Investment and Property Subcommittee Wednesday 27 May 2020 at 1.00pm

 

27 May 2020

Investment and Property Subcommittee Agenda

 

 

Recommendations contained in the agenda are NOT decisions of the meeting. Please refer to minutes for resolutions.

 

MEMBERSHIP OF THE Investment and Property Subcommittee

Chairperson, NRC Councillor Rick Stolwerk

Councillor Justin Blaikie	Councillor John Bain	Councillor Colin Kitchen
Ex-Officio Penny Smart	Independent Financial Advisor Jonathan Eriksen	Independent Financial Advisor Geoff Copstick

 

 

Item                                                                                                                                                                                   Page

1.0       apologies   

2.0       declarations of conflicts of interest

3.0       Confirmation of Minutes

3.1       Confirmation of Minutes - 26 February 2020                                                                                    3

4.0       Reports

4.1       Mount Tiger Forest Quarterly Report January - March 2020                                                      8

4.2       Responsible Investment Report - as at 31 December 2019                                                       36

4.3       Performance of Councils Externally Managed Funds to 30 April 2020                                  41   

5.0       Business with the Public Excluded                                                                                                      61

5.1       Confirmation of Confidential Minutes - 26 February 2020

5.2       Kensington Crossing Redevelopment Update

5.3       Leaseholder's Notice of Exit

5.4       Proposed Sale of a Whangarei CBD Property

5.5       Request for Nil or Low Rent

5.6       Tenant Request for Rent Relief

5.7       Land and Lease Holders' Easement and Covenant Requests

5.8       Kaipara Service Centre Tenancy

5.9       Proceeds From Land Sale  

   

27 May 2020

 

TITLE:	Confirmation of Minutes - 26 February 2020
ID:	A1316638
From:	Judith Graham, Corporate Excellence P/A

 

That the minutes of the Investment & Property Subcommittee  meeting held on 26 February 2020 be confirmed as a true and correct record.

 

Attachment 1: Investment and Property Subcommittee meeting minutes dated 26 February 2020 ⇩  

Name:	Dave Tams
Title:	Group Manager, Corporate Excellence
Date:

 

27 May 2020Attachment 1

Investment and Property Subcommittee Minutes

 

 

 

Present:

Chairperson, NRC Councillor Rick Stolwerk

Councillor Justin Blaikie

Councillor John Bain

Ex-Officio Penny Smart

Independent Financial Advisor Geoff Copstick

 

In Attendance:

Full Meeting

Chief Executive Officer

GM- Corporate Excellence

Finance Manager

 

                                                        Part Meeting

Strategic Projects Manager

Property Officer

                                                   Independent Financial Advisor  Jonathan Eriksen – by phone

 

The Chair declared the meeting open at 1.04pm.

Apologies (Ngā whakapahā) (Item 1.0)

 

Moved (Bain / Stolwerk) That the apologies from Councillor Colin Kitchen for non-attendance be received. Carried

 Declarations of Conflicts of Interest (Nga whakapuakanga) (Item 2.0)

Moved (Bain / Stolwerk)

It was advised that members should make declarations item-by-item as the meeting progressed.

Carried

Moved (Bain / Stolwerk)

Secretarial Note: Supplementary agenda (item 1.3) - Withdrawal of the Planned Annual General Funding Contribution from the Managed Fund Portfolio was tabled.

 Supplementary agenda Item 1.3  changed to item 5.3 and will be discussed in open after business with public excluded item 5.2.

Carried

1.             Confirmation of Minutes - 16 December 2019 (Item 3.1) ID: A1286905 Report from Dave Tams, Group Manager, Corporate Excellence

Moved (Bain / Stolwerk) That the minutes of the Investment & Property Subcommittee meeting held on 16 December 2019 be confirmed as a true and correct record. Carried

 

2.             Performance of Councils Externally Managed Funds to 31 January 2020 (Item 4.1) ID: A1288563 Report from Simon Crabb, Finance Manager

Moved (Bain / Stolwerk) That the report ‘Performance of Councils Externally Managed Funds to 31 January 2020’ by Simon Crabb, Finance Manager and dated 20 February 2020, be received. Carried Reviewed Externally managed funds report dated 20 February acknowledged investments for the month of January had positive performance. Debate around the impact the coronavirus is having on the global investment market and effects it is having. 1.18pm Phoned Jonathan Eriksen form EriksensGlobal. Jonathan Eriksen gave an update on the volatility of the global investment market.  Northland Regional Council portfolio has changed over time and is now deemed to be a conservative growth portfolio. Secretarial Note: 1.35pm Cr Bain declared a conflict of interest and withhold from participating in the rest of the discussion. Secretarial Note: Chair Smart left the meeting at 1:51pm. Secretarial Note: Chair Smart returned to the meeting at 1:53pm. Secretarial Note: Independent Financial Advisor Eriksen phone call ended at 2.01.

 

3.             Mount Tiger Forest Quarter Two Report (October - December 2019) (Item 4.2) ID: A1284587 Report from Alicia Jurisich, Property Officer

Moved (Stolwerk /Bain) That the report ‘Mount Tiger Forest Quarter Two Report (October - December 2019)’ by Alicia Jurisich, Property Officer and dated 10 February 2020, be received. Carried Secretarial Note: For discussion at next Investment & Property Subcommittee meeting, contractor costs on pg. 2 of Mount Tiger Forest Quarter two report by  Jenksmax Consulting Limited.

 

Business with Public Excluded (Item 5.0)

Moved (Bain /Blaikie)

1.         That the public be excluded from the proceedings of this meeting to consider confidential matters. 2.         That the general subject of the matters to be considered whilst the public is excluded, the reasons for passing this resolution in relation to this matter, and the specific grounds under the Local Government Official Information and Meetings Act 1987 for the passing of this resolution, are as follows: Item No. Item Issue Reasons/Grounds 5.1 Confirmation of Confidential Minutes - 16 December 2019 The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely otherwise to damage the public interest s7(2)(c)(ii). 5.2 Value of Consolidated Whangarei CBD Properties The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h). 3.         That the Independent Financial Advisor be permitted to stay during business with the public excluded.   Carried

 

Moved (Bain /Stolwerk)

That the committee resumes in open meeting. 2.24pm

Carried

 

4.             Withdrawal of the Planned Annual General Funding Contribution from the Managed Fund Portfolio (Item 5.3) ID: A1290315 Report from Simon Crabb, Finance Manager

Moved (Smart / Blaikie) 1.         That the report ‘Withdrawal of the Planned Annual General Funding Contribution from the Managed Fund Portfolio’ by Simon Crabb, Finance Manager and dated 25 February 2020, be received. 2.         That the Subcommittee approve that $2,068,979 is redeemed from the fund managers recommended by EriksensGlobal, and invested into term deposits, when the fund gain are above $2.1m and this decision is delegated to CE. 3.      Finance Manager  to confirm with Independent Financial Advisor  Jonathan Eriksen today 26 February 2020 if investment gains are above $2,068,979, money to be transfer immediately between long term and short term funds Carried Secretarial Note: Councillor Bain left the meeting at 2.33pm. Moved (Stolwerk / Smart ) Group Manager Corporate Excellence to contact Independent Financial Advisor  Jonathan Eriksen and ask for a more fluid report to better track updates of Councils Externally Managed Funds.   Group Manager Corporate Excellence to prepare paper to take to March council regarding authority  to withdrawal gains from Long term fund on a quarterly basis   Carried   Moved (Stolwerk / Blaikie ) Frequency of meetings to be discussed at next Investment & Property Subcommittee meeting.   Carried

 

Conclusion

The meeting concluded at 3.07pm.

 

 

27 May 2020

 

TITLE:	Mount Tiger Forest Quarterly Report January - March 2020
ID:	A1315134
From:	Nicole Inger, Property Officer

 

The purpose of this report is to present an update on Council’s Mount Tiger Forest by way of the attached report from Ian Jenkins of Jenksmax Consulting Limited, Council’s Forestry Consultant.  Mr Jenkins will be present at the meeting to answer any questions.

 

That the report ‘Mount Tiger Forest Quarterly Report January - March 2020’ by Nicole Inger, Property Officer and dated 12 May 2020, be received.

 

As per the Forestry Management Plan, council’s consultant, Jenksmax Consulting Limited, is to report back to Council every quarter providing an update of the Mount Tiger Forest.  The significant matters reported in Quarter Three are as follows:

 

·        In this quarter, no Health and Safety issues have arisen.

·        The main 2019/20 silvicultural work was the thinning of the 2010 stand of 25.8 ha. This was started in December (11 ha) and completed in January (14.8 ha).

·        The pre-plant spray of the 1991 area harvested earlier in 2019 is yet to be completed, due to waiting for suitable conditions and then the Covid-19 Level 4 lockdown.  NFML’s plan is to spray as soon as possible and plant in August 2020.

·        In January the annual Mt Tiger Forest Health Inspection was undertaken.  Overall the forest is in good health and no new pests or diseases were noted.

·        The 2020-2024 Forest Management Plan (“FMP”) was finalised and approved by the Subcommittee and full Council in February 2020.

·        Regular forest checks (6) have been undertaken for checking after storms, maintenance, trespass, operational planning, H&S inductions and general forest inspections.  Includes pre Covid-19 Level 4 lockdown inspection.

 

Attachment 1: NRC Q3 (end Mar 2020) 2019-20 FYear Report ⇩

Attachment 2: 2020 JKMX Mt Tiger JH Forest Health Report ⇩

Attachment 3: 2020 03 13 H&S Induct Silvicom ⇩  

Name:	Phil Heatley
Title:	Strategic Projects Manager
Date:	20 May 2020

 

27 May 2020Attachment 1

 

 

27 May 2020Attachment 2

 

 

 

 

 

 

 

 

 

 

 

 

 

27 May 2020Attachment 3

 

 

 

 

 

 

27 May 2020

 

TITLE:	Responsible Investment Report - as at 31 December 2019
ID:	A1314443
From:	Simon Crabb, Finance Manager

 

Responsible investing, also known as ethical investing or sustainable investing, is a holistic approach to investing, where social, environmental, corporate governance (ESG) and ethical factors are considered alongside financial performance when making an investment decision.

Councils Statement of Investment Policy and Objectives (SIPO) is the key document that sets out council’s responsible investment expectations in regards to its externally managed fund portfolio. Specifically, restricting investments in:

·    Fossil fuels (exploration, extraction and processing)

·    Alcohol

·    Tobacco

·    Gambling

·    Military weapons

·    Civilian firearms

·    Nuclear power

·    Adult entertainment

The EriksensGlobal responsible investment report as at 31 December 2019 is attached. This report presents councils exposure to restricted investments, as well as it investments in companies that support environmental sustainability.

 

 

1.         That the report ‘Responsible Investment Report - as at 31 December 2019’ by Simon Crabb, Finance Manager and dated 11 May 2020, be received.

 

 

Attachment 1: EriksensGlobal - Responsible Investment Report as at 31 December 2019 ⇩  

Name:	Dave Tams
Title:	Group Manager, Corporate Excellence
Date:

 

27 May 2020Attachment 1

 

 

27 May 2020

 

TITLE:	Performance of Councils Externally Managed Funds to 30 April 2020
ID:	A1317688
From:	Simon Crabb, Finance Manager

 

Councils managed fund portfolio generated returns of $2.1M for the month of April 2020.

 

April saw a vast improvement in liquidity within equity and credit markets due to the actions taken by governments and central banks around the world.  This enabled the Long Term Fund and Short Term Fund to record very good returns for the month.

 

A summary of the returns and target objectives for the 10 months ending 30 April 2020 for councils 2 managed funds is presented below, with the supporting detail and fund performance for longer periods contained in Attachment 1.

 

 

All monthly, quarterly and year to date (YTD) return percentages in this report and its attachment are not annualised

 

 

That the report ‘Performance of Councils Externally Managed Funds to 30 April 2020’ by Simon Crabb, Finance Manager and dated 19 May 2020, be received.

 

At 30 April 2020, the LTF has an overall market value of $42.1M, comprising of funds attributable to: Infrastructure Investment of $20.1M; Property Reinvestment of $7.1M; and Community Investment of $14.9M.

The LTF has performed as follows:

 

 

 

 

 

Short Term Investment Fund (STF)

At 30 April 2020, the STF has an overall market value of $10.5M, comprising of funds attributable to Working capital requirements of $4.7M (including $4M of self-managed term deposits), and Property Reinvestment of $5.8M.

The term deposits representing the Opex Reserve are not included in STF balance.

The STF has performed as follows:

 

Attachment 1: NRC Externally Managed Investment Funds - EriksensGlobal monthly report to 30 April 2020 ⇩  

Name:	Dave Tams
Title:	Group Manager, Corporate Excellence
Date:

 

27 May 2020Attachment 1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

27 May 2020

 

TITLE:

Business with the Public Excluded

 

The purpose of this report is to recommend that the public be excluded from the proceedings of this meeting to consider the confidential matters detailed below for the reasons given.

1.              That the public be excluded from the proceedings of this meeting to consider confidential matters.

2.              That the general subject of the matters to be considered whilst the public is excluded, the reasons for passing this resolution in relation to this matter, and the specific grounds under the Local Government Official Information and Meetings Act 1987 for the passing of this resolution, are as follows:

Item No.	Item Issue	Reasons/Grounds
5.1	Confirmation of Confidential Minutes - 26 February 2020	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to protect information which is subject to an obligation of confidence or which any person has been or could be compelled to provide under the authority of any enactment, where the making available of the information would be likely otherwise to damage the public interest s7(2)(c)(ii).
5.2	Kensington Crossing Redevelopment Update	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
5.3	Leaseholder's Notice of Exit	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
5.4	Proposed Sale of a Whangarei CBD Property	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
5.5	Request for Nil or Low Rent	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
5.6	Tenant Request for Rent Relief	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(b)(ii), the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
5.7	Land and Lease Holders' Easement and Covenant Requests	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(b)(ii) and the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h).
5.8	Kaipara Service Centre Tenancy	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h) and the withholding of which is necessary to enable council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations) s7(2)(i).
5.9	Proceeds From Land Sale	The public conduct of the proceedings would be likely to result in disclosure of information, the withholding of which is necessary to enable council to carry out, without prejudice or disadvantage, commercial activities s7(2)(h).

3.              That the Independent Financial Advisor be permitted to stay during business with the public excluded.

1.    Options

Not applicable. This is an administrative procedure.

2.    Significance and Engagement

This is a procedural matter required by law. Hence when assessed against council policy is deemed to be of low significance.

3.    Policy and Legislative Compliance

The report complies with the provisions to exclude the public from the whole or any part of the proceedings of any meeting as detailed in sections 47 and 48 of the Local Government Official Information Act 1987.

4.    Other Considerations

Being a purely administrative matter; Community Views, Māori Impact Statement, Financial Implications, and Implementation Issues are not applicable.