Mayor’s welcome

Last October a refreshed, action-focussed Council was elected to serve the people of Wellington City. I am proud to lead that Council and report on the progress we have made.

Our finances are healthy and we met 12 of the 13 legislated financial prudence benchmarks.

Two of the biggest themes to come through in the election were the economy and transport. In response, within 90 days of the election, we:

put forward an economic growth agenda underpinned by 8 Big Ideas

agreed the 2014/15 Annual Plan in record time without making service cuts

tripled our investment in cycling as part of that plan

maintained the rates rise at a low 2.5%.

We also contributed to the costs of the airport runway consent, worked with a developer on a new convention centre, brought the management of Wellington’s waterfront in-house and advanced plans for a film museum. I am delighted that our status as the country’s Events Capital has been confirmed with Wellington winning a majority of the 2014 New Zealand Association of Event Professionals Awards. That said, we will improve our Christmas and New Year programme in the coming year.

We put considerable energy into developing transport plans with the Greater Wellington Regional Council and the New Zealand Transport Agency, including agreement to progress the implementation of Bus Rapid Transit along our transport spine. We also completed the Tawa Valley Pathway – Ara Tawa, and modest cycle safety improvements. Clearly there is a need to do more since residents’ satisfaction with the safety and maintenance of cycle ways has dropped significantly, as interest in cycling grows.

Since we developed our current long-term plan, we have undertaken a significant programme to increase the resilience of our people, buildings, water and roading networks to a major earthquake. We have completed earthquake assessments on all the pre-1976 buildings. This work should provide us all with comfort that our city is well-prepared and that our programmes are more advanced than any other city in New Zealand.

As a Council, we will continue to address specific issues of importance to communities while also investing strategically to achieve our Towards Wellington 2040 Smart Capital vision. Wellington is in great shape as a city. Together we have the people and financial capacity to do more. I would like to acknowledge the work of elected members, staff and all our partners in taking the city forward over the last year. I look forward to working with you as we step up our investment in and commitment to our ambitious plan for sustainable and inclusive growth in our beautiful capital.

CELIA WADE-BROWN
Mayor

Chief Executive’s welcome

This is my second annual report as Chief Executive. It shows that we are in great shape.

In my Pre-Election Report 2013, I identified a number of factors that I would take into this current term of Council. I noted that:

we love this city and we don’t want to lose the momentum

regular Capex increases on a static rating-base are not sustainable

we need to manage our existing physical infrastructure well

we must use our strong financial position to invest in helping grow the economy, which would enable us to continue investing in our social infrastructure

people know we can’t do everything for everyone and that our budget is limited, which means we need to make some tough decisions about the services we provide.

The report was written a year ago and we have already made significant progress on many fronts. As the Mayor notes, we are committed to our growth agenda. We have developed key projects that will improve the economic vibrancy of the city, in addition to a range of smaller but equally as important growth activities throughout the city. In the coming year, we expect to make further announcements about major projects that will attract more visitors to Wellington and support growth of the film and technology sectors.

We have made great strides towards reducing our costs in a sustainable way and meeting our commitment to great customer service. Key projects include the rationalisation of our Council-controlled organisations at both a local and regional level. We are planning to bring water-related services across Wellington under the management of Capacity Infrastructure Services to provide an end-to-end comprehensive service across the region. We are also bringing our events, venues, tourism and economic development functions and activities under the umbrella of a single regional growth entity. These actions will not only deliver cost-savings but also mean more effective co-ordinated service delivery for the benefit of everyone living in the region.

We are also implementing a number of projects to improve efficiency and reduce our back office costs. These include:

improving our procurement processes

modernising our accommodation arrangements, and

adopting a new core computer system.

We are focused on doing the basics well so we can make the strategic financial investments that will help our city to grow and build on the enormous success it has already achieved.

Cities are the core of a country’s growth and success and they have to continually reinvent themselves to achieve their potential. Wellington is ready for positive transformation. We have transformed the city before – with the stadium, the waterfront and Te Papa. We can do it again, and we will.

We can achieve this while continuing to improve the value of the services we deliver over time. It’s in our best interests – and the interest of NZ Inc – to have world-class cities in New Zealand. The good news is we already have one – it’s called Wellington.

My thanks to all those who have contributed to our work this year and I look forward to continuing on and delivering on the Council’s vision for Wellington.

KEVIN LAVERY
Chief Executive

The place of the possible

Our role and direction

Our growth agenda

Financial highlights

Explaining our work

Our role and direction

Who we are

Our aims

Enabling the city to thrive.

Who we are

The Wellington City Council is made up of 15 elected representatives – the Mayor and 14 Councillors. It’s their job to make bylaws, set the city’s overall strategic direction, and approve budgets, policies and plans aimed at achieving that direction. Part of their role is to listen and take the pulse of the community before making decisions. They are supported in their governance role by two Community Boards.

The elected representatives are supported by the Council’s Chief Executive and 1550 staff, who provide advice, implement Council decisions, and look after the city’s day-to-day operations.

Our aims

In June 2013, the Council adopted an Annual Plan for the period 1 July 2013 to 30 June 2014, which outlined the services we planned to deliver during that period. This Annual Report explains how we’ve delivered on that plan.

The Annual Plan also confirmed our ongoing commitment to achieving our vision for the city – Towards Wellington 2040: Smart Capital. This vision contains four community outcomes, which guide our decisions about our services and what we plan to do: to be people centred; connected; an eco-city; and have a dynamic central city. The plan also confirmed our three priorities: an inclusive place where talent wants to live; a resilient city; and a well-managed city. 

Our outcomes and priorities are structured around seven activity areas against which we measure our performance. They are:

Governance – delivering trust and confidence in decision-making.

Environment – protecting and enhancing Wellington’s environment.

Economic Development – promoting the city’s competitive advantages to enhance quality of life.

Cultural Wellbeing – reflecting and shaping Wellington’s unique cultural identity.

Social and Recreation – sustaining safe, resilient and healthy communities.

Urban Development – preserving Wellington as a compact, vibrant and attractive city, now and into the future.

Transport – delivering an efficient and safe transport system that connects people and places.

Our growth agenda

Wellington can be a world-class city where talent wants to live

We need to grow our income and we have the capacity to do so

We have committed to a growth agenda

We’ve already made a start

And we’re committed to our 8 Big Ideas

We deliver value for money

We are more resilient

Wellingtonians participate

We do the basics well

We’ve got plans to grow

This year, Wellingtonians elected a new Council, which is action-oriented and responding to the issues facing Wellington.

Wellington can be a world-class city where talent wants to live

We have all the ingredients to be a world-class city – people, location and lifestyle – but we are not doing as well as we could. In recent years, our economy hasn’t performed as strongly as some other cities and we rely heavily on the government sector to keep the economy afloat.

The Council has made significant investments in assets and programmes that have lifted the city’s quality of life, eg sports and recreation facilities, infrastructure upgrades and social housing.

We need to grow our income and we have the capacity to do so

To become a city that is sustainable, dynamic, connected and people-centred, we need a stronger economy and a growing ratepayer base. The stronger the economy, the faster the ratepayer base grows. The faster the ratepayer base grows, the more we can invest in the city.

The Council’s financial position is strong and we have the opportunity and resources to do more, if we choose to. We have an AA credit rating with Standard and Poors, our rates are not as high as many of our neighbours and we have relatively low debt.

We have committed to a growth agenda

Our role is to support and enable the city’s entrepreneurs, investors, researchers and workers to succeed. We have committed to:

being open for business – we will remove red tape, make regulations clear and be customer-focussed

doing our core jobs well – we will deliver our services as efficiently and effectively as possible

bringing people together – we will enable people and organisations to connect so they can create jobs and business opportunities

investing for growth – we will invest in projects that make a real difference to the local economy and people.

We’ve already made a start

We have already made a start on projects that will achieve our goals, including:

establishing, with other councils, the Wellington Regional Economic Development Agency

joining up back-office and IT services with other councils in the region

contributing $1 million to the airport runway extension consent application cost

establishing the Wellington Economic Initiative Development (WEID) Fund and investing in Destination Wellington

reducing development contributions.

And we’re committed to our 8 Big Ideas

Our future programme includes projects aimed at growing the local economy, including:

a convention centre and hotel opposite Te Papa

a film museum to celebrate Wellington’s film sector and attract international tourists

international air connections to provide direct flights to Asia and beyond

a CBD tech precinct to connect people in high-tech industries

a development framework for Miramar as New Zealand’s creative industries hotspot

providing better transport choices

being open for business

being a liveable city that sustains what makes Wellington a great place to live

1

We deliver value for money

This year, the services we delivered cost $5.82 per resident per day. 

Our AA credit rating with Standard and Poors provides us a reduced cost of borrowing.

We kept rates increases affordable by limiting the 2013/14 rates increase to 2.5%.

Our net borrowings are 84% of income, which is below our operating target of 105% and well below our prudential limit of 150%.

And in the future we will keep reducing costs by continuing our efforts to provide shared services with other councils in the Wellington region.

2

We are more resilient

We have strengthened several Council buildings, with more to be completed by December 2014.

We assessed the structural performance of all pre-1976 buildings in the city and found that only 13% are earthquake prone.

We are making the water network resilient by strengthening the Maupuia and Maldive No 2 reservoirs, and installing emergency water tanks and auto shut-off valves.

We are building retaining walls, and strengthening bridges and tunnels including the Aotea Quay bridge and Hataitai Bus Tunnel.

We have developed programmes to support local leadership, and strengthen community and neighbourhood resilience and safety.

And in the future we will make it easier and more cost-effective for building owners by providing rates remissions for earthquake-strengthening of their buildings.

3

Wellingtonians participate

This year:

670,000 people attended Council supported events and 115,000 tickets were sold for the New Zealand Festival.

1.3 million people visited Te Papa, 600,000 visited other museums and galleries and 750,000 attended arts and cultural festivals.

1.2 million people visited Council swimming pools, 320,000 visited recreation centres and 600,000 visited the ASB Centre.

94% of residents used a local park or reserve, 95% used a beach or coastal area, and 72% used a walkway.

And in the future we will celebrate and promote increased use of our events, services and facilities by residents.

4

We do the basics well

We provide 350km of tracks and 40km² of Town Belt land.

Our infrastructure includes 1,058km of sewers, 80 water reservoirs, 33 water pumping stations, 7,300 hydrants and 1,245km of underground water pipes.

Our visitor attractions include Wellington Zoo, Zealandia and four botanic gardens.

Our residents regularly use the 12 libraries, seven swimming pools, seven recreation centres, 100 playgrounds and parks, 45 sportsfields and two marinas we provide.

We have 650km of roads and 12,000 parking spaces.

We provide 2,300 social housing homes to residents in need.

And in the future we will match our investment in social services and infrastructure to the areas where the population and demand for services is increasing.

5

We’ve got plans to grow

We agreed our 8 Big Ideas, which will bring economic growth to the city.

We’re attracting business, talent, investment and students to the region through Destination Wellington.

We helped establish the Business Improvement District in Miramar, which will boost the local economy.

We developed international relationships, including leading a delegation of 30 organisations to China and Japan.

We’re establishing the Wellington Regional Economic Development Agency with other councils in the region.

And in the future we will pursue our growth agenda by investing in projects that make a real difference to the local economy.

Financial highlights

We achieved an underlying net surplus of $1.2 million compared to a budgeted break-even. The underlying net surplus / (deficit) is a measure that reflects what Council collects through rates, investments and other income sources such as fees and charges, and what the Council spends on providing services to the city.

Having a small underlying surplus / (deficit) reflects Council’s commitment to intergenerational equity: each generation of ratepayers should pay for the services they consume.

Our headline net surplus is $27.5 million compared to a budgeted $35.7 million, giving rise to an unfavourable variance of $8.2 million.
As reported in the Statement of Comprehensive Financial Performance. The surplus includes grants from central government for capital projects which do not affect rates. The variance is mainly due to the revaluation of investment property – again not impacting on the rates requirement.

We met 12 out of 13 new financial prudence measures.
Central government has introduced new financial “benchmarks” that local bodies need to report against. This shows Council has acted prudently during the year and within the financial parameters set in our Long Term Plan.

We spent $128.0 million during the year on asset renewals and new assets from a budgeted capital expenditure programme of $172.5 million.
This expenditure included roads, swimming pools, social housing, water, wastewater and stormwater networks, parks and open spaces. We spent less than budgeted due to delays in completing swimming pool and social housing improvements and the deferral of earthquake strengthening the town hall. Council is working to improve the alignment of actual to budgeted capital spend.

We maintained the Council’s AA credit rating.
This reflects the Council’s strong financial state.

Council’s debt levels remain low – net debt is $346 million. Offsetting this we have $381 million of non-cash investments.
Council’s net debt has only increased by $2.6 million during the year, $26.6 million less than budget. The difference is mainly due to changes in the timing of capital projects.

The wide range of services the Council provides costs $5.82 per resident per day. This includes basic services such as roading, water, wastewater and stormwater as well as parks, gardens, swimming pools, libraries and the economic development of the city.

Activity area
Cost per resident per year
$
Cost per resident per day
$

Governance
83
0.23

Environment
712
1.95

Economic Development
210
0.58

Cultural Wellbeing
86
0.24

Social and Recreation
500
1.37

Urban Development
175
0.48

Transport
269
0.74

Council
83
0.23

$2,118
$5.82

The Council’s biggest source of income is rates revenue, which accounts for 55% of all income. The Council’s funding mechanism is governed by its Revenue & Financing Policy as disclosed in the 2012–22 Long Term Plan.

The Council’s largest operational expenditure is on Environment with 33%, which includes the maintenance of water, wastewater and stormwater networks, followed by Social & Recreation at 24%.

The Council’s revenue over time is influenced by the amount of grants it receives for capital expenditure in any one year. This varies dependant on the annual capital expenditure programme to be funded, as shown by the higher 2012 revenue levels resulting from an increase in housing grants received.

The Council has shifted its operational expenditure by strategy over time from Governance to Economic Development and Urban Development in line with its overall strategy as outlined in the 2009 & 2012 Long Term Plans.

Explaining our work

This report highlights our performance for each of our seven activity areas. You will find information about the state of the city – everything from the transport network to the state of the environment to the strength of Wellington’s communities.

For each activity area we have summarised the goals we want to achieve, why we are pursuing them and what we are doing to achieve those goals. We also describe how each activity area contributes towards our community outcomes.

For each activity we explain:

What we do – an outline of the scope of our work under the activity.

What we achieved – a description of milestones achieved during the year.

What it cost – a summary financial table for that activity.

How we performed – an outline of results against targets. We place these in the context of past results and next year’s targets where appropriate.

The performance information is drawn from a wide variety of sources, including annual surveys of Wellington residents. The Residents Monitoring Surveys (RMS) have a sample of 500 residents, aged over 18, that is representative of the Wellington population in terms of ward, age and gender. The standard margin of error is +/- 4.38%.

Over the last two years, we have made the transition from conducting our Residents Monitoring Surveys using telephone surveys to now conducting them online. Therefore, previous results are not directly comparable because of this methodology change. Consequently, we have not included results prior to the change for any measures taken from the RMS.

We will review all our performance measures and targets during the development of the 2015–25 Long Term Plan.

Our measures, financial results and commentary are independently scrutinised by Audit New Zealand.

Statements of Service Performance

Governance Pārongo ā-tāone

Environment Taiao

Economic development Whanaketanga ōhanga

Cultural wellbeing Oranga ahurea

Social and recreation Pāpori me te hākinakina

Urban development Tāone tupu ora

Transport Waka

Governance

Pārongo ā-tāone

1.1 Governance, information and engagement Pārongo, kōrerorero whānui me ngā mahi whakataunga

1.2 Māori and mana whenua partnerships Whai wāhitanga Māori (tae noa ki te mana whenua)

1.1 Governance, information and engagement Pārongo, kōrerorero whānui me ngā mahi whakataunga

1.2 Māori and mana whenua partnerships Whai wāhitanga Māori (tae noa ki te mana whenua)

Good governance builds trust, confidence and a healthy democracy

The result of good governance is public trust and confidence in the decisions we make. The wellbeing of local democracy relies on good governance.

It’s in our interest, and the city’s, that residents understand the Council’s plans for the future. It’s also important that people have the opportunity to participate in the decision-making process.

High-quality governance is the launching pad for successful cities. We are committed to an open and transparent decision-making process, and a culture that is open for business and puts residents first.

We strive for high-quality governance because better decisions today mean a better city tomorrow.

Our activities and relationship with residents today

We engage with and support elected members, residents and ratepayers, businesses and community leaders. We try to ensure they are well-informed and can contribute meaningfully to the Council’s decision-making processes.

We keep a record of our work and provide access to the information we hold. City Archives preserves and makes available a huge range of primary information about the city’s history. Our activities include:

managing local government elections

city governance and engagement

civic information

city archives.

Residents are very satisfied (70%) with their level of involvement in the decision-making process, up from 63% in the previous year, but only 36% of residents are satisfied that Council information is easy to access.

Participation in the 2013 Wellington local body elections was 41%, up from 39% in 2010. Increasing voter turnout remains a challenge.

The way residents want to receive and respond to information is changing, in line with technology advances.

Governance and engaging with residents in the future

A key future focus is embracing new technology to improve the way we govern, inform and engage. But regardless of technological change, customer service will be front and centre of our goals and activities.

New technology will also enable us to broaden our reach with the community. We will improve our website and move to ‘self-service’ by automating transactions and using smartphone apps and social media to connect with the public. This will not be at the expense of face-to-face customer service and communication with residents and ratepayers.

We will continue to work closely with our mana whenua partners, who have a special position in the city’s history.

We govern, inform and engage

This year we:

ran the local body elections, inducted a new council and introduced a new council decision-making structure

adopted a new Engagement Policy which includes a public commitment to how we will engage with Wellingtonians

made information more accessible through City Archives

set the Council’s strategic direction in the 2014/15 Annual Plan. This includes a growth agenda for the Council, and changes to development contributions and our rates remission policy.

Our governance activities contribute to us being:

People centred: They enhance trust and confidence in civic decision-making and encourage the community to participate in city governance. They also promote inclusiveness, celebrate social and cultural diversity, and enable us to respond to the needs and aspirations of Māori and mana whenua.

Connected: Providing information about our services allows people to use the city’s services, facilities and activities.

1.1

Governance, information and engagement

Pārongo, kōrerorero whānui me ngā mahi whakataunga

We want to inform people, and maintain their confidence, in our decision-making  

What we do

Our decisions need to reflect the services that matter to the community and how much they are willing to pay for them. We ensure people are well-informed and can contribute meaningfully to Council decision-making processes. The Local Government Act 2002 sets out the decision-making, planning and accountability procedures expected of local authorities.

Other legislation requires us to keep a record of our work and provide access to the information we hold. City Archives preserves and makes available a huge range of primary information about the city’s history. Our activities include:

city governance and engagement

civic information

City Archives.

What we achieved

We managed the 2013 local body elections, which resulted in an increased turnout of 41.1% compared with 38.5% in 2010, six new Councillors being elected and three new Community Board members.

We made information more accessible. City Archives digitised plans and documents related to water supply, drainage and stormwater to support our asset planning and management. We also worked with the Museum of Wellington City & Sea to manage their archives.

We engaged with Wellington residents. In October we adopted a new Engagement Policy, which includes a public commitment to how we will engage with Wellingtonians. We held a series of forums to communicate our strategic focus and receive input into our future planning with the business, sporting, Pacific, accessibility and multicultural communities. We also worked with our Youth Council, Pacific Advisory Group, Environmental Reference Group and Accessibility Advisory Group on key projects such as our Alcohol Management Strategy and our input into the Memorial Park precinct.

We set the Council’s strategic direction. In June 2014, we adopted the 2014/15 Annual Plan. The plan sets a growth agenda for the Council and includes changes to Development Contributions and our Rates Remission Policy, which will encourage development of quality buildings, reduce compliance costs and make our processes more efficient.

And we complied with new legislative obligations. We set up an independent District Licensing Committee, in accordance with the Sale and Supply of Alcohol Act 2012, to decide on alcohol licensing applications. This year, the Committee made 741 decisions.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

1.1.1
City Governance and Engagement¹

Expenditure
9,523
9,912
389
8,161

Revenue
(508)
(312)
196
(14)

Net Expenditure
9,015
9,600
585
8,147

1.1.2
Civic Information²

Expenditure
5,361
5,814
453
5,327

Revenue
(411)
(242)
169
(248)

Net Expenditure
4,950
5,572
622
5,079

1.1.3 
City Archives

Expenditure
1,481
1,364
(117)
1,283

Revenue
(182)
(180)
2
(208)

Net Expenditure
1,299
1,184
(115)
1,075

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

1.1.1 
City Governance and Engagement

Expenditure
53
110
57
-

Unspent portion
of budget to be
carried forward
n/a
-
-
n/a

Under budget due to reduced personnel expenditure and associated overhead allocations as well as lower elections costs.

Under budget due to reduced personnel expenditure and associated overhead allocations.

How we performed

We improved customer satisfaction with our information and engagement work. We will need to review the targets for these measures because they are based on a different survey methodology that is not comparable with our current results. The results for our information accessibility measures are also below target although we met our legislative obligations. Our service centre is very good at responding to enquiries and residents are satisfied with City Archives.

We understand how well the public is informed and engaged

This year, we increased our efforts to communicate and consult about Council’s work and the results of our decision-making, which resulted in a significant performance improvement.

e-democracy participation – number of ePetitions and number of people that participate

This year, we received 10 ePetitions and 283 people participated. This compared with 14 e-petitions and 2,148 participants in 2012/13.

There is no target for this performance measure.

Source: WCC Democratic Services

We measure how easy it is for residents to access information and whether that information is available in a timely manner

Council and committee agendas (%) made available to the public five days prior to the meeting

Result: 59% (target: 80%; 2012/13: 80%; 2011/12: 74%; 2010/11: 75%)

Source: WCC Democratic Services

The Local Government Official Information and Meetings Act 1987 requires us to make all agendas and reports available two days before meetings. We have set a higher standard for ourselves by aiming for five days.

Performance was partly affected by the Council’s move to a new governance structure after the 2013 Local Government Election, which resulted in an increase in the number of committees.

This year, 100% of agendas were made publicly available at least two days prior to the meetings.

This year, 22% of residents believed that Council information is not easy to access and 42% of residents neither agreed nor disagreed.

This year, 16% of residents disagreed that our website is easy to navigate and 21% neither agreed nor disagreed. 15% of residents disagreed that our website is easy to get information from and 27% neither agreed nor disagreed.

In response to the above results, last year we had focus groups where we asked people about our consultation and communication. We learnt that a lot of people do not know what Council does or how to have a say in our decision-making. In response, we have been highlighting the value and benefits of Council’s work through the Our Wellington page in The Dominion Post. We have made sure that we let people know how their input into our decision-making was used and what resulted. We are also ensuring that people can easily access Council information through search engines like Google.

We measure our success at protecting the city’s historic information and making it available to the public

1.2

Māori and mana whenua partnerships

Whai wāhitanga Māori (tae noa ki te mana whenua)

We have an obligation to ensure the views of mana whenua are heard.  

What we do

We ensure the special position of mana whenua Ngāti Toa Rangatira and Taranaki Whānui ki te Upoko o te Ika is acknowledged and reflected in the way we make decisions about the city and its resources. We also ensure their contribution to Wellington’s heritage and future is fully and publicly acknowledged. We work with mana whenua to explore opportunities for the city emerging from settlement of their historic Treaty of Waitangi claims and engage with the wider Māori community in particular on issues of specific interest to them.

What we achieved

We welcomed a new Council and new Wellington residents. The new Wellington City Council was formally welcomed by mana whenua at the inauguration ceremony on 30 October 2013. On 14 December almost 100 newcomers attended He Kāinga Hou – A New Home: In the Footsteps of Kupe, at Te Kura Kaupapa Māori o Ngā Mokopuna. Council, the kura whānau and mana whenua hosted a day of Māori culture and a guided tour to Oruaiti Pā site within the Oruaiti Reserve.

We hosted events. Te Rā o Waitangi (6 February) took place at Te Raukura, te wharewaka o Pōneke with co-host Wellington Tenths Trust. For the second year, we assisted the Te Whanganui-a-Tara Māori Secondary Schools Teachers Association to host Te Rā Haka at the ASB Sports Centre. Approximately 500 students from Seatoun to Ōtaki came together to learn a local iwi haka.

We assisted this year’s Matariki celebrations in collaboration with many organisations, delivering almost 100 events. One highlight was renowned artist Johnson Witihera’s Waituhi mural project in Opera House Lane. We also launched a new website for the Matariki festival (matarikiwellington.org).

And we installed a new pou whenua at Courtenay Place marking the significant iwi site of the Waitangi Stream. An early morning cultural blessing was provided by mana whenua kaumatua.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

1.2.1 
Māori and Mana Whenua Partnerships

Expenditure
225
225
-
222

Revenue
(1)
-
1
(5)

Net Expenditure
224
225
1
217

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

1.2.1 
Māori and Mana Whenua Partnerships

Expenditure
-
-
-
-

How we performed

We measure the health of our relationship with mana whenua

Mana whenua partner evaluation – satisfaction with Council relationship

Wellington City Council has two mana whenua partnerships: Te Runanga o Toa Rangatira Inc representing Ngāti Toa, and Port Nicholson Block Settlement Trust representing Taranaki Whānui ki Te Upoko o Te Ika (Taranaki Whānui).

Both our mana whenua partners have experienced a year of significant internal changes and, in recognition of this, Council’s elected members and officers have been supportive and understanding of our partners’ changing environment.

Overall, the relationship is perceived to be positive and effective by our partners. One partner noted that the Council was creating a stronger culture with respect to including mana whenua in decision-making processes and management of resources, and that there was good engagement by senior Council staff and Councillors. However, one partner also noted that there needs to be more clarity about the relationship and links at different levels of the organisation. It was reported that there needed to be further integration and normalisation of tangata whenua participation in decision-making processes.

There was some concern that as the Council develops further specific agreements with its partners, that the relationship could become focused on compliance or a business relationship rather than an enduring treaty-based partnership.

It was suggested that Wellington’s local councils could look to coordinate their mana whenua liaison more efficiently. This would be less time-consuming and more efficient than working separately with several different councils.

The partners agreed that Wellington was a great place to do business. Reasons for this were Wellington’s capital status, its location, and access to major transport routes.

It was reported that the Council has adopted and supported more environmentally sustainable practices recently. Further development of this focus and supporting initiatives are needed to ensure future sustainability.

Source: Mana whenua partners’ relationship evaluation 2014

We measure the engagement of the city’s Māori residents

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

Result: 56% of Māori surveyed were satisfied or neutral with regard to their involvement with decision-making (target: 85%; 2012/13: 60%).

Source: Residents Monitoring Survey 2014

Environment

Taiao

2.1 Gardens, beaches and green open spaces Ngā wāhi wātea me ngā mahi papa atawhai

2.2 Waste reduction and energy conservation Whakaiti para, hangarua me te pena pūnga

2.3 Water Wai

2.4 Wastewater Parawai

2.5 Stormwater Wai-ua

2.6 Conservation attractions Ngā painga kukume Papa Atawha

2.1 Gardens, beaches and green open spaces Ngā wāhi wātea me ngā mahi papa atawhai

2.2 Waste reduction and energy conservation Whakaiti para, hangarua me te pena pūnga

2.3 Water Wai

2.4 Wastewater Parawai

2.5 Stormwater Wai-ua

2.6 Conservation attractions Ngā painga kukume Papa Atawha

The world is facing unprecedented environmental and resource challenges

The global population is growing. Oil reserves are declining. Many parts of the world face shortages of food, water and other resources, and the climate is changing and becoming more unpredictable.

These changes affect all of us – either directly, for example through rising fuel prices or extreme weather events, or indirectly, such as when we hear about resource conflicts or climate-related natural disasters in the news.

These challenges are city challenges

Most of the world’s people live in cities, and cities are net consumers of the world’s resources. Cities contribute to global environmental problems, and are especially vulnerable to their impacts.

But, if cities are sometimes the problem, they must also be the solution. Cities have the potential to lead the world in responding to these environmental pressures. In cities, we can find new ways of living that achieve high quality of life without compromising the environment on which we rely.

Wellington has a head start in adapting to a low-carbon future

Wellington is a small and relatively compact city where many people get around on foot or by bus. Our economy relies on knowledge-based industries such as government and the creative sector – not on polluting or resource-intensive industries.

We have an abundance of renewable energy sources such as wind power, and a green landscape that not only provides opportunities for residents to enjoy the outdoors but also gives the city access to carbon credits.

We also have a population that values and is committed to the environment.

We’re not resting on our laurels

This year we:

reduced our waste and increased our levels of recycling

maintained over 40 square kilometres of reserve land

advanced the practice of Water Sensitive Urban Design

encouraged sustainable buildings by changing our development contributions policy

introduced a Smart Energy Challenge to stimulate ideas from the brightest people.

Our environment activities contribute to us being:

People centred: High-quality natural environments enhance Wellington’s unique ‘sense of place’, making it an even better place to live, work and play. They attract visitors and provide attractive, safe and accessible opportunities for leisure and recreation.

Connected: Accessible and high-quality natural and green environments encourage people to gather together, share activities and connect with each other. Networks of green spaces and corridors link the city with its coastline and beaches. Conservation connects people with the environment and links the present to the future.

Eco-city: High-quality natural and green environments protect and enhance our biodiversity and contribute to off-setting our carbon emissions. They model Wellington’s leadership role as capital city of a clean and green New Zealand and as a leading sustainable city of the 21st century.

A dynamic central city: A reliable and adequate supply of clean and safe water is critical for people to live, work, study and play in the central city and increasingly it will distinguish Wellington from other cities as a desirable and healthy place to live and establish a business.

2.1

Gardens, beaches and green open spaces

Ngā wāhi wātea me ngā mahi papa atawhai

We manage the city’s natural environment and gardens in ways that balance conservation and enhancement with opportunities for enjoyment and recreation.  

What we do

Wellington is surrounded by nature. We preserve the city’s unique environment and protect and restore its biodiversity. A high-quality natural environment enhances the city’s unique ‘sense of place’ and provides attractive, safe and accessible places for leisure and recreation. Our aim is to enhance enjoyment of these areas.

Our activities include:

local parks and open spaces

botanic gardens of Wellington

beaches and coastal operations

roads and open spaces

Town Belt and reserves

community environmental initiatives

walkways

biodiversity (pest management).

What we achieved

We upgraded and planned the future of our parks and open spaces. We completed the Grasslees Reserve upgrade with partial funding from the Charles Plimmer Bequest. Oruaiti Reserve was the first reserve in Wellington to receive the internationally recognised Green Flag accreditation. We continued building work on the heritage Halfway House in Glenside Reserve. We completed Our Capital Spaces, the new open space and recreation plan, which will direct Council’s priorities for the next 5–10 years.

We cleaned up the city after the storm. The June 2013 storm caused major tree damage, erosion and sea-wall damage around the city. We ensured that roads and key infrastructure were cleared quickly. Most clean-up work was completed by October 2013 with tree removal continuing throughout the year. We are continuing repair work on sea-walls and erosion around the coast.

We managed the botanic gardens for the benefit of all. We commissioned the design of the Children’s Garden in the Botanic Garden, which is funded by the Charles Plimmer Bequest and a fundraising campaign. We hosted Power Plant as part of the New Zealand Festival, which attracted 22,000 visitors to the Botanic Garden.

We maintained and beautified our beaches and coast. We completed coastal beautification work at Owhiro Bay and along the coastal walkway in Te Kopahou Reserve as per the South Coast Management Plan. We also maintained the Oriental Bay beaches and completed two sand shifts.

We secured the future of the Town Belt. We prepared and consulted on the draft Wellington Town Belt Bill and finalised the Wellington Town Belt Management Plan, which includes principles for working in partnership with mana whenua and protecting the Town Belt for future generations. We planted more than 50,000 eco-sourced native trees. This included restoration planting, enhancement planting within existing reserves and riparian planting to improve water quality in the Porirua Harbour.

We support community environmental initiatives. We distributed more than 32,000 native eco-sourced plants to environmental community groups and residents for planting. We continued working with Victoria University students on environmental research initiatives, and we had four summer scholars working on environmental projects.

We renewed the city’s walkways. We completed walkway renewals of the Piwakawaka Track in Odell Reserve, Mt Albert/Melrose Southern Walkway and Makara Peak Mountain Bike Park.

We protected Wellington’s biodiversity. We completed the third year of the south-west peninsula goat control project, which has resulted in a significant reduction in goats in the control area and good vegetation recovery. We have enhanced our pest plant programme in 36 key native ecosystems across the city. We continued controlling high priority weeds in the Town Belt.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.1.1 
Local Parks and Open Spaces

Expenditure
8,439
8,113
(326)
7,694

Revenue
(863)
(454)
409
(531)

Net Expenditure
7,576
7,659
83
7,163

2.1.2 
Botanical Gardens

Expenditure
4,715
4,790
75
4,510

Revenue
(364)
(408)
(44)
(379)

Net Expenditure
4,351
4,382
31
4,131

2.1.3 
Beaches and Coast Operations

Expenditure
964
1,029
65
1,020

Revenue
(50)
(51)
(1)
(51)

Net Expenditure
914
978
64
969

2.1.4 
Roads open spaces¹

Expenditure
9,132
8,602
(530)
10,070

Revenue
(553)
(633)
(80)
(694)

Net Expenditure
8,579
7,969
(610)
9,376

2.1.5 
Town belts²

Expenditure
4,783
4,420
(363)
5,070

Revenue
(1,276)
(209)
1,067
(422)

Net Expenditure
3,507
4,211
704
4,648

2.1.6 
Community environmental initiatives

Expenditure
456
436
(20)
389

Revenue
(9)
-
9
(24)

Net Expenditure
447
436
(11)
365

2.1.7 
Walkways

Expenditure
525
523
(2)
505

Revenue
-
-
-
-

Net Expenditure
525
523
(2)
505

2.1.8 
Biodiversity (pest management)³

Expenditure
1,397
1,097
(300)
1,123

Revenue
(133)
-
133
(65)

Net Expenditure
1,264
1,097
(167)
1,058

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.1.1 
Local Parks and Open Spaces⁴

Expenditure
1,939
1,987
48
894

Unspent portion
of budget to be
carried forward
n/a
220

n/a

2.1.2 
Botanical Gardens⁵

Expenditure
661
886
225
1,065

Unspent portion
of budget to be
carried forward
n/a
-

n/a

2.1.3 
Beaches and Coast Operations

Expenditure
147
192
45
116

Unspent portion
of budget to be
carried forward

-

2.1.5 
Town belts

Expenditure
113
113
-
155

Unspent portion
of budget to be
carried forward
n/a
-

n/a

2.1.7
Walkways

Expenditure
158
158
-
441

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Over budget due to additional storm event clean-up costs and a one-off cost relating to the recalibration of street cleaning to ensure the acceptable standard of cleanliness was maintained.

Under budget due to assets, which have been vested to Council. The value of these assets is reflected as income.

Over budget due to increased staff and contract expenditure.

Under budget mainly due to delays in the programme funded by the Plimmer Bequest including work on Watts Peninsula and planning for the Children’s Garden.

Under budget due to delays in the reconfiguring of the Curators House at Otari Wilton’s Bush.

How we performed

This activity offers good value-for-money, is highly used by residents and is maintained to a high standard.

We measure the standard of the open spaces we provide

Residents (%) who agree that green open spaces, gardens and beaches provide good value for money

Result: 77% (target: 90%; 2012/13: 80%).

Source: Residents Monitoring Survey 2014

We maintain roadside vegetation to enable free and safe traffic movement. Sometimes, people ask us to remove vegetation for other reasons, which we often will not do. Some of the dissatisfaction with this service may result from this tension between our policies and people’s expectations.

We measure the use of the open spaces we provide

Number of visitors to the Botanic Garden

Result: 1,542,535 (target: 1,200,000; 2012/13: 1,141,398).

Source: Botanic Garden

We measure the standard of our street cleaning service 1

We measure our efforts to protect and enhance biodiversity and native species health

Total number of native plantings undertaken by WCC

Result: 50,712 (target: 45,000; 2012/13: 41,155).

Source: WCC Parks, Sport and Recreation

Total number of native plants provided by WCC for community planting

Result: 32,378 (target: 32,000; 2012/13: 32,162).

Source: WCC Parks, Sport and Recreation

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

Result: 52% (target: 60%; 2012/13: 52%).

We did not achieve the target because we implemented a new contract model for delivering this service which has not yet run for a full year.

Source: WCC Parks, Sport and Recreation

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

Result: 97% (target: 95%; 2012/13: 100%).

Source: WCC Community Networks

2.2

Waste reduction and energy conservation

Whakaiti para, hangarua me te pena pūnga

Sustainability is about meeting our needs now without burdening future generations.  

What we do

A sustainable city uses resources efficiently, re-uses or recycles them, and only commits them to landfills as a last resort. Sustainability is about reducing the amount of energy we use and using clean energy from renewable sources. It is also about promoting a culture that values the environment and encourages pro-environment behaviour of everyone who lives, works, or studies here. Our activities include:

energy efficiency and conservation

closed landfill aftercare

waste minimisation, disposal and recycling.

What we achieved

We helped improve housing warmth and sustainability. We funded the Sustainability Trust to deliver the Warm Up Wellington project, which provided insulation retrofits to 250 low-income homes in Wellington. We delivered the Home Energy Saver Programme, which provided free home sustainability assessments to close to 400 households. We completed a national field trial for a rental housing warrant of fitness scheme.

We delivered the Smart Energy Capital programme. We provided $291,000 and leveraged another $725,000 from our partners for the Smart Energy Capital programme by:

partnering with Genesis Energy to deliver the SchoolGen Project, which provided solar energy installations and related education programmes in 10 Wellington schools

delivering the Smart Energy Challenge, which helped community energy projects to source crowd-funding

initiating energy efficiency projects in the commercial building sector and solar energy financing for Wellington households.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.2.1 
Waste minimisation, disposal and recycling management¹

Expenditure
11,292
12,365
1,073
10,711

Revenue
(12,195)
(12,393)
(198)
(12,079)

Net Expenditure
(903)
(28)
875
(1,368)

2.2.2 
Closed landfills aftercare²

Expenditure
(289)
477
766
(728)

Revenue
-
-
-
-

Net Expenditure
(289)
477
766
(728)

2.2.3 
Energy efficiency and conservation

Expenditure
-
-
-
-

Revenue
-
-
-
-

Net Expenditure
-
-
-
-

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.2.1 
Waste minimisation, disposal and recycling management³

Expenditure
339
1,987
1,648
488

Unspent portion 
of budget to be 
carried forward
n/a
-
-
n/a

2.2.2 
Closed landfills aftercare

Expenditure
-
-
-
-

2.2.3 
Energy efficiency and conservation

Expenditure
19
19
-
44

Unspent portion 
of budget to be 
carried forward
n/a
-
-
n/a

Under budget due to lower expenditure for landfill operations, refuse collection and depreciation. Higher than budgeted volumes of rubbish bag sales were also achieved during the year.

Under budget due to a reduction in the closed landfill provision at 30 June 2014.

Under budget due to delays in the Stage 4 landfill extension as a result of a protracted resource consent process.

How we performed

The services in this activity are well-used by residents and we have improved the efficiency of our waste disposal service. Council’s energy consumption was slightly higher than the previous year but we have successfully reduced our environmental footprint.

We measure how well we provide and encourage the use of recycling services to divert valuable material from the waste stream.

We have been discouraging people from disposing of general rubbish without paying for Council rubbish bags or a commercial service. This is particularly prevalent in the central city. Our work included investigations and prosecutions, which may have contributed to this result.

Diverted material includes kerbside recycling and inflows of soils that are able to be diverted. The decrease in diverted material is because, in previous years, we diverted large quantities of contaminated soil from construction projects to remediate closed sections of the landfill.

This year, 60% of residents used kerbside recycling weekly and another 32% used it fortnightly. Performance is not an issue although we will review the measure for future years.

The low result is from contaminated recycling not being collected. In these situations we leave information for the homeowner informing them what to include and exclude from their recycling.

We measure how efficiently we dispose of waste and its impact on the environment

Energy sourced from the Southern Landfill

Result: 7.0GWh (target: 8GWh; 2012/13: 5.2GWh; 2011/12: 8.3GWh; 2010/11: 7.4GWh).

Source: Nova Energy

Residents’ (%) agreement that waste management services provide good value for money

Result: 80% (target: 85%; 2011/12: 78%).

Source: Residents Monitoring Survey 2014

We measure energy use at Council sites

WCC corporate energy use (electricity and natural gas)
Properties | Target | Result | Explanation
WCC general (now includes all gas and large electricity sites) | Decrease from previous year (18,344,189 kwh) | 18,454,850 kwh | Gas use was higher than intended due to boiler control problems at the Civic buildings.
WCC Pools and recreation facilities | Decrease from previous year (17,887,367 kwh) | 18,446,633 kwh | The increase is because Tawa and Karori pools were both closed for part of the previous year, which made 2012/13 energy use lower than normal. We also added a new small learner pool at Karori pool and a hydrotherapy pool at Wellington Regional Aquatic Centre.
Main CCOs | Decrease from previous year (9,963,836 kwh) | 9,866,969 kwh  |

Source: WCC Energy Management

We measure the reduction of the Council’s environmental footprint

The table above compares emissions from diesel, petrol, electricity, gas, LPG, flights and the Southern Landfill. This is not the Council’s full corporate greenhouse gas inventory but rather a comparison of emissions sources over time.

We did not have our corporate greenhouse gas emissions independently audited or certified in 2013/14 as planned. We decided to compile city and regional level greenhouse gas inventory information instead. This information can be found on our website.

Number of carbon credits generated from Council reserves per annum

Result: 30,913 (target: 5,000).

Source: New Zealand Emission Unit Register account

During the year, the Council received 30,913 units as part of its annual allocation of units for post-1989 forests placed either in the Emissions Trading Scheme or the Permanent Forest Sink Initiative.

2.3

Water

Wai

Clean, safe water is essential for residents’ quality of life and wellbeing.  

What we do

These services are delivered by Capacity Infrastructure Services. Activities include:

water network

water collection and treatment.

What we achieved

We upgraded the network and improved resilience. We continued upgrading the water main network to meet new firefighting standards. We installed new emergency water tanks in Seatoun, Brooklyn, Island Bay, Berhampore, Te Aro, Crofton Downs, Churton Park, Johnsonville and Karori West. Seismic upgrading of the Maupuia reservoirs and Maldive No. 2 reservoir commenced to improve the resilience of the water supply network and we decommissioned unused reservoirs in Khandallah, Karori, Karaka Bay, Woodridge, Mt Cook and Northland.

We welcomed new shareholders to Capacity. This year, Porirua City and Upper Hutt City Council’s joined Hutt and Wellington City Councils as shareholders in Capacity Infrastructure Services Ltd.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.3.1 
Water Network¹

Expenditure
24,260
24,517
257
24,272

Revenue
(1,151)
(33)
1,118
(1,558)

Net Expenditure
23,109
24,484
1,375
22,714

2.3.2 
Water Collection and Treatment²

Expenditure
13,804
14,216
412
13,396

Revenue
(3)
-
3
(4)

Net Expenditure
13,801
14,216
415
13,392

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.3.1 
Water Network³

Expenditure
10,984
11,867
883
12,170

Unspent portion
of budget to be
carried forward
n/a
710

n/a

Under budget due to assets, which have been vested to Council. The value of these assets is reflected as income. Also interest expenditure is less than budgeted.

Under budget due to lower bulk water charges from GWRC.

Under budget due to the Hospital Prince of Wales reservoir project being put on hold as other options are investigated and delays to several renewal projects.

How we performed

Our water supply is of a very high quality and outages are rare. We see a pattern of improved water conservation. While perceptions of value for money have declined slightly, only 5% of residents believe that the service does not provide value for money.

We measure the quality of water supplied to residents

Compliance with Drinking Water Standards for New Zealand 2005

Compliance was achieved with the NZ Drinking Water Standards for all of the city’s water grading zones.

Source: Capacity Infrastructure Services Ltd

Residents’ (%) agreement that water services provide good value for money

Result: 77% (target: 90%; 2012/13: 81%).

Source: Residents Monitoring Survey 2014

Customer complaints regarding water quality (taste and odour)

Result: 196 complaints (target: fewer than 200; 2012/13: 165; 2011/12: 202; 2010/11: 289).

Source: Capacity Infrastructure Services Ltd

We measure the performance of services that ensure security of supply

Water pressure

Result: 96% of properties had appropriate water pressure, i.e. minimum 250kPa (target 97%; 2012/13: 96%; 2011/12: 96%; 2010/11: 96%).

Source: Capacity Infrastructure Services Ltd

Fire hydrants

Result: 99% of fire hydrants tested met New Zealand Fire Service Code of Practice for firefighting water supply requirements (target: 95%; 2012/13: 100%; 2011/12: 100%).

Source: Capacity Infrastructure Services Ltd

Water distribution network – quality grading

Result: all parts of the network retained the grading of ‘a’ to ‘b’ in the Ministry of Health quality grading (target: ‘a’ to ‘b’ grading).

Source: Capacity Infrastructure Services Ltd

An ‘a’ grading refers to assets that are completely satisfactory with negligible or very low levels of risk.

A ‘b’ grading refers to assets that are satisfactory with very low levels of risk.

A ‘c’ grading refers to assets that are marginally satisfactory with moderate-low risk.

In 2008, the Ministry of Health graded the entire network. Annually, they ensure this grading has been retained by reviewing the Council’s replacement and/or maintenance of water pipes.

Unaccounted for water (UFW) is mainly water lost through leaks in the public and private network. It also covers water used in fire-fighting and unmetered council use. Since 2006/07, UFW has fallen from 21% to 11%, contributing to an overall reduction in the amount of water Wellington uses.

Residential water consumption (per person per day)

Result: 264 litres per person per day (target: 290 litres per person per day; 2012/13: 288; 2011/12: 282; 2010/11: 297).

Source: Capacity Infrastructures Services Ltd

Total city water consumption during the year

Result: 26.4 billion litres (target: less than 30 billion litres; 2012/13: 26.6 billion litres; 2010/11: 28.4 billion litres).

Source: Capacity Infrastructures Services Ltd

2.4

Wastewater

Parawai

Maintaining public health and safety and having clean waterways is essential to the city’s environmental wellbeing.  

What we do

These services are delivered by Capacity Infrastructure Services. Activities include:

sewage collection and disposal

sewage treatment.

What we achieved

We renewed the network and improved resilience

Wastewater network renewals were completed at 18 locations throughout the city with a strong focus on Miramar where seven renewals were completed. Three wastewater pump stations were upgraded to ensure they meet performance expectations into the future.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.4.1 
Sewage collection and disposal network¹

Expenditure
17,886
18,167
281
17,277

Revenue
(1,859)
(571)
1,288
(1,892)

Net Expenditure
16,027
17,596
1,569
15,385

2.4.2 
Sewage treatment²

Expenditure
21,683
22,309
626
21,877

Revenue
(1,041)
(639)
402
(378)

Net Expenditure
20,642
21,670
1,028
21,499

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.4.1 
Sewage collection and disposal network³

Expenditure
7,924
8,242
318
6,882

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Under budget due to assets, which have been vested to Council. The value of these assets is reflected as income.

Under budget due to lower wastewater treatment plant costs for electricity and lower diversion of sludge to the landfill.

Under budget due to savings in several renewal projects and delays in the transition from analogue to digital telemetry programme.

How we performed

Our wastewater network is of a high quality and satisfaction with the service is very high. Although resident perceptions of value for money have declined, only 5% disagree that the service provides value for money. Our sewerage network is fully compliant with its resource consent but we have had some issues with contamination of freshwater, which we need to address.

We measure the standard of the wastewater service

Response time to service requests (%) within one hour of notification

Result: 95% of requests were responded to within one hour of notification (target: 95%; 2012/13: 67%).

Source: Capacity Infrastructure Services Ltd

Residents (%) who agree wastewater services provide good value for money

Result: 73% (target: 75%; 2012/13: 79%).

Source: Residents Monitoring Survey 2014

We measure the impact of wastewater on the environment

Decreasing water quality is due to pollutants running off roads and wastewater infiltration into the stormwater network. We have completed work to detect and repair infiltration issues in Miramar and work is underway in Island Bay. Investigations are continuing in Ngauranga, Karori and Kaiwharawhara to identify pollution sources and to improve water quality. To date, no pollution sources have been identified.

Sewage network – resource consent compliance

Result: 100% compliance (target: 100% compliance; 2012/13: 100%; 2011/12: 100%).

Source: Capacity Infrastructure Services Ltd

2.5

Stormwater

Wai-ua

The stormwater network keeps people and property safe from flooding.  

What we do

The stormwater network is managed by Capacity Infrastructure Services.

What we achieved

We upgraded the stormwater network. Stormwater drains were upgraded at five locations throughout the city. The Davis Street culvert was strengthened as it is on the Wellington oversize vehicles route. Work began on stage 2 of the Tasman Street stormwater upgrade project tunnelling under the Massey University campus.

We submitted the integrated catchment management plan (stage 1) to Greater Wellington Regional Council (GWRC) in accordance with the conditions of the resource consent for stormwater discharge to the Coastal Marine Area.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.5.1 
Stormwater management¹

Expenditure
17,503
18,138
635
17,490

Revenue
(1,852)
(49)
1,803
(3,655)

Net Expenditure
15,651
18,089
2,438
13,835

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.5.1 
Stormwater management²

Expenditure
4,193
5,220
1,027
2,564

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Under budget due to assets, which have been vested to Council. The value of these assets is reflected as income. Also insurance and interest expenditure was lower than budgeted.

Under budget due to delays in several projects in the stormwater renewal programme, including Tasman Street, Main Road Tawa and Kent Terrace, where work will continue in 2014/15.

How we performed

Overall performance is at a high level. Negative impacts from the network were localised and typically caused by cross-contamination as a result of storms.

We measure the standard of the stormwater service

Residents (%) who agree stormwater services provide good value for money

Result: 69% (target: 75%; 2012/13: 69%).

Source: Residents Monitoring Survey 2014

Response time to service requests (%) within one hour of notification

Result: 98% (target: 95%; 2012/13: 77%).

Source: Capacity Infrastructure Services Ltd

Number of buildings reported to have been flooded as a result of a less than 1-in-50-year rain event

Result: 5 properties flooded (target: 0; 2012/13: 49).

Source: Capacity Infrastructure Services Ltd

Flooding occurred in September and November 2013. Three of the flooding incidents were as a result of blocked sumps.

We understand the impact of stormwater on the environment

Seawater samples are collected and analysed for Enterococci bacteria, in accordance with GWRC and the Ministry for the Environment requirements. Samples collected within 48 hours of a heavy rain event can read high due to contaminants entering the stormwater network. This year, no beaches were closed for swimming during the summer. We are now starting stage two of a project developing management plans for Wellington catchments.

Stormwater resource consent compliance (includes the monitoring of overflows, stormwater outfall discharge and coastal water quality)

Stormwater resource consent compliance has been achieved.

Source: Capacity Infrastructure Services Ltd

2.6

Conservation attractions

Ngā painga kukume Papa Atawha

Nature is one of Wellington’s biggest attractions.  

What we do

We support the Wellington Zoo and Zealandia. These facilities play important conservation roles, protecting native and exotic flora and fauna. They inform and educate, attract visitors, and their existence creates economic incentives for the city’s environment to be protected and enhanced. Our activities include:

Wellington Zoo

Zealandia

(see also botanic gardens)

What we achieved

Wellington Zoo opened new attractions and treated native animals. Our walk-through Australian precinct, Neighbours, was officially opened at the end of September by Mayor Celia Wade-Brown and Australian High Commissioner Michael Potts. Nearly 500 native animals were treated at The Nest Te Kōhanga. They were brought in from the SPCA, the Department of Conservation (DOC), Zealandia and local members of the community. This shows the growing recognition of The Nest Te Kōhanga as a centre for native wildlife care.

We supported Zealandia and secured its future. This year, admission revenue was 8% above budget, paid visitor numbers increased by 19%, total membership numbers increased by 10% and the number of new members increase by 40%. Zealandia’s international reputation is growing. We had visitors from Canada, Korea, Australia, United Kingdom and the United States who work in the urban environment space, and see Zealandia as a world-leading working model.

Our conservation attractions won awards. The Zoo’s reptile and invertebrate house Hero HQ won the best Small Exhibit from a Large Organisation Award at the Zoo Aquarium Association Conference this year. The Zoo also won the Sustainable 60 Marketplace Award for excellence in sustainable initiatives. Zealandia has been voted Best Local Operator 2014 by the Viator Travel Awards, in recognition of a year of 5-star customer ratings.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.6.1 
Conservation visitor attractions

Expenditure
5,962
5,779
(183)
5,354

Revenue
-
-
-
-

Net Expenditure
5,962
5,779
(183)
5,354

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

2.6.1 
Conservation visitor attractions¹

Expenditure
1,203
1,203
-
2,144

Unspent portion
of budget to be
carried forward
n/a
1,866
-
n/a

Under budget due to delays in the ‘Meet the Locals’ project at the Zoo.

How we performed

We were above target for visitor attendance with a substantial visitor increase at Zealandia. We didn’t achieve our target for education programme attendees, although we had a significant improvement from last year.

We measure the success of our investments in promoting the city

Zealandia – education programme attendees

Result: 8,048 (target: 8,445; 2012/13: 7,645; 2011/12: 6,556; 2010/11: 7,068).

Source: Zealandia

1 We include this measure in this activity because street cleaning affects water quality in the harbour and city waterways.

Economic development

Whanaketanga ōhanga

Wellington is at a crossroads

A prosperous local economy is central to the city’s wellbeing. In the recent past, the economy has relied on two things to sustain its growth: expansion of the public sector; and an arts, culture and events scene that makes the city vibrant and attracts visitors. Those sectors have served us well. They have brought jobs and prosperity, a high quality of life, and a strong sense of city identity. They have also allowed us to remain resilient in spite of external events such as the global economic recession and the economic uncertainties following the Canterbury earthquakes.

But they cannot, on their own, deliver sustained economic success.

If we were to continue as we had, our economy would start to fall behind as other cities surpass us in technology and innovation, and adapt to a more competitive environment. We needed to act, and did, putting in place a vision of the city as a smart capital.

Wellington’s economy is transitioning

It is built around knowledge, creativity, and services. Wellington’s workforce is highly educated and the most tech-savvy in the country.

The city has the highest concentration of web and digital companies in the country, and the largest employer is now the professional, scientific and technical services sector.

These sectors of the economy rely on talented and knowledgeable workforces. As a result, average incomes and average GDP per person are significantly higher in Wellington than the national average.

Now we need to invest in projects and relationships

We have to generate more revenue if we want to invest more in Wellington’s amenities. If we invest wisely in projects that deliver a return, we will grow the business rate base and create opportunities for new and exciting city projects.

This year we’ve been developing a growth agenda to catalyse the city. The focus includes:

film and screen sector, possibly a film precinct

tech precinct in the CBD

science and tertiary sector, with a focus on commercialising R&D opportunities

facilities and events, such as a convention centre and possibly a film museum, a war and peace museum and an indoor arena

infrastructure, especially improving the transport network and extending the airport runway to make direct flights between Wellington and the United States and Asia possible.

The Council’s financial position is strong – we have an AA credit rating and relatively low debt – and we have the opportunity and the resources to do more if we choose.

We’ve made a good start creating the conditions for growth

This year we:

agreed to partner with the private sector to build a new convention centre

established a $3 million a year fund to support events, initiatives and growth opportunities

made significant progress with our proposal to merge the region’s economic CCOs into one agency

agreed to contribute $1 million to the process to extend the airport runway

promoted Wellington internationally as a destination for business, talent and investment

helped establish Business Improvement Districts

hosted WOW, the New Zealand Festival and many sports and cultural events.

Our economic development activities contribute to us being:

People centred: Our activities make Wellington a vibrant and entertaining place to live. They connect people with places and ideas, make Wellington an attractive place to live and do business, and attract tens of thousands of visitors to the city every year.

Connected: Major events, and our performance spaces and conference venues connect us to artists and events of national and international significance, and Wellington’s story is connected to the world by Positively Wellington Tourism’s marketing and promotion. Event-based websites and social media platforms are connecting people to what is on and how they can be there.

A dynamic central city: Our events, festivals, spaces and venues anchor Wellington’s appeal as a place of creativity, exploration, innovation and excitement. Iconic events such as the World of WearableArt® awards show (WOW), the New Zealand Festival and the International Rugby Sevens are world class and an integral part of our dynamic central city.

3.1

City promotions and business support

Ngā whakatairanga tāone me ngā āwhina pakihi

By supporting city promotions and major events, we underscore Wellington’s reputation as a great place to live and visit.  

What we do

Wellington’s economic prosperity is closely linked to residents’ quality of life. Prosperity provides the resources for businesses, the Council and individuals to contribute to the vibrancy of the city and invest in its future development.

Our promotions and business support activities are closely linked to Grow Wellington’s work. Working with other institutions in the region ensures that we use our resources effectively. Our activities include:

tourism promotions (Positively Wellington Tourism)

events attraction and support

convention venues (Positively Wellington Venues)

retail support (free weekend parking)

regional and external relations

grants and creative workforce

Destination Wellington.

What we achieved

We helped establish Business Improvement Districts (BIDS), which are a great way to boost local economies through businesses pooling funds for projects and improvements that complement existing Council services. This year, we helped with the establishment of a BID in Miramar and we are also in the early stages of establishing a possible Khandallah BID.

We developed our international relationships to grow business. In May 2014, the Mayor led a delegation of 30 organisations to China and Japan. The organisations included Gibson Group, Victoria University, ANZ Bank, Computer Power Plus, Carrickmore, The Formary, NZ Post, WelTec, Wellington International Airport Ltd and ACG Yoobee School of Design. Several local secondary schools were also represented in the delegation, which had a significant focus on education.

We funded proposals to create economic growth through the Wellington Economic Initiative Development (WEID) fund, which supports events, initiatives and partnership opportunities. This year was the first year of operation of the fund. The projects we supported included the development of an Innovation Festival for Wellington, a contribution to the Football United Tour in partnership with Welnix, and business start-up and attraction activities.

Destination Wellington attracted business, talent and investment to the region. This is a collaboration between the Council, Positively Wellington Tourism and Grow Wellington that aims to attract business, talent, investment and students to the region.

Our business attraction work included a presence at the South by Southwest event in Austin, Texas, running the AnimFX conference, attending the Game Developers Conference in San Francisco and exhibiting at the CeBIT Technology Event in Sydney.

Through Education Wellington we promoted Wellington at student fairs in South East Asia, China and Japan, led delegations to China, Japan, Vietnam and Indonesia, and hosted delegations from Japan and China.

We attracted screen projects worth more than $10 million through Film Wellington. Highlights include the Gibson Group television drama series War News, the third season of KHF Media’s successful series Girl vs Boy and commercial shoots for companies such as Honda, Whittaker’s and Z Energy.

We developed the high-tech capital website and supporting material to showcase and help strengthen the region’s tech sector and attract business, talent and investment to Wellington. We also re-launched the WellingtonNZ.com website as single platform for business, talent and student attraction as well as visitor attraction.

We supported arts and cultural events that contributed to Wellington’s economy and created jobs. WOW was once again a success with all performances selling out and more than 33,000 people from out of town attending the event. WOW makes a huge economic contribution to Wellington with the last economic impact study estimating economic value of $22.6 million. It also brings jobs to the city in the creative sector. The biannual New Zealand Festival was also held. This is the country’s premier arts festival and it delivered a programme of world-class dance and opera companies, performers, singers, visual artists and theatre groups, which attracted large numbers of people from outside the region to Wellington.

We hosted historic sporting events. It was a summer of cricket with three internationals: T20 NZ v West Indies; ODI; and the test matches between New Zealand and India, with the crowd at the Basin Reserve witnessing Brendon McCullum become the first New Zealander to score a triple century in a test match. We also hosted the FIFA World Cup 2014 Intercontinental Playoff match between the All Whites and Mexico, which was watched by a near capacity crowd of 33,000.

And we won the rights to host future events. Our bids to be a host city for the FIFA U20 World Cup 2015 and the ICC Cricket World Cup 2015 were successful. We won the right to host a quarter final for the Cricket World Cup ahead of major Australian cities. These events will bring significant visitation and international broadcast exposure to the city in 2015.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

3.1.1 
Tourism Promotion

Expenditure
5,676
5,600
(76)
5,740

Revenue
-
-
-
-

Net Expenditure
5,676
5,600
(76)
5,740

3.1.2 
Convention venues¹

Expenditure
25,201
3,993
(21,208)
17,952

Revenue
(21,936)
(186)
21,750
(14,659)

Net Expenditure
3,265
3,807
542
3,293

3.1.3 
Retail support (free weekend parking)

Expenditure
1,327
1,327
-
1,281

Revenue
-
-
-
-

Net Expenditure
1,327
1,327
-
1,281

3.1.4 
Grants and creative workforce²

Expenditure
1,201
1,502
301
1,512

Revenue
-
-
-
(40)

Net Expenditure
1,201
1,502
301
1,472

3.1.5 
Events attraction and support³

Expenditure
4,231
3,752
(479)
4,923

Revenue
(193)
-
193
(96)

Net Expenditure
4,038
3,752
(286)
4,827

3.1.6 
Regional and external relations⁴

Expenditure
2,664
1,006
(1,658)
643

Revenue
(8)
-
8
(40)

Net Expenditure
2,656
1,006
(1,650)
603

3.1.7 
Destination Wellington

Expenditure
1,843
1,900
57
982

Revenue
-
-
-
-

Net Expenditure
1,843
1,900
57
982

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

3.1.2 
Convention venues⁵

Expenditure
3,551
3,816
265
3,313

Unspent portion
of budget to be
carried forward
n/a
480
-
n/a

Under budget due to Wellington Venues Limited achieving an operating surplus.

Under budget due to lower than planned expenditure on marketing activities

Over budget due to the unbudgeted All Whites World Cup qualifier and earlier than budgeted FIFA U20 World Cup expenditure.

Over budget due to investments in economic projects, which were funded via the WEID fund. A total of $3m for WEID was approved by Council after the 2013/14 Annual Plan was finalised and was to be funded out of the 2012/13 audited operating surplus.

Under budget due to delays in renewal works on Positively Wellington Venues facilities.

How we performed

Our investments in economic development have been very successful. We had more people attending events, more visitors coming to Wellington and more money being injected into the local economy.

We measure the success of our investments in promoting the city

International visitors – guest nights

International visitor room nights increased to 686,692 in the year to April 2014, an increase of 2.8%. (target: increase international visitor nights by 1% from 2012/13; 2012/13: 667,760).

Source: Positively Wellington Tourism

Average length of stay – international and domestic visitors

Result: 2.04 nights (target: 2 nights; 2012/13: 2.04; 2011/12: 2.05).

Source: Statistics New Zealand

New Zealand market visitors

Domestic visitor room nights increased by 1.7% to 1,396,402 for the year to April 2014 (target: increase by 2% on previous year; 2012/13: 1,373,613).

Source: Positively Wellington Tourism

Positively Wellington Tourism – partnership funding

The Council’s funding amounted to 50% of total income (target: maintain the Council’s funding at less than 50% of total income; 2012/13: 49%; 2011/12: 48%).

Source: Positively Wellington Tourism

There is no target for this measure.

We understand the reach of events and promotion activities

Wellington venues occupancy

Result: 1,115 hire days (target: increase from previous year; 2012/13: 953).

Source: Positively Wellington Venues

Estimated attendance at WCC supported events

Result: 670,368 (target: 400,000; 2011/12: 549,128).

Source: WCC City Events

This result is above target because some major events were not included in the target. These included the All Whites World Cup qualifier and the Bledisloe Cup match.

We measure the success of our investments in economic development

Residents’ satisfaction (%) with WCC supported events and festivals

Result: 86% (target 95%; 2012/13: 90%).

Source: Residents Monitoring Survey 2014

Events Development Fund – ratio of spend to economic impact

Economic benefits outweighed costs by a ratio of 23:1. (target 20:1; 2012/13: 24:1).

Source: WCC City Events

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

Result: n/a (target 95%; 2012/13: 100%).

Source: WCC Community Networks

Three grants were funded during 2013/14 but none of the projects are due to report back until 2014/15.

We measure the standard of parking provision

Cultural wellbeing

Oranga ahurea

200,000 stories and counting…

Though Wellington is a relatively young city, it is filled with stories – from its history, from the many people and cultures who have settled here, and from Wellingtonians’ immense creativity.

For all Wellingtonians, those stories contribute to our sense of identity and belonging – our whakapapa, providing a basis for individual expression and community strength. They tell us what we all have in common, and what makes us unique – our distinct languages, art forms and histories, each of which adds life to the city.

They give us a sense of continuity, reminding us where we have come from, and a sense of confidence as we look to the future.

As individuals, communities, and as a city, we seek to keep those stories alive. We do this in many ways – through performance and festivals, through artworks, through the city’s heritage, and through our public conversations.

Wellington is renowned for its creativity and expression, as well as pride in who we are. But we can do more.

Cities are becoming increasingly diverse

People have higher expectations of places in an increasingly globalised world. They have greater awareness and expectations of what cities have to offer and what makes places distinctive. People are making more deliberate choices about where to live and where to visit.

But Wellington has an advantage

Wellington has a head start. Wellingtonians are already open, friendly and welcoming. We embrace and celebrate diversity. We are a compact, cosmopolitan city that is full of arts and events – there is always something to do. This is widely recognised:

This year a majority of New Zealanders agreed that Wellington is the arts capital and over 80% of New Zealanders agreed that Wellington has a culturally rich and diverse arts scene.

Our status as the country’s Events Capital was confirmed – with six awards, out of ten on offer, at the 2014 New Zealand Association of Event Professionals Event Awards.

Almost 90% of residents engaged in cultural activities at least once this year, and more than 80% agreed that Wellington is an easy place to get involved in the arts.

We’re supporting Wellington’s diverse arts and culture

While we are in a good position, other cities are investing heavily in their events. We need to make sure that we secure our position. There are opportunities to refresh our offerings and consider new attractions to draw in more tourists and get them to stay longer.

This year we:

supported arts and cultural festivals including the New Zealand Festival, Matariki, Diwali festival, Sky Show and Summer City

supported public art projects including light box exhibitions in Cobblestone Park and Courtenay Place

supported regional projects through the Wellington Regional Amenities Fund, such as BATS and Circa theatres and the Capital E Arts Festival for Children.

Our cultural wellbeing activities contribute to us being:

People centred: They shape Wellington’s sense of place and identity. They celebrate creativity and ideas and increase our understanding of culture and history. By enabling Wellington’s creative communities to thrive, they promote inclusive, tolerant and strong communities.

Connected: They provide ideas and places where people can connect, share and explore what is new and different. They connect the present with the past and future. Events and collaborations connect us with people, places and ideas here and abroad.

A dynamic central city: They enhance Wellington’s vibrancy as a diverse city where people want to live, work and play.

4.1

Arts and cultural activities

Ngā mahi toi me ngā ngohe ahure

Supporting arts activity adds vibrancy to the city as well as promoting inclusive and strong communities.  

What we do

Our arts activities ensure Wellington builds on its reputation as New Zealand’s arts and culture capital by continuing to be home to top-class museums and art galleries, orchestras, dance and theatre companies. A strong arts and culture sector contributes to a diverse economy, a creative identity and connected communities, which is why we live here. Our activities include:

galleries and museums

visitor attractions (Te Papa and Carter Observatory)

arts and cultural festivals

cultural grants

access and support for community arts

arts partnerships

regional amenities.

What we achieved

We purchased artworks and supported art projects. We supported many public arts projects including light box exhibitions in Cobblestone Park and Couretnay Place. We also completed several significant mural projects, some of which were in partnership with schools or artist-led. More than 8,000 young people participated in the 26th Artsplash Children’s Arts Festival. We also supported 22 projects through the Arts and Culture Fund. We purchased 14 artworks for the City Art Collection and we also undertook conservation work on the collection.

The Diwali Festival of Lights received record audience numbers and was welcomed to TSB Arena with an Indian flash mob performance. The programme included local and international performers. This year’s festival received recognition as a cultural festival of national significance, featuring in the TV3 documentary The Festival.

Summer City was extremely popular, with over 90 events held. Highlights included Gardens Magic, the new Kids Magic in the Gardens, Films by Starlight, Island Bay Festival, Bowl-a-rama Skate Festival, Chinese New Year Festival, NZCT Dragon Boat Festival, the Newtown Festival, the Great Scavenger Hunt, Culture Kicks, the Fringe Festival, and Out in the Square.

Our continuing support ensured the success of other events. The 19th annual Sky Show attracted over 100,000 people to watch New Zealand’s largest display. We delivered the ever popular Santa Parade where 60,000 people lined the streets of Wellington. Many continued on to Santa’s After Party in Frank Kitts Park and the early evening Carols by Candlelight show. We had a renewed focus on cultural festivals including the Pasifika Festival and Waitangi Day celebrations. Both these significant cultural events in the calendar received tremendous support by our event partners and the wider community.

We supported the Wellington Asia Residency Exchange. The exchange is a partnership with the Asia NZ Foundation. This year, renowned Chinese artist Li Xiaofei exhibited at Toi Pōneke and Wellington-based artist John Lake went to Beijing.

We supported regional projects through the Wellington Regional Amenities Fund. This year, $880,000 was granted to 11 projects, including work at BATS and Circa theatres as well as the Capital E Arts Festival for Children.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

4.1.1 
City Galleries and Museums

Expenditure
8,299
8,317
18
8,339

Revenue
-
-
-
-

Net Expenditure
8,299
8,317
18
8,339

4.1.2 
Visitor attractions (Te Papa/Carter Observatory)

Expenditure
3,021
3,025
4
3,023

Revenue
-
-
-
-

Net Expenditure
3,021
3,025
4
3,023

4.1.3 
Arts and cultural festivals

Expenditure
2,131
2,112
(19)
2,488

Revenue
(263)
(410)
(147)
(310)

Net Expenditure
1,868
1,702
(166)
2,178

4.1.4 
Cultural grants

Expenditure
1,019
1,019
-
853

Revenue
-
-
-
-

Net Expenditure
1,019
1,019
-
853

4.1.5 
Access and support for community arts

Expenditure
525
509
(16)
662

Revenue
(92)
(68)
24
(79)

Net Expenditure
433
441
8
583

4.1.6 
Arts partnerships

Expenditure
1,655
1,770
115
1,930

Revenue
(509)
(535)
(26)
(694)

Net Expenditure
1,146
1,235
89
1,236

4.1.7 
Regional Amenities Fund

Expenditure
661
609
(52)
643

Revenue
(69)
-
69
(32)

Net Expenditure
592
609
17
611

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

4.1.5 
Access and support for community arts¹

Expenditure
-
26
26
10

Unspent portion
of budget to be
carried forward
n/a
-

n/a

No arts installation projects in 2013/14 requiring capital funding.

How we performed

The number of people attending festivals and events was high and their contribution to the city’s economy is increasing. This year, the New Zealand Festival contributed $70 million to the economy and 32% of the 115,000 tickets were sold to people from outside the region.

We measure the effectiveness of our arts and culture support activities

Customer satisfaction (%) with the New Zealand Festival

Result: 87%. (target: 80%; 2011/12: 87%).

Source: New Zealand Festival

Total tickets sold to the New Zealand Festival and the proportion sold to customers outside the region

Result: 115,000 tickets sold (target: 130,000; 2012: 110,000). 32% of tickets were sold outside the region (target: 30%; 2012: 30%)

Source: New Zealand Festival

Economic contribution ($) the New Zealand Festival makes to the city’s economy (new spend)

Result: $70 million. (target: $40 million; 2012: $56 million).

Source: New Zealand Festival

User satisfaction (%) with Toi Pōneke facilities and services

Result: 83% of users were satisfied with Toi Pōneke facilities and services (target: 90%; 2012/13: 82%; 2011/12: 86%).

Source: Toi Pōneke Customer Satisfaction Survey2

Cultural grants – % of applicants who are satisfied with support and advice received from the Council

82% of applicants were satisfied with the support and advice received from the Council (target: 95; 2012/13: 73%).

Source: WCC Community Networks

The proportion of grant funds successfully allocated (through milestones being met)

Result: 100% (target: 95%; 2012/13: 97%).

Source: WCC Community Networks

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

Result: 100% (target: 90%; 2012/13: 100%).

Source: WCC Community Networks

We understand the reach of our arts and culture support activities

Total visits to museums and galleries (including Carter Observatory)

Result: 601,743 (target: 605,000; 2012/13: 644,411).

Source: Wellington Museums Trust

Venues subsidy – total number of performers and attendees at supported events

Result: 13,878 performers and 83,675 attendees. (target: increase from 2012/13; 2012/13: 16,270 performers and 84,342 attendees).3

Source: WCC City Events

Cultural grants – % first-time applicants who were successful

Result: 63% (target: 50%; 2012/13: 44%).

Source: WCC Community Networks

Number of artists involved in supported art projects delivered through the Public Art Fund

Result: 45 artists (no target; 2012/13: 39 artists).

Source: WCC City Arts

2 This is an online survey of Toi Pōneke residents, room users and gallery artists. This year, we received 99 responses.

3 2012/13 results have been updated from the figures included in the 2012/13 Annual Report.

Social and recreation

Pāpori me te hākinakina

5.1 Recreation promotion and support Ngā rauhanga hapori

5.2 Community participation and support Tautoko hapori

5.3 Public health and safety Hauora tūmatanui me te haumanu

5.1 Recreation promotion and support Ngā rauhanga hapori

5.2 Community participation and support Tautoko hapori

5.3 Public health and safety Hauora tūmatanui me te haumanu

Cities are people, not buildings

Cities are made up of communities – friends and families; people who share common interests such as sports and recreational interests, intellectual pursuits, creative endeavours, political beliefs and so on; people with a common occupation or professional interest, faith, culture; or people who share a neighbourhood.

These communities hold a city together. They provide a sense of belonging and common purpose. They are the basis of ‘social cohesion’ – which is, put simply, the reality that people care about each other and act accordingly.

They support people to live their lives fully, to engage with others confidently and to take up the opportunities the city has to offer, whether that means going to a sports event with others, getting the most out of a volunteer activity, or engaging with others to influence the city’s direction.

They underpin a wider sense of city identity – a sense that, irrespective of our different interests and backgrounds, we all belong to the wider Wellington community, we all share a love for this city.

But cities are changing

People are becoming more mobile, moving from place to place in search of opportunity and a higher quality of life.

City populations are becoming more diverse – not just in terms of age and culture but also in terms of people’s lifestyles, tastes and interests.

Technology is dissolving boundaries, allowing anyone, anywhere to communicate and collaborate in real time with others throughout the world.

And economies are becoming more dependent on knowledge and creativity, driven by the premium on innovation and the desire to lift productivity.

All of these changes mean that cities will compete for people – in particular, for the highly skilled, educated people who make up a large proportion of Wellington’s population.

Our future depends on growing participation

Our future as a city – the strength of our communities, our prosperity, the number and quality of jobs on offer, and the vibrancy and excitement of city life – will depend on our ability to build participation in civic life. This year has been no exception:

2.3 million people through our 12 libraries

320,000 people through our seven recreation centres

1.2 million swimmers splashing in our seven pools

120,000 visitors making use of our subsidised entry programmes

families in need and vulnerable Wellingtonians accessing our 2,300 social housing units

fewer people unemployed

volunteers engaged in city safety programmes and a reduction in reported crime.

Our social and recreation activities contribute to us being:

People centred: Access to recreation opportunities is important for people’s health and wellbeing. Our recreation facilities provide a wide range of health and wellbeing benefits to the people who use them.

Connected: They help people and communities connect and engage with each other and foster the exchange of knowledge and ideas through social, physical and virtual networks.

A dynamic central city: They respond to the diversity of individual and community needs and promote a safe and vibrant city for people to live, work and play.

5.1

Recreation promotion and support

Ngā rauhanga hapori

We provide a wide variety of community facilities throughout the city to encourage quality of life and healthy lifestyles.  

What we do

Our sporting and recreation facilities encourage people of all ages to engage in activities that help them live more active and healthy lives. Some facilities also attract visitors and raise the city’s profile by hosting national and international events. Our activities include:

swimming pools

sportsfields

synthetic sportsfields

recreation centres

recreation partnerships

recreation programmes

recreation leases

playgrounds

marinas

golf course.

What we achieved

We upgraded the city’s swimming pools. Work started on the Keith Spry Pool upgrade, which will include a new teaching pool, children’s play pool and changing facilities. The facility was closed in April 2014 and is scheduled to reopen during the 2015 summer. We also completed a five-yearly maintenance closure of the spray pool at the Wellington Regional Aquatic Centre.

We improved the range and usability of our sportsfields. We completed a new synthetic sportsfield at Alex Moore Park, which opened in May 2014. The excess soil from this development was used to level the surface at Raroa Park. We created a new, more durable couch grass surface at Evans Bay Park, the first in the Wellington region. We also improved drainage on three fields at Nairnville Park and around the Karori Park Cricket Block, which will be used for first-class cricket and as a training venue for the Cricket World Cup.

We made our playgrounds better places for our children to play. We completed playground renewals at Grasslees Park, Surrey Street Play Area, Crawford Green and Quebec Street Play Area.

We supported events at the ASB Sports Centre and Wellington Regional Aquatic Centre (WRAC). International events included the Asia-Pacific Floorball, Trans-Tasman Futsal and the Asia-Pacific Diving International. We also hosted 13 national events at ASB Centre and 16 national events at WRAC, including the New Zealand National Age Group Swimming Championships.

And we encouraged people to participate. We completed year one of our Ki-o-Rahi development programme, which aims to increase participation in sports and recreation from communities with low participation. This is a three-year joint project with Sport NZ.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

5.1.1 
Swimming Pools¹

Expenditure
19,125
19,343
218
18,866

Revenue
(6,940)
(7,417)
(477)
(6,827)

Net Expenditure
12,185
11,926
(259)
12,039

5.1.2 
Sportsfields

Expenditure
3,519
3,305
(214)
3,447

Revenue
(329)
(302)
27
(288)

Net Expenditure
3,190
3,003
(187)
3,159

5.1.3 
Sportsfields (Synthetic)

Expenditure
1,175
1,253
78
1,028

Revenue
(412)
(453)
(41)
(389)

Net Expenditure
763
800
37
639

5.1.4 
Recreation Centres²

Expenditure
9,387
9,859
472
9,436

Revenue
(2,600)
(2,762)
(162)
(2,512)

Net Expenditure
6,787
7,097
310
6,924

5.1.5 
Recreation partnerships

Expenditure
784
776
(8)
766

Revenue
-
-
-
-

Net Expenditure
784
776
(8)
766

5.1.6 
Playgrounds³

Expenditure
723
875
152
773

Revenue
(2)
-
2
-

Net Expenditure
721
875
154
773

5.1.7 
Marinas

Expenditure
761
781
20
534

Revenue
(581)
(574)
7
(578)

Net Expenditure
180
207
27
(44)

5.1.8 
Golf Course

Expenditure
214
234
20
178

Revenue
(59)
(65)
(6)
(51)

Net Expenditure
155
169
14
127

5.1.9 
Recreation programmes⁴

Expenditure
419
841
422
622

Revenue
(147)
(175)
(28)
(201)

Net Expenditure
272
666
394
421

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

5.1.1 
Swimming Pools⁵

Expenditure
3,713
3,714
1
4,054

Unspent portion
of budget to be
carried forward
n/a
3,802

n/a

5.1.2 
Sportsfields

Expenditure
888
864
(24)
1,375

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.1.3 
Sportsfields (Synthetic)

Expenditure
2,127
1,947
(180)
38

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.1.4 
Recreation Centres

Expenditure
160
161
1
188

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.1.5 
Recreation partnerships⁶

Expenditure
108
132
24
265

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.1.6 
Playgrounds

Expenditure
514
505
(9)
269

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.1.7 
Marinas⁷

Expenditure
126
142
16
96

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Operating revenue is under budget mainly due to the fitness centres.

Under budget due to lower interest costs for the ASB Sports Centre.

Under budget due to reduced personnel and depreciation expenditure.

Under budget due to reduced personnel expenditure.

Under budget due to delays with the upgrade of Keith Spry Pool.

Under budget due to development of a Basin Reserve master plan, which delayed progression on some renewals.

Under budget due to a minor saving in capital renewal work.

How we performed

User satisfaction with most services and facilities has improved, although perception of value for money has declined slightly. Use of our facilities was similar to previous years and has increased in some areas.

We understand the standard of the services we provide, and the value the public sees in them

Residents (%) who agree that WCC recreation services and facilities provide good value for money

Result: 59% (target: 80%; 2012/13: 61%).

Source: Residents Monitoring Survey 2014

The results for this measure have decreased substantially since we changed our survey methodology in 2012/13. We will review the target during the development of the next Long-term Plan.

We understand the reach and usage of the services we provide

Attendance was below target because of the maintenance closure of the Spray Pool at the Wellington Regional Aquatic Centre, the closure of Keith Spry Pool for upgrading, and the cool summer which affected attendance at our summer pools.

Visits to Wellington City Council recreation centres4

All our recreation centres had reduced attendance this year – the most significant being the Nairnville Recreation Centre, which we had to close to replace the roof.

ASB Centre courts % utilisation – peak and off-peak

Result: Peak = 41% (target 61%; 2012/13: 41%). Off-peak = 39% (target 30%; 2012/13: 28%).

Source: ASB Centre

Overall attendance increased by 16.5% this year. Peak attendance increased 1.2% and off-peak attendance increased by 37.5%. During the year we adjusted our peak/off-peak timetable to better reflect centre use for junior sport immediately after the school day.

Visits to the ASB Centre – peak and off-peak

Result: Peak = 332,539 (target 453,150; 2012/13: 324,694). Off-peak = 274,075 (target 145,350; 2012/13: 199,201).

Source: ASB Centre

See comment for previous measure.

Outdoor sportsfields – % of scheduled sports games that are played

Result: Winter = 78% (target: 80%; 2012/13: 84%). Summer = 89% (target: 90%; 2012/13: 94%).

Source: WCC Parks, Sports and Recreation

Artificial sportsfields % utilisation – peak and off-peak (summer and winter)

Result: Winter peak = 76% (target 80%; 2012/13: 79%). Off-peak = 18% (target 15%; 2012/13: 19%).
Summer peak = 35% (target 60%; 2012/13: 39%). Off-peak = 16% (target 10%; 2012/13: 13%).

Source: WCC Parks, Sports and Recreation

Summer peak use has reduced in percentage terms but the total hours of use have increased. The new field at St Patrick’s College has enabled higher use albeit at lower than targeted levels.

College artificial sportsfields % utilisation for WCC hours: (summer and winter).

Result: Winter = 66% (target 80%; 2012/13: 79%). Summer = 34% (target 60%; 2012/13: 36%).

Source: WCC Parks, Sports and Recreation

Use was below target at St Patrick’s College but on target at Wellington College.

5.2

Community participation and support

Tautoko hapori

We support a citywide network of community spaces and libraries, support community organisations, and provide homes for people whose needs are not met by state housing or the private housing market.  

What we do

We want Wellington to be a people-centred city – a city that supports diverse and inclusive communities. We support a network of community spaces and libraries to provide a focal point for community activities and programmes. We also support community leadership and advocacy to strengthen community resilience and safety.

We partner with Police and social agencies to coordinate a citywide approach to homelessness. By providing social housing, we ensure people’s basic needs are met. Our activities include:

libraries

access support (Leisure Card)

community advocacy and support

grants (social and recreation)

community centres and halls

housing.

What we achieved

We won awards for our housing programme. We won the following awards for our management and engagement work:

Australasian Housing Institute Award for Excellence in Social Housing

NZ Project Management Institute Awards – Finalists: Project Management Office of the Year, Project Manager of the Year and Emerging Project Manager of the Year

We won the following awards for the Central Park Apartments project:

New Zealand Institute of Architects Award for Housing, 2014

Australasian Housing Institute – Winner, Leading Housing Project, New Zealand

Wellington Civic Trust Award 2013 for Enhancement or Protection of the City’s Built Environment.

We made it easier to access our growing library catalogue. We introduced more self-issue units in some libraries. This year, our e-book collection grew by 37% and the number of issues grew by 78%. We also increased our electronic resources including launching Zinio, an online database offering digital access to more than 150 magazine titles.

We supported the city’s vulnerable residents. We worked closely with government, service providers and community organisations to implement the Te Mahana strategy. We also continued supporting an outreach service coordinated by the Soup Kitchen to provide support for the city’s rough sleepers and vulnerable community.

We strengthened the city’s social infrastructure and community connections. We helped build resilience within vulnerable communities and supported local initiatives such as volunteer services, neighbourhood support and community patrols. We also ensured residents had the opportunity to participate in communities of choice and access support and resources that respond to their needs.

We continued upgrading our housing. We have completed the first six years of our 20-year upgrade programme in partnership with the Crown. Construction began at Berkeley Dallard Apartments and Marshall Court, with both projects on-track for completion by the end of 2014. We are seeking tenders for the Kotuku (Kilbirnie) Project.

We helped our housing communities to grow. We undertook tenant wellbeing programmes, which focused on increasing inclusiveness and connectedness, including celebrating Neighbours Day for the third time in March 2014. Tenants are beginning to take the lead, organising 14 events including Chinese New Year. Primetimers, a positive aging programme for over-80s, is going from strength to strength and we had 16 tenants graduate from the Healthy Lifestyles Programme.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

5.2.1 
Libraries¹

Expenditure
21,595
21,062
(533)
20,104

Revenue
(1,594)
(2,082)
(488)
(1,832)

Net Expenditure
20,001
18,980
(1,021)
18,272

5.2.2 
Access Support

Expenditure
26
28
2
125

Revenue
-
-
-
-

Net Expenditure
26
28
2
125

5.2.3 
Community Advocacy

Expenditure
1,635
1,408
(227)
1,617

Revenue
(133)
(28)
105
(190)

Net Expenditure
1,502
1,380
(122)
1,427

5.2.4 
Grants (Social and Recreation)

Expenditure
3,403
3,413
10
3,312

Revenue
(13)
-
13
-

Net Expenditure
3,390
3,413
23
3,312

5.2.5 
Housing²

Expenditure
22,888
23,658
770
21,115

Revenue
(45,418)
(50,917)
(5,499)
(47,011)

Net Expenditure
(22,530)
(27,259)
(4,729)
(25,896)

5.2.6 
Community centres and halls³

Expenditure
2,726
3,087
361
2,854

Revenue
(277)
(220)
57
(223)

Net Expenditure
2,449
2,867
418
2,631

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

5.2.1 
Libraries

Expenditure
2,103
2,099
(4)
1,995

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.2.5 
Housing⁴

Expenditure
27,763
37,237
9,474
31,744

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.2.6 
Community centres and halls⁵

Expenditure
40
47
7
223

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Over budget due to lower operating revenue and higher personnel and depreciation expenditure.

Over budget due to timing of grant income recognition relating to the Housing Upgrade Project.

Under budget due to reduced personnel expenditure.

Under budget mainly due to timing changes on the Housing Upgrade project. Also Housing renewals are behind budget this year.

Under budget due to a minor saving in capital renewal work.

How we performed

Residents’ use and satisfaction with our libraries remains high although residents perceptions of value for money have decreased marginally. Our housing services are very high quality and are highly rated by tenants. Demand for recreation services is decreasing as our facilities face competition from other providers.

We understand the standard of the services we provide, and the value the public see in them

Libraries – user (%) satisfaction with services and facilities

Result: 83% (target: 90%; 2012/13: 87%).

Source: Residents Monitoring Survey 2014

Libraries – residents’ (%) satisfaction with range and variety of collection

Result: 86% (target: 85; 2012/13: 87%).

Source: Residents Monitoring Survey 2014

Residents (%) who agree that library services and facilities provide good value for money

Result: 75% (target: 85%; 2012/13: 76%).

Source: Residents Monitoring Survey 2014

We understand the reach and usage of recreation services

The decrease in programme use is a reflection of the decrease in recreation centre use. Competition in the school holiday programme has affected use. Note: these results exclude the ASB Centre.

Residents’ (%) rating of their ease (easy or very easy) of access to WCC recreation facilities and programmes

Result: 62% (target 85%; 2012/13: 55%).

Source: Residents Monitoring Survey 2014

We measure the standard of the housing services we provide

Wellington City Council housing tenants’ satisfaction (%) with services and facilities 5

City Housing compliance with legislative requirements

Result: all City Housing services and facilities complied with all legislative requirements (eg Residential Tenancies Act and building warrant of fitness). (Target: compliance; 2012/13: compliant).

Source: WCC City Housing

Wellington City Council housing tenants (%) who report positive social contact

Result: 88% (target: 65%; 2012/13: 87%; 2011/12: 91%; 2010/11: 90%).

Source: WCC Housing Tenants Survey

We measure the use and demand of the social housing resource

Occupancy rate of available housing facilities

Result: 98% (target: 90%; 2012/13: 94%; 2011/12: 83%; 2010/11: 86%).

Source: WCC City Housing

All tenants (existing and new) housed within policy

Result: 99% (target: 98%; 2012/13: 98%).

Source: WCC City Housing

Residents (%) who rate services and facilities as good value for money

Result: 85% (target: 85%; 2012/13: 85%; 2011/12: 83%; 2010/11: 83%).

Source: WCC Housing Tenants Survey

We track the progress of the housing upgrade project

Milestones for housing upgrade project

Result: Partially achieved. Target: meet all milestones, design standards and budgets (2012/13: achieved).

Source: WCC City Housing

Design standards were achieved across the projects. The upgrade of Berkeley Dallard and Etona project was slightly delayed and came in under budget. The Marshall Court project was started later due to resource consent delays and a need to alter construction sequencing.

See “What we achieved” for more information about our housing upgrade project.

We understand the effectiveness of our community support services

Community groups (%) satisfied with Council relationships

Grant recipients – result: 82% (target: 90%; 2012/13: 77%).

Contract funded organisations – result: 88% (target: 90%; 2012/13: 94%).

Source: WCC Community Networks Grants survey and Community Networks contracts survey6

Residents’ neighbourliness behaviour

Result: 90% of residents have displayed ‘neighbourliness’ behaviour (target: 65%; 2012/13: 92%).

Source: WCC Residents Monitoring Survey

Accessible Wellington Action Plan initiatives planned for year progressed or completed

Result: 95% (target: 80%; 2012/13: 81%).

Source: WCC Community Networks

Key projects include: an assisted voting programme for the 2013 local elections; the Council now uses “popdoc” for its annual report and annual plan, which enable these documents to be presented in accessible formats; and improvements in the design and construction of pedestrian kerb ramps, tactile pavers and footpath surfaces. Accessibility improvements are also being made across a range of other council services and projects.

We understand the effectiveness of our recreation- support distribution

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

Result: 100% (target: 95%; 2012/13: 100%).

Source: WCC Community Networks

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

Result: 100% (target: 90%; 2012/13: 96%).

Source: WCC Community Networks

We understand the reach and use of the services we provide

Libraries – residents (%) who are registered members

Result: 74% (target: 75%; 2012/13: 67%; 2011/12: 61%; 2010/11: 78%).

Source: Wellington City Libraries

In 2012/13 we reduced the target for online visits because we changed the measurement methodology, which we expected to decrease our results. As this decrease has not occurred, we will review the target during the development of the next Long-term Plan.

Library programmes – estimated attendees

Result: 75,525 (target: 70,000; 2012/13: 81,273; 2011/12: 95,544; 2010/11: 89,886).

Source: Wellington City Libraries

E-library users satisfaction (%) with the online library collection

Result: 78% (target: 67%; 2012/13: 70%).

Source: Wellington City Libraries

Occupancy rates (%) of Wellington City Council community centres and halls

Result: 35% (target: 60%; 2012/13: 30%).

Source: WCC Community Networks

We changed the methodology for calculating occupancy rates, which now combines the measure for community centres and community halls. The combined measure calculates occupancy based on the total number of hours the facility can be booked rather than a mix of bookable and staffed hours. For 2014/15, we have reduced the target to a new stretch target of 45%.

Homelessness – % of known homeless people supported by agencies

Target: 100%. This measure was intended to form part of the Te Mahana homelessness strategy. However, the strategy has not yet been fully implemented and therefore the information is not being collected.

Source: WCC Community Networks

5.3

Public health and safety

Hauora tūmatanui me te haumanu

We work to protect Wellingtonians from threats to their health and safety.  

What we do

Public confidence in the safety of the city’s streets and suburbs is a top priority. Wellington has a reputation of being a safe city with a vibrant CBD. Wellington’s location makes earthquake-preparedness particularly important, though the city is also at risk of other civil emergencies such as flooding and tsunami. We have legislative obligations to maintain public health standards by regulating food and liquor outlets, animals, trade waste and managing environmental noise problems. We also provide public toilets, cemeteries and crematorium services as a vital public health function. Our activities include:

burials and cremations

public toilets

public health regulations

city safety

Wellington Regional Emergency Management Office (WREMO).

What we achieved

We maintained our public facilities. We constructed the Seaforth Memorial Gardens and replaced the public toilet in the Karori Cemetery, and we developed a Greek Orthodox section at the Makara Cemetery. We refurbished the Balaena Bay toilets and the Alex Moore Park Pavilion.

We regulated public health. We adopted the Provisional Local Alcohol Policy, which sets rules for sale of alcohol in the city and we developed a strategy to create a safe and vibrant late-night environment.

We helped make the city safer. We developed the Graffiti Management Plan, an online guide, and supported community-led initiatives to manage graffiti. We also developed a partnership with the newly formed CBD Policing team to address antisocial behaviour in Cuba Mall, and we worked with Police to improve safety in nine city car parks.

The Wellington Regional Emergency Management Office (WREMO) helped prepare us for a future emergency. WREMO, with the Council’s internal resiliency units, has been implementing the Community-driven Emergency Management (CDEM) Group Plan. This year we:

completed or worked on community response plans for Tawa, Wadestown, Island Bay, Northland, Khandallah, Newtown, Karori and Thorndon.

worked with social agencies to identify and support vulnerable communities and worked with schools to improve emergency response plans.

continued developing the Tsunami Blue Lines project in Kilbirnie, Rongotai and Lyall Bay.

In conjunction with Massey University, we launched a new International Centre of Excellence in Community Resilience (ICoE:CR). The vision of the ICoE:CR is to be an internationally recognised centre of excellence to research and enable community resilience to disasters, actively collaborating with individuals, organisations and communities in the Wellington Region.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

5.3.1 
Burials and Cremations¹

Expenditure
1,830
1,704
(126)
1,760

Revenue
(856)
(865)
(9)
(865)

Net Expenditure
974
839
(135)
895

5.3.2 
Public Toilets

Expenditure
2,440
2,364
(76)
2,164

Revenue
-
-
-
-

Net Expenditure
2,440
2,364
(76)
2,164

5.3.3 
Public Health Regulations

Expenditure
4,508
4,483
(25)
3,878

Revenue
(2,685)
(2,591)
94
(2,533)

Net Expenditure
1,823
1,892
69
1,345

5.3.4 
City Safety²

Expenditure
1,634
1,372
(262)
2,105

Revenue
(10)
-
10
(59)

Net Expenditure
1,624
1,372
(252)
2,046

5.3.5 
WREMO

Expenditure
1,285
1,300
15
2,010

Revenue
(25)
(39)
(14)
(148)

Net Expenditure
1,260
1,261
1
1,862

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

5.3.1 
Burials and Cremations

Expenditure
320
308
(12)
110

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.3.2 
Public Toilets

Expenditure
484
537
53
734

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.3.4 
City Safety

Expenditure
-
-
-
-

Unspent portion
of budget to be
carried forward
n/a
-

n/a

5.3.5
WREMO

Expenditure
22
22
-
-

Over budget due to increased personnel and maintenance expenditure.

Over budget due to a change in accounting procedures with the new roading corridor contract. An internal cost transfer has been removed, this has no impact from a Council-wide perspective.

How we performed

The city is safer and healthier as the result of our work.

We understand the effectiveness of our public health and safety services and programmes

Dog control – complaints received (% of registered dogs)

Result: 30% (target: maintain or improve from 2012/13; 2012/13: 26%)

Source: WCC Public Health

Response to service requests – dog control

Result: We responded to 97% of urgent requests within one hour (target: 100%; 2012/13: 98%; 2011/12: 97%; 2010/11: 100%) and 99% of non-urgent requests within 24 hours (target: 99%; 2012/13: 99%; 2011/12 99%; 2010/11: 99%).

Source: WCC Public Health

Urgent requests are defined as dog attacks on people or other animals.

Food premises – number of cleaning notices and closures per year

Result: There were 32 cleaning notices and closures during the year. (no target; 2012/13: 38).

Source: WCC Public Health

Although we play a role in educating food operators, we cannot control how they operate their businesses and any subsequent change in their performance rating. We are analysing the results to see whether there is any trend that can be addressed.

Response to service requests – public toilets

Result: We responded to 100% of urgent requests within one hour (target: 100%; 2012/13: 100%; 2011/12: 98%), and 100% of non-urgent requests within three days (target: 95%; 2012/13: 95%; 2011/12: 98%).

Source: WCC Parks, Sports and Recreation

Percentage of planned inspections carried out for high risk (category 3) premises

Result: 109% (Target: 100%; 2012/13: 100%)

Source: WCC Public Health

There are 260 high risk premises in the city. This year, we carried out 283 inspections of those premises.

Percentage of inspections of high risk (category 3) premises carried out during high trading hours

Result: 34% (target: 25%; 2012/13: 26%).

Source: WCC Public Health

This year, we inspected 88 of the 260 high risk premises during high trading hours. The result has increased because we reallocated our resources to monitor liquor premises at peak trading. This is a proactive response to changes and expectations under new legislation. It is a joint monitoring initiative with the Police and Regional Public Health.

4 The 2011/12 figures include the ASB Centre, which opened that year. From 2012/13 onwards they are reported on separately.

5 This is a postal survey sent to the head tenant of each Council Housing Unit, each with a prepaid envelope. This year, we had 633 responses.

6 These are online surveys sent to grant recipients and organisations that hold multi-year contracts with WCC’s Community Services team. This year, we received 160 responses to the grants survey and 30 responses to the contracts survey. Results from 2012/13 have been updated.

Urban development

Tāone tupu ora

6.1 Urban planning, heritage and public spaces development Whakahaerenga whare me te whanaketanga

6.2 Building and development control Māherehere tāone, whanaketanga wāhi tuku-ihotanga, wāhi tūmatanui

6.1 Urban planning, heritage and public spaces development Whakahaerenga whare me te whanaketanga

6.2 Building and development control Māherehere tāone, whanaketanga wāhi tuku-ihotanga, wāhi tūmatanui

Developing Wellington sustainably and in areas that benefit the city the most

As the city’s population increases, new houses, infrastructure and services are required. Our urban growth strategy is to develop Wellington sustainably and in areas that benefit the city the most. Put another way, our aim is to promote smart growth and sustainable communities that enhance Wellington’s liveability, compactness, and distinctiveness.

The city’s population is expected to grow by around 55,000 people over the next 30 years.

Bringing land to market in a timely manner to support commercial development

Commercial development has been flat in the last five years. The Council’s challenge is to bring sufficient land to market in a timely manner to support commercial investment in growth areas.

The city also needs to be safe and resilient in case of an earthquake. This means ensuring that buildings are strong and strengthening them where necessary. We also need to take stock of buildings that may not be required in the future.

Wellington is a vibrant city where people want to live and work

Wellingtonians take considerable pride in the city’s look and feel. The Council’s urban growth strategy has served the city well. It has ensured growth is contained within defined limits where we want it, mostly along a ‘growth spine’ that stretches from north to south and has strong services and public transport links.

Wellington’s compact city form is enhanced by its natural setting – a harbour city surrounded by hills. Our built environment is an expression of the city’s history and where we are charting our future.

Wellington is unique among New Zealand cities in the compactness and character of its urban form. The city centre is vibrant, attractive, walkable and easily accessible from all parts of the city.

And we’re proud of our city and its unique character. Most residents agree that Wellington is a great place to live, work and play. They also believe that the city is an easy place to get to, use and enjoy.

We are protecting and enhancing Wellington’s urban environment

This year we:

worked on priority projects for the Central City Framework, including Memorial Park

completed the design for the Cenotaph enhancement and a staircase linking the Cenotaph to Parliament

continued several enhancement projects through Wellington Waterfront Limited

signed a housing accord with the Government to increase housing supply and make housing more affordable

continued earthquake-strengthening Council buildings and completed building assessments of almost all pre-1976 buildings

used the Built Heritage Incentive Fund to focus on heritage areas in Newtown, Berhampore and John Street.

Our urban development activities contribute to us being:

People centred: They promote the adequacy and safety of our homes and buildings and reduce the risks of injury and damage from earthquakes.

Connected: They connect people with places and make them easy to find and functional.

Eco-city: They promote intensive development rather than sprawl into green spaces and encourage the greening of streets, buildings and places. They promote walking and riding on buses and bikes.

A dynamic central city: They promote accessible and safe places where people want to live, work, and play, and where they can meet to share events and ideas. They encourage a built form and urban culture that reflects the energy and diversity of the people, and they shape a place where ideas, innovation and difference can be expressed and supported.

6.1

Urban planning, heritage and public spaces
development

Whakahaerenga whare me te whanaketanga

Wellington is a compact, vibrant, attractive and safe city – and we want to keep it that way  

What we do

Urban planning provides guidance on how and where the city should grow. It’s important this retains the things residents like about Wellington – its compactness, the ‘heart’ around the city centre and harbour, and the character of its hillside residential areas.

The Council is required to prepare a District Plan under the Resource Management Act 1991. The District Plan is the primary document that manages land use and development within the Council’s territorial boundaries.

We also look after public spaces – including the waterfront. Development of public spaces enhances people’s enjoyment of the city and contributes to our civic pride and our ‘sense of place’. Our activities include:

urban planning and policy development

waterfront development

public space and centres developments

built heritage development.

What we achieved

A couple of exciting Central City Framework projects progressed. We completed the design for the Cenotaph enhancement and a staircase linking the Cenotaph to Parliament. We received a Lotteries Grant for the project and Parliament agreed to fund the new staircase.

We’re co-investing, with central government and other parties, in Memorial Park, which will be completed in time for the 2015 ANZAC commemorations. The tunnel construction is under way and is expected to be completed by December 2014.

We preserved Wellington’s built heritage. We used the Built Heritage Incentive Fund to focus on heritage areas in Newtown, Berhampore and John Street. We also used the fund to enable listed heritage building owners to access Council grant funding to assist with seismic strengthening projects.

We are making housing more available and affordable. We signed a housing accord with the Government with a target of 7,000 new housing consents over the next five years.

We decided to bring the management of Wellington’s waterfront in-house. Redevelopment of Clyde Quay continued. We continued developing plans for the Frank Kitts Park playground. Wharf strengthening on Queens Wharf and a temporary replacement venue for the Town Hall at Shed 6 were completed. We resolved issues with the Taranaki Street Wharf dive platform. We developed and consulted on proposals for the North Kumutoto precinct.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

6.1.1 
Urban Planning and Policy Development

Expenditure
1,867
1,884
17
2,168

Revenue
-
(20)
(20)
(4)

Net Expenditure
1,867
1,864
(3)
2,164

6.1.2 
Waterfront development¹

Expenditure
10,568
2,496
(8,072)
11,534

Revenue
966
-
(966)
(9,514)

Net Expenditure
11,534
2,496
(9,038)
2,020

6.1.3 
Public spaces and centres development²

Expenditure
1,996
1,777
(219)
3,921

Revenue
-
-
-
-

Net Expenditure
1,996
1,777
(219)
3,921

6.1.4 
Built heritage development³

Expenditure
955
1,117
162
899

Revenue
-
-
-
-

Net Expenditure
955
1,117
162
899

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

6.1.1 
Urban Planning and Policy Development

Expenditure
535
527
(8)
967

Unspent portion
of budget to be
carried forward
n/a
-

n/a

6.1.2 
Waterfront development⁴

Expenditure
5,882
9,532
3,650
6,307

Unspent portion
of budget to be
carried forward
n/a
-

n/a

6.1.3 
Public spaces and centres development⁵

Expenditure
3,325
3,216
(109)
2,259

Unspent portion
of budget to be
carried forward
n/a
1,854

n/a

6.1.4 
Built heritage development

Expenditure
-
-
-
-

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Under budget due to lower interest costs for Wellington Waterfront.

Over budget due to higher labour charges and associated overhead allocations.

Under budget due to reduced labour charges and associated overhead allocations.

Under budget due to changes in the Waterfront Development Programme, driven by timing changes in the Clyde Quay Wharf development project.

Under budget due to delays to the Laneways, Parliamentary Precinct and Tinakori improvement projects.

How we performed

We did not achieve most of our targets for residents’ perceptions of our effectiveness at facilitating high-quality urban development and protecting the city’s built heritage. However, residents rated their waterfront experience very highly.

We measure our effectiveness at facilitating high-quality urban development

Overall, 12% of residents disagree with this statement and 32% neither agree nor disagree.

District Plan change appeals

Result: 100% of our District Plan appeals were resolved (target: 90%; 2012/13: 100%).

Source: WCC City Planning and Design

26% of residents disagree that their local suburban centre is lively and attractive, and 29% neither agree nor disagree.

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

Result: 100% (target: 95%; 2012/13: 100%).

Source: WCC Community Networks

We measure our effectiveness at protecting the city’s built heritage

District Plan listed items that are removed or demolished

Result: 0 (target: 0; 2012/13: 1).

Source: WCC City Planning and Design

There has been publicity during the year around a number of high-profile heritage buildings being earthquake-prone, which may have contributed to this decrease in performance this year. 14% of residents disagree that central city heritage items are appropriately valued and protected, and 13% of residents disagree for suburban heritage items.

6.2

Building and development control

Māherehere tāone, whanaketanga wāhi tuku-ihotanga, wāhi tūmatanui

We ensure developments do not harm the environment, and building works are safe and comply with the Building Code  

What we do

Like all cities, we control building and development work according to the provisions of the Building Act, the Resource Management Act and their District Plans. These controls are necessary to ensure buildings are safe and comply with the Building Code, and resources are used sustainably to protect public health and safety and to protect future users of land and buildings. They’re also needed to protect urban character and to preserve the city’s heritage.

We also have a statutory requirement to administer an Earthquake-prone Buildings Policy. The policy sets out processes to identify buildings that are below the required earthquake standards, and the requirements and timeframes for building owners to bring them up to the necessary standard. Our activities include:

building control and facilitation (building consents)

development control and facilitation (resource consents)

earthquake risk mitigation – built environment.

What we achieved

We administered building and resource consents. We had two significant publicly notified consents granted this year. They were an extension to the C and D Landfill and the Brooklyn Wind Turbine replacement. We had 257 resource consent pre-application hearing requests. This is the highest number since 2007/08 and a 22% increase from last year.

The High Court has directed the application to demolish the Harcourts Building back to the Environment Court. The hearing was set down for August 2014. We also have an agreement with the Christchurch City Council to assist with processing their building consents.

We continued strengthening Council buildings. We have completed strengthening of the Brooklyn library, Tawa library and Truby King Cottage, and initial strengthening of the Civic Administration Building. The Portico, Clarrie Gibbons Building, Network Newtown, Thistle Hall and Band Rotunda work will be completed by December 2014.

Work to strengthen the Town Hall paused in December 2013 due to an increase in projected costs during the tender process. We will present further recommendations to the Council during 2014/15.

We assessed the strength of buildings around the city. We completed building assessments for pre-1976 buildings with the final 146 assessments being completed in the early part of 2014/15. We have assessed 5,184 properties since the project began with 677 noted as earthquake prone.

We helped residents “Quakesafe” their homes. The Earthquake Commission has provided funding for a residential property assessment programme for 100 randomly chosen homes. The elements required to “Quakesafe” these homes will be collated and costed by a quantity surveyor and used to model the impact of an earthquake across the city. We hope to influence government agencies to develop a funding programme that mirrors California’s “Brace-Bolt” programme.

We assessed 315 dwellings under the home assessment programme, which we are running with the Master Builders Federation and the Certified Builders Association. This programme is also operating in Porirua and Hutt Cities.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

6.2.1 
Building Control and Facilitation¹

Expenditure
12,494
12,935
441
12,276

Revenue
(7,504)
(8,449)
(945)
(7,839)

Net Expenditure
4,990
4,486
(504)
4,437

6.2.2 
Development Control and Facilitation²

Expenditure
5,404
5,885
481
5,300

Revenue
(2,755)
(3,005)
(250)
(2,368)

Net Expenditure
2,649
2,880
231
2,932

6.2.3 
Earthquake risk mitigation – built environment³

Expenditure
1,736
1,541
(195)
355

Revenue
(7)
-
7
0

Net Expenditure
1,729
1,541
(188)
355

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

6.2.3 
Earthquake risk mitigation – built environment⁴

Expenditure
3,908
12,191
8,283
2,193

Unspent portion
of budget to be
carried forward
n/a
1,665
-
n/a

Over budget due to lower operating revenue for both building consents and building inspections.

Under budget due to reduced personnel expenditure and associated overhead allocations.

Over budget due to higher labour charges and associated overhead allocations.

Under budget mainly due to delays with the earthquake strengthening programme.

How we performed

This year, unexpected demand and the need to train new staff affected the timeliness of our legislative compliance processes. However, customer satisfaction with our services was good, we retained our Building Consent Authority accreditation and we achieved or partially achieved all our goals for mitigating earthquake risk. Uptake of the Financial Assistance Package was well below the previous year.

We measure the timeliness of our legislative compliance processes and related services

Building consents (%) issued within 20 working days

Result: 92% (target: 100%; 2012/13: 100%; 2011/12: 96%; 20010/11: 94%).

Source: WCC Building Compliance and Consents

We have implemented a process change to ensure that we restart the clock in a timely manner when considering further information provided by applicants. This has reduced the overall time that applications are within the Council process, but has resulted in the ‘recorded time’ for some being longer than 20 working days. We also trained new staff at the start of the year to undertake assessments, which affected this result. We are reviewing the way we process consents to reduce processing times in the future.

Code Compliance Certificates (%) issued within 20 working days

Result: 99% (target: 100%; 2012/13: 97%; 2011/12: 98%; 2010/11: 99%).

Source: WCC Building Compliance and Consents

Land Information Memorandums (LIMs) (%) issued within 10 working days

Result: 91% (target: 100%; 2012/13: 100%; 2011/12: 100%; 2010/11: 100%).

Source: WCC Building Compliance and Consents

For three consecutive months this year, we received a higher than average number of LIM requests, which coincided with a reduced number of staff to process them. Outside of this period we achieved our target.

Resource consents (%) that are monitored within three months of project commencement

Result: 98% (target: 90%; 2012/13: 99%; 2011/12: 91%; 2010/11: 90%).

Source: City Planning and Design

This year, we monitored 208 of 212 resources consents within three months of project commencement.

Subdivision certificates (%) – section 223 certificates issued within 10 working days

Result: 100% (target: 100%; 2012/13: 100%; 2011/12: 100%; 2010/11: 100%).

Source: City Planning and Design

This year, we issued 61 section 223 certificates.

Noise control (excessive noise) complaints (%) investigated within one hour

Result: 99% (target: 90%; 2012/13: 98%; 2011/12: 99%; 2010/11: 98%).

Source: City Planning and Design

This year, we responded to 5,154 noise complaints, of which 5,127 were responded to within one hour.

Environmental complaints (%) investigated within 48 hours

Result: 100% (target: 98%; 2012/13: 98%; 2011/12: 99%; 2010/11: 98%).

Source: City Planning and Design

This year we responded to 249 of the 250 environmental complaints within 48 hours.

We measure the satisfaction with the services we provide

Customers (%) who rate building control services as good or very good

Result: 69% (target: 70%; 2012/13: 70%).

Source: WCC GetSmart User Survey7

Customers (%) who rate development control services as good or very good

Result: 76% (target: 70%; 2012/13: 53%).

Source: WCC Development Control Services Customer Satisfaction Survey8

We measure the standard of the services we provide

Building Consent Authority (BCA) accreditation retention

Result: Retained (target: to retain status; 2012/13: retained; 2011/12: retained; 2010/11: retained).

Source: WCC Building Compliance and Consents

We measure our progress on earthquake risk mitigation

This year, we completed 841 assessments, which is 120% of our target of 700 assessments for the year. At 30 June 2014, a total of 5,184 buildings had been assessed since the programme began and 146 assessments were still to be completed.

Earthquake-prone building notifications (section 124) (%) that are issued without successful challenge

Result: 100% (target: 100%; 2012/13: 100%; 2011/12: 100%; 2010/11: 100%).

Source: WCC Earthquake Resilience

At 30 June 2014, we had one building subject to a challenge that was yet to be finalised by the Ministry of Business, Innovation and Employment.

Earthquake strengthened Council buildings – programme achievement

Result: Partially achieved. See “What we achieved”.

Source: WCC Earthquake Resilience

The programme was achieved apart from the Town Hall strengthening project not being started.

We measure uptake of the Financial Assistance Package

Weathertight houses – Financial Assistance Package (number of claims accepted and number of remediations claimed)

We accepted three claims and had four remediations claimed (no target; 2012/13: 49 claims accepted and 23 remediations claimed).

Source: WCC Financial Planning

7 This is an online post-application survey of building consent applicants. This year, we received 272 responses.

8 This is an online post-application survey of resource consent applicants. This year, we received 51 responses.

Transport

Waka

7.1 Transport Waka

7.2 Parking Ratonga tūnga waka

7.1 Transport Waka

7.2 Parking Ratonga tūnga waka

Effective cities have effective transport

Successful cities have two things in common – it’s easy for people to get together (that’s how innovation happens), and they have strong connections where it is easy to move people and goods around.

On that score, Wellington already has a well-performing transport network. The inner city is pedestrian-friendly and by national standards residents are high users of public transport.

But as the city grows and behaviour changes, more demand will be placed on our transport network. We will need to move people and goods to and through the city more quickly.

Successful cities are also eco-cities where pollution and carbon emissions are low.

We work with others to deliver

Much of our transport work is done in partnership. We are working with the New Zealand Transport Agency on improvement to key arterial routes and planning with the Greater Wellington Regional Council and others to find the right solutions for our city and the region in the future.

Increasing the resilience of our transport network is an ongoing challenge, with earthquakes and slips being the major risks.

Better connections from the state highway network to the airport are also a challenge. While the city is compact and travel times are relatively short, there are bottlenecks on some key routes at peak hours.

Wellington has an effective transport network

Wellington has a relatively safe and efficient transport network with high levels of public transport use and a high proportion of people who walk to and from work.

We have a transport system that our residents agree is convenient and easy to use. The network is also safe, with the number and social cost of road crashes decreasing substantially in recent years.

We have an effective public transport network that our residents used more than 35 million times this year. A minority of residents use cars to access the central city and total fuel used on Wellington roads has decreased in recent years.

We are also improving the quality and accessibility of our cycling network to offer residents another alternative to private motor vehicles.

We’re improving the network all the time

This year we:

obtained approval from the New Zealand Transport Agency (NZTA) for a comprehensive Johnsonville roading upgrade

worked in partnership with the NZTA on several state highway projects

completed investigation and design work for earthquake-strengthening the Hataitai Bus Tunnel

completed the Tawa Valley walking and cycling path

transitioned our parking services to an in-house service, which started on 1 July 2014.

Our transport activities contribute to us being:

People centred: They provide people with accessible and safe transport choices, from their homes to shops, for work, recreation and pleasure, including walkways and bikeways.

Connected: They allow people to connect with people and places in the central city for businesses, work or leisure.

An eco-city: They reflect a commitment to sustainable, safe and efficient transport choices, including walking and biking.

A dynamic central city: They provide for easy and affordable movement to and around the central city, especially by walking. They link people with places, events and activities and with commerce, business and trade.

7.1

Transport

Waka

We manage the transport network so it is sustainable, safe and efficient  

What we do

Between 200,000 and 300,000 people use some form of the city’s transport network every day, including city residents, commuters and visitors.

Wellingtonians are enthusiastic users of public transport, and an effective public transport network helps reduce congestion and reduces the city’s carbon emissions. A high proportion of residents walk and cycle to work instead of using private cars. Our activities include:

transport planning

vehicle network

passenger transport network

pedestrian and cycle network

network-wide control

road safety.

What we achieved

We worked with the New Zealand Transport Agency (NZTA) and Greater Wellington Regional Council (GWRC) on major projects. We obtained funding approval from the NZTA for the detailed design of a comprehensive roading upgrade in central Johnsonville. Construction work is planned to start in late 2014 and to be completed in 2015.

We provided technical advice on several projects including the Basin Bridge, Memorial Park, Karo Drive, and Buckle Street to Cobham Drive improvements. We also provided expert witness evidence to the Basin Bridge Board of Inquiry.

The Regional Land Transport Committee adopted a Bus Rapid Transit option to operate on the core public transport spine between the Railway Station and Wellington Hospital (and beyond). We are working with GWRC and the NZTA to establish governance and project management structures for this project.

We improved the resilience of the roading network and completed remedial and upgrade work around the city. We completed investigation and design work for earthquake-strengthening the Hataitai Bus Tunnel. We continued remedial work on the Aotea Quay Bridge and completed 104 bridge condition assessments. We also renewed 11 existing retaining walls and built 11 new retaining walls.

After the June 2013 storm, we repaired 25 sites along the south coast. This remedial work will continue over the next two years. We also provided project or site-specific approvals for 279 roads or part-roads to enable the rollout of ultrafast broadband.

We expanded and upgraded the pedestrian and cycle networks. The Tawa Valley walking and cycling path was completed in May 2014. We completed plans for protected cycle lanes in Island Bay. We also developed cycle network plans for Tawa, Newtown, Berhampore, Kilbirnie, Lyall Bay, Miramar and Strathmore. We installed 25 cycle racks around the city, installed 152 cycle boxes at intersections in the Central Business District and marked a cycle lane in Evans Bay Parade. We also repaired 108 bus shelters, and 2.7 km of handrails and safety fences.

We improved road safety. We received 734 submissions during our consultation on a proposal to lower the speed limit to 30km/h through most of the Central Business District. If approved, we expect the new speed limit to be introduced by the end of 2014. We continued minor safety works aligned to the NZTA Safer Journeys programme, which focused on accident black spot locations. This included driver feedback signs, school safety and speed limits.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

7.1.1 
Transport Planning¹

Expenditure
1,038
637
(401)
400

Revenue
(135)
(41)
94
(70)

Net Expenditure
903
596
(307)
330

7.1.2 
Vehicle network²

Expenditure
21,362
21,866
504
20,784

Revenue
(4,459)
(1,260)
3,199
(4,967)

Net Expenditure
16,903
20,606
3,703
15,817

7.1.3 
Cycle network³

Expenditure
441
519
78
313

Revenue
(10)
(20)
(10)
(18)

Net Expenditure
431
499
68
295

7.1.4 
Passenger transport network⁴

Expenditure
1,552
1,719
167
1,309

Revenue
(997)
(1,001)
(4)
(974)

Net Expenditure
555
718
163
335

7.1.5 
Pedestrian network⁵

Expenditure
6,008
6,177
169
6,032

Revenue
(112)
(39)
73
(139)

Net Expenditure
5,896
6,138
242
5,893

7.1.6 
Network-wide control and management

Expenditure
6,125
6,432
307
5,763

Revenue
(1,759)
(2,053)
(294)
(1,545)

Net Expenditure
4,366
4,379
13
4,218

7.1.7 
Road safety

Expenditure
5,811
5,970
159
5,410

Revenue
(1,525)
(1,851)
(326)
(1,245)

Net Expenditure
4,286
4,119
(167)
4,165

Over budget mainly due to unbudgeted costs relating to the Board of Inquiry for the Basin Bridge.

Under budget due to assets, which have been vested to Council. The value of these assets is reflected as income. Also depreciation and interest expenditure is less than budgeted.

Under budget due to lower depreciation expenditure.

Under budget due to lower interest expenditure and favourable bus shelter advertising revenue.

Under budget due to lower depreciation expenditure and due to assets, which have been vested to Council. The value of these assets is reflected as income.

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

7.1.2 
Vehicle network⁶

Expenditure
19,278
20,417
1,139
27,675

Unspent portion
of budget to be
carried forward
n/a
1,300

n/a

7.1.3 
Cycle network

Expenditure
1,886
1,729
(157)
1,353

Unspent portion
of budget to be
carried forward
n/a
-

n/a

7.1.4 
Passenger transport network

Expenditure
171
165
(6)
1,033

Unspent portion
of budget to be
carried forward
n/a
-

n/a

7.1.5 
Pedestrian network⁷

Expenditure
3,775
4,820
1,045
4,674

Unspent portion
of budget to be
carried forward
n/a
-

n/a

7.1.6 
Network-wide control and management⁸

Expenditure
1,891
2,140
249
2,529

Unspent portion
of budget to be
carried forward
n/a
-

n/a

7.1.7 
Road safety⁹

Expenditure
1,873
2,201
328
2,542

Unspent portion
of budget to be
carried forward
n/a
203

n/a

Under budget mainly due to the reprogramming of the Hataitai bus tunnel upgrade into 14/15 and due to the purchase of Aotea Quay land not proceeding.

Under budget mainly due to a decision not to proceed with the rollout of new rubbish bins on the back of trial results and savings on the footpath renewal programme.

Under budget due to savings in sign renewals.

Under budget mainly due a delay in the supply of components required for street lighting renewals. Savings were also achieved in some renewal projects relating to fences and guardrails.

How we performed

We had decreases in resident perceptions of the ease of movement around the city, although peak travel times between the CBD and suburbs were similar to last year. We achieved the majority of our targets for the quality of our transport infrastructure but we failed to achieve our satisfaction measures for transport infrastructure.

We measure the efficient movement of people and goods

Peak travel times between CBD and suburbs

| 2010/11 | 2011/12 | 2012/13 | 2013/14
Miramar | 9.0–19.0 | 8.0–20.0 | 10.0–15.0 | 11.0–13.3
Karori | 8.0–20.0 | 8.5–27.0 | 9.0–24.0 | 10.8–13.4
Island Bay | 8.0–16.0 | 7.0–14.0 | 8.0–21.0 | 10.4–15
Johnsonville | 7.0–24.0 | 7.0–28.0 | 7.0–26.0 | 7.8–19.0

Target is to maintain or improve on these times.

Source: City Networks

We measure the movement towards more sustainable transport options

Cyclists and pedestrians entering the CBD weekdays

Result: 836 cyclists (target: increase from 2012/13; 2012/13: 862); 5,875 pedestrians (target: increase from 2012/13; 2012/13: 5,480).

Source: City Networks

We measure this performance standard using a one-week survey in March each year. Results can vary from year to year depending on weather conditions when the survey is conducted. In the 2013 census, 3.5% of Wellington City residents cycled to work and 17.3% walked to work. This compared to the 2006 census when 2.1% cycled and 15.3% walked to work.

Primary school children (%) who walk to and from school daily9

Over the past four years we have developed relationships with 26 Wellington schools through the School Travel Plan programme. This year, we worked closely with 15 Wellington schools to look at road safety for children travelling to and from school, and investigate ways to encourage more children to walk or scooter to school. Initiatives include needs assessments for individual schools, peer-led active transport promotion, the development of drop-off zones and student involvement in road engineering improvements to remedy identified road safety issues.

Cable car passenger numbers

Result: 953,101 passengers (target: 1,084,400; 2012/13: 1,060,458; 2011/12: 1,067,634)

Source: Wellington Cable Car Ltd

Patronage was affected by construction-related breakdowns in the first half of the year and a mild winter. Improved bus routes and initial lack of availability of Snapper continued to reduce student passenger numbers. Snapper was added as a payment option on the Cable Car in February 2014.

We measure the standard of transport infrastructure and service

Chorus has carried out more trenching work on roads and footpaths as part of the roll-out of the ultrafast broadband network, which may have contributed to this result.

Requests for service

Result: we responded to 84% of urgent requests for service within two hours (target: 100%; 2012/13: 97%; 2011/12: 97%; 2010/11: 100%) and 89% of non-urgent request for service within 15 days (target: 100%; 2012/13: 96%; 2011/12: 97%; 2010/11: 100%).

Source: City Networks

Performance was adversely impacted by the June 2013 storm and the July 2013 earthquake, when resources were redirected to address the highest priority urgent response work.

The street lighting network is jointly maintained by the Council and Wellington Electricity. The storms at the start of the year caused significant street lighting outages. These were not repaired in a timely manner because higher priority issues were being attended to. The Council is investigating the introduction of new street lighting technology (including LED lights), which will improve the quality of the service.

Footpath condition rating – % compliant with WCC standards

Result: 97% (target: 97%; 2012/13: 92%; 2011/12: 97%; 2010/11: 97%).

Source: City Networks

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

Result: 93% of lights comply (target: 100%; 2012/13: 93%; 2011/12: 94%; 2010/11: 93%).

Source: City Networks

User satisfaction (%) with the safety and maintenance of cycle ways10

Council has undertaken a number of initiatives during the year designed to improve the safety and experience of cycling in the city. These include cycle-friendly grates over sumps, stop boxes for cyclists at intersections and speed limit reductions. The Council also agreed to significantly increase its investment in cycling in the 2014/15 year to improve safety further.

Residents (%) who agree that WCC transport network services provided good value for money

Result: 64% of residents agree that Council transport network provides good value for money (target: 75%; 2012/13: 65%)

Source: Residents Monitoring Survey 2014

Sea-wall and retaining wall condition rating

Result: 91% of walls are rated ‘3’ or better – ‘1’ being very good and ‘5’ very bad (target: 90%; 2012/13: 91%; 2011/12: 95%).

Source: WCC Infrastructure

Quarry

Result: achieved (target: to meet legislative compliance)

Source: City Networks

We measure progress towards increasing transport safety

Road casualties (per 10,000 population):

Targets (maximum per 10,000 population): Vehicle 15.2; Pedestrians 4; Cyclists 3.3

| 2010/11 | 2011/12 | 2012/13 | 2013/14
Vehicles | 47.2 | 29.2 | 26.3 | 12.9
Pedestrians | 3.7 | 3.7 | 3.3 | 3.1
Cyclists | 3.3 | 2.3 | 3.3 | 3.2

Source: NZ Transport Agency

7.2

Parking

Ratonga tūnga waka

Parking in the CBD is important for shoppers, tourists, and those working and visiting the city  

What we do

We provide about 10% of the parking in central Wellington. This consists mainly of on-street parking with the addition of some off-street parking.

What we achieved

We transferred contracted parking services back in-house with the new service taking effect 1 July 2014.

What it cost

Operating
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

7.2.1 
Parking¹

Expenditure
11,553
11,154
(399)
10,702

Revenue
(24,734)
(26,792)
(2,058)
(25,427)

Net Expenditure
(13,181)
(15,638)
(2,457)
(14,725)

Capital
expenditure
($000)
Actual
2014
Budget
2014
Variance
2014
Actual
2013

7.2.1 
Parking

Expenditure
1
1
-
(3)

Unspent portion
of budget to be
carried forward
n/a
-

n/a

Over budget due to lower enforcement revenue and one-off costs associated with transitioning parking enforcement from an external contractor to an internal Council team.

How we performed

Parking compliance and demand performance is moderate. However, residents have concerns about the parking availability.

We measure the standard of the provision of parking

On-street car park average occupancy (%)

Result: Overall occupancy 74% (target: 75%; 2012/13: 75%; 2011/12: 65%; 2010/11: 76%)

Zone | Weekday occupancy | Weekend occupancy
Cable / Civic | 61% | 91%
Cuba / Tory / Courtenay | 64% | 84%
Lambton / Terrace / Aitken | 84% | 81%

Source: WCC Infrastructure

We measure the percentage of cars that comply with the two-hour time restriction for on-street parking and the percentage of occupied car parks that have had an appropriate payment made.

We are working with the retail and hospitality sectors to explore options for a more targeted approach to parking fees and time limits. Our intention is to ensure there are a reasonable number of car parks available in different parts of the city at different times of the day.

A number of private car parking buildings are still out of operation following earthquake events during the year, although this hasn’t significantly affected the demand for, and use of, on-street car parking. We expect some of these parking buildings to be reopened during 2014/15.

Residents’ perceptions (%) that parking enforcement is fair

Result: 33% of residents believe that parking enforcement is fair (target: increase from previous year; 2012/13: 33%).

Source: Residents Monitoring Survey 2014

9 This result is taken from a subset of the RMS sample. We received 88 responses to this question.

10 This result is taken from a subset of the RMS sample. We received 65 responses to this question.

Financial Statements

A well-managed city - the financial overview

Wellington City Council and Group Consolidated Financial Statements For the year ended 30 June 2014

Statement of Compliance and Responsibility

Statement of Comprehensive Financial Performance

Statement of Changes in Equity

Statement of Financial Position

Statement of Cash Flows

Notes forming part of the Financial Statements

Financial Prudence

Funding Impact Statements

A well-managed city – the financial overview

Balanced budget requirement

Underlying operating result

Council Financial Performance

Council’s performance over time

Financial Position

Local Government (Financial and Prudence) Regulations 2014

Areas of reported non-compliance

2012/13 comparative measures

The Council has had a strong year financially, with an underlying net surplus of $1.2 million compared to a breakeven budget. We have delivered our broad range of services at a cost of $5.82 per resident per day. The Council’s fiscal prudence is further illustrated by meeting 12 out of 13 measures within the 2014 benchmarks required to be disclosed under the 2014 legislated Financial Reporting and Prudence regulations. This is the first year these benchmarks have been required to be disclosed. Their purpose is to enable an assessment of whether council is prudently managing its finances. They are summarised later in this overview and reported in detail on pages 199-205.

Following a similar trend to previous years, the Council has not spent all of the funds it had budgeted to invest in renewal and upgrade of its assets. Total capital expenditure for the year was $128.0 million compared to a budget of $172.5 million. This variance primarily relates to the deferral of significant upgrade projects including earthquake strengthening of the Town Hall and increasing the capacity of the city landfill along with delays in completion of social housing and swimming pool projects. This trend is likely to continue for the 2014/15 year, for which the Annual Plan has already been set, however a programme is in place to significantly improve the alignment between planned and actual capital expenditure for the 2015-25 Long-term Plan.

Balanced budget requirement

The Council’s financial strategy takes into consideration the level of rate increases, level of borrowings and its ability to ‘balance its budget’, as required by the Local Government Act.

The Balanced Budget requirement is closely linked to the principle of intergenerational equity, the notion that each generation of ratepayers pays their fair share for the goods and services that they use. As part of this principle, coupled with good financial governance and stewardship, Council aims to ensure:

Assets are not run down for future generations to reinstate,

Debt is not used to fund operating expenditure,

That debt levels are regularly reviewed to ensure that the projected debt levels will not restrict a future Council’s ability to fund new assets through debt, and

That the operational expenditure implications of capital expenditure decisions are considered.

Council sets its budget so that its net surplus includes capital transactions that it is required to show as revenue in the financial statements. For example, subsidies paid by New Zealand Transport Agency (NZTA) to help fund the renewal and upgrade of the Council’s roading network are included within the net surplus, while under accounting rules, the related capital expenditure is not. Council also adjusts this surplus to recognise that there are some expenditure items that it is prudent not to fund. Once these adjustments are made, Council has budgeted for a balanced budget, such that operating revenue equals operating expenditure.

Underlying operating result

The Council’s ‘underlying’ result is a surplus of $1.2 million. The underlying net surplus is the sum remaining after removing the impact of non-cash items (which don’t impact on the funding requirement from ratepayers i.e. these items are not included in the calculation to be recovered from rates) and capital items (such as grants and development contributions which are received to specifically fund capital expenditure). Financial reporting standards require the net surplus11 to include these transactions, which does not give a clear picture of whether the Council has sufficient Operating Revenue to meet its Operating Expenditure.

To understand the Council’s underlying financial performance (whether the Council is operating at an actual surplus or deficit), it is necessary to exclude these non-funded and capital-related transactions from the Net Surplus of $27.5 million, as shown in the table below.

| Actual 2014 $M | Budget 2014 $M | Variance $M
Reported net surplus | 27.5 | 35.7 | (8.2)
Exclude Non-cash funded items |  |  |
Vested Assets12 | (8.5) | - | (8.5)
Fair Value movements13 | 7.8 | (0.6) | 8.4
Gain/(Loss) and impairment of assets (net) | 2.3 | - | 2.3
Unfunded depreciation14 | 14.3 | 14.7 | (0.4)
Total Excluded Non-cash funded items | 15.9 | 14.1 | 1.8
Exclude revenue for capital items |  |  |
NZTA Subsidy on capital work | (10.5) | (10.3) | (0.2)
Development Contribution | (5.9) | (5.0) | (0.9)
Housing Upgrade Project Capital Grant and ring-fenced activities | (21.1) | (27.3) | 6.2
Bequests, trust and other external funding   | (2.2) | (1.5) | (0.7)
Total Excluded revenue for capital items | (39.7) | (42.6) | 4.4
Other adjustments |  |  |
Transfers to provisions and reserves | (5.7) | (5.7) | -
Additional net expenditure on Wellington Waterfront and Venues Projects, and Joint Ventures with Porirua | 5.0 | - | 5.0
Less variance from ring-fenced activities | (1.8) | - | (1.8)
Total Other adjustments | (2.5) | (5.7) | 3.2
Underlying surplus | 1.2 | - | 1.2

The variance between the underlying net surplus and budget is made up as follows:

Major Budget variations | $M
Unbudgeted revenue / (expenditure): |
Restatement of weathertight homes provision | (2.9)
Insurance costs (net of recoveries) funded through insurance reserve | (1.1)
Total unbudgeted revenue/expenditure | (4.0)
Significant variations from budget |
Decrease in rates revenue | (0.5)
Decrease in income from activities | (1.1)
Dividends in excess of budget (including Wellington International Airport Limited) |
Decrease in net interest expense | 1.8
Decrease in depreciation | 1.2
Other net variances | 1.6
Total significant variations from budget | 5.2
Council underlying variance excluding ring-fenced amounts | 1.2

Council Financial Performance

Net Surplus15

The Net Surplus is the difference between the expenses the Council incurred during the year and the income the Council received.

The Council recorded a net surplus of $27.5 million. The budgeted net surplus was $35.7 million. The net surplus for the year was $8.2 million less than budgeted. The key reasons for this variance are summarised in the preceding table.

In addition to transactions that make up the net surplus, the Statement of Comprehensive Financial Performance also includes the impact of revaluation of property, plant and equipment and other fair value adjustments. While not impacting on the Council’s funding requirement they do have an impact on Council equity.

In the 2014 year Council undertook its triennial revaluation of its infrastructural assets, which include water, wastewater, stormwater and roading assets. The 2013/14 Annual Plan budgeted for an increase of $176.1 million arising from this revaluation, reflecting the anticipated value uplift since the last revaluation.

The actual revaluation of these assets resulted in a decrease in asset values of $45.4 million due to the following factors:

The valuation on the replacement of assets using more modern technologies has meant that it is cheaper to replace existing assets than when older technologies were used during the previous revaluation calculation, and

During the year the Council also undertook a comprehensive review of its asset information to improve the accuracy and detail of its infrastructure asset management plans.

The reduction in asset values caused by revaluation are non-cash in nature and are restating the Council’s assets (that are being revalued) into current dollar value after taking into account asset condition and remaining life of the asset. This revaluation reduction equates to 0.7% of the total fixed asset value of $6.5 billion, and is a minor adjustment in the overall value of the Council’s assets. The decrease in the asset revaluation is partially offset by an increase in the value of the cash flow hedges of $9.5 million.

As a result of these non-cash movements, the Council has ended the financial year with a Comprehensive Expense of $8.3 million. This Comprehensive Expense reduces the overall equity of the Council by approximately 0.1%. This is explained further in the Financial Position and Changes In Net Worth sections of this overview.

Income

Deciding who pays

When the Council is deciding how to fund an activity (whether to use rates, user charges or other sources of income), we consider:

community outcomes that the activity contributes to

who benefits – individuals, identifiable parts of the community, or the community as a whole

the timeframe in which the benefit occurs – for example, an asset that lasts for several generations will generally be funded initially through borrowing – with ratepayers paying their share each year by funding depreciation on the asset (which pays off borrowing), so that everyone who benefits, present and future, contributes.

The Council’s Revenue and Financing Policy sets out how each activity will be funded based on these criteria. The policy is available on our website www.Wellington.govt.nz

The Council received total income of $451.7 million during the year compared to a budget of $424.4 million. The variance is largely due to unbudgeted revenue arising from Vested Assets, Wellington Waterfront Projects, Wellington Venues and a share in joint ventures with Porirua City Council.

Rates are the main source of funding for the Council, with revenue from operating activities, which includes user fees, being the next largest source. Other sources of income for the Council include income for capital expenditure, income from interest and dividends.

The Council received $246.3 million of income from rates.16 Rates income includes general rates levied on properties and a range of targeted rates including water, stormwater and sewerage rates, along with sector and area based rates.

General rates revenue is collected based on property rateable values. The Council currently applies a general rates differential of 2.8:1. This means that commercial properties pay 2.8 times more general rates per dollar of rateable value than non-commercial properties. This impacts on the value of total rates collected from each sector as shown in the graphs below.

Expenses17

The total expenses incurred by the Council during the year were $424.2 million which represents the cost of running the city during the year. The activities of the Council are divided into activity areas of focus:

Governance includes community engagement, Council elections and meetings.

Environment includes water supply, stormwater and sewerage, landfills and Kiwi Point Quarry. Also includes maintaining and protecting parks, botanic gardens, coastlines and open spaces.

Economic development includes supporting and attracting major events and promoting Wellington overseas and locally.

Cultural wellbeing includes support of the Wellington Museums Trust and events in the city, Wellington City Archives and Toi Poneke.

Social and recreation includes the libraries network, swimming pools, recreation centres, cemeteries, social housing, marinas, sportsfields, playgrounds and skate parks.

Urban development includes assessing building consent and resource consent applications, providing funding for heritage buildings and to develop streets and other public areas.

Transport includes maintaining and developing the city’s transport networks and providing on-street parking spaces.

The table below shows the cost per Wellington resident18 per day for each activity area.

Cost per activity area per resident per day

Activity area
Total cost
$M
Cost per resident per year
$
Cost per resident per day
$

Governance
16.6
83
0.23

Environment
142.5
712
1.95

Economic development
42.1
210
0.58

Cultural wellbeing
17.3
86
0.24

Social and recreation
100.1
500
1.37

Urban development
35.0
175
0.48

Transport
53.9
269
0.74

Council
16.7
83
0.23

Total
$424.2
$2,118
$5.82

Council’s performance over time

This section sets out Council’s performance over the last 5 years.

Income

The Council’s revenue is particularly influenced by the amount of grants it receives for capital expenditure in any one year. This varies dependant on the annual capital expenditure programme to be funded as shown by higher 2012 revenue levels resulting from an increase in housing grants received.

Operating Expenditure

The level of operating expenditure for each of activity area over time, is summarised below.

Financial Position

Changes in Net Worth

This section explains the financial position of the Council, focussing on its net worth (equity), capital expenditure and debt.

Summary Statement of Changes in Equity
Council
Group

Actual
2014
$M
Budget
2014
$M
Actual
2013
$M
Actual
2014
$M
Actual
2013
$M

Equity at the beginning of the year
6,348.3
6,358.6
6,306.3
6,510.7
6,466.2

Net surplus for the Year
27.5
35.7
28.2
31.0
30.4

Other comprehensive income / (expense)
(35.8)
176.1
13.8
(37.6)
14.1

Total comprehensive income/(expense) for the year
(8.3)
211.8
42.0
6.6
44.5

Equity - closing balances

Accumulated funds and retained earnings
4,953.6
4,986.0
4,923.0
5,005.0
4,970.9

Revaluation reserves
1,372.0
1,593.8
1,417.3
1,482.0
1,529.1

Hedging reserve
(0.4)
(23.9)
(10.0)
(0.4)
(10.0)

Fair value through other comprehensive income reserve
0.1
0.6
0.1
0.1
0.1

Restricted funds
14.7
13.9
18.0
17.4
20.6

Total Equity - closing balance
6,340.0
6,570.4
6,348.4
6,504.1
6,510.7

Net worth is the difference between the total assets and the total liabilities of the Council. Net worth is represented in the financial statements by the balance of equity.

The net worth of the Council at the end of the year was $6,340.0 million, a decrease of $8.3 million or 0.1% from the previous year. The main reasons for the reduction in Net Worth are a decrease in asset values as a result of infrastructure revaluation offset by the fair value movement in the Councils cash flow hedges.19

The graph above shows that significant changes occur as a result of movements in revaluations and hedges. Revaluations represent the change in the value of assets held, to restate the replacement value in current dollar terms based on their condition and remaining life. Changes in hedge values represent market value changes in value of the interest rate hedges that are held to maturity. For further explanation refer to Note 26 Hedging reserve page 161. Changes in revaluations, Cash Flow hedges and Fair Value are all non-cash movements and are subject to changes in market driven values beyond the control of the Council.

Assets and capital expenditure

The major assets of the Council include:

Property, plant and equipment (including land, buildings, pipes, roads and other infrastructure assets) – $6,536.0 million

Other assets (including investment properties and investments in subsidiaries and associates) – $371.2 million

During the year $128.0 million was spent on replacing, constructing and purchasing assets across the city, which contributed to the closing value of Property, plant and equipment. This was $44.5 million lower than the budget of $172.5 million included in the Annual Plan (inclusive of budgets carried forward from the previous year).

The main contributors to this variance were the deferral of earthquake strengthening of the Town Hall, expansion of the city landfill and delays in the upgrade of the Keith Spry Pool and social housing projects. Of the total underspend the Council proposes to carry-forward $14.9 million for projects that are now scheduled to be completed in the 2014/15 year. Expenditure on the balance of uncompleted projects will be reconsidered as part of the 2015-25 Long-term Plan.

The chart below shows how much was spent on each activity area during the year for replacing, constructing and purchasing assets:

To help spread the cost of assets to everyone who benefits, the Council budgets to recover a certain amount of the value of the asset each year. This amount is called depreciation.20 Depreciation spreads the cost of an asset over its useful life.

Liabilities

The Council has prudently managed its borrowings to ensure it meets the specified requirements in its Long-term Financial Strategy. Net borrowings at 30 June 2014 are 84% of income, within the target of 105% set by Council and significantly less than 150% limit contained within its Financial Strategy. This is illustrated on page 201.

The major liabilities of Council include:

gross borrowings - $419.1 million21

other liabilities (including trade and other payables) - $148.0 million.

The Council uses borrowings to fund the purchase or construction of new assets or upgrading existing assets that are approved though the Annual Plan and Long-term Plan process.

Net borrowings

Net borrowings are the total borrowings less any cash and cash equivalents and current deposits.

The gross borrowings of $419.1 million, less the balance of cash and cash equivalents of $52.6 million22 , less the current bank deposit of $20 million23 results in a net borrowing balance of $346.5 million at 30 June 2014.

Net borrowings increased by $2.6 million during the year. Net borrowings at the end of the year are $26.6 million less than budgeted in the 2013/14 Annual Plan. The difference is due to changes in the timing of capital projects and savings in capital expenditure.

Investment position

The Council continues to maintain a strong investment position when compared with the level of borrowings. The graph below compares the balance of investments and net borrowings over the last five years.

The value of investments primarily relates to investment properties, our share of the net assets of our associates (including Wellington International Airport Limited) and other financial assets.

Borrowings compliance

During the year the Council maintained its AA rating with the independent credit rating agency Standard and Poors. The credit rating is a comparative measure of the financial strength of the Council. The AA credit rating held by the Council is the highest credit rating attributed to any council across New Zealand. Holding and maintaining such a high credit rating provides a range of benefits to the Council that would not otherwise be available. These benefits include access to lower cost borrowings and access to a wider range of borrowing alternatives.

Local Government (Financial and Prudence) Regulations 2014

This is the first year for reporting of financial benchmarks required by legislation. The benchmarks disclosed in this year’s Annual Report are for the two financial years, 2012/13 and 2013/14; with the results for 2013/14 summarised below. There are 13 benchmarks that are split into the following 7 categories:

Ref | Category | Measure | 2013/14 Met
1. | Rates affordability benchmarks | Rates (income) affordability – were the actual rates increases below the 2012 LTP quantified dollar limit. | Yes
|  | Rates (increases) affordability - were the actual rates increases below the 2012 LTP percentage increases limit. | Yes
2. | Debt affordability benchmarks | Net Borrowing as a percentage of equity <10% | Yes
|  | Net Borrowing as a percentage of Income <150% | Yes
|  | Net Interest as a percentage of income is <15% | Yes
|  | Net Interest as a percentage of annual rates income <20% | Yes
|  | Liquidity (term borrowing committed loan facilities to 12 month peak net borrowing forecast) >110% | Yes
|  | Triennial additional loan funded capital expenditure (cumulative) limit <$60m | Yes
3. | Balanced Budget benchmark | Operating revenue is greater than operating expenditure as a proportion >100% | Yes
4. | Essential services benchmark | Capital expenditure on network services is greater than depreciation on network services as a proportion >100% | No (98%)
5. | Debt servicing benchmark | Borrowing costs as a proportion of operating revenue <10% | Yes
6. | Debt control benchmark | Net debt as a proportion of planned debt <100% | Yes
7. | Operations control benchmark | Net cash flow from operations as a proportion of its planned net cash flow from operations >100% | Yes

Areas of reported non-compliance

Essential services benchmark

The essential services benchmark compares the level of depreciation for network assets (comprising roading, drainage, waste and water assets) to the level of capital expenditure made during that financial year for those assets. The depreciation value used to calculate this measure includes depreciation for the Moa Point Sewerage Treatment Plant which is under an arrangement whereby 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 a portion of these 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 (125% 2012/13).

This measure also takes a snapshot of capital expenditure on a year on year basis, whereas capital expenditure for essential services are planned on a project by project basis and do not always neatly align with the depreciation expenses and funded within a financial year. This is further impacted by delays to projects that cause timing differences that will also affect the outcome of this measure. Accordingly it may be more appropriate to consider an average over a number of years as a measure of Councils performance in meeting this benchmark. If the average is taken across the 2013 and 2014 years, then Council has met the requirement for both years with an average of 108%. In light of these factors, the Council considers its performance against this measure as prudent.

2012/13 comparative measures

Financial benchmark regulations were not in place for the 2012/13 year, but Council is required to provide 2013 information as a comparator for 2014. Of the benchmarks for the 2012/13 financial year, the Council met eleven of thirteen. The two measures recorded as “not met” being the Debt Control and Operations Control benchmarks. The debt control benchmark shows whether actual net debt as defined by the regulations is equal or less than the planned net debt. The operations control benchmark shows whether actual net operating cash flow is equal or less than the planned net cash flow from operations.

During the preparation of the long-term plan for which these controls relate, a number of assumptions were made around the timing of events. Any departure from these assumptions can affect the outcome of these measures. The Council is satisfied that it is prudently managing its net debt position, as reflected in its AA credit rating and favourable ratios of net debt to income and net debt to investments. Council’s net debt to income ratio is significantly lower than most other metropolitan councils in New Zealand.

Council is also satisfied that it is prudently managing operational cash flow, with variances in the 2012/13 year explained by the timing difference in the receipt of revenues compared to budget that lead to the “not met” outcome for this measure.

11 As reported in the Statement of Comprehensive Financial Performance.

12 Vested Assets are assets where the ownership of the asset have been transfered to the Council and are non-cash in nature.

13 Fair Value movements describes the change in market value for assets that are revalued, these movements are non-cash in nature and primarily relate to annual Investment Property revaluations.

14 Unfunded depreciation is the amount of depreciation that is not funded by rates and relates mainly to roading assets that are funded by NZTA and sewerage treatment assets where the operator has responsibility for asset renewal.

15 Annual Report, Statement of Comprehensive Financial Performance, page 110 .

16 Annual Report, Notes to the financial statements, Note 1: Revenue from rates, page 127 .

17 Annual Report, Statement of Comprehensive Financial Performance, page 110 .

18 Estimated city population to be 200,100 by Statistics New Zealand.

19 Annual Report, Notes to the financial statements, Note 26 Hedging reserve, page 161 .

20 Annual Report, Statement of Comprehensive Financial Performance, page 110 .

21 Annual Report, Notes to the financial statements, Note 21 Borrowings, page 151 .

22 Annual Report, Notes to the financial statements, Note 10 Cash and Cash Equivalents, page 135 .

23 Annual Report, Notes to the financial statements, Note 13 Other financial assets, page 139 .

Wellington City Council and Group
Consolidated Financial Statements
For the year ended 30 June 2014

Section contents

Statement of Compliance and Responsibility | Page 109
Statement of Comprehensive Financial Performance | Page 110
Statement of Changes in Equity | Page 111
Statement of Financial Position | Page 112
Statement of Cash Flows | Page 113
Notes forming part of the financial statements | Page 115

Statement of Compliance and Responsibility

Compliance

Responsibility

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, have been complied with.

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 financial statements for the year ended 30 June 2014 fairly reflect the financial position, results of operations and service performance achievements of Wellington City Council and Group.

Celia Wade-Brown
Mayor
Kevin Lavery
Chief Executive
Andy Matthews
Chief Financial Officer

27 August 2014
27 August 2014
27 August 2014

Statement of Comprehensive Financial Performance

For the year ended 30 June 2014

Council
Group¹

Note
Actual
2014
$000
Budget
2014
$000
Actual
2013
$000
Actual
2014
$000
Actual
2013
$000

INCOME

Revenue from rates

Revenue from rates (excluding metered water)
1
234,007
233,551
226,022
234,007
226,022

Revenue from water rates by meter
1
12,329
13,333
11,366
12,329
11,366

Operating Activities

Revenue from development contributions
2
5,873
5,000
4,356
5,873
4,356

Revenue from grants, subsidies and reimbursements
2
43,315
49,746
46,795
49,597
51,076

Revenue from other operating activities
2
115,213
101,936
111,056
125,440
122,608

Revenue from investments
3
23,253
19,118
23,590
11,287
12,668

Total Revenue

433,990
422,684
423,185
438,533
428,096

Fair value movement on investment property revaluation
17
-
-
5,385

5,385

Other income
4
14,949
1,120
14,706
14,959
14,719

Finance income
5
2,752
560
3,139
3,085
3,497

TOTAL INCOME

451,691
424,364
446,415
456,577
451,697

EXPENSE

Finance expense
5
(22,754)
(21,965)
(23,150)
(22,756)
(23,152)

Expenditure on operating activities
6
(297,951)
(274,623)
(303,930)
(314,745)
(318,740)

Depreciation and amortisation
7
(95,860)
(92,109)
(91,148)
(96,611)
(91,977)

Fair value movement on investment property revaluation
17
(7,661)
-
-
(7,661)
-

TOTAL EXPENSE

(424,226)
(388,697)
(418,228)
(441,773)
(433,869)

TOTAL OPERATING SURPLUS

27,465
35,667
28,187
14,804
17,828

Share of equity accounted surplus/(deficit) from associates
41
-
-
-
16,120
12,705

NET SURPLUS BEFORE TAXATION

27,465
35,667
28,187
30,924
30,533

Income tax credit /(expense)
8
-
-
-
64
(91)

NET SURPLUS for the year

27,465
35,667
28,187
30,988
30,442

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified to surplus/(deficit)

Revaluations:

Fair value movement - property, plant and equipment - net
25
(45,290)
176,121
-
(47,163)
-

Share of other comprehensive income of associates:

Effect of changed shareholding in associates
25
-
-
-
38
-

Items that will be reclassified to surplus/(deficit)

Cash flow hedges:

Fair value movement - net
26
9,552
-
14,104
9,552
14,104

Reclassification to finance income
26
-
-
(163)
-
(163)

Fair value through other comprehensive income:

Fair value movement - financial assets - net
27
(30)
-
(61)
(30)
(61)

Share of other comprehensive income of associates:

Reclassification to share of equity accounted surplus
26
-
-
-
1
153

TOTAL OTHER COMPREHENSIVE INCOME/(EXPENSE)²

(35,768)
176,121
13,880
(37,602)
14,033

TOTAL COMPREHENSIVE INCOME/(EXPENSE) for the year²

(8,303)
211,788
42,067
(6,614)
44,475

The Group includes the Council, the subsidiaries disclosed in Note 40, and the Council’s interest in the associates disclosed in Note 41. A structural diagram of the Group is shown in Note 38.

Other comprehensive income / (expense) is non-cash in nature and only reflects changes in equity.

The notes on pages 116 to 198 form part of and should be read in conjunction with these financial statements.

Statement of Changes in Equity

For the year ended 30 June 2014

Council
Group

Note
Actual
2014
$000
Budget
2014
$000
Actual
2013
$000
Actual
2014
$000
Actual
2013
$000

EQUITY - Opening balances

Accumulated funds and retained earnings
24
4,922,977
4,950,327
4,897,679
4,970,809
4,943,343

Revaluation reserves
25
1,417,323
1,417,693
1,417,693
1,529,130
1,529,500

Hedging reserve
26
(9,955)
(23,896)
(23,896)
(9,956)
(24,050)

Fair value through other comprehensive income reserve
27
93
586
154
93
154

Restricted funds
28
17,960
13,878
14,701
20,647
17,301

TOTAL EQUITY - Opening balance

6,348,398
6,358,588
6,306,331
6,510,723
6,466,248

CHANGES IN EQUITY

Retained earnings

Net surplus for the year
24
27,465
35,667
28,187
30,988
30,442

Transfer to restricted funds
24
(4,779)
(767)
(4,072)
(5,097)
(4,639)

Transfer from restricted funds
24
8,056
761
813
8,307
1,293

Transfer from revaluation reserves
24
-
-
370
-
370

Revaluation reserves

Fair value movement - property, plant and equipment - net
25
(45,290)
176,121
-
(47,163)
-

Effect of changed shareholding in associates
25
-
-
-
38
-

Transfer to retained earnings
25
-
-
(370)

(370)

Hedging reserve

Movement in hedging reserve
26
9,552
-
13,941
9,553
14,094

Fair value through other comprehensive income reserve

Movement in fair value
27
(30)
-
(61)
(30)
(61)

Restricted funds

Transfer to retained earnings
28
(8,056)
(761)
(813)
(8,307)
(1,293)

Transfer from retained earnings
28
4,779
767
4,072
5,097
4,639

TOTAL COMPREHENSIVE INCOME

(8,303)
211,788
42,067
(6,614)
44,475

EQUITY - Closing balances

Accumulated funds and retained earnings
24
4,953,719
4,985,988
4,922,977
5,005,007
4,970,809

Revaluation reserves
25
1,372,033
1,593,814
1,417,323
1,482,005
1,529,130

Hedging reserve
26
(403)
(23,896)
(9,955)
(403)
(9,956)

Fair value through other comprehensive income reserve
27
63
586
93
63
93

Restricted funds
28
14,683
13,884
17,960
17,437
20,647

TOTAL EQUITY - Closing balance

6,340,095
6,570,376
6,348,398
6,504,109
6,510,723

The notes on pages 116 to 198 form part of and should be read in conjunction with these financial statements.

Statement of Financial Position

As at 30 June 2014

Council
Group

Note
Actual
2014
$000
Budget
2014
$000
Actual
2013
$000
Actual
2014
$000
Actual
2013
$000

ASSETS

Current assets

Cash and cash equivalents
10
52,573
2,622
44,389
56,853
50,518

Derivative financial assets
11
-
108
409
-
409

Trade and other receivables
12
37,387
41,658
49,556
39,664
52,047

Other financial assets
13
20,000
-
-
20,400
400

Prepayments

11,643
14,211
15,048
11,723
15,233

Inventories
14
969
866
875
1,755
1,901

Non-current assets classified as held for sale
15
1,367
-
272
1,367
272

Total current assets

123,939
59,465
110,549
131,762
120,380

Non-current assets

Derivative financial assets
11
4,428
949
3,280
4,428
3,280

Trade and other receivables
12
-
12,675
-
-
-

Other financial assets
13
9,849
8,392
8,369
9,849
8,369

Intangibles
16
16,750
13,900
13,549
16,820
13,588

Investment properties
17
192,901
200,474
205,951
192,901
205,951

Property, plant and equipment
18
6,536,012
6,768,587
6,546,292
6,547,197
6,558,933

Investment in subsidiaries
40
3,809
3,809
3,809
-
-

Investment in associates
41
19,504
19,519
19,519
174,631
170,453

Total non-current assets

6,783,253
7,028,305
6,800,769
6,945,826
6,960,974

TOTAL ASSETS

6,907,192
7,087,770
6,911,318
7,077,588
7,081,354

LIABILITIES

Current liabilities

Derivative financial liabilities
11
180
469
404
180
404

Trade and other payables
19
57,638
53,217
57,945
60,322
62,352

Revenue in advance
20
12,105
11,889
11,405
13,224
11,892

Borrowings
21
129,371
129,572
155,562
129,375
155,565

Employee benefit liabilities and provisions
22
5,228
6,638
5,698
6,440
6,988

Provision for other liabilities
23
30,781
16,797
34,501
30,781
34,501

Total current liabilities

235,303
218,582
265,515
240,322
271,702

Non-current liabilities

Deferred tax
9
-
-
-
1,279
1,427

Derivative financial liabilities
11
4,788
23,812
12,831
4,788
12,831

Trade and other payables
19
630
-
630
630
630

Borrowings
21
289,747
246,063
232,768
289,750
232,775

Employee benefit liabilities and provisions
22
1,207
1,649
1,474
1,288
1,564

Provision for other liabilities
23
35,422
27,288
49,702
35,422
49,702

Total non-current liabilities

331,794
298,812
297,405
333,157
298,929

TOTAL LIABILITIES

567,097
517,394
562,920
573,479
570,631

EQUITY

Accumulated funds and retained earnings
24
4,953,719
4,985,988
4,922,977
5,005,007
4,970,809

Revaluation reserves
25
1,372,033
1,593,814
1,417,323
1,482,005
1,529,130

Hedging reserve
26
(403)
(23,896)
(9,955)
(403)
(9,956)

Fair value through other comprehensive income reserve
27
63
586
93
63
93

Restricted funds
28
14,683
13,884
17,960
17,437
20,647

TOTAL EQUITY

6,340,095
6,570,376
6,348,398
6,504,109
6,510,723

TOTAL EQUITY AND LIABILITIES

6,907,192
7,087,770
6,911,318
7,077,588
7,081,354

The notes on pages 116 to 198 form part of and should be read in conjunction with these financial statements

Statement of Cash Flows

For the year ended 30 June 2014

Council
Group

Note
Actual
2014
$000
Budget
2014
$000
Actual
2013
$000
Actual
2014
$000
Actual
2013
$000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from rates - Council (excluding metered water)

234,890
233,551
225,077
234,890
225,077

Receipts from water rates by meter

12,086
13,333
11,373
12,086
11,373

Receipts from rates- Greater Wellington Regional Council

48,575
50,341
46,517
48,575
46,517

Receipts from activities and other Income

137,052
108,056
116,087
151,890
134,271

Receipts from grants and subsidies - Operating

5,189
7,251
6,913
16,446
11,168

Receipts from grants and subsidies - Capital

37,129
42,495
45,938
39,253
46,377

Receipts from investment property lease rentals

11,174
9,220
13,508
11,174
13,649

Cash paid to suppliers and employees

(276,384)
(260,882)
(254,770)
(310,507)
(285,646)

Rates paid to GWRC

(48,828)
(50,341)
(50,410)
(48,828)
(50,410)

Grants paid

(32,341)
(29,389)
(32,811)
(25,743)
(22,959)

Income tax paid

-
-
-
(15)
-

Net GST (paid) / received

(609)
-
(455)
(1,487)
(1,246)

NET CASH FLOWS FROM OPERATING ACTIVITIES

127,933
123,635
126,967
127,734
128,171

CASH FLOWS FROM INVESTING ACTIVITIES

Dividends received

12,079
9,898
10,922
12,079
10,922

Interest received

2,240
10
1,642
2,491
1,856

Decrease in bank investments

-
-
-
-
1,532

Proceeds from sale of property, plant and equipment

4,088
15,075
3,492
4,088
3,492

Loan advance made

(300)
-
-
(300)
-

Increase in investments

(20,683)
-
(123)
(20,683)
(523)

Purchase of investment properties

(781)
-
(92)
(781)
(92)

Purchase of intangibles

(1,788)
(3,305)
(4,877)
(1,859)
(4,886)

Purchase of property, plant and equipment

(125,147)
(154,413)
(122,260)
(126,976)
(122,962)

NET CASH FLOWS FROM INVESTING ACTIVITIES

(130,292)
(132,735)
(111,296)
(131,941)
(110,661)

CASH FLOWS FROM FINANCING ACTIVITIES

New borrowings

86,197
29,967
156,360
86,197
156,360

Repayment of borrowings

(55,000)
-
(129,000)
(55,000)
(129,000)

Interest paid on borrowings

(20,654)
(20,866)
(21,264)
(20,654)
(21,264)

NET CASH FLOWS FROM FINANCING ACTIVITIES

10,543
9,101
6,096
10,543
6,096

Net increase/(decrease) in cash and cash equivalents

8,184
-
21,767
6,335
23,606

Cash and cash equivalents at beginning of year

44,389
2,622
22,622
50,518
26,912

CASH AND CASH EQUIVALENTS AT END OF YEAR
10
52,573
2,622
44,389
56,853
50,518

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 cash of $24.320m relating to the housing upgrade project and waste activities; this has been offset against borrowings. See Note 21: Borrowings for more information.

The notes on pages 116 to 198 form part of and should be read in conjunction with these financial statements.

Statement of Cash Flows – continued

The net surplus from the Statement of Comprehensive Financial Performance is reconciled to the net cash flows from operating activities in the Statement of Cash Flows as follows:

Reconciliation of net surplus to net cash flows from operating activities

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Net surplus for the period

27,465
28,187
30,988
30,444

Add/(deduct) non-cash items:

Vested assets
4
(8,468)
(10,519)
(8,468)
(10,519)

Bad debts written off not previously provided for
6
101
46
101
46

Depreciation and amortisation
7
95,860
91,148
96,841
91,958

Impairment of property, plant and equipment
6
458
-
458
-

Fair value changes in investment properties
17
7,661
(5,385)
7,661
(5,385)

Other fair value changes

(375)
(850)
(375)
(566)

Movement in provision for impairments of doubtful debts

(322)
(179)
(333)
(217)

Tax expense

-
-
392
22

Non-cash movement in provisions

(65)
15,852
(65)
15,851

Total non-cash items

94,850
90,067
96,211
91,144

Add/(deduct) movement in working capital:¹

Trade and other receivables

12,390
5,066
12,312
5,506

Prepayments

3,405
(837)
3,421
(942)

Inventories

(94)
(9)
85
118

Trade and other payables

(1,095)
1,262
(702)
1,127

Revenue In advance

700
(484)
(397)
(751)

Employee benefit liabilities

(737)
(1,115)
(689)
(1,243)

Provision for other liabilities

(18,000)
(4,997)
(17,945)
(4,993)

Total working capital movement

(3,431)
(1,114)
(3,914)
(1,178)

Add/(deduct) investing and financing activities:

Net (gain)/loss on disposal of property, plant and equipment

1,861
1,127
1,782
1,162

Dividends received

(12,079)
(10,922)
(113)
(94)

Interest received

(2,240)
(1,642)
(2,383)
(1,863)

Tax paid

-
-
(15)
-

Interest paid on borrowings

21,507
21,264
21,507
21,261

Subvention payment

-
-
(209)
-

Share of equity accounted surplus in associates

-
-
(16,120)
(12,705)

Total investing and financing activities

9,049
9,827
4,449
7,761

Net cash flow from operating activities

127,933
126,967
127,734
128,171

Excluding non-cash items

The notes on pages 116 to 198 form part of and should be read in conjunction with these financial statements.

Notes forming part of the Financial Statements

Summary of Significant Accounting Policies

Reporting entity

Basis of preparation

Judgements and estimations

Basis of consolidation

Income

Expenses

Taxation

Goods and Services Tax (GST)

Financial instruments

Inventories

Investment properties

Non-current assets classified as held for sale

Property, plant and equipment

Intangible assets

Research and Development

Leases

Employee benefit liabilities

Provisions

Equity

Contingent assets and liabilities

Statement of cash flows

Related parties

Budget figures

Cost allocation

Comparatives

New Public Benefit Entity Standards

Note 1: Revenue from rates

Note 2: Revenue from operating activities

Note 3: Revenue from investments

Note 4: Other income

Note 5: Finance income and expense

Note 6: Expenditure on operating activities

Note 7: Depreciation and amortisation

Note 8: Income tax expense

Note 9: Deferred tax assets and liabilities

Note 10: Cash and cash equivalents

Note 11: Derivative financial instruments

Note 12: Trade and other receivables

Note 13: Other financial assets

Note 14: Inventories

Note 15: Non-current assets classified as held for sale

Note 16: Intangibles

Note 17: Investment properties

Note 18: Property, plant and equipment

Note 19: Trade and other payables

Note 20: Revenue in advance

Note 21: Borrowings

Note 22: Employee benefit liabilities and provisions

Note 23: Provision for other liabilities

Note 24: Accumulated funds and retained earnings

Note 25: Revaluation reserves

Note 26: Hedging reserve

Note 27: Fair value through other comprehensive income reserve

Note 28: Restricted funds

Note 29: Special reserves and funds

Note 30: Trusts and bequests

Note 31: Financial Instruments

Financial risk management

Credit risk

Liquidity risk

Market risk

Note 32: Analysis of operating surplus by activity area

Note 33: Major budget variations

Note 34: Analysis of capital expenditure by activity area 

Note 35: Capital expenditure performance 

Note 36: Commitments

Note 37: Contingencies

Note 38: Group structure

Note 39: Joint ventures

Note 40: Investment in Subsidiaries

Note 41: Investment in Associates

Note 42 : Related party disclosures

Note 43: Remuneration and staffing

Note 44: Events after the end of the reporting period

For the year ended 30 June 2014

|  | Page
Summary of significant accounting policies | 116
Note |  |
1 | Revenue from rates | 127
2 | Revenue from operating activities | 128
3 | Revenue from investments | 130
4 | Other income | 130
5 | Finance income and expense | 131
6 | Expenditure on operating activities | 132
7 | Depreciation and amortisation | 133
8 | Income tax expense | 134
9 | Deferred tax assets and liabilities | 135
10 | Cash and cash equivalents | 135
11 | Derivative financial instruments | 136
12 | Trade and other receivables | 137
13 | Other financial assets | 139
14 | Inventories | 141
15 | Non-current assets classified as held for sale | 141
16 | Intangibles | 142
17 | Investment properties | 143
18 | Property, plant and equipment | 144
19 | Trade and other payables | 150
20 | Revenue in advance | 150
21 | Borrowings | 151
22 | Employee benefit liabilities and provisions | 154
23 | Provision for other liabilities | 156
24 | Accumulated funds and retained earnings | 159
25 | Revaluation reserves | 160
26 | Hedging reserve | 161
27 | Fair value through other comprehensive income reserve | 161
28 | Restricted funds | 161
29 | Special reserves and funds | 162
30 | Trusts and bequests | 163
31 | Financial instruments | 164
32 | Analysis of operating surplus by activity | 171
33 | Major budget variations | 173
34 | Analysis of capital expenditure by activity | 175
35 | Capital expenditure performance | 177
36 | Commitments | 179
37 | Contingencies | 181
38 | Group structure | 183
39 | Joint ventures | 184
40 | Investment in subsidiaries | 185
41 | Investment in associates | 186
42 | Related party disclosures | 190
43 | Remuneration and staffing levels | 193
44 | Events after the end of the reporting period | 198

Summary of Significant Accounting Policies

Reporting entity

Wellington City Council is a territorial local authority governed by the Local Government Act 2002.

The primary objective of the Council and Group is to provide goods or services for community or social benefits rather than making a financial return. Accordingly, for the purposes of financial reporting, Wellington City Council is a public benefit entity.

The financial statements include the Council and Group. A Group structural diagram is included in Note 38. The Council includes the results and operations of Wellington City Council as a separate legal entity, the Council’s interests in the joint ventures as disclosed in Note 39 and both the Wellington Waterfront and Wellington Venues projects. The Group includes the Council, the subsidiaries disclosed in Note 40, and the Council’s interest in the associates disclosed in Note 41.

All entities included within the Group are domiciled in Wellington, New Zealand.

Basis of preparation

The financial statements of the Council and Group are for the year ended 30 June 2014 and were authorised for issue by Council on 27 August 2014.

Statement of compliance

The financial statements have been prepared in accordance with the requirements of the Local Government Act 2002, which includes the requirement to comply with New Zealand Generally Accepted Accounting Practice (NZ GAAP).

The financial statements comply with New Zealand accounting standards appropriate for Public Sector Public Benefit Entities (NZ IFRS PBE) for periods beginning on or after 1 December 2012.

Measurement base

The measurement basis applied is historical cost, modified by the revaluation of certain assets and liabilities as identified in this summary of significant 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 inflation rates used are obtained from the latest relevant Business Economic Research Ltd (BERL) forecasts and the discount rate is the Council’s forecast long-term cost of borrowing.

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.

Change of accounting policies

There have been no changes in accounting policies during the financial period.

Standards, amendments and interpretations issued but not yet effective and not early adopted

Standards, amendments and interpretations issued but not yet effective that have not been early adopted and which are relevant to the Council include:

NZ IFRS 9 (2009) (PBE) Financial Instruments and NZ IFRS 9 (2010) (PBE) Financial Instruments - The Council has previously made the decision not to early adopt NZ IFRS 9 (PBE) Financial Instruments to replace NZ IAS 39 (PBE) Financial Instruments: Recognition and Measurement, as not all phases of NZ IFRS 9 (PBE) have been completed and authorised for use.

The NZ IFRS PBE suite of accounting standards currently applicable for Public Benefit Entities is interim, pending the introduction of a new set of New Zealand Public Benefit Entity Accounting Standards (PBE standards). The transition date to the PBE standards is 1 July 2014.

No disclosures have been made in regard to new or amended NZ IFRS that are only applicable to ‘for profit’ entities.

Judgements and estimations

The preparation of financial statements using NZ IFRS PBE 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.

Basis of consolidation

The Group includes joint ventures, subsidiaries and associates. A Group structure diagram is included in Note 38.

Joint ventures

Joint ventures are contractual arrangements with other parties to undertake a jointly controlled operation. The Council has a liability in respect of its share of joint ventures’ deficits and liabilities, and shares in any surpluses and assets. The Council’s proportionate interest in the assets, liabilities, revenue and expenditure is included in the financial statements of the Council and Group on a line-by-line basis.

Subsidiaries

Subsidiaries are entities that are controlled by the Council. In the Council financial statements, the investment in subsidiaries are carried at cost. In the Group financial statements, subsidiaries are accounted for using the purchase method where assets, liabilities, revenue and expenditure is added in on a line-by-line basis.

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, but not control, over their operating and financial policies. 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.

Income

Income comprises revenue, gains and finance income and is measured at the fair value of consideration received or receivable. Specific accounting policies for major categories of income are outlined below:

Rates

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 proportionately throughout the year.

Operating activities

Grants, subsidies and reimbursements

Grants, subsidies and reimbursements are initially recognised at their fair value where there is reasonable assurance that the payment 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.

Development contributions

Development contributions are recognised as income 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.

Fines and penalties

Revenue from fines and penalties (eg traffic and parking infringements, library overdue book fines, rates penalties) is recognised when infringement notices are issued or when the fines/penalties are otherwise imposed.

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.

Sale of goods

Sale of goods is recognised when products are sold to the customer and all risks and rewards of ownership have transferred to the customer.

Investment revenues

Dividends

Dividends are recognised when the shareholders’ rights to receive payment have 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.

Other income

Specific accounting policies for major categories of other income are outlined below:

Donated, subsidised or vested assets

Where a physical asset is acquired for nil or nominal consideration, the fair value of the asset received is recognised as income when the control of the asset is transferred to the Council.

Gains

Gains include additional earnings on the disposal of property, plant and equipment and movements in the fair value of financial assets and liabilities.

Finance income

Interest

Interest income is recognised using the effective interest rate method.

Donated services

The Council benefits from the voluntary service of many Wellingtonians in the delivery of its activities and services (e.g. 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.

Expenses

Specific accounting policies for major categories of expenditure are outlined below:

Operating activities

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 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.

Finance expense

Interest

Interest expense is recognised using the effective interest rate method. All borrowing costs are expensed in the period in which they are incurred.

Depreciation and amortisation

Depreciation of property, plant and equipment and amortisation of intangible assets are charged on a straight-line basis over the estimated useful life of the associated assets.

Taxation

Income tax on the surplus or deficit for the year comprises current and deferred tax.

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.

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.

Goods and Services Tax (GST)

All items in the financial statements are exclusive of GST, with the exception of receivables 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.

Financial instruments

Financial instruments include financial assets (loans and receivables and financial assets at fair value through other comprehensive income), financial liabilities (payables and borrowings) and derivative financial instruments. Financial instruments are initially recognised on trade-date at their fair value plus transaction costs. Subsequent measurement of financial instruments depends on the classification determined by the Council. Financial assets 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 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.

Financial assets

Financial assets are classified as loans and receivables or financial assets at fair value through other comprehensive income.

Loans and receivables comprise cash and cash equivalents, trade and other receivables and loans and deposits.

Cash and cash equivalents comprise cash balances and call deposits with maturity dates of three months or less.

Trade and other receivables 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.

Loans and deposits include loans to other entities (including subsidiaries 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. Trade and other receivables 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.

Financial assets at fair value through other comprehensive income relate to equity investments that are held by the Council for long-term strategic purposes and therefore are not intended to be sold. Financial assets at fair value through other comprehensive income 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 income is recognised within surplus or deficit.

Financial liabilities

Financial liabilities comprise trade and other payables 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.

Derivatives

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 income while the ineffective part is recognised within surplus or deficit. Gains or losses recognised in other comprehensive income transfer to surplus or deficit in the same periods as when the hedged item affects the surplus or deficit. Where a derivative is used to hedge variability in the fair value of the Council’s fixed rate borrowings (fair value hedge), the gain or loss is recognised within surplus or deficit.

As per the International Swap Dealers’ Association (ISDA) master agreements, all swap payments or receipts are settled net.

Inventories

Inventories consumed in the provision of services (such as botanical supplies) are measured at the lower of cost and current replacement cost.

Inventories held for resale (such as rubbish bags), are recorded at the lower of cost (determined on a first-in, first-out basis) and net realisable value. This valuation includes allowances for slow-moving and obsolete stock. Net realisable value is the estimated selling price in the ordinary course of business.

Inventories held for distribution at no or nominal cost, are recorded at the lower of cost and current replacement cost.

Investment properties

Investment properties are properties which are held primarily to earn rental income and/or for capital growth. These properties include the Council’s ground leases, land and buildings and the Wellington Waterfront Project’s investment properties.

Investment properties exclude those properties held for strategic purposes or to provide a social service. This includes properties which generate cash inflows as the rental revenue is incidental to the purpose for holding the property. Such properties include the Council’s social housing assets, which are held within operational assets in property, plant and equipment.

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.

Non-current assets classified as held for sale

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.

Property, plant and equipment

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.

Infrastructure assets include the roading network, water, waste and drainage reticulation networks 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.

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.

Specific measurement policies for categories of property, plant and equipment are shown below:

Operational assets

Plant and equipment and the Civic Centre complex are measured at historical cost and not revalued.

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.

Land and buildings are valued at fair value on a three-year cycle by independent registered valuers.

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 (roading network, water, waste and drainage reticulation assets) are valued at optimised depreciated replacement cost on a three-year cycle by independent registered valuers. Infrastructure valuations 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 at fair value on a three-year cycle.

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.

Revaluations

The result of any revaluation of the Council’s property, plant and equipment is recognised within other comprehensive income 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, with any remaining increase recognised within other comprehensive income 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.

Further information in respect of the most recent valuations for each class is provided in Note 25: Revaluation reserves.

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 estimated useful lives and depreciation rate ranges of the major classes of property, plant and equipment are as follows:

Asset Category
2014

Useful Life
(years)
Depreciation
Rate

Land
unlimited
not depreciated

Buildings
1 ~ 75
1.33% ~ 100%

Civic Centre complex
10 ~ 78
1.28% ~ 10%

Plant and equipment
3 ~ 100
1% ~ 33.3%

Library collections
3 ~ 11
9.1% ~ 33.3%

Restricted assets (excluding buildings)
unlimited
not depreciated

Infrastructure assets:

Land (including land under roads)
unlimited
not depreciated

Roading:

Formation/earthworks
unlimited
not depreciated

Pavement
13 ~ 40
2.5% ~ 7.7%

Traffic islands
80
1.25%

Bridges and tunnels
3 ~ 175
0.57% ~ 33.3%

Drainage
60 ~ 130
0.8% ~ 130%

Retaining walls
30 ~ 75
1.33% ~ 3.33%

Pedestrian walkways
10 ~ 50
2% ~ 10%

Pedestrian furniture
10 ~ 25
4% ~ 10%

Barriers (handrails, guardrails)
25
4%

Lighting
3 ~ 50
2% ~ 33.3%

Cycleway network
25
4%

Parking equipment
8 ~ 10
10% ~ 12.5%

Passenger transport facilities
25
4%

Traffic infrastructure
5 ~ 40
2.5% ~ 20%

Drainage, waste and water:

Pipework
50 ~ 130
0.77% ~ 2%

Fittings
25 ~ 110
0.91% ~ 4%

Water pump stations
20 ~ 100
1% ~ 5%

Water reservoirs
25 ~ 100
1% ~ 4%

Equipment
20
5%

Sewer pump stations
20 ~ 80
1.25% ~ 5%

Tunnels
3 ~ 175
0.57% ~ 33.3%

Treatment plants
3 ~ 100
1% ~ 33.3%

The landfill post closure asset is depreciated over the life of the landfill based on the capacity of the landfill.

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.

Impairment

The carrying amounts of property, plant and equipment 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 income.

Disposal

Gains and losses arising from the disposal of property, plant and equipment are recognised within surplus or deficit in the period in which the transaction occurs. Any balance attributable to the disposed asset in the asset revaluation reserve is transferred to retained earnings.

Work in progress

The cost of projects within work in progress is transferred to the relevant asset class when the project is completed and then depreciated.

Intangible assets

Intangible assets predominantly comprise computer software and carbon credits. They are recorded at cost less any subsequent amortisation and impairment losses.

Computer software has a finite economic life and amortisation is charged to surplus or deficit on a straight-line basis over the estimated useful life of the asset. Typically, the estimated useful lives and depreciation rate range of these assets are as follows:

2014

Asset Category
Useful Life
(years)
Depreciation
Rate

Computer software
1 ~ 7
14.29% ~ 100%

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 are recognised at cost at the date of allocation or purchase.

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.

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.

Leases

Operating leases as lessee

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.

Operating leases as lessor

The Group leases investment properties and a portion of land and buildings. Rental income is recognised on a straight-line basis over the lease term.

Finance leases

Finance leases transfer to the Group (as lessee) substantially all the risks and rewards of ownership of the leased asset. Initial recognition of a finance lease results in an asset and liability being recognised at amounts equal to the lower of the fair value of the leased property or the present value of the minimum lease payments.

The finance charge is released to surplus or deficit over the lease period and the capitalised values are amortised over the shorter of the lease term and the useful life of the leased item.

Employee benefit liabilities

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 (qualified for), 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.

Retirement gratuities

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.

Other contractual entitlements

Other contractual entitlements 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.

Provisions

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.

Landfill post-closure costs

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. 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 has a 21.5% joint venture interest in the Spicer Valley landfill. The Council’s provision for landfill post-closure costs includes the Council’s proportionate share of the Spicer Valley landfill provision for post-closure costs.

ACC partnership programme

The Council is an Accredited Employer under the ACC Partnership Programme. As such the Council accepts the management and financial responsibility of our employee work-related injuries. From 1 April 2009 the Council changed its agreement with ACC from Full Self Cover (FSC) to Partnership Discount Plan (PDP). Under the PDP option, the Council is responsible for managing work related injury claims for a two-year period only and transfer ongoing claims to ACC at the end of the two-year claim management period with no further liability. Under the ACC Partnership Programme the Council is effectively providing accident insurance to employees and this is accounted for as an insurance contract. The value of this liability represents the expected future payments in relation to work-related injuries occurring up to the end of the reporting period for which the Council has responsibility under the terms of the Partnership Programme.

Financial guarantee contracts

A financial guarantee contract is a contract that requires the Council 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 Council 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 Council’s best estimate of the obligation or the amount initially recognised less any amortisation.

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 disaggregated 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 income reserve and restricted funds (special funds, reserve funds, 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.

Contingent assets and liabilities

Contingent liabilities and contingent assets are disclosed in the Notes forming part of the Financial Statements 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.

Statement of cash flows

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 income sources of the Council and the 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 income. Financing activities relate to activities that change the equity and debt capital structure of the Council and Group and financing costs.

Related parties

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 members of the Group and key management personnel, including the Mayor and Councillors, the Chief Executive and all members of the Executive Leadership Team.

The Mayor and Councillors are considered Directors as they occupy the position of a member of the governing body of the Council reporting entity. Directors’ remuneration comprises any money, consideration or benefit received or receivable or otherwise made available, directly or indirectly, to a Director during the reporting period. The disclosures for the Group include the remuneration of the Mayor and those Councillors in their role as Trustees or Directors of entities within the Group. Directors’ remuneration does not include reimbursement of authorised work expenses or the provision of work-related equipment such as cell phones and laptops.

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 subsidiaries 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. For completeness, any additional expenditure approved by the Council is explained in Notes 32 to 35. 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.

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.

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 2013/14 year)

New Public Benefit Entity Standards

From 1 July 2014 the public sector in New Zealand moves to new Public Benefit Entity accounting standards (PBE standards). These standards are issued by the New Zealand Accounting Standards Board (NZASB) of the External Reporting Board comprising:

Public Benefit Entity International Public Sector Accounting Standards (PBE IPSAS);

Public Benefit Entity International Financial Reporting Standards (PBE IFRS), including Public Benefit Entity International Accounting Standards (PBE IAS); and

Public Benefit Entity Financial Reporting Standards (PBE FRS).

There are new standards that have not been part of the current NZ IFRS PBE suite. In particular there are new standards that deal with exchange and non-exchange revenue and service concession assets.

Other changes resulting from the adoption of the new standards include the possible de-recognition of the Basin Reserve Trust and the Wellington Regional Stadium Trust as associates. This is due to Council not having an equity interest in the two entities in the form of a formal shareholding investment, this being a necessary condition for an associate under the new accounting standards. This change would only affect the Group results and the effect of the change is not considered significant.

The financial impacts of any changes at 1 July 2014 will be accounted for through opening retained earnings and will not have a material effect on Council’s financial performance in the 2014/15 year.

Note 1: Revenue from rates

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

General rates

Base sector
71,280
68,202
71,280
68,202

Commercial, industrial and business sector
59,325
58,723
59,325
58,723

Targeted rates
-

-

Base sector
6,505
6,579
6,505
6,579

Commercial, industrial and business sector
4,900
5,163
4,900
5,163

Sewerage
35,463
33,518
35,463
33,518

Stormwater
18,145
17,397
18,145
17,397

Water
24,461
22,648
24,461
22,648

Downtown
13,881
13,745
13,881
13,745

Marsden Village
14
14
14
14

Tawa driveways
33
33
33
33

Total revenue from rates (excluding metered water)
234,007
226,022
234,007
226,022

Revenue from water rates by meter
12,329
11,366
12,329
11,366

Total revenue from rates for Wellington City Council
246,336
237,388
246,336
237,388

Total rates billed
294,450
284,043
294,450
284,043

less Greater Wellington Regional Council component
(48,114)
(46,655)
(48,114)
(46,655)

Total revenue from rates for Wellington City Council
246,336
237,388
246,336
237,388

The total amount of rates charged on Council owned properties that have not been eliminated from revenue and expenditure is $11.333m (2013: $10.419m). For the Group rates of $11.378m (2013: $10.455m) have not been eliminated.

Rates remissions

Revenue from rates and levies is shown net of rates remissions. The Council’s Rates Remission and Postponement Policies provide for general rates to be partially remitted for rural open space; land used principally for games or sport and in special circumstances (where the rating policy is deemed to unfairly disadvantage an individual ratepayer). A remission of the Downtown levy targeted rate may also be granted to provide rates relief for downtown commercial property temporarily not fit for the purpose due to the property undergoing development and therefore not receiving the benefits derived by contributing to the Downtown levy targeted rate. The Council committed itself at the start of the year to certain remissions, which for the reporting period ended 30 June 2014 totalled $0.215m (2013: $0.260m).

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Total revenue from rates
246,551
237,648
246,551
237,648

less Council policy remissions

Rural open space
134
129
134
129

Land used principally for games or sport
81
80
81
80

Downtown levy
-
51
-
51

Total remissions
215
260
215
260

Total revenue from rates (net of remissions)
246,336
237,388
246,336
237,388

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.

Ratings base

The revenue from rates for Wellington City Council was billed on the following rating information held as at 30 June 2013.

The number of rating units – 76,021.

Council

2014
$000

Total capital value of rating units
50,540,014

Total land value of rating units
22,127,973

Note 2: Revenue from operating activities

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Grants, subsidies and reimbursements

Operating
7,284
7,192
12,317
12,237

Capital
36,031
39,603
37,280
38,839

Total grants, subsidies and reimbursements
43,315
46,795
49,597
51,076

Development contributions
5,873
4,356
5,873
4,356

Other operating activities

Fines and penalties
8,411
10,132
8,411
10,132

Rendering of services
100,539
94,888
109,744
104,687

Sale of goods
6,263
6,036
7,285
7,789

Total other operating activities
115,213
111,056
125,440
122,608

Total revenue from operating activities
164,401
162,207
180,910
178,040

For the Council, the principal grants and reimbursements are from:

1. The New Zealand Transport Agency (NZTA), which reimburses part of the Council’s costs for maintaining the local roading infrastructure. The capital reimbursements from NZTA of $10.491m (2013: $10.641m) and operating reimbursements of $4.555m (2013: $4.471m) are for costs already incurred and there are no unfulfilled conditions or other contingencies relating to the reimbursements.
2. The Crown, for the upgrade of the Council’s social housing stock. The capital grant recognised in the current year of $24.514m (2013: $28.088m) is part of a 10 year work programme that commenced in 2008 and the revenue is recognised in accordance with that agreed work programme. There are no unfulfilled conditions or other contingencies relating to this grant.

For the Group, the additional principal subsidy was $5.261m (2013: $3.814m) from Greater Wellington Regional Council to Wellington Cable Car Limited for the maintenance and upgrade of the overhead wire trolley system.

Rendering of services includes revenue from all Council services and is broken down as follows:

Rendering of Services
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Animal control
1,041
1,128
1,041
1,128

Berths and boat sheds
581
578
581
578

Building consents and licensing services
11,814
11,591
11,814
11,591

Community programmes and facilities hire
2,622
2,403
2,622
2,403

Community housing
19,808
17,992
19,808
17,992

Convention and conference centre
13,865
14,441
13,865
14,441

Encroachments and reserve land contributions
1,768
1,702
1,768
1,702

Green spaces
2,025
1,967
2,025
1,967

Landfill operations and recycling
8,407
7,673
8,407
7,673

Lease revenue from property, plant and equipment
4,332
4,744
4,332
4,744

Libraries - hireage
952
1,095
952
1,095

Parking fees and permits
18,015
17,042
18,015
17,042

Rendering of services recognised in subsidiaries
-
-
9,205
9,799

Roading infrastructure projects
1,388
1,261
1,388
1,261

Services to Greater Wellington Regional Council
989
751
989
751

Swimming pools
6,519
6,382
6,519
6,382

Trade waste
571
565
571
565

Other
5,842
3,573
5,842
3,573

Total rendering of services
100,539
94,888
109,744
104,687

Rendering of services contains unbudgeted revenue from Wellington Waterfront Project ($1.241m), Wellington Venues Project ($13.601m) and the Porirua City Joint Ventures ($0.490m).

Note 3: Revenue from investments

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Dividend from investment in associates
41
11,966
10,828
-
-

Dividend from investment in subsidiary

-
94
-
-

Dividend from investment in other entities

113
-
113
-

Investment property lease rentals
17
11,174
12,668
11,174
12,668

Total revenue from investments

23,253
23,590
11,287
12,668

The primary investment dividend was from Council’s 34% holding in Wellington International Airport Limited. Council also received its first dividend ($0.113m) from its investment in the Local Government Funding Agency (LGFA).

Note 4: Other income

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Gain on disposal of property, plant and equipment
2,786
360
2,786
361

Release of provisions
1,593
2,403
1,603
2,415

Petrol tax
1,074
1,102
1,074
1,102

Restricted funds
1,028
322
1,028
322

Vested assets
8,468
10,519
8,468
10,519

Total other income
14,949
14,706
14,959
14,719

Restricted funds are received for specific purposes and are generally held for future use within special reserves or bequest and trust funds. For further information refer to Note 28: Restricted funds

Vested assets are principally infrastructural assets such as roading, drainage, waste and water assets that have been constructed by developers. As part of the consents process, ownership of these assets is transferred to the Council, and on completion they become part of the city’s network. Vested assets are non-cash in nature and represent a future obligation to the Council, as the Council will have the on-going costs associated with maintaining the assets.

The values of principal vested assets received were: Roading ($3.346m) and Drainage, waste and water ($4.183m).

Note 5: Finance income and expense

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Finance income

Amortisation of loans to related parties
13
512
465
512
465

Cash flow hedge movements reclassified from hedging reserve
26
-
163
-
163

Fair value hedge adjustments to borrowings

-
648
-
648

Interest on deposits, loans and receivables

2,240
1,641
2,573
1,999

Movements on derivatives at fair value through surplus or deficit
11
-
222
-
222

Total finance income

2,752
3,139
3,085
3,497

Less

Finance expense

Fair value hedge movements

-
648
-
648

Interest on borrowings

21,466
21,269
21,468
21,269

Interest on finance leases

41
62
41
64

Movements on derivatives at fair value through surplus or deficit

137
-
137
-

Re-discounting of interest on provisions

1,110
1,171
1,110
1,171

Total finance expense

22,754
23,150
22,756
23,152

Net finance cost

20,002
20,011
19,671
19,655

Movements arising from the remeasurement of the Group’s fair value hedges are offset by a fair value adjustment to borrowings so there is no impact on the net surplus for the year.

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.

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 22: Employee benefit liabilities and provisions, and Note 23: Provision for other liabilities.

Note 6: Expenditure on operating activities

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Auditor’s remuneration:

Audit services - Audit New Zealand - Financial Statements

337
301
411
390

Audit services - Audit New Zealand - other

7
7
7
7

Audit services - Other Auditors

-
-
52
50

Impairments

Bad debts written off not previously provided for

101
46
101
46

Increase in provision for impairment of trade and other receivables
12
218
803
218
803

Impairment loss from property, plant and equipment
18
458
-
1,246
-

Governance and employment

Councillor remuneration as directors/trustees
43
1,341
1,317
1,368
1,407

Directors/trustees of subsidiaries - remuneration

-
-
442
467

Other elected members’ remuneration (Community Boards)
43
95
105
95
105

Employee benefits expense:

- Remuneration

71,268
73,666
89,175
91,320

- Superannuation contributions (including Kiwisaver)

1,897
1,380
2,272
1,644

- Termination benefits (including severances)

924
1,781
974
1,862

Other personnel costs

3,515
2,894
3,950
3,339

Insurance

Insurance premiums

12,142
11,482
12,613
11,910

Insurance reserve costs - net
29
1,163
451
1,163
451

General

Advertising, printing and publications

2,380
2,146
8,173
8,189

Consultants and legal fees

7,497
5,961
7,720
6,157

Contractors

3,260
2,701
4,982
3,815

Direct costs

106,095
105,644
115,090
113,871

Grants - general

10,827
13,182
10,624
13,082

Grants to subsidiaries
42
18,275
18,274
-
-

Grants to associates
42
355
1,355
355
1,355

Information and communication technology

6,062
6,012
6,818
6,748

Loss on disposal of property, plant and equipment

2,565
1,357
2,486
1,393

Loss on disposal of intangibles

2,082
130
2,082
130

Operating lease - minimum lease payments

1,116
1,174
1,864
1,706

Reassessment of provisions
23
2,979
15,945
2,979
15,945

Utility costs

18,316
17,861
18,710
18,355

Other general costs

22,676
17,955
18,775
14,193

Total expenditure on operating activities

297,951
303,930
314,745
318,740

Auditor’s remuneration

During the period Audit New Zealand provided other services to the Council, namely assurance services relating to the Clifton Terrace Carpark managed by the Council on behalf of the New Zealand Transport Agency.

General

Direct costs are costs directly attributable to the provision of Council services, including contracts, maintenance, management fees, materials and services.

Grants – general include $2.250m towards the funding of the Museum of New Zealand Te Papa Tongarewa.

Operating lease minimum lease payments are for non-cancellable agreements for the use of assets such as buildings and specialised computer equipment.

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 $11.333m on Council owned properties.

Note 7: Depreciation and amortisation

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Depreciation

Buildings
21,879
17,780
21,879
17,780

Civic Centre complex
2,962
2,866
2,962
2,866

Restricted buildings
1,302
1,240
1,302
1,240

Drainage, waste and water infrastructure
33,153
33,176
33,153
33,176

Landfill post closure
202
250
202
250

Library collections
2,438
2,307
2,438
2,307

Plant and equipment
9,797
10,243
10,500
10,994

Roading infrastructure
20,201
19,418
20,201
19,418

Total depreciation
91,934
87,280
92,637
88,031

Amortisation

Computer software
3,926
3,868
3,974
3,946

Total amortisation
3,926
3,868
3,974
3,946

Total depreciation and amortisation
95,860
91,148
96,611
91,977

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).

Note 8: Income tax expense

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Current tax expense

Current year
-
-
-
47

Prior period adjustment
-
-
-
-

Total current tax expense
-
-
-
47

Deferred tax expense

Origination and reversal of temporary differences
(75)
(270)
-
-

Change in unrecognised temporary differences
-
-
-
44

Recognition of previously unrecognised tax losses
75
270
-
-

Total deferred tax expense
-
-
-
44

Reconciliation of tax on the surplus and tax expense
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Surplus for the period before taxation
27,465
28,187
30,924
30,533

Prima facie income tax based on domestic tax rate - 28%
7,690
7,892
8,658
8,549

Effect of non-deductible expenses and tax exempt income
(7,710)
(8,169)
(9,944)
(8,013)

Effect of tax losses utilised
75
270
-
-

Current years loss for which no deferred tax asset was recognised
20
7
30
7

Recognition of prior year loss
(75)
-
(75)
(51)

Change in unrecognised temporary differences
-
-
92
103

Prior period adjustment
-
-
12
22

Share of income tax of equity accounted associates
-
-
1,163
(526)

Tax Expense/ (Credit)
-
-
(64)
91

Imputation credits
Group

2014
$000
2013
$000

Imputation credits available in subsequent periods
98
101

Note 9: Deferred tax assets and liabilities

Unrecognised temporary differences and tax losses

Deferred tax assets have not been recognised in respect of the following items:

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Deductible temporary differences
-
-
971
463

Tax losses
1,882
2,003
1,921
2,005

Total
1,882
2,003
2,892
2,468

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 $0.527m (2013: $0.561m) and for the Group $0.810m (2013: $0.691m).

Deferred tax assets have not been recognised in respect of these items as it is not probable that future taxable profits will be available against which the benefit of the losses can be utilised.

In 2014 $0.270m (2013: $0.964m) previously unrecognised tax losses, with a tax effect of $0.076m (2013: $0.270m) were recognised by the Group by way of loss transfer arrangement.

As at 30 June 2014, the Group had a deferred tax liability of $1.279m (2013: $1.427m).

Note 10: Cash and cash equivalents

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Cash at bank
4,434
7,284
5,600
10,105

Cash on hand
41
105
56
115

Short term bank deposits up to 3 months
48,098
37,000
51,197
40,298

Total cash and cash equivalents
52,573
44,389
56,853
50,518

Bank balances that are interest bearing earn interest based on current floating bank deposit rates.

Short term deposits are made with a registered bank 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 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 11: Derivative financial instruments

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Current assets

Interest rate swaps - fair value hedges
-
409
-
409

Total current assets
-
409
-
409

Non-current assets

Interest rate swaps - cash flow hedges
4,428
3,280
4,428
3,280

Total non-current assets
4,428
3,280
4,428
3,280

TOTAL DERIVATIVE FINANCIAL INSTRUMENT ASSETS
4,428
3,689
4,428
3,689

Current liabilities

Interest rate swaps - cash flow hedges
180
404
180
404

Total current liabilities
180
404
180
404

Non-current liabilities

Interest rate swaps - cash flow hedges
4,651
12,831
4,651
12,831

Interest rate swaps - non-hedged
137
-
137
-

Total non-current liabilities
4,788
12,831
4,788
12,831

Total derivative financial instrument liabilities
4,968
13,235
4,968
13,235

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 31: Financial instruments

Note 12: Trade and other receivables

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Trade receivables - debtors

11,027
10,959
13,255
13,048

Provision for impairment - debtors

(256)
(241)
(256)
(532)

Net trade receivables - debtors

10,771
10,718
12,999
12,516

Trade receivables - fines

9,773
10,703
9,773
10,703

Provision for impairment - fines

(6,286)
(6,623)
(6,286)
(6,623)

Net trade receivables - fines

3,487
4,080
3,487
4,080

Trade receivables from related parties

- Subsidiaries
42
976
671
-
-

- Associates
42
34
13
34
13

Total trade receivables from related parties

1,010
684
34
13

Total net trade receivables

15,268
15,482
16,520
16,609

Accrued income

7,096
6,099
7,417
6,602

GST receivable

5,014
4,406
5,134
4,722

Rates receivable

9,053
10,417
9,053
10,417

Sundry receivables

956
13,152
1,540
13,697

TOTAL TRADE AND OTHER RECEIVABLES

37,387
49,556
39,664
52,047

Represented by:

Current

37,387
49,556
39,664
52,047

Non-current

-
-
-
-

Total trade and other receivables

37,387
49,556
39,664
52,047

Current trade receivables, rates receivables and sundry receivables are non-interest bearing and receipt is generally on 30 day terms, therefore the carrying value of trade and other receivables approximates their fair value.

The movement in the provision for impairment of trade receivables is analysed as follows:

Provision for impairment of total trade receivables
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
6,864
6,647
7,155
6,920

New provisions made
218
803
218
821

Release of unused provision
(351)
(367)
(351)
(367)

Amount of provision utilised
(189)
(219)
(480)
(219)

Provision for impairment of total trade receivables - closing balance
6,542
6,864
6,542
7,155

The ageing profile of trade and other receivables at the reporting date is as follows:

Council
2014
Receivables
2013
Receivables

Gross
$000
Impaired
$000
Net
$000
Gross
$000
Impaired
$000
Net
$000

Trade and other receivables

Not past due
21,425
-
21,425
31,020
-
31,020

Past due 0-3 months
6,311
(98)
6,213
7,802
(113)
7,689

Past due 3-6 months
3,252
(115)
3,137
3,218
(111)
3,107

Past due more than 6 months
12,941
(6,329)
6,612
14,380
(6,640)
7,740

Total trade and other receivables
43,929
(6,542)
37,387
56,420
(6,864)
49,556

Group
2014
Receivables
2013
Receivables

Gross
$000
Impaired
$000
Net
$000
Gross
$000
Impaired
$000
Net
$000

Trade and other receivables

Not past due
23,128
-
23,128
32,575
-
32,575

Past due 0-3 months
6,402
(98)
6,305
8,126
(113)
8,013

Past due 3-6 months
3,252
(115)
3,137
3,695
(111)
3,584

Past due more than 6 months
13,423
(6,329)
7,094
14,806
(6,931)
7,875

Total trade and other receivables
46,205
(6,542)
39,664
59,202
(7,155)
52,047

The receivables past due for more than six months primarily relates to fines. Due to their nature, the collection pattern for fines is longer than that for trade debtors.

Note 13: Other financial assets

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Financial assets at fair value through other comprehensive income

Equity investments:

- Civic Assurance

590
620
590
620

- NZ Local Government Funding Agency (LGFA)

1,883
1,883
1,883
1,883

Loans and deposits

Bank deposits - term greater than 3 months

20,000
-
20,400
400

LGFA - borrower notes

1,328
480
1,328
480

Loans to related parties - associates
42
1,586
1,407
1,586
1,407

Loans to related parties - other organisations

4,312
3,979
4,312
3,979

Loans to external organisations

150
-
150
-

TOTAL OTHER FINANCIAL ASSETS

29,849
8,369
30,249
8,769

Represented by:

Current

20,000
-
20,400
400

Non-current

9,849
8,369
9,849
8,369

Total other financial assets

29,849
8,369
30,249
8,769

Civic Assurance is the trading name of New Zealand Local Government Insurance Corporation Limited, which provides insurance products and other financial services principally to local authorities. The Council holds a 4.78% (2013: 4.78%) shareholding in this entity with no present intention to sell.

The New Zealand Local Government Funding Agency Limited (LGFA), which commenced in December 2011 is an alternative debt provider majority owned by and operated for local authorities. The Council holds an 8% shareholding of the paid-up capital and as a shareholder will benefit from a return on its investment and as a borrower from lower borrowing costs. The LGFA has a AA+ (domestic long term) credit rating from Standard and Poors.

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

Note
2014
$000
2013
$000
2014
$000
2013
$000

Loans to related parties - associates

Wellington Regional Stadium Trust
(nominal value $15,394,893)

Opening balance

1,407
1,248
1,407
1,248

Amortisation of fair value adjustment

179
159
179
159

Closing balance at fair value
42
1,586
1,407
1,586
1,407

Loans to related parties - other organisations

Karori Wildlife Sanctuary Trust
(nominal value $10,346,689)

Opening balance

3,979
3,673
3,979
3,673

Amortisation of fair value adjustment

333
306
333
306

Closing balance at fair value

4,312
3,979
4,312
3,979

Loans to other external organisations

Opening balance

-
-
-
-

New loan advanced

300
-
300
-

Loan repayments

(150)
-
(150)
-

Closing balance at fair value

150
-
150

Total loans

6,048
5,386
6,048
5,386

The fair value movement on loans reflects the timing of their expected repayments and the interest free nature of the loan. Over the remaining life of the loans their fair value will be amortised back up to their full nominal value.

The amortisation rate applicable to the Wellington Regional Stadium Trust is 12.710% and the rates applicable to the Karori Wildlife Sanctuary Trust range from 6.875% to 12.710%. Both loans are due for repayment by the end of 2040.

Loans to other external organisations are 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 42: Related party disclosures.

Note 14: Inventories

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Consumables
631
551
1,313
1,457

Inventories held for re-sale
256
193
360
313

Inventories held for distribution
82
131
82
131

Total inventories
969
875
1,755
1,901

Consumables are materials or supplies which will be consumed in conjunction with the delivery of services. Consumables within the Council predominately comprise nursery plants, printing products and drainage and waste consumables. Consumables within the Group are mainly Wellington Cable Car Limited inventories of spare parts.

Inventories held for resale within the Council mainly comprise inventories at the Botanic Gardens and the Council’s swimming pools. The Group includes inventories at Wellington Museums Trust and Wellington Zoo.

Inventories held for distribution primarily relate to the holding of wheelie bins, green bins and recycling bags for distribution at no or nominal cost.

Note 15: Non-current assets classified as held for sale

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
272
949
272
949

Disposals
(272)
(899)
(272)
(899)

Transfers from property, plant and equipment
1,367
222
1,367
222

Non-current assets classified as held for sale - closing balance
1,367
272
1,367
272

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.

Note 16: Intangibles

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Computer software

Cost - opening balance
43,011
38,981
43,701
39,662

Accumulated amortisation
(31,941)
(28,936)
(32,592)
(29,509)

Computer software opening balance
11,070
10,045
11,109
10,153

Acquired by direct purchase
1,792
5,023
1,871
5,029

Amortisation
(3,926)
(3,868)
(3,974)
(3,946)

Net disposals
(2,082)
(130)
(2,082)
(130)

Transfer from property, plant and equipment
-
-
-
3

Total computer software - closing balance
6,854
11,070
6,924
11,109

Cost
39,849
43,011
40,491
43,701

Accumulated amortisation
(32,995)
(31,941)
(33,567)
(32,592)

Total computer software - closing balance
6,854
11,070
6,924
11,109

Work in progress

Computer software
9,864
2,442
9,864
2,442

Total work in progress
9,864
2,442
9,864
2,442

Carbon credits

Cost - Opening Balance
37
-
37
-

Additions
25
37
25
37

Net disposals
(30)
-
(30)
-

Total Carbon credits - closing balance
32
37
32
37

Total intangibles
16,750
13,549
16,820
13,588

Disposals and transfers are reported net of accumulated amortisation.

Work in progress

The increase in computer software work in progress of $7.422m to $9.864m reflects Council’s commitment to enhancing its technological capabilities across a number of platforms. Council has embarked on replacing its core applications, a new electronic document records management system and a new asset management information system for its infrastructure assets.

Carbon credits

As part of the Emissions Trading Scheme (ETS) the Council received carbon credits from Central Government in recognition of the carbon absorbed by a portion of the Council’s green belt. For the year ending 30 June 2014 the Council received 29,721 credits (2013: 149,979). The Council purchased 110,000 credits (2013: 80,000) in the market to cover the expected liabilities associated with landfill operations. During the year 54,613 credits were surrendered to meet the Council’s ETS obligations for the 2013 calendar year. At 30 June 2014 the total number of credits held is 320,194 (2013: 234,686).

At 30 June 2014 the liability relating to these credits is $0.024m (2013: $0.080m).

More information on carbon credits can be found in the Statements of Service Performance under Activity 2.2: Waste reduction and energy conservation.

Note 17: Investment properties

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
205,951
200,474
205,951
200,474

Additions by acquisition
-
-
-
-

Additions by subsequent expenditure
781
92
781
92

Fair value revaluation movements taken to surplus/(deficit)
(7,661)
5,385
(7,661)
5,385

Transfer to property, plant and equipment
(6,170)
-
(6,170)
-

Investment properties - closing balance
192,901
205,951
192,901
205,951

Wellington City Council’s investment properties were valued as at 30 June 2014 by William Bunt (FNZIV, FPINZ), registered valuer and Director of Valuation Services for CBRE Limited. Wellington Waterfront Project’s investment properties were valued as at 30 June 2014 by Andrew Washington (BCom (VPM) ANZIV SPINZ), registered valuer and Director Valuations for Colliers International (Wellington Valuation) Limited.

The Council’s total investment properties comprise ground leases of $153.480m (2013: $154.902m) and land and buildings of $39.421m (2013: $51.049m) held for investment purposes.

Ground leases are parcels of land owned by the Council in the central city or on the waterfront that are leased to other parties who own the buildings situated on the land. The leases are generally based on 21-year perpetually renewable terms. As these parcels of land are held for investment purposes the rentals are charged on a commercial market basis.

The basis of valuation varies depending on the nature of the lease. For sites that are subject to a terminating lease the approach is to assess the value of the rental income over the remaining term of the lease and add the residual value of the land at lease expiry. For sites subject to perpetually renewable leases values have been assessed utilising a discounted cash flow and arriving at a net present value of all future anticipated gross rental payments.

Revenues and expense
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Revenue from investment properties
11,174
12,668
11,174
12,668

Direct operating expenses of investment properties

- From investment properties that generated income
545
339
545
339

Contractual obligations for capital expenditure
19
35
19
35

Contractual obligations for operating expenditure
13
48
13
48

The direct operating expenses relating to investment properties form part of the direct expenses in Note 6: Expenditure on operating activities.

Fair value of investment properties valued by
independent registered valuers
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

William Bunt - CBRE Limited
154,830
156,662
154,830
156,662

Andrew Washington - Colliers International Limited
38,071
49,289
38,071
49,289

Total fair value of investment properties valued by independent registered valuers
192,901
205,951
192,901
205,951

Note 18: Property, plant and equipment

The movements in the property, plant and equipment assets are summarised as follows:

Summary
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Property, plant and equipment - Opening balance
6,546,292
6,501,686
6,558,933
6,514,367

Additions
104,321
149,795
105,948
149,956

Disposals
(3,503)
(6,823)
(3,504)
(6,860)

Depreciation expense
(91,934)
(87,280)
(92,637)
(88,031)

Impairment losses
(458)
-
(458)
-

Revaluation movement
(45,290)
-
(47,163)
-

Transfer from non-current assets held for sale
(1,367)
-
(1,367)
-

Transfer to non-current assets held for sale
-
(222)
-
(222)

Transfer from investment properties
6,170
-
6,170
-

Transfer to intangibles
-
-
-
(3)

Movement in work in progress
21,781
(10,864)
21,275
(10,274)

Property, plant and equipment - Closing balance
6,536,012
6,546,292
6,547,197
6,558,933

The movements according to the individual classes of assets are as follows:

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Operational assets

Land

Land - at cost - opening balance
-
-
-
-

Land - at valuation - opening balance
203,331
206,036
203,331
206,036

Total land - opening balance
203,331
206,036
203,331
206,036

Additions
6,976
-
6,976
-

Disposals
-
(2,205)
-
(2,205)

Revaluation movement
-
-
-
-

Transfer between asset classes
2,775
(500)
2,775
(500)

Total land - closing balance
213,082
203,331
213,082
203,331

Land - at cost - closing balance
-
-
-
-

Land - at valuation - closing balance
213,082
203,331
213,082
203,331

Total land - closing balance
213,082
203,331
213,082
203,331

Buildings

Buildings - at cost - opening balance
60,906
-
60,906
-

Buildings - at valuation - opening balance
547,282
547,704
547,282
547,704

Total cost/valuation
608,188
547,704
608,188
547,704

Accumulated depreciation
(17,813)
-
(17,813)
-

Total buildings - opening balance
590,375
547,704
590,375
547,704

Additions
10,741
60,906
10,741
60,906

Depreciation expense
(21,879)
(17,780)
(21,879)
(17,780)

Disposals
(1,228)
(485)
(1,228)
(485)

Impairment
(458)
-
(458)
-

Revaluation movement
(9,295)
-
(9,295)
-

Transfer between asset classes
365
30
365
30

Transfer from investment properties
6,170
-
6,170
-

Total buildings - closing balance
574,791
590,375
574,791
590,375

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Buildings - at cost - closing balance
69,409
60,906
69,409
60,906

Buildings - at valuation - closing balance
539,236
547,282
539,236
547,282

Total cost/valuation
608,645
608,188
608,645
608,188

Accumulated depreciation
(33,853)
(17,813)
(33,853)
(17,813)

Total buildings - closing balance
574,792
590,375
574,792
590,375

Landfill post closure costs¹

Landfill post closure - at cost - opening balance
3,783
3,930
3,783
3,930

Accumulated depreciation
(2,100)
(1,850)
(2,100)
(1,850)

Total landfill post closure costs - opening balance
1,683
2,080
1,683
2,080

Depreciation expense
(202)
(250)
(202)
(250)

Movement in post closure costs
(139)
(147)
(139)
(147)

Total landfill post closure costs - closing balance
1,342
1,683
1,342
1,683

Landfill post closure - at cost - closing balance
3,643
3,783
3,643
3,783

Accumulated depreciation
(2,301)
(2,100)
(2,301)
(2,100)

Total landfill post closure costs - closing balance
1,342
1,683
1,342
1,683

Civic Centre complex

Civic Centre complex - at cost - opening balance
173,691
172,949
173,691
172,949

Accumulated depreciation
(55,931)
(53,065)
(55,931)
(53,065)

Total Civic Centre complex - opening balance
117,760
119,884
117,760
119,884

Additions
1,541
745
1,541
745

Disposals
(687)
-
(687)
-

Depreciation expense
(2,962)
(2,866)
(2,962)
(2,866)

Transfer between asset classes
-
(3)
-
(3)

Total Civic Centre complex - closing balance
115,652
117,760
115,652
117,760

Civic Centre complex - at cost - closing balance
173,817
173,691
173,817
173,691

Accumulated depreciation
(58,165)
(55,931)
(58,165)
(55,931)

Total Civic Centre complex - closing balance
115,652
117,760
115,652
117,760

Plant and equipment

Plant and equipment - at cost - opening balance
157,065
156,363
169,867
169,045

Accumulated depreciation
(77,728)
(74,512)
(83,415)
(79,448)

Total plant and equipment - opening balance
79,337
81,851
86,452
89,597

Additions
13,846
11,304
15,473
11,464

Depreciation expense
(9,797)
(10,243)
(10,500)
(10,994)

Disposals
(1,491)
(3,548)
(1,492)
(3,585)

Transfer between asset classes
-
(27)
(1,873)
(27)

Transfer to intangibles
-
-
-
(3)

Total plant and equipment - closing balance
81,895
79,337
88,060
86,452

Plant and equipment - at cost
166,755
157,065
179,310
169,867

Accumulated depreciation
(84,860)
(77,728)
(91,250)
(83,415)

Total plant and equipment - closing balance
81,895
79,337
88,060
86,452

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

2014
$000
2013
$000
2014
$000
2013
$000

Library collections

Library collections - at cost - opening balance
3,972
1,977
3,972
1,977

Library collections - at valuation - opening balance
15,715
15,715
15,715
15,715

Total cost/valuation
19,687
17,692
19,687
17,692

Accumulated depreciation
(4,377)
(2,070)
(4,377)
(2,070)

Total library collections - opening balance
15,310
15,622
15,310
15,622

Additions
2,072
1,995
2,072
1,995

Depreciation expense
(2,438)
(2,307)
(2,438)
(2,307)

Revaluation movement
(132)
-
(132)
-

Total library collections - closing balance
14,812
15,310
14,812
15,310

Library collections - at cost - closing balance
-
3,972
-
3,972

Library collections - at valuation - closing balance
14,812
15,715
14,812
15,715

Total cost/valuation
14,812
19,687
14,812
19,687

Accumulated depreciation
-
(4,377)
-
(4,377)

Total library collections - closing balance
14,812
15,310
14,812
15,310

TOTAL OPERATIONAL ASSETS
1,001,574
1,007,796
1,007,739
1,014,911

Infrastructure assets

Drainage, waste and water

Drainage, waste and water - at cost - opening balance
76,885
46,755
76,885
46,755

Drainage, waste and water - at valuation - opening balance
1,350,574
1,350,574
1,350,574
1,350,574

Total cost/valuation
1,427,459
1,397,329
1,427,459
1,397,329

Accumulated depreciation
(66,398)
(33,222)
(66,398)
(33,222)

Total drainage, water and waste - opening balance
1,361,061
1,364,107
1,361,061
1,364,107

Additions
27,784
30,130
27,784
30,130

Depreciation expense
(33,153)
(33,176)
(33,153)
(33,176)

Revaluation movement
(23,397)
-
(23,397)
-

Transfer between asset classes
(4)
-
(4)
-

Total drainage, water and waste - closing balance
1,332,291
1,361,061
1,332,291
1,361,061

Drainage, waste and water - at cost - closing balance
-
76,885
-
76,885

Drainage, waste and water - at valuation - closing balance
1,332,291
1,350,574
1,332,291
1,350,574

Total cost/valuation
1,332,291
1,427,459
1,332,291
1,427,459

Accumulated depreciation
-
(66,398)
-
(66,398)

Total drainage, water and waste - closing balance
1,332,291
1,361,061
1,332,291
1,361,061

Roading

Roading - at cost - opening balance
77,227
38,614
77,227
38,614

Roading - at valuation - opening balance
784,374
784,374
786,974
786,974

Total cost/valuation
861,601
822,988
864,201
825,588

Accumulated depreciation
(38,113)
(18,695)
(38,113)
(18,695)

Total roading - opening balance
823,488
804,293
826,088
806,893

Additions
35,286
38,613
35,286
38,613

Depreciation expense
(20,201)
(19,418)
(20,201)
(19,418)

Revaluation movement
(14,481)
-
(16,354)
-

Transfer between asset classes
4
-
1,877
-

Total roading - closing balance
824,096
823,488
826,696
826,088

Roading - at cost - closing balance
-
77,227
-
77,227

Roading - at valuation - closing balance
824,096
784,374
826,696
786,974

Total cost/valuation
824,096
861,601
826,696
864,201

Accumulated depreciation
-
(38,113)
-
(38,113)

Total roading - closing balance
824,096
823,488
826,696
826,088

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Infrastructure land

Infrastructure land - at cost - opening balance
-
-
-
-

Infrastructure land - at valuation - opening balance
36,077
36,447
36,077
36,447

Total infrastructure land - opening balance
36,077
36,447
36,077
36,447

Additions
2,799
-
2,799
-

Disposal
-
(370)
-
(370)

Revaluation movement
2,015
-
2,015
-

Transfer between asset classes
(2,884)
-
(2,884)
-

Total infrastructure land - closing balance
38,007
36,077
38,007
36,077

Infrastructure land - at cost - closing balance
-
-
-
-

Infrastructure land - at valuation - closing balance
38,007
36,077
38,007
36,077

Total infrastructure land - closing balance
38,007
36,077
38,007
36,077

Land under roads

Land under roads - at cost - opening balance
2,947,937
2,944,770
2,947,937
2,944,770

Additions
58
3,117
58
3,117

Disposals
(51)
(88)
(51)
(88)

Transfer between asset classes
109
360
109
360

Transfer to non-current assets held for sale
(84)
(222)
(84)
(222)

Land under roads - closing balance
2,947,969
2,947,937
2,947,969
2,947,937

TOTAL INFRASTRUCTURE ASSETS
5,142,363
5,168,563
5,144,963
5,171,163

Restricted assets

Art and cultural assets

Art and cultural assets - at cost - opening balance
9,279
8,731
11,615
11,066

Additions
13
548
13
549

Transfer between asset classes
(365)
-
(365)
-

Art and cultural assets - closing balance
8,927
9,279
11,263
11,615

Restricted buildings

Restricted buildings - at cost - opening balance
34,832
33,175
34,832
33,175

Accumulated depreciation
(6,793)
(5,766)
(6,793)
(5,766)

Total restricted buildings - opening balance
28,039
27,409
28,039
27,409

Additions
638
1,981
638
1,981

Depreciation expense
(1,302)
(1,240)
(1,302)
(1,240)

Disposals
-
(111)
-
(111)

Restricted buildings - closing balance
27,375
28,039
27,375
28,039

Restricted buildings - at cost - closing balance
35,470
34,832
35,470
34,832

Accumulated depreciation
(8,095)
(6,793)
(8,095)
(6,793)

Total restricted buildings - closing balance
27,375
28,039
27,375
28,039

Parks and reserves

Parks and reserves - at cost - opening balance
208,802
204,516
208,802
204,516

Additions
2,706
603
2,706
603

Disposals
(46)
(16)
(46)
(16)

Transfer between asset classes
-
3,699
-
3,699

Transfer to non-current assets held for sale
(1,283)
-
(1,283)
-

Parks and reserves - closing balance
210,179
208,802
210,179
208,802

Disposals and transfers are reported net of accumulated depreciation.

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Town Belt - at cost
84,544
88,103
84,544
88,103

Transfer between asset classes
-
(3,559)
-
(3,559)

Total restricted buildings - closing balance
84,544
84,544
84,544
84,544

Zoo animals - at cost
500
500
500
500

TOTAL RESTRICTED ASSETS
331,525
331,164
333,861
333,500

Work in progress

- Land
80
53
80
53

- Buildings
52,311
13,881
52,311
13,881

- Civic Centre complex
-
5,835
-
5,835

- Plant and equipment
7,990
13,354
8,074
13,944

- Drainage, waste and water
-
457
-
457

- Roading
-
4,840
-
4,840

- Art and cultural
169
173
169
173

- Restricted buildings
-
176
-
176

TOTAL WORK IN PROGRESS
60,550
38,769
60,634
39,359

Total property, plant and equipment
6,536,012
6,546,292
6,547,197
6,558,933

Core Assets

Included within the infrastructure assets above are the following core Council assets:

Council | 2014
| Closing book value | Additions | Replacement Cost
| Constructed | Vested
| $000 | $000 | $000 | $000
Water supply |  |  |  |
- treatment plants and facilities | 198,824 | 793 | - | 342,597
- other assets | 315,647 | 1,783 | - | 540,993
Sewerage |  |  |  |
- treatment plants and facilities | 171,589 | - | - | 211,785
- other assets | 317,622 | 3,873 | - | 725,665
Stormwater drainage | 327,629 | 3,032 | - | 615,621
Flood protection and control works | - | - | - | -
Roads and footpaths | 602,634 | 4,994 | 500 | 784,610
Total | 1,933,945 | 14,475 | 500 | 3,221,271

The replacement cost is based on the optimised replacement cost estimate amounts in the valuation for the 2013/14 year. The core value of Roads and footpaths shown above excludes the value of retaining walls, street lighting, sumps & leads and other related assets totalling $221.5 million that are included in the value of Roading assets under infrastructural assets as disclosed in the previous page.

Finance leases

The net carrying amount of plant and equipment assets held by the Council under finance leases is $0.739m (2013: $0.906m).

Revaluation of property, plant and equipment

The Council’s operational land and buildings were valued as at 30 June 2012, and infrastructural land as at 30 June 2014 by William Bunt (FNZIV, FPINZI), registered valuer and Director of Valuation Services for CBRE Limited.

Library collections were valued as at 30 June 2014 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. An independent peer review was conducted by Michaela O’Donovan, Manager Service Design and Implementation, National Library of New Zealand.

Drainage, waste and water infrastructure and the roading network were valued as at 30 June 2014 by John Vessey (MIPENZ), Partner of Opus International Consultants Limited.

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 2012 and 30 June 2014 for the operational land and buildings were assessed using appropriate indices. The increase in asset value of 3.4% was not considered material by management and accordingly the assets were not revalued at 30 June 2014.

Further information on revaluation reserves and movements is contained in Note 25: Revaluation reserves.

Service concession arrangement

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 drainage, waste and water asset 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 section 100 of the Local Government Act 2002, the Council does not fully rates fund the plant’s depreciation expenditure.

Veolia’s monthly management fee is determined in accordance with annually adjusted tariffs. The contract terminates either on the expiry of the 25 year term (2020) or on the occurrence of a contract default event by either party. The contract’s right of renewal resides with the Council.

Insurance of assets

Council

2014
$000
2013
$000

Total value of property, plant and equipment
6,536,012
6,546,292

Value or assets covered by insurance contracts
3,042,231
3,065,601

The maximum amount to which assets are insured under Council insurance policies
550,000
462,500

The value of assets covered by insurance excludes land and land under roads.

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 fund of $9.609m (2013: $10.022m) exists to meet the cost of claims that fall below deductible limits under Council insurance policies. Refer to Note 29: Special Reserves and Funds.

Note 19: Trade and other payables

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Trade payables and accruals

43,753
42,875
46,875
47,118

Trade payables owing to related parties

- Subsidiaries
42
1,203
980
-
-

- Associates
42
1,030
712
1,030
712

Interest payable

3,679
2,826
3,679
2,826

Sundry payables

8,603
11,182
9,368
12,326

TOTAL TRADE AND OTHER PAYABLES

58,268
58,575
60,952
62,982

Represented by:

Current

57,638
57,945
60,322
62,352

Non-current

630
630
630
630

Total trade and other payables

58,268
58,575
60,952
62,982

Trade payables are non-interest bearing and are normally settled on terms varying between seven days and the 20th of the month following the invoice date.

Note 20: Revenue in advance

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Inspection and licensing fees
2,335
2,392
2,335
2,392

Lease rentals
3,942
2,584
3,942
2,584

Rates and water
968
1,457
968
1,457

Indoor Community Sports Centre
1,800
2,043
1,800
2,043

Wellington Venues
1,547
1,270
1,547
1,270

Revenue in advance - subsidiaries
-
-
1,119
487

Other
1,513
1,659
1,513
1,659

Total revenue in advance
12,105
11,405
13,224
11,892

Note 21: Borrowings

The Council maintains a prudent borrowings position in relation to our equity and annual income. 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.

Net Borrowings

The following table offsets cash and cash equivalents and other current (12 months or less) investment deposits held against the gross borrowings to obtain a net borrowings position.

Net borrowings
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Total gross borrowing and overdraft facilities utilised
419,118
388,330
419,125
388,340

Less

Cash and cash equivalents
(52,573)
(44,389)
(56,853)
(50,518)

Bank deposits - term (3-12 months)
(20,000)
-
(20,400)
(400)

Total net borrowings
346,545
343,941
341,872
337,422

Further discussion and illustration of the net borrowing and investment position is included in the Financial Overview on page 106.

Gross Borrowings

The gross borrowings are comprised as follows:

Gross borrowings
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Current

Bank facilities - short term - committed
-
-
-
-

Commercial paper
100,000
100,000
100,000
100,000

Debt securities - fixed rate bonds
-
25,000
-
25,000

Debt securities - floating rate notes
29,000
30,000
29,000
30,000

Finance leases
371
562
375
565

Total current
129,371
155,562
129,375
155,565

Non-current

Bank loans - term
3,125
3,035
3,125
3,035

Debt securities - fixed rate bonds
20,000
15,409
20,000
15,409

Debt securities - floating rate notes
266,500
214,000
266,500
214,000

Finance leases
122
324
125
331

Total non-current
289,747
232,768
289,750
232,775

Total borrowings
419,118
388,330
419,125
388,340

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 31: Financial instruments.

Bank facilities

A total of $145m (2013: $145m) of committed bank facilities is available to the Council. Some $55m is on a short term basis of less than one year and $90m for longer than one year. Interest is payable in arrears at wholesale market rates. A further $5m (2013: $5m) is available as an uncommitted facility with interest payable in arrears at wholesale market rates. Of these facilities, none were drawn at the end of the reporting period (2013: Nil).

Bank loans – term

Loans for the Council relate to the wastewater treatment plant joint venture with Porirua City Council, and comprise several individual loans totalling $3.125m (2013: $3.035m) with maturities from 2015 to 2036. The average effective interest rate applicable is 7.00%

Commercial paper

The Group has issued $100m of commercial paper with maturities of three months or less. The interest is paid on issue. The interest rates range from 3.31% to 3.71%.

Debt securities

The Group has issued $20m (2013: $40m) of fixed rate bonds with maturities from 13 June 2016 to 31 July 2023. Interest is payable six monthly in arrears. The interest rates range from 4.47% to 7.13%. The value of fixed rate debt securities included a fair value hedge adjustment of $Nil (2013: $0.409m) relating to the fair value interest rate swaps associated with a bond that matured on 31 March 2014.

The Group has issued $295.5m (2013: $244m) of floating rate notes with maturities from 26 July 2014 to 15 April 2023. Interest is payable quarterly in arrears. The interest rates vary from 3.28% to 4.81% and are subject to quarterly reset dates.

The following table shows the further available but as yet unutilised borrowing facilities available to the Council and Group at the end of the reporting period.

Borrowing and overdraft facilities unutilised
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Bank facilities - short term - committed
55,000
55,000
55,000
55,000

Bank facilities - long term - committed
90,000
90,000
90,000
90,000

Bank facilities - short term - uncommitted
5,000
5,000
5,000
5,000

Bank overdraft
1,500
1,500
1,550
1,550

Total borrowing and overdraft facilities unutilised
151,500
151,500
151,550
151,550

Bank overdraft

An overdraft facility of $1.500m (2013: $1.500m) is available to Council. This facility was undrawn as at 30 June 2014 (2013: undrawn). The Group has additional overdraft facilities of $0.050m (2013: $0.050m).

Security

Council 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 $24.320m (2013: $15.442m) of cash that may only be used for a specified purpose; this amount has been offset against borrowings. As part of the agreement with the Crown for the Housing Upgrade Project an amount of $21.041m (2013: $13.059m), representing the accumulated cash surpluses from the Housing activity, has been ring fenced for future investment in the Council’s social housing assets. There is also an amount of $3.279m (2013: $2.383m) related to accumulated cash surpluses 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.

Finance lease liabilities

The Group has entered into finance leases for items of plant and equipment, predominantly computer equipment. The net carrying amount of the leased items is included within plant and equipment shown in Note 18: Property, plant and equipment.

The finance leases can be renewed at the Group’s option, with rentals set by reference to current market rates for items of equivalent age and condition. The Group does have the option to purchase the asset at the end of the lease term.

There are no restrictions placed on the Group by any of the finance leasing arrangements.

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

The finance lease liabilities are analysed as follows:

Analysis of finance lease liabilities
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Future minimum lease payments

Not later than one year
394
596
399
600

Later than one year and not later than five years
130
336
133
344

Later than five years
-
-
-
-

Total future minimum lease payments
524
932
532
944

Future finance charges
(31)
(46)
(32)
(48)

Present value of future minimum lease payments
493
886
500
896

Present value of future minimum lease payments

Not later than one year
371
562
375
565

Later than one year and not later than five years
122
324
125
331

Later than five years
-
-
-
-

Total present value of future minimum lease payments
493
886
500
896

Note 22: Employee benefit liabilities and provisions

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Current

Short-term benefits

Payroll accruals
771
459
1,039
793

Holiday leave
4,380
4,525
5,324
5,481

Total short-term benefits
5,151
4,984
6,363
6,274

Termination benefits

Other contractual provisions
77
714
77
714

Total termination benefits
77
714
77
714

Total current
5,228
5,698
6,440
6,988

Non-current

Long-term benefits

Long service leave provision
-
-
69
78

Retirement gratuities provision
1,207
1,474
1,219
1,486

Total long-term benefits
1,207
1,474
1,288
1,564

Total employee benefit liabilities and provisions
6,435
7,172
7,728
8,552

Movements in the above short term and long term benefit provisions are analysed as follows:

Long service leave provision
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
-
-
78
101

Additional or increased provision made
-
-
-
-

Release of provision
-
-
(9)
(23)

Amount utilised
-
-
-
-

Long service leave - closing balance
-
-
69
78

Retirement gratuities provision
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
1,474
1,649
1,486
1,699

Movement in required provision
(52)
(23)
(52)
(23)

Release of unused provision
(109)
(170)
(109)
(182)

Rediscounting of interest
92
102
92
102

Amount utilised
(198)
(84)
(198)
(110)

Retirement gratuities - closing balance
1,207
1,474
1,219
1,486

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.

Estimation

The gross retirement gratuities provision (inflation adjusted at 2.57%) as at 30 June 2014, before discounting, is $1.679m (2013: $2.093m). The discount rate used is 6.50%.

Movement in the above termination benefits provision is analysed as follows:

Other contractual provisions
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
714
1,229
714
1,229

New provision
77
714
77
714

Release of unused provision
-
(463)
-
(463)

Amount utilised
(714)
(766)
(714)
(766)

Other contractual provisions - closing balance
77
714
77
714

Background

The above provision is to cover estimated redundancy costs as at 30 June 2014 resulting from current restructuring within the Council.

Note 23: Provision for other liabilities

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Current

ACC Partnership programme
31
20
31
20

Landfill post closure costs
2,311
3,322
2,311
3,322

Storm costs
-
855
-
855

Weathertight homes
28,439
30,304
28,439
30,304

Total current
30,781
34,501
30,781
34,501

Non-current

Landfill post closure costs
13,468
13,027
13,468
13,027

Weathertight homes
21,954
36,675
21,954
36,675

Total non-current
35,422
49,702
35,422
49,702

Total provision for other liabilities
66,203
84,203
66,203
84,203

Movements in the above provisions for other liabilities are analysed as follows:

ACC Partnership programme
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
20
10
20
10

Change in provision for risks incurred
95
96
95
96

Amounts utilised
(84)
(86)
(84)
(86)

Total liability for claims outstanding
31
20
31
20

Represented by:

Present value of future payments
30
17
30
17

Risk margin
1
3
1
3

Total liability for claims outstanding
31
20
31
20

Background

The Council is a member of the Accident Compensation Corporation (ACC) partnership programme. The Council acts as an agent on behalf of ACC managing claims for its employees and providing entitlements under the Accident Insurance Act 1998 in relation to work-related personal injuries and illnesses.

Estimation

This provision represents an estimate of the claims outstanding at the end of the reporting period together with an estimate of the claims incurred but not yet reported.

Landfill post closure costs
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
16,349
17,217
16,349
17,217

Release of provision
(1,284)
(1,521)
(1,284)
(1,521)

Re-discounting of interest
1,018
1,069
1,018
1,069

Amount utilised
(304)
(416)
(304)
(416)

Landfill post closure costs - closing balance
15,779
16,349
15,779
16,349

Background

The Council operates the Southern Landfill (Stage 3) and has a 21.5% joint venture interest in the Spicer Valley Landfill. It also manages a number of closed landfill sites around Wellington. The Council has responsibility for the closure of its landfills and to provide ongoing maintenance and monitoring of the landfills after they are closed.

As part of the closure of landfills, or landfill stages, the Council’s responsibilities include:

final cover application and vegetation;

incremental drainage control features; and

completing facilities for post closure responsibilities.

Post closure responsibilities include:

treatment and monitoring of leachate;

ground water and surface monitoring;

gas monitoring and recovery;

implementation of remedial measures such as needed for cover and control systems; and

ongoing site maintenance for drainage systems, final cover and vegetation.

The management of the landfill will influence the timing of recognition of some liabilities – for example, the Southern Landfill operates in stages. A liability relating to any future stages will only be created when the stage is commissioned and when refuse begins to accumulate in this stage.

Estimations

The long term nature of the liability means there are inherent uncertainties in estimating costs that will be incurred. The provision has been estimated using known improvements in technology and known changes to legal requirements. Future cash flows are discounted using the rate of 6.50%. The gross provision (inflation adjusted at 2.80%), before discounting, is $23.287m as at 30 June 2014 (2013: $24.505m). 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 700,000m³ (2013: 658,051m³) and is expected to close in 2018. 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 an estimated remaining capacity of 536,000m³ (2013: 589,000m³) and an estimated remaining life out to the end of 2022.

Storm costs
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
855
-
855
-

New provision
-
855
-
855

Amount utilised
(855)
-
(855)
-

Storm costs - closing balance
-
855
-
855

Background

Following a severe storm in June 2013 a provision was made for an estimate of the associated clean-up costs not covered through the self-insurance reserve fund. The clean-up has been completed and the provision extinguished.

Weathertight homes
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
66,979
56,057
66,979
56,057

Additional or increased provision made
2,884
14,965
2,884
14,965

Amount utilised
(19,470)
(4,043)
(19,470)
(4,043)

Weathertight homes - closing balance
50,393
66,979
50,393
66,979

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 $4.997m (2013: $7.739m) as a provision for future claims relating to weathertightness issues not yet identified or not yet reported.

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 an applicable discount 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.

Timing of claim payments

Represents the expected timing of claim payments based on the expected length of time it takes to settle claims. This assumption is based on experience and the actual timings for claims already settled.

Participation in Financial Assistance Package scheme

The provision for 2014 includes certain actuarial assumptions around the Government’s Financial Assistance Package (FAP). This assumption is based on actual and expected participation rates in the scheme.

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.

The table below illustrates the potential impact on surplus or deficit of changes in some of the assumptions listed above.

Council and Group
2014

+10%
-10%

Assumption
Effect on
Surplus or Deficit

$000
$000

Amount claimed
5,039
(5,040)

Settlement level award
5,039
(5,040)

Council contibution to settlement
5,039
(5,040)

Timing of claim payments
241
(465)

Participation in FAP scheme
(1,748)
1,748

Change in percentage of homeowners who will make a successful claim
500
(500)

Council and Group
2014

+2%
-2%

Assumption
Effect on
Surplus or Deficit

$000
$000

Discount rate
(1,624)
1,353

Funding of weathertight homes settlements

Weathertight homes settlements are funded initially through borrowings. To repay those borrowings, the Council has agreed to incrementally increase rates by 0.75% per annum until such time as the weathertight homes liability has been settled and the associated borrowings and funding costs are repaid. 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

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
(3,442)
(2,562)
(3,442)
(2,562)

Funding for weathertight homes liability
4,996
3,331
4,996
3,331

Total amounts paid
(19,470)
(4,043)
(19,470)
(4,043)

Interest allocation
(614)
(168)
(614)
(168)

Closing balance funded through borrowings
(18,530)
(3,442)
(18,530)
(3,442)

Note 24: Accumulated funds and retained earnings

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Accumulated funds

1,269,134
1,269,134
1,293,162
1,293,162

Retained earnings

Opening balance

3,653,843
3,628,545
3,677,647
3,650,181

Net surplus

27,465
28,187
30,988
30,442

Transfers from revaluation reserves
25
-
370
-
370

Transfers from restricted funds
28
8,056
813
8,307
1,293

Transfers to restricted funds
28
(4,779)
(4,072)
(5,097)
(4,639)

Retained earnings - closing balance

3,684,585
3,653,843
3,711,845
3,677,647

Total accumulated funds and retained earnings

4,953,719
4,922,977
5,005,007
4,970,809

Note 25: Revaluation reserves

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Land - opening balance
144,302
144,672
144,302
144,672

Transfer between classes
(48)
-
(48)
-

Transfer to retained earnings on disposal of assets
-
(370)
-
(370)

Land - closing balance
144,254
144,302
144,254
144,302

Buildings - opening balance
240,462
240,462
240,462
240,462

Revaluation adjustment
(9,295)
-
(9,295)
-

Buildings - closing balance
231,167
240,462
231,167
240,462

Library collections - opening balance
7,147
7,147
7,147
7,147

Revaluation recognised in other comprehensive income
(132)
-
(132)
-

Library collections - closing balance
7,015
7,147
7,015
7,147

Drainage, waste and water - opening balance
641,549
641,549
641,549
641,549

Revaluation recognised in other comprehensive income
(23,397)
-
(23,397)
-

Drainage, waste and water - closing balance
618,152
641,549
618,152
641,549

Infrastructure land - opening balance
13,347
13,347
13,347
13,347

Revaluation recognised in other comprehensive income
2,015
-
2,015
-

Transfer between classes
48
-
48
-

Infrastructure land - closing balance
15,410
13,347
15,410
13,347

Roading - opening balance
370,516
370,516
372,389
372,389

Revaluation recognised in other comprehensive income
(14,481)
-
(16,354)
-

Roading - closing balance
356,035
370,516
356,035
372,389

Associates’ revaluation reserves - opening balance
-
-
109,934
109,934

Revaluation recognised in other comprehensive income
-
-
-
-

Effect of changed shareholding in associates
-
-
38
-

Associates’ revaluation reserves - closing balance
-
-
109,972
109,934

TOTAL REVALUATION RESERVES
1,372,033
1,417,323
1,482,005
1,529,130

These revaluation reserves are represented by:

Opening balance
1,417,323
1,417,693
1,529,130
1,529,500

Revaluation recognised in other comprehensive income
(45,290)
-
(47,163)
-

Effect of changed shareholding in associates
-
-
38
-

Transfer to retained earnings on disposal of assets
-
(370)
-
(370)

Total revaluation reserves - closing balance
1,372,033
1,417,323
1,482,005
1,529,130

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 2014 Council revalued its infrastructure assets (networks and land), library collections and investment properties.

The Council is conducting a stocktake of infrastructural assets. The decrease on revaluation recorded in the 2014 financial year is due to the improvement in data about the condition and quantity of infrastructural assets that Council owns.

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.

Note 26: Hedging reserve

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
(9,955)
(23,896)
(9,956)
(24,050)

Cash flow hedge net movement recognised in other comprehensive income
9,552
14,104
9,552
14,104

Cash flow hedge movement reclassified to finance income
-
(163)
-
(163)

Cash flow hedge movement reclassified to share of equity accounted surplus of associate
-
-
1
153

Hedging reserve - closing balance
(403)
(9,955)
(403)
(9,956)

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 Group includes the equity accounted net movement in the hedging reserve of our associate, Wellington International Airport Limited.

Note 27: Fair value through other comprehensive income reserve

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Opening balance
93
154
93
154

Fair value adjustment taken to other comprehensive income
(30)
(61)
(30)
(61)

Fair value through other comprehensive income - closing balance
63
93
63
93

This reserve reflects the accumulated fair value movement in the Council’s investment in Civic Assurance, for which there is no intention to sell. See Note 13: Other financial assets - for further information.

Note 28: Restricted funds

Council
Group

Note
2014
$000
2013
$000
2014
$000
2013
$000

Special reserves and funds
29
14,271
17,553
17,025
20,240

Trusts and bequests
30
412
407
412
407

14,683
17,960
17,437
20,647

Opening balance

17,960
14,701
20,647
17,301

Additional funds

4,779
4,072
5,097
4,639

Funds utilised

(3,813)
(813)
(4,064)
(1,293)

Funds released to retained earnings

(4,243)
-
(4,243)
-

Restricted funds - closing balance

14,683
17,960
17,437
20,647

These funds are held by Council for specific purposes. More detailed information on the Council’s restricted funds is disclosed in Note 29: Special reserves and funds and Note 30: Trusts and bequests.

Note 29: Special reserves and funds

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Wellington economic initiatives development fund

Opening balance
3,000
-
3,000
-

Additional funds
3,000
3,000
3,000
3,000

Funds utilised
(1,625)
-
(1,625)
-

Wellington economic initiatives development fund - closing balance
4,375
3,000
4,375
3,000

Reserve purchase and development fund

Opening balance
285
299
285
299

Additional funds received
2
7
2
7

Funds utilised
-
(21)
-
(21)

Reserve purchase and development fund - closing balance
287
285
287
285

Early Settlers Memorial Park reserve

Opening balance
3
23
3
23

Funds utilised
(3)
(20)
(3)
(20)

Early Settlers Memorial Park reserve - closing balance
-
3
-
3

Insurance reserve

Opening balance
10,022
9,723
10,022
9,723

Additional funds received
750
750
750
750

Funds utilised - net of recoveries
(1,163)
(451)
(1,163)
(451)

Insurance reserve - closing balance
9,609
10,022
9,609
10,022

Subsidiaries’ restricted funds

Opening balance
-
-
2,687
2,600

Additional funds received
-
-
318
567

Funds utilised
-
-
(251)
(480)

Subsidiaries’ restricted funds - closing balance

2,754
2,687

Subdivision development reserve
-
4,119
-
4,119

Other reserves
-
124
-
124

Total special reserves and funds - closing balance
14,271
17,553
17,025
20,240

Wellington economic initiatives development fund

This fund has been set up to be part of an integrated approach to fostering growth in the economy.

Reserve purchase and development fund

This fund is used to purchase and develop reserve areas within the city but was not utilised during this year.

Early Settlers Memorial Park reserve

This reserve is used to upgrade and maintain the Bolton Street Cemetery and surrounding park and walkways. This fund has now been exhausted.

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 $0.750m (2013: $0.750m) are funded through rates as identified in the Annual Plan.

Subsidiaries’ restricted funds

The restricted funds of the subsidiaries relate to the Wellington Museums Trust and the Wellington Zoo Trust:

The Wellington Museums Trust has three reserves; a Capital Reserve, a Colonial Cottage Museum Collection reserve and a City and Sea Collection reserve. The two collection reserves are for the purpose of future museum acquisitions.

The Wellington Zoo Trust has a number of trust and bequests made, which are held as restricted funds until utilised.

Note 30: Trusts and bequests

Council
Closing Balance
2013
$000
Additional Funds
2014
$000
Funds Utilised
2014
$000
Closing Balance
2014
$000

A Graham Trust
3
-
-
3

A W Newton Bequest
286
15
-
301

Charles Plimmer Bequest
-
1,009
(1,009)
-

E A McMillan Estate
6
-
-
6

E Pengelly Bequest
12
1
-
13

F L Irvine Smith Memorial
6
1
-
7

Greek NZ Memorial Association
5
-
-
5

Kidsarus 2 Donation
3
-
-
3

Kirkcaldie and Stains Donation
17
-
-
17

QEII Memorial Book Fund
20
1
(3)
18

Schola Cantorum Trust
6
-
-
6

Stanley Banks Trust
19
-
(10)
9

Terawhiti Grant
10
-
-
10

Wellington Beautifying Society Bequest
14
-
-
14

Total trusts and bequests
407
1,027
(1,022)
412

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.

Charles Plimmer - Distributions through the Public Trust recognised as income - $1.009m

Funds utilised

Trusts and bequests funds utilised during the year were:

Charles Plimmer

Grasslees Park, Tawa - $550,000

Alex Moore Park and walkway - $380,000

Botanical Gardens Children’s garden - $79,000

Stanley Banks

educational grants to children of WWII service personnel - $10,300

QEII Memorial Book fund

Purchase of Commonwealth language books - $3,000

Other than those specific trusts and bequests discussed above, the others are generally provided for library, educational or environmental purposes.

Note 31: Financial Instruments

The following tables provide an analysis of the Council’s financial assets and financial liabilities by reporting category as described in the summary of accounting policies:

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Financial assets

Loans and receivables

Cash and cash equivalents
52,573
44,389
56,853
50,518

Trade and other receivables
37,387
49,556
39,664
52,047

Other financial assets
27,376
5,866
27,776
6,266

Total loans and receivables
117,336
99,811
124,293
108,831

Financial assets at fair value through other comprehensive income

Other financial assets
2,473
2,503
2,473
2,903

Total financial assets at fair value through other comprehensive income
2,473
2,503
2,473
2,903

Hedged derivative financial instruments

Derivatives designated as cash flow hedges
4,428
3,280
4,428
3,280

Derivatives designated as fair value hedges
-
409
-
409

Total hedged derivative financial instruments
4,428
3,689
4,428
3,689

Total financial assets
124,237
106,003
131,194
115,423

Total non-financial assets
6,782,955
6,805,315
6,946,394
6,965,931

TOTAL ASSETS
6,907,192
6,911,318
7,077,588
7,081,354

Financial liabilities

Financial liabilities at amortised cost

Trade and other payables
58,268
58,575
60,952
62,982

Borrowings
419,118
388,330
419,125
388,340

Total financial liabilities at amortised cost
477,386
446,905
480,077
451,322

Derivative financial instruments

Derivatives designated as cash flow hedges
4,831
13,235
4,831
13,235

Total derivative financial instruments
4,831
13,235
4,831
13,235

Financial liabilities at fair value through surplus/deficit

Derivative financial instruments - non-hedged
137
-
137
-

Total financial liabilities at fair value through surplus/deficit
137
-
137
-

Total financial liabilities
482,354
460,140
485,045
464,557

Total non-financial liabilities
84,743
102,780
88,434
106,074

Total liabilities
567,097
562,920
573,479
570,631

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.

Council and Group
2014
2013

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 income
-
-
2,473
-
-
2,503

Derivative financial instruments

- Fair value hedges
-
-
-
-
409
-

- Cash flow hedges
-
4,428
-
-
3,280
-

Financial liabilities

Derivative financial instruments

- Cash flow hedges
-
4,831
-
-
13,235
-

- non-hedged swaps
-
137
-
-
-
-

Reconciliation of fair value movements in Level 3
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Equity investments

Opening balance - 1 July
2,503
2,681
2,503
2,681

Purchases
-
-
-
-

Disposals
-
(117)
-
(117)

Gains or losses recognised in other comprehensive income
(30)
(61)
(30)
(61)

Closing balance - 30 June
2,473
2,503
2,473
2,503

The level 3 equity investments comprise the Council’s shareholdings in the Local Government Funding Agency $1.833m (2013: $1.833m) and Civic Assurance $0.590m (2013:$0.620m). Refer to Note 13: Other financial assets 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 37: Contingencies). 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

2014
$000
2013
$000
2014
$000
2013
$000

Financial instruments with credit risk

Cash and cash equivalents
52,532
44,284
56,797
50,403

Derivative financial instrument assets
4,428
3,689
4,428
3,689

Trade and other receivables

- Trade receivables
15,268
15,482
16,520
16,609

- Other receivables
22,119
34,074
23,144
35,438

Other financial assets

- Bank deposits - term
20,000
-
20,400
400

- LGFA borrower notes
1,328
480
1,328
480

- Loans to related parties - associates
1,586
1,407
1,586
1,407

- Loans to related parties - other organisations
4,312
3,979
4,312
3,979

- Loans to external organisations
150
-
150
-

Financial guarantees to related parties
600
700
600
700

Total financial instruments with credit risk
122,323
104,095
129,265
113,105

Receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

The Council is exposed to credit risk as a guarantor of the LGFA’s borrowings. Further information about this exposure is explained in Note 37: Contingencies.

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.

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Cash - registered banks

AA-
4,434
7,284
5,600
10,105

Short term deposits - registered banks

AA-
48,098
36,000
51,197
38,970

A+
-
1,000
-
1,328

Term deposits (greater than 3 months) - registered banks

AA-
10,000
-
10,400
400

A+
10,000
-
10,000
-

Term deposits - borrower notes - NZ LGFA

AA+
1,328
480
1,328
480

Derivative financial instrument assets

AA-
4,428
3,689
4,428
3,689

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

2014
$000
2013
$000
2014
$000
2013
$000

Contractual cash flows of financial liabilities excluding derivatives

0-12 months
200,845
224,791
203,534
229,832

1-2 years
104,395
39,429
104,398
38,804

2-5 years
139,265
176,441
139,265
176,444

More than 5 years
95,146
46,526
95,146
46,526

TOTAL CONTRACTUAL CASH FLOWS OF FINANCIAL LIABILITIES EXCLUDING DERIVATIVES
539,651
487,187
542,343
491,606

Represented by:

Carrying amount as per the Statement of Financial Position
477,386
446,905
480,077
451,322

Future interest payable
62,265
40,282
62,266
40,284

Total contractual cash flows of financial liabilities excluding derivatives
539,651
487,187
542,343
491,606

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

2014
$000
2013
$000
2014
$000
2013
$000

Contractual cash flows of derivative financial liabilities

0-12 months
3,478
6,612
3,478
6,612

1-2 years
1,464
4,310
1,464
4,310

2-5 years
1,289
3,998
1,289
3,998

More than 5 years
(252)
39
(252)
39

TOTAL CONTRACTUAL CASHFLOW OF DERIVATIVE FINANCIAL LIABILITIES
5,979
14,959
5,979
14,959

Represented by:

Future interest payable
5,979
14,959
5,979
14,959

Total contractual cash flows of derivative financial liabilities
5,979
14,959
5,979
14,959

In addition to cash to be received in 2014/15 the Council currently has $145m in unused committed bank facilities available to settle obligations as well as $89.915m of cash, cash equivalents and receivables and is expected to have sufficient cash to meet all contractual liabilities as they fall due.

The Council is exposed to liquidity risk as a guarantor of all of LGFA’s borrowings. This guarantee becomes callable in the event of the LGFA failing to pay its obligations when they fall due. Information about this exposure is explained in Note 37: Contingencies.

The Council mitigates exposure to liquidity risk by managing the maturity of its borrowings programme within the following maturity limits:

Period | Minimum | Maximum | Actual
0-3 years | 20% | 60% | 53%
3-5 years | 20% | 60% | 21%
More than 5 years | 15% | 60% | 26%

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 debt prior interest rate swaps | Actual % of fixed debt after interest rate swaps
50% | 95% | 6% | 90%

The table below shows the effect of the interest rate swaps at reducing the Council’s exposure to interest rate risk:

Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Financial instruments subject to interest rate volatility - before effect of interest rate swaps

Cash and cash equivalents
52,573
44,389
56,853
50,518

Bank deposits - term greater than 3 months
20,000
-
20,400
400

Bank facilities - short term
-
-
-
-

Bank loans
(3,125)
(3,035)
(3,125)
(3,035)

Commercial paper
(100,000)
(100,000)
(100,000)
(100,000)

Debt securities - floating rate notes
(295,500)
(244,000)
(295,500)
(244,000)

Total financial instruments subject to interest rate volatility - before effect of interest rate swaps
(326,052)
(302,646)
(321,372)
(296,117)

Effect of interest rate swaps in reducing interest rate volatility

Effect of fair value hedge
-
(25,000)
-
(25,000)

Effect of Cash flow interest rate swaps - hedged
303,500
277,000
303,500
277,000

Effect of Cash flow interest rate swaps - non-hedged
7,500
-
7,500
-

Total effect of interest rate swaps in reducing interest rate volatility
311,000
252,000
311,000
252,000

Total financial instruments subject to interest rate volatility - after effect of interest rate swaps
(15,052)
(50,646)
(10,372)
(44,117)

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 2014 the fair value of the interest rate swaps was -$0.540m (2013: -$9.546m). This liability will reduce to zero as the swaps reach the end of their lives, and therefore do not represent a liability that the Council will be required to pay cash to settle.

Given that the interest rate swaps have terms that match with the borrowings (short term bank facilities, commercial paper and debt securities), it is appropriate to include the effect of the interest rate swaps on the borrowings interest rate and present the net effective interest rates for the underlying borrowings:

Weighted effective interest rates
Council
Group

2014
%
2013
%
2014
%
2013
%

Investments

Cash and cash equivalents
3.79
3.18
3.71
3.17

Short term deposits > 3 months
4.29
-
4.29
-

Bank deposits - term
-
-
-
4.25

LGFA - borrower notes
4.11
3.35
4.11
3.35

Loans to related parties
-
-
-
-

Borrowings

Bank facilities - short term
-
-
-
-

Bank loans
7.00
7.00
7.00
7.00

Commercial paper
3.46
2.78
3.46
2.78

Debt securities - fixed
5.14
6.32
5.14
6.32

Debt securities - floating
4.17
3.50
4.17
3.50

Derivative financial instruments - hedged
5.04
5.00
5.04
5.00

Derivative financial instruments - non-hedged
4.84
-
4.84
-

Finance leases
10.20
10.28
10.21
10.29

Loans to related parties, being the loans to the Wellington Regional Stadium Trust and to the Karori Wildlife Sanctuary Trust, are both on interest free terms.

Sensitivity analysis

While the Council has significantly reduced the impact of short-term fluctuations on the Group’s earnings through interest rate swap arrangements, there is still some exposure to changes in interest rates.

The tables below illustrate the potential surplus and deficit impact of a 1% change in interest rates based on the Council’s and the Group’s exposures at the end of the reporting period:

Council

2014

+1%
-1%
+1%
-1%

Interest rate risk

Effect on Surplus
or Deficit
Effect on Other Comprehensive Income

Note
$000
$000
$000
$000

Financial assets

Cash and cash equivalents - Council
a
526
(526)

Bank deposits - term greater than 3 months

200
(200)

LGFA - Borrower notes

13
(13)

Derivatives - Interest rate swaps - hedged
b

7,417
(8,023)

Financial liabilities

Bank term loans

(31)
31

Commercial paper
c
(180)
180

Debt securities
d
(840)
840

Derivatives - Interest rate swaps - hedged
b

8,069
(8,496)

Derivatives - Interest rate swaps - non-hedged
e
859
(916)

Total sensitivity to interest rate risk

547
(604)
15,486
(16,519)

a. Cash and cash equivalents

Council funds are in a number of different registered bank accounts with interest payable on the aggregation of all accounts. A movement in interest rates of plus or minus 1% has an effect on interest income of $0.526m.

b. Derivatives - hedged interest rate swaps

Derivatives include interest rate swaps with a fair value totalling -$0.540m. A movement in interest rates of plus 1% has an effect on increasing the unrealised value of the hedged interest rate swaps by $15.486m. A movement in interest rates of minus 1% has an effect on reducing the unrealised value of the hedged interest rate swaps by $16.519m.

c. Commercial paper

Commercial paper is part of a programme and subject to floating rates and totals $100m. The full exposure to changes in interest rates has been reduced because the Council has $82m of the 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 $0.180m.

d. Debt securities

Debt securities at floating rates total $295.500m. The full exposure to changes in interest rates has been reduced because the Council has $211.500m of this debt at fixed rates through interest rate swaps. Debt securities at fixed rates total $20m. A movement in interest rates of plus or minus 1% has an effect on the interest expense of $0.840m.

e. Derivatives – non-hedged interest rate swaps

Council presently has non-hedged interest rate swaps with a fair value totalling $0.137m. A movement in interest rates of plus 1% has an effect on the interest expense of $0.859m. A movement in interest rates of minus 1% has an effect on the interest expense of -$0.916m.

Equity management

The Group’s equity includes accumulated funds and retained earnings, revaluation reserves, a hedging reserve, a fair value through other comprehensive income reserve and restricted funds which comprise special funds, reserve funds and trusts and bequests.

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 32: Analysis of operating surplus by activity area

This analysis by activity area is a summary of the “what it cost” information within the Statements of Service Performance. Refer to pages 24 to 97 for more detailed information including variance explanations in respect of the Council’s strategies and activities.

Operating Income and Expenditure

Council
Income
Expenditure
Net
Net

Actual
2014
$000
Budget
2014
$000
Actual
2014
$000
Budget
2014
$000
Actual
2014
$000
Budget
2014
$000
Variance
2014
$000

Activity area

Governance
1,102
733
16,590
17,314
(15,488)
(16,581)
1,093

Environment
21,349
15,440
142,512
144,978
(121,163)
(129,538)
8,375

Economic development
22,137
186
42,143
19,080
(20,006)
(18,894)
(1,112)

Cultural wellbeing
933
1,013
17,311
17,361
(16,378)
(16,348)
(30)

Social and recreation
62,082
68,490
100,078
101,146
(37,996)
(32,656)
(5,340)

Urban development
9,300
11,473
35,020
27,634
(25,720)
(16,161)
(9,559)

Transport
33,731
33,056
53,890
54,473
(20,159)
(21,417)
1,258

Total activity areas
150,634
130,391
407,544
381,986
(256,910)
(251,595)
(5,315)

Council
301,057
293,973
16,682
6,711
284,375
287,262
(2,887)

Total activity areas and Council
451,691
424,364
424,226
388,697
27,465
35,667
(8,202)

The variance in Governance is due to savings arising from personnel vacancies during the year.

Environment is under budget due to assets which have been vested to Council. The value of these assets is reflected as income. The favourable position was also impacted by a reduction in the Closed Landfill Provision, and lower landfill operations, refuse collection and waste water treatment plant operational costs.

The variance in Economic Development is due to unbudgeted investments in economic projects, which were funded via the Wellington Economic Initiatives Development Fund (WEID). A total of $3m for WEID was approved by Council, after the 2013/14 Annual Plan was finalised, and was to be funded out of the 2012/13 Audited Operating Surplus.

Social and Recreation is over budget mainly due to the timing of grant income recognition relating to the Housing Upgrade Project. Libraries are also over budget due to lower operating revenue and higher personnel and depreciation expenditure.

Transport is under budget due to assets which have been vested to Council. The value of these assets is reflected as income. This has offset an unfavourable variance in parking due to lower enforcement revenue and one off costs associated with transitioning parking enforcement from an external contractor to an internal Council team.

Urban development is over budget due to a downward movement in the fair value of investment properties and additional depreciation costs all relating to the Wellington Waterfront Project.

The variance in Council is due to number of factors including the increase in the provision for weathertight homes, payments from the insurance reserve, the decrease in the value of commercial properties and reduced rates revenue. Offset by higher than budgeted Wellington International Airport Limited dividend income.

Other major operating income and expenditure budget variances are explained within Note 33: Major budget variations.

Council
Income
Expenditure
Net
Net

Actual
2013
$000
Budget
2013
$000
Actual
2013
$000
Budget
2013
$000
Actual
2013
$000
Budget
2013
$000
Variance
2013
$000

Activity area

Governance
475
384
14,993
15,287
(14,518)
(14,903)
385

Environment
21,732
14,897
140,030
140,022
(118,298)
(125,125)
6,827

Economic development
14,835
-
33,033
19,404
(18,198)
(19,404)
1,206

Cultural wellbeing
1,115
1,047
17,938
17,898
(16,823)
(16,851)
28

Social and recreation
63,707
70,642
96,694
97,468
(32,987)
(26,826)
(6,161)

Urban development
19,725
10,684
36,453
25,777
(16,728)
(15,093)
(1,635)

Transport
34,385
33,400
50,713
53,737
(16,328)
(20,337)
4,009

Total activity areas
155,974
131,054
389,854
369,593
(233,880)
(238,539)
4,659

Council
290,441
285,552
28,374
9,587
262,067
275,965
(13,898)

Total activity areas and Council
446,415
416,606
418,228
379,180
28,187
37,426
(9,239)

Note 33: Major budget variations

Statement of Comprehensive Financial Performance
Council

2014
$000
2013
$000

Reconciliation of actual surplus to underlying surplus and variance to budget

Council actual net surplus
27,465
28,187

Less:

Fair value movements:

Investment property revaluation (including Wellington Waterfront Project)
7,661
(5,385)

Other
175
(298)

Total fair value movements
7,836
(5,683)

Additional net expenditure from Wellington Waterfront and Venues Projects and Porirua Joint Ventures
5,003
6,764

Changes to external funding for capital expenditure:

Restricted funds income
52
(72)

(Increase)/Decrease in development contributions revenue
(873)
644

Timing of the Housing New Zealand capital grant
6,225
6,513

Change in New Zealand Transport Agency reimbursement - capital
(227)
(139)

Additional external funding towards capital projects
(730)
(271)

Total changes to external funding for capital expenditure
4,447
6,675

Vested assets - income
(8,468)
(10,519)

Gain on disposal of assets
(2,786)
(360)

Loss on disposal of assets and intangible assets
4,647
1,487

Loss on impairment of assets
458
-

Expenditure not funded under section 100 of LGA

New Zealand Transport Agency funded transport projects
110
(31)

Moa Point Treatment Plant and Living Earth
-
(517)

Total additional expenditure not funded under section 100 of LGA
110
(548)

Underlying Council actual net surplus
38,712
26,003

less Council budget net surplus
35,667
37,426

Council underlying variance from budget
3,045
(11,423)

Major Budget Variations

Unbudgeted revenue/(expenditure):

Restatement of weathertight homes provision
(2,884)
(14,965)

Provision for storm costs
-
(855)

Insurance costs (net of recoveries) funded through insurance reserve
(1,163)
(451)

Total unbudgeted revenue/expenditure
(4,047)
(16,271)

Significant variations from budget

Decrease in rates revenue
(498)
(2,228)

Decrease in income from activities
(1,052)
(3,276)

Dividends in excess of budget (including Wellington International Airport Limited)
2,181
1,624

Decrease in net interest expense
1,762
1,997

Decrease in depreciation
1,244
2,820

Other net variances¹
1,605
2,039

Total significant variations from budget
5,242
2,976

COUNCIL UNDERLYING VARIANCE EXCLUDING RINGFENCED AMOUNTS
1,195
(13,295)

Variance in ringfenced City Housing surplus / (deficit)
973
505

Variance in ringfenced Waste Activity surplus / (deficit)
877
1,367

Council underlying variance from budget
3,045
(11,423)

Other net variances relate to other reduced costs in programmes, projects and organisational costs.

Statement of Changes in Equity

Significant variations from budgeted changes in equity are as follows:

$8.202m of lower surplus in the current year,

$221.411m of lower revaluation movements for Property, plant and equipment due to improved data on the condition and quantity of infrastructure assets owned, and

$9.552m of favourable movements in the hedging reserve.

Total equity is $230.281m lower than budgeted primarily due to the $220.061m of variations above, plus a $10.190m lower opening position due to annual plan budget timing.

Statement of Financial Position

Significant variations from budget are as follows:

Current assets are $64.474m higher than budget primarily due to:

Higher short term deposits due to prefunding of debt repayments - $20.000m

Higher short-term deposits due to unspent capital expenditure - $44.470m

Non-current assets are $245.052m lower than budget primarily due to

Lower values for property, plant and equipment due to revaluations - $221.411m

Lower values for investment properties due to revaluations - $7.573m

Payment of a trade receivable recognised as non-current in the annual plan budget which was repaid in the current year - $12.675m.

Higher derivative asset values due to favourable changes in the interest rate valuation curves (ie. due to higher interest rates) - $3.479m

Total liabilities are $49.703m higher than budget due to:

Lower derivative liability values due to favourable changes in the interest rate valuation curves and timing of the annual plan budget - $19.313m

Higher provisions for other liabilities, primarily weathertight homes, mainly due to annual plan timing differences - $22.118m

Higher levels in gross borrowings due to prefunding of debt repayments on favourable interest rates, and differences in annual plan budget timing, offset by underspends in the capital expenditure programme - $43.483m

Statement of Cash Flows

Significant variations from budget are as follows:

Net cash flows from operating activities increased by $4.298m primarily due to higher revenue from activities and other income - $28.996m and grants received - $7.428m, offset by higher payments to suppliers and employees - $15.502m and grants paid - $2.952m.

Net cash flows from investing activities were slightly below budget in total but included higher dividends – $2.181m and unbudgeted interest received of $2.230m. This was offset by lower proceeds from the sale of Property, plant and equipment - $10.987m but increased investments, primarily bank deposits greater than 3 months of $20.000m. Less cash was also spent on the purchase of new Property, plant and equipment - $29.266m.

Note 34: Analysis of capital expenditure by activity area 

This analysis reports capital expenditure performance against the approved budget contained within the Annual Plan by activity area. The note reflects Wellington City Council capital expenditure only.

Council
Annual
Plan
Budget
Budget
Brought
Forward
from
Total
Capex
Budget
Budget
to Carry
Forward
to
Available
Capex
Budget
Actual
Capex
Variance
Net

2014
$000
2013
$000
2014
$000
2015
$000
2014
$000
2014
$000
2014
$000

Activity area

Governance
110
-
110
-
110
53
57

Environment
29,203
5,467
34,670
(2,796)
31,874
27,680
4,194

Economic development
765
3,531
4,296
(480)
3,816
3,551
265

Cultural wellbeing
26
-
26
-
26
-
26

Social and recreation
38,278
13,239
51,517
(3,802)
47,715
38,368
9,347

Urban development
26,087
2,897
28,984
(3,519)
25,466
13,650
11,816

Transport
31,321
1,655
32,976
(1,503)
31,473
28,875
2,598

Total activity areas
125,790
26,789
152,579
(12,100)
140,480
112,177
28,303

Council
13,929
5,954
19,883
(2,826)
17,056
15,815
1,241

Total capital expenditure
139,719
32,743
172,462
(14,926)
157,536
127,992
29,544

Excluding additional expenditure funded from external sources:

SPCA Capital contribution towards Chest Hospital
309

Track Maintenaince for Spicer Forest
3

Insurance recoveries for June 2013 storm damage repairs
438

Halfway House Glenside from Lotteries Commission
28

Cost recover for retaining wall 64A Waripori St
20

Cost recovery for retaining wall works (2-8 Durham Crescent)
1

Greater Wellington Regional Council funding for Park & Ride facilities (Raroa Station on Fraser Ave)
50

Greater Wellington Regional Council funding for Bus Stop facilities (Churchill Drive, Ngaio)
50

Private work carried out in association with bus layby (114A Newlands Rd, Newlands)
2

Total adjusted net variance
30,445

The $29.54m variance in the capital expenditure programme represents a shift in Council’s process, where the majority of these projects will be reprioritised in the forthcoming 2015-25 Long-term Plan to ensure the Council has the capacity to deliver these projects within the financial year that they will be budgeted for.

The variance of $29.54m has been adjusted for additional external funding received over and above budget.

Budget to carry forward

Amounts committed for future expenditure at end of the reporting period from within these capital expenditure budget carry forwards have been included within Note 36: Commitments.

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 Performance.

Council
Annual
Plan
Budget
Budget
Brought
Forward
from
Total
Capex
Budget
Budget
to Carry
Forward
to
Available
Capex
Budget
Actual
Capex
Variance
Net

2013
$000
2012
$000
2013
$000
2014
$000
2013
$000
2013
$000
2013
$000

Activity area

Governance
-
31
31
-
31
19
12

Environment
27,186
5,254
32,440
(5,467)
26,973
26,963
10

Economic development
5,494
1,736
7,230
(3,531)
3,699
3,313
386

Cultural wellbeing
40
-
40
-
40
10
30

Social and recreation
47,075
8,057
55,132
(13,239)
41,893
41,091
802

Urban development
9,545
2,979
12,524
(2,897)
9,627
11,726
(2,099)

Transport
32,258
8,473
40,731
(1,655)
39,076
39,803
(727)

Total activity areas
121,598
26,530
148,128
(26,789)
121,339
122,925
(1,586)

Council
14,539
5,032
19,571
(5,954)
13,617
11,192
2,425

Total capital expenditure
136,137
31,562
167,699
(32,743)
134,956
134,117
839

Excluding additional expenditure funded from external sources:

Zoo Trust - Contribution
461

Trench Sharing - Wellington Electricity Lines Limited
109

Track Maintenance - Spicer Forest
99

The Nest Te Kōhanga - Zoo Trust
82

Town Belt Maintenance - Max Drake
50

Willis Street - Wellington Electricity Lines Limited
31

Ross Street - Wellington City Transport Limited
18

ASB Sports Centre - Four Winds
15

Karori Recreation Centre - Energy Efficiency and Conservation Authority
8

Minor funding for capital works
2

Total adjusted net variance
1,714

Note 35: Capital expenditure performance 

Capital expenditure projects

The following analysis shows the actual capital expenditure against budget. Projects are classified according to the strategic area. Detailed commentaries on each strategic area, activity and the outcomes that they contribute towards are contained in the strategy area section of the Statements of Service Performance.

Actual
Expenditure¹
Proposed Budget
Carry Forward²
Forecast Completion
of total Capex Budget
Budget3
Notes

2014
$000
2014
$000
2014
$000
2014
$000

Governance

City governance and engagement
53
-
53
110

Total Governance
53
-
53
110

Environment

Local parks and open spaces
1,939
220
2,159
2,207

Botanical gardens
661
-
661
886
4

Water network
10,984
710
11,694
12,577

Sewage collection and disposal network
7,924
-
7,924
8,242

Stormwater management
4,193
-
4,193
5,220

Conservation visitor attractions
1,203
1,866
3,069
3,069

Other
776
-
776
2,469
5

Total Environment
27,680
2,796
30,476
34,670

Economic development

Visitor attractions and Convention venues
3,551
480
4,031
4,296

Total Economic development
3,551
480
4,031
4,296

Cultural Wellbeing
-
-
-
26

Social and recreation

Swimming Pools
3,713
3,802
7,515
7,516

Sportsfields
888
-
888
864

Libraries
2,103
-
2,103
2,099

Housing
27,763
-
27,763
37,237
6

Public toilets
484
-
484
537

Other
3,417
-
3,417
3,264

Total Social and recreation
38,368
3,802
42,170
51,517

Urban development

Urban planning and policy
535
-
535
527

Waterfront development
5,882
-
5,882
9,532

Public spaces and centres development
3,325
1,854
5,179
5,070

Earthquake risk mitigation - built environment
3,908
1,665
5,573
13,856
7

Total Urban development
13,650
3,519
17,169
28,985

Transport

Vehicle network
19,278
1,300
20,578
21,717

Cycle network
1,886
-
1,886
1,729

Passenger transport network
171
-
171
165

Pedestrian network
3,775
-
3,775
4,820

Network-wide control and management
1,891
-
1,891
2,140

Road safety
1,873
203
2,076
2,404

Parking
1
-
1
1

Total Transport
28,875
1,503
30,378
32,976

Council
15,815
2,826
18,641
19,882
8

Total capital expenditure projects
127,992
14,926
142,918
172,462

Actual capital expenditure consists of all expenditure 2013/14 including expenditure against carry forwards.

Proposed budget carry forwards represent the portion of the project budget to be carried forward to future financial years.

Budgets comprise 2013/14 Annual Plan budgets brought forward into 2013/14 from the previous financial period.

Under budget due to delays in the reconfiguring of the Curator’s House at Otari-Wilton’s Bush.

Under budget due to delays in the Stage 4 landfill extension as a result of a protracted resource consent process.

Under budget due to timing changes on the Housing Upgrade project. Housing renewals are also behind budget this year. The revised timeframes for the Housing Upgrade project will be reflected in the 2015-25 LTP.

Savings due to the changes to the Town Hall strengthening project. Options will be presented to Council and funding will be included in the 2015-25 LTP to deliver the approved option.

Savings on property renewal costs.

Note 36: Commitments

Capital commitments
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Approved and contracted - property, plant and equipment
38,375
48,790
46,475
51,775

Approved and contracted - investment properties
19
35
19
35

Approved and contracted - intangibles
-
1,400
-
1,400

Approved and contracted - share of associates
-
-
1,030
5,745

Approved and contracted - share of joint ventures
-
-
-
-

Total capital commitments
38,394
50,225
47,524
58,955

The capital commitments above often span more than one financial year and includes the capital expenditure carried forward from Note 34: Analysis of capital expenditure by activity area, which forms only part of the total commitments shown.

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 6: Expenditure on operating activities.

The future expenditure committed by these leases is analysed as follows:

Non-cancellable operating lease commitments as lessee
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Plant and equipment

Not later than one year
29
22
125
154

Later than one year and not later than five years
13
8
113
172

Later than five years
-
-
-
-

Land and buildings

Not later than one year
973
981
1,335
1,263

Later than one year and not later than five years
1,625
2,135
1,975
2,392

Later than five years
1,100
1,398
1,100
1,398

Total non-cancellable operating lease commitments as lessee
3,740
4,544
4,648
5,379

Operating leases – Group as lessor

The Group has also entered into commercial property leases of its investment property portfolio and other land and buildings.

The land and buildings held for investment purposes are properties which are not held for operational purposes and are leased to external parties.

Ground leases are parcels of land owned by the Group in the central city or on the waterfront that are leased to other parties who own the buildings situated on the land. The leases are generally based on 21-year perpetually renewable terms. As these parcels of land are held for investment purposes the rentals are charged on a commercial market basis.

The land and buildings not held for investment purposes are either used to accommodate the Group’s operational activities or are held for purposes such as road widening, heritage, or are being monitored for compliance reasons. In some cases, parts of these assets are leased to external parties on a commercial basis. The terms of these commercial leases generally range from 1 to 15 years.

The committed revenues expected from these lease portfolios are analysed as follows:

Non-cancellable operating lease commitments as lessor
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Investment properties

Not later than one year
9,332
9,344
9,332
9,344

Later than one year and not later than five years
36,220
36,280
36,220
36,280

Later than five years
81,846
89,994
81,846
89,994

Land and buildings

Not later than one year
1,434
2,158
1,512
1,070

Later than one year and not later than five years
2,771
4,246
2,771
1,045

Later than five years
7,557
4,150
7,557
4,150

Total non-cancellable operating lease commitments as lessor
139,160
146,172
139,238
141,883

Commitments to related parties

The Council and Group have no commitments to key management personnel beyond normal employment obligations.

The Council has commitments to its subsidiaries and associates only to the extent of the expenditure approved in the Long-term Plan for the period ending 30 June 2014. Other expenditure approved as part of the Long-term Plan for the period from 1 July 2014 to 30 June 2022 is subject to change and approval each year through the Annual Plan.

Council
Annual Plan
LTP
Total

2014/15
$000
2016-2022
$000

$000

Subsidiaries

Wellington Zoo Trust
2,757
19,593
22,350

Wellington Museums Trust
7,860
53,972
61,832

Positively Wellington Tourism
5,630
48,189
53,819

Carter Observatory
312
2,100
2,412

Wellington Venues
-
716
716

Total subsidiary commitments
16,559
124,570
141,129

Associates

Basin Reserve Trust
605
2,485
3,090

Total associate commitments
605
2,485
3,090

Other related parties

Karori Wildlife Sanctuary Trust
875
-
875

Total other related party commitments
875
-
875

Total related party commitments
18,039
127,055
145,094

Note 37: Contingencies

Contingent liabilities
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Financial guarantees to community groups
600
700
600
700

Uncalled capital - LGFA
1,883
1,883
1,883
1,883

Other legal proceedings
2,237
172
2,237
172

Share of associates’ contingent liabilities
-
-
-
-

Share of joint ventures’ contingent liabilities
-
-
-
-

Total contingent liabilities
4,720
2,755
4,720
2,755

The financial guarantees to community groups above are analysed below:

Outstanding debt subject to Council guarantees
Council
Group

2014
$000
2013
$000
2014
$000
2013
$000

Karori Wildlife Sanctuary Trust
600
700
600
700

Total outstanding debt subject to Council guarantees
600
700
600
700

Karori Wildlife 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.

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 $1.883m. 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 2014, LGFA had borrowings totalling $3,778m (2013: $2,422m).

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.

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 Council is anticipated to be less than $2.237m.

Unquantified contingent liabilities

The Government’s Weathertight Homes Financial Assistance Package aims to help people get their non-weathertight homes fixed faster, and centres on the Government and local authorities each contributing 25% of agreed repair costs and affected homeowners funding the remaining 50% backed by a Government loan guarantee. A provision for known claims and future claims has been made (refer Note 23: Provisions for other liabilities). 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.

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.

Contingent assets

The Council and Group have no contingent assets as at 30 June 2014 (2013: $Nil).

Note 38: Group structure

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 226. 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.

Percentages above represent the Council’s interest and/or ownership (for accounting purposes) in each of the entities in the Group.

1. The legal name of the subsidiary is the Partnership Wellington Trust Inc.
2. The legal name of the associate is Capacity Infrastructure Services Limited.
3. The legal name of the subsidiary is Wellington Venues Limited.

Note 39: Joint ventures

The Council has significant interests in the following joint ventures:

Joint Venture | Interest 2014 | Interest 2013 | Nature of business
Wastewater treatment plant – Porirua City Council | 27.6% | 27.6% | 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 | 21.5% | 21.5% | 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.

Share of Net Assets
2014
$000
2013
$000

Assets

Current

Inventory
36
5

Trade and other receivables
1,126
693

Non-current

Property, plant and equipment
21,012
19,430

Share of total assets
22,174
20,128

Liabilities

Current

Trade and other payables
-
-

Non-current

Borrowings
3,125
3,035

Provisions for other liabilities
1,661
1,768

Share of total liabilities
4,786
4,803

Share of net assets
17,388
15,325

The Council’s and Group’s share of the joint ventures’ current year net surplus and revaluation movements included in the financial statements are shown below.

Share of Net Surplus and Revaluation Movements
2014
$000
2013
$000

Operating revenue
2,679
2,400

Operating expenditure
(2,660)
(3,540)

Share of net surplus or (deficit)
19
(1,140)

Share of current year revaluation movement
2,044
-

The Council’s and Group’s share of the joint ventures’ capital commitments is $Nil (2013: $Nil) and contingent liabilities is $Nil (2013: $Nil).

Note 40: Investment in Subsidiaries

The following entities are subsidiaries of Council:

Subsidiary
Interest
2014
Interest
2013
Nature of business

Positively Wellington Tourism
(Partnership Wellington Trust Inc)
100%
100%
Creates economic and social benefit by marketing the city with the private sector as a visitor destination.

Wellington Waterfront Limited
100%
100%
Manages the Wellington Waterfront Project.

Wellington Cable Car Limited  
100%
100%
Owns and manages the trolley bus overhead wiring system and the Cable Car.

Wellington Museums Trust
100%
100%
Administers the Cable Car Museum, Capital E, the City Gallery, the Colonial Cottage Museum, the Carter Observatory and the Museum of Wellington City and Sea

Positively Wellington Venues
(Wellington Venues Limited)
100%
100%
Manages the Wellington Venues Project.

Wellington Zoo Trust
100%
100%
Manages and guides the future direction of the Wellington Zoo.

The reporting period end date for all subsidiaries 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 Report on Council Controlled Organisations (page 226).

The cost of the Council’s investment in subsidiaries is reflected in the Council’s financial statements as follows:

Investment in subsidiaries
2014
$000
2013
$000

Wellington Cable Car Limited
3,809
3,809

Total investment in subsidiaries
3,809
3,809

The equity investment represents the cost of the investment to the Council and includes all capital contributions made by the Council to subsidiaries. The Council has only made equity investments in Wellington Cable Car Limited. 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.

Information on inter-company transactions is included in the Note 42: Related party disclosures.

Note 41: Investment in Associates

The Council has a significant interest in the following associates:

Associate
Interest
2014
Interest
2013
Nature of business

Basin Reserve Trust  
50%
50%
Manages, operates and maintains the Basin Reserve

Capacity
(Capacity Infrastructure Services Limited)
50%
62.5%
Jointly manages water services for Wellington, Lower Hutt, Upper Hutt and Porirua cities. (refer below for voting rights)

Chaffers Marina Holdings Limited
10.99%
11.45%
Holding company for Chaffers Marina Limited.

- Chaffers Marina Limited
100%
100%
Owns and manages the marina.

Wellington International Airport Limited
34%
34%
Owns and manages Wellington International Airport facilities and services.

Wellington Regional Stadium Trust
50%
50%
Owns and manages the Westpac Stadium.

Full copies of the associates’ separately prepared financial statements can be obtained directly from their offices.

Basin Reserve Trust

The Basin Reserve Trust was established on 24 February 2005 to manage, operate and maintain the Basin Reserve and has a reporting period end date of 30 June. 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. On this basis the Trust is recognised as an associate of the Council in accordance with NZ IAS 28 (PBE): Investments in Associates. It is therefore appropriate to recognise the interest that Wellington City ratepayers have in the Trust within the Council’s financial statements. As each party has equal power to appoint Trustees, Wellington City Council’s ownership interest in the Trust has been accounted for at 50%.

Capacity

Capacity, the trading name for Capacity Infrastructure Services Limited was jointly created with Hutt City Council on 9 July 2003 and has a reporting period ending 30 June. At inception Wellington City Council and Hutt City Council each owned Class A and Class B shares in the company. Effective from 1 November 2013 Upper Hutt City and Porirua City Councils have formally joined as shareholders. The new structure is as follows:

Class A shares
(voting rights)
Class B Shares
(financial entitlements)
Ownership interest

Wellington City Council
150
200
50%

Hutt City Council
150
100
25%

Upper Hutt City Council
150
40
10%

Porirua City Council
150
60
15%

Total shares on issue
600
400

The Class A shares represent voting rights and are split evenly between the four Councils. The Class B shares confer the level of contributions and ownership benefits of each council. The company is considered to be jointly controlled because of the equal sharing of voting rights conferred through the Class A shares and is therefore an associate of each Council in accordance with NZ IAS 28 (PBE): Investments in Associates. Each Council will equity account for their respective ownership interest as determined by the proportionate value of Class B shares held. Wellington City Council’s ownership interest in the company is 50%.

Greater Wellington Regional Council, who is responsible for the bulk supply of water, is currently considering joining the single delivery agency. This would ensure knowledge and ideas are shared to ensure a long term regional approach to water management.

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 2014 Council held a 10.99% interest in Chaffers Marina Holdings Limited (2013: 11.45%) which has been reflected 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).

Wellington Regional Stadium Trust

Wellington Regional Stadium Trust was jointly created with Greater Wellington Regional Council and has a reporting period end date of 30 June. 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. On this basis the Trust is an associate of the Council in accordance with NZ IAS 28 (PBE): Investments in Associates. It is therefore appropriate to recognise the interest that Wellington City ratepayers have in the Trust within the Council’s financial statements. As each Council has equal power to appoint Trustees, Wellington City Council’s ownership interest in the Trust has been accounted for at 50%.

Summary of Financial Position and Performance of Associates

The Council’s share of the assets, liabilities, revenues and surpluses or deficits of the associates is as follows:

Associates
Assets
2014
$000
Liabilities
2014
$000
Revenues
2014
$000
Surplus/(Deficit)
2014
$000

Basin Reserve Trust
421
38
317
(91)

Capacity
1,835
1,499
6,641
18

Chaffers Marina Holdings Limited
668
138
95
(15)

Wellington International Airport Limited
286,391
136,678
37,703
15,192

Wellington Regional Stadium Trust
49,863
9,438
8,155
1,016

Associates
Assets
2013
$000
Liabilities
2013
$000
Revenues
2013
$000
Surplus/(Deficit)
2013
$000

Basin Reserve Trust
524
50
318
(100)

Capacity
1,343
1,073
4,763
45

Chaffers Marina Holdings Limited
690
143
97
(16)

Wellington International Airport Limited
276,346
130,935
36,104
11,349

Wellington Regional Stadium Trust
48,412
9,115
8,347
1,427

Investment in associates

The cost of the Council’s investment in associates is reflected in the Council financial statements as follows:

Investment in associates
Council

2014
$000
2013
$000

Capacity
400
376

Chaffers Marina Holdings Limited
1,329
1,368

Wellington International Airport Limited
17,775
17,775

Total investment in associates
19,504
19,519

The investment in associates in the Group financial statements represents the Council’s share of the net assets of the associate. This is reflected in the Group financial statements as follows:

Investment in associates
Group

2014
$000
2013
$000

Basin Reserve Trust

Opening balance
474
574

Equity accounted earnings of associate
(91)
(100)

Closing balance - investment in Basin Reserve Trust
383
474

Capacity

Opening balance
271
226

Change in shares during the year
24
-

Change in equity due to changed shareholding
23
-

Equity accounted earnings of associate
18
45

Closing balance - investment in Capacity
336
271

Chaffers Marina Holdings Limited

Opening balance
998
1,014

Change in shares during the year
(39)
-

Change in equity due to changed shareholding
15
-

Equity accounted earnings of associate
(15)
(16)

Closing balance - investment in Chaffers Marina Holdings Limited
959
998

Wellington International Airport Limited

Opening balance
130,633
129,959

Dividends
(11,966)
(10,828)

Equity accounted earnings of associate
15,192
11,349

Share of hedging reserve - movement
1
153

Closing balance - investment in Wellington International Airport Limited
133,860
130,633

Wellington Regional Stadium Trust

Opening balance
38,078
36,651

Equity accounted earnings of associate
1,016
1,427

Closing balance - investment in Wellington Regional Stadium Trust
39,094
38,078

Total investment in associates
174,631
170,453

The Council’s share of the results of the Basin Reserve Trust, Capacity, Chaffers Marina Holdings Limited, Wellington International Airport Limited and the Wellington Regional Stadium Trust is as follows:

Share of associates’ surplus/(deficit)
Group

2014
$000
2013
$000

Basin Reserve Trust

Share of net surplus/(deficit) before tax
(91)
(100)

Tax (expense)/credit
-
-

Share of associate’s surplus/(deficit) - Basin Reserve Trust
(91)
(100)

Capacity

Share of net surplus/(deficit before tax)
18
45

Tax (expense)/credit
-
-

Share of associate’s surplus/(deficit) - Capacity
18
45

Chaffers Marina Holdings Limited

Share of net surplus/(deficit) before tax
(15)
(16)

Tax (expense)/credit
-
-

Share of associate’s surplus/(deficit) - Chaffers Marina Holdings Limited
(15)
(16)

Wellington International Airport Limited

Share of net surplus before tax
16,088
11,671

Tax (expense)/credit
(896)
(322)

Share of associate’s surplus/(deficit) - Wellington International Airport Limited
15,192
11,349

Wellington Regional Stadium Trust

Share of net surplus before tax
1,016
1,427

Tax (expense)/credit
-
-

Share of associate’s surplus - Wellington Regional Stadium Trust
1,016
1,427

Total share of associates’ surplus/(deficit)
16,120
12,705

Note 42 : Related party disclosures

Identity of related parties

In this section, the Council discloses the remuneration and related party transactions of key management personnel, which comprises the Directors (the Mayor and Councillors), the Chief Executive and all members of the Council’s Executive Leadership Team. All members of the Group are also considered to be related parties of Wellington City Council, including its joint ventures, subsidiaries and associates.

Key management personnel

Council
Group

Note
2014
$
2013
$
2014
$
2013
$

Council Members (Directors)

Short-term employee benefits
43
1,385,983
1,362,501
1,455,653
1,529,492

Chief Executive and Executive Leadership Team

Short-term employee benefits

2,480,499
2,219,482
2,480,499
2,219,482

Post employment benefits

52,576
22,148
52,576
22,148

Termination benefits

285,000
104,520
285,000
104,520

Total remuneration paid to key management

4,204,058
3,708,651
4,273,728
3,875,642

For further disclosure of the remuneration payable to the Mayor, Councillors and the Chief Executive refer to Note 43: Remuneration and staffing.

Material related party transactions – key management personnel

During the year key management personnel, as part of normal local authority relationships, were involved in transactions of a minor and routine nature with the Council on normal commercial terms (such as payment of rates and purchases of rubbish bags).

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

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 $1.883m representing 8% of paid-up capital.

Karori Wildlife Sanctuary Trust (Zealandia)

The Council has influence in the governance, funding and operations of the Karori Wildlife Sanctuary Trust (trading as Zealandia) which is not part of the Group, to the extent that it is considered appropriate to disclose the nature of the transactions as being between related parties.

The Council appoints two of the five trustees including the Chair. Operational funding of $0.875m was made during the year to 30 June 2014. The Council has a concessionary loan totalling $10.347m on interest free terms to the Trust. Further information on the loan is included in Note 13: Other financial assets.

Intra group transactions and balances

During the year the Council has entered into several transactions with its joint venture partner Porirua City Council. The nature of these intra-group transactions and the outstanding balances at the year-end are as follows:

Intra group transactions and balances - Joint ventures
2014
$000
2013
$000

Expenditure incurred by the Council to fund the operation and management of:

Porirua - waste water treatment plant
2,196
1,792

During the year the Council has entered into several transactions with its subsidiaries. The nature of these intra-group transactions and the outstanding balances at the year-end are as follows:

Intra group transactions and balances - Subsidiaries
2014
$000
2013
$000

Dividend received from:

Wellington Cable Car Limited
-
94

Revenue for services provided by the Council to:

Positively Wellington Tourism
222
125

Positively Wellington Waterfront
27
2

Wellington Cable Car Limited
50
68

Wellington Museums Trust
1,485
1,970

Wellington Venues Limited
32
-

Wellington Zoo Trust
361
608

2,177
2,773

Expenditure incurred by the Council to fund operations and management of:

Positively Wellington Tourism
6,475
6,390

Positively Wellington Waterfront
1,075
1,075

Wellington Museums Trust
8,010
8,010

Wellington Zoo Trust
2,715
2,799

18,275
18,274

Expenditure for services provided to the Council by:

Positively Wellington Tourism
178
168

Wellington Cable Car Limited
13
323

Wellington Museums Trust
329
313

Wellington Venues Limited
5,585
5,386

Wellington Zoo Trust
1,798
1,280

7,903
7,470

Current receivables owing to the Council from:

Positively Wellington Waterfront
29
-

Wellington Cable Car Limited
1
2

Wellington Museums Trust
267
30

Wellington Venues Limited
386
-

Wellington Zoo Trust
293
639

976
671

Current payables owed by the Council to:

Positively Wellington Tourism
89
15

Wellington Cable Car Limited
4
-

Wellington Museums Trust
657
15

Wellington Venues Limited
32
492

Wellington Zoo Trust
421
458

1,203
980

Current receivables and payables

The receivables and payables balances are non-interest bearing and are to be settled with the relevant entities on normal trading terms and conditions.

During the year the Council has entered into several transactions with its associates. The nature of these intra-group transactions and the outstanding balances at the year-end are as follows:

Intra group transactions and balances - Associates
2014
$000
2013
$000

Dividend received from:

Wellington International Airport Limited
11,966
10,828

Revenue for services provided by the Council to:

Basin Reserve Trust
71
71

Capacity
45
34

Wellington International Airport Limited
-
1

Wellington Regional Stadium Trust
279
276

395
382

Expenditure incurred by the Council to fund the operation and management of:

Basin Reserve Trust
355
355

Wellington International Airport Limited¹
-
1,000

355
1,355

Expenditure for services provided to the Council from:

Capacity
15,200
11,370

Wellington International Airport Limited
120
108

Wellington Regional Stadium Trust
2
297

15,322
11,775

Current receivables owing to the Council from:

Basin Reserve Trust
5
2

Capacity
9
3

Wellington Regional Stadium Trust
20
8

34
13

Current payables owed by the Council to:

Capacity
1,030
605

Wellington International Airport Limited
-
35

Wellington Regional Stadium Trust
-
72

1,030
712

Limited-recourse funding loan and advance

Wellington Regional Stadium Trust - nominal value - $15,394,893
1,586
1,407

This grant to Wellington International Airport Limited related to the agreement to fund 50% (capped at $1m) of the resource consent costs arising from the airport runway extension.

Current receivables and payables:

The receivables and payables balances are non-interest bearing and are to be settled with the relevant entities on normal trading terms and conditions.

Limited-recourse funding loan and advance

The $15m loan to the Wellington Regional Stadium Trust (WRST) 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 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.

Note 43: Remuneration and staffing

Mayoral and Councillor remuneration

Remuneration is any money, consideration or benefit received, receivable or otherwise made available, directly or indirectly, to the Mayor or a Councillor during the reporting period. The Mayor and Councillors are considered directors as they occupy the position of a member of the governing body of the Council reporting entity. The disclosures for the Group include the remuneration of the Mayor and the appropriate Councillors in their role as trustees or directors of entities within the Group.

The following people held office as, either or both, elected members of the Council’s governing body, and trustees or directors of entities comprising the Group during the reporting period. The total remuneration attributed to the Mayor and Councillors during the year from 1 July 2013 to 30 June 2014 was $1,455,653 (2013: $1,529,492) and is disaggregated and classified as follows:

Council Member
Monetary Remuneration
Non
Monetary
Remuneration
Total
Council
Remuneration
2014
Director/
Trustee
Fees
Total
Remuneration
2014

Salary
Resource
Consent
Hearing
Fees
Allowances

$
$
$
$
$
$
$

Current Council

Ahipene-Mercer, Ray
82,639
-
360
3,000
85,999
5,544
91,543

Coughlan, Jo
86,073
-
360
3,000
89,433
6,250
95,683

Eagle, Paul
86,073
-
360
3,000
89,433
20,000
109,433

Foster, Andy
89,085
1,727
360
3,000
94,172
7,500
101,672

Free, Sarah
56,105
-
240
2,000
58,345
5,000
63,345

Lee, David
56,105
-
240
2,000
58,345
-
58,345

Lester, Justin
93,050
-
360
3,000
96,410
-
96,410

Marsh, Simon
78,447
-
360
3,000
81,807
3,750
85,557

Pannett, Iona
86,073
-
360
3,000
89,433
-
89,433

Peck, Mark
56,105
-
240
2,000
58,345
-
58,345

Ritchie, Helene
80,340
-
360
3,000
83,700
-
83,700

Sparrow, Malcolm
56,105
-
240
2,000
58,345
-
58,345

Wade-Brown, Celia
159,240
-
-
3,000
162,240
-
162,240

Woolf, Simon
56,105
-
240
2,000
58,345
-
58,345

Young, Nicola
56,105
-
240
2,000
58,345
-
58,345

Previous Council

Best, Ngaire
24,461
-
120
1,000
25,581
4,240
29,821

Cook, Stephanie
26,789
-
120
1,000
27,909
-
27,909

Gill, Leonie
25,971
-
-
1,000
26,971
-
26,971

McKinnon, Ian
28,816
-
120
1,000
29,936
12,886
42,822

Morrison, John
24,461
-
120
1,000
25,581
4,500
30,081

Pepperell, Bryan
24,461
1,727
120
1,000
27,308
-
27,308

Totals
1,332,609
3,454
4,920
45,000
1,385,983
69,670
1,455,653

TOTAL MONETARY REMUNERATION
1,340,983
69,670
1,410,653

Total non- monetary remuneration
45,000
-
45,000

Salary

The Remuneration Authority is responsible for setting the remuneration levels for elected members (Clause 6, Schedule 7 of the Local Government Act 2002). The Council’s monetary remuneration (salary) detailed above was determined by the Remuneration Authority. As permitted under the Authority’s guidelines the Council has chosen for its elected members to receive an annual salary for the 2013/14 financial year rather than the alternative option of a combination of meeting fee payments and annual salary.

Resource consent hearings payments

The determination issued by the Remuneration Authority also provides for the payment of hearing fees for those Councillors who sit as members of the Hearings Committee for hearings of resource consent applications lodged under the Resource Management Act 1991. The fees for members, who act in this capacity, are paid at the rate of $100 per hour for the Chair and $80 per hour for other members.

Taxable and non-taxable allowances – mileage, broadband services and mobile phones

The Remuneration Authority’s current policy does not allow Councillors to claim an allowance for mileage for their normal duties. However, prior to this decision Councillors had voluntarily decided to forgo receiving this allowance from December 2008.

Councillors are able to choose either of the following two options:

The payment of a communication allowance of $30 per month; 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.

Director/Trustee Fees

In November 2012, the Council resolved that no further payments would be made to elected members appointed to Council Controlled Organisation (CCO) boards from the start of the new triennium (being 19 October 2013). On 14 November 2013 the Council resolved that elected members appointed to the Council Organisation (CO) boards, including the Wellington Regional Stadium Trust, Zealandia, and Wellington International Airport Limited (where applicable), would not receive remuneration with respect to those appointments. Any remuneration that otherwise would have been paid to elected members on a Council Organisation board will be paid directly to the Council and included in the relevant grant fund.

For the period from 1 July 2013 to the end of the previous triennium (being 19 October 2013), which is prior to the above resolutions taking effect, the following payments were made to elected members in their capacity as Council appointees to the following organisations:

Council Member
Position
Director/Trustee Fees
Organisation
Council
Interest
%

Subsidiaries
$
Associates
$

Current Council

Ahipene-Mercer, Ray
Trustee
5,544
-
Wellington Museums Trust
100

Coughlan, Jo
Trustee
6,250
-
Positively Wellington Tourism
100

Eagle, Paul
Director
7,500
-
Positively Wellington Venues
100

Director
-
12,500
Wellington Regional Stadium Trust
50

Foster, Andy
Director
-
7,500
Capacity
50

Free, Sarah
Director
-
5,000
Capacity
50

Marsh, Simon
Trustee
3,750
-
Wellington Zoo Trust
100

Previous Council

Best, Ngaire
Director
4,240
-
Positively Wellington Venues
100

McKinnon, Ian
Director
-
12,886
Wellington International Airport Limited
34

Morrison, John
Trustee
-
4,500
Wellington Regional Stadium Trust
50

Total director and trustee fees
27,284
42,386

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
$
Total
2014
$

TAWA COMMUNITY BOARD

Current Board

Tredger, Robert (Chair)
13,823
360
14,183

Lucas, Margaret (Deputy Chair)
8,490

8,490

Hansen, Graeme (previous Deputy Chair)
8,490

8,490

Herbert, Richard
6,078

6,078

Lester, Justin (Councillor remuneration shown above)
-

-

Marshall, Jack
6,078

6,078

Sutton, Alistair
8,490

8,490

Sparrow, Malcolm (Councillor remuneration shown separately above)
6,310
180
6,490

Previous Board

Reading, Chris
2,552

2,552

MAKARA/OHARIU COMMUNITY BOARD

Grace, Christine (Chair)
9,890
540
10,430

Burden, Murray
3,218

3,218

Liddell, Judy
4,727

4,727

Rudd, Wayne
4,727

4,727

Scotts, Margie
4,727

4,727

Todd, Hamish
4,727

4,727

Previous Board

Bruce, Gavin (Deputy Chair)
1,595

1,595

Totals
93,922
1,080
95,002

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.

Malcolm Sparrow was the previous Chair of the Tawa Community Board, before his election to the Council.

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 2014.

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

2014
$
2013
$

Short-term employee benefits

Kevin Lavery

Salary¹
379,624
99,726

Motor Vehicle
20,376
-

TOTAL REMUNERATION PAID OR PAYABLE
400,000
99,726

Garry Poole

Salary²
-
327,345

Other remuneration:

Accrued leave entitlement for the tenure of employment (1998 - 2013)
-
123,027

Contractual payment due at expiry of fixed term employment agreement
that commenced on 2 March 2008
-
104,520

Total remuneration paid or payable
-
554,892

1 Kevin Lavery is on a fixed term individual employment agreement with total remuneration of $400,000pa. His remuneration for 2013 reflects his term as Chief Executive only being for the 3 months from 31 March 2013 to 30 June 2013.
2 Garry Poole was on a fixed term individual employment agreement with total remuneration of $419,231pa. for the 2013 year.

Severances

In accordance with Schedule 10, section 19 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.

For the year ending 30 June 2014 the Council made severance payments to 15 employees (2013:12) totalling $290,555 (2013: $240,830).

The individual values of each of these severance payments are: $7,668; $6,500; $6,531; $31,998; $1,561; $14,832; $12,169; $75,700; $8,582; $10,000; $700; $54,399; $8,055; $45,000; $6,860.

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
| 2014 | 2013
The number of full-time employees as at 30 June | 971 | 910
The full-time equivalent number of all other non full-time employees | 228 | 216
The number of employees receiving total annual remuneration of less than $60,000 | 1044 | 1024
The number of employees receiving total annual remuneration of more than $60,000 in bands of $20,000 |  |
$60,000 - $79,999.99 | 266 | 257
$80,000 - $99,999.99 | 142 | 122
$100,000 - $119,999.99 | 74 | 76
$120,000 - $139,999.99 | 44 | 39
$140,000 - $159,999.99 | 23 | 10
$160,000 - $179,999.99 | 14 | 14
$180,000 - $219,999.99* | 9 | 9
$220,000 - $299,999.99* | 7 | 9
$300,000 - $400,000** | 3 | 2

The Council as at 30 June has 1626 (2013:1562) individual employees of which 655 (2013: 652) work part-time.

A full-time employee or full-time equivalent is based on a 40 hour week.

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 it has been combined with the next highest band.

** Includes the Chief Executive.

Note 44: Events after the end of the reporting period

There are no events after the end of the reporting period that require adjustment to the financial statements or the notes to the financial statements.

Financial Prudence

The government has introduced the new Local Government (Financial Reporting and Prudence) Regulations 2014 which has a series of measures and benchmarks, disclosed in the following pages. These measures further highlight the financial performance of Council in a way that is consistent and standardised.

These measures allow for comparison of financial performance with other Councils. However, 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 Councils’ results with other Councils due to their size, location and provision of services.

The Council considers there are three key financial areas that demonstrate whether a Council is being managed in a prudent manner; they are in broad terms the level of rate increases, level of borrowings and the balancing of the budget. A Council sets what it believes to be prudent levels for each of these areas when it adopts its Long-term Plan. Set out below is a summary of how the Council has performed against those targets.

Rates Increase

The Financial Strategy outlines the Councils strategy on rate increases and how to maintain the ratepayers willingness to pay rates as they perceive the value of the services provided by Council. There are two measures that indicate Councils adherence to its strategy:

1. Percentage limit on rate increases before growth (in the rating base) is 4.0% (based on the Local Government Cost Index for 2013/14).

The percentage rate increase for 2013/14 is 3.65%.
2. Dollar limit on rate increases for rates revenue not to exceed, this was set at $249.7 million for 2013/14.

The rates revenue for 2013/14 is $246.3 million.

The Council has adhered to its limits as set out in Long-term Financial Strategy as set out in the 2012 Long-term Plan.

Borrowing levels

The Financial Strategy outlines its guiding principles on the level of borrowing the Council may undertake, and in broad terms:

a) Debt cannot be used to fund operations, and
b) The current level of debt will not restrict a future Councils ability to fund new assets through debt.

The Council has met all of its borrowing measures set out in the following pages, as the Council continues to be prudent in carefully managing its debt levels and ensuring that future generations are not impeded in their ability to borrow to fund future capital expenditure.

Balanced Budget

This measure is designed to highlight whether a Council has achieved a balanced budget as discussed in the financial overview. The Council’s aim is to be as close to the 100% as possible, as large variances would indicate that ratepayers are either paying too much or too little rates that could lead to intergenerational issues in later years.

Council has achieved 103% for 2014 indicating that Council has managed to effectively balance the needs of running the city with that of meeting the ratepayers expectations.

Annual report disclosure statement for year ending 30 June 2014

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.

Rates affordability benchmark

The council meets the rates affordability benchmark if—

its actual rates income equals or is less than each quantified limit on rates; and

its actual rates increases equal or are less than each quantified limit on rates increases.

These limits are based on the Local Government Cost Index and the limits are set each year during the Annual Plan process. This will cause some limits to be different than those disclosed in the 2012-2022 Long-term Plan. Where this occurs both the Annual Plan and Long-term Plan limits will be disclosed.

Rates (income) 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 is $249,671,000 (quantified limit for the 2013/14 Annual Plan was $248,386,000).

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 included in the council’s long-term plan. The quantified limit is a 3.96% increase before growth (quantified limit for the 2013/14 annual plan was a 3.57% increase).

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, PricewaterhouseCoopers Wellington.

Net borrowing as a percentage of equity

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 10% of equity.

Net borrowing as a percentage of income24

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 150% of income. For this measure income is defined as total revenue less vested assets and development contribution income.

Net interest as a percentage of income25

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 income, being less than or equal to 15% of income. For this measure income is defined as total revenue less vested assets and development contribution income.

Net interest as a percentage of annual rates income

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 income, being less than or equal to 20% of annual rates income.

Liquidity (term borrowing committed loan facilities to 12 month peak net borrowing forecast)

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 110%. For debt affordability, liquidity is the total of Councils arranged loan facilities, both drawn down and not drawn down, compared with the peak net borrowings expected for the next 12 months. Net borrowings for debt affordability are defined as comprised of borrowings less cash and cash equivalents.

Borrowings funded capital expenditure limit

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 no more than $60 million of capital expenditure funded by new borrowing over the council triennium. This is an accumulative measure over the three years of the Council triennium.

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. The capital expenditure included in this measure includes the renewal of assets ($43.2 million), assets that increase capacity ($0.6 million) and assets that increase the level of service ($8.2 million) provided as part of the network services.

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.

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.

Additional information

Areas of reported non-compliance

The essential services benchmark compares the level of depreciation for network assets (comprising roading, drainage, waste and water assets) to the level of capital expenditure made during that financial year for those assets. Included within the depreciation figure, there is a depreciation amount included 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 (125% 2012/13).

This measure also takes a snapshot of capital expenditure on a year on year basis, whereas capital expenditure for essential services are planned on a project by project basis and do not always neatly align with the financial year. This is further impacted by delays to projects that cause timing differences that will affect the outcome of this measure.

Therefore over time there will be an irregular pattern of expenditure and the Council believes an average over time should be applied to this measure to ensure that Council is sufficiently meeting this requirement. If the average is taken for the two years shown, then Council has met the requirement for both years with an average of 108% for both years. In light of these factors, the Council considers its performance against this measure as prudent.

2012/13 Comparative measures

The debt control benchmark shows whether actual net debt as defined by the regulations is equal or less than the planned net debt. During the preparation of the long-term plan for which this control relates to, a number of assumptions were 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 its net debt position, as reflected in its AA credit rating and favourable ratios of net debt to income and net debt to investments. Council’s net debt to income ratio is significantly lower than most other metropolitan councils in New Zealand.

The operations control benchmark shows whether actual net operating cash flow is equal or less than the planned net cash flow from operations. During the preparation of the long-term plan for which this control relates to, a number of assumptions were made around the timing of events. Any departure from these assumptions can affect the outcome of this measure. The Council is satisfied that it is prudently managing operational cash flow, with variances in the 2012/13 year explained by the timing difference in the receipt of revenues compared to budget that lead to the “not met” outcome for this measure.

24 The income figure used for this calculation of Net Borrowing as percentage of Income and Net Interest as a percentage of Income is Total Income less Vested Assets and Development Contribution Income. The Council has also deducted variable capital grants it recieves for social housing from these calculations.

25 Ibid.

Funding Impact Statements

Whole of Council

1.1 Governance, information and engagement

1.2 Māori engagement (including mana whenua)

2.1 Open spaces and conservation

2.2 Waste reduction, recycling and energy conservation

2.3 Water

2.4 Wastewater

2.5 Stormwater

2.6 Conservation attractions

3.1 City promotions and business support

4.1 Arts and culture activities

5.1 Recreation promotion and support

5.2 Community participation and support

5.3 Public health and safety

6.1 Urban planning, heritage and public spaces development

6.2 Building and development management

7.1 Transport

7.2 Parking services

Capex by Activity Area

For the period 1 July 2013 to 30 June 2014

The funding impact statements show the source and application of funds for activities of the Council. The statements present the capital and operational expenditure separately. The format is prescribed in the Local Government (Financial Reporting and Prudence) Regulations 2014 to improve the ability to compare the results across different councils.

Whole of Council

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
128,147
134,395
128,018
131,000
131,652

Targeted rates (other than a targeted rate for water supply)
99,740
102,343
99,097
103,552
103,405

Subsidies and grants for operating purposes
6,831
6,935
6,660
7,250
9,131

Fees, charges, and targeted rates for water supply¹
109,101
110,360
108,342
113,761
113,528

Interest and dividends from investments
9,308
9,308
12,530
9,908
14,259

Local authorities fuel tax, fines, infringement fees, and other receipts
12,162
12,396
9,607
10,817
7,889

Total operating funding (A)
365,289
375,737
364,254
376,288
379,864

Applications of operating funding

Payments to staff and suppliers
235,262
240,510
229,409
244,969
241,712

Finance costs
22,647
22,859
22,247
21,965
22,372

Other operating funding applications
29,568
30,671
35,537
29,623
32,684

Total applications of operating funding (B)
287,477
294,040
287,193
296,557
296,768

Surplus (deficit) of operating funding (A - B)
77,812
81,697
77,061
79,731
83,096

Sources of capital funding

Subsidies and grants for capital expenditure
45,765
39,967
39,925
42,495
35,500

Development and financial contributions
5,000
5,000
4,356
5,000
5,873

Increase (decrease) in debt
14,919
25,873
19,651
20,893
17,819

Gross proceeds from sales of assets
-
9,000
-
15,075
12,675

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
65,684
79,840
63,932
83,463
71,867

Applications of capital funding

Capital expenditure

- to meet additional demand
2,702
1,590
3,181
1,634
1,640

- to improve the level of service
54,491
61,255
52,695
53,991
49,423

- to replace existing assets
78,944
86,632
78,241
84,094
76,929

Increase (decrease) in reserves
7,359
12,060
6,876
23,475
26,971

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
143,496
161,537
140,993
163,194
154,963

Surplus (deficit) of capital funding (C - D)
(77,812)
(81,697)
(77,061)
(79,731)
(83,096)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
91,703
94,155
88,577
92,107
90,863

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

1.1 Governance, information and engagement

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
14,666
15,711
14,666
16,356
16,356

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
56

Fees, charges, and targeted rates for water supply¹
384
694
470
733
1,044

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
15,050
16,405
15,136
17,089
17,456

Applications of operating funding

Payments to staff and suppliers
7,892
8,772
7,509
8,579
8,757

Finance costs
3
3
12
14
12

Internal charges and overheads applied
7,031
7,541
7,023
8,156
7,097

Other operating funding applications
10
10
127
267
416

Total applications of operating funding (B)
14,936
16,326
14,671
17,016
16,282

Surplus (deficit) of operating funding (A - B)
114
79
465
73
1,174

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
-
-
-
-
-

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
-
-
-
-
-

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
-
-

- to replace existing assets
-
110
19
110
53

Increase (decrease) in reserves
114
(31)
446
(37)
1,121

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
114
79
465
73
1,174

Surplus (deficit) of capital funding (C - D)
(114)
(79)
(465)
(73)
(1,174)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
114
79
99
73
83

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

1.2 Māori engagement (including mana whenua)

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
237
244
237
225
225

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
-
-
5
-
1

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
237
244
242
225
226

Applications of operating funding

Payments to staff and suppliers
229
236
214
214
186

Finance costs
-
-
1
1
1

Internal charges and overheads applied
8
8
4
8
37

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
237
244
219
223
224

Surplus (deficit) of operating funding (A - B)
-
-
23
2
2

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
-
-
-
-
-

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
-
-
-
-
-

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
-
-

- to replace existing assets
-
-
-
-
-

Increase (decrease) in reserves
-
-
23
2
2

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
-
-
23
2
2

Surplus (deficit) of capital funding (C - D)
-
-
(23)
(2)
(2)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
-
-
2
2
2

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

2.1 Open spaces and conservation

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
26,648
29,484
26,648
26,540
26,540

Targeted rates (other than a targeted rate for water supply)
408
418
408
436
436

Subsidies and grants for operating purposes
549
566
766
637
679

Fees, charges, and targeted rates for water supply¹
1,188
1,224
1,215
1,118
1,668

Internal charges and overheads recovered
5,207
5,332
5,120
4,910
4,920

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
34,000
37,024
34,157
33,641
34,243

Applications of operating funding

Payments to staff and suppliers
16,453
18,432
16,932
16,980
17,574

Finance costs
1,668
1,822
1,559
1,674
1,563

Internal charges and overheads applied
11,776
12,583
12,127
11,233
11,737

Other operating funding applications
100
100
57
80
88

Total applications of operating funding (B)
29,997
32,937
30,675
29,967
30,962

Surplus (deficit) of operating funding (A - B)
4,003
4,087
3,482
3,674
3,281

Sources of capital funding

Subsidies and grants for capital expenditure
250
700
472
1,080
1,060

Development and financial contributions
1,099
1,099
792
1,099
831

Increase (decrease) in debt
(1,206)
(1,695)
(1,117)
(2,071)
(1,745)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
143
104
147
108
146

Applications of capital funding

Capital expenditure

- to meet additional demand
49
52
50
53
50

- to improve the level of service
94
52
97
55
96

- to replace existing assets
2,479
2,280
2,525
2,545
2,872

Increase (decrease) in reserves
1,524
1,807
957
1,129
409

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
4,146
4,191
3,629
3,782
3,427

Surplus (deficit) of capital funding (C - D)
(4,003)
(4,087)
(3,482)
(3,674)
(3,281)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
4,226
4,313
3,971
3,952
3,911

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

2.2 Waste reduction, recycling and energy conservation

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
496
1,819
496
451
451

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
11,821
11,200
12,079
12,393
12,191

Internal charges and overheads recovered
296
303
89
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
7
7
-
-
4

Total operating funding (A)
12,620
13,329
12,664
12,844
12,646

Applications of operating funding

Payments to staff and suppliers
10,817
11,728
8,723
11,112
9,438

Finance costs
1,002
826
1,050
1,051
992

Internal charges and overheads applied
(78)
(60)
(367)
111
135

Other operating funding applications
-
-
11
5
8

Total applications of operating funding (B)
11,741
12,494
9,417
12,279
10,573

Surplus (deficit) of operating funding (A - B)
879
835
3,247
565
2,073

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
8
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
204
802
137
91
84

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
204
802
145
91
84

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
204
802
137
91
84

- to replace existing assets
865
8,486
395
963
275

Increase (decrease) in reserves
14
(7,651)
2,860
(398)
1,798

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,083
1,637
3,392
656
2,157

Surplus (deficit) of capital funding (C - D)
(879)
(835)
(3,247)
(565)
(2,073)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
879
835
657
565
430

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

2.3 Water

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates (other than a targeted rate for water supply)
23,536
24,651
23,536
24,804
24,804

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
12,854
12,855
11,427
13,366
12,391

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
36,390
37,506
34,963
38,170
37,195

Applications of operating funding

Payments to staff and suppliers
19,816
20,560
20,232
21,373
20,803

Finance costs
1,945
2,073
1,825
1,912
1,775

Internal charges and overheads applied
1,720
1,780
1,778
1,704
1,697

Other operating funding applications
-
-
10
-
-

Total applications of operating funding (B)
23,481
24,413
23,845
24,989
24,275

Surplus (deficit) of operating funding (A - B)
12,909
13,093
11,118
13,181
12,920

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
109
-
-

Development and financial contributions
1,231
1,231
733
1,231
1,663

Increase (decrease) in debt
1,899
973
2,472
988
390

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
3,130
2,204
3,314
2,219
2,053

Applications of capital funding

Capital expenditure

- to meet additional demand
254
274
274
274
243

- to improve the level of service
2,876
1,930
3,040
1,945
1,810

- to replace existing assets
8,226
9,962
8,856
9,962
8,931

Increase (decrease) in reserves
4,683
3,131
2,262
3,219
3,989

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
16,039
15,297
14,432
15,400
14,973

Surplus (deficit) of capital funding (C - D)
(12,909)
(13,093)
(11,118)
(13,181)
(12,920)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
13,824
13,701
13,823
13,744
13,788

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

2.4 Wastewater

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates (other than a targeted rate for water supply)
33,433
34,667
33,433
35,370
35,370

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
1,252
1,289
1,182
1,210
1,129

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
34,685
35,956
34,615
36,580
36,499

Applications of operating funding

Payments to staff and suppliers
16,863
18,218
18,475
20,715
19,795

Finance costs
3,662
3,730
3,554
3,402
3,298

Internal charges and overheads applied
5,079
5,252
3,685
3,821
3,481

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
25,604
27,200
25,714
27,938
26,574

Surplus (deficit) of operating funding (A - B)
9,081
8,756
8,901
8,642
9,925

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
1,007
1,007
1,038
1,007
735

Increase (decrease) in debt
(818)
(822)
(708)
(822)
(537)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
189
185
330
185
198

Applications of capital funding

Capital expenditure

- to meet additional demand
189
185
172
185
198

- to improve the level of service
-
-
158
-
-

- to replace existing assets
7,363
7,226
6,552
7,226
7,725

Increase (decrease) in reserves
1,718
1,530
2,349
1,416
2,200

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
9,270
8,941
9,231
8,827
10,123

Surplus (deficit) of capital funding (C - D)
(9,081)
(8,756)
(8,901)
(8,642)
(9,925)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
12,984
12,986
12,514
12,538
12,533

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

2.5 Stormwater

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
-
-
-
-
-

Targeted rates (other than a targeted rate for water supply)
17,363
17,405
17,363
18,089
18,089

Subsidies and grants for operating purposes
39
40
57
40
30

Fees, charges, and targeted rates for water supply¹
9
9
93
9
18

Internal charges and overheads recovered
-
-
1
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
17,411
17,454
17,514
18,138
18,137

Applications of operating funding

Payments to staff and suppliers
5,356
5,083
6,599
7,486
6,694

Finance costs
2,618
2,858
2,436
2,612
2,417

Internal charges and overheads applied
2,955
3,056
1,913
1,600
1,839

Other operating funding applications
-
-
-
-
-

Total applications of operating funding (B)
10,929
10,997
10,948
11,698
10,950

Surplus (deficit) of operating funding (A - B)
6,482
6,457
6,566
6,440
7,187

Sources of capital funding

Subsidies and grants for capital expenditure
189
-
-
-
-

Development and financial contributions
107
107
85
107
113

Increase (decrease) in debt
(35)
(7)
8
(7)
117

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
261
100
93
100
230

Applications of capital funding

Capital expenditure

- to meet additional demand
95
100
64
100
105

- to improve the level of service
166
-
29
-
125

- to replace existing assets
3,532
3,912
2,470
3,912
3,963

Increase (decrease) in reserves
2,950
2,545
4,096
2,528
3,224

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
6,743
6,557
6,659
6,540
7,417

Surplus (deficit) of capital funding (C - D)
(6,482)
(6,457)
(6,566)
(6,440)
(7,187)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
6,482
6,457
6,543
6,440
6,552

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

2.6 Conservation attractions

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
5,378
5,751
5,378
5,779
5,779

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
-
-
-
-
-

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
5,378
5,751
5,378
5,779
5,779

Applications of operating funding

Payments to staff and suppliers
122
132
128
127
135

Finance costs
767
776
689
708
680

Internal charges and overheads applied
264
264
264
268
264

Other operating funding applications
3,164
3,499
3,149
3,590
3,590

Total applications of operating funding (B)
4,317
4,671
4,230
4,693
4,669

Surplus (deficit) of operating funding (A - B)
1,061
1,080
1,148
1,086
1,110

Sources of capital funding

Subsidies and grants for capital expenditure
155
412
541
412
241

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
467
1,239
1,430
1,239
722

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
622
1,651
1,971
1,651
963

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
622
1,651
1,971
1,651
963

- to replace existing assets
172
241
173
241
240

Increase (decrease) in reserves
889
839
975
845
870

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,683
2,731
3,119
2,737
2,073

Surplus (deficit) of capital funding (C - D)
(1,061)
(1,080)
(1,148)
(1,086)
(1,110)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
1,061
1,080
1,124
1,086
1,293

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

3.1 City promotions and business support

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
5,032
5,175
5,032
4,311
4,311

Targeted rates (other than a targeted rate for water supply)
14,572
14,630
14,572
14,583
14,583

Subsidies and grants for operating purposes
-
-
40
-
92

Fees, charges, and targeted rates for water supply¹
-
-
635
186
616

Internal charges and overheads recovered
-
-
-
50
50

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
19,604
19,805
20,279
19,130
19,652

Applications of operating funding

Payments to staff and suppliers
5,755
5,844
6,739
7,160
9,164

Finance costs
295
318
304
682
740

Internal charges and overheads applied
2,133
2,227
2,077
2,192
1,873

Other operating funding applications
9,178
9,077
8,366
7,523
7,923

Total applications of operating funding (B)
17,361
17,466
17,486
17,557
19,700

Surplus (deficit) of operating funding (A - B)
2,243
2,339
2,793
1,573
(48)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
4,011
-
2,419
-
2,593

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
4,011
-
2,419
-
2,593

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
4,011
-
2,419
-
2,593

- to replace existing assets
1,483
864
894
765
958

Increase (decrease) in reserves
760
1,475
1,899
808
(1,006)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
6,254
2,339
5,212
1,573
2,545

Surplus (deficit) of capital funding (C - D)
(2,243)
(2,339)
(2,793)
(1,573)
48

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
2,243
2,339
1,450
1,573
1,624

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

4.1 Arts and culture activities

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
11,716
12,567
11,716
11,132
11,132

Targeted rates (other than a targeted rate for water supply)
5,135
5,121
5,135
5,216
5,216

Subsidies and grants for operating purposes
420
430
285
402
206

Fees, charges, and targeted rates for water supply¹
626
645
823
611
717

Internal charges and overheads recovered
162
166
162
341
341

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
18,059
18,929
18,121
17,702
17,612

Applications of operating funding

Payments to staff and suppliers
3,256
3,254
3,131
3,219
3,317

Finance costs
272
264
187
215
178

Internal charges and overheads applied
1,488
1,566
1,611
935
857

Other operating funding applications
12,177
12,981
12,306
12,484
12,395

Total applications of operating funding (B)
17,193
18,065
17,235
16,853
16,747

Surplus (deficit) of operating funding (A - B)
866
864
886
849
865

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
40
25
10
25
-

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
40
25
10
25
-

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
40
25
10
25
-

- to replace existing assets
-
1
-
1
-

Increase (decrease) in reserves
866
863
886
848
865

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
906
889
896
874
865

Surplus (deficit) of capital funding (C - D)
(866)
(864)
(886)
(849)
(865)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
866
864
867
849
904

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

5.1 Recreation promotion and support

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
23,011
24,507
23,011
24,661
24,661

Targeted rates (other than a targeted rate for water supply)
850
863
850
776
776

Subsidies and grants for operating purposes
396
397
597
396
490

Fees, charges, and targeted rates for water supply¹
11,490
11,713
10,249
11,353
10,551

Internal charges and overheads recovered
1,025
1,049
988
1,005
1,046

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
36,772
38,529
35,695
38,191
37,524

Applications of operating funding

Payments to staff and suppliers
16,484
17,459
16,209
17,116
17,010

Finance costs
3,978
3,949
3,513
3,902
3,441

Internal charges and overheads applied
9,085
9,560
9,684
9,770
9,095

Other operating funding applications
400
400
405
400
417

Total applications of operating funding (B)
29,947
31,368
29,811
31,188
29,963

Surplus (deficit) of operating funding (A - B)
6,825
7,161
5,884
7,003
7,561

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
17
-
(24)

Development and financial contributions
466
466
308
466
430

Increase (decrease) in debt
3,563
1,935
3,216
1,469
3,734

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
4,029
2,401
3,541
1,935
4,140

Applications of capital funding

Capital expenditure

- to meet additional demand
1,502
871
1,433
871
957

- to improve the level of service
2,061
1,064
1,783
1,064
2,777

- to replace existing assets
3,227
2,853
3,069
2,902
3,902

Increase (decrease) in reserves
4,064
4,774
3,140
4,101
4,065

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
10,854
9,562
9,425
8,938
11,701

Surplus (deficit) of capital funding (C - D)
(6,825)
(7,161)
(5,884)
(7,003)
(7,561)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
6,913
7,250
6,828
7,091
7,188

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

5.2 Community participation and support

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
21,744
22,424
21,744
22,293
22,293

Targeted rates (other than a targeted rate for water supply)
4,410
4,555
4,410
4,245
4,245

Subsidies and grants for operating purposes
1,124
1,050
1,102
1,023
1,230

Fees, charges, and targeted rates for water supply¹
18,650
18,688
19,435
20,635
21,140

Internal charges and overheads recovered
1,222
1,259
1,093
1,363
1,304

Local authorities fuel tax, fines, infringement fees, and other receipts
1,029
964
632
851
553

Total operating funding (A)
48,179
48,940
48,416
50,410
50,765

Applications of operating funding

Payments to staff and suppliers
25,034
25,603
23,201
24,926
25,376

Finance costs
(739)
(1,326)
(871)
(602)
(1,105)

Internal charges and overheads applied
11,788
12,357
12,026
12,416
12,205

Other operating funding applications
3,524
3,588
3,382
3,574
3,423

Total applications of operating funding (B)
39,607
40,222
37,738
40,314
39,899

Surplus (deficit) of operating funding (A - B)
8,572
8,718
10,678
10,096
10,866

Sources of capital funding

Subsidies and grants for capital expenditure
34,600
28,448
28,088
30,739
24,514

Development and financial contributions
88
88
58
88
81

Increase (decrease) in debt
(88)
(88)
(155)
(88)
(84)

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
34,600
28,448
27,991
30,739
24,511

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
34,293
28,416
27,986
25,694
24,506

- to replace existing assets
5,311
7,447
5,976
7,031
5,400

Increase (decrease) in reserves
3,568
1,303
4,707
8,110
5,471

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
43,172
37,166
38,669
40,835
35,377

Surplus (deficit) of capital funding (C - D)
(8,572)
(8,718)
(10,678)
(10,096)
(10,866)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
11,480
12,086
12,478
13,707
13,681

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

5.3 Public health and safety

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
8,409
8,848
8,409
7,713
7,713

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
10
10
84
10
55

Fees, charges, and targeted rates for water supply¹
3,287
3,385
3,469
3,436
3,480

Internal charges and overheads recovered
666
682
688
668
689

Local authorities fuel tax, fines, infringement fees, and other receipts
57
59
52
48
39

Total operating funding (A)
12,429
12,984
12,702
11,875
11,976

Applications of operating funding

Payments to staff and suppliers
7,364
7,688
8,051
7,860
8,143

Finance costs
76
80
67
70
74

Internal charges and overheads applied
4,312
4,549
3,903
3,292
3,537

Other operating funding applications
25
25
20
29
55

Total applications of operating funding (B)
11,777
12,342
12,041
11,251
11,809

Surplus (deficit) of operating funding (A - B)
652
642
661
624
167

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
15
15
10
15
13

Increase (decrease) in debt
33
135
38
95
127

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
48
150
48
110
140

Applications of capital funding

Capital expenditure

- to meet additional demand
9
33
9
24
25

- to improve the level of service
39
117
39
86
115

- to replace existing assets
633
1,074
796
606
686

Increase (decrease) in reserves
19
(432)
(135)
18
(519)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
700
792
709
734
307

Surplus (deficit) of capital funding (C - D)
(652)
(642)
(661)
(624)
(167)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
658
648
564
639
575

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

6.1 Urban planning, heritage and public spaces development

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
7,040
7,159
7,040
7,254
7,254

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
20
21
4
20
5

Internal charges and overheads recovered
-
-
-
-
(10)

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
7,060
7,180
7,044
7,274
7,249

Applications of operating funding

Payments to staff and suppliers
1,895
1,950
1,503
2,029
1,747

Finance costs
1,134
1,078
958
1,370
1,008

Internal charges and overheads applied
2,575
2,696
2,197
2,337
2,661

Other operating funding applications
1,455
1,455
4,425
1,526
1,525

Total applications of operating funding (B)
7,059
7,179
9,083
7,262
6,941

Surplus (deficit) of operating funding (A - B)
1
1
(2,039)
12
308

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
31
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
1,208
3,668
446
3,739
3,013

Gross proceeds from sales of assets
-
9,000
-
15,075
12,675

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
1,208
12,668
477
18,814
15,688

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
1,208
3,668
477
3,739
3,013

- to replace existing assets
5,360
2,915
9,056
9,114
6,728

Increase (decrease) in reserves
(5,359)
6,086
(11,095)
5,973
6,255

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
1,209
12,669
(1,562)
18,826
15,996

Surplus (deficit) of capital funding (C - D)
(1)
(1)
2,039
(12)
(308)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
1
1
11
12
11

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

6.2 Building and development management

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
8,053
8,335
8,053
8,857
8,857

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
10,611
10,929
10,237
11,425
10,218

Internal charges and overheads recovered
90
92
-
423
283

Local authorities fuel tax, fines, infringement fees, and other receipts
55
56
(29)
29
48

Total operating funding (A)
18,809
19,412
18,261
20,734
19,406

Applications of operating funding

Payments to staff and suppliers
10,733
10,791
9,693
12,135
11,892

Finance costs
1
-
-
-
3

Internal charges and overheads applied
8,004
8,556
8,141
8,407
7,937

Other operating funding applications
35
36
4
35
57

Total applications of operating funding (B)
18,773
19,383
17,838
20,577
19,889

Surplus (deficit) of operating funding (A - B)
36
29
423
157
(483)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
2,977
17,595
2,193
13,234
3,909

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
2,977
17,595
2,193
13,234
3,909

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
2,977
17,595
2,193
13,234
3,909

- to replace existing assets
-
-
-
-
-

Increase (decrease) in reserves
36
29
423
157
(483)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
3,013
17,624
2,616
13,391
3,426

Surplus (deficit) of capital funding (C - D)
(36)
(29)
(423)
(157)
483

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
36
29
42
157
28

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

7.1 Transport

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
27,666
28,534
27,666
27,924
27,924

Targeted rates (other than a targeted rate for water supply)
33
33
33
33
33

Subsidies and grants for operating purposes
4,166
4,315
3,729
4,667
5,590

Fees, charges, and targeted rates for water supply¹
2,057
2,181
1,879
2,100
1,357

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
-
-
-
-
-

Total operating funding (A)
33,922
35,063
33,307
34,724
34,904

Applications of operating funding

Payments to staff and suppliers
11,526
12,070
11,646
11,852
12,113

Finance costs
4,300
4,637
4,083
4,303
4,034

Internal charges and overheads applied
5,786
6,009
4,961
6,696
6,046

Other operating funding applications
-
-
4
10
19

Total applications of operating funding (B)
21,612
22,716
20,694
22,861
22,212

Surplus (deficit) of operating funding (A - B)
12,310
12,347
12,613
11,863
12,692

Sources of capital funding

Subsidies and grants for capital expenditure
10,101
10,407
10,659
10,264
10,080

Development and financial contributions
987
987
1,332
987
2,007

Increase (decrease) in debt
3,134
2,113
6,948
3,000
1,920

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
14,222
13,507
18,939
14,251
14,007

Applications of capital funding

Capital expenditure

- to meet additional demand
604
75
58
127
62

- to improve the level of service
5,900
5,935
11,163
6,406
6,227

- to replace existing assets
25,754
24,831
28,585
24,786
22,586

Increase (decrease) in reserves
(5,726)
(4,987)
(8,254)
(5,205)
(2,176)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
26,532
25,854
31,552
26,114
26,699

Surplus (deficit) of capital funding (C - D)
(12,310)
(12,347)
(12,613)
(11,863)
(12,692)

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
20,093
20,560
19,318
20,461
20,125

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

7.2 Parking services

LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Sources of operating funding

General rates, uniform annual general charges, rates penalties
(16,785)
(16,588)
(16,785)
(15,638)
(15,638)

Targeted rates (other than a targeted rate for water supply)
-
-
-
-
-

Subsidies and grants for operating purposes
-
-
-
-
-

Fees, charges, and targeted rates for water supply¹
17,814
18,488
17,575
17,992
18,562

Internal charges and overheads recovered
-
-
-
-
-

Local authorities fuel tax, fines, infringement fees, and other receipts
9,850
10,146
7,850
8,800
6,172

Total operating funding (A)
10,879
12,046
8,640
11,154
9,096

Applications of operating funding

Payments to staff and suppliers
11,075
11,472
9,915
10,071
10,655

Finance costs
12
12
16
17
16

Internal charges and overheads applied
574
605
603
549
748

Other operating funding applications
-
-
(290)
-
(303)

Total applications of operating funding (B)
11,661
12,089
10,244
10,637
11,116

Surplus (deficit) of operating funding (A - B)
(782)
(43)
(1,604)
517
(2,020)

Sources of capital funding

Subsidies and grants for capital expenditure
-
-
-
-
-

Development and financial contributions
-
-
-
-
-

Increase (decrease) in debt
-
-
-
1
-

Gross proceeds from sales of assets
-
-
-
-
-

Lump sum contributions
-
-
-
-
-

Total sources of capital funding (C)
-
-
-
1
-

Applications of capital funding

Capital expenditure

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
1
-

- to replace existing assets
-
-
(3)
-
-

Increase (decrease) in reserves
(782)
(43)
(1,601)
517
(2,020)

Increase (decrease) in investments
-
-
-
-
-

Total applications of capital funding (D)
(782)
(43)
(1,604)
518
(2,020)

Surplus (deficit) of capital funding (C - D)
782
43
1,604
(517)
2,020

Funding balance ((A - B) + (C - D))
-
-
-
-
-

Expenses for this activity grouping include the
following depreciation/amortisation charge
373
413
457
517
437

1 Included in this figure is the metered water rates (applicable to Funding Impact Statement for Water).

Capex by Activity Area

Activity Area
LTP
2012/13
$000
LTP
2013/14
$000
Actuals
2012/13
$000
AP
2013/14
$000
Actuals
2013/14
$000

Governance:

- to meet additional demand
-
-
-
-
-

- to improve the level of service
-
-
-
-
-

- to replace existing assets
-
110
19
110
53

Governance Total
-
110
19
110
53

Environment:

- to meet additional demand
587
611
560
612
596

- to improve the level of service
3,962
4,435
5,432
3,742
3,078

- to replace existing assets
22,637
32,107
20,971
24,849
24,006

Environment Total
27,186
37,153
26,963
29,203
27,680

Economic Development:

- to meet additional demand
-
-
-
-
-

- to improve the level of service
4,011
-
2,419
-
2,593

- to replace existing assets
1,483
864
894
765
958

Economic Development Total
5,494
864
3,313
765
3,551

Cultural Wellbeing

- to meet additional demand
-
-
-
-
-

- to improve the level of service
40
25
10
25
-

- to replace existing assets
-
1
-
1
-

Cultural Wellbeing Total
40
26
10
26
-

Social and Recreation:

- to meet additional demand
1,511
904
1,442
895
982

- to improve the level of service
36,393
29,597
29,808
26,844
27,398

- to replace existing assets
9,171
11,374
9,841
10,539
9,988

Social and Recreation Total
47,075
41,875
41,091
38,278
38,368

Urban Development:

- to meet additional demand
-
-
-
-
-

- to improve the level of service
4,185
21,263
2,670
16,973
6,922

- to replace existing assets
5,360
2,915
9,056
9,114
6,728

Urban Development Total
9,545
24,178
11,726
26,087
13,650

Transport:

- to meet additional demand
604
75
58
127
62

- to improve the level of service
5,900
5,935
11,163
6,407
6,227

- to replace existing assets
25,754
24,831
28,582
24,786
22,586

Transport Total
32,258
30,841
39,803
31,320
28,875

Council:

- to meet additional demand
-
-
1,121
-
-

- to improve the level of service
-
-
1,193
-
3,205

- to replace existing assets
14,539
14,430
8,878
13,930
12,610

Council Total
14,539
14,430
11,192
13,930
15,815

Total Council:

- to meet additional demand
2,702
1,590
3,181
1,634
1,640

- to improve the level of service
54,491
61,255
52,695
53,991
49,423

- to replace existing assets
78,944
86,632
78,241
84,094
76,929

TOTAL COUNCIL
136,137
149,477
134,117
139,719
127,992

Appendices

Report on council controlled organisations

Monitoring information

Glossary

Mayor and councillors

Independent auditor’s report

Report on council controlled organisations

Wellington Regional Stadium Trust

Partnership Wellington Trust (trading as Positively Wellington Tourism)

Wellington Museums Trust

Wellington Venues Limited (trading as Positively Wellington Venues)

Lambton Harbour Management Limited (trading as Wellington Waterfront Limited)

Wellington Cable Car Limited

Capacity Infrastructure Services Limited

Wellington Zoo Trust

Basin Reserve Trust

In order to achieve our objectives for Wellington, we have established several companies and trusts. These organisations were set up to independently manage Council facilities, or to deliver significant services and undertake development on behalf of the Wellington community. Where necessary, we provide funding to support their operations and capital investment requirements.

The following pages explain what the organisations do, how their performance is measured, and how they performed during 2013/14.

Wellington Regional Stadium Trust

STRUCTURE
OBJECTIVES
ACTIVITIES
PERFORMANCE MEASURES
TARGET
2013/14
ACTUAL
2013/14

All of the trustees are jointly appointed by the Council and Greater Wellington Regional Council (GWRC).

As at 30 June 2014, they are John Shewan (Chair), Councillor Nigel Wilson (GWRC), Steven Fyfe, Sir John Anderson, Liz Dawson, Sue Elliott, Mark McGuinness and Councillor Paul Eagle.

The Chief Executive is Shane Harmon.
The Wellington Regional Stadium Trust owns, operates and maintains the Stadium as a high-quality multi-purpose sporting and cultural venue. It provides facilities to be used for rugby, cricket and other sports codes, musical and cultural events, and other users including sponsors and event and fixture organisers.
The Trust:

operates the Stadium

manages the event programme and seeks opportunities to provide regular quality events

ensures the Stadium is provided to the community for appropriate usage

administers the Trust assets and the Stadium on a prudent commercial basis.

Number of events.
46
61

Total revenue.
$15.72 million
$16.33 million

Event revenue.
$5.36 million
$5.81 million

Net surplus.
$1.58 million
$2.24 million

Note: the Wellington Regional Stadium Trust is not formally defined as a Council Controlled Organisation. This report on their activities is presented to recognise the interest that Wellington city ratepayers have in the Trust and its activities.

Partnership Wellington Trust (trading as Positively Wellington Tourism)

STRUCTURE
OBJECTIVES
ACTIVITIES
PERFORMANCE MEASURES
TARGET
2013/14
ACTUAL
2013/14

All trustees are appointed by the Council.  

As at 30 June 2014, they are Howard Greive (Chair), Sarah Gibbs, Councillor Simon Woolf and Chris Wilkinson.

The Chief Executive is
David Perks.    
The Partnership Wellington Trust markets and adds value to Wellington to achieve sustainable economic growth for the people of the city.

It acts to enhance the recognition of Wellington as a desirable visitor destination, enhance the profile of city businesses and to promote strategic alliances and private sector partnerships, and maximise the city’s share of regional spending.

It also promotes community focused initiatives, aims to improve the sustainability of Wellington’s commercial sector through its marketing initiatives, and facilitates the coordination of marketing initiatives that are appropriate to its objectives.
The Trust:

promotes Wellington as a visitor destination in national and international markets

markets Wellington as a convention and conference destination

provides visitor information services

runs initiatives that promote retail growth, including the downtown retail campaign

profiles Wellington’s strengths in arts, sport and education attractions, and conducts development of an ongoing events profile for the city

facilitates the development of new tourism and event product, and the development of the Visiting Friends and Relatives (VFR) market

manages Wellington’s destination profile on the internet

conducts research and analysis of the tourism industry.

International direct arrivals to Wellington Airport from Australia.      
Increase by 5% over 2012/13 levels
Increased 1.4%

International commercial guest nights.
Increase by 1% relative to 2012/13
Increased 2.6%

Domestic commercial guest nights in Wellington City.
Increase by 2% relative to 2012/13
Decreased 1.5%

Weekend occupancy in partner hotels.
Increase by 2% relative to 2012/13  
Decreased 2%

Downtown weekend visitation.
Maintain at 2012/13 levels  
Decreased 0.7%

i-SITE revenue.
Maintain at 2012/13 levels  
Decreased 14.5%

Cost effectiveness.
Maintain Council’s funding at 50% or less of Wellington’s marketing activity investment
43.26%

Visits to WellingtonNZ.com.
10% increase over 2012/13 levels 
visits decreased 5%

Wellington Museums Trust

STRUCTURE
OBJECTIVES
ACTIVITIES
PERFORMANCE MEASURES
TARGET 2013/14
ACTUAL 2013/14

All trustees are appointed by the Council.

As at 30 June 2014, they are Quentin Hay (Chair), Councillor Nicola Young, Rachel Farrant, Jackie Lloyd and Jill Wilson.

The Chief Executive is Pat Stuart.  
The Wellington Museums Trust was established in 1995 to promote and manage the City Gallery Wellington, the Museum of Wellington City & Sea, the Colonial Cottage, Capital E, the Wellington Cable Car Museum and the Carter Observatory. The Trust has a management agreement with the New Zealand Cricket Museum.

The Trust manages and develops the programmes and services, and acquires and manages collections for the benefit of Wellington. It provides advice to the Council for the development of museum and gallery services in Wellington, establishes exhibition programmes and education policies for its facilities, and develops acquisition, deaccession and collection development policies. It liaises with Positively Wellington Tourism to enhance its attraction to Wellington’s visitors.  
The Trust:

delivers high quality experiences, events and exhibitions at its facilities

manages conservation and care for the objects of its collections, and conducts research and development to enhance visitors’ experiences

offers quality education experiences to children and young people

promotes and protects the heritage of venues

develops and operates the Soundhouse Studio 

works with national and international artists and collectors.    

Attendance targets:

City Gallery

143,000

150,289

Capital E 

52,000

59,265

Museum of Wellington

94,000

112,536

Colonial Cottage 

2,075

2,375

Cable Car Museum

220,998

229,960

Carter Observatory

50,000

47,318

Subsidy per customer (excludes $50,000 for Capital E festival).
$14.34
$13.29

Carter Observatory subsidy per customer.
$7.12
$6.07

Percentage of visitors to all trust institutions who rate the quality of their experience as good or very good.
90% on average
88%

Percentage of visitors to all Trust institutions are repeat visitors.
27% average
37%

Percentage of all residents are aware of Trust institutions.
Approximately 85% (across all institutions)
83%26

Wellington Venues Limited (trading as Positively Wellington Venues)

STRUCTURE
OBJECTIVES
ACTIVITIES
PERFORMANCE MEASURES
TARGET 2013/14
ACTUAL 2013/14

All directors are appointed by the Council.

As at 1 June 2014, they are Chris Parkin (Chair), Councillor Simon Woolf, Mike Egan, Samantha Sharif, Lorraine Witten, Linda Rieper and Dan Bridges.

The Chief Executive is Glenys Coughlan.  
Wellington Venues Limited exists to manage and promote Wellington’s major Events venues, including the Michael Fowler Centre, Town Hall, St James Theatre and Opera House as venues, and to help establish Wellington as the premier city for events and conferences.    
Wellington Venues Ltd:

manages and operates the Venues and any related Events business

advocates for the Venue and Event sector for the benefit of the residents of Wellington

works to achieve greater community access to the Venues’ facilities

develops and maintains beneficial relationships with other national and international institutions, supports Positively Wellington Tourism, and develops new initiatives in its role as a key provider of event and performance venues.

Venue hire days.
Occupancy across all venue per annum of >/= 60%  
50%

Performance days and revenues.

348

Convention and events days and revenues.

385

Maintain appropriate mix of commercial and community hires.

Achieved

Pan-venue asset management.

Achieved

Reduced environmental foot print targets.

Achieved

Joint marketing with PWT and other partners.

Achieved

Contingency plan for seismic strengthening of Town Hall.

Achieved

Lambton Harbour Management Limited (trading as Wellington Waterfront Limited)

Structure
Objectives
Activities
Performance measures
Target 2013/14
Actual 2013/14

The Council is the 100% shareholder in this company and appoints all of the directors.

As at 30 June 2014, they are council officers Kevin Lavery (Chair), Derek Fry, Andy Matthews and Greg Orchard.

On 1 April 2014, the external Board of Wellington Waterfront Limited was disestablished.  
Wellington Waterfront Limited acts as the implementation manager for the waterfront development area. This means ensuring that the waterfront area is recognised locally and internationally for its design; is attractive; caters for a wide range of activities; is readily accessible to all people; and is both safe and perceived to be safe. Wellington Waterfront Limited also acts to protect significant heritage buildings on the waterfront, and makes sure that activities on the waterfront are integrated with those on the harbour.  
The company:

implements the objectives of the Waterfront Framework as outlined in the Waterfront Development Plan

demonstrates willingness to engage with the public about how the waterfront is developed

manages day to day operations on the waterfront, including cleaning, security and maintenance

negotiates and manages contracts for the design and construction of the waterfront’s public spaces

negotiates and manages contracts and leases for all building development sites, and the refurbishment and re-use of existing buildings

owns and manages the marina.  

Percentage of residents visiting the waterfront.
95%        
97%

Percentage of residents satisfied with the waterfront.
90%
90%

Number of project milestones achieved on time.
All project milestones achieved

Developer selection process completed on Sites 9&10 (Q4).

Achieved

Complete building and public space improvements around Queen’s wharf (Q4).

Deferred to 2014/15

Negotiate a new naming rights agreement for the TSB arena (Q3).
Underway. To be completed in 2014/15

Complete seismic strengthening, fit out and upgrade work on Shed 6 (Q1).
Achieved

Complete public space development on Clyde Quay Wharf (Q4).
Underway. To be completed in 2014/15

Subject to capital raising, complete the upgrade of the children’s playground at Frank Kitts Park and the development of public activity space on Queen’s wharf.

Planning work is underway. To be completed in 2014/15

Wellington Cable Car Limited

Structure
Objectives
Activities
Performance measures
Target 2013/14
Actual 2013/14

The Council is the 100% shareholder in this company and appoints all of the directors.

As at 30 June 2014, they are council officers Anthony Milford (Chair) and Andy Matthews. The Chief Executive is Simon Fleisher.

On 1 April 2014, the external Board of Wellington Cable Car Limited was disestablished.  
Wellington Cable Car Limited owns and operates the Cable Car as an efficient, reliable and safe transport service and a uniquely Wellington tourism asset. It also owns and maintains the overhead wiring system for the trolley bus passenger network which services the city.  
The company:

maintains the cable cars and associated track, plant, tunnels, bridges and buildings in accordance with best engineering practice, and to meet the certification requirements of the New Zealand Transport Agency

manages the cable car passenger service operation

markets the cable car

identifies options for enhancing the cable car travel and tourism experience

specifies and controls the contract for the inspection, maintenance and repair of the trolley bus overhead wiring system.

Cable car passenger numbers.
1,084,400
956,612

All cable car vehicles and associated buildings and equipment are maintained to required safety standards.
Achieve
Achieved

Cable car service reliability.
Greater than 99%
98.6%

Percentage of residents who have used the cable car in the last 12 months.
30%
52.6%

Percentage of users who rate the standard and operational reliability of the Cable Car as good or very good.
95%
91%

Capacity Infrastructure Services Limited

Structure
Objectives
Activities
Performance measures
Target 2013/14
Actual 2013/14

Wellington City Council, Hutt City Council, Upper Hutt City Council, and Porirua City Council are equal voting shareholders in this Council-controlled trading organisation, and between them appoint all of the directors. The company is overseen by a board of directors made up of four sole Council appointments (one from each council) and four joint appointments. Each council continues to own its respective water, stormwater and wastewater assets and determines the level and standard of services to be provided to its customers and ratepayers.

As at 30 June 2014, the Councillor appointees are Councillor Sarah Free (Wellington City Council), Councillor David Bassett (Hutt City Council), Mayor Nick Leggett (Porirua City Council) and Mayor Wayne Guppy (Upper Hutt City Council). The remaining directors are John Strahl (Chair), Ian Hutchings and Reveen Jadrum.

The Chief Executive is
David Hill.  
The objective of Capacity is to manage the provision of water services (water supply, stormwater and wastewater) to the residents and businesses in the areas served by its customers. Capacity’s current customers are Wellington City Council, Hutt City Council, Upper Hutt City Council and Porirua City Council.  
The company’s purpose is to provide high quality, safe and environmentally sustainable services to shareholding councils and other customers with a principal focus on asset management planning and contracted service delivery for the operation, maintenance and on-going development of drinking water, stormwater and wastewater assets and services.

The company is committed to ensuring all work managed on behalf of customers accords with the highest standards of health and safety for those involved in the work and for the general public. The company will continually seek opportunities to integrate water, stormwater and wastewater activities within the Wellington region where such integration can deliver least cost, best practice outcomes to the benefit of shareholder councils and other entities.

See the Environment activity area for more information on water, stormwater and wastewater services.
Provide a reliable water supply, wastewater and stormwater service.
Fewer than four unplanned supply cuts (pipe bursts) per 1000 connections
1.1 breaks/1000 connections

Develop and complete asset management plans.
Within agreed timeframes
Target met

Deliver budgeted capital expenditure projects for respective councils.
Within agreed timeframes and budget
Target met

Deliver budgeted operating and maintenance activities for respective councils.
Within agreed timeframes and budget
Target met

Manage and operate Capacity within its budget.
Within agreed budget
Target met

Comply with relevant standards, legislation and resource consents.
Achieve full compliance
Target met

Wellington Zoo Trust

Structure
Objectives
Activities
Performance measures
Target 2013/14
Actual 2013/14

The Wellington Zoo Trust was established on 1 July 2003 and all of the trustees are appointed by the Council.

As at 30 June 2014, they are Ross Martin (Chair), Frances Russell, Linda Meade, Alan Dixson, and Councillor Simon Marsh.
The Wellington Zoo Trust manages the assets and operations of Wellington Zoo for the benefit of the residents of Wellington and visitors to the city. It promotes species conservation, educates the community by building an awareness of plant and animal species, and supports the conservation and educational activities of other organisations.  
The Trust:

cares for resident animals and manages the animal collection

provides a high-quality visitor experience

participates in captive management breeding and breed-for-release programmes

develops and maintains high quality animal exhibits

delivers educational material and learning experiences

contributes to zoological, conservation and facilities management research projects.

Number of visitors.    
216,89027
227,434

Conservation Programme Managed Species (% of total collection).
41%
40%

Average WCC subsidy per visitor.
$12.52
$11.94

Annual fundraising target for ZCP.
$400,000
$241,00028

Average income per visitor (excluding WCC grant).
$14.82
$14.01

Ratio of generated Trust income as % of WCC grant.
118%
117%

Basin Reserve Trust

Structure
Objectives
Activities
Performance measures
Target 2013/14
Actual 2013/14

There are four trustees, of whom two are appointed by the Council and two by Cricket Wellington.

As at 30 June 2014, the two trustees appointed by the Council are Councillor Paul Eagle and Sir John Anderson (Chair). The two trustees appointed by Cricket Wellington are Don Neely and John Greenwood. The Chief Executive of Cricket Wellington is Peter Clinton.
The Basin Reserve Trust manages and operates the Basin Reserve to continue to attract national and international sporting events to Wellington.
The Trust:

manages the Basin Reserve for recreational activities and the playing of cricket for the residents of Wellington

contributes to the events programme for Wellington

operates as a successful not-for-profit undertaking

preserves and enhances the heritage value of the Basin Reserve.

Number of events:

Cricket

12

22

Other sports

6

9

Community

2

2

Number of event days:

Cricket

32

41

Other sports

6

9

Community

2

2

Attendance figures

28,000

30,664

26 This result excludes the Cricket Musuem because it was closed for most of the 2013/14 year.

27 This figure has increased from the original 2012–22 Long-term Plan target to reflect the higher than anticipated visitor numbers.

28 The Trust’s fundraising target for the year was 25% of capital expenditure. The $400,000 target was based on anticipated capital expenditure of $2 million. The trust’s actual capital expenditure was $962,826. Based on this, the fundraising target should have been $240,706, which the Trust achieved.

Monitoring information

Governance outcome indicators

Environment outcome indicators

Economic development outcome indicators

Cultural wellbeing outcome indicators

Social and recreation outcome indicators

Urban development outcome indicators

Transport outcome indicators

The following indicators have been developed to assess achievement of our Council outcomes that were set as part of the 2012-22 Long-term Plan.

The Council’s outcomes are our aspirations for the city and our communities. They are aimed at promoting Wellington’s social, economic, environmental, and cultural wellbeing now and in the future.

The Council outcomes reflect areas of the city we are able to influence, whereas community outcomes reflect the community’s overall aspirations including areas we have limited ability to influence (for example, affordability of housing). Over time we expect to see improvement across all areas. The information provided below is a complete record of the ‘outcomes indicators’ section under each strategy area.

Note: we only have 2012/13 and 2013/14 results for indicators that are sourced from the Council’s Residents Monitoring Survey (RMS). This is because we made changes to the survey methodology in 2012/13 that mean the results of previous RMS are not directly comparable.

We use some acronyms:

GIS: Geographic Information Systems

PWT: Positively Wellington Tourism

NZTA: New Zealand Transport Agency

GWRC: Greater Wellington Regional Council

Governance outcome indicators

Council outcome indicator | Source | Data
Residents who agree that decisions are made in the best interests of the city | WCC Residents Monitoring Survey | (2013, 2014) 31%, 36%.
Residents who state that they understand how the Council make decisions | WCC Residents Monitoring Survey | (2013, 2014) 27%, 30%.
Residents who believe they have an influence on Council decision-making | WCC Residents Monitoring Survey | (Large and Some Influence) 2013: 41%, 2014: 41%.
Mana whenua partner agreement that the use and protection of the city’s resources for the future is appropriate | WCC Research, Consultation and Planning | Both partners agree that Council is making appropriate decisions regarding the use and protection of the city’s resources.
Residents who believe they have the opportunity to participate in city life | WCC Residents Monitoring Survey | (Agree and strongly agree) 2013: 67%, 2014: 64%.
Voter turnout in local elections | WCC Democratic Services | 2010: 39%, 2013: 41%.

Environment outcome indicators

Council outcome indicator
Source
Data

Hectares of open space land owned or maintained by WCC, per capita29
WCC Parks, Sports and Recreation
2009/10: 208.6m²/person (4,078 hec);
2010/11: 206.7m²/person (4,086 hec);
2011/12: 210.9m²/person (4,221 hec);
2012/13: 202.1m²/person (4,086 hec);
2013/14: 206.5m²/person (4,213 hec).

Residents usage of the city’s open spaces
WCC Residents Monitoring Survey
See table below.

Usage of the city’s open spaces (this table is part of the above measure)

Weekly
Yearly

2012/13
2013/14
2012/13
2013/14

Coastal areas or beaches
19%
20%
95%
94%

Botanic gardens
5%
5%
83%
78%

Parks and reserves
26%
25%
94%
92%

Town Belt or outer green belt
9%
13%
72%
72%

Walking tracks
10%
14%
72%
72%

Sports fields
16%
12%
60%
58%

Residents perceptions that the natural environment is appropriately managed and protected
WCC Residents Monitoring Survey
2013: 80%, 2014: 77%.

Kilometres of managed tracks and walkways
WCC Parks, Sports and Recreation
2009/10 = 337km; 2010/11 = 327km; 2011/12 = 335km; 2012/13 = 360km; 2013/14 = 340km.30

Hours worked by recognised environmental volunteer groups and Botanic Garden volunteers
WCC Parks, Sports and Recreation
2009/10 = 25,000 hours; 2010/11 = 28,000 hours;
2011/12 = 31,200 hours; 2012/13 = 24,682 hours;
2013/14 = 34,611 hours.

Bird counts - abundance and distribution
WCC Parks, Sports and Recreation
Average number of birds observed at each station.31
See table below.

Bird counts (this table is part of the above measure)

% of stations where species were recorded
average number of birds observed at each station

Species
2008
2009
2010
2011
2012
2013
2008
2009
2010
2011
2012
2013

bellbird
23
7
3
0
1.5
3
0.13
0.56
0.19
0.00
0.02
0.03

fantail
57
47
51
27
18.5
19.9
0.33
4.50
7.44
0.35
0.25
0.23

grey warbler
93
76
68
59
69
70.6
1.51
7.75
9.84
0.84
1.20
1.3

hihi

1

0
0
0
0.00
0.06
0.00
0.00
0.00
0

kaka
16
7
6
1
5.5
9.5
0.07
0.56
0.44
0.10
0.07
0.12

kakariki

1

0.05
0.5
0.5
0.00
0.06
0.00
0.01
0.02
0.01

karearea

1

0
0.5
1
0.00
0.06
0.00
0.00
0.01
0.01

kingfisher
27
15
4
0.02
2.5
3
0.16
1.13
0.25
0.03
0.04
0.03

saddleback
4
3

0.05
1
2.5
0.02
0.19
0.00
0.07
0.02
0.03

shining cuckoo
8
19
29
0.16
19.5
21.4
0.03
1.44
3.00
0.17
0.25
0.24

silvereye
98
89
55
79
82.5
74.6
2.66
19.75
0.00
1.86
2.40
2.01

tui
99
93
89
72
36.5
80.1
2.16
16.88
38.31
1.35
0.80
2.16

whitehead

6
1
0.04
5
3
0.00
0.75
0.18
0.06
0.09
0.04

kererū
20
16
15
0.06
3
9
0.11
1.25
1.62
0.07
0.03
0.11

Water consumption (commercial and residential combined)
Capacity Infrastructure Services Ltd
(2012/13, 2013/14) 23.7 billion litres, 26.4 billion litres. This figure is total usage excluding unaccounted for water.

Renewable energy (GWh) generated in the city
Meridian Energy
Total renewable energy generated in the city: 2012/13 = 476 GWh, 2013/14 = 542 GWh.32  

City-wide greenhouse gas emissions
URS Report – Greenhouse gas inventory for the Wellington Region.
Total net emissions (t CO₂e)
2009/10: 1,325,237; 2010/11: 1,242,162;
2011/12: 1,367,690; 2012/13: 1,243,802.

Fresh water biological health (macroinvertebrates)
GWRC
(2008/09, 2009/10, 2010/11, 2011/12, 2012/13) Makara Stream: 113, 112, 110, 120, 122.7;
Karori Stream: 95, 82, 79, 95.5, 100.8;
Kaiwharawhara Stream: 85, 91, 87, 86.7, 81.1.
Most recently available data are for 2012/13 year.

Fresh water quality
GWRC
(2008/09, 2009/10, 2010/11, 2011/12, 2012/13) Makara Stream: Fair, Good, Fair, Fair, Fair;
Karori Stream: Fair, Fair, Fair, Fair, Fair;
Kaiwharawhara Stream: Fair, Fair, Fair, Fair, Fair.
Most recently available data are for 2012/13 year.

Residents actions to reduce stormwater pollution.
WCC Residents Monitoring Survey
(2013, 2014) Putting litter in a rubbish bin: 91%, 90%; Pouring all household liquid waste down inside sink, toilet or gully trap: 64%, 64%; Disposing of oil, paint, chemicals by putting them out with household rubbish or taking them for recycling: 49%, 47%; collect sweepings from driveway, paths or yard for composting or for disposal with your household rubbish: 49%, 43%; Wash the car at the car wash or on the lawn: 30%, 26%; Washing paint brushes in an inside sink: 48%, 50%; Pick up droppings left by dogs: n/a, 18%.

Total waste to landfill, per capita
WCC CitiOperations
2009/10 = 0.41 tonnes/person; 2010/11 = 0.42 tonnes/person; 2011/12 = 0.43 tonnes/person; 2012/13 = 0.41 tonnes/person; 2013/14 = 0.40 tonnes/person.

Residents actions to reduce waste from homes (including recycling, composting, etc).
WCC Residents Monitoring Survey
(2013, 2014) Use Council’s kerbside recycling service: 86%, 82%; Donating things to second-hand shops/charities: 80%, 79%; Reusing plastic containers such as food containers: 85%, 81%; Buying refills: 59%, 58%; Avoiding using plastic bottles or bags/use green bags: 34%, 30%; Taking things to recycling stations: 39%, 40%; Home composting: 41%, 39%.

New Zealanders and residents perceptions that Wellington is an eco-city
WCC Residents Monitoring Survey and Arts Omnibus Survey
(2013, 2014) New Zealanders: 27%, 30% Residents: 29%, 29%.

Energy-use, per capita (Wellington Region)
Wellington Electricity
2009/10: 7.2 MWh/person; 2010/11: 7.0 MWh/person; 2011/12: 6.9 MWh/person; 2012/13: 6.7 MWh/person; 2013/14: 6.6 MWh/person.

Number/sqm of ‘green star’ buildings/space in the city
New Zealand Green Building Council
2013/14: Design rating = 9 buildings, 141,365 m²; Interior fitout rating = 3 buildings, 37,964 m².

Residents (%) who live in an insulated property
WCC Residents Monitoring Survey
(2013, 2014) Residents’ who report their home as rarely or never: Cold: 27%, 31%; Damp: 60%, 58%; Hard to heat: 49%, 51%.

Economic development outcome indicators

Council outcome indicator
Source
Data

Number of enterprises and jobs in the city and central city
Statistics NZ
(2012) City - enterprises: 25,163; jobs: 151,853. Central city – enterprises: 8,643; jobs: 96,412.  

Visitor numbers – international (guest nights)
PWT
(2009/10, 2010/11, 2011/12, 2012/13, 2013/14) 692,202; 702,463; 776,834; 667,760; 686,692.

Visitor numbers – domestic (guest nights)
PWT
(2009/10, 2010/11, 2011/12, 2012/13, 2013/14): 1,352,242; 1,280,162; 1,315,814; 1,373,613; 1,396,402.

Accommodation (commercial) – occupancy rates and guest nights
Statistics NZ
(2009/10, 2010/11, 2011/12, 2012/13, 2013/14) Guest nights: 2,017,445; 1,982,625; 2,092,605; 2,041,371; 2,083,094 Occupancy: 64%, 62%, 66%, 64%, 67% (year-end April).

Number of major conferences
PWT
2011/12 = 468; 2012/13 = 606; 2013/14 = 619 (year-end March).

Number of A-level events33 held in Wellington and their economic contribution
WCC Events
2009/10 = 9 A-Level events ($34.8m); 2010/11= 9 A-Level events ($23.7m); 2011/12 = 16 A-Level events ($17m); 2012/13 = 9 A-level events ($30.2m); 2013/14 = 10 A-level events ($30.9m).

New Zealand’s top 200 companies based in Wellington.
NZ Management Magazine
(2008/09, 2009/10, 2010/11, 2011/12, 2012/13)
24, 20, 18, 20, 21.

Business enterprises - births and growths (net growth in business)
Statistics NZ
Annual growth (business units) : 2008/09 = 1.9%; 2009/10 = -1.9%; 2010/11: 0.0%; 2011/12: 0.7%; 2012/13 = -0.20%. Net growth 2000–2010: 22%.34

Growth in business and employees - ‘smart’ business
Market Economics
(2012) Number of smart businesses in the city: 4,896; Percentage of employees working in smart business sector: 31.0%.

Domestic and international airline passengers entering Wellington Airport
Wellington International Airport
(2009/10, 2010/11, 2011/12, 2012/13, 2013/14 - March year-end). Domestic: 4,491,402; 4,479,664; 4,474,000; 4,647,000; 4,684,000. International: 626,365; 654,615; 718,000; 727,000; 753,000.

Free wifi usage (logons/day) – waterfront and central city
Citylink
(2012/13) Central city: 1,903,357 logons (5,214 per day) Waterfront: 106,659 (292 per day). (2013/14) Central city: 2,431,247 logons (6,661 per day) Waterfront: 194,852 (534 per day).

Residents who have access to broadband (%) including ultrafast
WCC Residents Monitoring Survey
(2013, 2014): 97%, 97%.

Gross Domestic Product (per capita growth)
Infometrics
(2008/09, 2009/10, 2010/11, 2011/12, 2012/13) 0.60%, 2.80%, 2.90%, 0.40%, 1.6%35 Regional share of national employment: 11.5% (MBIE Regional Activity Report).

Educational achievement (degree level qualifications)
Statistics NZ
(2006 Census, 2013 Census) Percentage of Wellingtonians over the age of 15 that have a Degree-level qualification or higher: 33%, 38%.

Labour force participation rate and youth NEET rates
Statistics NZ
(2012/13, 2013/14) Labour force participation rate: 71.5%, 73.2% (2012/13, 2013/14) Youth NEET rates: 9.9%, 12.4%.

Income – household and personal
Statistics NZ
(2006 Census, 2013 Census): Median personal income: $32,500, $37,900.
(2006 Census, 2013 Census): Median Household Income: $72,200, $91,100.

Ratio of income to cost of living for residents
Statistics NZ
Between 2012 and 2013, the difference between earnings and cost of living decreased by 3% (became less expensive).

Pedestrian counts – average of various Lambton Quay sites
WCC golden mile pedestrian survey
(2012/13, 2013/14) Average hourly pedestrian counts for various Lambton quay sites Monday – Friday: 2,179; 2,069.  

Total value of exports (value and estimated tonnage)
Statistics NZ
(2012/13; 2013/14) Wellington Airport: Tonnage: 870; 1,028. Value $18.5 M, $13.5 M. Wellington Seaport: Tonnage 1.15M; 1.07M. Value $989M; $1,022M.

Number of international air connections (by country)
Wellington International Airport
One - Australia.

Businesses and employees engaged in research and development sector
Statistics NZ
(2008; 2009; 2010; 2011; 2012) Businesses: 152; 155; 150; 146; 152. Employees: 4,930; 4,830; 4,940; 4,980; 4,920.

Secondary (international) and Tertiary (international and domestic) students enrolled per 1000 residents
Education Counts
(2013/14) International fee paying secondary school students: 347; Tertiary students: Domestic: 28,049; International: 3,801.

Cultural wellbeing outcome indicators

COUNCIL OUTCOME INDICATOR | SOURCE | DATA
Residents frequency of engagement in cultural and arts activities | WCC Residents Monitoring Survey | (2013, 2014) At least once a week: 7%, 7%; At least once a month: 30%, 25%; At least once ever six months: 32%, 34%; At least once a year: 15%, 13%; Less often: 12%, 12%.
New Zealanders and residents perceptions that ‘Wellington has a culturally rich and diverse arts scene’ | WCC Residents Monitoring Survey and Arts Omnibus Survey | New Zealanders (2010, 2011, 2012, 2013, 2014) 85%, 81%, 77%, 84%, 84%.   Residents’ (2013, 2014) 92%, 89%.
Residents perceptions that Wellington’s local identity (sense of place) is appropriately valued and protected | WCC Residents Monitoring Survey | (2013, 2014) 77%, 72%.
Number of events held at key venues36 | Venues and Te Papa | (2009/10, 2010/11, 2011/12, 2012/13, 2013/14) 1,514; 1,489; 1,424; 1,356; 1,689.  
New Zealanders and Residents perceptions that ‘Wellington is the arts capital of New Zealand’ | WCC Residents Monitoring Survey and Arts Omnibus Survey | New Zealanders (2010, 2011, 2012, 2013, 2014) 68%, 65%, 61%, 54%, 52%.   Residents (2013, 2014) 70%, 68%.
New Zealanders and Residents perceptions that ‘Wellington is the events capital of New Zealand’ | WCC Residents Monitoring Survey and Arts Omnibus Survey | New Zealanders (2010, 2011, 2012, 2013, 2014) 53%, 42%, 37%, 29%, 31%.   Residents (2013, 2014) 51%, 48%.
Residents (%) agreement with the statement that ‘Wellington is an easy place to get involved in the arts’ | WCC Residents Monitoring Survey | (2013, 2014) 87%, 80%.

Social and recreation outcome indicators

COUNCIL OUTCOME INDICATOR
SOURCE
DATA

Residents usage of WCC community facilities
WCC Residents Monitoring Survey
(2013, 2014) Community centre = 19%, 20%;
Community Hall = 17%, 19%.

Residents perceptions that they feel a sense of community with others in their local neighbourhood
Quality of Life Survey
(2006, 2008, 2010, 2012) 57%, 51%, 60%, 53%.  

Residents perceptions that Wellington offers a wide range of recreation activities
WCC Residents Monitoring Survey
(2013, 2014) 76%, 76%.

Residents frequency of physical activity
WCC Residents Monitoring Survey
(2013, 2014) 64%, 65% (more than 2.5 hours per week).

Residents perceptions of barriers restricting participation in recreation activities, for example, too busy, poor health, no facilities, parking, transport, weather, expense, etc.
WCC Residents Monitoring Survey
(2013, 2014) Too busy: 47%, 45; Poor health: 11%, 9%; Lack of motivation: 24%, 23%; Lack of parking/public transport/transport: 20%, 19%; Weather: 27%, 30%; Expense: 37%, 36%.

Residents importance of sense of community in local neighbourhood
Quality of Life Survey
(2006, 2008, 2010, 2012): 69%, 59%, 70%, 75%.  

Residents usage of WCC Libraries
WCC Residents Monitoring Survey
(2013, 2014) 68%, 69%.

Residents frequency of visiting WCC Libraries
WCC Residents Monitoring Survey
(2013, 2014) more than once a week: 5%, 5%; once a week: 10%, 15%; once every 2–3 weeks: 29%, 22%; once a month: 18%, 19%; once every 2–3 months: 19%, 17%; once every 4–6 months: 13%, 11%; less often: 6%, 11%.

Residents engaging in neighbourly actions
WCC Residents Monitoring Survey
(2013, 2014) Spoken to a neighbour: 92%, 88%; given help to a neighbour: 58%, 55%; received help from a neighbour: 43%, 44%; participated in an activity with a neighbour: 28%; 34%; discussed emergency preparedness with a neighbour: 12%, 19%; none of the above: 7%, 10%.

Types of social networks to which residents belong (i.e. community, sports, ethnic, etc)
Quality of Life Survey
(2006, 2008, 2010, 2012) School or work network: 62%, 67%, 65%, 58%; Hobby/interest group: 37%, 41%, 38%, 30%; Online community groups (eg Facebook): 20%, 38%, 59%, 51%; Sports club: 33%, 29%, 30%, 29%; Church/spiritual group: 32%, 26%, 23%, 19%; Community/voluntary group: 22%, 19%, 22%, 18%; Friends: 4%, 11%, 7%, 3%.  

Ethnic diversity of the city’s population and resident’s values regarding diversity
Statistics NZ and WCC Residents Monitoring Survey
30% of the city’s population are non-European. 67% of residents believe that different lifestyles and cultures make Wellington a better place to live.

Residents perceptions of safety – central city and local neighbourhood (day and night)
WCC Residents Monitoring Survey
(2013, 2014) Central city day = 98%, 98%. Central city night = 72%, 69%. Neighbourhood day = 99%, 99%. Neighbourhood night = 85%, 83%.

Resident perceptions – city safety issues of most concern37
WCC Residents Monitoring Survey
(2013, 2014): Alcohol and drug problems: 54%, 55%. Dangerous drivers (including speed, drunk drivers): 34%, 35%. Threatening people/people behaving dangerously: 53%, 51%. Poorly lit/dark public areas (streets, paths, parks): 63%, 71%. Traffic including busy roads/lack of pedestrian facilities: 31%, 31%. Car theft/vandalism: 33%, 29%. Graffiti: 46%, 40%. Vandalism (broken windows in shops): 30%, 28%. Poorly maintained/dangerous public areas: 37%, 40%.

Crime – number recorded (resolution rate) – by category38
NZ Police
(2009, 2010, 2011, 2012, 2013) Offences against the person (% resolved): 7,222 (80%); 6,959 (76%); 6,406 (77%); 5,837 (71%); 5,445 (59%). Burglary/Theft: 21,259 (21%); 19,733 (19%); 20,144 (19%); 17,606 (20%); 16,920 (17%). Illicit drug offences: 2,367 (97%); 1,907 (95%); 1,810 (96%); 2,603 (96%); 1,157 (89%). Public order offences: 5,108 (87%); 4,342 (86%); 4,056 (89%); 3,807 (85%); 3596 (78%).

Residents with home emergency items and plan
WCC Residents Monitoring Survey
Items: (2013, 2014): 78%, 80%; Plan: (2013, 2014): 42%, 50%.

Number of notifications of the most prevalent food and water-borne diseases
WCC Building Consents and Licensing
2009/10 = 291; 2010/11 = 210; 2011/12 = 161; 2012/13 = 234; 2013/14 = 264.

Life expectancy (with break-down)
Statistics NZ
Male: 1995–1997 = 75.4; 2000–2002 = 78; 2005–2007 = 80.1%. Female: 1995–1997 = 81.2; 2000–2002 = 82.5; 2005–2007 = 83.7%. (Census – dataset not updated in 2011/12, 2012/13 or 2013/14).

Residents perception of their ‘quality of life’
WCC Residents Monitoring Survey
(2013, 2014) 88%, 86%.

Urban development outcome indicators

COUNCIL OUTCOME INDICATOR
SOURCE
DATA

Residents perceptions that Wellington is a great place to live, work and play
WCC Residents Monitoring Survey
(2013, 2014) great place to live: 93%, 89%; great place to work: 66%, 62%; great place to play: 88%, 88%.

Value of commercial and residential building consents
Statistics NZ
(2010, 2011, 2012, 2013, 2014 March year-end). Commercial: $308m, $264m, $204m, $226m, 271m. Residential: $211m, $266m, $217m, $327, $255m.

Population density – central city area, ‘Growth Spine,’ inner-city residential, outer residential, suburban centres (long-term indicator).
WCC GIS
(2001, 2006, 2013) Central city: 5,844; 8,547; 11,797 people; ‘Growth Spine:’ 18,348; 22,293; 25,301 people; Inner city: 23,559; 25,227; 26,583 people; Outer residential: 98,718; 108,402; 111,639 people; Suburban centres: 2,295; 3,105; 3,261 people. (Census – updated in 2013).

Residents perceptions of the city centre as an easy place to get to, use and enjoy
WCC Residents Monitoring Survey
(2013, 2014): easy to get around: 81%, 78%; easy to access leisure activities: 74%, 71%.

Residents perceptions of urban design/urban form safety issues (ie graffiti, vandalism, poorly lit public spaces etc)
WCC Residents Monitoring Survey
(2013, 2014) Poorly lit public areas: 63%, 71%; Vandalism: 30%, 28%; Graffiti: 46%, 40%; Poorly maintained public areas: 37%, 40%.

% of city’s population who reside in the central city
Statistics NZ
(2006 census, 2013 census) 7.3%, 8.9%.39

Building density (buildings per hectare) – central city area, ‘Growth Spine,’ inner-city residential, outer residential, suburban centres (long-term indicator)
WCC GIS
(2010, 2011, 2012, 2013) Central Area – 1,904 (7.85 buildings per hectare); 1,884 (7.76 buildings per hectare); 1,869 (7.70 buildings per hectare); 1,870 (7.7 buildings per hectare). Inner Residential – 10,652 (34.60 buildings per hectare); 10,633 (34.5l buildings per hectare); 10,578 (34.46 buildings per hectare), 10,577 (34.39 buildings per hectare). Outer Residential – 76,699 (21.84 buildings per hectare); 76,818 (21.88 buildings per hectare); 76,990 (21.96 buildings per hectare); 77,009 (21.9 buildings per hectare). Suburban Centres – 2,217 (7.37 buildings per hectare); 2,207 (7.34 buildings per hectare); 2,201 (7.32 buildings per hectare); 2,202 (7.32 buildings per hectare). Growth Spine – 10,172 (13.93 buildings per hectare); 10,153 (13.90 buildings per hectare)); 10,124 (13.87 buildings per hectare); 10,131 (13.87 buildings per hectare).40

Proportion of houses within 100m of a public transport stop.
WCC GIS
2006 = 48%; 2008 = 48%; 2010 = 48%; 2011 = 47%; 2012 = 46%; 2013 = 45%.41

Identified earthquake-prone buildings that have been strengthened/demolished
WCC Building Consents and Licensing
2009/10: 4; 2010/11: 11; 2011/12: 12; 2012/13: 44; 2013/14: 52.

Residents perceptions that heritage items contribute to the city and local communities’ unique character  
WCC Residents Monitoring Survey
(2013, 2014) City: 92%, 85% Local community: 72%, 67%.

New Zealanders’ perception that Wellington is an attractive destination
Colmar Brunton Omnibus Survey
(2010, 2011, 2012, 2013, 2014)
82%, 75%, 77%, 78%, 80%.

Residents rating of sense of pride in the way their city looks and feels.
WCC Residents Monitoring Survey
(2013, 2014) 82%, 75%.

Transport outcome indicators

COUNCIL OUTCOME INDICATOR
SOURCE
DATA

Residents perceptions that peak traffic volumes are acceptable
WCC Residents Monitoring Survey
(2013, 2014) 57%, 53%.

Total fuel used on Wellington roads, per capita
WCC Infrastructure Planning and Data
2009/10: 2,012 litres/person 2010/11: 1,934 litres/person; 2011/12: 1,908 litres/person; 2012/13: 1,843 litres/person; 2013/14: 1,817 litres/person.

Residents perceptions that the city’s transport system allows easy access from the suburbs to the city
WCC Residents Monitoring Survey
(2013, 2014) 63%, 64%.

Mode of transport used by residents to come into the CBD – by car, bus, walking, train, and cycling
WCC Residents Monitoring Survey
(2013, 2014) Car: 33%, 31%; Bus: 34%, 28%; Walking: 20%, 27%; Train: 6%, 6%; Cycle: 3%, 4%.

Residents perceptions that public transport is convenient and affordable
WCC Residents Monitoring Survey
(2013, 2014) Convenient: 68%, 70%; Affordable: 40%, 38%.

Uses of public transport: buses, trains
Greater Wellington
(2013, 2014 Total passenger boardings – Wellington Region – 000s)
Bus: 23,608; 23,981. Train: 11,355; 11,643.

Air quality monitoring (i.e. nitrogen dioxide, carbon monoxide, and particulate matter PM₁₀)
Greater Wellington
(2009, 2010, 2011, 2012, 2013 Calendar years): Nitrogen dioxide (µg/m³): Maximum: 100.1, 105.4, 93.7, 92.0, 79.8; Mean (annual): 27.4, 25.8, 24.4, 20.2, 19.4. Carbon monoxide (mg/m³): Maximum: 2.9, 3.2, 2.5, 1.9, 2.1; Mean (annual): 0.6, 0.6, 0.6, 0.4, 0.4. Particulate matter PM₁₀ (µg/m³): Maximum: 31, 32, 34, 32, 28; Mean: 13, 13, 13, 13, 14.

Number of road crashes resulting in injury
NZTA
(2009, 2010, 2011, 2012, 2013): Total: 433, 372, 314, 298, 333; Fatal: 3, 3, 6, 2, 2; Serious: 53, 55, 79, 77, 35.  

Social cost of all crashes – includes loss of life estimates and non-injury crashes.
NZTA
(2009, 2010, 2011, 2012, 2013)
$112m, $104m, $116m, $98m, $59m.

Residents perceptions of transport related safety issues (i.e issues of most concern)
WCC Residents Monitoring Survey
(2013, 2014) Traffic or busy roads: 31%, 31%; Car theft or vandalism: 33%, 29%; Poorly lit or dark public areas: 63%, 71%; Dangerous driving: 34%, 35%.

29 All per capita calculations are based on the Wellington City resident population estimate from Statistics NZ as at 30 June each year.

30 The decrease from 2012/13 to 2013/14 is due to improvements in measurement methodology. We excluded some non-WCC pathways that were previously included.

31 In 2011 we changed the areas we were conducting bird counts in, which led to a change in abundance that we were recording.

32 These figures do not include small scale renewables such as solar PV, microwind and solar hot water.

33 ‘A level’ events are defined as those events with a total funding spend of $50K plus, excluding the iconic events, being WOW, Hertz Sevens & NZ International Arts Festival.

34 Previous results have been changed as more up-to-date data is available.

35 Previous results have been changed as more up-to-date data is available.

36 Key venues include: Westpac Stadium, St James Theatre, Opera House, Wellington Town Hall, Michael Fowler Centre, TSB Bank Arena and Te Papa.

37 In the Residents Monitoring Survey, residents were asked what issues were particularly concerning, as opposed to which issue was of ‘most’ concern.

38 There has been an error in calculation of Burglary/Theft numbers in previous reports. The error has been corrected and data updated accordingly.

39 Central city is defined as the Thorndon/Tinakori, Lambton and Willis St/Cambridge area units.

40 Dataset not updated in 2013/14.

41 Dataset not updated in 2013/14.

Glossary

Annual Plan – The Annual Plan is a budget prepared by Council showing the expected cost of running the city for the year of the plan 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).

Associates – are entities that the Council owns a share of but does not control. Our share of the associates’ surplus/deficit and net assets is recorded in the Group financial statements. The Council’s associates are Basin Reserve Trust (50%), Capacity (50%), Chaffers Marina Holding Limited (11%), Wellington International Airport Limited (34%) and Wellington Regional Stadium Trust (50%).

Capital expenditure – expenditure on assets that provide a long term ongoing benefit to Council, usually fixed assets (Property, Plant and Equipment), for example buildings.

Cash and cash equivalents – includes cash as well as deposits which mature in three months or less.

Current asset – an asset that can readily be converted to cash or will be used to repay a liability within 12 months of balance date.

Current liability – a liability that is required to be discharged within 12 months of balance date.

Depreciation (amortisation) – 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).

External funding for capital expenditure – Funding recorded as income but used to fund capital expenditure projects.

Fair value – essentially reflects the market value of assets or liabilities.

Investment properties – these are properties that are primarily held by the Council to earn rental income.

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 – A ten year forecast prepared every three years showing the expected cost of running the city for the following ten years and how the costs will be funded.

Net borrowings – Net borrowings is total borrowings less any funds held on deposit.

Net surplus/(deficit) - Net surplus/deficit is the difference between total income 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 income and fair value movements.

Operational expenditure – expenditure that is not capital expenditure (see Capital expenditure).

Prudential limits – these are limits applied to the level of borrowings to ensure we are managing the Council’s assets and liabilities prudently. These limits are outlined in the Investment and Liability Management Policy in the Long-term Plan.

Ring-fenced – funds that can only be used for a specific purpose.

Total comprehensive income / (expense) – 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 changing fair values of assets the Council owns.

Underlying funding surplus/(deficit) – the portion of the overall net surplus/(deficit) that has arisen from changes to operating income operational expenditure as compared to budget.

Unfunded depreciation – the amount of depreciation that is not funded by rates and relates mainly to roading assets that are funded by NZTA and sewerage treatment assets where the operator has responsibility for asset renewal.

Vested assets – assets that are created by others and passed into Council ownership (e.g. roads built by a developer as part of a subdivision).

Mayor and councillors

Celia Wade-Brown
(Mayor)
City-wide

Phone: (04) 801 3102
mayor@wcc.govt.nz

Council appointments

The Mayor is an ex officio member of all committees and subcommittees other than a quasi-judicial committee.

Ray Ahipene-Mercer
Eastern Ward

Phone: (04) 388 2366
ray.ahipene-mercer@wcc.govt.nz 

Council appointments

Chair: Regulatory Processes Committee

Portfolio Leader: Economic Growth and Arts

Sarah Free
Eastern Ward

Phone: 021 121 6412
sarah.free@wcc.govt.nz

Council appointments

Portfolio Leader: Community Facilities

Director: Capacity Infrastructure Services

David Lee
Southern Ward

Phone: 021 220 2357
david.lee@wcc.govt.nz

Council appointments

Portfolio Leader: Environment – Climate Change

Jo Coughlan
Onslow-Western Ward

Phone: (04) 473 7920
jo.coughlan@wcc.govt.nz

Council appointments

Chair: Economic Growth and Arts Committee 

Paul Eagle
Southern Ward

Phone: 021 673 630
paul.eagle@wcc.govt.nz

Council appointments

Chair: Community, Sport and Recreation Committee

Trustee: Wellington Regional Stadium Trust

Trustee: Basin Reserve Trust

Andy Foster
Onslow-Western Ward

Phone: (04) 476 9220
andy.foster@wcc.govt.nz

Council appointments

Chair: Transport and Urban Development Committee

Justin Lester
(Deputy Mayor)
Northern Ward

Phone: (04) 478 8264
justin.lester@wcc.govt.nz

Council appointments

Chair: Governance, Finance and Planning Committee

Chair: Performance Review Committee

Director: Wellington Waterfront Ltd

Tawa Community Board (appointed member)

Simon Marsh
Eastern Ward

Phone: 021 922 196
simon.marsh@wcc.govt.nz

Council appointments

Portfolio Leader: Economic Growth and Arts – Small Medium Enterprise and Tertiary Liaison

Trustee: Wellington Zoo Trust

Iona Pannett
Lambton Ward

Phone: (04) 384 3382
iona.pannett@wcc.govt.nz

Council appointments

Chair: Environment Committee

Portfolio Leader: Transport and Urban Development - Buildings

Malcolm Sparrow
Northern Ward

Phone: 027 232 2320
malcolm.sparrow@wcc.govt.nz

Council appointments

Portfolio Leader: Community, Sport and Recreation – Community Resilience

Tawa Community Board (appointed member)

Simon Woolf
Onslow-Western Ward

Phone: 027 975 3136
simon.woolf@wcc.govt.nz

Council appointments

Portfolio Leader: Community Engagement

Director: Positively Wellington Tourism

Director: Positively Wellington Venues Ltd

Mark Peck
Lambton Ward

Phone: 027 446 1650
mark.peck@wcc.govt.nz

Council appointments

Chair: Audit and Risk Subcommittee

Helene Ritchie
Northern Ward

Phone: (04) 473 1335
helene.ritchie@wcc.govt.nz

Council appointments

Portfolio Leader: Environment – Natural Environment

Nicola Young
Lambton Ward

Phone: 021 654 844
nicola.young@wcc.govt.nz

Council appointments

Portfolio Leader: Transport and Urban Development – Central City Projects

Trustee: Wellington Museums Trust

Independent auditor’s report

To the readers of the Wellington City Council and group’s annual report for the year ended 30 June 2014

The Auditor-General is the auditor of the Wellington City Council (the City Council) and group. The Auditor-General has appointed me, Bede Kearney, using the staff and resources of Audit New Zealand to audit:

the financial statements of the City Council and group that comprise:

the statement of financial position as at 30 June 2014 on page 112;

the statement of comprehensive financial performance, statement of changes in equity and statement of cash flows for the year ended 30 June 2014 on pages 110, 111 and 113; and

the notes to the financial statements that include accounting policies and other explanatory information about the financial statements on pages 116 to 198;

the statement of service provision of the City Council (made up of the individual service performance statements of each group of activities of the City Council) on pages 24 to 97;

the funding impact statements in relation to each group of activities of the City Council on pages 207 to 223;

the statements about budgeted and actual capital expenditure in relation to each group of activities of the City Council on page 224;

the funding impact statement of the City Council on page 206; and

the disclosures of the City Council that are required by the Local Government (Financial Reporting and Prudence) Regulations 2014 on pages 199 to 205.

In addition, the Auditor-General has appointed me to report on whether the City Council and group’s annual report complies with the Other Requirements of schedule 10 of the Local Government Act 2002, where applicable, by including:

information about:

internal borrowing on page 152;

reserve funds on pages 161 to 163;

remuneration paid to the elected members and certain employees of the City Council on pages 193 to 197;

employee staffing levels and remuneration on page 198;

severance payments on page 197; and

council controlled organisations on pages 226 to 234;

a report on the activities undertaken by the City Council and group to establish and maintain processes to provide opportunities for Maori to contribute to the Council’s decision-making processes on pages 29 and 30; and

a statement of compliance signed by the Mayor of the Council, and by the City Council and group’s chief executive on page 109.

Opinion

Audited information

In our opinion:

the financial statements of the City Council and group on pages 110 to 198:

comply with generally accepted accounting practice in New Zealand; and

fairly reflect:

the City Council and group’s financial position as at 30 June 2014; and

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

the statement of service provision of the City Council on pages 24 to 97:

complies with generally accepted accounting practice in New Zealand; and

fairly reflects the City Council’s levels of service for the year ended 30 June 2014, including:

the levels of service as measured against the intended levels of service adopted in the long-term plan; and

the reasons for any significant variances between the actual service and the expected service.

the funding impact statements in relation to each group of activities of the City Council on pages 207 to 223, fairly reflect by each group of activities 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.

the statements about budgeted and actual capital expenditure in relation to each group of activities of the City Council on page 224, fairly reflects by each group of activities the capital expenditure spent as compared to the amounts budgeted and set out in the City Council’s long-term plan.

the funding impact statement of the City Council on page 206, fairly reflects 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 disclosures on pages 199 to 205 represent a complete list of required disclosures and accurately reflect the information drawn from City Council’s audited information.

Compliance with the other requirements of schedule 10

In our opinion, which is not an audit opinion, the City Council and group’s annual report complies with the Other Requirements of schedule 10 that are applicable to the annual report.

Our audit was completed on 27 August 2014. This is the date at which our opinion is expressed.

The basis of our opinion is explained below. In addition, we outline the responsibilities of the Council and our responsibilities, and we explain our independence.

Basis of opinion

We carried out our audit in accordance with the Auditor-General’s Auditing Standards, which incorporate the International Standards on Auditing (New Zealand). Those standards require that we comply with ethical requirements and plan and carry out our audit to obtain reasonable assurance about whether the information we audited is free from material misstatement.

Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence readers’ overall understanding of the financial statements and the statement of service provision. If we had found material misstatements that were not corrected, we would have referred to them in our opinion.

An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the information we audited. The procedures selected depend on our judgement, including our assessment of risks of material misstatement of the information we audited, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the City Council and group’s preparation of the information we audited that fairly reflect the matters to which they relate. We consider internal control in order to design procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the City Council and group’s internal control.

An audit also involves evaluating:

the appropriateness of accounting policies used and whether they have been consistently applied;

the reasonableness of the significant accounting estimates and judgements made by the Council;

the adequacy of all disclosures in the information we audited;

determining the appropriateness of the reported statement of service provision within the Council’s framework for reporting performance; and

the overall presentation of the information we audited.

We did not examine every transaction, nor do we guarantee complete accuracy of the information we audited.

When reporting on whether the annual report complies with the Other Requirements of schedule 10 of the Local Government Act 2002, our procedures were limited to making sure the information required by schedule 10 was included in the annual report, where relevant, and identifying material inconsistencies, if any, with the information we audited. This work was carried out in accordance with International Standard on Auditing (New Zealand) 720; The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements. As a result we do not express an audit opinion on the City Council’s compliance with the requirements of schedule 10.

We did not evaluate the security and controls over the electronic publication of the information we are required to audit and report on. We have obtained all the information and explanations we have required and we believe we have obtained sufficient and appropriate evidence to provide a basis for our opinion.

Responsibilities of the Council

The Council is responsible for preparing:

financial statements and the statement of service provision that:

comply with generally accepted accounting practice in New Zealand;

fairly reflect the City Council and group’s financial position, financial performance and cash flows; and

fairly reflect its service performance, including achievements compared to forecast;

funding impact statements in relation to each group of activities that fairly reflects by each group of activities 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;

statements about budgeted and actual capital expenditure in relation to each group of activities that fairly reflects by each group of activities the capital expenditure spent as compared to the amounts budgeted and set out in the City Council’s long-term plan or annual plan;

a funding impact statement that fairly reflects 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;

disclosures in accordance with the requirements of the Local Government (Financial Reporting and Prudence) Regulations 2014; and

the other information in accordance with the requirements of schedule 10 of the Local Government Act 2002.

The Council is responsible for such internal control as it determines is necessary to ensure that the annual report is free from material misstatement, whether due to fraud or error. The Council is also responsible for the publication of the annual report, whether in printed or electronic form.

The Council’s responsibilities arise under the Local Government Act 2002.

Responsibilities of the Auditor

We are responsible for expressing an independent opinion on, the information we are required to audit, and whether the Council has complied with the Other Requirements of schedule 10, and reporting that opinion to you. Our responsibility arises under section 15 of the Public Audit Act 2001 and section 99 of the Local Government Act 2002.

Independence

When carrying out this audit, which includes our report on the Other Requirements, we followed the independence requirements of the Auditor-General, which incorporate the independence requirements of the External Reporting Board. During the year we carried out a review of the revenue and expenditure of the Clifton Terrace car park managed by the City Council on behalf of the New Zealand Transport Agency. Since 30 June 2014 we have commenced a review of the Council’s process to select providers for the proposed Wellington Regional ICT Infrastructure Shared Services. Other than this audit, which includes our report on the Other Requirements, and the assignments described above, we have no relationship with or interests in the City Council or any of its subsidiaries.

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