject to depreciation.

The movements according to the individual classes of assets are as follows:

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Operational assets

Land

Land – at cost – opening balance
21,862
21,741
21,862
21,741

Land – at valuation – opening balance
222,243
222,907
222,243
222,907

Total land – opening balance
244,105
244,648
244,105
244,648

Additions
1,297
120
1,297
120

Revaluation movement
49,035
-
49,035
-

Revaluation adjustment
(563)
-
(563)
-

Transfer between asset classes
(460)
(663)
(460)
(663)

Total land – closing balance
293,414
244,105
293,414
244,105

Land – at cost – closing balance
-
21,862
-
21,862

Land – at valuation – closing balance
293,414
222,243
293,414
222,243

Total land – closing balance
293,414
244,105
293,414
244,105

Buildings

Buildings – at cost – opening balance
46,914
25,906
55,457
25,906

Buildings – at valuation – opening 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 – opening balance
564,756
562,509
569,252
562,509

Additions
15,663
18,613
15,663
19,091

Depreciation expense
(21,490)
(21,784)
(21,861)
(22,199)

Disposals
(390)
(419)
(390)
(419)

Revaluation adjustment
132,351
-
132,351
-

Transfer between asset classes
55,733
5,837
55,733
8,770

Acquisition of controlled entity
-
-
-
1,500

Total buildings – closing balance
746,623
564,756
750,748
569,252

Buildings – at cost – closing balance
-
46,914
-
55,457

Buildings – at valuation – closing balance
746,623
561,635
754,983
561,635

Total cost/valuation
746,623
608,549
754,983
617,092

Accumulated depreciation
-
(43,793)
(4,235)
(47,840)

Total buildings – closing balance
746,623
564,756
750,748
569,252

Landfill post closure costs ¹

Landfill post closure – at cost – opening balance
4,561
3,265
4,561
3,265

Accumulated depreciation
(2,834)
(2,333)
(2,834)
(2,333)

Total landfill post closure costs – opening balance
1,727
932
1,727
932

Depreciation expense
(283)
(132)
(283)
(132)

Transfer between asset classes
(152)
-
(152)
-

Movement in post closure costs
(115)
927
(115)
927

Total landfill post closure costs – closing balance
1,177
1,727
1,177
1,727

Landfill post closure – at cost – closing balance
4,174
4,561
4,174
4,561

Accumulated depreciation
(2,997)
(2,834)
(2,997)
(2,834)

Total landfill post closure costs – closing balance
1,177
1,727
1,177
1,727

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

2018
$000
2017
$000
2018
$000
2017
$000

Civic Centre complex

Civic Centre complex – at cost – opening balance
161,576
173,965
161,576
173,965

Accumulated depreciation
(63,902)
(61,443)
(63,902)
(61,443)

Total Civic Centre complex – opening balance
97,674
112,522
97,674
112,522

Additions
2,327
767
2,327
767

Depreciation expense
(2,675)
(2,592)
(2,675)
(2,592)

Disposals
(13)
-
(13)
-

Impairment
-
(11,446)
-
(11,446)

Transfer between asset classes
(4)
(2,631)
(4)
(2,631)

Transfer from non-current assets held for sale
-
1,054
-
1,054

Total Civic Centre complex – closing balance
97,309
97,674
97,309
97,674

Civic Centre complex – at cost – closing balance
163,833
161,576
163,833
161,576

Accumulated depreciation
(66,524)
(63,902)
(66,524)
(63,902)

Total Civic Centre complex – closing balance
97,309
97,674
97,309
97,674

Plant and equipment

Plant and equipment – at cost – opening balance
239,658
216,102
257,450
231,319

Accumulated depreciation
(109,549)
(100,714)
(120,540)
(109,808)

Total plant and equipment – opening balance
130,109
115,388
136,910
121,511

Additions
13,011
7,535
13,539
11,334

Depreciation expense
(11,178)
(11,106)
(12,352)
(12,386)

Disposals
(161)
(29)
(162)
(1,086)

Impairment
(4)
-
(4)
-

Transfer between asset classes
(58,059)
18,321
(58,059)
15,388

Acquisition of controlled entity
-
-
-
2,149

Total plant and equipment – closing balance
73,718
130,109
79,872
136,910

Plant and equipment – at cost
175,029
239,658
192,696
257,450

Accumulated depreciation
(101,311)
(109,549)
(112,824)
(120,540)

Total plant and equipment – closing balance
73,718
130,109
79,872
136,910

Library collections

Library collections – at cost – opening balance
-
3,545
-
3,545

Library collections – at valuation – opening 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 – opening balance
14,841
14,107
14,841
14,107

Additions
2,629
1,709
2,629
1,709

Depreciation expense
(1,767)
(2,352)
(1,767)
(2,352)

Revaluation movement
-
1,377
-
1,377

Total library collections – closing balance
15,703
14,841
15,703
14,841

Library collections – at cost – closing balance
2,629
-
2,629
-

Library collections – at valuation – closing balance
14,841
14,841
14,841
14,841

Total cost/valuation
17,470
14,841
17,470
14,841

Accumulated depreciation
(1,767)
-
(1,767)
-

Total library collections – closing balance
15,703
14,841
15,703
14,841

Total operational assets
1,227,944
1,053,212
1,238,223
1,064,509

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Infrastructure assets

Drainage, waste and water

Drainage, waste and water – at cost – opening balance
-
63,847
-
63,847

Drainage, waste and water – at valuation – opening balance
1,466,792
1,352,086
1,466,792
1,352,086

Total cost/valuation
1,466,792
1,415,933
1,466,792
1,415,933

Accumulated depreciation
-
(64,014)
-
(64,014)

Total drainage, water and waste – opening balance
1,466,792
1,351,919
1,466,792
1,351,919

Additions
16,748
22,995
16,748
22,995

Depreciation expense
(35,309)
(32,386)
(35,309)
(32,386)

Disposals
(6)
-
(6)
-

Revaluation movement
-
146,458
-
146,458

Revaluation adjustment
(457)
-
(457)
-

Transfer between asset classes
2,636
(22,195)
2,636
(22,195)

Total drainage, water and waste – closing balance
1,450,404
1,466,792
1,450,404
1,466,792

Drainage, waste and water – at cost – closing balance
16,748
-
16,748
-

Drainage, waste and water – at valuation – closing balance
2,973,091
1,466,792
2,973,091
1,466,792

Total cost/valuation
2,989,839
1,466,792
2,989,839
1,466,792

Accumulated depreciation
(1,539,435)
-
(1,539,435)
-

Total drainage, water and waste – closing balance
1,450,404
1,466,792
1,450,404
1,466,792

Roading

Roading – at cost – opening balance
-
88,659
-
88,659

Roading – at valuation – opening 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 – opening balance
1,014,334
868,101
1,016,934
870,701

Additions
33,366
26,867
33,366
26,867

Depreciation expense
(28,786)
(25,039)
(28,786)
(25,039)

Revaluation movement
-
144,434
-
144,434

Revaluation adjustment
44
-
44
-

Transfer between asset classes
813
(29)
813
(29)

Total roading – closing balance
1,019,771
1,014,334
1,022,371
1,016,934

Roading – at cost – closing balance
33,365
-
33,365
-

Roading – at valuation – closing balance
1,452,141
1,014,334
1,454,741
1,016,934

Total cost/valuation
1,485,506
1,014,334
1,488,106
1,016,934

Accumulated depreciation
(465,735)
-
(465,735)
-

Total roading – closing balance
1,019,771
1,014,334
1,022,371
1,016,934

Infrastructure land

Infrastructure land – at cost – opening balance
-
3,720
-
3,720

Infrastructure land – at valuation – opening balance
38,793
35,818
38,793
35,818

Total infrastructure land – opening balance
38,793
39,538
38,793
39,538

Revaluation movement
-
2,985
-
2,985

Transfer between asset classes
463
(3,730)
463
(3,730)

Total infrastructure land – closing balance
39,256
38,793
39,256
38,793

Infrastructure land – at cost – closing balance
-
-
-
-

Infrastructure land – at valuation – closing balance
39,255
38,793
39,255
38,793

Total infrastructure land – closing balance
39,255
38,793
39,255
38,793

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Land under roads

Land under roads – at cost – opening balance
2,956,261
2,950,144
2,956,261
2,950,144

Additions
194
1,833
194
1,833

Disposals
(57)
(506)
(57)
(506)

Transfer between asset classes
(595)
4,413
(595)
4,413

Transfer from non-current assets held for sale
-
377
-
377

Land under roads – closing balance
2,955,803
2,956,261
2,955,803
2,956,261

Total infrastructure assets
5,465,233
5,476,180
5,467,833
5,478,780

Restricted assets ¹

Art and cultural assets

Art and cultural assets – at cost – opening balance
8,730
8,667
11,069
11,006

Additions
178
19
178
19

Transfer between asset classes
(36)
44
(36)
44

Art and cultural assets – closing balance
8,872
8,730
11,211
11,069

Restricted buildings

Restricted buildings – at cost – opening balance
42,294
40,865
42,294
40,865

Accumulated depreciation
(12,408)
(10,870)
(12,408)
(10,870)

Total restricted buildings – opening balance
29,886
29,995
29,886
29,995

Additions
921
1,168
921
1,168

Depreciation expense
(1,621)
(1,577)
(1,621)
(1,577)

Disposals
(249)
-
(249)
-

Transfer between asset classes
(387)
300
(387)
300

Restricted buildings – closing balance
28,550
29,886
28,550
29,886

Restricted buildings – at cost – closing balance
42,198
42,294
42,198
42,294

Accumulated depreciation
(13,648)
(12,408)
(13,648)
(12,408)

Total restricted buildings – closing balance
28,550
29,886
28,550
29,886

Parks and reserves

Parks and reserves – at cost – opening balance
216,333
211,888
216,333
211,888

Additions
1,399
943
1,399
943

Disposals
-
(140)
-
(140)

Transfer between asset classes
(7,059)
3,569
(7,059)
3,569

Transfer from non-current assets held for sale
-
73
-
73

Parks and reserves – closing balance
210,673
216,333
210,673
216,333

Town Belt

Town Belt – at cost – opening balance
81,486
84,544
81,486
84,544

Additions
124
-
124
-

Transfer between asset classes
7,622
(3,058)
7,622
(3,058)

Town Belt – at cost
89,232
81,486
89,232
81,486

Zoo animals – at cost
500
500
500
500

Total restricted assets
337,827
336,935
340,166
339,274

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

2018
$000
2017
$000
2018
$000
2017
$000

Work in progress

Land
2,623
3,155
2,623
3,155

Buildings
84,676
50,573
84,902
50,573

Civic Centre complex
924
1,227
924
1,227

Plant and equipment
22,722
17,149
22,722
17,149

Library
194
781
194
781

Drainage, waste and water
45,853
18,261
45,853
18,261

Roading
38,870
14,517
38,870
14,517

Art and cultural
108
179
108
179

Total work in progress
195,970
105,842
196,196
105,842

TOTAL PROPERTY, PLANT AND EQUIPMENT
7,226,974
6,972,168
7,242,418
6,988,405

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 2018, 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 2017 and 30 June 2018 for infrastructural network and infrastructural land assets were assessed using appropriate indices. The increase in asset value of 0.6% of Total Assets was not considered material by management and accordingly the assets were not revalued at 30 June 2018.

Further information on revaluation reserves and movements is contained in Note 27: Revaluation reserves.

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
2018

Closing book
value
Additions
Replacement
Cost

Constructed
Vested

$000
$000
$000
$000

Water supply

– treatment plants and facilities
-
-
-
-

– other assets
348,289
4,328
1,772
900,660

Sewerage

– treatment plants and facilities
171,857
695
-
234,835

– other assets
514,476
4,786
1,163
1,074,607

Stormwater drainage
415,782
1,990
2,015
836,471

Flood protection and control works
-
-
-
-

Roads and footpaths
1,019,771
31,264
2,102
1,511,737

TOTAL CORE ASSETS
2,470,175
43,063
7,052
4,558,310

Council
2017

Closing book
value
Additions
Replacement
Cost

Constructed
Vested

$000
$000
$000
$000

Water supply

– treatment plants and facilities
-
-
-
-

– other assets
386,880
8,393
1,554
878,743

Sewerage

– treatment plants and facilities
174,369
1,200
431
230,000

– other assets
486,333
7,856
-
1,018,655

Stormwater drainage
419,210
2,901
660
817,747

Flood protection and control works
-
-
-
-

Roads and footpaths
1,014,334
24,341
2,526
1,450,806

TOTAL CORE ASSETS
2,481,126
44,691
5,171
4,395,951

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.

Service concession arrangements

The service concession arrangement assets 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. These assets are included in the infrastructure assets class and are valued consistently with other waste infrastructure network assets.

The carrying value of these service concession assets for the Group is $151.431m (2017: $154.231m).

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 infrastructure assets class 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 section100 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

2018
$000
2017
$000

Total value of property, plant and equipment
7,226,974
6,972,168

less assets (primarily land) excluded from insurance contracts
(3,784,347)
(3,642,819)

Value of assets covered by insurance contracts
3,442,627
3,329,349

The maximum amount to which assets are insured under Council insurance policies
1,144,000
1,293,000

In addition to 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 $11.406m (2017: $4.156m) 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 (2017: $1.500m). The net cost of claims applied to the reserve during the year amounted to $2.750m (2017: $6.910m). The majority of the cost in 2017 related to the Kaikoura earthquake in November 2016. The reserve was replenished from previous surpluses by $8.500m to achieve the desired level of cover.

For more information on the claims applied against the reserve refer to Note 38: Financial impacts of the Kaikoura earthquake (page 242).

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
2018
$000
2017
$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 (i.e. $100) made in respect of Trusts, for which 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 234).

The following entities are controlled entities of Council:

Controlled entities
Accounting Interest
2018
Accounting Interest
2017
Nature of business

Karori Sanctuary Trust (Trading as Zealandia)
100%
100%
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 (Trading as Experience Wellington)
100%
100%
Administers the Cable Car Museum, Capital E, the City Gallery, the Nairn Street Cottage, the Space Place (Carter Observatory), theWellington 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.

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
Council

2018
$000
2017
$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
2018
Accounting Interest
2017
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
42.11%
42.11%
Manages all water services for Wellington, Lower Hutt, Upper Hutt and Porirua City Councils and the 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 2018 Council held a 10.52% interest in Chaffers Marina Holdings Limited (2017:10.52%) 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

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. 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
2018
$000
Liabilities
2018
$000
Revenues
2018
$000
Surplus/(Deficit)
2018
$000

Associates

Chaffers Marina Holdings Limited
591
184
132
(17)

Wellington International Airport Limited
403,591
204,600
43,737
16,270

Jointly controlled entity

Wellington Water Limited
9,388
8,676
11,340
(10)

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)

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:

Council

2018
$000
2017
$000

Chaffers Marina Holdings Limited

Opening balance
872
903

Equity accounted earnings of associate
(17)
(31)

Closing balance – investment in Chaffers Marina Holdings Limited
855
872

Wellington International Airport Limited

Opening balance
162,366
136,706

Dividends
(12,610)
(11,937)

Equity accounted earnings of associate
16,270
13,432

Share of net revaluation of property, plant and equipment – movement
20,588
24,165

Share of hedging reserve – movement
(301)
-

Closing balance – investment in Wellington International Airport Limited
186,313
162,366

Wellington Water Limited

Opening balance
722
810

Equity accounted earnings of jointly controlled entity
(10)
(88)

Closing balance – investment in Wellington Water Limited
712
722

TOTAL INVESTMENT IN ASSOCIATES AND JOINTLY CONTROLLED ENTITY
187,880
163,960

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 171).

Note 21: Exchange transaction, transfers and taxes payable

Exchange transactions, transfers and taxes payable
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Current

Exchange transactions and transfers payable
60,686
58,155
64,620
59,639

Taxes payable
6,113
3,498
6,375
3,627

Non-current

Exchange transactions and transfers payable
630
630
630
630

TOTAL EXCHANGE TRANSACTIONS, TRANSFERS AND TAXES PAYABLE
67,429
62,283
71,625
63,896

Comprised of:

Exchange transactions and transfers payable
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Trade payables and accruals
52,752
51,293
56,686
52,780

Interest payable
3,231
3,113
3,231
3,113

Sundry payables
5,333
4,379
5,333
4,376

Total exchange transactions and transfers payable
61,316
58,785
65,250
60,269

Taxes payable
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

GWRC rates
4,539
3,207
4,539
3,207

Other
1,574
291
1,836
420

Total taxes payable
6,113
3,498
6,375
3,627

TOTAL EXCHANGE TRANSACTIONS, TRANSFERS AND TAXES PAYABLE
67,429
62,283
71,625
63,896

Exchange transactions, transfers and payable to related parties
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Controlled entities
570
2,354
-
-

Associates and jointly controlled entity
2,267
4,333
2,267
4,333

Total exchange transactions, transfers and payable to related parties
2,837
6,687
2,267
4,333

Payables under exchange transactions, transfers and taxes payable are non-interest bearing and are normally settled on terms varying between seven 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

2018
$000
2017
$000
2018
$000
2017
$000

Exchange

Lease rentals
2,569
2,910
2,569
2,910

Other
-
-
425
250

Taxes

Rates
1,423
1,345
1,423
1,345

Transfers

Wellington Venues operations
1,182
1,048
1,182
1,048

Inspection and licensing fees
3,770
3,639
3,770
3,639

Other
1,058
1,202
1,585
1,876

Liabilities recognised under conditional transfer agreements
6,182
18,778
7,557
19,649

TOTAL REVENUE IN ADVANCE
16,184
28,922
18,511
30,717

Relevant significant accounting policies

Liabilities recognised under conditional transfer agreements

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 in the 2017/18 year relates to funding received from NZTA in relation to roading and urban cycle ways.

The primary liability recognised as being under a conditional transfer agreement in the 2016/17 year related to the remaining $15.127m capital grant received from the Crown for the housing upgrade project, which has been fully utilised in 2017/18.

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

2018
$000
2017
$000
2018
$000
2017
$000

Current

Bank loans – term
58
96
58
196

Commercial paper
85,000
85,000
85,000
85,000

Debt securities – fixed rate bonds
5,000
-
5,000
-

Debt securities – floating rate notes
41,000
15,000
41,000
15,000

Finance leases
-
-
-
-

Total current
131,058
100,096
131,058
100,196

Non-current

Bank loans – term
4,586
4,224
4,586
4,292

Debt securities – fixed rate bonds
15,000
20,000
15,000
20,000

Debt securities – floating rate notes
431,500
371,500
431,500
371,500

Total non-current
451,086
395,724
451,086
395,792

TOTAL GROSS BORROWINGS
582,144
495,820
582,144
495,988

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

2018
$000
2017
$000
2018
$000
2017
$000

Total gross borrowings
582,144
495,820
582,144
495,988

Less

Cash and cash equivalents (see Note 11)
(95,996)
(76,907)
(106,856)
(85,366)

Term deposits > 3 months
(10,000)
-
(10,000)
-

TOTAL NET BORROWINGS
476,148
418,913
465,288
410,622

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 221).

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
4,644
4,644
2019-2041
7.00

Commercial paper
100,000
85,000
2018
2.05 - 2.10

Debt securities – fixed rate bonds
20,000
20,000
2018-2023
4.06 - 5.48

Debt securities – floating rate notes
472,500
472,500
2018-2033
2.30 - 3.08

Total
723,644
582,144

Security

Borrowings are secured by way of a Debenture Trust Deed over the Council’s rates revenue.

Internal Borrowings

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 $45.796m (2017: $61.135m) 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 $34.502m (2017: $51.175m), representing any unused grant funding (2017: $15.172m) 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. The last of the Crown funding was utilised during the 2017/18 year.

Waste reduction and energy

An amount of $11.294m (2017: $9.960m) 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. Council is committed to a number of waste minimisation projects that will utilise these funds.

Note 24: Employee benefits and liabilities provision

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Current

Short-term benefits

Payroll accruals
1,984
2,213
2,530
2,922

Holiday leave
5,527
5,324
6,809
6,612

Total short-term benefits
7,511
7,537
9,339
9,534

Termination benefits

Other contractual provisions
220
274
220
274

Total termination benefits
220
274
220
274

Total current
7,731
7,811
9,559
9,808

Non-current

Long-term benefits

Long service leave provision
-
-
54
35

Retirement gratuities provision
772
889
772
889

Total long-term benefits
772
889
826
924

TOTAL EMPLOYEE BENEFIT LIABILITIES AND PROVISIONS
8,503
8,700
10,385
10,732

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

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
889
995
889
1,007

Movement in required provision
31
9
31
9

Release of unused provision
(29)
(49)
(29)
(49)

Rediscounting of interest
22
27
22
27

Amount utilised
(141)
(93)
(141)
(105)

Retirement gratuities – closing balance
772
889
772
889

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 1.84%) as at 30 June 2018, before discounting, is $0.917m (2017: $1.088m). The discount factor of 4.75% is based on the Treasury risk-free rate.

Other contractual provisions
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
274
55
274
55

New provision
220
274
220
274

Release of unused provision
(19)
-
(19)
-

Amount utilised
(255)
(55)
(255)
(55)

Other contractual provisions – closing balance
220
274
220
274

Background

The above provision is to cover estimated redundancy costs as at 30 June 2018 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

2018
$000
2017
$000
2018
$000
2017
$000

Current

Landfill post closure costs
1,556
1,508
1,556
1,508

Weathertight homes
13,646
11,236
13,646
11,236

Unreinforced masonary grants
541
840
541
840

Total current
15,743
13,584
15,743
13,584

Non-current

Landfill post closure costs
17,615
16,205
17,615
16,205

Weathertight homes
32,629
28,199
32,629
28,199

Total non-current
50,244
44,404
50,244
44,404

TOTAL PROVISIONS FOR OTHER LIABILITIES
65,987
57,988
65,987
57,988

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

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
17,713
16,771
17,713
16,771

Movement in provision
981
491
981
491

Re-discounting of interest
999
627
999
627

Amount utilised
(522)
(176)
(522)
(176)

Landfill post closure costs – closing balance
19,171
17,713
19,171
17,713

Current
1,556
1,508
1,556
1,508

Non-current
17,615
16,205
17,615
16,205

Landfill post closure costs – closing balance
19,171
17,713
19,171
17,713

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

on-going 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 Treasury risk free rate of 3.83%. The gross provision (inflation adjusted at 2.57%), before discounting, is $23.396m (2017: $23.152m). 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 453,130m³ (2017: 545,530m³) and is expected to close in 2022. 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 2052.

Weathertight homes
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
39,435
44,420
39,435
44,420

Additional or increased provision made
12,523
4,429
12,523
4,429

Amount utilised
(5,683)
(9,414)
(5,683)
(9,414)

Weathertight homes – closing balance
46,275
39,435
46,275
39,435

Current
13,646
11,236
13,646
11,236

Non-current
32,629
28,199
32,629
28,199

Weathertight homes – closing balance
46,275
39,435
46,275
39,435

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 $14.234m (2017: $5.377m) as a provision for future claims relating to weathertightness issues not yet identified or not yet reported.

Movement in the provision

During the year $5.683m was paid as either part or full settlement of claims. An additional $12.523m 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 which 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 the Treasury’s risk-free rate. 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
2018
$000

+10%
-10%

Assumption
Effect on Surplus
or Deficit

Amount claimed
4,627
(4,628)

Settlement level award
4,627
(4,628)

Council contibution to settlement
4,627
(4,628)

Change in percentage of homeowners who will make a successful claim
1,423
(1,424)

+2%
-2%

Assumption
Effect on Surplus
or Deficit

Discount rate
(2,821)
2,256

Funding of weathertight homes settlements

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

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
(30,966)
(26,883)
(30,966)
(26,883)

Rates funding for weathertight homes liability
7,227
7,227
7,227
7,227

Total amounts paid
(5,683)
(9,414)
(5,683)
(9,414)

Interest allocation
(1,710)
(1,896)
(1,710)
(1,896)

Closing balance funded through borrowings
(31,132)
(30,966)
(31,132)
(30,966)

Note 26: Deferred tax

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Deductible temporary differences
-
-
542
852

Tax losses
120
394
365
394

TOTAL DEFERRED TAX
120
394
907
1,246

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 $0.00m (2017: $0.110m) and for the Group $0.254m (2017: $0.349m).

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.

As at 30 June 2018, the Group has a deferred tax liability of $0.882m (2017: $0.938m).

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 2018

Council
Group

Note
Actual
2018
$000
Budget
2018
$000
Actual
2017
$000
Actual
2018
$000
Actual
2017
$000

EQUITY – Opening balances

Accumulated funds

1,269,134
1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

3,793,827
3,777,087
3,756,048
3,788,286
3,745,251

Revaluation reserves

1,677,312
1,488,578
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
1,648
1,648
3,221
2,026

Non-controlling interest

-
-
-
284
284

Restricted funds

8,243
15,202
14,064
12,135
18,741

TOTAL EQUITY – Opening balance

6,730,121
6,551,649
6,384,501
6,891,143
6,516,932

CHANGES IN EQUITY

Retained earnings

Net surplus for the year

32,207
32,361
31,679
36,932
36,150

Transfer to restricted funds

(13,018)
(4,518)
(4,518)
(13,701)
(5,147)

Transfer from restricted funds

6,352
3,765
10,339
6,700
11,753

Transfer from revaluation reserves

261
-
279
261
279

Revaluation reserves
27

Fair value movement – property, plant and equipment – net

180,413
122,876
295,254
201,001
319,419

Transfer to retained earnings

(261)

(279)
(261)
(279)

Hedging reserve
28

Movement in hedging reserve

(4,079)
-
17,447
(4,380)
17,447

Fair value through other comprehensive revenue and expense reserve
29

Movement in fair value – Equity investments

856
-
1,240
856
1,240

Movement in fair value – Available for sale equities

-
-
-
759
(45)

Non-controlling interest

Movement of non-controlling interest

-
-
-
-
-

Restricted funds
30

Transfer to retained earnings

(6,352)
(3,765)
(10,339)
(6,700)
(11,753)

Transfer from retained earnings

13,018
4,518
4,518
13,701
5,147

Total comprehensive revenue and expense

209,397
155,237
345,620
235,168
374,211

EQUITY – Closing balances

Accumulated funds

1,269,134
1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

3,819,629
3,808,695
3,793,827
3,818,478
3,788,286

Revaluation reserves

1,857,464
1,611,454
1,677,312
2,016,078
1,815,338

Hedging reserve

(25,362)
-
(21,283)
(25,663)
(21,283)

Fair value through other comprehensive revenue and expense reserve

3,744
1,648
2,888
4,836
3,221

Non-controlling interest

-
-
-
284
284

Restricted funds

14,909
15,955
8,243
19,136
12,135

TOTAL EQUITY – Closing balance

6,939,518
6,706,886
6,730,121
7,126,311
6,891,143

Total comprehensive revenue and expense attributable to:

Wellington City Council and Group

209,397
155,237
345,620
234,884
373,927

Non-controlling interest

-
-
-
284
284

209,397
155,237
345,620
235,168
374,211

The notes on pages 160 to 246 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 $232.630m higher than budget primarily due to:

$57.537m of additional revaluation increases relating to operational land and building assets. This increase above budget reflects the better asset information available on asset values and lives.

$4.079m movement (decrease) in the hedging reserve due to unfavourable increases in swap interest rates

The above movements reflect the primary changes in total comprehensive revenue and expense of $54.160m offset by an opening balance budget variance for total equity of $178.472m, primarily for revaluation reserves, due to the fact that the 2016/17 revaluations which were much higher than budget as these were only finalised after the Annual Plan budget for 2017/18 was approved by Council.

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

2018
$000
2017
$000
2018
$000
2017
$000

Land – opening balance
155,091
155,091
155,091
155,091

Revaluation recognised in other comprehensive revenue and expense
49,035
-
49,035
-

Transfer between classes
(463)
-
(463)
-

Revaluations adjustment
(560)
-
(560)
-

Land – closing balance
203,103
155,091
203,103
155,091

Buildings – opening balance
230,355
230,634
230,355
230,634

Revaluation recognised in other comprehensive revenue and expense
132,351
-
132,351
-

Transfer to retained earnings on disposal of assets
(261)
(279)
(261)
(279)

Buildings – closing balance
362,445
230,355
362,445
230,355

Library collections – opening balance
8,392
7,015
8,392
7,015

Revaluation recognised in other comprehensive revenue and expense
-
1,377
-
1,377

Library collections – closing balance
8,392
8,392
8,392
8,392

Drainage, waste and water – opening balance
764,610
618,152
764,610
618,152

Revaluation recognised in other comprehensive revenue and expense
-
146,458
-
146,458

Prior year revaluation adjustments
(457)
-
(457)
-

Drainage, waste and water – closing balance
764,153
764,610
764,153
764,610

Infrastructure land – opening balance
18,395
15,410
18,395
15,410

Revaluation recognised in other comprehensive revenue and expense
-
2,985
-
2,985

Transfer between classes
463
-
463
-

Infrastructure land – closing balance
18,858
18,395
18,858
18,395

Roading – opening balance
500,469
356,035
500,469
356,035

Revaluation recognised in other comprehensive revenue and expense
-
144,434
-
144,434

Prior year revaluation adjustments
44
-
44
-

Roading – closing balance
500,513
500,469
500,513
500,469

Associates' revaluation reserves – opening balance
-
-
138,026
113,861

Revaluation recognised in other comprehensive revenue and expense
-
-
20,588
24,165

Associates' revaluation reserves – closing balance
-
-
158,614
138,026

Total revaluation reserves – closing balance
1,857,464
1,677,312
2,016,078
1,815,338

These revaluation reserves are represented by:

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
1,677,312
1,382,337
1,815,338
1,496,198

Revaluation recognised in other comprehensive revenue and expense
181,386
295,254
201,974
319,419

Transfer to retained earnings on disposal of assets
(261)
(279)
(261)
(279)

Prior year revaluation adjustments
(413)
-
(413)
-

Revaluations adjustment
(560)
-
(560)
-

TOTAL REVALUATION RESERVES
1,857,464
1,677,312
2,016,078
1,815,338

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 2018 Council has revalued its investment properties, which are revalued annually – refer to Note 17 – Investment properties, for more information.

Council has also revalued its operational land and building assets with the revaluation movements shown above.

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

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
(21,283)
(38,730)
(21,283)
(38,730)

Cash flow hedge net movement recognised in other comprehensive revenue and expenses
(4,079)
17,447
(4,380)
17,447

TOTAL HEDGING RESERVE
(25,362)
(21,283)
(25,663)
(21,283)

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

The Group movement reflects the hedging related to Wellington International Airport Limited.

Note 29: Fair value through other comprehensive revenue and expense reserve

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Opening balance
2,888
1,648
3,221
2,026

Movements:

Civic Financial Services Limited
(8)
40
(8)
40

Local Government Funding Agency
864
1,200
864
1,200

Creative HQ shareholdings – available for sale
-
-
759
(45)

TOTAL FAIR VALUE THROUGH OTHER COMPREHENSIVE REVENUE AND EXPENSE RESERVE
3,744
2,888
4,836
3,221

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 179).

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 Council holds for specific purposes and trusts and bequests that have been bestowed upon the Council for the benefit of all Wellingtonians.

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Special reserves and funds
14,448
7,800
17,753
11,115

Trusts and bequests
461
443
1,383
1,020

TOTAL RESTRICTED FUNDS
14,909
8,243
19,136
12,135

Special reserves and funds
Opening
Balance
2018
$000
Additional
Funds
2018
$000
Funds
Utilised
2018
$000
Closing
Balance
2018
$000

Council

City growth fund
2,862
3,000
(3,602)
2,260

Reserve purchase and development fund
782
-
-
782

Insurance reserve
4,156
10,000
(2,750)
11,406

Total Council
7,800
13,000
(6,352)
14,448

Controlled entities' reserve funds
3,294
123
(112)
3,305

Total Group – Special reserves and funds
11,094
13,123
(6,464)
17,753

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 $3.601m 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 Council’s insurance policies. Annual additions to the reserve of $1.500m (2017: $1.500m) are funded through rates as identified in the Annual Plan. During the year $2.750m (2017: $6.910m) was used to meet under-excess insurance costs.

A further amount of $8.500m was added to the fund from previous Council surpluses to replenish the fund following the costs incurred from the Kaikoura earthquake in November 2016, up to the desired level. For more information on the cost of claims refer to Note 38 - Financial impacts of the Kaikoura earthquake.

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 six reserves; a Capital reserve, a Capital E reserve, a Nairn Street Cottage collection reserve, a Wellington Museums collection reserve, a City Gallery reserve and a Wellington Museum Plimmer 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
2018
$000
Additional
Funds
2018
$000
Funds
Utilised
2018
$000
Closing
Balance
2018
$000

Council

A Graham Trust
3
-
-
3

A W Newton Bequest
333
15
-
348

E A McMillan Estate
6
-
-
6

E Pengelly Bequest
15
1
-
16

F L Irvine Smith Memorial
8
-
-
8

Greek NZ Memorial Association
5
-
-
5

Kidsarus 2 Donation
4
-
-
4

Kirkcaldie and Stains Donation
17
-
-
17

QEII Memorial Book Fund
21
1
-
22

Schola Cantorum Trust
7
1
-
8

Terawhiti Grant
10
-
-
10

Wellington Beautifying Society Bequest
14
-
-
14

Total Council – Trusts and bequests
443
18
-
461

Controlled entities' trusts and bequests
598
560
(236)
922

Total Group – Trusts and bequests
1,041
578
(236)
1,383

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

This bequest is held and administered by the Public Trust and is primarily used for major beautification projects. As the sole beneficiary, Wellington City Council applies for distribution of available funds 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.

The value of the funds held by the Public Trust is approximately $16.362m but the distributions to the beneficiary are only available from an agreed percentage of revenue generated. The distributions are only drawn down as required.

During the year:

Distributions recognised as revenue – $0.010m

Funds utilised towards the Newlands Park upgrade – $0.010m

Statement of cash flows
For the year ending 30 June 2018

Council
Group

Actual
2018
$000
Budget
2018
$000
Actual
2017
$000
Actual
2018
$000
Actual
2017
$000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from rates – Council

295,301
278,112
286,658
295,301
286,658

Receipts from rates – Greater Wellington Reginal Council

63,284
60,573
60,589
63,284
60,589

Receipts from activities and other revenue

148,467
140,506
145,185
180,802
160,648

Receipts from grants and subsidies – Operating

8,635
9,600
7,994
17,004
22,797

Receipts from grants and subsidies – Capital

27,039
46,313
12,899
27,185
13,347

Receipts from investment properties

11,648
11,214
12,038
11,648
12,038

Cash paid to suppliers and employees

(324,275)
(317,801)
(312,227)
(385,572)
(367,290)

Rates paid to GWRC

(62,304)
(60,573)
(59,324)
(62,304)
(59,324)

Grants paid

(37,068)
(45,651)
(43,395)
(10,814)
(17,388)

Income tax paid

-
-
-
(535)
(165)

Net GST (paid) / received

(3,630)
-
2,753
(4,261)
2,202

NET CASH FLOWS FROM OPERATING ACTIVITIES

127,097
122,293
113,170
131,738
114,112

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received

12,714
11,240
12,041
12,714
12,041

Interest received

1,603
704
2,367
1,792
2,579

Loan repayments

19
-
10,399
34
10,414

Proceeds from sale of property, plant and equipment

234
10,350
1,248
236
1,248

Increase in investments

(11,616)
-
(960)
(13,017)
(856)

Cash from aquisition of controlled entity

-
-
-
-
941

Purchase of investment properties

(548)
-
(153)
(548)
(153)

Purchase of intangibles

(3,456)
(8,162)
(5,029)
(3,476)
(5,057)

Purchase of property, plant and equipment

(170,339)
(187,584)
(132,617)
(171,192)
(135,841)

NET CASH FLOWS FROM INVESTING ACTIVITIES

(171,389)
(173,452)
(112,704)
(173,457)
(114,684)

CASH FLOWS FROM FINANCING ACTIVITIES

New borrowings

101,324
313,020
85,659
101,324
85,659

Repayment of borrowings

(15,000)
(224,977)
(80,323)
(15,168)
(80,431)

Interest paid on borrowings

(22,943)
(26,863)
(22,904)
(22,947)
(22,913)

NET CASH FLOWS FROM FINANCING ACTIVITIES

63,381
61,180
(17,568)
63,209
(17,685)

Net increase/(decrease) in cash and cash equivalents

19,089
10,021
(17,102)
21,490
(18,257)

Cash and cash equivalents at beginning of year

76,907
(8,877)
94,009
85,366
103,623

CASH AND CASH EQUIVALENTS AT END OF YEAR

95,996
1,144
76,907
106,856
85,366

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 160 to 246 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 $45.796m (2017: $61.135m) relating to the housing upgrade project and waste activities. For more information see Note 23: Borrowings (page 201).

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 $4.804m higher than budgeted primarily due to:

$27.858m of additional revenue compared to budget including additional transport and infrastructure revenue ($1.516m) and landfill charges for contaminated and special waste ($3.806m)

Lower than planned expected capital grant receipts ($19.274m) mainly due to early receipt of the Housing upgrade grants

Net cash flows from investing activities were $2.063m lower than budget primarily due to:

$21.951m of lower capital expenditure, offset by

$10.116m lower proceeds from asset sales

$11.616m higher investment due to a longer term deposit maturity ($10m) and LGFA borrower notes that are not included in the budget

Net cash flows from financing activities were $2.200m higher than budget primarily due to:

$1.719m decrease in gross borrowings due to lower than expected capital expenditure

Offset by lower interest costs on borrowings ($3.919m)

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

2018
$000
2017
$000
2018
$000
2017
$000

Net surplus for the period
32,207
31,679
36,932
36,150

Add/(deduct) non-cash items:

Vested assets
(8,087)
(6,250)
(8,087)
(6,250)

Bad debts written off not prevously provided for
152
151
154
151

Depreciation and amortisation
107,415
101,889
109,047
103,623

Impairment of property, plant and equipment
3
11,446
3
11,446

Fair value changes in investment properties
(6,937)
(18,222)
(6,937)
(18,222)

Other fair value changes
(4)
(5,278)
143
(5,278)

Movement in provision for impairments of doubtful debts
27
777
27
777

Tax expense/(credit)
-
-
(151)
(22)

Gain on business combination
-
-
-
(4,072)

Non-cash movement in provisions
11,049
4,440
11,235
4,596

Total non-cash items
103,618
88,953
105,434
86,749

Add/(deduct) movement in working capital: ¹

Exchange receivables and non-exchange recoverables
(7,049)
537
(4,121)
3,677

Prepayments
(1,209)
(2,512)
(1,058)
(2,019)

Inventories
(136)
(48)
(118)
205

Exchange transactions, taxes and transfers payables
6,018
7,852
4,535
4,855

Revenue in advance
(12,738)
(14,176)
(12,315)
(14,604)

Employee benefit liabilities
(197)
516
(490)
219

Provision for other liabilities
(3,503)
(7,632)
(3,429)
(7,809)

Total working capital movement
(18,814)
(15,463)
(16,996)
(15,476)

Add/(deduct) investing and financing activities:

Net (gain)/loss on disposal of property, plant and equipment
1,459
(495)
1,458
(153)

Dividends received
(12,714)
(12,041)
(104)
(104)

Interest received
(1,603)
(2,367)
(1,671)
(2,442)

Tax paid and subvention receipts
-
-
(53)
(213)

Interest paid on borrowings
22,944
22,904
22,948
22,914

Share of equity accounted surplus in associates
-
-
(16,210)
(13,313)

Total investing and financing activities
10,086
8,001
6,368
6,689

NET CASH FLOWS FROM OPERATING ACTIVITIES
127,097
113,170
131,738
114,112

Excluding non-cash items

Other disclosures

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 Group.

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 Group 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 Group’s financial assets and financial liabilities by reporting category as described in the accounting policies:

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Financial assets

Loans and receivables

Cash and cash equivalents
95,996
76,907
106,856
85,366

Receivables and recoverables
55,815
49,364
58,049
50,700

Other financial assets
16,579
4,978
18,012
5,019

Total loans and receivables
168,390
131,249
182,917
141,085

Financial assets at fair value through other comprehensive revenue and expense

Other financial assets
6,137
5,281
8,167
6,622

Total financial assets at fair value through other comprehensive revenue and expense
6,137
5,281
8,167
6,622

Hedged derivative financial instruments

Derivatives designated as cash flow hedges
381
1,283
381
1,283

Total hedged derivative financial instruments
381
1,283
381
1,283

Total financial assets
174,908
137,813
191,465
148,990

Total non-financial assets
7,530,599
7,268,587
7,710,122
7,424,978

TOTAL ASSETS
7,705,507
7,406,400
7,901,587
7,573,968

Financial liabilities

Financial liabilities at amortised cost

Exchange transactions and transfers payable
61,316
58,785
65,250
60,269

Taxes payable
6,113
3,498
6,375
3,627

Borrowings
582,144
495,820
582,144
495,988

Total financial liabilities at amortised cost
649,573
558,103
653,769
559,884

Derivative financial instruments

Derivatives designated as cash flow hedges
25,742
22,566
25,742
22,566

Total derivative financial instruments
25,742
22,566
25,742
22,566

Total financial liabilities
675,315
580,669
679,511
582,450

Total non-financial liabilities
90,674
95,610
95,765
100,375

TOTAL LIABILITIES
765,989
676,279
775,276
682,825

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
2018
2017

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
-
-
8,167
-
-
6,622

Derivative financial instruments

– Cash flow hedges
-
381
-
-
1,283
-

Financial liabilities

Derivative financial instruments

– Cash flow hedges
-
25,742
-
-
22,566
-

Reconciliation of fair value movements in Level 3
Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Financial assets at fair value through other comprehensive revenue and expense

– Equity investments

Opening balance – 1 July
5,281
4,041
6,622
5,468

Purchases
-
-
95
-

Disposals
-
-
(110)
(11)

Impairment
-
-
(168)
(27)

Gains or losses recognised in other comprehensive revenue and expense
856
1,240
1,728
1,192

Closing balance – 30 June
6,137
5,281
8,167
6,622

The level 3 equity investments comprise the Group’s shareholdings in the Local Government Funding Agency $5.339m (2017: $4.475m), Civic Assurance $0.798m (2017: $0.806m) and the Creative HQ incubator/accelerator shareholdings $2.030m (2017: $1.341m). Refer to Note 14: Other financial assets (page 179) 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 231)). 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

2018
$000
2017
$000
2018
$000
2017
$000

Financial instruments with credit risk

Cash and cash equivalents
95,996
76,907
106,856
85,366

Derivative financial instrument assets
381
1,283
381
1,283

Receivables and recoverables
55,815
49,364
58,049
50,700

Other financial assets

– Bank deposits – term
10,000
-
11,401
-

– LGFA borrower notes
6,304
4,688
6,304
4,688

– Loans to related parties – other organisations
31
27
31
27

– Loans to external organisations
244
263
276
304

Financial guarantees to related parties
-
168
-
168

Total financial instruments with credit risk
168,771
132,700
183,298
142,536

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 Group 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 231).

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

2018
$000
2017
$000
2018
$000
2017
$000

Cash – registered banks

AA-
1,976
4,886
11,288
10,978

Short term deposits – registered banks

AA-
94,000
66,000
94,000
68,349

A
-
6,000
-
6,000

Term deposits (greater than 3 months) – registered banks

AA-
10,000
-
11,401
-

Term deposits – borrower notes – NZ LGFA

AA+
6,304
4,688
6,304
4,688

Derivative financial instrument assets

AA-
381
1,283
381
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.

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Contractual cash flows of financial liabilities excluding derivatives

0–12 months
205,502
173,575
209,436
175,288

1–2 years
52,911
58,193
52,911
58,261

2–5 years
239,930
158,914
239,930
158,914

More than 5 years
240,407
257,441
240,407
257,441

Total contractual cash flows of financial liabilities excluding derivatives
738,750
648,123
742,684
649,904

Represented by:

Carrying amount as per the Statement of Financial Position
643,460
557,973
647,394
559,754

Future interest payable
95,290
90,150
95,290
90,150

Total contractual cash flows of financial liabilities excluding derivatives
738,750
648,123
742,684
649,904

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

2018
$000
2017
$000
2018
$000
2017
$000

Contractual cash flows of derivative financial liabilities

0–12 months
8,194
8,719
8,194
8,719

1–2 years
7,368
6,321
7,368
6,321

2–5 years
11,914
8,510
11,914
8,510

More than 5 years
34
1,690
34
1,690

Total contractual cashflow of derivative financial liabilities
27,510
25,240
27,510
25,240

Represented by:

Future interest payable
27,510
25,240
27,510
25,240

Total contractual cash flows of derivative financial liabilities
27,510
25,240
27,510
25,240

In addition to cash to be received in 2018/19 the Group currently has $121.550m in unutilised committed bank facilities available to settle obligations as well as $164.905m of cash, cash equivalents and receivables and is expected to have sufficient cash to meet all contractual liabilities as they fall due.

The Group 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 231).

The Group 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% | 38%
3–5 years | 20% | 60% | 29%
More than 5 years | 15% | 60% | 33%

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%
5%
83%

The table below shows the effect of the interest rate swaps at reducing the Council’s exposure to interest rate risk:

Council
Group

2018
$000
2017
$000
2018
$000
2017
$000

Financial instruments subject to interest rate volatility – before effect of interest rate swaps

Cash and cash equivalents
95,996
76,907
106,856
85,366

Bank deposits – term greater than 3 months
10,000
-
11,401
-

Commercial paper
(85,000)
(85,000)
(85,000)
(85,000)

Debt securities – floating rate notes
(472,500)
(386,500)
(472,500)
(386,500)

Total financial instruments subject to interest rate volatility – before effect of interest rate swaps
(451,504)
(394,593)
(439,243)
(386,134)

Effect of interest rate swaps in reducing interest rate volatility

Effect of Cash flow interest rate swaps – hedged
365,500
372,500
365,500
372,500

Effect of Cash flow interest rate swaps – non-hedged
60,000
-
60,000
-

Total effect of interest rate swaps in reducing interest rate volatility
425,500
372,500
425,500
372,500

Total financial instruments subject to interest rate volatility – after effect of interest rate swaps
(26,004)
(22,093)
(13,743)
(13,634)

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 2018 the fair value of the interest rate swaps was -$25.362m (2017: -$21.283m). This liability will reduce to zero as the swaps reach the end of their lives, and therefore do not represent a liability that the Group 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

2018
%
2017
%
2018
%
2017
%

Investments

Cash and cash equivalents
2.33
2.54
2.17
2.40

Bank deposits – term
2.34
-
2.36
-

LGFA – borrower notes
2.50
2.47
2.50
2.47

Loans to related parties
4.00
4.00
4.00
4.00

Loans to external organisations
-
-
-
-

Borrowings

Bank loans
7.00
7.00
7.00
7.00

Commercial paper
2.06
2.02
2.06
2.02

Debt securities – fixed
4.84
4.84
4.84
4.84

Debt securities – floating
2.63
2.59
2.63
2.59

Derivative financial instruments – hedged
4.30
4.52
4.30
4.52

Derivative financial instruments – non-hedged
3.50
-
3.50
-

The related party loan to the Wellington Regional Stadium Trust is on interest free terms.

Sensitivity analysis

While the Group 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 Group’s exposures at the end of the reporting period:

Group

2018
$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
1,069
(1,069)
-
-

LGFA – borrower notes

63
(63)
-
-

Term deposits > 3 months

114
(114)
-
-

Derivatives – Interest rate swaps – hedged
b
-
-
987
(1,141)

Financial liabilities

Derivatives – interest rate swaps – hedged
b
-
-
26,181
(28,376)

Debt securities – floating rate notes
c
1,590
(1,590)
-
-

Debt securities – fixed rate bonds
d
-
-
-
-

Bank term loans
e
-
-
-
-

Commercial paper
f
280
(280)
-
-

Total sensitivity to interest rate risk

3,116
(3,116)
27,168
(29,517)

a. Cash and cash equivalents

Group 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 $1.069m accordingly.

b. Derivatives – hedged interest rate swaps

Derivatives include hedged interest rate swaps with a fair value totalling -$25.362m. A movement in interest rates of plus 1% has an effect on increasing the unrealised value of the hedged interest rate swap assets by $0.987m. A movement in interest rates of minus 1% has an effect on reducing the unrealised value of the hedged interest rate swap assets by $1.141m. A movement in interest rates of plus 1% has an effect on increasing the unrealised value of the hedged interest rate swap liabilities by $26.181m. A movement in interest rates of minus 1% has an effect on reducing the unrealised value of the hedged interest rate swap liabilities by $28.376m.

c. Debt securities – floating rate notes

Debt securities at floating rates total $472.500m. The full exposure to changes in interest rates has been reduced because the Group has $313.500m 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 $1.590m accordingly.

d. Debt Securities – fixed rate bonds

The Group has $20.000m of fixed rate bonds which are not exposed to interest rate changes.

e. Bank Loan

The Group, through the Council’s joint ventures with Porirua City Council has a bank term loan of $4.644m. 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 Group has a Commercial Paper programme which is subject to floating rates and totals $100.000m of which only $85.000m is presently utilised. The full exposure to changes in interest rates has been reduced because the Group has $57.000m 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

2018
$000
2017
$000
2018
$000
2017
$000

Approved and contracted – property, plant and equipment
61,577
36,519
61,577
36,519

Approved and contracted – investment properties
-
-
-
-

Approved and contracted – intangibles
-
80
-
80

Approved and contracted – share of associates
-
-
14,004
10,958

Approved and contracted – share of joint ventures
-
-
-
-

TOTAL CAPITAL COMMITMENTS
61,577
36,599
75,581
47,557

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 2017/18 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 168).

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

2018
$000
2017
$000
2018
$000
2017
$000

Plant and equipment

Not later than one year
19
43
80
397

Later than one year and not later than five years
4
25
92
288

Later than five years
-
-
-
-

Land and buildings

Not later than one year
4,052
1,982
6,481
3,525

Later than one year and not later than five years
17,147
4,718
24,430
10,213

Later than five years
1,100
845
4,039
2,549

TOTAL NON-CANCELLABLE OPERATING LEASE COMMITMENTS AS LESSEE
22,322
7,613
35,122
16,972

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 leases 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

2018
$000
2017
$000
2018
$000
2017
$000

Investment properties

Not later than one year
10,209
9,972
10,209
9,972

Later than one year and not later than five years
36,070
37,499
36,070
37,499

Later than five years
56,684
64,280
56,684
64,280

Land and buildings

Not later than one year
2,407
2,405
2,455
2,425

Later than one year and not later than five years
6,392
6,719
6,392
6,719

Later than five years
5,338
5,787
5,338
5,787

TOTAL NON-CANCELLABLE OPERATING LEASE COMMITMENTS AS LESSOR
117,100
126,662
117,148
126,682

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

2018
$000
2017
$000
2018
$000
2017
$000

Financial guarantees to community groups
-
168
-
168

Uncalled capital – LGFA
1,866
1,866
1,866
1,866

Other legal proceedings
495
393
522
393

Share of associates' and jointly controlled entity's contingent liabilities
-
-
27
-

Share of joint ventures' contingent liabilities
-
-
-
-

TOTAL CONTINGENT LIABILITIES
2,361
2,427
2,415
2,427

Contingent assets

The Council and Group have no contingent assets that can be quantified as at 30 June 2018 (2017: $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 does not mature until 30 June 2020 but early repayment during the current period ending 30 June 2018 has extinguished the loan and the guarantee ahead of schedule.

NZ Local Government Funding Agency Limited (LGFA)

Council is one of 30 local authority shareholders and 8 local authority guarantors of the LGFA. In that regard 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, Council is a guarantor of all of LGFA’s borrowings. At 30 June 2018, LGFA had borrowings totalling $8,272m (2017: $7,945m).

Financial reporting standards require 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. 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 Group is anticipated to be less than $0.522m.

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% (2017: 25%) of agreed repair costs and affected homeowners funding the remaining 50% (2017: 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 205)). 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 were partially successful in having parts of the claims struck out.  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

As at 30 June 2018, the Council had a contingent asset for 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 (2017: $33m). 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 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 242).

Note 35: Jointly controlled assets

The Council has significant interests in the following joint ventures:

Joint Venture
Interest
2018
Interest
2017
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)
2018
$000
2017
$000

ASSETS

Current

Inventory
22
22

Receivables and recoverables
2,516
2,045

Non-current

Property, plant and equipment
24,183
23,882

Share of total assets
26,721
25,949

LIABILITIES

Non-current

Borrowings
4,644
4,320

Provisions for other liabilities
2,497
2,340

Share of total liabilities
7,141
6,660

SHARE OF NET ASSETS
19,580
19,289

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
2018
$000
2017
$000

Operating revenue
1,601
1,279

Operating expenditure
(1,298)
(1,081)

Share of net surplus or (deficit)
303
198

Share of current year revaluation movement
(14)
1,338

The Council’s and Group’s share of the joint ventures’ capital commitments is $Nil (2017: $Nil) and contingent liabilities is $Nil (2017: $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

2018
$
2017
$

Council Members

Remuneration
1,493,628
1,492,887

Chief Executive and Executive Leadership Team

Remuneration
2,176,138
2,531,744

TOTAL REMUNERATION PAID TO KEY MANAGEMENT PERSONNEL
3,669,766
4,024,631

As at 30 June 2018 key management personnel comprised of 21 individuals: 15 elected members or 15 fulltime equivalents (2017: 15) and 6 executive leaders or 6 fulltime equivalents (2017: 8).

For further disclosure of the remuneration payable to the Mayor, Councillors and the Chief Executive refer to Note 37: Remuneration and staffing (page 238).

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 Councillor’s disclose their personal interests in a register available on the Council Website.

There are no commitments from 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 2018 Council contributed $0.399m (2017: $0.383m) to fund the core operations of the Trust and $0.250m (2017: 0.250m) for turf management services.

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 2018 Council transacted directly with WRST to the amount of $0.830m as part of the original $5.000m funding grant recognised in 2016/17 for the upgrade of the concourse.

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
Council

2018
$000
2017
$000

Expenditure incurred by the Council to fund the operation and management of:

Porirua – waste water treatment plant
1,922
2,011

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
Council

2018
$000
2017
$000

Revenue for services provided by the Council to:

Karori Sanctuary Trust
30
43

Wellington Cable Car Limited
55
48

Wellington Museums Trust
1,729
1,469

Wellington Regional Economic Development Agency
431
166

Wellington Zoo Trust
260
1,054

2,505
2,780

Grant funding by Council for the operations and management of:

Karori Sanctuary Trust
980
875

Wellington Cable Car Limited
-
1,000

Wellington Museums Trust
8,759
8,628

Wellington Regional Economic Development Agency
11,928
7,404

Wellington Zoo Trust
3,240
3,125

24,907
21,032

Expenditure for services provided to the Council by:

Karori Sanctuary Trust
16
11

Wellington Cable Car Limited
57
37

Wellington Museums Trust
587
313

Wellington Regional Economic Development Agency
6,490
10,044

Wellington Zoo Trust
723
1,967

7,873
12,372

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
2

Wellington Museums Trust
-
40

Wellington Regional Economic Development Agency
4
63

Wellington Zoo Trust
204
1,189

210
1,294

Current payables owed by the Council to:

Karori Sanctuary Trust
9
1

Wellington Cable Car Limited
58
5

Wellington Museums Trust
235
251

Wellington Regional Economic Development Agency
87
366

Wellington Zoo Trust
181
1,731

570
2,354

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 $32.780m (2017: $33.404m) when the grant funding of $24.907m (2017: $21.032m) and expenditure for services provided to Council of $7.873m (2017: $12.372m) 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
Council

2018
$000
2017
$000

Dividend received from:

Wellington International Airport Limited
12,610
11,937

Revenue for services provided by the Council to:

Wellington International Airport Limited
65
61

Wellington Water Limited
1,083
517

1,148
578

Expenditure for services provided to the Council from:

Wellington International Airport Limited
244
1,132

Wellington Water Limited
36,437
26,995

36,681
28,127

Current receivables and recoverables owing to the Council from:

Wellington International Airport Limited
1
-

Wellington Water Limited
307
187

308
187

Current payables owed by the Council to:

Wellington Water Limited
2,267
4,333

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 2017 to 30 June 2018 was $1,493,628 (2017: $1,492,887) and is broken down and classified as follows:

Council Member
Monetary
Remuneration
Non-monetary
Remuneration

Salary
$
Allowances
$

$
Total
$

Lester, Justin (Mayor)
173,212
-
2,200
175,412

Calvert, Diane
91,581
400
2,200
94,181

Calvi-Freeman, Chris
91,581
400
2,200
94,181

Dawson, Brian
91,581
400
2,200
94,181

Day, Jill
111,263
400
2,200
113,863

Eagle, Paul (resigned September 2017)
29,264
100
550
29,914

Fitzsimons, Fleur (elected December 2017)
36,131
200
917
37,248

Foster, Andy
91,581
400
2,200
94,181

Free, Sarah
91,581
400
2,200
94,181

Gilberd, Peter
91,581
400
2,200
94,181

David, Lee
91,581
400
2,200
94,181

Marsh, Simon
91,581
400
2,200
94,181

Pannett, Iona
98,600
400
2,200
101,200

Sparrow, Malcolm
91,581
400
2,200
94,181

Woolf, Simon
91,581
400
2,200
94,181

Young, Nicola
91,581
400
2,200
94,181

TOTAL REMUNERATION PAID TO COUNCIL MEMBERS
1,455,861
5,500
32,267
1,493,628

Total monetary remuneration
1,461,361

Total non-monetary remuneration
32,267

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 2017/18 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
2018
$

TAWA COMMUNITY BOARD

Herbert, Richard (Chair)
18,168
540
-
18,708

Lucas, Margaret (Deputy Chair)
9,084
-
-
9,084

Hansen, Graeme
9,084
-
-
9,084

Langham, Liz
9,084
-
-
9,084

Marshall, Jack (includes Youth Council attendance fee)
9,084
-
660
9,744

Parkinson, Robyn
9,084
-
-
9,084

Day, Jill (see Councillor remuneration above)
-
-
-
-

Sparrow, Malcolm (see Councillor remuneration above)
-
-
-
-

MAKARA-OHARIU COMMUNITY BOARD

Grace, Christine (Chair)
9,290
540
-
9,830

Apanowicz, John (Deputy Chair)
4,646
-
-
4,646

Liddell, Judy
4,646
-
-
4,646

Renner, Chris
4,646
-
-
4,646

Rudd, Wayne
4,646
-
-
4,646

Todd, Hamish
4,646
-
-
4,646

TOTAL REMUNERATION TO COMMUNITY BOARD MEMBERS
96,108
1,080
660
97,848

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 2018.

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

2018
$
2017
$

Short-term employee benefits

Kevin Lavery

Salary
425,160
413,160

Motor vehicle park
3,000
3,000

TOTAL REMUNERATION OF THE CHIEF EXECUTIVE
428,160
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 2018 the Council made severance payments to 21 employees totalling $405,695 (2017: 15 employees, $261,259).

The individual values of each of these severance payments are: $700; $54,762; $71,125; $6,000; $22,835; $7,878; $6,019; $4,591; $4,312; $15,410; $4,680; $14,650; $2,076; $30,000; $6,083; $26,925; $10,256; $3,560; $68,864; $28,969; $16,000.

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
| 2018 | 2017
Full-time and full-time equivalent employee numbers |  |
Full-time employees (based on a 40 hour week) as at 30 June | 1,038 | 1,037
Full-time equivalents for all other non full-time employees | 264 | 265
Remuneration bands |  |
The number of employees receiving total annual remuneration of less than $60,000 | 1,106 | 1,115
The number of employees receiving total annual remuneration of more than $60,000 in bands of $20,000 |  |
$60,000 - $79,999.99 | 272 | 269
$80,000 - $99,999.99 | 182 | 175
$100,000 - $119,999.99 | 91 | 80
$120,000 - $139,999.99 | 53 | 56
$140,000 - $159,999.99 | 36 | 30
$160,000 - $179,999.99 | 12 | 12
$180,000 - $199,999.99 | 9 | 8
$200,000 - $239,999.99* | 9 | 6
$240,000 - $299,999.99* | 6 | 6
$300,000 - $419,999.99* | 4 | 5
TOTAL EMPLOYEES | 1,780 | 1,762

Of the 1,780 (2017: 1,762) individual employees, 742 (2017: 725) 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 5 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 two years shown.

Council has resolved that in addition to legislative requirements to disclose the above bandings it has also included the 2 lowest remuneration grades.

Grade | Salary Range | 2018
Q | $33,705 - $42,132 | 402
9 | $42,132 - $55,672 | 414

The Q grade includes 2 training level rates applicable to certain ‘Parks, Sports and Recreation’ positions that require people employed in these positions to meet specified core competencies before moving to the either level 2, or to the fully qualified rate of $20.20

The current living wage rate for WCC is $20.20. Each year the living wage rate for WCC will be reviewed in accordance with the latest Living Wage rate announced/published by Living Wage Aotearoa.

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 Council’s own Civic Administration Building (CAB) in Civic Square.

Assets affected

Buildings

The Civic Administration Building (CAB) in Civic Square 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 operational 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 were demolished in 2017.

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 2017/18 year a total of $2.026m (2017: $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 an impairment loss of $11.446m was recognised. CAB is not a revalued asset therefore the loss was included within Expenditure on operating activities in the Statement of Comprehensive Revenue and Expense for the period ending 30 June 2017.

Contingent Asset – Insurance recoveries

As at 30 June 2018, the Council had a contingent asset for 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 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

In August 2018 the Council and The Movie Museum Limited announced a mutually-agreed parting of the ways for a joint project to construct a convention centre and movie museum. The Council are to consider continuing with the project which would now combine the convention centre with an exhibition space. $0.132m of costs that were directly attributable to the Movie Museum arrangement, that had previously been included within work in progress, have now been expensed in the year ended 30 June 2018.

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 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 Council provides (eg. the sale of goods at market rates) are defined as being exchange transactions. Only a few services provided by 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 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 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, amendments to standards have been made with effect for periods beginning after 1 January 2017.

2016 Omnibus amendments to PBE standards – These amendments were issued in parts in January 2017, being effective for periods beginning on or after 1 January 2017 or 1 January 2018, but not all parts being able to be early adopted. A relevant amendment for the Council that is able to be adopted 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 effect, this means that the Service Concession assets that have been previously disclosed as a separate class of asset will now be included within the Drainage, water and waste asset class.

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:

In April 2017, the XRB issued Impairment of Revalued Assets, which now scopes in revalued property, plant and equipment into the impairment accounting standards PBE IPSASs 21 and 26, which will require Council to assess at each reporting date whether there is any indication that an asset may be impaired. However, where an impairment loss is recognised for an asset, or group of assets, that is revalued, an entity is not necessarily required to revalue the entire class of assets to which that impaired asset, or group of assets, belongs. This amendment is effective for periods beginning on or after 1 January 2019.

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 2017/18 year).

1 A Tier 1 entity is defined as being either, publicly accountable or large (ie. expenses over $30m). Council exceeds the expenses threshold.

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 2018

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 three years of the 2015-25 LTP, which encompasses the financial years 2015/16; 2016/17 and 2017/18 is $301,552,000. This means rates revenue should remain below this2 limit for each of these years.

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.

This 4.5% limit is an average for the first three 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 after growth. The quantified limit for 2017/18 is therefore 6.0% before growth (1.5% growth was assumed in the LTP for 2017/18) and 4.5% after growth.

The actual average for these years was 5.4% before growth and 4.2% after growth. Therefore Council met this benchmark overall for the three 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 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 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 revenue4

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 Council’s existing external net debt. Net borrowings for debt affordability are defined as borrowings less cash and cash equivalents.

NOTE: this measure 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 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 2014/15 and 2017/18 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 qualified limit was set at $301,552,000 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.

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.

4 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 2017 to 30 June 2018
Whole of Council

2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
161,126
161,708
172,610
170,671
170,476

Targeted rates
122,801
124,308
129,872
126,135
125,933

Subsidies and grants for operating purposes
6,684
8,995
6,942
9,601
7,615

Fees and charges
125,481
130,802
128,271
134,003
131,425

Interest and dividends from investments
11,013
20,632
11,113
11,294
14,315

Local authorities fuel tax, fines, infringement fees, and other receipts
9,517
7,777
9,679
8,963
8,064

Total operating funding (A)
436,622
454,222
458,487
460,667
457,828

Applications of operating funding

Payments to staff and suppliers
285,730
294,995
289,293
302,602
307,439

Finance costs
26,498
23,644
32,365
25,420
23,765

Other operating funding applications
44,114
48,970
43,112
45,889
51,818

Total applications of operating funding (B)
356,342
367,609
364,770
373,911
383,022

Surplus (deficit) of operating funding (A - B)
80,280
86,613
93,717
86,757
74,806

Sources of capital funding

Subsidies and grants for capital expenditure
35,376
29,872
21,637
46,313
45,146

Development and financial contributions
2,000
3,026
2,000
2,000
3,305

Increase (decrease) in debt
75,701
7,668
78,186
88,044
39,478

Gross proceeds from sales of assets
7,600
-
18,350
10,350
146

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
120,677
40,566
120,173
146,707
88,075

Applications of capital funding

Capital expenditure

– to meet additional demand
1,909
1,168
8,126
1,810
410

– to improve the level of service
89,000
48,232
104,294
79,445
55,321

– to replace existing assets
81,613
87,823
93,876
101,217
117,209

Increase (decrease) in reserves
28,435
(10,044)
7,594
50,992
(10,059)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
200,957
127,179
213,890
233,464
162,881

Surplus (deficit) of capital funding (C - D)
(80,280)
(86,613)
(93,717)
(86,757)
(74,806)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
102,250
101,109
108,742
106,417
106,614

Funding impact statement for 1 July 2017 to 30 June 2018
for Governance, information and engagement

1.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
17,417
17,528
17,175
18,122
18,122

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
889
1,005
528
536
497

Internal charges and overheads recovered
-
605
-
-
156

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
18,306
19,138
17,703
18,658
18,775

Applications of operating funding

Payments to staff and suppliers
10,758
10,471
10,100
11,265
9,867

Finance costs
18
13
21
15
13

Internal charges and overheads applied
7,481
6,922
7,517
7,309
7,432

Other operating funding applications
10
29
10
10
11

Total applications of operating funding (B)
18,267
17,435
17,648
18,599
17,323

Surplus (deficit) of operating funding (A - B)
39
1,703
55
59
1,452

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
77
(46)
(55)
(59)
(38)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
77
(46)
(55)
(59)
(38)

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
-
-
-
-
-

– to replace existing assets
116
-
-
-
8

Increase (decrease) in reserves
-
1,657
-
-
1,406

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
116
1,657
-
-
1,414

Surplus (deficit) of capital funding (C - D)
(39)
(1,703)
(55)
(59)
(1,452)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
39
46
55
59
46

Funding impact statement for 1 July 2017 to 30 June 2018
for Māori and Mana Whenua partnerships

1.2
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
288
295
296
300
300

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
-
(1)
-
-
4

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
288
294
296
300
304

Applications of operating funding

Payments to staff and suppliers
274
256
281
272
275

Finance costs
1
1
1
1
1

Internal charges and overheads applied
11
8
12
15
25

Other operating funding applications
-
13
-
10
1

Total applications of operating funding (B)
286
278
294
298
302

Surplus (deficit) of operating funding (A - B)
2
16
2
2
2

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
-
14
-
-
-

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
-
14
-
-
-

Surplus (deficit) of capital funding (C - D)
(2)
(16)
(2)
(2)
(2)

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 2017 to 30 June 2018
for Gardens, beaches and green open spaces

2.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
31,414
33,822
32,087
35,994
35,994

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
731
837
764
671
870

Fees and charges
1,465
3,480
1,494
1,825
2,267

Internal charges and overheads recovered
5,203
4,584
5,311
5,287
4,914

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
38,813
42,723
39,656
43,777
44,045

Applications of operating funding

Payments to staff and suppliers
20,088
20,497
20,249
20,806
21,480

Finance costs
2,250
2,480
2,716
2,443
1,964

Internal charges and overheads applied
12,438
11,999
12,635
13,528
13,777

Other operating funding applications
121
599
101
115
182

Total applications of operating funding (B)
34,897
35,575
35,701
36,892
37,403

Surplus (deficit) of operating funding (A - B)
3,916
7,149
3,955
6,886
6,642

Sources of capital funding

Subsidies and grants for capital expenditure
-
289
50
-
215

Development and financial contributions
183
376
183
183
281

Increase (decrease) in debt
(1,432)
(861)
(315)
(2,932)
(2,959)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(1,249)
(196)
(82)
(2,749)
(2,463)

Applications of capital funding

Capital expenditure

– to meet additional demand
82
-
395
-
-

– to improve the level of service
878
605
1,082
50
1,870

– to replace existing assets
1,707
5,497
2,396
4,087
2,265

Increase (decrease) in reserves
-
851
-
-
44

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
2,667
6,953
3,873
4,137
4,179

Surplus (deficit) of capital funding (C - D)
(3,916)
(7,149)
(3,955)
(6,886)
(6,642)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
3,916
6,648
3,955
7,058
6,598

Funding impact statement for 1 July 2017 to 30 June 2018
for Waste reduction and energy conservation

2.2
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
729
778
499
982
882

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
29
-
-
-

Fees and charges
13,353
18,751
13,599
13,632
17,462

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
1
-
-
8

Total operating funding (A)
14,082
19,559
14,098
14,614
18,352

Applications of operating funding

Payments to staff and suppliers
12,552
12,762
12,814
12,786
15,280

Finance costs
774
943
663
665
1,048

Internal charges and overheads applied
42
108
25
544
1,070

Other operating funding applications
255
353
105
210
(15)

Total applications of operating funding (B)
13,623
14,166
13,607
14,205
17,383

Surplus (deficit) of operating funding (A - B)
459
5,393
491
409
969

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
92

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
773
267
5,391
1,662
377

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
773
267
5,391
1,662
469

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
-
65
-
-
15

– to replace existing assets
1,232
541
5,882
2,071
2,429

Increase (decrease) in reserves
-
5,054
-
-
(1,006)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,232
5,660
5,882
2,071
1,438

Surplus (deficit) of capital funding (C - D)
(459)
(5,393)
(491)
(409)
(969)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
459
338
491
409
648

Funding impact statement for 1 July 2017 to 30 June 2018
for Water

2.3
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates
39,932
40,257
42,493
41,713
41,713

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
35
1,606
36
35
72

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
39,967
41,863
42,529
41,748
41,785

Applications of operating funding

Payments to staff and suppliers
23,971
23,835
25,234
24,257
24,059

Finance costs
2,310
1,847
2,712
2,039
2,029

Internal charges and overheads applied
1,386
1,899
1,406
1,912
1,720

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
27,667
27,581
29,352
28,208
27,808

Surplus (deficit) of operating funding (A - B)
12,300
14,282
13,177
13,540
13,977

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
671
792
671
671
761

Increase (decrease) in debt
1,964
519
1,562
1,319
(194)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
2,635
1,311
2,233
1,990
567

Applications of capital funding

Capital expenditure

– to meet additional demand
538
544
639
501
-

– to improve the level of service
4,206
4,370
5,187
4,747
7,718

– to replace existing assets
10,191
9,515
9,584
10,282
7,264

Increase (decrease) in reserves
-
1,164
-
-
(438)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
14,935
15,593
15,410
15,530
14,544

Surplus (deficit) of capital funding (C - D)
(12,300)
(14,282)
(13,177)
(13,540)
(13,977)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
12,300
13,118
13,177
13,540
14,415

Funding impact statement for 1 July 2017 to 30 June 2018
for Wastewater

2.4
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates
38,694
39,112
40,857
39,540
39,540

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
1,256
985
1,281
1,293
829

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
39,950
40,097
42,138
40,833
40,369

Applications of operating funding

Payments to staff and suppliers
22,158
20,333
23,178
21,123
20,652

Finance costs
4,033
3,563
4,372
3,427
4,042

Internal charges and overheads applied
3,473
4,949
3,533
5,166
5,160

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
29,664
28,845
31,083
29,716
29,854

Surplus (deficit) of operating funding (A - B)
10,286
11,252
11,055
11,117
10,515

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
549
880
549
549
876

Increase (decrease) in debt
491
(566)
1,715
3,826
1,504

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
1,040
314
2,264
4,375
2,380

Applications of capital funding

Capital expenditure

– to meet additional demand
230
256
319
375
-

– to improve the level of service
316
303
1,620
2,801
1,716

– to replace existing assets
10,780
10,113
11,380
12,316
12,182

Increase (decrease) in reserves
-
894
-
-
(1,003)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
11,326
11,566
13,319
15,492
12,895

Surplus (deficit) of capital funding (C - D)
(10,286)
(11,252)
(11,055)
(11,117)
(10,515)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
13,439
13,599
14,439
14,470
13,428

Funding impact statement for 1 July 2017 to 30 June 2018
for Stormwater

2.5
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates
17,902
18,012
18,953
17,986
17,986

Subsidies and grants for operating purposes
142
99
148
131
139

Fees and charges
10
665
10
10
3

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
18,054
18,776
19,111
18,127
18,128

Applications of operating funding

Payments to staff and suppliers
7,303
6,487
7,260
6,993
7,280

Finance costs
3,268
2,453
3,929
2,707
2,187

Internal charges and overheads applied
1,452
1,894
1,470
1,938
1,692

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
12,023
10,834
12,659
11,638
11,159

Surplus (deficit) of operating funding (A - B)
6,031
7,942
6,452
6,489
6,969

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
58
43
58
58
73

Increase (decrease) in debt
931
985
1,142
874
1,699

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
989
1,028
1,200
932
1,772

Applications of capital funding

Capital expenditure

– to meet additional demand
237
233
243
236
-

– to improve the level of service
4,550
4,235
4,660
4,524
5,218

– to replace existing assets
2,233
2,749
2,749
2,661
4,030

Increase (decrease) in reserves
-
1,753
-
-
(507)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
7,020
8,970
7,652
7,421
8,741

Surplus (deficit) of capital funding (C - D)
(6,031)
(7,942)
(6,452)
(6,489)
(6,969)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
6,031
6,189
6,452
6,489
7,476

Funding impact statement for 1 July 2017 to 30 June 2018
for Conservation attractions

2.6
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
6,625
6,989
6,899
6,970
6,970

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)
6,625
6,989
6,899
6,970
6,970

Applications of operating funding

Payments to staff and suppliers
219
236
225
187
194

Finance costs
804
645
1,000
721
609

Internal charges and overheads applied
288
300
289
-
2

Other operating funding applications
3,759
3,919
9,832
4,303
4,220

Total applications of operating funding (B)
5,070
5,100
11,346
5,211
5,025

Surplus (deficit) of operating funding (A - B)
1,555
1,889
(4,447)
1,759
1,945

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(738)
301
5,290
(918)
(950)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(738)
301
5,290
(918)
(950)

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
-
901
-
-
-

– to replace existing assets
817
1,055
843
841
720

Increase (decrease) in reserves
-
234
-
-
275

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
817
2,190
843
841
995

Surplus (deficit) of capital funding (C - D)
(1,555)
(1,889)
4,447
(1,759)
(1,945)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
1,555
1,655
1,553
1,759
1,670

Funding impact statement for 1 July 2017 to 30 June 2018
for City promotions and business support

3.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
5,104
4,377
7,948
4,982
4,982

Targeted rates
15,172
14,713
16,115
15,253
15,253

Subsidies and grants for operating purposes
-
957
-
2,090
659

Fees and charges
14,638
348
14,925
13,587
413

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
34,914
20,395
38,988
35,912
21,307

Applications of operating funding

Payments to staff and suppliers
21,861
8,786
24,140
18,870
8,016

Finance costs
791
1,378
856
1,771
961

Internal charges and overheads applied
949
850
955
1,230
939

Other operating funding applications
17,048
16,734
12,298
20,013
12,549

Total applications of operating funding (B)
40,649
27,748
38,249
41,884
22,465

Surplus (deficit) of operating funding (A - B)
(5,735)
(7,353)
739
(5,972)
(1,158)

Sources of capital funding

Subsidies and grants for capital expenditure
-
1,619
-
-
172

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
7,477
5,116
614
10,988
2,359

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
7,477
6,735
614
10,988
2,531

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
-
-
-
2,777
-

– to replace existing assets
1,742
886
1,353
2,239
599

Increase (decrease) in reserves
-
(1,504)
-
-
774

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,742
(618)
1,353
5,016
1,373

Surplus (deficit) of capital funding (C - D)
5,735
7,353
(739)
5,972
1,158

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
1,840
1,726
1,814
1,628
1,705

Funding impact statement for 1 July 2017 to 30 June 2018
for Arts and culture activities

4.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
13,325
14,090
13,769
14,272
14,272

Targeted rates
5,335
5,540
5,474
5,599
5,599

Subsidies and grants for operating purposes
417
148
426
924
70

Fees and charges
588
599
600
599
676

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
19,665
20,377
20,269
21,394
20,617

Applications of operating funding

Payments to staff and suppliers
4,162
4,721
4,269
5,195
4,635

Finance costs
289
149
574
260
224

Internal charges and overheads applied
1,057
1,145
1,075
1,208
1,308

Other operating funding applications
13,440
13,854
13,627
14,030
14,334

Total applications of operating funding (B)
18,948
19,869
19,545
20,693
20,501

Surplus (deficit) of operating funding (A - B)
717
508
724
701
116

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(690)
531
9,311
557
(147)

Gross proceeds from sales of assets
-
-
-
-
1

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(690)
531
9,311
557
(146)

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
25
1,244
10,024
1,247
443

– to replace existing assets
2
42
11
11
-

Increase (decrease) in reserves
-
(247)
-
-
(473)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
27
1,039
10,035
1,258
(30)

Surplus (deficit) of capital funding (C - D)
(717)
(508)
(724)
(701)
(116)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
717
755
724
867
755

Funding impact statement for 1 July 2017 to 30 June 2018
for Recreation promotion and support

5.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
25,575
25,994
25,655
27,963
27,963

Targeted rates
1,214
1,107
1,341
1,325
1,325

Subsidies and grants for operating purposes
204
381
208
187
232

Fees and charges
11,847
11,450
12,002
11,523
11,477

Internal charges and overheads recovered
1,136
923
1,160
1,192
1,046

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
39,976
39,855
40,366
42,190
42,043

Applications of operating funding

Payments to staff and suppliers
18,456
18,896
19,047
19,955
20,118

Finance costs
3,795
2,947
3,814
3,330
2,694

Internal charges and overheads applied
9,293
8,956
9,478
10,336
11,352

Other operating funding applications
678
701
694
696
670

Total applications of operating funding (B)
32,222
31,500
33,033
34,317
34,834

Surplus (deficit) of operating funding (A - B)
7,754
8,355
7,333
7,873
7,209

Sources of capital funding

Subsidies and grants for capital expenditure
-
1,006
-
50
71

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
(340)
(213)
(1,644)
672
(1,826)

Gross proceeds from sales of assets
-
-
-
-
2

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
(340)
793
(1,644)
722
(1,753)

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
1,651
4,648
1,335
2,502
1,560

– to replace existing assets
5,763
4,061
4,354
6,093
4,968

Increase (decrease) in reserves
-
439
-
-
(1,072)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
7,414
9,148
5,689
8,595
5,456

Surplus (deficit) of capital funding (C - D)
(7,754)
(8,355)
(7,333)
(7,873)
(7,209)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
7,754
7,916
7,333
7,873
8,282

Funding impact statement for 1 July 2017 to 30 June 2018
for Community support

5.2
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
24,366
24,737
26,687
24,653
24,653

Targeted rates
4,519
4,457
4,606
4,624
4,624

Subsidies and grants for operating purposes
934
1,122
937
937
570

Fees and charges
23,557
23,478
25,428
24,042
22,404

Internal charges and overheads recovered
820
722
600
917
317

Local authorities fuel tax, fines, infringement fees, and other receipts
551
534
526
516
497

Total operating funding (A)
54,747
55,050
58,784
55,689
53,065

Applications of operating funding

Payments to staff and suppliers
26,304
26,269
26,914
26,821
26,939

Finance costs
(1,561)
(2,136)
(1,083)
(1,983)
(1,545)

Internal charges and overheads applied
11,968
13,323
12,392
11,592
13,696

Other operating funding applications
4,376
4,761
4,766
4,902
4,452

Total applications of operating funding (B)
41,087
42,217
42,989
41,332
43,542

Surplus (deficit) of operating funding (A - B)
13,660
12,833
15,795
14,357
9,523

Sources of capital funding

Subsidies and grants for capital expenditure
17,777
12,219
200
11,790
14,636

Development and financial contributions
-
129
-
-
10

Increase (decrease) in debt
18,931
(1,599)
5,025
(397)
9,462

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
36,708
10,749
5,225
11,393
24,108

Applications of capital funding

Capital expenditure

– to meet additional demand
822
135
1,270
694
-

– to improve the level of service
25,050
13,463
9,802
7,641
3,271

– to replace existing assets
6,719
5,158
9,748
5,625
29,454

Increase (decrease) in reserves
17,777
4,826
200
11,790
906

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
50,368
23,582
21,020
25,750
33,631

Surplus (deficit) of capital funding (C - D)
(13,660)
(12,833)
(15,795)
(14,357)
(9,523)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
16,409
14,514
17,594
17,259
13,526

Funding impact statement for 1 July 2017 to 30 June 2018
for Public health and safety

5.3
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
9,674
10,099
10,045
11,765
11,765

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
25
11
26
-
12

Fees and charges
4,109
6,414
4,189
4,151
4,304

Internal charges and overheads recovered
676
604
690
687
629

Local authorities fuel tax, fines, infringement fees, and other receipts
39
28
40
39
22

Total operating funding (A)
14,523
17,156
14,990
16,642
16,732

Applications of operating funding

Payments to staff and suppliers
9,098
12,053
9,438
9,917
9,840

Finance costs
100
115
118
128
119

Internal charges and overheads applied
4,479
5,400
4,528
5,767
6,077

Other operating funding applications
130
178
131
54
47

Total applications of operating funding (B)
13,807
17,746
14,215
15,866
16,083

Surplus (deficit) of operating funding (A - B)
716
(590)
775
776
649

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
964
1,709
1,346
1,354
(85)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
964
1,709
1,346
1,354
(85)

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
489
25
253
44
100

– to replace existing assets
1,191
2,696
1,868
2,086
899

Increase (decrease) in reserves
-
(1,602)
-
-
(435)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,680
1,119
2,121
2,130
564

Surplus (deficit) of capital funding (C - D)
(716)
590
(775)
(776)
(649)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
716
1,012
775
776
1,084

Funding impact statement for 1 July 2017 to 30 June 2018
for Urban planning, heritage and public spaces development

6.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
7,343
7,622
6,937
7,632
7,632

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
10

Fees and charges
20
333
21
21
49

Internal charges and overheads recovered
-
546
-
42
(1)

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
7,363
8,501
6,958
7,695
7,690

Applications of operating funding

Payments to staff and suppliers
2,639
4,409
2,438
4,137
4,336

Finance costs
17
13
20
14
14

Internal charges and overheads applied
3,396
1,865
3,439
2,483
2,314

Other operating funding applications
1,300
1,664
1,050
1,050
1,629

Total applications of operating funding (B)
7,352
7,951
6,947
7,684
8,293

Surplus (deficit) of operating funding (A - B)
11
550
11
11
(603)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
6,949
5,352
1,850
141
15,428

Gross proceeds from sales of assets
2,600
-
3,250
3,250
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
9,549
5,352
5,100
3,391
15,428

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
383

– to improve the level of service
8,581
3,443
3,424
1,683
9,263

– to replace existing assets
979
1,950
1,687
1,719
2,637

Increase (decrease) in reserves
-
509
-
-
2,542

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
9,560
5,902
5,111
3,402
14,825

Surplus (deficit) of capital funding (C - D)
(11)
(550)
(11)
(11)
603

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
11
41
11
11
45

Funding impact statement for 1 July 2017 to 30 June 2018
for Building and development control

6.2
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
9,538
8,685
9,893
8,705
8,705

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
12,159
13,280
11,908
12,922
13,521

Internal charges and overheads recovered
228
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
24
13
25
24
1

Total operating funding (A)
21,949
21,978
21,826
21,651
22,227

Applications of operating funding

Payments to staff and suppliers
12,700
13,546
12,538
13,254
13,341

Finance costs
3
1
2
3
-

Internal charges and overheads applied
8,939
8,342
8,979
8,114
7,547

Other operating funding applications
136
26
137
135
34

Total applications of operating funding (B)
21,778
21,915
21,656
21,506
20,922

Surplus (deficit) of operating funding (A - B)
171
63
170
145
1,305

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
54

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
6,331
4,244
25,938
17,227
7,021

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
6,331
4,244
25,938
17,227
7,075

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
6,502
4,391
26,108
17,372
5,901

– to replace existing assets
-
-
-
-
1,316

Increase (decrease) in reserves
-
(84)
-
-
1,163

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
6,502
4,307
26,108
17,372
8,380

Surplus (deficit) of capital funding (C - D)
(171)
(63)
(170)
(145)
(1,305)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
171
147
170
145
142

Funding impact statement for 1 July 2017 to 30 June 2018
for Transport

7.1
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
33,495
35,761
37,015
37,626
37,721

Targeted rates
33
33
33
95
33

Subsidies and grants for operating purposes
4,231
4,668
4,433
4,576
5,033

Fees and charges
2,080
5,036
2,121
1,996
2,649

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
1
-
-
-

Total operating funding (A)
39,839
45,499
43,602
44,293
45,436

Applications of operating funding

Payments to staff and suppliers
11,919
12,652
12,253
13,842
14,251

Finance costs
5,771
4,606
6,854
5,232
5,523

Internal charges and overheads applied
6,260
6,248
6,317
6,742
7,013

Other operating funding applications
2,760
1,236
260
260
239

Total applications of operating funding (B)
26,710
24,742
25,684
26,076
27,026

Surplus (deficit) of operating funding (A - B)
13,129
20,757
17,918
18,217
18,410

Sources of capital funding

Subsidies and grants for capital expenditure
17,599
13,869
21,387
34,473
29,463

Development and financial contributions
539
806
539
539
1,305

Increase (decrease) in debt
9,557
3,363
13,184
6,721
4,216

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
27,695
18,038
35,110
41,733
34,984

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
5,260
4
-

– to improve the level of service
19,952
8,650
24,572
18,793
16,463

– to replace existing assets
20,872
25,187
23,196
41,153
38,703

Increase (decrease) in reserves
-
4,958
-
-
(1,772)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
40,824
38,795
53,028
59,950
53,394

Surplus (deficit) of capital funding (C - D)
(13,129)
(20,757)
(17,918)
(18,217)
(18,410)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
23,012
25,119
25,292
26,600
28,159

Funding impact statement for 1 July 2017 to 30 June 2018
for Parking

7.2
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
(15,056)
(14,370)
(15,442)
(14,875)
(14,875)

Targeted rates
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees and charges
20,561
20,778
21,023
21,385
21,345

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
7,853
6,080
8,038
7,334
6,404

Total operating funding (A)
13,358
12,488
13,619
13,844
12,874

Applications of operating funding

Payments to staff and suppliers
10,589
9,759
10,776
10,970
10,257

Finance costs
581
334
770
4
12

Internal charges and overheads applied
2,003
2,439
2,013
2,816
3,192

Other operating funding applications
1
(121)
1
1
(12)

Total applications of operating funding (B)
13,174
12,411
13,560
13,791
13,449

Surplus (deficit) of operating funding (A - B)
184
77
59
53
(575)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
312
350
239
244
(546)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
312
350
239
244
(546)

Applications of capital funding

Capital expenditure

– to meet additional demand
-
-
-
-
-

– to improve the level of service
496
481
114
113
116

– to replace existing assets
-
-
184
184
183

Increase (decrease) in reserves
-
(54)
-
-
(1,420)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
496
427
298
297
(1,121)

Surplus (deficit) of capital funding (C - D)
(184)
(77)
(59)
(53)
575

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the following depreciation/amortisation charge
184
131
59
53
845

Capital Expenditure by Strategy

Strategy
2016/17
LTP
$000
2016/17
Actual
$000
2017/18
LTP
$000
2017/18
AP
$000
2017/18
Actual
$000

Governance:

– to meet additional demand
-
-
-
-
-

– to improve the level of service
-
-
-
-
-

– to replace existing assets
116
-
-
-
8

Governance Total
116
-
-
-
8

Environment:

– to meet additional demand
1,087
1,033
1,596
1,112
-

– to improve the level of service
9,950
10,479
12,549
12,122
16,537

– to replace existing assets
26,960
29,470
32,834
32,258
28,890

Environment Total
37,997
40,982
46,979
45,492
45,427

Economic Development:

– to meet additional demand
-
-
-
-
-

– to improve the level of service
-
-
-
2,777
-

– to replace existing assets
1,742
886
1,353
2,239
599

Economic Development Total
1,742
886
1,353
5,016
599

Cultural Wellbeing

– to meet additional demand
-
-
-
-
-

– to improve the level of service
25
1,244
10,024
1,247
443

– to replace existing assets
2
42
11
11
-

Cultural Wellbeing Total
27
1,286
10,035
1,258
443

Social and Recreation:

– to meet additional demand
822
135
1,270
694
-

– to improve the level of service
27,190
18,136
11,390
10,187
4,932

– to replace existing assets
13,673
11,915
15,970
13,804
35,321

Social and Recreation Total
41,685
30,186
28,630
24,685
40,253

Urban Development:

– to meet additional demand
-
-
-
-
383

– to improve the level of service
15,083
7,834
29,532
19,055
15,165

– to replace existing assets
979
1,950
1,687
1,719
3,953

Urban Development Total
16,062
9,784
31,219
20,774
19,501

Transport:

– to meet additional demand
-
-
5,260
4
-

– to improve the level of service
20,448
9,131
24,686
18,906
16,579

– to replace existing assets
20,872
25,187
23,380
41,337
38,886

Transport Total
41,320
34,318
53,326
60,247
55,465

Council:

– to meet additional demand
-
-
-
-
26

– to improve the level of service
16,304
1,408
16,113
15,151
1,666

– to replace existing assets
17,269
18,373
18,641
9,849
9,553

Council Total
33,573
19,781
34,754
25,000
11,245

Total Council:

– to meet additional demand
1,909
1,168
8,126
1,810
410

– to improve the level of service
89,000
48,232
104,294
79,445
55,321

– to replace existing assets
81,613
87,823
93,876
101,217
117,209

TOTAL COUNCIL
172,522
137,223
206,296
182,472
172,940

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 three 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 three 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.

Residents Monitoring Survey (RMS). This survey is undertaken annually by Council. The survey is conducted in two parts. The sample size for part 1 was 974 and for part 2 was 988. The standard margin of error was calculated at +/- 3.1 percent.

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 adjustments that do not affect the rating requirements of 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).

Council meeting attendance

Councillor
Meetings held of which the Councillor is a member
Meetings
Attended
Full Council Meetings
(11)
City Strategy Committee
(28)
Long-term and Annual Plan Committee
(5)
Regulatory Processes
(10)
CEO Performance Review
(7)
District Licensing Committee
(28)
Council Controlled Organisations Subcommittee
(3)
Finance, Audit & Risk
Subcommittee
(6)
Grants Subcommittee
(6)
Wellington Region Waste Management and Minimisation Plan (joint committee)
(6)
Wellington Regional Amenities Fund (joint committee)
(3)

NUMBER
NUMBER
%
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER
NUMBER

Mayor Justin Lester
79
66
84%
10
23
5
6
7

3
6
3

3

Diane Calvert
67
65
97%
11
27
5
10
6

6

Chris Calvi-Freeman
54
53
98%
10
28
5
10

Brian Dawson
50
49
98%
10
28
5

6

Jill Day
57
56
98%
10
28
5

7

6

Andy Foster
63
59
94%
11
25
5

6
6

6

Sarah Free
63
52
83%
10
28
5

1

2
6

Peter Gilberd
50
48
96%
11
26
5

6

David Lee
57
52
91%
11
26
5
7

3

Simon Marsh
47
41
87%
10
25
4

2

Iona Pannett
57
56
98%
11
28
5

7

5

Malcolm Sparrow
54
50
93%
11
25
5
9

Simon Woolf
47
42
89%
11
25
3

3

Nicola Young
56
53
95%
11
27
5

4
6

Fleur Fitzsimons*
30
29
97%
7
12
5

3

2

* appointed in Feb 2018

Prior council member

Paul Eagle*
14
14
100%
2
8

4

* resigned Sept 2017

Number of meetings held
91

11
28
5
10
7
6
3
6
6
6
3

Notes

The meeting attendance figure relates to Council, committee (excluding City Strategy pre meeting sessions) and subcommittee meetings. Councillors are also appointed to Council-controlled organisations, community boards, working parties, advisory groups and other external bodies. The meeting attendance figures provided do not include Councillors’ attendance at these meetings. Such meetings can conflict with Council meeting times.

There were 28 hearing days for District Licensing Committee however Clr Foster was only appointed to six committee meetings and attended all six.

Independent auditor’s report

To the readers of Wellington City Council’s annual report for the year ended 30 June 2018

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, Karen Young, 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 26 September 2018. This is the date on which we give our report.

Opinion on the audited information

In our opinion:

the financial statements on pages 158 to 246:

present fairly, in all material respects:

the City Council and Group’s financial position as at 30 June 2018;

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; and

the funding impact statement on page 254, 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 statement of service provision on pages 38 to 143:

presents fairly, in all material respects, the levels of service for each group of activities for the year ended 30 June 2018, 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; and

the statement about capital expenditure for each group of activities on pages 45 to 138, 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 254 to 271, 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 performance against benchmarks as required by the Local Government (Financial Reporting and Prudence Regulations 2014) on pages 247 to 253, 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 our 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 description used for the statement of service provision, 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 275, 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.

In addition to our audit of the audited information and our report on the disclosure requirements, we have audited the City Council’s 2018-28 long term plan, and performed a limited assurance engagement related to the City Council’s debenture trust deed, and performed a review of the revenue and expenditure of the Clifton Terrace car park management by the City Council and Group on behalf of the New Zealand Transport Agency. Other than these engagements, we have no relationship with, or interests in, the City Council or its subsidiaries and controlled entities.

Karen Young
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand