Agenda of Risk and Assurance Committee Meeting

Te Rārangi Take
Order of Business

1.0	Apologies & Leave of Absence – Ngā Whakapāhatanga me te Wehenga ā-Hui An apology for Absence had been received from Councillor Eileen Lawson. At the close of the agenda no requests for leave of absence had been received.
2.0	Conflict of Interest – He Ngākau Kōnatunatu Members need to be vigilant to stand aside from decision-making when a conflict arises between their role as a Member of the Council and any private or other external interest they might have. This note is provided as a reminder to Members to scan the agenda and assess their own private interests and identify where they may have a pecuniary or other conflict of interest, or where there may be perceptions of conflict of interest. If a Member feels they do have a conflict of interest, they should publicly declare that at the start of the relevant item of business and withdraw from participating in the meeting. If a Member thinks they may have a conflict of interest, they can seek advice from the General Counsel or the Manager: Democracy and Governance (preferably before the meeting). It is noted that while Members can seek advice and discuss these matters, the final decision as to whether a conflict exists rests with the member.
3.0	Confirmation of Minutes – Te Whakamana i Ngā Miniti Minutes of the Risk and Assurance Committee Meeting held Monday 7 December 2020. (Previously circulated)
4.0	Risk Assurance Update	7
5.0	Health & Safety Risk Management Update	25
6.0	Treasury Activity and Funding Update	37
7.0	Annual Review of Treasury Management Policy	45
8.0	Group Manager Corporate Quarterly Update	49
9.0	Report from the Chair - Recap of 2020	57
10.0	Minor Items – Ngā Take Iti
11.0	Urgent Items – Ngā Take Whakahihiri
12.0	Recommendation to Exclude the Public from Item 13	59
13.0	IT Risks and Controls

Tuesday, 2 February 2021

Te Hui o Te Kaunihera ā-Rohe o Heretaunga

Hastings District Council: Risk and Assurance Committee Meeting

Te Rārangi Take
Report to Risk and Assurance Committee

Nā:

From:

Steffi Bird, Risk Assurance Advisor

Regan Smith, Risk and Corporate Services Manager

Te Take:

Subject:

Risk Assurance Update

1.0 Purpose and summary - Te Kaupapa Me Te Whakarāpopototanga

1.1 The purpose of this report is to update the Committee on recent risk assurance activity including internal assurance reviews and action status from all internal reviews and external audits.

1.2 Internal Assurance Reviews

1.3 Organisation Policy Review

1.4 Background

· Through BowTie Analysis workshops in 2018, ‘Policies and procedures’ were identified as a key control against a number of strategic risks at Hastings District Council (HDC). Driven by these workshop outcomes, the Risk Assurance function initiated a review of organisational policies to assess the effectiveness of developing and implementing policies at HDC.

· This review was not initially included in the review programme for 2020/21 however, HDC’s Risk Assurance function agreed that a critical control review would be beneficial, in addition to the three planned reviews included in the approved Risk Assurance Review Plan for 2020/21.

1.5 Summary of Findings

· Overall, Risk Assurance found policies to be substantially effective as a critical control, with opportunities to improve consistency across the organisation and introduce methods of obtaining policy data for monitoring effectiveness and reporting purposes.

· The specific findings and subsequent recommendations have been categorised into six different themes; Policy Development, Policy Approval, Policy Review, Training & Implementing, Policy Access, and Monitoring & Reporting. The report (Attachment 1) was presented to Lead Team Assurance at the December meeting and progress continues to identify the appropriate officers, responsible for the completion of each recommendation.

1.6 Internal Audit Data Analytics

1.7 Background

· The Internal Audit Data Analytics was undertaken by Crowe as part of the contracted Internal Audit Plan for 2020/21. The data analytics was last performed in 2017 and found no suspicious transactions. This is the third time we have conducted this review over the past four years.

· The transactional data testing included transactions during the period 1 July 2019 to 30 June 2020. The tests to detect suspicious transactions were undertaken across payroll and accounts payable payments and master data.

· Note that the data analysis work did not include assessment of the respective internal controls within the business processing areas and was limited to factual reporting of identified data anomalies as per the specified tests undertaken.

1.8 Summary of Findings

· Crowe provide a summary of testing results of the payroll and finance application data that included anomalies in the accounts payable data and transactions, cross matching of data between accounts payable and the payroll system, and payroll data and transactions.

· A management summary is provided with an Excel workbook containing the results for each area. Each Excel workbook included a summary results table with risk indicators and recommended actions and the detailed transactions and master data records identified through completion of the specified tests.

· A total of 43 tests were run, which identified 621 transactions that suggested possible anomalies with a recommendation that they be investigated further. Payroll have reviewed these transactions and have found no suspicious transactions. Accounts Payable team have undertaken an initial review and found no areas of concern, with a more detailed review to be completed.

1.9 Action Status Summary

· A status summary of all current actions raised from internal assurance reviews and external audits is presented in Attachment 2.

· Key points to note from the summary are:

- Ten of the 14 overdue tasks are part of two primary projects in progress; implementation of a cash handling policy and procedures (4 tasks) and the procurement of a new contract management system (6 tasks).

- A new contract management system has been selected and will be implemented over 2021. A project delivery and change management plan is being developed.

- The Assurance Review Programme for 2020/21 is on track. Fieldwork and findings for the joint review of HDC Consenting functions were completed in 2020, and work continues into 2021 with Crowe to produce a combined report for management.

· Risk Assurance has initiated a new process internally to oversee and track the completion of internal review and external audit tasks on a regular basis. This will enable consistent and frequent status updates to be provided to the Risk & Assurance Committee in future.

1.10 World Economic Forum – The Global Risks Report 2021

· The World Economic Forum have recently released The Global Risks Report 2021, and an extract of the report is provided in Attachment 3 as a horizon scan opportunity for Risk and Assurance.

· Of significant note are the positions of ‘Infectious Diseases’ and ‘Climate Action Failure’ on the Global Risks Landscape diagram, found on page six.

2.0 Recommendations – Ngā Tūtohunga

A) That the Risk and Assurance Subcommittee receive the report titled Risk Assurance Update dated 2 February 2021.

Attachments:

1 ⇩	HDC Policies Review Final Report - Nov 2020	PMD-9-1-21-28
2 ⇩	Assurance Actions Summary - January 2021	PMD-9-2-21-52
3 ⇩	World Economic Forum - The Global Risks Report 2021	ADM-01-26-6-21-6

Tuesday, 2 February 2021

Te Hui o Te Kaunihera ā-Rohe o Heretaunga

Hastings District Council: Risk and Assurance Committee Meeting

Te Rārangi Take
Report to Risk and Assurance Committee

Nā:

From:

Jennie Kuzman, Health and Safety Manager

Nikola Bass, Health & Safety Partner

Te Take:

Subject:

Health & Safety Risk Management Update

1.0 Executive Summary – Te Kaupapa Me Te Whakarāpopototanga

1.1 The purpose of this report is to provide an update to the Committee in regards to the management of Health and Safety risks within Council.

1.2 This report provides information on

· Contractor Health and Safety Performance for the period 1 September to 30 November 2020.

· Summary of Internal Health and Safety Audits and Inspection Findings

· Progress on ISO45001 Internal Gap Analysis

· Health and Safety Strategic Projects

2.0 Recommendations – Ngā Tūtohunga

A) That the Risk and Assurance Committee receive the report titled Health & Safety Risk Management Update dated 2 February 2021.

3.0 Background – Te Horopaki

3.1 The purpose of this report is to provide information to the Committee in regards to the management of Health and Safety risks within Council.

3.2 This issue arises due to the Health and Safety at Work Act 2015 and the requirement of that legislation for Elected Members to exercise due diligence to ensure that Council complies with its Health and Safety duties and obligations.

4.0 Discussion – Te Matapakitanga

4.1 Contractor Health & Safety Performance

4.2 To assist Elected Members in undertaking their due diligences requirements in regards to the management of Contractor Health and Safety risks, reports covering the Health and Safety performance of those Contractors working under Council’s 10 highest-risk term contracts, are provided to the Committee on a regular basis.

4.3 The report for the period 1 September to 30 November 2020 is attached (attachment one) and includes Health and Safety performance indicator scores for each of the Contractors working under Council’s 10 highest-risk term contracts. These contracts are long term and the activities undertaken within these contracts collectively cover all of Council’s critical Health and Safety risks.

4.4 The 10 contractors in alphabetical order are:

· Allied Security Ltd (After Hours Security Contract) - NEW CONTRACT

· Armourguard Ltd (Noise Control Contract)

· City Care Ltd (Water Services Maintenance Contract)

· Downer Ltd (Urban Road Maintenance Contract)

· Fulton Hogan Ltd (Rural Road Maintenance Contract)

· Gemco Ltd (Toitoi Redevelopment Contract)

· JJ’s Waste & Recycling (Municipal Waste Collection Contract)

· M.W. Lissette Ltd (Landfill Civil Works Contract)

· Recreational Services Ltd (Parks, Open Spaces and Amenities Maintenance Contract)

· Smart Environmental Ltd (Municipal Recycling Collection Contract)

4.5 Commentary regarding trends and analysis is included within this contractor performance report.

4.6 Internal Health & Safety Facility Inspection Progress

4.7 On an annual basis, the Health and Safety Team undertakes an internal inspection for Health and Safety Compliance for 18 staffed Council facilities ranging in diversity from the civic administration building, Landfill, Libraries, Animal Welfare Centre and aquatic facilities.

4.8 To date, 15 of the 18 facilities have had inspections completed with the remainder to be completed by early February.

4.9 Whilst no critical safety concerns were raised during the inspections and the vast majority of findings show compliance, there were some common issues identified including:

· Electrical Testing/Tagging – some not completed/incomplete

· Fire Extinguisher Testing – some not completed/incomplete

· Emergency Preparedness – some drills overdue, staff lacking knowledge /training

· Hazardous substances – some inventories incomplete, missing safety data sheets, incorrect storage

· Personal Protective Equipment – some in poor condition/unsuitable

· Storage & Housekeeping – some items being stored in work areas creating trip hazards, unsecured shelving and cluttered storage areas.

4.10 Corrective action plans have been developed for each facility to ensure appropriate and timely actions are taken to mitigate these issues. Progress towards completion of these action plans are being tracked within Risk Manager (electronic Health and Safety system) and closely monitored by the Health and Safety Team. A cross-council approach is being developed for the Electrical Testing/Tagging and Fire Extinguisher Testing.

4.11 Additionally, annual inspections undertaken by an independent Health and Safety Consultant are scheduled to be undertaken in April 2021. A summary report of the independent inspection findings will provided to the Committee once completed.

4.12 ISO/NZ Standard 45001:2018 (Health and Safety Management Systems) Gap Analysis Progress

4.13 At the July 2020 Meeting, the Risk & Assurance Committee supported an internal review of Council’s Health and Safety systems, led by the Health & Safety Manager, to determine what would be required to meet the ISO/ NZS 45001:2018 Health and Safety Management Standard (essentially an internal gap analysis). It was agreed that progress updates would be provided to the Committee.

4.14 The Health and Safety Management systems Standard is set out in sections as follows:

4.15 ISO 45001:2018 Table of Contents

Section:
1	Scope
2	Normative References
3	Terms and Definitions
4	Context of the Organisation
5	Leadership and Worker Participation
6	Planning
7	Support
8	Operation
9	Performance Evaluation
10	Improvement

4.16 Sections 1-3 of the standard set out the scope and definitions of terms within the standard, with the effective audit criteria beginning from Section 4 (context of the organisation).

4.17 A review of the criteria set out in section 4 (covering the context of the organisation and its stakeholders, and the scope of the Occupational Health and Safety Management System) has been completed and it is the Health and Safety Manager’s assessment that Council would be able to demonstrate compliance with this section of the standard.

4.18 Work is currently underway on assessing section 5 (Leadership and Worker Participation) and section 6 (Planning – which covers actions to address risks and opportunities) across the organisation, a summary of the findings will be provided to the Committee at its next meeting.

4.19 Health and Safety Strategic Projects underway

4.20 Whilst there are a number of proactive activities underway across the organisation to improve Health and Safety within Council, it is important to recognise two strategic Health and Safety projects that are in progress to improve the management some of Council’s critical Health and Safety risks. These two projects are 1. the overhaul and implementation of a new Permit to Work system and 2. the introduction of an organisational Work-related Stress Management Framework.

4.21 Permit to Work Framework

4.22 The introduction of an consistent streamlined Permit to Work System for high risk activities will ensure more effective management of the following critical safety risks which impact upon staff, contractors and public safety:

· Risk of serious health effects from exposure to asbestos

· Risk of fatality when working in confined spaces

· Risk of fatality when working at height, resulting from a fall from height or a falling object

· Risk of fatality when working in excavations

· Risk of fatality from loss of containment and/or exposure to a hazardous substance

4.23 The framework for the system has been drafted in consultation with affected teams and incorporating good practice guides from WorkSafe and Industry. Further consultation is now underway with all affected staff in accordance with Health and Safety worker engagement regulations. This process will ensure that the final framework that is implemented will be practical and work effectively and consistently across Council.

4.24 Progress towards implementation of the improved Permit to Work System will be reported to the Committee.

4.25 Work-Related Stress Management

4.26 The impact of stress and other mental health issues in the workplace have been identified as significant Health and Safety risk for some time and in particular the risk of serious health effects from exposure to work factors causing stress is identified as one of Council’s critical Health and Safety risks.

4.27 Over the past two years, Council has implemented a range of tools to support staff Mental Health and Wellbeing including the introduction of the Mauri tū Mauri ora (wellbeing) programme, and mandatory Mental Health Matters training for all staff.

4.28 During 2020, a review of Council’s Stress Policy was undertaken. A new Work-related Stress Management policy was developed and finalised in late 2020 (a copy of the new policy is attached). This updated policy is based upon the UK management standards for work-related stress and was developed with feedback from staff and unions.

4.29 Work is now underway to develop tools and training programmes for staff to use which compliment this policy. This work will be undertaken in consultation with staff and regularly reviewed for effectiveness.

4.30 Progress towards implementation of the Work-related Stress Management Framework will be reported to the Committee.

Attachments:

1 ⇩	Health & Safety Contractor Performance Report - 1 September - 30 November 2020	HR-03-11-4-21-176
2 ⇩	Work-related Stress Management Policy - Final Draft - 26 November 2020	HR-03-02-2-20-41

Item 5 Health & Safety Risk Management Update
Health & Safety Contractor Performance Report - 1 September - 30 November 2020	Attachment 1

Health & Safety Contractor Performance Report

1. Leading Indicators: Health & Safety Observations 1 September – 30 November 2020^{^[1]}

Contractor	Contract	Excellent	Good	Fair	Poor	Total
Allied Security*	Afterhours Security	0	0	0	0	0
Armourguard	Noise Control	1	2	0	0	3
City Care	Water Services Maintenance	16	1	1	0	18
Downers	Urban Road Maintenance	16	8	4	1	29
Fulton Hogan	Rural Road Maintenance	2	1	2	0	5
Gemco Construction	Toitoi Redevelopment	7	0	1	2	10
HSM Group*	Afterhours Security & Afterhours Animal Control	0	0	0	0	0
JJ’s Waste & Recycling	Municipal Waste Collection	1	0	0	0	1
M W Lissette	Landfill Civil Works	1	2	0	1	4
Recreational Services	Parks, Open Spaces and Amenities Maintenance Contract	6	1	0	1	8
Smart Environmental	Municipal Recycling	22	4	0	0	26

· These are proactive observations undertaken by HDC staff of contractor workers undertaking tasks associated with the HDC contract works.

· This key indicator measures both the quality of the work being undertaken by contractors and the quantity of observations being undertaken of these contracts by HDC Staff.

· The vast majority of observations have shown the work to be of a good or excellent H&S standard.

· * After hours Security contract was awarded to Allied Security from 18 September 2021.

2.
Lagging Indicators: Health & Safety Incidents Reported – 1 September – 30 November 2020

Contractor	Hazard Identification	Near Miss	Property Damage	Non-Injury Incident	No Treatment	First Aid	Medical Treatment	Lost Time
Allied Security	0	0	0	0	0	0	0	0
Armourguard	0	0	0	0	0	0	0	0
City Care	0	0	0	0	0	0	0	0
Downers	1	2	6	2	0	0	0	0
Fulton Hogan	2	3	7	4	0	0	0	0
Gemco Construction	0	0	0	0	1	0	0	0
HSM Group	0	0	0	0	0	0	0	0
JJ’s Waste & Recycling	0	0	0	0	0	0	0	0
M W Lissette	0	1	8	1	0	0	0	0
Recreational Services	5	10	7	0	2	1	1	1
Smart Environmental	0	0	3	0	0	0	0	0

· These are incidents reported by contractor workers undertaking tasks associated with the HDC contract works.

· It is important to regularly review incidents to understand causes and implement appropriate corrective actions. Good reporting of hazards and near misses can reduce the potential for more severe incidents.

· Improved contractor reporting this period but not all contractors are reporting to the desired standard. With four contractors are reporting to the desired standard – Downers, Fulton Hogan, MW Lissette and Recreational Services. Continued improvement needs to be made in collecting the information from other contractors.

Item 5 Health & Safety Risk Management Update
Work-related Stress Management Policy - Final Draft - 26 November 2020	Attachment 2

· Work-related Stress Management Policy

Hastings District Council is committed to protecting the health, safety and wellbeing of our employees. We recognise that work-related stress is a health and safety issue and acknowledge the importance of identifying and reducing workplace stressors.

This policy specifically addresses work-related stress. For other causes of stress (which are not related to work) such as stress caused by breakdown of personal relationships or personal finances, the Fit-for-Work and Rehabilitation Policy and/or the Mauri tū Mauri ora (Wellbeing) Framework are more appropriate.

Defining ‘Work-related Stress’

Work-related stress describes an employee’s stress response to work-related factors. These responses may be physical, mental, emotional or behavioural.

There is often confusion between challenge/pressure and stress in the workplace. While challenge at work can have positive effects on people, work-related stress is a work-related health issue that can pose risks to health.

In the short term, stress may not be harmful. But if a stressful situation goes on, it can affect employee health and wellbeing in ways such as:

• physical effects, like headaches, indigestion, tiredness, slow reactions, shortness of breath, change in body weight and over the longer term, physical illness

• mental effects, like difficulty in decision-making, forgetfulness

• emotional effects, like irritability, excess worrying, feeling worthless, anxiety, defensiveness, anger, mood swings

• Behavioural effects, like diminished performance, withdrawal behaviours, impulsive behaviour, increase in alcohol and nicotine consumption, changes to appetite (loss of appetite or binge eating).

• longer-term health issues, like musculoskeletal disorders, cardiovascular disease, immune deficiency disorders, gastrointestinal disorders, psychiatric/psychological illness

Managing Work-related Stress

Council will ensure that workplace stressors are identified and will put in place measures to eliminate or control the risks from stress.

Council will ensure the following actions are undertaken to assist with controlling work-related stress

• Provide training for all Managers and Team Leaders in good management practices.

• Provide access to confidential counselling for staff affected by stress caused by work

• Provide adequate resources to enable Managers and Team Leaders to implement measures to control the risks from work-related stress

• Consult with employees on proposed action relating to the prevention of work-related stress.

Responsibilities

The Chief Executive and Lead Team shall ensure that:

· Managers and Team Leaders have the capability and knowledge to identify, understand and support employees who may be feeling stressed as a result of work

· Policies are in place to prevent or resolve unacceptable behaviour.

· Managers consult employees in decisions that may impact their health and safety, and have processes to enable workers to raise issues and concerns they might have.

· This policy, and any supporting procedures and control measures are regularly reviewed for effectiveness.

•

Team Leaders & Managers will

· Lead by example - following good management practices.

· Ensure good communication between management and staff, particularly where there are organisational and procedural changes.

· Ensure staff are fully trained to undertake their duties.

· Ensure staff are provided with meaningful developmental opportunities.

· Monitor workloads to ensure that staff are not overloaded. Monitor working hours and overtime to ensure that staff are not overworking. Monitor holidays to ensure that staff are taking their full entitlement.

· Listen and take appropriate actions (including seeking guidance from H&S staff) when staff raise concerns around work-related stress.

•

Health & Safety Staff will

· Provide guidance and support to managers in developing and implementing control measures for work-related stress risks.

· Provide specialist advice and awareness training on work-related stress.

· Refer employees to counsellors or specialist agencies as required.

· Support individuals who have been off sick with work-related stress and advise them and their manager on a safe plan for return to work.

· Monitor and review the effectiveness of measures to reduce work-related stress.

· Inform the Lead Team of any changes and developments in the field of work-related stress.

Employees will

· Raise issues of concern with your Health & Safety Representative, Team Leader/Manager or Health & Safety Team.

· Accept opportunities for counselling when recommended.

General Requirements

Because each work situation is different, taking a blanket approach to managing work-related stress risks is not always appropriate. Instead Managers are directed to work with employees and the Health and Safety team to review the risks and develop suitable controls that are specific to the work team and work environment.

References

• Health and Safety at Work Act 2015

• WorkSafe NZ Guidance: Work-related Stress

• Health & Safety Executive UK Guidance: Stress

• Worksafe Victoria (Australia) Guidance: Work-related Stress

• HDC Mauri tū Mauri ora (Wellbeing) Framework (HPRM:HR-03-3-5-19-2)

• HDC Fit-for-Work and Rehabilitation Policy (HPRM: HR-03-2-2-17-27)

Tuesday, 2 February 2021

Te Hui o Te Kaunihera ā-Rohe o Heretaunga

Hastings District Council: Risk and Assurance Committee Meeting

Te Rārangi Take
Report to Risk and Assurance Committee

Nā:

From:

Aaron Wilson, Financial Controller

Te Take:

Subject:

Treasury Activity and Funding Update

1.0 Executive Summary – Te Kaupapa Me Te Whakarāpopototanga

1.1 The purpose of this report is to update the Subcommittee on treasury activity and funding issues.

1.2 Since the last update in September, Council has borrowed a further $20m from the Local Government Funding Agency (LGFA).

1.3 The Council’s current total external debt is $185m as at 31 December 2020. Offsetting this are $40m of term deposits, giving a net external debt position of $145m.

1.4 Council is currently compliant with its Treasury Management Policy.

1.5 Officers have been working with Bancorp Treasury Services about future funding requirements, and reviewing the Council’s Treasury Policy (see separate report concerning this matter).

1.6 Officers have, after discussions and advice from Bancorp, opened an account with the Bank of China, this is to allow better access to competitive interest rates on term deposit investments. Bank of China has an “A” Credit rating.

1.7 The Reserve Bank of New Zealand (RBNZ) left its Official Cash Rate (OCR) at 0.25% at its 11th November 2020 review.

2.0 Recommendations – Ngā Tūtohunga

A) That the Risk and Assurance Committee Meeting receive the report titled Treasury Activity and Funding Update dated 2 February 2021.

3.0 Background – Te Horopaki

3.1 The Hastings District Council has a Treasury Policy which is a summarised version of the Treasury Management Policy and forms part of the 2018-2028 Long Term Plan. Under these policy documents, responsibility for monitoring treasury activity is delegated to the Risk and Assurance Committee.

3.2 Council is provided with independent treasury advice by Miles O’Connor of Bancorp Treasury Services and receives daily and monthly updates on market conditions.

3.3 Under the Treasury Policy, formal reporting to Council occurs quarterly and regular more in depth treasury reporting is provided for the Risk and Assurance Committee.

4.0 Discussion – Te Matapakitanga

4.1 Council’s debt portfolio is managed within macro limits set out in the Treasury Policy. It is recognised that from time to time Council may fall out of policy due to timing issues. The treasury policy allows for officers to take the necessary steps to move Council’s funding profile back within policy in the event that a timing issue causes a policy breach.

4.2 Attachment 1 sets out Council’s overall compliance with Treasury Management Policy as at 31 December 2020.

4.3 The Council’s current total external debt is $185.74m as at 31 December 2020. Offsetting this are $40m of term deposits, giving a net external debt position of $145.74m. This is supported by the Treasury Position 31 December 2020 Report in Attachment 1.

4.4 It should also be noted on the Treasury position dashboard, Council’s cost of funds has fallen from 3.57% as at the end of the last financial year to 2.67%, driven by an increasing proportion of floating rates.

4.5 Recent Borrowings: On 12th October Council borrowed $20m this amount was borrowed from the Local Government Funding Agency (LGFA) at a floating rate of Bank Bill 90 day Benchmark Rate (BKBM) (currently 0.27% pa) plus a margin. The details are as follows:

Draw Date	Amount	Margin	Effective Interest Rate	Maturity Date
12/10/2020	$10m	0.6050%	0.8750%	15/04/2028
12/10/20209	$10m	0.6450%	0.9150%	20/04/2029

4.6 Council has 5 active term deposits totalling $40m with rates ranging from 0.95% pa to 1.41% pa. $20m of these are linked to a loan maturity in May 2021, and the remaining $20m is held as funding for future capital expenditure.

4.7 As the BKBM has fallen, the margin between what Council can borrow at and what it can receive as a return on term deposits has narrowed significantly. With Council only having two banks that it can invest with, and an investment cap of $20m per bank, officers after discussions with treasury advisors Bancorp approached Bank of China to open an account.

4.8 The need for prefunded funds is an important factor in Standard and Poors Global (S&P), rating agency’s assessment of Council. The current rating of AA allows Council to borrow at a lower interest rate than would be the case with a lower rating.

4.9 Recent RBNZ announcements: The RBNZ left its Official Cash Rate (OCR) at 0.25% at its 11th November 2020 review.

5.0 Next steps – Te Anga Whakamua

5.1 Council Officers will continue to work with Bancorp Treasury Services to keep Council’s financing costs to a minimum, maintaining adequate liquidity, while maintaining compliance with Council’s Treasury policy.

Attachments:

1 ⇩

Treasury Dashboard 31st December 2020

FIN-15-01-21-21

Summary of Considerations - He Whakarāpopoto Whakaarohanga

Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-Rohe

The Council is required to give effect to the purpose of local government as set out in section 10 of the Local Government Act 2002. That purpose is to enable democratic local decision-making and action by (and on behalf of) communities, and to promote the social, economic, environmental, and cultural wellbeing of communities in the present and for the future.

This report contributes to the purpose of local government by primarily promoting economic wellbeing and more specifically through the Council’s strategic objective of sustainable use of resources and providing resilience to hazards and shocks.

Link to the Council’s Community Outcomes – Ngā Hononga ki Ngā Putanga ā-Hapori

This report promotes the economic wellbeing of communities in the present and for the future.

Māori Impact Statement - Te Tauākī Kaupapa Māori

There are no known impacts for Tangata Whenua.

Sustainability - Te Toitūtanga

This report promotes sustainable financing costs ensuring the economic wellbeing of communities in the present and for the future.

Financial considerations - Ngā Whakaarohanga Ahumoni

This report will ensure that financing costs are kept within Council’s existing budgets.

Significance and Engagement - Te Hiranga me te Tūhonotanga

This report has been assessed under the Council's Significance and Engagement Policy as being of minor significance.

Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto / ā-waho

There has been no external engagement.

Risks

The purpose of this report and the Treasury Policies it refers to, assist officers to manage Council’s treasury risk.

Rural Community Board – Te Poari Tuawhenua-ā-Hapori

There are no implications for the Rural Community Board.

Tuesday, 2 February 2021

Te Hui o Te Kaunihera ā-Rohe o Heretaunga

Hastings District Council: Risk and Assurance Committee Meeting

Te Rārangi Take
Report to Risk and Assurance Committee

Nā:

From:

Aaron Wilson, Financial Controller

Te Take:

Subject:

Annual Review of Treasury Management Policy

1.0 Executive Summary – Te Kaupapa Me Te Whakarāpopototanga

1.1 The purpose of this report to undertake a review of Council’s Treasury Management Policy.

1.2 This report looks at Councils officer’s review of Treasury Policy and what proposed changes to the policy have been recommended.

1.3 A detailed review of the Treasury management policy was completed in conjunction with Bancorp, Council’s Treasury advisors in February 2020. This resulted in changes to daily transaction limits, definitions of liquid assets, the fixed and floating debts limits, the maturity profile of external debt, and changes to interest cost benchmarks.

1.4 On reviewing the Treasury policy this year, officers feel apart from one limit change that has been recommended by Council at an LTP workshop on the 8^th December 2020, the policy is fit for purpose.

1.5 The change that was to adjust the net external debt as a percentage of income from 150% up to 175%, based on the 2021/2031 Long Term Plan (LTP) requirements and the need for some contingency in the event of an emergency.

2.0 Recommendations – Ngā Tūtohunga

A) That the Risk and Assurance Committee Meeting receive the report titled Annual Review of Treasury Management Policy dated 2 February 2021.

B) That the Committee approves the proposed changes to the Treasury Management Policy and forwards it to Council for adoption.

3.0 Background – Te Horopaki

3.1 Hastings District Council has a Treasury Management Policy which has the aim of minimising the Council’s costs and risks in the management of its external borrowings and maximise its return on investments.

3.2 It is a requirement of the Local Government Act 2002 Section 102 [2] that all Councils have a Liability Management Policy and an Investment Policy. Hastings District Council has chosen to incorporate these policies into a single policy entitled Treasury Management Policy.

3.3 Until July 2019 Council’s treasury advisor was PriceWaterhouse Coopers. As a result of a RFP process Council has changed its Treasury Advisors to Bancorp Treasury.

4.0 Discussion – Te Matapakitanga

4.1 A detailed review of the Treasury management policy was completed in conjunction with Bancorp, Council’s Treasury advisors in February 2020.

4.2 This resulted in changes to daily transaction limits, definitions of liquid assets, the fixed and floating debts limits, the maturity profile of external debt, and changes to interest cost benchmarks. The changes also simplified the policy, without significantly changing the risk profile of the policy.

4.3 Officers have reviewed the document this year and have found that the changes and improvements to the narrative that were made were still fit for purpose and relevant.

4.4 Over the last few months, officers have been working with Council to complete the LTP 2021/2031. As the plan has become clearer, with decisions made as to what areas in the capital programme will require investment and in what year, so has the funding of the capital programme and to what level of debt will need to be incurred over the 10 year period.

4.5 External debt is forecast to rise to over the next 10 year period putting pressure on the current policy limit of 150% of revenue. In years 3 – 5 external debt is predicted to be at the maximum limit of the 150% current policy limit, which would leave no room for any emergency or urgent debt to be taken on.

4.6 In moving the policy limit of net external debt to 175% of revenue, this would allow between $33m – $57m of contingency headroom. Council at the LTP workshop on 8^th December recommended that officers bring this to the Risk and Assurance committee for consideration and advice for Council prior to the adoption of the draft LTP.

5.0 Options – Ngā Kōwhiringa

5.1 The Risk and Assurance Subcommittee can choose to adopt the proposed change to increase the HDC Policy Limit from 150% of net external debt to revenue.

6.0 Next steps – Te Anga Whakamua

6.1 The updated policy will be taken to the Operations and Monitoring Committee for ratification and adoption.

Attachments:

There are no attachments for this report.

Summary of Considerations - He Whakarāpopoto Whakaarohanga

Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-Rohe

This report contributes to the purpose of local government by primarily promoting economic wellbeing and more specifically through the Council’s strategic objective of protecting Council’s assets and efficient use of public funds.

Link to the Council’s Community Outcomes – Ngā Hononga ki Ngā Putanga ā-Hapori

This proposal promotes the economic wellbeing of communities in the present and for the future.

Māori Impact Statement - Te Tauākī Kaupapa Māori

There are no known impacts on Tangata Whenua of adopting the revised Treasury Management Policy.

Sustainability - Te Toitūtanga

There is no impact on sustainability of adopting the revised Treasury Management Policy.

Financial considerations - Ngā Whakaarohanga Ahumoni

There is no financial impact of adopting the revised Treasury Management Policy.

Significance and Engagement - Te Hiranga me te Tūhonotanga

This report has been assessed under the Council's Significance and Engagement Policy as being of minor significance.

Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto / ā-waho

Apart from consultation between officers and Council’s treasury advisers, no other consultation has occurred on this matter. Any changes to the policy will be included in the draft 2021-2031 Long Term Plan which will be consulted on with the community through April 2021.

Risks

There are no implications.

Rural Community Board – Te Poari Tuawhenua-ā-Hapori

There are no implications.

Tuesday, 2 February 2021

Te Hui o Te Kaunihera ā-Rohe o Heretaunga

Hastings District Council: Risk and Assurance Committee Meeting

Te Rārangi Take
Report to Risk and Assurance Committee

Nā:

From:

Bruce Allan, Group Manager: Corporate

Te Take:

Subject:

Group Manager Corporate Quarterly Update

1.0 Purpose and summary - Te Kaupapa Me Te Whakarāpopototanga

1.1 The purpose of this report is to provide the Committee with an update on matters of interest to the Committee that are not included on separate agenda items for this meeting.

Insurance Update

1.2 With the change to AON as Council’s insurance broker, the renewal dates have changed from 1^st July to 1^st November each year. Policies have been renewed and cover is in place on all policies. Premiums have been finalised with premium details attached as Attachment 1. Premiums have increased by $39,400 or 3.3% on last year. The biggest change made to policies was to implement a loss limit on fire related losses therefore reducing the fire levy payable. The loss limit on buildings included in the material damage policy has been set at $90m which has created a policy saving of approximately $150,000 per annum. Without this adjustment, council would have experienced a much larger increase for 2020/21.

Procurement Update

1.3 On 7^th May 2020, our new Procurement Policy and Strategy was adopted by Council. The most significant change was the move from ‘value for money’ to ‘public value’, defined as not being solely focused on price, but about getting the best result over the whole life of the goods, services or works. This included the concept of ‘sustainable or broader outcomes’, being that procurement can be used to support wider social, economic, cultural and environmental outcomes that go beyond the immediate purchase of goods and services.

1.4 To bring to life and as part of the Regional Procurement Strategy, a Progressive Procurement Toolkit and accompanying Supplier Guide is in development. The toolkit will assist councils in identifying opportunities that support sustainable outcomes through future procurements. Hastings District Council is leading this work in collaboration with the other councils, with an implementation plan currently being worked on.

Digital Exclusion Overview

1.5 Please refer to attached as Attachment 2 an Internal Report on Digital Exclusion for discussion.

2021-2031 Long Term Plan

1.6 Good progress is being made on finalising the 2021-2031 Long Term Plan with operational and capital budgets being finalised in preparation for the final discussions with Council in February.

1.7 Audit NZ will be on site in late January / early February to audit the Asset Management Plans and Long Term Plan which will be reported to Risk and Assurance when completed.

1.8 At the time of writing the Financial and Infrastructure strategies were being written and are not in a completed enough form to be circulated for this agenda. It is recommended that a LTP special Risk and Assurance meeting be held in early March to take the committee through the more significant components of the LTP prior to Council adopting it for consultation with an aim of providing the committee with all the assurances of a robust and complete process.

Outstanding Actions

1.9 Attached as Attachment 3 are the outstanding actions from previous Risk and Assurance meetings.

2.0 Recommendations – Ngā Tūtohunga

A) That the Risk and Assurance Committee received the report titled Group Manager Corporate Quarterly Update dated 2 February 2021.

Attachments:

1 ⇩	Digital Exclusion Summary Report	PMD-9-3-21-22
2 ⇩	2021 Insurance Comparison	IRB-3-20-21-97
3 ⇩	Status of Actions Sheet	CG-16-57

Item 8 Group Manager Corporate Quarterly Update
Status of Actions Sheet	Attachment 3

Hastings District Council

Risk and Assurance Committee

Status of Actions Sheet – February 2021

Item No.	Meeting Date	Action	Reporting Officer	Progress	Complete
1	02/07/19	Governance Oversight of Finances · Finance to develop a inhouse training package.	GM:C	Delayed due to COVID-19
2	27/07/20	Health & Safety Risk Management · Internal audit against ISO 45001:2018 Gap Analysis standard be undertaken with progress reports to Committee.	Jennie Kuzman	Included on February agenda
3	18/10/20	Risk Assurance · Review Risk Appetite statements in 2021 following adoption of 2021-31 Long Term Plan · Incorporate annual review of growth nodes (industrial and residential) for Committee, focusing on risks being addressed by Council	Regan Smith GM:C	For May meeting For July meeting
4	18/10/20	Insurance · Provide short summary of insurance cover under catastrophic event situations	GM:C	For February meeting
5	07/12/20	Long Term Plan · That a futurist be invited to speak in 2021. The CE indicated this may be addressed as part of the council retreat. It was suggested that the Heretaunga Takoto Noa Māori Standing Committee members also be invited to this presentation. (once this approach/retreat programme had been ok’d – Democracy & Governance to be advised through CE’s office/Bruce Allan). · Fees and Charges – ensure being amended via small regular amounts (and the level of rating funding needed) so council not fall behind. · Rough estimation of effect on council’s rates (down to a macro level) from income lost from 3 Waters assets – to be presented to council meeting (8/12/2020). · Amending council’s Treasury Policy – A recommendation come back to R & A meeting on 2 Feb 2021 so council not in breach of policy (150% to increase to 175%) · “Deep dive” into asset management plans in Feb 2021 (Jaun Park and Craig Thew to select two areas to work through).	CE/GM:C Lex V GM:C GM:C/ Karen Young Jaun Park/ Craig Thew	TBC Provided to Council on 8/12/20 Included on February agenda Included on February agenda	Completed
6	07/12/20	2019/2020 Annual Report • Feedback to be given to Department of Internal Affairs as part of audit reform – seeking revocation of the current requirement regarding individual recording of subsequent complaints on the same matter, as well as the initial complaint.	Aaron Wilson/ Karen Young	Discussios being held with SOLGM on best way to approach the DIA

HASTINGS DISTRICT COUNCIL

Risk and Assurance Committee MEETING

Tuesday, 2 February 2021

RECOMMENDATION TO EXCLUDE THE PUBLIC

SECTION 48, LOCAL GOVERNMENT OFFICIAL INFORMATION AND MEETINGS ACT 1987

THAT the public now be excluded from the following part of the meeting, namely:

13 IT Risks and Controls

The general subject of the matter to be considered while the public is excluded, the reason for passing this Resolution in relation to the matter and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this Resolution is as follows:

GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED

REASON FOR PASSING THIS RESOLUTION IN RELATION TO EACH MATTER, AND

PARTICULAR INTERESTS PROTECTED

GROUND(S) UNDER SECTION 48(1) FOR THE PASSING OF EACH RESOLUTION

13 IT Risks and Controls

Section 7 (2) (h)

The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial ativities.

To protect Council's IT controls and risk management.

Section 48(1)(a)(i)

Where the Local Authority is named or specified in the First Schedule to this Act under Section 6 or 7 (except Section 7(2)(f)(i)) of this Act.

[1] Current as of 14 January 2021 as entered into Council’s H&S System

Te Rā Hui: Meeting date:	Tuesday, 2 February 2021
Te Wā: Time:	9.00am
Te Wāhi: Venue:	Landmarks Room Ground Floor Civic Administration Building Lyndon Road East Hastings
Te Hoapā: Contact:	Democracy and Governance Services P: 06 871 5000 \| E: democracy@hdc.govt.nz
Te Āpiha Matua: Responsible Officer:	Group Manager: Corporate - Bruce Allan

Mematanga: Membership:	Koromatua Chair: Jon Nichols – External Independent Appointee Nga Kai Kaunihera Councillors: Simon Nixon (Deputy Chair), Alwyn Corban, Tania Kerr, and Geraldine Travers Robin Hape - Heretaunga Takoto Noa Māori Standing Committee appointee Jaun Park – External Independent Appointee Mayor Sandra Hazlehurst (ex-officio)
Tokamatua: Quorum:	4 members
Kaihokoe mo te Apiha Officer Responsible:	Group Manager: Corporate – Bruce Allan
Te Rōpū Manapori me te Kāwanatanga Democracy & Governance Services:	Christine Hilton (Extn 5633)

Item 4 Risk Assurance Update
HDC Policies Review Final Report - Nov 2020	Attachment 1

Item 4 Risk Assurance Update
Assurance Actions Summary - January 2021	Attachment 2

Item 4 Risk Assurance Update
World Economic Forum - The Global Risks Report 2021	Attachment 3

Item 6 Treasury Activity and Funding Update
Treasury Dashboard 31st December 2020	Attachment 1

Item 8 Group Manager Corporate Quarterly Update
Digital Exclusion Summary Report	Attachment 1

Item 8 Group Manager Corporate Quarterly Update
2021 Insurance Comparison	Attachment 2

Risk and Assurance Subcommittee – Terms of Reference