Group Quarterly Performance Pack - 2020/2021 Quarter 2 For the 6 months ended 31 December 2020 Finance and Performance Committee
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Group Quarterly Performance Pack 2020/2021 Quarter 2 For the 6 months ended 31 December 2020 Finance and Performance Committee
Group financials at a glance
6 months into the third year of the updated 10-year budget
Continuing capital progress Operating performance on track
Capital investment of $1.2 billion Positive six months
$6m (1%) increase compared to Direct Favourable to budget
the same period last year Revenue $100 million favourable against budget of $1.0 billion
$96m less than budget with 93% Direct
Favourable to budget
delivered Expenditure $90 million favourable against budget of $1.5 billion
Prudent debt management Outlook for FY21
• High levels of uncertainty amidst COVID-19
Net debt at $10.1 billion disruptions and economic impact
• Year-end budget $10.9b • Monthly monitoring of financial risks with a long-
Net debt to total assets at 17% term financial sustainability and recovery focus
• Year-end budget 18% Risks for FY21
Projected gross debt to adjusted revenue circa 285% • Further disruptions from new strains of COVID-19
• Year-end budget 290% l Policy limit of 270% • Delays in achieving cashflow benefits from asset
recycling
Stable credit ratings from S&P Global Ratings (AA)
and Moody’s Investor Service (Aa2)
2Group capital performance
Capital investment & funding sources Commentary
A: Capital investment was $1,205 million for the six-month
$ million FY 20 FY 21 Quarter 2 YTD FY 21 period, which was an increase of 1 per cent or $6 million
from the same period last year. This compared to the budget
Notes Actual Actual Budget Variance Budget
of $1,300 million resulted in 93 per cent delivery.
Key budget variances were from:
Capital investment A 2,560 1,205 1,300 (96) 2,567 • Auckland Council: Capital expenditure was slower than
Auckland Council1 548 231 276 (45) 453 budgeted across the organisation, including city centre,
stormwater, community facilities and ICT, partly due to
Auckland Transport 862 358 410 (52) 757 the late budget and local board work programme
ATEED - - - - - adoption. Remedial actions are being taken to accelerate
projects.
Panuku1 128 - - - 100 • Auckland Transport: There was a delay in delivery of
Ports of Auckland 100 17 27 (10) 74 EMU’s due to the impact of COVID- 19 in Spain, and
unplanned KiwiRail track maintenance resulted in testing
Regional Facilities Auckland 74 12 23 (11) 50 delays. Alert Level 3 lockdown in August 2020 also
Watercare 590 377 366 10 738 delayed progress on construction of AMETI. Various road
and footpath projects were behind budget but are
expected to be delivered in full in the second half of the
year.
City Rail Link investment (Auckland Council 258 210 198 12 395
share)
B: Development contributions were $34 million higher than
budget, due to an increase in developer activity.
Capital funding sources C: The majority of the shortfall in capital grants and subsidies
relates to Waka Kotahi NZ Transport Agency capital
Development contributions B 156 107 73 34 137
subsidies. The budget assumed a $95 million subsidy being
Capital grants and government subsidies C 438 188 296 (108) 454 received for the Penlink and Mill Road properties, the cash
received has been accounted for as proceeds from asset
sales.
Cash proceeds from asset sales 108 146 390
2
Change in underlying net debt 1,170 327 1,319
Cash operating funding 688 437 267
Note: For this and the following pages within the Group Performance Overview, the prior period is defined as the 6 months to 31 December 2020.
1. Panuku managed assets and expenditure owned by Auckland Council is added to Panuku financials. Refer to glossary for more details.
2. This excludes non-cash net debt accounting adjustments for items such as foreign exchange & commercial paper discount adjustments of $31m for the 6-months.
3Group balance sheet
Net debt Net debt to total assets Commentary
Net debt over the 6-month period increased by
$223 million, driven by capital spending.
12.1b
Q2 10.9b 11.7b Q2
10.1b 18%
9.9b
17% 19% 19% COVID-19 added pressure to the Group’s cash
17% 17%
8.7b 16% 16% revenue, decreasing cash revenues and
8.0b 8.2b
increasing borrowings. This is currently
expected to result in a debt to revenue ratio of
around 285 per cent compared to the
Emergency Budget’s 290 per cent.
S&P Global Ratings have upgraded the NZ
central government’s credit rating, reflecting a
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY17 FY18 FY19 FY20 FY21 FY22 FY23
quick economic recovery from COVID-19.
Ratings for the LGFA, some other government
Actual debt Budget Actual net debt to total assets entities and local councils were also upgraded
Net debt to total assets budget
to reflect the stronger government rating and
strong individual credit profiles. There will be a
small decrease in the council’s funding cost for
debt funded through the LGFA.
Gross debt to adjusted revenue 1
The group’s credit rating remains at AA and
Aa2 with a stable outlook from S&P Global
Actual results Projection Internal ceiling Policy limit Ratings and Moody’s Investor Services
respectively.
285% 285% 285% Our total assets increased by $2.2 billion this
half year to $58.2 billion which resulted in a
270%
265% net debt to total assets ratio of 17 per cent.
260% 264%
254%
246%
FY17 FY18 FY19 FY20 FY21 FY22 FY23
1. Gross debt to adjusted revenue was calculated using the S&P methodology. The calculation adjusts net debt for cash balances, lease obligations, and exchange rate movements. It also adjusts operating revenue for capital revenue,
development contributions, and capital grants/subsidies. 4Group treasury performance as at 31 December 2020 (excluding POAL)
Key metrics Borrowing sources in NZD million
No breaches in Treasury Management Policy ✓ Local Government
LGFA covenant compliance ✓ Funding Agency
$3,207
Credit rating (S&P/Moody’s) AA/Aa2
Average term to maturity of borrowings 6.35 yrs
Gross cost of funds -current quarter v prior quarter 4.09% - 4.19%
Forecast borrowing requirement over next 12 months $890m
$1.65b NZD Green Bonds
Back-up facilities + cash
$850
Mark to market interest rate swap position ($1.97b)
Commentary: Foreign currency
• By 31 Dec 2020, long term interest rates had recovered from all-time lows. This borrowings
resulted in a favourable movement in the mark to market interest rate swap NZD borrowings $4,577
position. $1,566
• The fixed floating cover – council remains largely protected from increasing
interest rates due to our high degree of fixed rate cover.
Fixed vs floating rate interest cover Forecast cost of borrowings
Fixed cover Total Projected 5.50% 5.10% 5.11%
4.99% 4.99% 5.05% 5.09% 5.08% 5.06%
14b Debt (LTP)
Floating 5.00%
12b 4.50% 4.23% 4.22% 4.22% 4.15% 4.02% 3.89% 3.79% 3.74%
10b 4.00%
Max Fixed Limit 3.50%
8b
3.00%
6b
2.50%
4b 2.00%
2b 1.50%
Min Fixed Limit FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28
b
Projected cost (Emergency Budget 2020/2021) Projected cost (Annual Plan 2019/2020)
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
5Group operating performance
Operating performance Commentary
A: Net direct expenditure was $190 million favourable to
$ million FY 20 FY 21 Quarter 2 YTD FY 21 budget. Net direct expenditure includes operating revenue
Notes Actual Actual Budget Variance Budget and costs from day-to-day operations and excludes
accounting and finance factors such as depreciation,
interest, and rates income.
Net direct expenditure A 794 335 525 190 1,019
B: Direct revenue was $100 million favourable to budget.
Key favourable revenue items include:
Direct revenue B 2,032 1,071 971 100 1,922
• Higher regulatory revenue due to growth in resource
Fees & user charges 1,316 636 607 29 1,219 and building consent volumes, against a budgeted 25%
Operating grants and subsidies 382 221 227 (6) 411 drop in consenting activity.
• Better than budgeted infrastructure growth charges
Other direct revenue 334 214 137 77 292 from increased levels of development activity in
Auckland. This revenue is earmarked for the funding of
Direct expenditure C 2,826 1,406 1,496 90 2,941 drought-related capital expenditure.
• Higher rental revenue from new and renegotiated
Employee benefits 997 476 485 9 959 leases.
Grants, contributions & sponsorship 148 113 113 - 159
C: Direct expenditure was $90 million favourable to budget.
Other direct expenditure 1,681 817 898 81 1,823
Key favourable expenditure items include:
• Delays in work programmes resulted in lower spend in
Other key operating lines consultancy and professional services.
• Repairs and maintenance costs were underspent due to
General rates 1,653 1,741 1,740 1 1,744
work being scheduled to be carried out later in the
Targeted rates 224 232 232 - 232 year.
• COVID-19 related cleaning costs and electricity usage
from streetlights were lower than anticipated.
Vested assets D 494 158 217 (63) 410
Finance revenue 10 3 4 (1) 7 D: Vested assets revenue for the half year was $63 million
Regional fuel tax revenue 144 75 71 4 143 lower than budget due the timing of receipt of assets from
property developers.
Non-direct revenue 16 16 - 16 -
Depreciation and amortisation 963 497 513 16 1,051
Finance costs 444 200 227 27 454
Non-direct expenditure 174 89 - (89) -
6Other key finance areas
Ports of Auckland Commentary
$ million 12 months 6 months 6 months Change Ports of Auckland’s revenue for the half year was $9m lower than the comparative
period in prior year. Container volumes were down due to the capacity constraints at
to 30 Jun to 30 Dec to 31 Dec from prior
the terminal. In contrast, volumes through the multi-cargo wharves were ahead of
2020 2020 2019 period
forecast.
Revenue 231 114 123 9
Net profit after tax 23 17 17 0
Net debt 488 488 478 10
Net assets 821 818 823 5
Auckland Int. Airport Commentary
$ 31 Dec 30 Sep Change Council Auckland Council owns approximately 18% of Auckland International Airport Limited.
2020 2020 value
Share AIAL Performance:
7.58 7.29 4% $2.0b • During the six months to 31 December 2020, passenger numbers decreased to
Price
2.8 million, down 73.4% on the comparative period in the prior year. Domestic
$ million 6 months 6 months Change passengers recovered to around 65% of pre-COVID-19 levels. The company took
to 31 Dec to 31 Dec from prior the opportunity of low passenger numbers to upgrade core infrastructure.
2020 2019 period • Commercial property revenue increased 2.4%, driven by rental growth in the
existing property portfolio and a part year contribution from the large new
Revenue 132 375 243 Foodstuffs distribution centre.
Net profit after tax 28 147 119 • No interim dividend will be paid.
The interim results for the 6 months to 31 December 2020 can be found on their
Dividend received 0 30 30 website.
7Other key performance areas
Group FTEs Commentary
Auckland Council Group’s full time equivalents (FTEs) decreased by 167 since 30 June 2020.
Entity FTEs 30 June 31 Dec
Variance Auckland Council FTEs have decreased largely due to attrition (resignation, retirement, and end of
2020 2020
contract), redundancy and tight recruitment controls.
Group 11,083 10,916 (167) Auckland Unlimited’s FTE decreased mainly as a result of the border closure and lockdowns resulting in
events and programmes being postponed or cancelled. In addition, there has been a recruitment freeze.
Auckland Council 6,470 6,310 (160)
Auckland Unlimited 850 803 (47) POAL (reduction in back office roles – 19 staff) and Panuku FTEs decreased mainly due to unfilled
Auckland Transport 1,767 1,780 13 vacancies following restructures and recruitment freezes.
Panuku 214 199 (15)
Watercare FTEs increased mainly due to recruitment of additional FTEs in their Customer and Operations
Watercare 1,084 1,146 62 teams to help manage the drought and COVID-19 response.
POAL 698 678 (20)
Auckland Transport’s FTE increase was mainly driven by the parking enforcement revenue initiative
which required an increase in transport officers, as well as a restructure of the Chief Engineering office to
ensure sufficient asset management of core infrastructure.
Key targeted rates & RFT Commentary
$ million YTD YTD YTD The Natural Environment and Water Quality targeted rates provide essential investment towards
Variance Reserve Auckland’s natural environment and water quality outcomes. More information on these targeted rates
revenue spend2 budget2
is provided in Auckland Council’s strategic focus areas.
Water quality1 42 24 27 (3) 30 The City Centre targeted rate helps fund the development and revitalisation of the city centre with the
aim of enhancing the city centre as a place to work, live, visit and do business.
Natural
30 10 15 (4) 32 The Accommodation Provider targeted rate (APTR) funds 50% of ATEEDs activities towards growing the
environment1
visitor economy, including tourism marketing and major events. The APTR and related expenditure was
City Centre1 24 17 21 (4) 60 suspended from 1 April 2020 until March 2021.
Auckland Transport has 14 key expenditure groups that are funded from a mix of RFT, development
Accommodation contributions, and NZTA funding. A detailed breakdown of the total spend toward the 14 key
4 - 4
provider1 expenditure groups is provided in the Auckland Transport performance pack, which will be presented to
the CCO Oversight Committee. Two of the large projects have qualified for shovel ready funding and
Regional Fuel have consequently not received regional fuel tax funding. The council will be consulting on an
75 11 197
Tax amendment to the current Regional Fuel Tax scheme alongside consulting on the Regional Land
Any unspent targeted rates and RFT is ring-fenced into reserves and can only be Transport Plan.
spent for the purpose it was collected.
1. Targeted rate revenues are recognised in full at the start of the financial year.
2. Relates to capital and operating expenditure
8Glossary
Key financial term Description Why is this important?
Group The consolidated Auckland Council Group, which It provides an aggregated big picture view of the revenue and expenditure for
includes Auckland Council, the council-controlled Auckland Council, the CCOs, subsidiaries, associates and joint ventures.
organisations (CCOs), subsidiaries, associates and
joint ventures.
Panuku Managed Activities (PMA) The assets and related revenue and expenditure Some of Auckland Council’s assets, revenue and expenditure are managed by
within Auckland Council that are managed by Panuku. The quarterly performance reports separate these assets, revenues, and
Panuku Development Auckland. expenditures from Auckland Council’s financials to provide a clearer reflection of
Panuku and Auckland Council’s management performance respectively.
Group delivery assumption The 10-year capital expenditure timing assumption While all projects will be delivered over the decade, not all expenditure will be spent
that was made in the 10-year Budget 2018-2028. in the specific financial years as initially planned. This includes consideration on the
Group's overall capacity for capital delivery and constraints within Auckland's
physical works market, particularly in the short term.
Development contributions The fees that council charge for infrastructure on Development contributions help fund capital expenditure that is related to providing
new developments. These fees are charged if the new infrastructure for developments.
development requires council to provide new
infrastructure for: transport, footpaths, roads and
intersections.
Net debt The short and long-term borrowings (including The council borrows from domestic and offshore financial markets via bond issuances
bank overdrafts) less cash on hand. which may result in the council holding large amounts of gross debt and cash at
certain times.
Gross debt to adjusted revenue The Group’s key borrowing metric as measured by The Group has a limit of 270% in its treasury management policy and 265% as an
S&P. The calculation adjusts net debt for cash internal limit. This ensures that the Group is managing its debt prudently.
balances, lease obligations, and exchange rate
movements. It also adjusts operating revenue for
capital revenue, development contributions, and
capital grants/subsidies.
Mark-to-market (MTM) interest rate swap The non-realisable gains/losses as a result of The Group does not speculate on interest rate movements but fixes a portion of its
position market interest rate movements on the Group’s borrowings via interest rate swaps (financial contracts to convert variable interest
interest rate hedges. rates into fixed rates). The MTM interest rate swap position shows the net impact to
the Group’s surplus/deficit if it were to not hold the interest rate swaps to maturity
but broke the contracts at the reporting date.
9Glossary
Key financial term Description Why is this important?
Net direct expenditure The operating expenditure less revenue collected Net direct expenditure generally includes operating revenue and costs that each
from day-to-day operations excluding accounting business unit is responsible for managing. It excludes items that are collected and
and finance factors such as depreciation, interest, allocated centrally, which is not within each business unit’s control and performance.
vested assets and rates income. One-off and non-cash items are also excluded.
Vested assets The value of assets that have been gifted/vested to Vested assets are classified as an accounting revenue and are non-cash transactions
council, normally as a result of a development that result in an increase in council assets. It is typically non-controllable and is driven
agreement. Note: This is a non-cash transaction. by external development agreements. Council is subsequently responsible for
maintaining these assets.
Full-time equivalents (FTE) The human resource metric which converts the Unlike headcount, which is the actual number of full-time, part-time and casual
total hours worked by employees into a employees. FTE shows a standardised measure based on the number of hours
standardised measure. One FTE is 40 hours a week. worked. For example, two part-time employees working 20-hours a week would
equate to one FTE.
Financial year (FY) The period between 1 July to 30 June of the The council’s financial year begins on 1 July of every year and ends on 30 June of the
following year. E.g. FY20 refers to 1 July 2019 to 30 following year. The council’s Annual Plan and Annual Report are aligned to its
June 2020. financial year.
Year-to-date (YTD) The period from the start of the financial year (1 YTD allows the council to report on its performance and progress within the financial
July) and up to the current period. E.g. Q1 YTD year, typically on a three-monthly basis (quarters).
refers to the first three months of the financial
year.
10Auckland Council Group Strategic Focus Areas
Auckland Council Group key strategic focus areas
Key strategic focus areas from the LTP are presented within each organisations’ packs.
The table below provides an overview of each organisations’ respective strategic focus areas.
Group Auckland Council Auckland Transport Panuku Watercare Auckland Unlimited
City Centre programme Water Quality Improvement Customer experience Waterfront development Central interceptor Stadia
programme
36th America’s Cup (AC36) Natural Environment Road safety Transform & unlock Water supply investment Zoo development
programme
City Rail Link Regulatory Public transport Wastewater investment Aotea Centre development
Māori outcomes delivered Waste Active modes Economic development
across the group
Community investment Key projects Destination – Visitor
including One Local attraction
Initiatives (OLIs)
Asset management
12Group strategic focus area – City Centre programme
Key commentary Strategic context
Key the
For Statistics
6 months to 31 December 2020, a total of $135 million was spent on the city centre programme against a budget of $166 Auckland’s city centre is an important
million. ‘economic engine’ for both the region and
New Zealand and is experiencing rapid
Highlights growth. While the ongoing impacts from the
1. Blessings and opening ceremonies were held to formally open the new public spaces in November and December 2020, including global pandemic continue to play out,
the upgrade of Albert Street, between Customs Street and Wyndham Street, Te Komititanga and improvements to Galway Street, Auckland is still gearing up to host a number
between Commerce Street and Gore Street. These projects contribute to a growing public space network in the city centre. of large-scale events, including the 36th
2. The infrastructure works delivered by the Wynyard Edge Alliance to support the 36 th America’s Cup was delivered on-time and America’s Cup. The full calendar of events will
under budget to support the event, which commenced on 17 December 2020. each play a role in supporting Auckland’s
3. Auckland City Centre Advisory Board supported the extension of the city centre targeted rate through to 2031, to be included as economic recovery, and as well as providing
part of the public consultation for the Long-term Plan 2021-2031. This will ensure continued investment in the city centre, economic benefits, will also leave lasting
cultural and legacy benefits for Auckland and
supporting the realisation of the City Centre Masterplan 2020.
New Zealand.
4. Work to support the next phase of City Rail Link construction continues, with Auckland Council, Auckland Transport, City Rail Link
Limited and the Link Alliance planning for the reopening of Wellesley Street West in mid-2021 and the subsequent closure of the
Auckland’s city centre is an important
Victoria Street and Albert Street intersection.
The city centre work programme will deliver
5. The Downtown Programme continues to make good progress and is on track to meet the revised timeline. Key highlights for this
key stormwater, transport and community
quarter include a dawn blessing to formally open the Galway Street enhancement project which was held on 26 November 2020 infrastructure to support these events and
outside The Hotel Britomart which was recently completed. The Ferry Basin redevelopment project also held a dawn blessing of the achieve the City Centre Masterplan’s vision.
first pavilion of Te Ngau o Horotiu on 11 December 2020. This event was particularly important as it unveiled the Kāhui Kaiarataki This positions the city centre as Auckland’s
design elements, being the Te Wairere (capping beam), Kaitiaki figures (columns) and Taniko Maunga (ceiling soffit patterning). This cultural, civic, retail and economic heart.
was done so that berths five and six could be made operational to the public on 17 December 2020.
Issues/Risks
1. Downtown Programme – the customer impacts of delivery across Quay Street, Hobson Street and Lower Albert Street remain a high
risk as people move through a changing site. Health and safety remains a key focus given the work is in a constrained corridor and
over water. A health and safety reset has occurred, culminating in a ‘A Stand in the Gap’ health and safety event on 8 December
2020, with all members of the project, including non-site personnel and Auckland Transport senior personnel being encouraged to
attend.
2. The changing construction methodology for the City Rail Link Aotea Station potentially moves the reinstatement of Victoria Street
and the construction of stage one of Victoria Street Linear Park. This could impact on the current budget for the project.
13Group strategic focus area – City Centre programme Continued
Actual
Portfolio of works YTD /Budget Description Outlook
• Silo Park extension – the new public space and cultural shade structure were completed in December 2020.
• Westhaven Promenade – the construction was completed in November 2020 providing an uninterrupted
boardwalk and cycle way close to the water’s edge along Westhaven Drive.
• Westhaven Marine Village – construction was completed in November 2020. This new facility will
accommodate marine related activities and attract new businesses and visitors to Westhaven Marina.
• Pile Berth Redevelopment (Pile Moorings) – reclamation works continue along the existing breakwater.
Leading transformation from a • New Wynyard Quarter public spaces – the Urunga Plaza and the hotel promenade were opened in
former industrial area to a September 2020.
vibrant new waterfront city • Vos Shed – rebuild and restoration works were completed in November 2020 in accordance with the original
Waterfront neighbourhood. Panuku design.
$20m
development /$21m facilitates outcomes including • Wynyard Quarter Draft Masterplan – the draft masterplan is under production, engagement with key
(delivered by On track new housing, visitor and stakeholders and mana whenua is underway. A final draft will be presented to the Planning Committee in
Panuku) resident satisfaction; enhanced mid-2021.
public amenity and access; place • Harbour Bridge Park – Panuku have brought forward plans to redevelop Harbour Bridge Park to ensure co-
activation and community ordination with Waka Kotahi’s Northern Pathway project. Consultation is underway with the Waitematā
engagement Local Board and mana whenua.
• The final items associated with the America’s Cup Host Venue Agreement were completed end of 2020:
o extension of the CCTV network into new public spaces
o Bascule Bridge toilet upgrades
o the fishing fleet move for the event duration
o legal documentation including lease agreement and licence to occupy for the event.
Auckland Council has a vision to
transform the waterfront into
an attractive, people friendly
• The programme is progressing towards completion of the majority of physical works in early- to mid-2021
environment. Auckland
despite delays in 2020 related to COVID-19 and unforseen ground conditions for the seawall works.
Downtown Transport will be delivering the
programme first part of this vision from
• Quarter one of 2021 will see the completion of the Quay Street East enabling works project, the completion
$71.8m
(delivered by /$96.2m 2018 to 2021. The
of the superstructure works on the Te Wānanga Project (formally the Downtown Public Space) and
On track completion of two sections of the Quay Street enhancement project (those sections being lower Queen
Auckland transformation will support the
Street to lower Commerce Street and lower Albert Street to lower Queen Street paving works). By the end of
Transport) 36th America’s Cup. The project
April 2021 the programme will be largely completed with the exception of some planting and architectural
includes seismic strengthening
features on Te Wānanga (Downtown Public Space).
to improve the resilience of
critical infrastructure on Quay St
water’s edge.
14Group strategic focus area – City Centre programme Continued
Actual
Portfolio of works YTD /Budget Description Outlook
Construction of essential
infrastructure to host the 36th
America’s Cup including
$13.2m • The construction programme was completed in 2020 and all the structures have been handed over.
AC36 shared /$16.7m syndicate base platforms,
• Asset capitalisation is expected to be completed by March 2021.
infrastructure On track Hobson Wharf Extension,
• Ongoing asset management plans with maintenance schedules are underway.
Breakwater structures, infill
structures and floating
infrastructure.
• Te Hā Noa – Victoria Street Linear Park – the detailed business case is underway for the area between
Hobson Street and Kitchener Street. The business case is scheduled for completion in April 2021.
• Albert Street Upgrade (Customs to Wyndham Street) and Te Komititanga (lower Queen Street) – these
projects are complete and, following a blessing and an opening ceremony on 18 December 2020, are now
publicly accessible.
• Karangahape Road enhancements – construction of the project continues on the southern side of
Delivers improved pedestrian
Karangahape Road, between Ponsonby Road and the Karangahape Road overbridge, and on the northern
and public spaces around the
side of Karangahape Road, between the Karangahape Road overbridge and Pitt Street. The project will be
Midtown / $13.7m key transport hubs. The
Karangahape /$12.8m programme is aligned with and
complete in April 2021.
Delayed • Federal Street Stage 2 – the upgrade of Federal Street, between Mayoral Drive and Wellesley Street, is
quarter leverages off development
scheduled to commence in early 2021 once the construction contract has been awarded.
opportunities from the City Rail
• Myers Park – the detailed design phase is expected to be complete by March 2021 with construction to
Link and bus infrastructure.
follow in financial year 2021/2022.
• Waihorotiu Queen Street Valley Pilot – significant public engagement was undertaken in the second half of
2020. As a result, a design has been developed to improve the look and feel of Queen Street and will be
implemented in the next few months. In addition, we will be going out to consultation in the next couple of
months with a plan to limit non-essential traffic on Queen Street. Implementation is expected by June 2021
to coincide with the Victoria Street City Rail Link works.
15Strategic focus area – 36th America’s Cup (AC36)
Key commentary Strategic context
For the 6 months to 31 December 2020 a total of $13.2 million was spent against the 2020/2021 America’s Cup capital budget of $18 The Prada Cup challenger selection series,
million. A total of $137.7 million has been spent against the total America’s Cup revised budget of $152.8 million. and the 36th defence of the America’s
Highlights Cup will focus global attention on
1. The infrastructure project delivered by Wynyard Edge Alliance is 98 per cent complete on cost and 100 per cent on construction. The Auckland and New Zealand over the first
draft value for money report commissioned by the council and the Crown will be considered by the Wynyard Edge Alliance Board in three months of 2021.
January 2021.
The four themes of the America’s Cup 36
2. The event permit was granted to America’s Cup Event Limited (ACE) by Auckland Council in November 2020 after an agency wide effort. programme are place, participation,
ACE as the event organiser and permit holder is responsible for the health and safety at its event. economic wellbeing and storytelling. The
3. A major events operations centre (MEOC) with representatives from council agencies and emergency services is set up on race days to programme vision is ‘Ignite the Passion –
support the city’s day to day running alongside the event. MEOC is working closely with ACE’s on-site operations centre running from Celebrate Our Voyages’. This is
the Cup Village. underpinned by the whakataukī ‘He waka
4. Prada America’s Cup World Series Auckland and Christmas Race took place from 17 to 20 December 2020. Approximately 65,000 people eke noa kia eke panuku, kia eke tangaroa
visited the Cup Village over the four days, and it is estimated that 600 to 1,000 spectator boats were on water each day. - We’re in this waka together, through all
5. The Prada Cup Challenger Series will take place from 15 January to 22 February 2021, and America’s Cup Match 6 to 21 March 2021. our efforts, we will succeed’.
6. The city-wide activations programme, Summernova, attracted approximately 20,600 people across three venues over the four race days
The expected AC36 programme outcomes
in December 2020. Around 20 Summernova events and activations will take place between January and March 2021. comprise a blend of hard and soft benefits
7. 360 Hosts’ City Skipper volunteers were rostered to support the central city, Takapuna, Devonport and the eastern bays during the that will improve the prosperity of
World Series and Christmas Race. The volunteer programme will continue during the Prada Cup and the Match. Auckland and New Zealand and enhance
8. Of the 77 superyacht berths, 73 berths are fully booked over February and March 2021. Around a third are international vessels that the international profile of both.
have met New Zealand exemption and quarantine requirements.
9. The over-arching AC36 evaluation report (post-event) will be made up of several parts, including the final event report, independent
economic assessment of the AC36 events, Wynyard Edge Alliance’s value for money report and leverage and legacy project reports.
Issues/risks
1. COVID-19 contingency plans have been developed to determine how the event can be delivered depending on the restrictions that may
be in place.
2. The revised budget of $20 million means some of the mitigations to offset city disruptions are not able to be implemented as originally
planned. Where adjustments have been made, care has been taken not to compromise public safety or create adverse impacts on the
event.
Key programme of works Status Key deliverable this quarter Outlook
Construction of essential infrastructure to host the 36th The construction programme was completed in 2020 and
AC36 Infrastructure project On track
America’s Cup including syndicate base platforms. all the structures have been handed over.
Enabling third party commercial site On track Negotiations to relocate final Wynyard tenants to alternative Completed.
negotiations and earlyand
AC36 Event (planning works
city integration) sites to allow
National remainingplanning
and city-wide infrastructure works to commence.
and coordination to ensure Event delivery continues with the key agencies and
On track
project AC36 events roll out safely and successfully. stakeholders.
Identifying, capturing and tracking of benefits related to AC36 Key project work is ongoing on the leverage and legacy
AC36 Legacy and Leverage project On track
pre, during and post the event. plans, and the post-event data and evaluation plan.
16Group strategic focus area – City Rail Link (CRL)
Key commentary Strategic context
For the 6 months to 31 December 2020, CRLL incurred capital expenditure of $418 million against a budget of $431 million. This project is The City Rail Link is New Zealand’s largest
funded 50 per cent by Auckland Council and 50 per cent by the Crown. transport infrastructure project ever. The
Highlights 3.45km twin-tunnel underground rail link
1. Contract C1 (Britomart and lower Queen Street) continues to work to programme with continued focus on the internal station will transform the downtown Britomart
management systems and building and architectural works within the Chief Post Office building. Te Komititanga square (lower Queen Transport Centre into a two-way through-
Street) was opened to the public in December 2020. station. This will enable the Auckland rail
2. The Contract C2 (Albert Street to Wyndham Street) project was completed in October 2020. network to at least double rail capacity
3. The C3 Alliance (civil works) design and construction works have continued to progress across all areas, including utility diversions when it is completed in 2024.
works, diaphragm walling, piling and mass excavation. Mined tunnels continue to be constructed at both Karangahape Station and The link will extend the existing rail line
Mount Eden portal. underground through Britomart to Albert
Street, then beneath Karangahape Road
4. The tunnel boring machine “Dame Whina Cooper” arrived and is being assembled. A public open day to see the tunnel boring machine
and rising to join the western line at Eden
was held in December 2020. Tunnelling with the tunnel boring machine is due to start in quarter four.
Terrace. Two new stations with
5. The C5 (track) and C7 (systems) variation work into the C3 Alliance has been completed and the formal contractual paperwork signed.
underground platforms will be built on
6. The Ōtāhuhu Station improvements project was completed in November 2020. Albert Street and at Karangahape Road
Issues/Risks Square. Mount Eden Station will also be
1. COVID-19 has continued to impact the project during the different levels of lockdown. The implications of these impacts continue to be redeveloped to include the rail link and a
assessed and remain ongoing due to the New Zealand immigration and border control situation. new modern rail station.
2. Working with Immigration New Zealand and border control to mobilise key personnel and plant to the project.
Key programme of Status Description Outlook
works 1 – Britomart
Contract Building tunnels through and under Britomart Station and
Station/Lower Queen On Track Queen Street to the Precinct Properties' Commercial Bay
The focus is to open the Chief Post Office building by the end of quarter three with
Street (lost time development so that trains can run in both directions
continued work to streetscape areas around Britomart Station.
due to through Britomart. Redeveloping the Britomart station
COVID) building (the former Chief Post Office) into a more
attractive, modernised transport centre.
Contract 2 – Albert Building tunnels down the middle of Albert Street
On Track
Street (Customs to between Wyndham Street and Customs Street to connect
(lost time
Wyndham Street) Britomart to the new Aotea Station. When complete, this Project complete.
due to
contract will transform Albert Street to create a high-
COVID)
quality public space for people and businesses.
Contract 3 – Stations, On Track Construction of the underground stations at Aotea and
Works will continue at all construction sites at Aotea, Karangahape and Mount Eden
tunnels, western link (lost time Karangahape Road Square, redevelopment of the Mt
stations. The works will include diverting utilities and commencing construction of
connection and rail due to Eden Station, construction of the western rail link
underground structural elements, including piling and diaphragm wall installation.
system COVID) connection and rail systems.
17Group strategic focus area – Māori outcomes
Key commentary Key Statistics Strategic context
The Māori outcomes portfolio consists of two types of initiatives; those delivered through Initiatives delivered through The Kia ora Tāmaki Makaurau (council
dedicated Māori outcomes LTP funding - The Māori Outcomes Fund, and initiatives that Māori outcomes LTP funding group’s Māori outcomes performance
contribute to Māori outcomes using other funding sources, such as those funded through No. of initiatives committed 28 measurement framework) 10 strategic
departmental budgets. priorities are:
No. of initiatives completed 0
1. Marae development
The Māori Outcomes Fund Performance measures for 2. Kaitiakitanga (particularly water)
For the 3 months to 30 December 2020 (YTD), approximately $9.1 million of the dedicated Māori outcomes LTP funding 3. Te Reo Māori (particularly te reo
Māori outcomes LTP funding was spent against a budget of $11.9 million. The FY21 budget
Total no. of measures1 6 names)
is $19.4m (CE target is $18.3m) and delivery for the majority of the programme is weighted
Measures for this period 4. Māori Business, Tourism &
towards Q3 and Q4.
Met N/A Employment
Key highlights for Q2 include the launch of the first bilingual signage at Tahurangi / Crum
Unmet N/A 5. Realising Rangatahi potential
Park and dual naming of 22 further parks in the Whau Local Board area as part of the Te
6. Māori Identity and Culture
Kete Rukuruku programme. In December Toi Tu Toi Ora – Contemporary Māori Art, the Overall financial progress for
7. Whānau and Tamariki Wellbeing
largest exhibition in the 132-year history of Auckland Art Gallery Toi o Tāmaki, opened. Māori outcomes LTP funding 8. Māori Housing & Papakāinga
Maori design was also prominent throughout the AC36 village. YTD expenditure $9.1m 9. Effective Māori participation
Initiatives delivered through other funding sources YTD budget $11.9m 10. Empowered Organisation (internal)
Across the council group, there are other initiatives that also contribute towards Māori
outcomes in addition to the dedicated LTP funding. Key highlights for Q2 include Auckland The framework aligns with the Auckland
Unlimited’s delivery of the Tāmaki Makaurau Taki Hua (Māori Economic Summit 2020) Plan commitments to Māori outcomes,
Named by Te Kawerau ā Maki, Auckland Council, and the Bethells family, transferred and the 2018 LTP.
ownership of 2.68ha of land at Te Henga/Bethells Beach to Te Kawerau a Maki for a marae.
Strategic priority areas YTD Actual/Budget Key deliverables & outlook for the Māori Outcomes Fund
The Marae Infrastructure Programme (MIP) is progressing with building works completed at Te Kia Ora Marae and water and waste to be
completed in Q3. All works were completed at Piritahi Marae pending final consents and handover in Q3. Development agreements are
being processed with two marae with plans underway for further physical and urgent works across several marae. The MIP has been
$2,737k
Marae development /$3,704K delayed in part due to a lack of internal resourcing and mitigations for this are being worked through to return the programme to
Delayed schedule. MIP Preparatory work for construction works at Motairehe and Te Aroha Pa was also undertaken in Q2 by Auckland Transport
as part of their marae programme, that will be completed by 30 June. The design and workshops for the development of the Te Motu a
Hiaroa master plan has been completed. The master plan enables council to partner with mana whenua in developing a long-term plan
for Te Motu a Hiaroa, supporting the trusts aspirations for a marae on the motu.
Te Whakaoratanga Te Puhinui, Panuku’s Puhinui Regeneration Programme presented it’s draft strategy at a Puhinui Community
Wānanga. The draft strategy includes mana whenua input and has received positive feedback and support by Te Ākitai Waiohua. A hui
$113k
Kaitiakitanga (particularly /$255k with mana whenua has been scheduled in January with the final strategy due in March. The co-design process for the Western Kiosk
water) Delayed requires engagement with the Tāmaki Makaurau Mana Whenua Forum. An alternative plan to advance this project is being discussed with
the Forum in February. If approved this will enable a significant step towards the outcome, and trigger expenditure of the majority of the
allocated budget, by 30 June.
18Group strategic focus area – Māori outcomes Continued
Strategic priority areas YTD Actual/Budget Key deliverables & outlook for the Māori Outcomes Fund
Auckland Unlimited conducted an audit of all RFA/ATEED sites in December. The results will be available by early February. A programme
to deliver bi-lingual signage and announcements by 30 June 2021 will be reviewed and prioritised by the Maori Outcomes Steering Group
$546k
Te Reo Māori (particularly te /$652k (MOSG). MOSG is reviewing the delivery of FY21 Te Reo Māori projects on February 17th and will mitigate delays and push to achieve
reo names) Delayed outcomes by 30 June.Te Kete Rukuruku has delivered 23 names to Whau local board including the launch of the first bilingual signage
park – Tahurangi / Crum Park. Dual names at the 22 other parks in the local board area are now visible on the council website and signs
will be updated as per their renewal’s schedules. Four local boards will begin plans for Māori naming of parks in Q3
In collaboration with mana whenua, NZ House (Te Pou) officially opened with the AC36 Race Village. Tu Mai AC36 volunteer training was
completed with 700+ volunteers, intent on embedding Māori values in the visitor experience. Māori Economic Summit was delivered,
$1,259k
Māori Business, Tourism & /$1,491k with approx. 170 attendees. Survey results from the Māori Economic Summit to be shared in Q3. Mana whenua and Māori businesses
Employment On track supported through key activity undertaken. Tāmaki Herenga Waka Festival planning progressed, with 85% programming complete in Q2.
Amotai experienced continued growth, with 143 Tāmaki based Māori businesses registered in 2020 and 21 buyers onboarded since
October.
Ngā Mātārae are working with the Tāmaki Makaurau Mana Whenua Forum to explore the development of a Rangatahi sub-committee.
$0k
Realising Rangatahi potential
/$0k The Tāmaki Makaurau Mana Whenua Forum will be discussing the creation of a Rangatahi Committee on 25 February. Ngā Mātārae
began work on an assessment of internal and external activity underway to support Rangatahi outcomes. This assessment will be used to
develop an action plan and potential initatives.
The Māori Cultural Heritage Programme’s ‘Sites of Significance’ initiative continues to progress with ongoing refinement of the Māori
$928k Heritage Alert Layer and online tools. The Ngāti Ōtara Multi-sport facility is on track, with the cultural narrative design complete. Q3 will
Māori Identity and Culture /$1,158k see the installation of the artworks in conjunction with the wider building programme. Ngā Punawai, mana whenua designed water
On track fountains to be placed downtown, are preparing for completion and installation in February with shop drawings agreed and completed in
Q2.
The Manaaki Fund, supporting Māori-led COVID-19 resilience and recovery initiatives, was set up during the first lockdown using FY20
$1,489k
Whānau and Tamariki /$1,728k underspend from the Māori Outcomes Fund. The Manaaki Fund has to date supported 34 applications from Māori council partners with
Wellbeing On track outcomes now being realised e.g. the employment of three FTEs for 12 months by Te Uri o Hau Settlement Trust to work for its native
nursery in Te Arai, including formal horticultural training.”
$170k
Māori Housing & Papakāinga /$170k Te Mahurehure Marae received a Māori Housing and Papakāinga grant via the Cultural Initiatives Fund. Work has continued in Q2 and
On track updates will be available in Q3.
Cultural Values Assessment (CVA) Review has completed the Practice and Guidance Note, ready for mana whenua review, Māori GIS
Layers 80% complete and Te Mātāpuna pilot 90% complete. The CVA Project has been significantly delayed due to resourcing constraints
brought about by the emergency budget, as well as the impact of lockdowns that have reduced the ability to engage Mana Whenua. The
$1,628k
Effective Māori participation /$2,363k impact is likely to be a 50 percent underspend in FY21 ($600k of the $1,.2m budget) with activity will now be carried over into FY22.Ngā
Delayed Mātārae are developing an engagement approach that will enable Auckland Council to engage with all 19 Iwi Authorities and key
Matawaaka Authorities at Chair / CEO level. This work is vital to ensure that Māori are able to provide feedback on the 10-year budget
consultation during Q3. The engagement work also enables Ngā Mātārae to connect capacity grants with a formal relationship agreement
and an operational master services agreement to cover the Council family.
19Strategic focus area – Climate action projects
Key commentary Strategic context
For the 6 months to 31 December, Auckland Council invested in a range of projects with climate outcomes, including climate action Tāmaki Makaurau (Auckland) is in a
projects that were funded through the Emergency Budget 2020/2021. The spend for the first year will be slightly lower than forecast due climate emergency. We have less than a
to changes in project sequencing to improve efficiency. decade to make major changes to avoid
Highlights: the worst impacts of climate change.
1. Te Tāruke-ā-Tāwhiri / Auckland's Climate Plan was published online and launched through a successful Auckland Conversation's event
in December 2020. Staff will continue work on implementation and monitoring of the plan, including establishing the cross-sectoral Our region is already experiencing the
leadership group and partnerships with others that are required to reach our regional climate goals. impacts of a changing climate. Over the
2. In spite of the restrictions due to COVID-19, the Council group planted over 701,000 trees during the 2020 planting season. last decade, Auckland felt the impacts of
3. Watercare continued investment into a diversified water supply that is more resilient to drought, with the Pukekohe bore coming back extreme weather events, and is still
into service during the update period and providing 5 mega litres per day into the network. Significant progress also occurred on the feeling the impacts of the 2020 drought.
Papakura Water Treatment plant, which will open in February 2021, and upgrades to the Waikato Water Treatment plant. These are expected to increase in
4. Online engagement with our Live Lightly channels, which encourage Aucklanders to reduce their carbon footprint, increased by 11,500 frequency and severity.
people from October to December 2020, compared to the previous quarter.
5. Panuku and legacy CCO, Regional Facilities Auckland, achieved nine per cent and six percent carbon emissions reductions against the Te Tāruke-ā-Tāwhiri: Auckland’s Climate
previous year, with both achieving Carbonreduce status through Toitū. Plan outlines the priority areas and
Issues/Risks: actions required to transition our region
1. Full implementation of Te Tāruke-ā-Tāwhiri will require significant change across the Council group to implement the actions in the towards a net-zero, climate resilient
climate plan that we are responsible for. The Council will also need to work with a broad range of groups external to council to future.
encourage action across all sectors of Auckland society. This will be challenging at current levels of resourcing. The climate investment
package included in the ten-year budget will partially reduce this risk, by increasing the staff resourcing and budgets available.
Key programme of works Status Description Outlook
Auckland Council’s plan to reduce its own corporate The three pilot sites targeted for gas boiler replacement have completed
Reducing Auckland Council
Delayed emissions, to meet the region’s climate commitments and decarbonisation plans and supplier selection is underway. 87 fossil fuelled vehicles
organisational emissions
show Council leadership on its own assets. have been removed from the fleet with a further 44 identified for removal.
An action plan for the Auckland region to reduce emissions Development of governance and partnerships to support delivery of the plan is
Te Tāruke-ā-Tāwhiri:
On track in line with a 1.5°C warming pathway, while ensuring the progressing, with a Climate Political Steering Group established, and a cross-
Auckland’s Climate Plan
region is prepared for the impacts of climate change. sectoral Leadership Group and rangatahi roopu in development.
Coastal compartment management plans will apply a long- Mana whenua engagement on the programme is ongoing. Public engagement on
Coastal Management
On track term, sustainable approach to management of our coast the pilot Whangaparaoa Coastal Management Plan and publication of updated
Framework
over the next 100 years. coastal erosion rates for the region are both scheduled in February 2021.
Programme supports Aucklanders to change the way they Development underway of a "Living Lightly' workshop series to inspire lower
Community engagement
On track travel, their energy use, how they eat, what they buy and impact lifestyles and create community champions. Increased demand for
and behaviour change
waste. Enabling Aucklanders to reduce carbon footprint. community engagement expected during the ten-year budget consultation.
Foundational climate Key climate initiatives funded by the Emergency budget, Development of climate assessment tools is underway. Request for Proposals have
initiatives On track which include climate assessment tools, an audit of the been issued for the Auckland Unitary Plan climate audit. The Natural Hazard Risk
Unitary Plan and natural hazard risk assessment. Management Action Plan is being finalised ready for committee endorsement.
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