Annual Report 2007/08

For the year ended 30 June 2008

The Mayor's report

I am delighted to present this summary of the Annual Report to you, my first as Mayor of Nelson.

It is important that we take the time to look back and reflect on what the city has achieved in the past year. It is just as important that Council keeps the community informed of its performance against what the Council had signalled through the 2007/08 Annual Plan.

With the new Council elected in October 2007, part way through this reported financial year, we have been working diligently to ensure it is business as usual while we develop a new positive direction for the city. Our Heart of Nelson central city strategy process is one example of Council’s vision to encourage innovative development and to create a forward-looking blueprint for the future. The new Council’s direction was signalled through the 2008/09 Draft Annual Plan and earlier this year preliminary work began on the 2009 Long-term Council Community Plan, a plan that will chart Council priorities and work, over the next ten years. You will be asked to take part in developing this Community Plan at the beginning of 2009.

Complementing this long term approach for the central city, Council is taking climate change and related issues seriously. Council approved a new Sustainability Policy and developed a Climate Change Action Plan to coordinate its response to these critical issues. One area I would like to highlight is the cleaning of the city’s air. Air monitoring over the past year has shown continued improvement. The open fire ban is in place, the air in the hospital valley is perceptibly cleaner and Council has launched a new scheme, with some Central Government funding, that focuses on replacing older enclosed burners to continue this positive trend. Council is now also turning its attention towards reducing industrial sources of air pollution.

I appreciate the hard work of all Councillors over the past 12 months. Thanks to the previous Council for their part in representing the interests of our city and to the new Council for their energy and drive in working towards a better future for Nelson. I also acknowledge the work of the Council staff who have managed the transition towards a new Council vision while maintaining already high workloads. In particular, I would like to acknowledge the work that Viesturs Altments has capably overseen during his seven years as Chief Executive of the Council.

Kerry Marshall 

The Chief Executive's Report

This will be the last Annual Report Summary that I present to the people of Nelson as Chief Executive of Nelson City Council. I am pleased that the organisation has continued to perform well over the past year, despite some challenges.

The storm at the end of July impacted on both the water supply and the parks of Nelson. It demonstrated that the vagaries of nature can be unpredictable and costly. The response was very quick and efficient from Council staff and contractors alike and this was appreciated by Council and the community. There were three breaks in the Maitai pipeline that took five days to repair, even with contractors and staff working around the clock. Council parks will take some years to recover, especially Isel Park.

My thanks go to the two Mayors, Paul Matheson and Kerry Marshall, with whom I have worked over the past year. I am also grateful for the work of the Councillors and staff for their dedication and efforts over the previous 12 months. I am satisfied that Council has continued to manage the city’s assets responsibly and with the best interests of the community in mind, and I wish the Council and the incoming Chief Executive the very best for the years ahead.

Viesturs Altments

Audit Report

To the readers of Nelson City Council and Group’s Summary Annual Report for the year ended 30 June 2008. We have audited the summary annual report.

Unqualified Opinion

In our opinion:

• the summary annual report represents, fairly and consistently, the information regarding the major matters dealt with in the annual report; and
• the information reported in the summary financial statements complies with FRS-43:  Summary Financial Statements and is consistent with the full financial statements from which it is derived.

We expressed an unqualified audit opinion, in our report dated 2 October 2008, on:

• the full financial statements; and
• the Council and group’s compliance with the other requirements of Schedule 10 of the Local Government Act 2002 that apply to the annual report.

Basis of Opinion

Our audit was conducted in accordance with the Auditor-General’s Auditing Standards, which incorporate the New Zealand Auditing Standards. Other than in our capacity as auditor, which includes being auditor of the Council’s Long Term Council Community Plan, we have no relationship with or interests in Nelson City Council or any of its subsidiaries.

Responsibilities of the Council and the Auditor

The Council is responsible for preparing the summary annual report and we are responsible for expressing an opinion on that report. These responsibilities arise from the Local Government Act 2002.

Scott Tobin, Audit New Zealand
On behalf of the Auditor-General
Christchurch, New Zealand
30 October 2008

Matters Relating to the Electronic Presentation of the Audited Financial Statements, Performance Information and the Other Requirements

This audit report relates to the financial statements, performance information and the other requirements of Nelson City Council and group for the year ended 30 June 2008 included on Nelson City Council’s website. The Nelson City Council is responsible for the maintenance and integrity of Nelson City Council’s website. We have not been engaged to report on the integrity of Nelson City Council’s website. We accept no responsibility for any changes that may have occurred to the financial statements, performance information and the other requirements since they were initially presented on the website.

The audit report refers only to the financial statements, performance information and the other requirements named above. It does not provide an opinion on any other information which may have been hyperlinked to or from the financial statements, performance information and the other requirements. If readers of this report are concerned with the inherent risks arising from electronic data communication they should refer to the published hard copy of the audited financial statements, performance information and the other requirements as well as the related audit report dated 2 October 2008 to confirm the information included in the audited annual report presented on this website.

Legislation in New Zealand governing the preparation and dissemination of financial information may differ from legislation in other jurisdictions.

Summary

It’s been another busy and vibrant year for Nelson. Here is a summary of Nelson City Council’s achievements during the 2007/08 financial year, as reported in the 2008 Annual Report adopted by Council on 2 October. The annual report covers all 15 Council activities, which are broad service areas like water supply or environmental management. The summary Council provides here for residents must represent, fairly and consistently, the major matters dealt with in the annual report. It cannot provide as complete a review as the full Annual Report, which is available at Civic House, the Nelson Public Libraries or as a download. Download the Annual Report summary (580KB PDF)

An Annual Report is an audited record of Council’s performance and is an important part of Council’s accountability to the public. It sets out whether Council did what it planned and budgeted to do and, if not, why there were differences. Project budgets may be underspent, for example, because of adjustments to completion times.

The financial information included in the full Annual Report has been prepared in accordance with New Zealand Generally Accepted Accounting Practice (GAAP) as appropriate for a public benefit entity. This summary annual report complies with Financial Reporting Standards 43 (FRS-43): Summary Financial Statements.

Key Council projects and achievements for the year to 30 June 2008

The Performing Arts and Conference Centre

An agreement was negotiated to acquire land for the Performing Arts and Conference Centre. The agreement has still to be finalised at year end but it is hoped that planning for this long awaited community facility will soon be able to progress.

Festivals

Council led a great Arts Festival in October 2007, followed by a stunning Summer Festival. Who could forget the once in a lifetime experience of the Dame Kiri te Kanawa concert in February? It was an amazing event for the thousands of locals and visitors who attended.

Community Planting

Another great series of community planting days saw large turnouts including around 200 volunteers at Oyster Island. Community planting days are fine examples of Council working with enthusiastic locals to improve our city environment.

Iwi

A maturing relationship with iwi M¯aori, including the inclusion of contemporary designs on the re-built Aratuna Normanby Bridge telling the story of the Maitai River and its eel ponds.

Ecofest

Ecofest continued to build on its previous successes with around 6,000 people flocking to enjoy the festival of the environment in a brand new venue, Founders Heritage Park.

Cycling awards

Council’s innovation in cycling was once again rewarded with top honours in the SPARC Cycle-Friendly Awards and we recently celebrated the opening of the extension to the Atawhai shared pathway. It now provides a safer off road walking and cycling link from Clifton Terrace to Nelson City.

Economic Development

The newly reviewed Regional Economic Development Strategy is up and running. Tasman District Council has joined Nelson City in co-funding the regional Economic Development Agency.

Chinese Gardens

The superb Chinese Gardens opened in November 2007. The beautiful garden was four years in the making and built as an example of traditional garden design and to symbolise Nelson’s sister city relationship with Huangshi in the Hubei Province of China. The $645,000 cost of the garden was offset by many charitable donations from New Zealand and Chinese organisations.

The Two Trafalgars

The new grandstands were completed at Trafalgar Park in time for the highlight of the Summer Festival, Opera in the Park with Dame Kiri, and on the other side of the river the Trafalgar Centre re-vamp began. The new look Trafalgar Centre is due to re-open in February 2009 as a vastly improved and more energy efficient facility.

Natureland

Natureland was retained in a new and exciting guise. Management of this family favourite attraction was passed to the Orana Wildlife Trust in October. The Trust has many plans to improve the Park including introducing new exotic animals and increasing conservation initiatives, while retaining the popular farmyard animals.

Nelson North Wastewater Plant

The final performance testing step was completed in the Nelson North wastewater plant upgrade. This means cleaner effluent being discharged into Tasman Bay with far fewer odour problems. The next stage is development of the wetlands, which are planned for 2009/10.

Seniors Parking Pass

The trial ‘free senior parking permit’ became a permanent fixture. The annual pass allows seniors to park in the CBD for one hour per day without the payment of any fee. The annual pass costs $20 and will be price adjusted every two years in line with the consumer price index.

Sk8park

The Neale Park skatepark opened in May with a huge crowd attending and is a great success with the park being in almost constant use by keen skaters of all ages.

The Waterfront

Wakefield Quay developments continued along our world-class waterfront. This included the unveiling of the Early Settlers Memorial Wall, which, thanks to the sponsorship of Nelson families, lists the names of our earliest immigrants and details of the ships they arrived on. 

Saxton Field Stadium

Work began on the new $12.5 million Saxton Field Sports Stadium. It has been a real community effort to bring a project to fruition that promises such outstanding benefits to the region. The stadium will accommodate basketball, netball, volleyball and table tennis with facilities suitable for national-level competition. It is scheduled to open in September 2009.

Building Consents Accreditation

Council received accreditation as a Building Consent Authority; one of the first wave of Councils to meet these rigorous standards.

The Suter

The Suter Art Gallery became a Council Controlled Organisation (CCO) after year end and a new Trust Board was appointed to oversee its operation.

Key performance indicators

Council has divided its work into 15 activities. Council sets a number of performance indicators for each activity in its Long-term Council Community Plan. In total there are 131 indicators, and the Annual Report includes an assessment of whether or not Council has achieved these objectives. The large table on page 3 summarises whether Council achieved/exceeded targets, came close to achieving the target, did not achieve or did not measure a performance indicator during the year. Examples of the performance indicators are included for each activity.

Working with Māori

The major joint achievement for Council and Māori this year was the continuing implementation of the 2005 Memorandum of Understanding (MOU) between Tangata Whenua Whakatu and Nelson City Council. This framework is intended to assist Council and Tangata Whenua to work towards shared goals, and provide opportunities for all Māori to participate in decisions that shape Nelson’s future.

Other key activities of Council that provided opportunities for Māori to contribute to its decision-making processes over the year were:

• Three Kotahitanga Hui where rangatira (local leaders) met with Council leaders to discuss strategic and policy issues
• The Council Kaumatua advised the Mayor and Chief Executive, and assisted Council to meet its legal obligations to Māori
• Supporting iwi on kaitakitanga (guardianship) of the Nelson environment
• Iwi monitors were engaged during major earthworks near significant sites including Oyster Island and the Nelson North Wastewater Treatment Plant upgrade.

Financial performance

Download the Financial Statements for the year ended 30 June 2008 (pages 26 - 85) (362KB PDF)

Financial results for the year

Council recorded a surplus for the year ended 30 June 2008 of $21.5 million, which was $3.7 million over budget. The reasons for this are listed in the Annual Report, but the most significant reason was the vested assets which were $6.7 million over budget. The proceeds from the Ridgeway development were $0.5 million under budget due to the down turn in property sales.

As used here, ‘surplus’ refers to an accounting surplus, which is a net increase in the value of Council assets. It is different from a rating surplus, which refers to surplus funds raised through rates that were either not spent because of project delays or cost savings, or if excess revenue was earned beyond what was expected. A rating surplus is carried over to reduce the funding required in the following financial year.

Council posted a rating surplus of $1.03 million largely due to savings in many of Council’s activities, where projects were not completed during 2007/08. These projects will be carried over into the current 2008/09 year and funded from the balance carried forward.

Council borrowings at $36.7 million were lower than the budgeted $58.3 million because of delays with capital projects such as the Regional Sewerage Scheme upgrade, the Campbell and Collingwood Street upgrades, and regional community facilities such as the Saxton Field Stadium and the south end of the Trafalgar Centre.

Notes

• These summary financial statements have been prepared in compliance with ‘Financial Reporting Standard No. 43 Summary Financial Statements’ issued by the Financial Reporting Standards Board of the New Zealand Institute of Chartered Accountants (May 2007).
• The financial information is shown in New Zealand dollars.
• This Summary has been authorised for issue by the Mayor and Chief Executive, 30 October 2008.
• This Summary Financial Report has been extracted from the Nelson City Council 2007/08 Annual Report dated 2 October 2008 and was audited by Audit New Zealand who issued an unqualified opinion dated 2 October 2008.

On 30 July 2008 a destructive wind storm event hit Nelson with wind gusts of up to 151 kph recorded at Princes Drive. The costs of the wind damage was extensive and it was estimated to amount to approximately $1.48 million plus a loss of value of the Council’s pine plantations of $0.84 million. The Council has an emergency fund which had a balance of $1.01 million as at 30 June 2008. This reserve will be used in the first instance, and any excess costs will be funded by borrowings. There were no significant events after the balance date for the 2006/07 year.

Capital expenditure

Total actual capital expenditure for 2007/08 was $27.6 million, compared to the estimate of $43.8 million. The main areas of under spending were delays in Regional Community Facilities, ($10.8 million due to delays in Saxton Field Stadium and the Trafalgar Centre), Community Housing ($1.5 million for the Orchard Street redevelopment), and the marina, ($1.3 million for the Akersten Street development).  These delays have resulted in lower operating and maintenance, interest and depreciation costs.  They also resulted in reduced borrowings and lower sales of assets (Akersten Street properties).

 

Annual Report Downloads

Complete Annual Report 07-08 - 197 pages (2MB PDF)

Annual report by sections

Introduction pages 1-25 (735KB PDF)

• Message from the Mayor
• Message from the Chief Executive
• Statement of Compliance and Responsibility
• Audit statement
• Being accountable to the community
• Community outcomes--goals for Nelson
• Opportunities for Maori to contribute to decision-making processes

Financial Statements for the year ended 30 June 2008 (pages 26 - 86) (362KB PDF)

• Statement of Financial Performance for the year ended 30 June 2007
• Movements in equity for the year ended 30 June 2007
• Balance sheet as at 30 June 2007
• Cashflows as at 30 June 2007
• Notes to accounts

Significant Activities Part 1 (pages 87 - 107) (183KB PDF)

• Significant activities
• Water supply
• Sewage disposal
• Stormwater and flood protection
• Transport

Significant Activities Part 2 (pages 108 - 132) (304KB PDF)

• Solid waste management
• Environmental management
• Regulatory compliance
• Parks and open space
• Recreation and leisure

Significant Activities Part 3 (pages 133 - 163) (276KB PDF)

• Community facilities
• Economic and tourism support
• Managing emergencies and natural hazards
• Social development
• Culture, heritage and arts
• Democracy and administration

Financials and Policies (pages 164-197) (173KB PDF)

• Financial reserves and trusts
• Summary of capital expenditure
• Statement of financial involvement in CCTOs and other companies or organisations
• Equal employment opportunities
• Borrowing objectives and policies
• Investment objectives and policies
• Individual rates
• Council information