19 May 2016

Corporate property, council performance discussed at Finance and Performance

The council’s Finance and Performance Committee today considered updates on corporate property, council performance and other matters.

The agenda is available on Auckland Council’s website and minutes will be added once they are confirmed. This meeting was also webcast on the council’s website and items are available on demand.

Items 1- 8 were administrative items.

Item 9: Disposals recommendation report

The committee approved the disposal of two properties, part of 15 Austin Place, Pukekohe, and 601 Beach Road, Rothesay Bay.

Item 10: Te Toa Takitini - Quarter three Māori responsiveness portfolio report

Te Toa Takitini Māori Responsiveness Portfolio monitors and reports on activity and expenditure, including Māori transformational shift priorities and co-governance activity.The committee received the report.

Item 11: Quarterly Report on Non-Rateable property rating treatment

The report informed the committee on the programme of work under way to standardise the rating treatment of non-rateable properties across Auckland. It follows a high-level review which identified a number of issues that required further analysis, with more than 10,000 properties to be reviewed in the coming years.

The committee received the report.

Item 12: Auckland Council Investments Limited debt to equity conversion

Auckland Council Investment Limited (ACIL) has two wholly-owned subsidiaries which collectively hold council’s 22.4 per cent stake in Auckland International Airport Limited (AIAL).

On formation, Auckland Council inherited the former Auckland City Council’s AIAL shares, and the former Manukau City Council’s subsidiary holdings of AIAL shares and financing structure.

A subsidiary was created by statute to hold Auckland City Council’s AIAL shares. This structure is no longer necessary and they will be amalgamated into ACIL. This is an administrative process and does not change council’s control over its AIAL shares.

Following the amalgamation, there will be a debt of $299 million owing from ACIL to council (remaining from the expired finance structure), which is no longer required.

The committee approved the conversion of this $299 million owed to council into ACIL equity and to accept the resulting issue of shares from ACIL.

Item 13: Auckland Council Performance Report for the period 1 July 2015 to 31 March 2016

The committee received a report highlighting the council’s performance.

Item 14: Alternate Financing - Corporate Property

Auckland Council owns a range of corporate office buildings with an approximate 2014 capital value of $311 million. The largest, both in terms of office space and value, is 135 Albert Street.

Both Ernst & Young (EY) and Cameron Partners identified re-structuring the corporate accommodation portfolio as a financing opportunity, when they were commissioned by the council to investigate alternative sources of financing.

This report requested approval for the Auckland Council Chief Executive, Group Chief Financial Officer and Chair of the Finance and Performance Committee to bring a financing proposal in relation to 135 Albert Street and 35 Graham Street to a future Finance and Performance Committee.

No other properties in the corporate property portfolio are being considered due to commercial and complexity reasons.

The committee approved the recommendation.

Item 15: Budget update

The committee received a report on the council’s budget.

Item 16: Reports Pending Status Update

This was an administrative report.

ENDS

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