Transcript for:
Key Highlights from Recent Meeting

meeting open. Welcome everybody. So we'll start with the apologies and I guess we have Hazel, everyone else seems to be here I think, so could I have a mover please? Andrew just before you do, I have to leave the meeting at 1.30 to attend a future-proof meeting, so sorry about that, so my apologies from then. Good as gold, thanks Jim. So should we include that in the in the motion as well. If someone would like to move, please. Happy to move, Mike. Thanks, Lou. Thanks, Susan. All in favour? Aye. Contrary, no. It's carried. Disclosure of members' interests. Do we have any today? No. I'll move on to item four, late items. Any late items? No late items. So... Confirmation of order of meeting. No changes, Ken? No, I don't see any need for change. We do have a number of guests joining us at the meeting today, but they're well aware of the time. So, yes, I'm hoping they'll be here at the required time. Happy to move, Andrew. Graeme? Thanks, Graeme. A seconder? Second, Susan. Thanks, Susan, I think that was. Cheers. All in favour, please say aye. I promptly no carried. Okay, item six, which is confirmation of the minutes from 18 February. Have we all, I'll take those as being read. Anything raised from those minutes? Andrew Graham speaking. My diary is showing me that I was at that meeting, but my name's not recorded there. Right. I was going to bring that up too, so yeah, I think there's some mistake. Thanks, Bruce. Okay. So I'm sure we can have that remedied, Sam. Yes, we'll make the changes. Thank you. Okay. So with that change, could I have a mover for the minutes to be received as a true and correct record, please? Thank you, Marcus. Seconder? I'll second it. Thanks, Bruce. All in favour, please say aye. Aye. Contrary, no. Carried. Thank you. Item seven, Jason. Has Jason joined us? He has. I see Sam nodding. Hi, Jason. How are you doing? Good, thank you. Great. And the floor is yours. Okay. Sam, I don't think we had issues with trying to get the presentation. Is that right? Oh, no. Sam is sharing. Brilliant. Perfect. Thanks, Sam. Good morning, or good afternoon, sorry, everyone. Thanks for allowing me time just to give you a quick update on where we are as a sector for tourism and particularly for Waipā District. So a report has obviously been provided to you and prepared, which was our last six months performance at the end of 31st December 2019. As you would have seen, Waipā District Council was going through significant growth, probably one of the fastest growing Regions for us with regards to tourism impact you were experiencing double-digit growth pretty much from through visitor expenditure and also commercial accommodation But we are here today to discuss just that obviously a bit of a change in the dynamic given COVID and the impact for tourism particularly as a sector to the next slide Sam perfect So just first a couple of slides, obviously, just covering off some data. We're now receiving international and national data on a weekly basis from the government and also from the airlines. So no surprise, obviously, since COVID lockdown and international travel restrictions were put in place, international visitor arrivals into New Zealand have been dropping at a very sharp rate. We still do have airline connectivity, which I will go through. because we are still maintaining what we call a baseline service for connections across the world, mainly for repatriation flights but also for cargo and service across the country as well. So weekly card transactions, again no surprise obviously overall our visitor expenditure is down significantly but when you do look on to the left top five obviously food, liquor and pharmacies. We are still seeing some cumulative and some obviously weekly growth in expenditure compared to all our other visitor type expenditure and transactions as well. Thanks, Sam. So the impact for us as a sector, again, look, I mean, all of this has been reported. But just to cover off in summary, we were already impacted through the loss of China group travel, which started in the second to last week of January. So with that, all of our international facing products, our hotels. Our motels, our Airbnbs were immediately impacted by that because many of China group travel actually did stay in the Waikato. They were our fourth largest international visitor market behind Australia, North America and UK and Europe. It did shut us down pretty much once international travel restrictions hit us. And the visitor economy covers more than just the tourism operators. Again, we've mentioned accommodation. It also impacts retail, hospitality, transport providers. Our occupants. operators, of course, but also event organisers in major venues. And of course, Mystery Creek, Avanti Drome and Lake Harapero are key event platforms for Waipā District. We have had significant job losses and business closures across tourism. I have down underneath that last bullet point, look, the immediate business impact that we have been coaching our businesses through and helping them get through. Some have gone into what we call temporary or seasonal closure. So again, we have a lot of seasonality in tourism. Many who would close for winter have closed, but those that potentially have never closed before, we've suggested they go into hibernation. And so that's what we're calling temporary seasonal closures. We've had a number of businesses, you know, Hobbiton was obviously one of the most public ones reported in the media. But again, all our motels, hotels, retail, hospitality. have pretty much reduced service and staff. There's only essential services operating as we know, but again with alert level three we do see some opening up potentially in the hospitality sector for Waiapā anyway. And then the last obviously implication for us is we have had a number of businesses who are permanently closing. Not only are these a loss definitely to the tourism industry to try and bring people back when we don't have products, but also particularly for those vulnerable communities with some of these operators. have been going for many years. Thanks Sam. Can I ask a question about that? Sure. Have you got examples of what businesses are struggling and like what who isn't closing, like who is closing and how it is impacting around the wider district? Yeah so particularly for Wai Pā it has mainly been your hospitality, potentially some of your retail and also accommodation. So we've had many Nearly all of your accommodation has pretty much gone into hibernation or closure. They're calling it temporary closure, but some of them have been able to access the wage subsidy, which is great. But again, what we're going to see is the impacts are longer than the 12-week wage subsidy right now. So it's post-12 weeks that we're quite concerned about. We have been lobbying nationally, the government, and I think that's all sectors, not just tourism, around potentially extending the wage subsidy for 20 weeks. because it will take a lot to restart the tourism sector again. People's propensity to travel is quite low. We will travel locally and potentially we will travel intra-regionally, so staying within the region. But to try and stand up the domestic travel market is going to be a long haul. We're looking at a six to 12 months recovery plan for that. Great. So lastly, look, I mean, nothing else. Priority of this was just something we do for industries, people know where we all fit. So from the tourism perspective, when we respond, obviously we're providing industry support right now at a national level, regional level and also at a local level. But then we have Te Waka, our Chambers of Commerce, our business associations and all local government have been great in actually supporting us with what we call the business and community support side for tourism businesses. And then lastly, we're obviously partnered with the Civil Defence Network around providing welfare support. Not just for tourism operators, again it's also been utilising tourism operators. Many of our caterers have now been repurposed into providing food services pretty much or supporting the food banks and actually cooking meals. We also have a number of our transport operators and tourism being basically requisitioned now to provide transport options and actually getting people around such as essential workers and many of the staff potentially we've been redeploying into the civil defence network through providing security. and welfare and call centre as well. So not only are we also working with civil defence, we're also putting staff into there as well. Even though we're obviously dealing with COVID, this is just for you to be aware, there are obviously continuing issues that were going on with with COVID and with the tourism industry. First up was domestic airline connectivity. So look, Air New Zealand has been pretty open that they will not be restarting until alert level one. So we meet with Air New Zealand weekly just to see how we will try and stand the industry back up again. They're going to focus very much on what we call an incremental restart. So that's doing a width and breadth strategy across the country. So potentially maybe only two or three flights into Hamilton per day. But again, it's to try and get that reach across the whole network first. before they can actually stand up and have a full schedule like we have seen at a Hamilton airport, particularly over the last three to four years. Airline connectivity internationally is still continuing, so those are just some a summary of some of the ones that are still flying. So look Air New Zealand are still connecting into North America and Hong Kong, into Australia. Fiji Airlines are still flying into Fiji on a daily service, and Qatar has probably used the most to try and repatriate northern hemisphere. travelers back to their homes through Qatar and then also Korean Airlines are still operating a daily service as well. For future again Air New Zealand is saying they will be focusing very much on the domestic market first they will traditionally be a domestic airline for the first six to twelve months and domestic also includes Australia and the Pacific. American Airlines so far have been the only one we've met with who plan to return to New Zealand from October 2020 so they have put a stake in the ground to say when they will start flying into New Zealand again. Now, the reason why I just raised international airline connectivity is because it will take this country at least two to five years before we ever go back to the type of connectivity we've had as a country previously before lockdown. So again, it's going to be a very long burn for us as a country to regain the international visitor arrivals we've seen in the past. Air traffic control services up for review. The reason why I just put that in there is just to let everyone know there was no Waikato airports or airfields, but particularly Hamilton Airport isn't impacted. But for us in the central North Island, Rotorua is one that is going to be impacted around potentially the closure of air traffic control tower services. That will mean potentially that we will be re-diverting the domestic network through Tauranga and Hamilton. So unfortunately for Rotorua's loss, it could be our gain. And then lastly, we've still got the investigation underway around Whakaari White Island. So the WorkSafe investigation should be coming to a close shortly. There will be impacts on the tourism and suppliers around adventure tourism for this country. And also we will be up weighting Qualmark, which is our accreditation program, particularly around health and safety for the country. Thanks, Sam. Just some events. Dates are as you're aware now, Field Days is going online. So from the 30th of June for two weeks, Field Days will be providing a virtual exhibition space, very similar to other international events who offer this type of experience. Again, it is a trial, but we do hope to bring Field Days back in 2021. Obviously, not only is it the largest major event for Wai Pā, but it's definitely for the Waikato with regards to economic impact. We worked due to host the New Zealand Tourism Awards in November. That has been postponed until next year, so we will reset the date for that. Explore and Trends, these are what we call our two main international trade shows. They've obviously been delayed. Trends 2021, which is the main time when we actually sell the Waikato to the world, we will not be having until maybe June next year, so we're just awaiting on a date for that. Two major convention centres were due to open this year, Te Pai and... Christchurch which potentially is the one that will be taking a lot of business away for us for business events that has now been delayed for another year and of course that in New Zealand International Convention Centre we will not know the reopening date of that until they work through the final insurance claims. So again by having these two convention centres not operating means that places like Claude Lins and the Mystery Creek Event Centre are going to be filling the gap for national and international conferences for the short term. which is actually a good opportunity for us again as a region post-COVID. But we also do still have events planned. So the major events, obviously, the National Waka Ama is at this stage still planned to take effect in Lake Karapiro. And we also have our first major event for the region, the ICC Women's Cricket World Cup scheduled for the 8th of February. Again, this one will particularly be... decided by around October, November, whether international travel restrictions have lifted to enable some of the players to come. Otherwise, they will have to go into, if it does continue, into isolation until the Cricket World Cup can be held. So what we have seen, particularly for other parts of the sector, is that events have been more postponed for Waipa and for the wider Waikato region rather than completely cancelled and not returning. There is some positivity for us as we do see this is the lead sector to into recovery economically and socially for the district. Next slide Sam. So response, we have a what we call three tiered response plan. Obviously this is no similar to everyone else right now. We have a mitigate process which we're currently in now. We then have a restart phase and then we have a reimagine phase. So initially in the response phase, no different to everyone else, lots of briefings, lots of support. We're obviously having face-to-face briefings across all the sector long before the shutdown. And now we've moved to the virtual space. We're still doing advocacy at a national level to try and make sure we can access more business support for the region. Some of the gap right now out of government support and out of the support that Tawaka can provide is it doesn't cover any employees for 100 employees. Employees Plus. So that's quite the pointy end of town, we call it, for most of our region, for our big employers. Again, wage subsidy, okay, but outside of that, there's actually no large industry support. So we've been pushing that through government to try and unlock some of that if this lockdown continues. We've been doing one-on-one operator check-ins. We have 240 listed operators with us. So again, these are daily to weekly check-ins by all our teams to make sure everyone's been able to access business advice and some of the wage support. We've been doing webinars and we've now moved in the last two weeks into workforce redeployment. So again we've been taking some organisations or employers that have maybe at least five to ten staff members displaced through to Hobbiton who had one of the largest at around 270 and actually redeploying them and offering them redeployment options into the kiwifruit industry. We placed 110 staff into kiwifruit with transport from Hobbiton. as well as the avocado industry which will be the next seasonal workforce will be standing up until the end of the year. We'll put staff into supermarkets, civil defence, security and also they've been providing some services from home but again what we are going to see over the next two weeks and we're starting to measure that is the full impacts of people that we cannot redeploy that potentially will be out of work. So there's currently a survey underway and we'll be updating all councils. and the government around the overall impact for tourism in Waikato. Thanks, Sam. Under the restart phase, so again, we want to congratulate local government because obviously getting some of those shovel-ready projects through with the Crown Infrastructure Partners for their consideration is a great win for the region, but potentially for the sector. Pretty much every district has put up around one to two tourism projects as part of shovel-ready. So again... We do need to focus on the future and how we will restart the region. Research, we were already in market and about to finish up our domestic perceptions and major event research. This is now becoming quite timely for us and will help us inform around how we will try and bring back the domestic travellers into the region based on some of the research we have undertaken. We're also working on a major and business events restart campaign, so that planning has been underway for a couple of weeks. so that when we're ready to go, we can push go on that. We do see events and business events and corporate travel as being the kickstarter we need for economic and social recovery across the region. New developments, again, you've all got new developments going on, potentially in your regions. Hidden Lake, obviously one of your newest hotels in Cambridge, only opened on Christmas Eve. So Glenda and the team we've been keeping in touch with quite a lot because they haven't been in operation very long. Their impacts are quite severe. So... Again, making sure that we still have some future developments that will continue across the region to take us through the next stage. Data and insights I've touched on have now gone to weekly. So again, we're sharing that information in Te Waka. And now we're contributing to the Te Waka economic outlook as well, which is great. And then lastly, the Mighty Local campaign was launched two weeks ago. And it's definitely around the restart phase. Thanks, Sam. So Mighty Local, again, is a partnership with ourselves, Tiwaka, all the Chambers of Commerce, so Te Ao Mutu and obviously Cambridge Chamber of Commerce, plus the Waikato Chamber of Commerce, all our councils, the business associations that also exist in some communities and all our regional eye sites. We're in phase one. So for the last two weeks, we've been promoting businesses with contactless delivery, promoting, you know, people that are still doing entertainment online or virtually from within Waikato. recipes from our beloved chefs, well-being and fitness. And this week we launched Business Stories. So again, we're starting to use this platform to promote some of the businesses and how they're pivoting into obviously response or looking at different opportunities for their business. So the idea is to try and give people hope during phase one. During phase two, which is obviously from alert level three, we will increase our takeaway and F&B listings. And also essential services are starting to grow as well. In phase two, we will move more to a local phase. At the moment, it's a regional platform, but the idea is potentially people will be able to group the types of information and services available at a local community level and at a district level as well. And then phase three, which is when hopefully all travel restrictions are lifted, we will then activate basically the buy local, eat local, event local, shop. visit and explore within the region and obviously that's in partnership with many communities and business associations that already have local programs such as Cambridge with their Totally Locally Cambridge campaign so we're working with Kelly and the team around how we'll try and push their program rather than this one once we get to phase three. Thanks Sam. And when it comes to how we will actually respond long term. So at the moment we're in phase one, so we're calling it the hyper local phase. So one to three months we'll be pushing basically localism, everything to do with obviously how you purchase and interact with your local community. At phase two, which then we'll move into a three to six month bracket, we're estimating we can then start to do intra-regional travel. So we'll be targeting the drive market within the Waikato region. We'll be hopefully starting to stand up community events again that can happen at a local level. and regional business meetings might be able to begin again with social distancing. At level three, which is what we're planning our scenarios for six to 12 months, we can then stand up the domestic market. That is when potentially we will mainly focus on drive. So as you've heard me say before, 2.5, potentially 3 million people live within three hours radius of the Waikato region, including the region itself. So we'll definitely be focusing on the drive market. National events will be returning as well as national meetings and then eventually corporate travel, which again, business are quite a good lead for us with regards to stand up the sector again. And then lastly, we're planning on one to two years before we actually start to see any sort of international impact again. Short haul markets into Australia and the Pacific will open first, and then we will eventually move back into major events, international conferences and starting to bring back the corporate. and leisure travel market into Waikato. So that's the time frame we are currently doing our scenario planning for but as we all know it may change every week based on the levels we have. And then lastly re-imagine. So you would have seen that last week or actually two weeks ago as well the government announced that there was a call to reshape and re-imagine the tourism industry. So we have been pushing for the last two to three months with Tourism New Zealand and the Minister for Tourism around what we're calling a reimagining of tourism. Now is our chance that this is more than a shock, it's actually a bit of a circuit breaker for the sector and for all business sectors for us all to look and see how could we do our businesses differently. We all knew that tourism was growing at quite an exponential rate and there were some areas that were really feeling the pressure such as Queenstown and central Otago. and Cathedral Cove, some of our sites, Mount Tongariro. So for us now, it's great to see the government are taking this seriously. So we're now working with Tourism New Zealand to lead a new plan, domestically and internationally, but also look at all these types of questions. You know, where are our previous visitor arrivals and expenditure growth right for the region? What will success look like for us for the future for a visitor market? How do we move our sector from boom and bust, again no different to the food and fibre sector or any other business cycle? And lastly, how do we move to more sustainable community-led tourism? And for us in the Waikato, what we call creating net benefit, rather than just benefiting those that potentially were making money out of tourism, we want to see communities thrive and that they have the decision around what sort of tourism they want. So again, we will be moving our 2016 Tourism Opportunities Plan, which many of you were involved in. We will now be developing a Destination Management Plan and that will be happening nationally as well. to try and what we call transform tourism for the better. So there is no such word as recovery now, we will not be receiving the same sorts of level of tourism as we did previously, but neither we might not have the same sort of services and opportunities available in tourism as well post COVID. So again, it is a good opportunity for us to look at transforming the sector. Look, and lastly, just obviously a call, I call it to all my local government partners. I really appreciate everyone helping to promote your rates relief remissions and installment policies, not just for the tourism sector, but for all business. It's great to see you're all continuing with your resource consent process, maybe in a more delayed way, but again, the liquor and food licensing is going to be more important for us, particularly when we try and stand up after Alert Level 3. We still have the Regional Major Events Strategy activation, so again, we are still awaiting a decision from Well Energy Trust about potentially helping to establish a Regional Major Events Fund, which will actually assist all the districts to be able to bid for major events again. and also to attract and bid new major events into our shoulder season across the region. And then lastly, again, just to thank you all for your continual funding to support the tourism industry. And that would obviously be more important through restart and the reimagine phase. And again, the point I made earlier, we will not be recovering to pre-COVID levels for at least two to five years as a sector and as a region. That's pretty much it from me. So happy to take any questions. Thanks, Jason. I've got to say, that's a fantastic response to what must have been a massive shock to the industry. Yeah, and of course, in Waipā, and probably a lot of Waikato as well, domestic tourism is actually a lot bigger than international. So we really want to see... And as you have in your plan, that being worked on as soon as it becomes a possibility. But yeah, does anyone have questions? Just put your hands up. I can see you all clear. Okay. Yeah, thanks a lot, Jason. And yeah, fantastic effort, I think, being put in by all your team in this situation. A couple of questions. Well, the first one was that I noticed that in the regional major event strategy, there's a new funding partner. mentioned, is that the Well Energy relationship or is it? All right. Correct, yes it is Well Energy. Yeah, no that's great. And the other thing is for your reimagining, you know, the future of tourism, I saw that you had your stakeholders listed. I didn't see the Department of Conservation there, not that they are a tourism operator, but most of our you know popular destinations, you know I think a Cathedral Cove, you know. they're actually managed by the department and I just wonder if it'd be worthwhile trying to get them sort of around the table so that because I hear you know they worry about the pressure points that we were experiencing and that you know just having their input you know might be beneficial. Yes no look absolutely so you're sorry about that Claire the Department of Conservation are part of that so it's actually a joint Tourism New Zealand and DOC. review of tourism and it's only because they both actually contributed to the national tourism Aotearoa strategy so they are definitely part of it we don't obviously have a lot of any national parks but we do still have a lot of crown estate and some of the crown estate in our region are obviously some of our waterfalls and lake areas so again and along our rivers we just they will be engaging in that as well because we did obviously have some opportunities with DOC originally before COVID to look at developing short walks for the region under the ground walks mental so that's some projects that we now have brought forward again to say can we reconsider moving some of this for the domestic market oh that sounds fantastic yeah well done we have any other questions liz yeah i guess just a huge thank you jason to the support you have operators um you know i've been uh affected a little myself and the and the calls that i get from your team are very encouraging that's very that's very certain Just one of the things I just wanted to check in with you on, and that's we do have a presentation a little bit later for Maungatautari, and I see you've also given them some support, and that's really great, who are reliant on a lot of the international visitors. And I guess it's lucky for us in some ways that there's not that many Wai Pā operators that are reliant on internationals. Maungatautari is probably one of them. Perhaps our eyesight to a certain degree in servicing international guests. But other than that, do you think that there are any other... aspects of YPAR that are going to be greatly affected with internationals because that's really where the biggest you know issues are going to be it's mainly going to be the sports the sports code so I think if we can try and get some of the international sporting events back up and running as soon as possible depending on travel restrictions they would be the main impact for YPAR but you are correct look pretty much most of our events which are great and our operators pretty much talk to the domestic market and I still feel that again look the Waikato Expressway and some of the other work that potentially has been put forward for Shabariri, even extending the expressway down to Pieriti. That's just all going to help the ease of domestic travel. And we definitely see the push from Self Drive, obviously the Motorhome and Caravan Association. They are going to be another first leader and mover back into the region as well, which is fantastic. So we're working with them and AA Traveller. around trying to get more people back into YPAR. So I think, again, your geographic location, your natural environment, and also your event platforms hold you in a stronger position around obviously recovering compared to other parts of our region. Great. Okay. Thanks very much for that. You've done an awful lot of work and you've got a lot more in front of you, I can see. But that's great. And if we've got no more queries... We have a recommendation. Do we have a mover, please? Thanks, Marcus. Thanks, Claire. All in favour, please say aye. Aye. Contrary, no. Carried. Thanks very much, Jason. All the best. Thanks, Sam. We are relying on you. Thank you. And thanks, Sam. Good work. Yes. I see we have Mark Morgan with us yet. And also... Kelvin and Andrew are there. We'll get to you guys before long. But Mark from CE Hamilton Airport. Yeah, the floor is yours. And just like Jason, you've had a massive change to your business. So, yeah, let's hear how you're going on. Thanks, Andrew. And thanks for the opportunity. Welcome to all of the. elected members. Hopefully we've got a presentation coming up and that should be before you now. Look, today I've also got Scott Kendall, my finance manager. Hi everyone. So Scott will deal with a couple of the finance slides and as most of what we have to talk to you about is in the realms of finance, I'm useful to have him here. Perhaps not quite the presentation I had intended to present a month ago. But as we know, a lot has changed and a massive amount has changed for Rau in the last three or four weeks. So the presentation is primarily, and if we can move to the next slide, is primarily around the COVID-19 response for Rau. But I thought, and there's about eight or nine slides, key slides to take you through. And I think what you'll see is how we've dealt with the crisis, what the implications have been for the group now and for the next 15 months, and a summary that sheds some positive light at the end of the tunnel. Thanks, Sam, if we move on. So I guess the first point I think is useful to, you've obviously received... our six-month interim results. Some say you're only as good as your last results, but sadly that's not quite the case today. But look, we were travelling extremely well, very good first six months, and in fact on target for a record financial performance under any measure of our SOI for this financial year. But of course, and that led to our draft SOI that you've also received, and that of course is now... pretty much irrelevant and I see that you ironically have an appendix letter to my Chair Barry Harris about OSOI and as you can imagine we are working very quickly towards a revised SOI for the next three years, particularly the financials but also there'll be some narrative change and some priority changing as well. We have as I say completed a very detailed 15-month forecast through to 30 June next year. That will form, of course, now part of the year one of the SOI. So, look, we have a presentation. The Rail Board and myself have a presentation to all shareholding councils in May, and we, by that stage, will have finalised the new drafts. So... Moving on to the next slide. So I think now just looking at the impact, and look, very difficult to, well, it's very easy to explain in simple terms. It's had a massive impact on the business. But if I divide it into these four areas that are before you, of course, the first is the aeronautical business. In New Zealand, complete, as you know, suspension of flights. So for us, that was an immediate loss of income, really from April, but from the last week of March. and along with our general aviation, L3 Harris, the flight school, basically, you know, 97%, 98% loss of our aeronautical income overnight. Terminal closed, and we're really operating as an emergency medical service only at the airport. Had the same impact on our property, but in fact, our property is our lifeline that I will come to. But again, really overnight. impact on our tenancies. We're quite a large landlord, as you know, but to date, and Scott will talk a wee bit about this, but to date we've had good support from our tenants, but we're early days, as we know, into the next sort of three to six months as businesses work through how they're going to operate and survive during this process. We've obviously suspended the terminal upgrade work, and I'll talk to that a bit further on. which of course was a major piece of work, approximately $15 million of proposed work. The hotel has been, sorry, if we can just go back to the previous slide, Sam. The hotel impacted significantly as well. Fortunately, during April, it was taken over by Ministry of Health as a isolation facility. It wasn't required. It was a backup to the Auckland. hotels. Nonetheless we have received and we are receiving payment for the use of the hotel by the government but that ends really this week and from then on difficult times ahead and we'll talk about that. And obviously our people, all my team are working remotely, that's working very very well. My sort of 11 or 12 on our immediate COVID team response but of course the cafe and store staff are at home, unable to work, and part of the government subsidy. Our rescue fire team does remain on site at this point. So that's really been the impact. What have we really tried to do about it? If we could move to the next slide. First of all, we very quickly leading into... Probably two weeks before we moved into level two and level three, or before we even knew what that meant, we had worked very closely with the board around a pandemic plan, how we would operate the business, and more importantly, started to look at some scenario and modelling at that point. As Jason would have mentioned earlier on, as borders such as China were closing to tourism, we also saw the writing on the ward. on the wall for our own business. So that plan was developed and approved by the board before we even went into lockdown. We've completed significant cost reductions in the business. That's right across the business. So that's some major cost reductions in our expense lines, reductions pretty much across our business in terms of payroll. anything up to a 20% reduction and the board have also taken a reduction in their director fees. We applied for and received the government wage subsidy across the group and with the hotel we worked through and are still working through with Jetpack but they've gone through a full restructuring exercise. A number of people have been made redundant, a number have been retained under the government subsidy. but we have a meeting later this week with Jet Park to look at stage two. The airport association that we're part of is doing a major piece of work with central government to try and see what support, if any, there are for airport companies that have been significantly hit. As you know, we are long-term infrastructure owners and that requires significant cash and capital. to maintain the assets. So there's a piece of work going on in that space. We've already covered the people, we can move to the next slide. The scenario modelling that I talk about there, I think the point that I'll make here and come back to at the end is that most... airport companies, particularly regional airport companies, are significantly hit and hit now. We are fortunate that we made the decision five or six years ago that the board, then under the leadership of John Spencer and then implemented by myself and my team, we have as you know diversified the airport company and that has I guess bought us time. So we have completed a very conservative model for argument's sake that it assumes no Air New Zealand activity of any meaningful sense before October this year and then only a recovery of about 40 percent of passenger numbers through 2021 calendar year and well into 2022 before we have a positive EBITDA really. So what is, and we've also taken a very conservative view of our leases, of our lessees ability to pay us etc. No activity out of the hotel really for the balance of this calendar year. So very very conservative. but realistic modeling. Fortunately we have a major land sale that is unconditional and a very extremely good family, significant family, multinational business that have agreed to further provide a letter of credit to the airport company which gives me confidence to to build the road so to speak so that delivers about two and a half million dollars of margin of free cash flow into the group early next year. So the reality is that we can get through this year and through to June 21 almost a slightly positive cash position. The balance sheet's taken a bit of a hit and Scott will take you through that. And also we have some work going on on Central Precinct and again we have the ability hopefully to settle down. some unconditional land sales with the same degree of confidence around further sureties, which will also feed some additional cash into the group. We've only utilised about 65% of our debt funding and in fact we have further facilities that we were intending to take anyway pre-COVID and we will still take, which will take our funding up to about $30 million. And then we will have only utilised not much more than 50% of that by June next year. So most of the cash burn is funded out of our overdraft during this period. And then the land sales kick back in and we're back in positive space. Being said, very supportive and no issues there around funding. Next slide please. So we have joined with Hamilton City and I have spoken to Gary Dyett and others around the obviously the Crown infrastructure projects. We have put forward two applications if you've had a chance to review the submission. As you would be aware there are 23 projects we have submitted for the terminal redevelopment. And also for an amalgam of a number of projects around the airport that deal with roading, lateral infrastructure, our wastewater plant and various other aspects. The gain is also worth about $11 million. So we have put those in. Whether we're successful, who knows. But under the terminal redevelopment project, we're ready to go. tenders have been received and being evaluated the week of lockdown. Our consent is in with what within with your council at the moment and that's well that was well underway. So it is a shovel ready project. We could be out of the ground and doing enabling works within a month of a funding line. The key for myself and the board will be what are the tags that the government apply if we are successful. to the funding mechanism, how much of it is a loan, is a grant, etc. That's underway. And that's part of our recovery programme. So if we go to the next slide. Been important as we've worked through really the devastation of the past three or four weeks to make sure that we still keep our eye on the longer term for the group. and our focus over the next 12 months. I won't spend any detailed time here other than to let you know that we have a clear set of a clear business plan and a clear set of objectives for FY21. Most of those remain in place. We are reviewing them currently as a management team, but we are trying to make sure that... We continue, property is a major contributor and as you can see they're potentially just shy of $8 million in land sales in this next 12 month period. Operations, we continue to maintain the runway. Fortunately in our 10-year asset management plan we have a very quiet, we just spent close to a million dollars finishing in March of this year on some apron works and some pumps. some other bits and pieces, but we have a very quiet capital expenditure for aeronautical over the next 12 to 18 months, which couldn't have come at a better time. But we maintain the assets and you need to know that we will. When it comes to, we'll be working very closely with Air New Zealand to try and obviously kickstart services again. And so our whole marketing. and social media and comms strategy will be around exactly that. A hotel is a much more difficult beast, as you would have gained from Jason's presentation. But look, we are working now closely with Jetpack to understand what a plan coming out the other side may look like. Fortunately, it's a hotel. that wasn't reliant on international tourism, but it is reliant on conferencing in particular. And we're yet to understand the behaviour of the business community as we go forward in this new world. So we have just almost, we're spending close to $4 million on the hotel just prior to lockdown. So it's a property that we're going to have to... to maintain in the meantime and fund and our conservative modeling does um uh does mean that the group can um fund its interests in the hotel uh certainly for the next 18 months with limited activity from it and if we move now into the next slide which is probably uh the financial a couple of slides here on on sort of financials and i'll let scott lead in now. Our overarching comment here would be you had a lot of detail in the six month interim results so we decided there was no point in replicating information you will have read. So Scott will summarise it here and more importantly take you out the other side over the next couple of years. Alright, good afternoon everyone and thanks Mark for the introduction. Yeah, I won't dwell too much on the past because it's unfortunately become largely irrelevant but I guess just some key takeaways from the slide and what you may have read already in the interim report, but really that momentum we've built in the past couple of years around a sustainable, so recurring revenue base through passenger growth in the airport business, through our property portfolio, that it continued really well for the first half of the year. And, you know, obviously without COVID-19, we expect it to continue through the full year and beyond. Yeah, just some points around property, obviously talking some big numbers around land sales. I guess that they are land sales that have been contemplated. Under our 10-year plan, the land sales in the pipeline, it's not something that we've done as a knee-jerk reaction or sort of a fire sale type arrangement just to get some cash for the next couple of years. The land we're selling is sort of surplus to aeronautical requirements. In fact, much of it's actually physically separated from the airport through a gulley system. So we're not compromising any core assets, sort of future capability by selling this land. It very much is land that was serviced at the airport, so it's why it's been sold off at the time it has been. Yeah, just with the hotel, obviously it is a new investment for us, a new industry we've invested in. Really pleased with the early trading performance. Yeah, and probably pleasing that we didn't, other than the initial money to do the property up, it tends to some deferred maintenance and things. It's actually traded cash flow positive. It has not been profitable with depreciation and things, but... We're actually able to repay some debt. And, you know, the early vital signs of inoccupancy and room rate have been certainly in line with the expectation. And again, kind of right up until February, March, it was really just coming into a stride around the conference centre and the food and beverage offerings. So, yeah, I think, you know, it was looking really positive. And hopefully on the other side, that's the momentum we can leverage off again. So probably just look. Look to the future now and just move to the next slide, please. So I've given here just sort of in six-month increments the remainder of the financial year. also the financial year that we're in and then the following three that are presented in the draft statement of the tent you've received. I think important to focus on EBITDA because that's sort of a cash flow metric for us that includes land sales but it excludes of course costs like depreciation which is around three million dollars a year for us which in the short term is not necessarily linear with the investment we make into assets. So seeing Obviously seeing a reasonably significant decline in this calendar year across the business, certainly going to suffer. And that's, as we see in the sort of early six months between December 20 and June next year, that's the effect of this large land sale taking effect. And then as the business kind of gets back on its feet, you can see it's slowly back to cash flow positive. So I guess you want to compare the red and the blue, the blue bars and red line and the green line is sort of where we think we're going to head now. So you can see definitely the next sort of 15 to 18 months is going to be a bit painful. But after that, very much back on our feet and not becoming heavily reliant on land sales, certainly out past the next 18 months. So we've only assumed what's already under contract and what's unconditional will settle in those numbers. So I think that's the conservative, but realistic and conservative on both fronts. Certainly the costs we're looking to remove out of the business aren't anything that's going to compromise us long term. giving up capability but um either we've built or we've managed to hang on to for as long as we have i think there's some um yeah definitely conservative and look if things don't play out the way we see them doing and certainly not as positive as um they might do there's some opportunities if um further but for now it's um this sort of is realistic that we can preserve our current capability anyway um yeah i guess just to overlay the net profit slide um yeah there's a lot more um probably the deficits are bigger largely because of the effect of depreciation but ultimately following a fairly similar trend to the cash flow that land sales over the next 18 months will get us cash flow positive and we expect by the end of business to be largely cash flow positive from its recurring trading to be sustainable and yeah that's probably I guess the main takeaway there. And it's not really built into the slides, but just as Mark talked about the effect on the balance sheet, look, we expect that there will be some impact. So a balance sheet around property values and those sort of equity movements. So as a shareholder, that obviously will impact your accounts as well. But I guess out of this as a shareholder in a non-financial sense, out of all of this, we're preserving our core capability. We're not compromising any of our analytical capability. So I think, yeah, in terms of what the service will keep delivering. that shouldn't be compromised or at least our ability to do it. That was really all I had. Just a review of the financials. So I'll be passed back to Mark to wrap up. This is our last slide. My apologies. We've taken a bit of your time. But look, I think the key themes here really are, as I opened up, we hit this situation in a very strong position and in a very strong balance sheet. a record year, the foresight of the diversification through our 10-year group strategy has, I think, really bought this company time. Perhaps unlike some other regional airports that I think will need to go to their shareholders very quickly for additional funding or through their bank funding lines, we don't need to. That non-revenue has been absolutely ... critical to, and in fact ironically we never predicted a COVID-19 scenario, but we did predict a loss of aeronautical income through cessation of services or reduced services. So has been one and the same. And look overall the recovery as Scott has mentioned will be modest. but sustainable. And as I want to keep restating, we won't need to go to our core debt at this stage or funding lines to fund this. We can fund it out of, in effect, the working capital. And most importantly, I think, for you as the shareholders, there is no requirement for the board to come to its shareholders for support, and we don't see a scenario at all that requires the shareholders to assist the airport company in the foreseeable future. So that's it from me. Sorry, Andrew, I apologise that we're over time, but happy to take questions if you've got time. Yeah, no, thanks, guys. I think we were aware that a bit of extra time was going to be required for you guys with such a massive impact. I just got a quick question about the flight school. Would they not get back to level one or possibly could they operate at level two? Well, in fact, Scott's just had some advice today. It could well be that the pilots that are well through their qualification will be able to start flying under level three. So as soon as next week, we could see some flight activity. But it will be to your point, Andrew, down at level one, probably. There'll be the social distancing issues when you have an instructor and a trainee pilot on board. So I think we're we still are unclear. and so are L3 as to when that will be. I think it's worth noting that we don't quite know where we're going to go with L3 in the sense that they've got about 180 pilots currently at the airport in Hamilton or out at the accommodation at the airport. So I think they're fine for the next few months. The question is whether they're going to be the logistics of moving pilots across borders for training. And actually, there is not a dearth of pilots in the global marketplace as a result of the catastrophe for the airlines. So I think those two would suggest to us that we've got difficult times ahead post the end of 2020 with L3. Yeah, that makes sense. Yeah, I think as you've both noted, the stage that you're at with your property development has been a very fortunate thing. If this had occurred at the beginning of that, it would have been far more financially destructive. But does anyone else have any queries? Okay, that might be the case. Look, thank you very much. A really comprehensive update and great to see you recovered from the shock and being really positive and constructive going forward. So thanks very much to you both. Thank you, everyone. Thanks very much. Thank you. Cheers. And I see we have Kelvin. Sorry, what was that? Ah, okay. So we've got Kelvin and also is Peter available? Yes, I am. Ah, great. So thanks, Kelvin and Peter. And we'll let you get onto the shared services. Thanks, Mr. Chairman. And thanks for the opportunity to speak with you this afternoon. You've been provided with a copy of the company's statement of intent and half yearly report to 31 December 2019. And I... I'm conscious of the fact this is the first opportunity I've had as the newish chair of the LAS to talk to you. So I wanted to start by just briefly introducing myself and then I wanted to talk a little bit about the company's transformation role, how we're going to do things differently, what it means for your council and then I want to conclude with some remarks about COVID-19. But I guess the key point is that certainly from the board of LAS's perspective. the organization has never been more relevant than it will be in a post-COVID-19 recovery period. So the first point I wanted to make is that my family has been heavily invested in the Waikato for a very long time. My mother's family came to this region in 1865. My father's family came to this region in the 1880s, and all my family live in the region. My mum lives in Hauraki. district. My sister lives in Thames Coromandel. I have another sister in Hamilton, a brother in Waipā district. And after 44 years, Ange and I are leaving Auckland next week and moving to Cambridge. So we very much look forward to becoming Waipā District Council rate payers as from the 1st of May. So as you can see, my family's been heavily invested in the success of the region and it's one of the reasons I took the job. The other reason is the clarity of the opportunity and I've spent 21 years in local government governance across multiple CCOs and clarity of role is actually quite unusual. In this case, the company's vision is to have Waikato councils working together in the best way possible for the collective benefit of them and their communities. which means less burden on ratepayers, happier communities, council staff and more effective councils. So as we've set out in our statement of intent, the organisation really exists to do three things. First of all, to create effectiveness and efficiency gains for shareholders such as you. Secondly, to help increase the influence of the region. And thirdly, to help shareholders provide a better customer experience. What LAS does is provide an opportunity to think regionally without boundaries and to then help councils use that thinking locally to improve the well-being of the community. So thinking regionally means that rather than individual councils trying to solve their problems individually, LAS can help them work them out with the costs of that spread while still allowing local choices to whether to implement solutions locally. I think that it's fair to say my observation would be that over the years of its existence, the organization's done a good job. But I think one of the reasons that I've been hired is that there was an opportunity seen to be able to really grasp the company's potential. So when I was hired, the board said that it wanted to undertake a number of transformative projects at pace. And for that reason, we are going to and are driving the organization harder and faster. And earlier this year, the board committed to do just that. We are looking to be bolder, more disruptive, to enable you to help you transform how you and other Waikato councils operate. We also won't be afraid of failing. And by that, I mean recognising the opportunities worth pursuing, as long as we do it fast. Coming from the private sector, having spent 35 years in the private sector, my observation would be that... There's nothing wrong with failure so long as you fail fast and fail cheap. So with that in mind and looking ahead over the next 18 months, there are really three core elements to what we're doing. There are some key strategic projects which we'll be looking to advance as fast as possible. And you'll see those projects in the statement of intent. There are some business as usual projects. And in addition, I've asked for a re-examination of some of the work that we're doing to see whether we should stop. doing it. As you'll appreciate, it's really fundamental to perceptions of success of an organisation that they seem to be making progress month by month. So one of the things we've done is introduced a lot more careful tracking about what it is that we're doing and whether we're being successful. And we're looking to improve the communications to key council staff as well. I've said to my board colleagues, and you'll be aware, I'm sure that the that everyone that sits around the LAS board, with the exception of me, is a chief executive of one of the member councils. I've said to my board colleagues that they are really the difference between LAS succeeding and failing. And the reason for that is that they are the ones who will dictate the resourcing and prioritization and cooperation, which is accorded to LAS projects. And I've made the point pretty clearly that without their total commitment, the organization will fail, but equally their success. LASA's success will be their success and vice versa. So turning now to what it means for your council, think three things. First of all, you should consider this organisation as an extension of your vision of building the future together to promote the well-being of Waipā District and its people. We've both got a role to play in providing solutions to the high growth region of the Waikato. We both recognise the need to do more with less to drive cost out of local councils. We both want to ensure that nationally the Waikato region punches above its weight by showing that the region can provide joined up services across the region. And we both want to improve the well-being of the community. Indeed, it's in your vision. Secondly. As an organisation, as I've said before, we're not limited by boundaries. We're tasked with thinking regionally to enable you to act better locally. And I think the opportunities to work with you and your companion councils to achieve your aspirations are boundless, regardless, and possibly even more because of COVID-19. Thirdly, obviously, by necessity, we need resource to achieve our outcomes. And you'll see that some of the initiatives that we've proposed in the statement of intent will require some upfront investment in order to achieve some mid to long-term savings. Now I said I would finish with a few words on coronavirus. It won't surprise you to know that as a board we've discussed very early on whether we should make any substantive changes to our work program to reflect what will be a new reality. What we concluded indeed was that in fact we should keep doing what we're doing because it's going to be even more important. Moreover it's going to help rebuild the region and increase resilience. Our view is that in a post-COVID-19 period, during the recovery period, there'll be need in the region for at least the following three things. First, security of public works to enable the private sector to plan long range, and I think importantly, commit to training and for their staff to commit to stay in the region. Secondly, a demonstration of restraint by public bodies on what might be perceived as non-essential spending, in other words, doing more with less. And thirdly, motivation and encouragement and development of current council staff. Now, we're planning to deliver all of those already through our work program as set out in the Statement of Intent. So thank you for the opportunity to talk to you. I obviously wish that I could have spoken with you in person, but no doubt that opportunity will arise sometime shortly in the future. Kelvin and I are more than happy to take any questions, Mr Chair, but I wondered, Kelvin, if there is any additional points that you wanted to make? Well covered, Peter. Thank you. Okay, thanks very much for that. Yeah, as you mentioned, the LAS has been active in our, well, between our councils for a number of years now and been very successful. particularly with Rata, the roading accord. But what's happening now is an absolute step change. And I totally agree with what you said about it being more important post-COVID rather than less. So, yeah, I wish you every success, of course. Now, questions. I think Claire, yes. Yeah, yeah. Thanks, Andrew. And great to meet you via Zoom, Peter, and it's good to see you too, Kelvin. I did send through some questions, but two are ones that I'd just like to ask in this forum. The first one is that, you know, you've made a strong case for continuing how you're going at the moment, you know, that all those things that you're focusing on will be more important than ever when we're dealing in the post-COVID. era I guess, but a lot of the things that are done rely on the, I suppose, the goodwill of councils and releasing resources from their business to work on last stuff and I can foresee that councils are actually going to be pretty hard pressed with their own staffing resources, dealing with you know extra things that have come out of the woodwork to do with COVID-19 and so what assurance can you give us that you won't sort of find yourself high and dry, that you can't get the sort of resources that you do need, you know, from the individual councils that have normally been really supportive because, you know, your staff are just completely committed, you know, to this other work. Kelvin, would you mind if I answered that question first and then maybe there's a few additional points you want to make? I think, Councillor, thank you. That's a great question. The good news is we had, I'm happy to say, thought of that as well. And one of the earliest things that we did well before lockdown was, when we could see this thing coming, was to reach out to councils to ask them to think about whether in the context of any redeployment of assets and people that they were doing, whether there were going to be some people that might in fact be freed up to be able to work on some of our projects to make them go faster. And I was pleasantly surprised, particularly from some of the smaller councils, to be honest, about the positive response that we got in terms of offering up staff. That's the first point. The second point is that, more specifically, Calvin's been in touch with the chief executives of all of the councils, I think as recently as yesterday, Calvin, where we've set out some specific skill sets that we're looking for in order to be able to advance some of our strategic. projects. So as I say, great question. Surprisingly positive response from the from the councils that we've reached out to. But you're absolutely right. The resourcing issue may even flow over time. And it's something we're acutely conscious of. Kelvin, did you have any points to add? Look, I think that sort of covers it all off, Peter, to be honest. Well, that's really encouraging, actually. It's good to get that clarification. That's great. Now, the question I had was about the energy and carbon management that's mentioned in the SOI here. I wasn't sure whether that is the carbon audit that our councillors... sort of before the last election. That was one of the directions that we gave staff that we wanted to get something organised in that, which would help us, I suppose, formulate a plan, you know, for climate change and that. And is the energy management that's mentioned that LAS does, is that feeding into that audit or not? So the short answer is, Councillor, no, it's, well... It... It's certainly not the audit that you're referring to. I don't see any particular reason why the people that we engage to provide that support to councils could not help with that audit, if that was something that the Waiapā executive team were interested in doing. But I'm not actually privy to the status of the particular piece of work that you're referring to. I know that Martin Lynch, who's one of the guys that tends to work with Wai Pā District Council, has been doing some bespoke work in this area, but I'm not sure whether it specifically relates to that report that you're referring to. Okay, oh well, thanks for the clarification. Okay, any more questions? No, okay, well, hey, thank you very much for that presentation. And, yeah, particularly now in a period of significant change, it's really great to see the positivity we have going forward, even with the weird world we have around us at the moment. So, yeah, thanks, Peter, Kelvin, very much. Thank you very much, Mr. Chair. Thank you, guys. Yes. And I see Andrew Michael is... available and will talk to us about the LGFA. Thank you for the opportunity. I'll just maybe make a few brief comments and then touch on the current environment and then leave some time for questions. So LGFA started in 2012. It currently has 67 member councils with a number of others in the process of joining and the current environment is probably just... Even for the councils that don't have any debt, they realise that having access to finance is important. So it's sort of probably speeding up their timetable for joining. LGFA is based on similar models in the Scandinavian countries. The longest of those is in Denmark. That's been going for 130 years now. So what LGFA wants is to be a very long-term provider of financing to the local authorities. authority sector. The objectives are interest savings on council's debt to provide a range of borrowing options, so short-term and longer-term financing, and probably the most important one is access to debt markets, and that's been the area that's perhaps been the most challenging thing over the past couple of months. In terms of the financials, the ... profit for the year to June 2020, which was forecast to be $10 million, is on track. So we even ran the part numbers for April yesterday, and again, the monthly profit is on track. A lot of the forecasting that's in the draft SOI is just out of date. It's just been superseded by the events that we've seen the last few months. But that said, Just remember that LGFA has $10 billion of lending to the sector, so we borrow from investors and on lend it and every time we do we take a small margin. So the profit really on all that lending is locked in until those loans mature. So even though there may well be some variability in profit, a lot of it is locked in. That said, the profitability probably shouldn't be your primary concern. It is where councils get the savings is in the savings on their interest costs and certainty around accessing of finance. So that's probably the key thing. The current environment, interest rates are low. So maybe that's one little bit of good news for councils. So short term interest rates. councils like yourself can borrow below 1% now. Longer term, we just completed a $1 billion debt issue just over a week ago. So we borrowed for six years and we borrowed at 1.46% for $1 billion. So we will add on 20 points to councils or 25 points to Waiapā, I think it is. So you'd be accessing longer term money, six year money at around 1.7%, just to give you some idea of borrowing costs. So that's, you know, one bit of good news. Probably two or three weeks ago, we were receiving record borrowing requests from councils. There was a lot of councils knowing that maybe, you know, fee income is dropping and they needed to get more money into. to cover that so we've never had a month we've had a higher amount of borrowing costs. LGFA was the first non-government entity, well entity other than the government, to issue in New Zealand since the level four lockdown was imposed. For a while investors were very reluctant to invest it's just you know they're worried even if we buy it we won't be able to sell things, and there's just that whole risk aversion. But we had two developments. One was LGFA have a $1 billion standby facility from the New Zealand government that expires next year, but the Minister of Finance provided a letter to LGFA saying that the government would roll that over for a further period of time. So that support from the government. was just a it's really symbolic to investors that there's going to be that ongoing support from the government for LGFA. The second thing that occurred is the Reserve Bank announced that they were going to buy back government bonds. Subsequent to that they added LGFA to the list of securities that they are able to buy. So they signaled that buy back up to three billion dollars of LGFA bonds from investors and it was that that really gave the confidence to investors that if we buy them there's actually going to be another huge buyer in the market for that. So again, you know, the level of support that we're getting from the government has been extremely important. There's going to be significant challenges for councils, particularly in the 2021 sort of financial year. Part of the working group that DIA are running, looking at doing a lot of modelling on council financial performance for the remainder of this year and next year, and that's feeding into a lot of the other government workstreams, such as the recovery workstream. So there's some quite sobering reading come out of that. For WIPAR, you're probably well positioned in terms of your debt levels. not high relative to some of the other higher growth councils in New Zealand. So, yeah, there are a lot of challenges, and that's probably one of the challenges for us, is that potentially we're going to get breaches of the financial covenants in the next financial year, not this financial year. So to date, we've never had a breach of any of the financial covenants. If revenue falls significantly for councils with a large amount of debt to start with, then they could well breach that net debt to revenue covenant. So that's something we'll have to deal with. But for those growth councils, one of the last tools they've really got is having to cut their capex. And again, that's not particularly conducive to starting growth in the economy. working against the law a bit of what the government wants to achieve. So I'd just like to, you know, we appreciate that there's no compulsion for councils to use LGFA. You're still free to borrow from any other sources that you want. So I'd just like to acknowledge Ken and his team because Waiapā was one of the early supporters of LGFA. We very much value your support of us and, you know, the professional relationship that we have. Thanks, Andrew. I think, yeah, almost goes without saying, but I'll say it anyway, LGFA has been another great contributor to the local government scene generally. And certainly, well, I guess WIPAR hasn't used your services that greatly. We certainly intend to in the future, possibly even more with COVID, possibly not. We don't know yet, do we, Ken? Yeah, that's true. We don't know. But yeah, but very comforted by that 1.7% number, Andrew. Yeah, that is very well-priced borrowing ability. I like the one that was below 1% even better. But yeah, short term, possibly isn't us that much. No, thanks, Andrew. Does anyone else have any questions? Bruce, and then Claire. You're still muted, Bruce. Press the spacebar. There we go. No, no, you need to keep pressing it, mate. Oh, okay. I'm learning. I've changed machines. One doesn't work, so one's in the bin soon. Andrew, just on page 33, share capital, I noticed Whitepar's got 200,000 shares at 0.4%, just a simple one. Marlborough District have got double hours but a 9.9 of a percent. Could you explain that? Yes, the shareholding is just something sort of historical. So when LGFA was started it needed 25 million of equity. So there was I think nine or ten councils that were the initial subscribers and then they onsold. some of their shares to a second group of councils that came in as shareholders. So LGFA pay a small dividend to councils on their shareholding, that is 2% over our cost of funds, but our cost of funds might only be like 1.5% at the moment. So on $100,000 of shares, you're only going to be getting like the $3,000 or $4,000 dividend. So that is really not material. So the level of equity you have is really not that important. It is the savings that you get on your borrowing costs that are going to be the big drivers of why councils should be members of LGFA. So it really doesn't give you a lot of advantage over a council that is a non-shareholder, because again, they're still getting the same. borrowing benefits that you are. It's just simply a fact we needed some councils to put in some equity to get the thing off the ground. So again, we're grateful for the councils that did that. Thank you. I was just interested in doubling the figure and being in ordinary terms and thinking, well, how did you get to that? So no, thank you. I just worked it out for you, Bruce. It's a rounding thing. And we've actually got 0.444 of a percent. And when you double that, you get 0.88. So it's just rounding up and down. Thank you, Mr. Chair. You are so knowledgeable. All good. Claire. Yeah, thanks. The question I had is about LGFA saying one of their principles is that they'll demonstrate social and environmental responsibility. And one question that I've been asking in the past is. Will LGFA consider introducing something like green financing or environmental bonds? You know, like the Productivity Commission did a report to a low emissions economy, you know, a couple of years ago. They highlighted that actually there's a bit of a gap in New Zealand with this kind of financing where councils could borrow for a project that would be, you know, reducing emissions or for environmental outcomes. And usually it's at a slight margin less or something. just to say it's a good thing to be doing and we want to encourage councils. Do you think LGFA would do that or are you talking to government about that? Thank you for that question. It is the whole environmental issues have been pushed a little bit to the back at the moment because of everything that's going on. But LGFA has done a significant amount of work on that and we are intending to offer green financing to councils. So remembering that it's not LGFA that is doing things with the money, we're just on lending it. middle. We've actually got all the documents up and ready to go but the issue is we're going to need councils to identify green projects. Also there's three categories so there's green, social and sustainable. So for example a lot of the water things actually come under sustainable. So there's a whole industry around it and it involves the water. identifying things and also there's a certification process involved on that so I could probably speak to you for a day on this topic because it is if you see the documents they you know it must be like 100 pages long and we've got all that ready to go so it is all happening but it will be it's not going to be compulsory it will be up to each council as to how they use that but green investing is a big theme globally, probably particularly in Europe, probably less so in the US. But certainly, it does give you better access to debt markets if you can, if you're under a green framework. Well, I'm thrilled to hear that you're working on it. I actually think you should report on it, say that you're actually preparing or working on a proposal, because I think a lot of people would be looking for that. And yeah, I'll just say, well, congratulations. I think it's great that you've made it. yeah, some, I suppose, some groundwork progress and yeah, look forward to seeing, yeah, when you can actually make an announcement. Yeah, we did flag, we have a council day each year sort of in July and we did flag that it was something we intend to do. So we would, you know, give the update again this year. But it is something that's definitely happening and we're more than happy to come and speak to you if you want to have, you know, more in depth discussion about that side of the business. Thank you. Any other questions for Andrew? No? Okay, that being the case, thank you very much for Zooming with us and yeah, always good. Might see you in flesh one of these days. Yeah, no, pleasure. Okay, thanks very much. Cheers. Okay, well thanks for that everybody. We have... a recommendation that runs from A to G. I'm not even going to attempt to read them all out, so I'm sure you can. Yeah, sorry Andrew, probably the thing we just need to turn our attention to, because obviously a key part of that series of recommendations is the three letters that are in the appendices, appendix four, five and six. So I do just wonder whether just before you put the recommendation... whether it is just with just seeking any input into those three letters because obviously when you actually do put the recommendation you will be essentially locking in those letters. Yeah, thanks for that, Ken. You're very right. I did think of that. I read through them and I felt they seemed pretty appropriate as they are because particularly with... Whew. cast my mind back now, particularly with the airport. We acknowledged that there was going to be a major revision in their SOI. But yeah, does anyone have any thoughts on a note? All good? Thanks for that, Ken, but I think we're all good. So could I have a mover, please? Thank you, Bruce. And the seconder? Thanks, Lou. Cheers. All in favour? All right. Contrary no, it's carried. Okay, moving on to item number nine. And I see Nada's there. Ken, did you want to introduce or? No, look, I'm very happy to leave this to Nada to take us through the financial report. Yeah, I guess the only thing of significance, and again, there is a health warning there, a little bit like the four-monthly report that you saw at the last council meeting. Obviously, anything in that forecast column is obviously outdated by the COVID events. So, yeah, so a huge effort is... gone in right across council in the last two or three weeks to re-forecast and you should see the results of that re-forecast and you should have obviously quite a different forecast column in the next financial report. With that said, happy for Nada to take us through the report. Thanks very much. Thanks Ken. Good afternoon everyone. So at the currently Standing at the end of March, the total income is currently at 74% of the forecast and the operating expenditure is at 72% of the full year forecast. We have vested assets of $11.8 million recognised to date and that's currently 94% of the forecast. Discovered assets is $402,000. And... Development and reserve contributions of $4.4 million have been received to date and subsidies and grants are at 47% of the forecast. We have capital expenditure to date of $71.3 million which is 51% of the forecast and there have been no major budget changes this month due to reforecasting happening now. There was one arbitrage arrangement made on the 12th of March that utilised $6 million of short-term fixed borrowings, and it was on match terms, maturing in June, and will yield approximately $13,000 of net interest. The rates, we have the 62.1 million that's been set for the year. Prior years outstanding at this time was 62,000 and we have currently 464,000 outstanding at the year to date. And then I'll take the rest of the report as being read and if anyone's got any questions. Okay, any questions? Not a big change, really, to what we had presented at the council meeting. Yeah, pretty much. Thanks for that, Nada. That's great. And there being no questions, I'll ask for a move for the recommendation. Thank you, Roger. And a seconder. A second. Thanks, Claire. Thanks, Claire. I'll catch you next time, Philip. All in favour? Aye. Aye. Contrary, no. That's carried. Thank you very much. And thanks, Nada. And we'll move on to item 10, health and safety. Kim, what should I say? Yeah, look, I think, is she a Steph? Yeah, Steph is still there. So, yeah, this is absolutely Steph Shaw's baby. And in fact, Bev is Bev as well, who has joined us. So, yeah, I'll hand over to Steph and Bev. Great. Welcome, Steph and Bev. Hi, guys. Another good news story. We need some of them. Steph, do you want to start off? Oh, no? Yeah. All yours. All mine? Okay, so I take it that you guys have read the report and the attachments to this. I do see that there are a couple of questions from Claire, but is there anything else that you guys would like to ask? before I get to those questions from Claire? Looks like the floor is yours, Claire. You had a couple of questions? Yeah, well, I mean, the first one was that there were four, the council entranceways were the location of a number of accidents. So have you looked into those entranceways? Is there something to do with the entranceways? Like, yeah, Bev, have you got an idea? Oh, Dev? Yeah, there were just the two trips in entranceways. And we did get... property to have a look um and there wasn't anything of significance that we found can you guys hear me now yeah yeah so we didn't find anything of significance um of why they tripped the only thing we it was sort of at the lip where the doors um kind of closed, and this is at Cambridge, so property did have a look at those, but we couldn't find anything that would have caused those trips. And we haven't had any reported since, so it may have been just one of those things. But we are continuing to monitor anyway. Yeah, yeah. Oh, no, that's right. I mean, it would just be our luck that, you know, our facilities are causing a problem for people that are coming into visit. Yeah. yeah so I just thought be good to know a bit more about that yeah okay can you hear me yes yes wonderful I'm so sorry I lost my my voice there for a minute so I clear I understood you had another question as well and that was regarding what ways we have to keep track of how health and safety resources and processes are being utilized yeah that's a really good question perhaps if I if you go to the the A3 or the big report on a page. Above the health and safety due diligence plan monitoring, above that is the health and safety lead indicators. Now these lead indicators are basically the resources and the contractors that we use and so essentially what we pay for and that's how we monitor and provide to you the details and what we're spending our health and safety budget on. We do have a very small health and safety budget obviously, but what this health and safety lead indicators shows you is that we pay an ongoing fee to the Waikato Occupational Health Consultancy who deliver our health monitoring services. We also provide money to the EAP service which provides, I guess, counselling services to all of our staff. We also have training, health and safety training. So we have set aside $27,000 for health and safety training in an annual year. And that obviously is first aid refreshes and a health and safety committee training, as well as any investigation training, which we are looking at at the moment, and our regular conflict training, which obviously comes out of that budget as well. And these are all... reported through these reporting mechanisms to yourselves and also to the executive team. So I guess that's one of our due diligence in how we show that we are utilising external resources and finances appropriately. Oh no, that's a great explanation and I can see how it all fits together. I guess I was wondering about how you knew if just individual staff members were actually involved. you know knowledgeable about health and safety practices or if they were starting a new task or something that they they did actually get the right briefing and stuff like that like are you confident that that kind of sort of more grassroots of those processes are working well as well? I think feel free to jump in here but I'm actually very confident because we have some very good well-educated health and safety representatives now and I must say they are committed, they attend the meetings, they go back to their respective teams and they disseminate that information. You know we're making sure that any training is out there. I've got Bev and Terry now working with all staff and especially team leaders and supervisors about how to keep their staff safe. I know that's great. Thank you. Yes, thank you. Can you hear me all right? I can. No, doesn't seem to be coming through my headphones. I think this is a great report. But the question I have is, is there any way that we can assess some of the external influences on our team's health and safety from COVID-19? Yes, absolutely. And again, Bev, feel free to jump in here. This report only covers the period from November through to February. So critically, it essentially misses all the COVID-19. That will come in the next report. But yes, absolutely, we have a staff monitor or staff register, which we monitor the health and well-being of all our staff, any that have immunocompromised health issues. We are aware of where our staff are, what they're doing, and with us likely moving to level three next week, we've gone out to all managers to advise us of where exactly their staff are going to be working, whether they will be continuing to work from home, whether we will have some, like our parks operators, working back out in the community, and from a health and safety perspective, we're working up. some really good protocols around how to keep them all safe. So I hope that's answered your question, Councillor Gordon. Yeah, I was more wondering about whether any of the external influences over which we've got no control, you know, that they're actually finding in their own family circumstances or something like that, that's actually affecting their mental state, which obviously is a health and safety issue. I can come in here if you like, Steph. I've just come out of a webinar with EMA, in which one of New Zealand's leading people in health and safety, Paul Jarvie, was part of. So they've actually ruled out quite a few ways on how this can be managed in multiple levels. And I know that our WIPAR team have been working along those same lines. you know, this is all pretty new to everybody. So we're still writing up those protocols and hopefully getting everything in place prior to actually going out next week on level three. Oh, good. Great to see those. Thanks. Great. Anybody else? No, I just like to say it's, it's great to see your health and safety programme maturing each each report that we get. And I just wanted to say, I think your one-page Gary's health and safety commitment, that's a really, really good thing to put in place. There's nothing like everybody in the organisation seeing that the CE is committed to the programme. So, yeah, congratulations on that. Thank you. Cheers. Well done. Okay. So I have a recommendation to accept the report. Do I have a mover, please? Thank you, Claire. Thank you, Elwyn. All those in favour, please say aye. Aye. Contrary, no. That's carried. Thanks, ladies. That's terrific. Welcome, Phil. We're just going to pass a motion to move into public excluded and then go. off live. Thanks, Roger. And a seconder. Thanks, Susan. All in favour, aye. Aye. Contrary, no. It's carried. So, Sam, we'll let you do your thing.