MINUTES OF A meeting of the Corporate and Strategic Committee



Date:                          Wednesday 12 November 2014


Time:                          9.00am



Council Chamber

Hawke's Bay Regional Council

159 Dalton Street



Present:                     D Hewitt - Chairman

R Barker

P Beaven

T Belford

A J Dick

R Graham

M Mohi

D Pipe

C Scott

F Wilson


In Attendance:          E Lambert – Chief Executive

I Maxwell – Group Manager Resource Management

P Drury – Group Manager Corporate Services

M Adye – Group Manager Asset Management

L Hooper – Governance & Corporate Administration Manager

J Powrie – Team Leader Assets

J Bell – (Massey University Business Development Manager, HB

T Skerman – Economic Development Manager

J Brown – Callaghan Innovation Regional Partner


1.       Welcome/Apologies/Notices

The Chairman welcomed everyone present to the meeting.

Councillor Wilson advised that Councillor @HBRC email addresses have been set up and suggested that all Councillors use these for Council-related business as opposed to ‘personal’ email addresses.

The Committee Chairman explained that staff were advised, on Monday 10 November, that one of the Maori Committee representatives on the Committee, Shaun Haraki, is currently on ‘hiatus’ while the Wairoa Taiwhenua undertakes a review of their representation on the Maori Committee. Prior to this triennium, representation from the Maori Committee – as per C&S Terms of Reference – was the Maori Committee Chairman + 1 other. Therefore it is suggested that Mike Mohi be appointed as replacement for Shaun Haraki for the short term at least. Once the Wairoa Taiwhenua has completed their review, the Maori Committee will make a recommendation to Council for a replacement on the C&S Committee for the remainder of the triennium.

C&S7/14  Resolutions

1.     That the Corporate and Strategic Committee writes a letter thanking Mr Haraki for his contributions to date.



2.     The Corporate & Strategic Committee agrees that Mike Mohi be appointed as a Maori Committee representative on the Corporate and Strategic Committee of the Hawke’s Bay Regional Council for the meeting of Wednesday 12 November 2014 as a short term replacement on the Committee for Mr Shaun Haraki.



3.     That the apology for absence from Mr Mike Paku be received.




2.       Conflict of Interest Declarations

There were no conflict of interest declarations.


3.       Confirmation of Minutes of the Corporate and Strategic Committee Held on 10 September 2014



Minutes of the Corporate and Strategic Committee held on Wednesday, 10 September 2014, a copy having been circulated prior to the meeting, were taken as read and confirmed as a true and accurate record.




4.       Matters Arising From Minutes of the Corporate and Strategic Committee Held on 10 September 2014

There were no matters arising from the minutes.



Follow-ups From Previous Corporate and Strategic Committee Meetings


Mrs Lambert updated the Committee on the status of the items from the 10 September meetings on the follow-ups table. In relation to Councillor representation on outside bodies, there was discussion of the expectation that councillors will commit to attending the meetings of the bodies they are appointed to, and the CE gave an undertaking to follow up with relevant staff about the resumption of HPUDS Implementation Committee meetings.



1.      That the Committee receives the report “Follow-ups from Previous Corporate and Strategic Committee Meetings”.





Call For any Minor Items not on the Agenda


That Corporate and Strategic Committee accepts the following minor items not on the agenda, for discussion as item 18:

1.      Pest Management meeting in Te Pohue (Graham)

2.      Goats (Barker)

3.      Napier Gisborne Rail (Wilson)

4.      FAWC (Pipe)

5.      Business Hawke’s Bay Hub (Belford)

6.      Tukituki Meetings (Belford)

7.      Peter Frasier (Belford)

8.      Cycle Governance Committee (Scott)

9.      Mangaroa Signing (Mohi)



Notice of Motion


The Chairman outlined the process to be undertaken in consideration of this item.

Councillor Beaven spoke to his Notice of Motion and outlined his rationale for putting it forward. The alternative proposal the Motion seeks investigation of is being put forward by Councillors Beaven, Belford, Graham and Barker as they believe it reduces key risks in the current HBRIC scheme, while still accomplishing the key goals intended for water storage.

The core assumptions of the alternative proposal (distributed via email to Councillors, the HBRIC Ltd CE and Chairman, the HBRC CE and Mr Mohi) are summarised as:

     Cheaper ‘dam-only’ proposition – do away with distribution network (or minimise the network)

     Can use dam on Makaroro at similar scale

     Water price can be reduced through alternative

     Dam-only has improved environmental outcomes

     Only public sector funding to be used

Mrs Lambert provided an overview of the staff’s understanding of the core assumptions of the alternative proposal for a dam only, without the distribution network; followed by staff’s preliminary understanding, of the impacts that the alternative would have on the scheme footprint and the rivers/streams and aquifers in the basin.

In relation to the distribution network, Mrs Lambert explained that because the Waipawa River loses 3.0 -4.7 cumecs of surface water to ground water (equivalent to 95 million m3 per year and the approximate static storage of the dam) a head race is required from Waipawa to Tukituki rivers. Without the head race it will only be possible to provide water to 30% of the customer base that is proposed to be supplied by the RWSS – from either proposal.

In response to queries, Mr Iain Maxwell provided an explanation of the hydrology, flows and losing/gaining reaches in the rivers on the Ruataniwha Plain, and modelling which has proven that pumping groundwater permanently reduces the base flow of those rivers. Although the aquifers recover partially between irrigation seasons, they never recover to the previous top level therefore resulting in a permanent, increasing reduction over time. Scientists do expect the aquifer to reach an equilibrium at some point, where the levels will not decline below a certain level, however it is uncertain when this equilibrium might be reached.

Mrs Lambert then explained that the RWSS (proposed) canal head race has a capacity of 8.8 m3/s to service 17,200 ha and requires 58m m3 of water at a cost of $42m or 0.72c/m3. Based on preliminary calculations, the alternative proposal for 10,000 ha requires capacity of 5 m3/s using 40m m3 at an estimated cost of $36m equating to 0.90c/m3.

Mrs Lambert further explained the principles of possible cost impacts of scaling down the scheme, resulting in a smaller customer base able to access the water, and provided cost estimates calculated by running the alternative proposition through the same financial model used to determine the price of water for the Council approved RWSS scheme.

Some comparisons provided:

Current proposed dam has 90m m3 storage volume to service 25,000 ha, which has a value of $120M = $1.34/m3 of water – Whereas alternative dam proposal to service 10,000 ha requires 40m m3 and has a value of $99M = $2.50/m3 of water.


Alternative Proposal

Alternative Proposal without Opex


$135M (99-dam, 36 – distribution)


All other capex (land purchase etc)

As HBRC approved proposal

As HBRC approved proposal

Electricity revenue



Saleable volume

36M m3

36M m3


HBRIC (80M) plus institutional investors

HBRIC (80M) plus institutional investors

Opex cost

Pro rata reduction in opex costs but retain all Centralines costs

Pro rata reduction minus Centralines and SPV

Cost per m3 of water




In terms of the ‘improved environmental outcomes’ mooted in the alternative proposal, Mrs Lambert explained that the proposal assumes groundwater can be pumped with no effects, however the effects of groundwater pumping would significantly compromise all spring fed streams in Zones B, C and D – which provide key spawning native fish habitats. In addition, the dam size would have to accommodate flushing flows requiring an additional storage capacity of around 4M m3 to the dam size proposed. The alternative of on-farm storage for 90M m3 would require 3,600 ha of land (possibly productive).

One of the reasons given for the alternative proposal is “to avoid the expensive cost of private money” by removing private sector capital and publically funding the dam via HBRIC Ltd and the Crown, removing the need for high commercial returns. In fact, CIIL (the Crown) will invest only once private sector capital has been exhausted and  will not enter into a financial structure not involving the private sector, so the alternative proposal would not ‘qualify’ for Crown funding. HBRIC (HBRC) cannot reasonably afford to fund the difference.

Commercial and structural issues with any major departure from RWSS as proposed and consented include:

·         Groundwater abstraction sections of Plan Change 6 will need to be substantially re-written through a further Plan Change process

·         Alternative proposal will need to go through a new resource consent application process

·         The alternative proposed doesn’t enable unified control of nutrients

·         Construction contracts will need to be significantly renegotiated and economies of scale could be compromised for a smaller project

·         The Crown (if willing) would need to completely re-structure their investment criteria to suit an amended RWSS

Finally, all of the aspects of the alternative proposal have been put forward, examined and discarded at various stages through the pre-feasibility and feasibility stages of the RWSS project and the HBRC adopted proposal brought together the optimum package for cost, water uptake and price.

The alternative proposal is not hydrologically feasible, will increase the unit cost of water, will necessitate additional plan changes and resource consent processes, and could jeopardise agreements already negotiated.

Speakers on the motion traversed the aspirations of the proposed alternative, the rationale for proposing the alternative, and the extensive investigations and research carried out by expert in engineering, resource management, science, commercial and environmental law, geology and hydrology science, among others through the pre-feasibility and feasibility stages of the project in arriving at the Council-approved proposal. Speakers also raised their support for the decisions and outcomes of the Board of Inquiry process and the expert engineering, scientific and environmental advice heard and considered there to determine its final decision and grant resource consents for the RWSS.



1.     That the Corporate and Strategic Committee receives the Notice of Motion.


For: Scott, Graham, Wilson, Beaven, Pipe, Barker, Mohi, Belford, Hewitt

Abstained: Dick


The Corporate and Strategic Committee recommends that Council:

2.     Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted policy on significance and that Council can exercise its discretion under Sections 79(1)(a) and 82(3) of the Local Government Act 2002 and make decisions on this issue without conferring directly with the community and persons likely to be affected by or to have an interest in the decision due to the nature and significance of the issue to be considered and decided.

3.      Investigates a modification to the current RWSS proposal which minimises the pipework as far as possible or utilises exclusively the natural waterways and aquifers. In particular:

3.1       What would the revised cost of the project be?

3.2       At the current proposed dam size what would be the size of the accessible irrigation footprint, including both ground water and surface water users, and including the lower Tukituki catchment?

3.3       Of those who have currently signed Water User Agreements, how many would no longer have access to water?

3.4       What impact would the lower project cost have on the cost of the water and how would this impact on uptake?

3.5       What would the recalculated economic benefits of the project be for the Hawke’s Bay region?


For:  Graham, Beaven, Barker, Belford

Against: Dick, Scott, Wilson, Pipe, Mohi, Hewitt



The meeting adjourned at 1045am and reconvened at 11am



Napier Port Presentation


The Chairman introduced Mr Garth Cowie (Chief Executive) and Mr Jim Scotland (Chairman) and welcomed them to the meeting.

Mr Scotland advised that Napier Port’s unaudited financial results for the 2013-14 year are being reported today, and there may be some commercially private information that limits their ability to fully respond to some questions.

Mr Cowie outlined the operating results for the year, being a 7.9% revenue rise, net operating cash flows of $23.4M and increased Net Profit after Tax.

Highlights of the year include:

·         Non containerised tonnage grew 3.2%

·         Container volumes rose 6.7%

·         A lift of 3%, in overall cargo volumes to a new record of 4.105 million tonnes

·         Longburn Intermodal Freight Hub: Joint Venture established

·         13 shipping services in peak season providing shippers with greater choice and more competitive rates

·         Two new Gottwald cranes commissioned

·         Just 3 Lost Time Injury days from 2 minor injuries

·         Random drug and alcohol testing introduced.

The year ahead:

·         Forecast increase in containers – necessitating investment in infrastructure, plant and people to increase capacity and capability levels

·         Projecting increase in apple plantings coming on stream over next 3 years

·         Increase in volume brings forward infrastructure investment programme

Key aspects of future include:

·         Likely to require additional empty depot space

·         Terminal intensification plan brought forward

·         Looking to build local additional storage and warehousing capacity for containerised exports

·         Total 10 year capital investment programme now over $200 million

·         Ensuring the necessary plant and equipment is acquired to meet existing and future customer needs and service expectations

Napier Port is a regional and nationally significant infrastructure asset.



1.      That the Corporate and Strategic Committee receives the Napier Port presentation and report.





Significance and Engagement Policy


Mr Drew Broadley provided an overview of the development and consultation process for the Significance and Engagement Policy and sought committee members’ feedback in light of the comments received. Suggested amendments include:

·           Addition of explanations of RMA requirements relating to resource consent application notification decisions or reference to where that information can be found

·           Addition of an explanation of regionally significant natural assets (capital) that Council doesn’t own but is charged with protecting or managing, like the HP aquifer

·           Provide clarity in relation to how Council takes into account the values and input of non-Maori

·           Special Consultative Process – include information about where documents can be accessed by the public



1.     That the Corporate and Strategic Committee receives the “Significance and Engagement Policy Feedback” report and considers the comments raised, along with current amendments in the Policy.

2.     The Corporate and Strategic Committee recommends that Council adopts, subject to final amendments, the Significance and Engagement Policy.





Hawke's Bay Regional Council Forest Assets


The Chairman welcomed Mr Mike Adye and Mr James Powrie (Team Leader Assets). Discussions and queries covered feral goat pest management, the Primary Growth Partnership for High Performance Manuka Plantations and its objectives, in addition to how forest establishment operating costs are funded, selection of tree species to meet different ‘return’ requirements and their maturity rates. There was further discussion about whether forest assets should remain on the HBRC ‘books’ or whether these would be better ‘managed’ by HBRIC Ltd.



1.     That the Corporate and Strategic Committee receives the “Hawke’s Bay Regional Council Forest Assets report.

The Corporate and Strategic Committee recommends that Council:

2.     Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted policy on significance and that Council can exercise its discretion under Sections 79(1)(a) and 82(3) of the Local Government Act 2002 and make decisions on this issue without conferring directly with the community and persons likely to be affected by or to have an interest in the decision due to the nature and significance of the issue to be considered and decided.

3.       Endorses the proposed ongoing maintenance regime for the HBRC forest estate.

4.     Requests a paper within the next year, establishing values other than commercial, that demonstrate the justification for Council maintaining this investment and projects the ongoing programme beyond 10 years to cover the rotation period of the range of species.



The meeting adjourned at 12.50pm and reconvened at 1.15pm


2015 Proposed Schedule of Council and Committee Meetings


Mrs Lambert sought Councillors input to the proposed schedule for 2025 meetings. It was suggested that the schedule should attempt to ‘stick to’ Tuesday, Wednesday or Thursday for meetings, and confirmed that the schedule proposed has taken that into consideration while also considering specific Committee requirements and statutory timeframes around consultation and hearings.



1.      The Corporate and Strategic Committee recommends that Council adopts the 2015 Schedule of Meetings as proposed.





Massey University Update


Mr John Bell (Massey University Business Development Manager, HB appointed February 2013) went through a presentation about the relationship between Massey University, which was initiated about 3 years ago, to identify areas where Massey can work with HBRC to address regional issues and create growth opportunities. Mr Bell then provided an overview of current initiatives that Massey is involved with in Hawke’s Bay.



1.    That the Corporate and Strategic Committee receives the Massey University Update report.





Implications of Ruataniwha Water Storage Scheme for Other Council Work Programmes


Mr Maxwell provided this report in response to queries asking what, if any, work programmes had been delayed or cancelled due to staff workloads being re-directed or focussed on the RWSS.



1.      That the Corporate and Strategic Committee receives the “Implications of Ruataniwha Water Storage Scheme for Other Council Work Programmes” report.





Callaghan Research and Development Fund and Update on Wairoa Primary Sector Opportunities


Mrs Jenny Brown, Callaghan Innovation Regional Partner, explained her role and the role of Callaghan Innovation in assisting businesses to access Research and Development funds to enable them to grow their businesses.

Mr Tom Skerman, Economic Development Manager, provided an update on the work on identifying Wairoa Primary Sector opportunities being done in the areas of dairying and, in particular Goat dairy.



1.     That the Corporate and Strategic Committee receives the “Callaghan Research and Development Fund and Update on Wairoa Primary Sector Opportunities” report.






The Big Six Community Engagement Feedback


Mrs Lambert outlined the process of how Councillors are now able to digest and consider all the feedback received as part of the LTP development process over the next 2-3 months.



1.    That the Corporate and Strategic Committee receives the The Big Six Community Engagement Feedback” report and considers the issues raised as part of the Long Term Plan development process.





Minor Items Not on the Agenda





Councillor / Staff


Pest Management meeting

OSPRI held an outstanding field day at Te Pohue recently, which Cr Graham attended

Cr Graham



Read with interest that Panpac, HBRC and DoC are considering how to extend their goat pest management programmes. Requests report about what the current circumstance with goats is and the size and nature of the problem as well as current resourcing.

Cr Barker


Napier-Gisborne Rail

Meeting with the Mayors of HDC, NCC, WDC and Gisborne heard presentation by a group wanting to change the rail corridor to a road, and another from the short-line freight proposal group – where there was unanimous agreement that HBRC seeks lease of the rail corridor for re-establishment of rail freight service. Cr Dick distributed an information sheet with pertinent facts about the Napier-Gisborne rail corridor to Councillors.

Cr Wilson


PC6 meeting last night, held in Elsthorpe wasn’t very well attended but successful none-the-less. These meetings have been organised to help people get up to speed with the requirements and implications of Plan Change 6 and so hopes that attendance at future meetings is higher.

Cr Hewitt

Councillor Hewitt left the meeting at 2.45pm and Councillor Pipe assumed the Chair.


Tukituki Meetings

Lower Tukituki water user meeting – Questions for HBRIC Ltd response: what was the purpose of the meeting? Who was or wasn’t invited? Are there going to be more of these meetings?.

Cr Belford


Peter Fraser

Peter Frasier has written a report critiquing the RWSS.. Will HBRIC Ltd be reviewing the report and reporting back to Council?

Cr Belford


Business HB Hub

Proposal emailed out previously, with request from CE feedback from Councillors. Limited feedback received and CE has now advised the Agent that HBRC is willing to rent space and underwrite subject to NCC and/or HDC also agreeing to underwrite. Now awaiting response from Agent.

Cr Belford



Has heard good publicity and from all accounts attendance at Summer F.A.W.C! was up, particularly from out of town. Formal report will come from HB Tourism as part of its next quarterly update.

Cr Pipe


Waipawa meeting was very successful

Cr Pipe


Cycle Governance Group

Cr Scott attended the first meeting of the group recently and they will be formally reporting back to Council with the draft strategy once they have done some work on where funding costs will be allocated.

Cr Scott


Mangaroa signing

The Mangaroa Marae MoU signing took place last night, and several Councillors attended.

Mr Mohi





November 2014 Public Transport Update


Mrs Redgrave provided an update on the Public Transport programme, including passenger numbers, bikes on buses and fare structures.



1.     That the Corporate and Strategic Committee receives the November 2014 Public Transport Update report.





Works Group Background and Financial Presentation





1.      That the “Works Group Background and Financial Presentation” report be deferred to the 10 December 2014 Environment and Services Committee meeting.






There being no further business the Chairman declared the meeting closed at 2.55pm on Wednesday, 12 November 2014.


Signed as a true and correct record.




DATE: ................................................               CHAIRMAN: ...............................................