Decisions from Finance & Performance Committee 27 August

Councillors have also voted to retain the fund’s existing Responsible Investment Settings as outlined in the fund’s current Statement of Investment Policy and Objectives (SIPO).

The fund’s SIPO sets out the framework for governing the investment of the fund and is reviewed every three years by Dunedin City Holdings Limited (DCHL).

A report on the latest review was considered at today’s meeting of the DCC Finance and Performance Committee.

The most significant change related to a recommendation from DCHL that the fund’s strategic asset allocation from a balanced income approach to a growth-orientated one.

This would see the fund’s current mix moving from 45% growth assets and 55% income assets to 80% growth assets and 20% income assets, to provide the best balance between returns and risk,

The report also noted increased returns would be a long-term objective, and that short-term volatility would continue to be expected and managed.

In the medium to long term, these changes could result in consistently higher distributions.

The Waipori Fund was established in 1998 following the sale of the Waipori Power Generation Limited and its holding in United Electricity Limited. Initially worth $56 million, it has grown over the years to be valued at $117.7 million as of 30 June 2026.

Councillor first voted 8-5 (with one abstention) for an amendment to retain the existing responsible investment settings as set in the current SIPO.

Those voting for the amendment were Mayor Sophie Barker and Councillors John Chambers, Christine Garey, Doug Hall, Marie Laufiso, Mickey Treadwell, Steve Walker and Hoani Langsbury. Those against were Councillors Andrew Simms, Brent Weatherall, Cherry Lucas, Lee Vandervis and Jo Galer, while Jeffrey Broughton abstained.

Councillors then voted 14-0 to note the Waipori Fund SIPO Review and approve the Waipori Fund SIPO objectives, including the move to a growth-orientated portfolio and the amendment agreed earlier. They also approved the draft Governance Agreement between DCC and DCHL.

More information here (item 8):Finance and Performance Committee - Agenda items 8 and 9

Investment Framework adopted

The Investment Framework sets out how the Council defines, governs and manages its wider $1.1 billion investment portfolio, and what it expects those investments to deliver over time.

The current investment structure includes:

• The Waipori Fund – owned directly by Council, managed by Dunedin City Treasury Limited
• The investment property portfolio – owned directly by Council, part of DCC’s total property portfolio
• DCHL – owned by Council. DCHL owns, on behalf of Council, the following companies:
  
  • Aurora Energy Limited
  • City Forests Limited
  • Delta Utility Services Limited
  • Dunedin Stadium Property Limited
  • Dunedin Venues Management Limited
  • Dunedin Airport Limited (50%)
  • Dunedin Railways Limited.
• The new approach provides a framework for how Council defines, governs and manages its investment portfolio, including:
  
  • The investment framework provides a one portfolio approach for the management and strategic oversight of Council’s investments.
  • Provides a consistent view of risk and diversification.
  • Provides clear investment objectives – to protect the real value of capital for future generations and to provide strong, consistent and sustainable distributions to Council.
  • Optimises total returns and cash distributions over the long term.
  • Establishes a distribution model which should result in a higher, predictable, consistent and sustainable dividends.

Councillors voted unanimously to adopt the investment framework.

DCHL are also developing an implementation plan which will be reported to Council in November.

Reports

Councillors also voted to note the latest quarterly reports from the Dunedin City Holdings Limited group and for the Waipori Fund, as well as the DCC’s Financial Report to 30 June 2026.

The DCHL group result recorded a draft net profit (before tax) of $33.6m for the year ended 30 June 2026. That was slightly below budget but $7.6m ahead of the previous year.

The Waipori Fund’s value was $117.7 million at the end of June 2026 – even after a $3 million distribution to the DCC – and the fund's value remained well above its March 2026 balance of $114.2 million.

The DCC’s net surplus (including Waipori) for the year to 30 June 2026 was $596,000.

More information

Significant forecasting assumption

Councillors also voted to approve draft significant forecasting assumptions which will be used in the development of the 10 year plan 2027-37 and the Water Services Strategy 2027-37 (Water Services Strategy).

A report to the meeting noted the information and data supporting the assumptions remains interim and that Council will be updated if further information or updated data becomes available.

Rating method and financial policies review

Councillors also gave direction on a range of matters following a Rating and Financial Policy Review workshop on 15 July 2026.

The review provides an opportunity to assess whether existing rating and financial policies remain appropriate, equitable, transparent, and aligned with Council's strategic objectives.

At the workshop, several areas were identified that could require further investigation by staff, and Councillors today voted to include a range of matters needing detailed investigation and option development as part of the 10 year plan process.

These were:

• Rating treatment of Forsyth Barr Stadium
• Funding and rating treatment of the Tertiary Area
• Rating options for heritage buildings
• Rating options for vacant buildings and/or abandoned land
• Development of affordability measures for inclusion in the Financial Strategy of the 10 year plan 2027-37
• Review of rates remission and postponement policy
• Review of the general rates differential for the commercial category.

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