Agenda of Regional Council Meeting

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

Subject: Affixing of Common Seal

Reason for Report

1. The Common Seal of the Council has been affixed to the following documents and signed by the Chairman or Deputy Chairman and Chief Executive or a Group Manager.

Seal No.

Date

1.1

Leasehold Land Sales

1.1.1 Lot 198

DP 10728

CT C2/1017

- Agreement for Sale and Purchase

1.1.2 Lot 5

DP 13096

CT E3/508

- Agreement for Sale and Purchase

1.1.3 Lot 428

DP 11483

CT C1/807

- Agreement for Sale and Purchase

1.1.4 Lot 8

DP 11626

CT C2/602

- Agreement for Sale and Purchase

3692

3693

3694

3695

27 July 2015

5 August 2015

17 August 2015

Decision Making Process

2. Council is required to make every decision in accordance with the provisions of Sections 77, 78, 80, 81 and 82 of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within these sections of the Act in relation to this item and have concluded the following:

2.1 Sections 97 and 88 of the Act do not apply

2.2 Council can exercise its discretion under Section 79(1)(a) and 82(3) of the Act and make a decision on this issue without conferring directly with the community or others due to the nature and significance of the issue to be considered and decided

2.3 That the decision to apply the Common Seal reflects previous policy or other decisions of Council which (where applicable) will have been subject to the Act’s required decision making process.

Recommendations

That Council:

1. 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.

2. Confirms the action to affix the Common Seal.

Iain Maxwell

Group Manager
Resource Management and
Acting Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

Subject: Save Our Aquifer Petition to Hawke's Bay Regional Council

Reason for Report

1. Council has received a request to lodge a petition from the community, the text of which states:

1.1. To Hawkes Bay Regional Council: We request a moratorium on any new or amended water take consents from the Heretaunga Aquifer until the TANK Group process has been completed and any necessary amendments have been made to regional plans.

2. Mr Paul Bailey will make a verbal presentation to Council, as the Representative of the petition, at the meeting on Wednesday 26 August 2015, at 9.15am.

Background

TANK Plan Change

3. In 2012, the Council formed a group of stakeholders which has become commonly referred to as the ‘TANK Group’. This Group remains active today and was convened to advise the Council on future land and water management and associated policy approaches for the Greater Heretaunga and Ahuriri catchment area. That catchment area comprises the Tutaekuri, Ahuriri, Ngaruroro and Karamu surface water catchments, Heretaunga Plains aquifer system and the associated estuarine and coastal receiving environments.

4. Through collaboration, members of the TANK Group have been tasked with providing the Council (via the Regional Planning Committee) with consensus recommendations regarding objectives and policies for a regional plan change to the RRMP covering the TANK catchments. That plan change will be a significant step towards giving effect to the National Policy Statement for Freshwater Management (NPSFM) and also implementing the HB Land and Water Management Strategy (‘LWMS’).

5. The TANK Group is not starting from a blank canvas, nor operating in a silo. The Group’s efforts fit within a broader context of statutory planning instruments and non-statutory processes and documents. These include the RMA, NPSFM, NZ Coastal Policy Statement, the Regional Policy Statement and LWMS.

6. The 2015-25 Long Term Plan signals that a regional plan change for the TANK catchments is to be ready by December 2017 for adoption and public submissions thereafter. The project plan for the TANK plan change also features public release of a draft plan change in late 2016 for informal public discussion and feedback purposes. It is very likely that the formal submission and hearing phase will be up to two years’ duration. Beyond that, it is difficult to predict the length of time which might be required to resolve any appeals made against decisions on submissions.

7. Since the TANK Group was first convened, the Group has held sixteen meetings and numerous other smaller group meetings have also occurred. Table 1 sets out the TANK Group’s current membership.

8. When first formed, the TANK Group’s work programme was aiming toward a plan change being publicly notified in June 2014. One of the principal reasons for the now extended timeframes was the TANK Group’s preference to wait for additional science information rather than make recommendations based on State of the Environment monitoring information up to 2009.

9. The Science Team has recently published the 2009-2013 State of the Environment ‘Trends’ summary report. The technical information upon which the ‘Trends’ report is based is being used to inform the TANK Group’s discussion and deliberations.

10. The TANK Group itself has not adopted any position in relation to this petition or any other proceedings for resource consent applications within the TANK catchments. However this does not, and has not, precluded individual members of the TANK Group taking a stance in relation to resource consent processes while the TANK Group continues considering the broader land and freshwater management policy options.

TABLE 1: current membership of TANK Collaborative Stakeholder Group

Member Name	Organisation/Group
Aki Paipper	Operation Pātiki ki Kohupātiki Ngāti Hori
Brett Gilmore	PanPac & HB forestry sector
Bruce Mackay	Heinz-Watties
Christine Scott	HBRC councillor
Hugh Ritchie	Federated Farmers
Ivan Knauf	Dairy sector
Jerf van Beek	Twyford Irrigators Group
Joella Brown*	Nga Marae o Heretaunga
Jason Strong	Napier City Council
John Cheyne	Te Taiao HB Environment Forum
Joyce-Anne Raihania	Department of Conservation
Lesley Wilson	HB Fruitgrowers Assoc.
Marei Apatu	Te Taiwhenua o Heretaunga
Mark Clews	Hastings District Council
Mike Glazebrook	Ngaruroro Water Users Group
Morry Black	Matahiwi Marae
Neil Eagles	Royal Forest and Bird Society (Napier)
Ngaio Tiuka	Ngati Kahungunu Iwi Inc.
Nick Jones	Hawke’s Bay District Health Board
Peter Beaven	HBRC Councillor
Peter Kay	HDC Rural Community Board
Peter Paku	Ruahapia Marae
Phil Holden	Gimblett Gravels Winegrowers
Scott Lawson	HB Vegetable Growers
Stephen Randall (Jenny Mauger)	Ngā Kaitiaki o te Awa a Ngaruroro
Te Kaha Hawaikirangi	Ngā Hapū o Tūtaekurī
Tim Herman	Pipfruit NZ
Tom Belford	HBRC Councillor
[vacant]	Fish and Game NZ (Hawke's Bay)
Vaughan Cooper	Royal Forest and Bird Society (Hastings/Havelock North)
Wayne Ormsby*	Te Roopu Kaitiaki o te Wai Māori
Xan Harding	HB Winegrowers

* recent replacements currently pending confirmation as at time of writing.

Moratorium and Prohibited Activities

11. Councils cannot impose a ‘moratorium’ merely by way of passing a council resolution. A ‘moratorium’ requires some sort of statutory instrument to effect the temporary suspension of activity. The Regional Council could affect a ‘moratorium’ by way of a change to regional plans under the RMA (presuming the finite regulatory roles of the Regional Council under the RMA allow it to do so). Alternatively, some sort of legislative change could be introduced by central government.

12. In both cases, those changes are not instant – they are subject to a process involving, at least, an assessment of benefits and costs of options, plus an opportunity for submissions to be made by interested parties supporting or opposing any such proposal. In the absence of a statutory (i.e. legislative or regional plan) restriction, the Regional Council remains obliged to receive and process any resource consent applications it may receive, assessed against existing plans and policies.

13. If a community wishes to prevent an activity from occurring it can, through policy development, make such activities ‘prohibited’ in a regional (or district) plan, through the relevant statutory processes.

14. The use of a prohibited activity status is very rare in a New Zealand context and is uncommon (only one prohibited activity exists now) in our Regional Resource Management Plan (RRMP).

15. A resource consent application cannot be made for a prohibited activity and a consent cannot be granted. As the name suggests, prohibited activity status is the most restrictive of any activity status and therefore must be used with care. The decision to use it should be backed with sound evidence of its necessity, including justification through objectives and policies (see for example Ngatiwai Trust Board v Whangarei District Council [2004] A057/04).

16. Changing the status of any consents required for water take and use would require a change to the RRMP. This would require a thorough and appropriate Plan Change process including, but not limited to, an assessment of the proposal against Part 2 of the Resource Management Act (RMA) and an associated background assessment process under section 32 of the RMA along with notification and submissions from the public.

17. Depending on the outcome of the submissions process a hearing may then also be required. These processes typically span two years or more (national statistics suggest a plan change takes on average 8 years in New Zealand at the moment).

Resource Consent Decision-making Processes

18. Council, as the consent authority, does have the option of requiring certain levels of investigation for any applicant for a new consent for the take and use of water in order for a consent to be issued. Under S88 of the RMA, the consent authority must decide if an adequate assessment of effects (AEE) has been provided to support the application. In effect, the Council as consent authority, can ‘set the bar’ in terms of the amount of the type and detail of information it requires to process the consent.

19. If Council was concerned about the management of the resource and the actual or potential effects on it, it could choose to require a detailed AEE with a high level of detailed groundwater modelling to support the application.

20. For takes within this aquifer (and others), typically the Council will require an assessment to determine that the take will not have a significant stream depletion effect on adjacent surface water bodies, that it will not adversely affect adjacent efficient bores, that it will not induce salt water intrusion, that the aquifer is able to sustain the take and that the take is efficient for the intended use.

21. Groundwater trends in the confined aquifer, as assessed through monitoring, are not demonstrating that water is being allocated on an unsustainable basis. Therefore high level detailed groundwater modelling has not been required in this area.

22. It is useful while considering this request to also reflect on what Council’s functions are when considering this type of activity.

22.1. HBRC is required to assess the effects of resource use activities and ensure that any adverse effects are avoided, remedied or mitigated through appropriate conditions in resource consents.

22.2. The RRMP assists HBRC to carry out its functions to achieve the purposes of the RMA. The RRMP has a policy and rule framework for assessing resource use activities.

22.3. HBRC must have regard to the provisions of the RRMP when considering applications for resource consents.

22.4. This gives the RRMP the force and effect of a regulation under the RMA.

22.5. Council is obliged to receive any consent application. It must grant any controlled activity application but may grant or decline any other restricted discretionary activity, discretionary activity or non-complying activity application. Generally the taking of water is a discretionary activity under the RRMP. Applications must be processed within the time limits prescribed by the RMA.

22.6. The Council is able to review consent conditions in circumstances when a regional plan change amends or adds new rules relating to freshwater allocation limits and minimum flows. If the TANK process leads to new or changed allocation limits and minimum flows, the Council will be able to review consents to align these with these amendments after the plan change becomes operative.

23. As noted above, the Council does not have the authority to set a moratorium on the allocation of water. The one precedent elsewhere in New Zealand required an Act of Parliament.

24. There is opportunity to alter the manner in which water is allocated via a plan change, and this can happen via the TANK process. Until this happens, the existing RRMP guides decision making and that enables the allocation of water where it is demonstrated that it is appropriate to do so.

Decision Making Process

25. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendations

1. That the Council formally receives the Save Our Aquifer Petition.

2. That Council declines the request to impose a moratorium on any new or amended water take consents from the Heretaunga Aquifer for the reasons noted in this paper.

Gavin Ide

Manager, Strategy and Policy

Malcolm Miller

Manager Consents

Iain Maxwell

Group Manager
Resource Management and
Acting Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

Subject: Heretaunga Plains Groundwater

Reason for Report

1. At the Regional Council meeting on 29 July, Council instructed, by resolution, that staff investigate options for developing an ‘interim limit’ for groundwater on the Heretaunga Plains and report back with options available to achieve this by the end of August 2015.

2. This report presents a range of options that could be pursued to develop an understanding of what the theoretical limits for groundwater pumping could be based on effects on the environment.

3. It is important to note that a ‘limit’ per se could not be adopted by Council without following due process under Schedule 1 of the Resource Management Act. This Schedule outlines the processes to be followed in developing policy statements and plans by local authorities. In particular it requires engagement and consultation with Ministry for the Environment, other Ministries, iwi, other local authorities and our broader community.

Background

4. One of the primary issues that has generated interest in this matter from a broader community perspective is a view that the Heretaunga Plain Aquifer is being managed unsustainably and consents are being granted in the face of evidence that the aquifer is under pressure. Staff are clear that this is not the case.

5. Monitoring across the confined part of the aquifer suggest that most groundwater levels have remained similar for approximately 150 years. There is also no evidence of saline intrusion (the sea pushing into the aquifer) in the groundwater monitoring bores close to the coast. The monitoring that is being undertaken shows that the aquifer is not under ‘stress’ in the confined part. This suggests that Council does not need to take any immediate action.

6. The other factor at play is a suggestion that pumping water from the confined part of the aquifer has an immediate effect on the semi-confined and unconfined parts, lowering river flows, and that this in turn affects those who are taking water in these areas and are linked to minimum flows. This does not happen. The aquifer pumping in the confined zone will not cause a stream depletion effect in the semi-confined or unconfined parts of the aquifer and so continuing to issue water take consents in the confined part of the aquifer (for whatever purpose) will not unfairly disadvantage those in the semi-confined or unconfined parts.

7. In recent consent replacement processes Council has responded to new information about the semi-confined and unconfined parts of the aquifer and have limited the allocation of water in these areas and have coupled takes to minimum flows in nearby water bodies, this reflecting the understanding of stream depletion effects.

8. In light of the concerns within the community and the misunderstanding of the aquifer and how it behaves, staff are developing a range of digital media and other communications material that will describe the new understanding of the geology of the area and how the aquifer behaves. We consider this will be useful in providing people confidence that, despite some views, Council has a good understanding of the aquifer and is developing cutting edge tools to assist with its future management.

Summary of Options

9. It is emphasised here that the summary of options, other than option 1, only considers the development of science programmes to support an understanding of groundwater quantity. It is not an assessment of groundwater quality.

10. Only option 1 would include groundwater quality and quantity, along with associated stream depletion effects.

Option #1 – Continue Heretaunga Plains Gravel Aquifer Model

11. The model is currently under construction and calibration by the HBRC Hydrology/Hydrogeology team. Steady state and transient model versions are scheduled to be calibrated by 1^st quarter 2016.

12. To evaluate coastal areas and the potential for sea water intrusion due to over abstraction from the aquifer, a contaminant model will also be required. Predictive scenarios for limit setting can be developed after the transient model has been constructed and calibrated.

13. Results of predicative scenarios for limit setting could be completed and reported by 3^rd or 4^th quarter 2016. This work stream has already been accounted for in project budgets and there would be no additional costs associated with this option.

Option #2 – Heretaunga Plains Gravel Aquifer Model –Steady State only

14. If temporal variation (including periodic fluctuations or long-term trends) is important in either the groundwater stresses to be modelled or the model results being sought, transient simulations are required. Otherwise, steady state predictions should be considered.

15. A model that is calibrated in steady state only will probably only allow predictions of changes caused by impacts such as water extraction or climate change with low confidence. However, if a transient model is developed, the model is likely to provide a high level of confidence when predicting periods shorter or similar to that of the transient model are used.

16. With this understanding, the sequence of events would be the following:

16.1. Calibrate a steady-stage model

16.2. Evaluate preliminary limit setting

16.3. Calibrate a transient model

17. The preliminary evaluation (11.2) would probably be revised after the transient model had been calibrated, and the predictive scenarios would be re-run.

18. Using this approach, a preliminary evaluation could be conducted and reported by 1^st quarter 2016. However, this option would delay further development of the Heretaunga Plains Gravel Aquifer, suspending the overall schedule by approximately 3 to 5 months.

19. If this option was contracted to an external party to complete it would require an additional $80,000 to fund.

Option #3a – Sub-model Created from Current Heretaunga Plains Gravel Aquifer Model - Internal

20. The Heretaunga model is currently under construction and has yet to be calibrated or vetted. However, a preliminary evaluation for limit setting in the confined coastal areas of the Heretaunga Plains can be conducted by creating a sub-model of the Heretaunga Plains Gravel Aquifer model.

21. Under this option, the sub-model would be calibrated, but not to the degree that the Heretaunga Plains Gravel Aquifer model will be calibrated. The evaluation completed under this scenario would be considered preliminary at best, and would probably be revised once the Heretaunga Plains Gravel Aquifer model was complete. Under this option, results of preliminary evaluation for limit setting in the coastal confined aquifer could be completed and reported by 1^st quarter 2016.

22. Under this option, this workstream would be completed by HBRC’s Hydrology/Hydrogeology team. There would be no additional external costs associated with this option. However, this option would delay further development of the Heretaunga Plains Gravel Aquifer, suspending the overall schedule approximately 3 to 5 months.

Option #3b – Sub-model Created from Current Heretaunga Plains Gravel Aquifer Model - External.

23. This option is similar to Option #2, with the primary difference being that most of the work would be conducted by an outside consultant. HBRC would provide the basic model setup to an outside consultant using the existing Heretaunga model. The consultant would be required to calibrate the model and conduct the necessary preliminary evaluation of limit setting for the confined coastal aquifer.

24. As with Option #2, results of preliminary evaluation for limit setting in the coastal confined aquifer could again be completed and reported by 1^st quarter 2016. While most of the work would be conducted by an outside consultant, team members from the Hydrology/Hydrogeology team would still be required for model development on an as-needed basis.

25. It is estimated that this would result in periodic delays in the development of the Heretaunga Plains Gravel Aquifer model and push back the overall model development and predictive scenario schedule approximately 1 to 2 months.

26. Costs for this work stream to be conducted by an outside consultant are estimated at $150,000.

Option #4 –Water Balance and Percentage of Groundwater Recharge

27. A simple alternative for evaluating limit setting would be a decision based process based on simple water balance (groundwater recharge and discharge). The calibrated steady state model would provide the values for groundwater recharge (groundwater entering the confined aquifer from the hydraulically upgradient unconfined aquifer) and groundwater discharge (through springs and submarine springs). Note: This would essentially be the first step for Option #2.

28. The information from this would be used to inform any limit setting for the confined coastal aquifer based on management objectives (i.e. controlling saltwater intrusion, stream depletion effects, maintaining groundwater levels, etc.) and a function of groundwater recharge percentage. This approach is considered very simplistic and would have a high level of uncertainty.

29. If this option was contracted to an external party to complete it would require an additional $40,000 to fund.

Option #5 – Sea water Intrusion Evaluation only

30. As previously mentioned, according to our understanding of the conceptual model of the Heretaunga Plains gravel aquifer, sea water intrusions at coastal areas are unlikely. This is because of the very high piezometric heads of the aquifer, some approximately 10 m above sea level. Moreover, the sea water/fresh water interface is most likely located several kilometres offshore.

31. For any seawater intrusion to occur, this high pressure difference would have to be overcome, e.g. aquifer drawdowns generated by pumping would have to be close to 10 metres. Such high drawdowns are not known currently to occur. In the coastal areas, pumping drawdowns are typically less than 1 m, even for large abstractions. This is also supported by groundwater monitoring data which does not show any significant drawdown trends.

32. If only the potential for sea water intrusion was to be addressed, a simplified “crude” model could be used to conduct an analysis on specific scenarios. Steps for this approach would include:

32.1. Set up and calibrate a steady state model

32.2. Simplified model construction, would only include key features (i.e. major streams)

32.3. Using a simple scenario (e.g. one well pumping at different rates using a range of values for aquifer parameters)

32.4. Simple transient simulation (constant average pumping/ recharge, not seasonal variations)

32.5. This type of evaluation would be fairly easy to set up and conduct. The results of this analysis would be to provide us with a preliminary estimate of what would have to occur for sea water intrusion to occur. This option would probably delay further development of the Heretaunga model by about 1-2 months.

33. If this option was contracted to an external party to complete it is likely to require an additional $100,000 to fund.

Costs

34. All options, except option 1 have either an impact on the delivery of the agreed science programme for Heretaunga groundwater, or a financial implication if the work is contracted externally.

35. There are no options for funding this work from within existing science budgets, without a corresponding impact on service delivery. No detailed assessment of what work could be discontinued to fund this has been conducted.

Implementation of the Information

36. Once completed, the technical information could be used to form a position that Council could adopt around processing any new consents for takes from the aquifer.

37. This was done for the Ruataniwha basin groundwater area in 2007. By 2007, modelling of the Ruataniwha Basin groundwater had developed to a stage where it was understood that increasing groundwater abstraction would result in further reduction in flow in the Tukituki and Waipawa Rivers.

38. Armed with this understanding Council endorsed an approach that applications for resource consent to take groundwater from the Ruataniwha basin be publically notified with a likelihood of the staff recommendation being to decline the application. This effectively stopped the further allocation of groundwater on the Ruataniwha Plains.

39. If the technical work for all or parts of the Heretaunga Plains demonstrated that the modelled limit was either close, or already exceeded, then Council could look to take a similar approach.

40. This could require increasing the information and processing requirements for applications. If applicants wished to obtain water contrary to the limits indicated by the modelling they would need to provide a more detailed and sophisticated groundwater model that demonstrates water availability. Council could require this information under S88 of the RMA. If this information was not compelling, it is likely that the staff recommendation would be to decline the application.

41. If the technical work demonstrated that the modelled limit was far from being exceeded then Council could have comfort that continuing to issue resource consents, with the associated best practise and examination of the applications, was not going to impact on resource sustainability.

42. This latter approach is the current approach of consenting staff in the Heretaunga Plains confined aquifer areas. The monitoring provided by Council’s monitoring bores does not indicate that the resource is being managed unsustainably. It appears that there is still capacity to allocate water. However consents are generally issued for a maximum of 10 years in this area and then have review conditions, which provide for allocation limits to be adjusted if RRMP provisions are developed with new allocation limits that would be exceeded under the current allocation processes.

43. Exactly how these are adjusted can be guided by the RRMP policies and rules and these policies and rules could establish priorities for the use of water. This approach allows for the groundwater modelling to be completed and the TANK process to conclude before consent processing changes are made.

44. An alternative option, if the modelling shows limits are breached or are close to breach, could be to create a second category of groundwater takes which are given less priority should the RRMP change. If existing groundwater permits are assigned “A” allocation status new consents could be assigned “B” allocation status. These “B” groundwater takes would not be able to be replaced once the allocation limit is set via the plan change process, if the allocation is exceeded. This has parallels with the current surface water approach for consents where the allocatable volume is exceeded.

45. In this case Policy 39(c)(iv) provides:

45.1. “Where over-allocation still exists, to reduce the allocation on a pro-rata basis except that where the consent holder has been advised (e.g. in the consent document) that the water allocated may no longer be available for allocation at the time of consent renewal, in which case the consent may not be renewed.”

46. This approach would give some security that existing takes won’t be affected by further allocation that proves to be unsustainable. However, this approach could have the effect of discouraging some activities from establishing if they are not confident that they will have adequate certainty for taking water, when in time the modelling and TANK work may establish that there is still water to allocate.

47. Note that this would come back for consideration at another meeting if the limits were breached.

Financial and Resource Implications

48. If an option other than #1 were chosen there would be impacts on either cash or staff time.

49. If the impact was on staff time then completion of the final Heretaunga Groundwater model would likely be delayed and so delay the completion of the TANK policy process.

50. If the impact was on cash (i.e. the work was contracted out) then Council would either need to agree to unbudgeted expenditure or instruct staff to review other budgeted work and reduce the levels of service in order to free up the cash for this work.

51. The following table summarizes the options and indicates the potential impact on timing of existing work and cash contributions;

Option	Impact on TANK GW science	Additional external cost
1 - Existing programme	No change	No change
2 – Steady State model	Delay 3- 5 months	$80,000
3a – Sub model internal	Delay 3- 5 months	Nil
3b – Sub model external	Delay 1-2 months	$150,000
4 – Water balance/recharge	Nil	$40,000
5 – Sea water intrusion	Delay 1-2 months	$100,000

Decision Making Process

52. Council is required to make a decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained in Part 6 Sub Part 1 of the Act in relation to this item and have concluded the following:

52.1. The decision does potentially significantly alter the service provision or affect a strategic asset.

52.2. The decision does fall within the definition of Council’s policy on significance and will require consultation with the public.

52.3. The persons affected by this decision are all persons with an interest in the region’s management of natural and physical resources.

52.4. Options for Council’s consideration are included in this report.

52.5. The decision may be inconsistent with an existing policy or plan as the Regional Resources Management Plan currently does not have any groundwater allocation limits.

52.6. Given the nature and significance of the issue to be considered and decided, and also the persons likely to be affected by, or have an interest in the decisions made, Council will need to consult directly with the community or others having an interest in the decision.

Recommendations

That Council:

1. Agrees that the decisions to be made are significant under the criteria contained in Council’s adopted policy on significance and that Council cannot 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.

2. Instructs staff to begin work on option X and that this be completed using internal/external resources.

3. If the work is to be completed externally, agrees to this being unbudgeted and unfunded expenditure.

Mark Trewartha

Team Leader Principal Scientist Hydrology/Hydrogeology

Malcolm Miller

Manager Consents

Dr Stephen Swabey

Manager, Science

Iain Maxwell

Group Manager
Resource Management and
Acting Chief Executive

Attachment/s

There are no attachments for this report.

Regional Transport Committee Amended Terms of Reference for Adoption

Attachment 1

Regional Transport Committee

Terms of Reference

(for Council adoption 26 August 2015)

1. Prepare the Regional Land Transport Plan (RLTP) for approval by the Regional Council, in accordance with the Land Transport Management Act 2003.

2. Prepare the Regional Public Transport Plan (RLTP) for approval by the Regional Council, in accordance with the Land Transport Management Act 2003.

3. Monitor the implementation of the Regional Land Transport Plan and the Regional Public Transport Plan.

4. Advocate to Government on transport issues of concern to the region.

5. Undertake governance of RoadSafe Hawke’s Bay.

6. Monitor passenger transport objectives and make recommendations to the Regional Council on public transport policies.

7. Provide the Regional Council with any advice and assistance it may request in relation to its transport responsibilities.

Members	a. Voting Members Two elected members of the Regional Council being: Councillor Alan Dick Councillor Rick Barker One representative, as appointed by Council, from each of the following organisations who are able to propose to the Committee short term replacements to attend in their place if they are unable to attend any meeting: Wairoa District Council Hastings District Council Napier City Council Central Hawke's Bay District Council New Zealand Transport Agency
	b. Advisory Members (non voting)
	New Zealand Police – representing road safety Automobile Association (AA) – representing access and mobility, including private motorists, pedestrians, cyclists and public transport users Port of Napier – representing the Port and coastal shipping KiwiRail – representing rail issues Road Transport Association NZ – representing the road transport industry; Cultural interests representative, also representing environmental issues
Chairman	A member of the Committee as elected by the Hawke’s Bay Regional Council, being: Councillor Alan Dick
Deputy Chairman	A member of the Committee as elected by the Hawke’s Bay Regional Council, being: Councillor Rick Barker
Quorum	A quorum of the Regional Transport Committee shall be four members
Voting	In accordance with section 105(7) at any meeting of the RTC, the Chairman, or any other legislated person presiding at the meeting,— (a) has a deliberative vote; and (b) in the case of an equality of votes, does not have a casting vote (and therefore the act or question is defeated and the status quo is preserved). Regional Council, Territorial Authority and NZ Transport Agency representative members have full speaking rights and voting rights on all matters
Advisory Members	Advisory members are non-voting. The role of advisory members is to: Provide advice to the Regional Transport Committee on matters pertaining to their advisory portfolios, when requested by the Chair Report on relevant activities or events pertaining to their advisory portfolios.
Meeting Frequency	Three monthly, or as required
Staff Executive	Transport Manager
Technical Advisory Group (TAG)	The Transport Committee considers advice relating to strategic transport issues from a Technical Advisory Group (TAG), generally comprising Roading and Infrastructural Planning officers from NZTA and the Territorial Authorities, and is chaired by the HBRC Transport Manager. TAG members attend but do not vote at the Transport Committee meetings. TAG members may provide advice at meetings when invited to do so by the Chair

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

Subject: Recommendations from the Environment and Services Committee

Reason for Report

1. The following matters were considered by the Environment and Services Committee on Wednesday 12 August 2015 and are now presented for consideration and approval.

Decision Making Process

2. These items have all been specifically considered at the Committee level.

Recommendations

The Environment and Services Committee recommends that Council:

HBRC Works Group

2. Endorses the findings of the independent review of Council’s service delivery arrangements of its infrastructure functions completed in accordance with Section 17(A) of the Local Government Act 2002, and agrees to retain the existing service delivery arrangements for Council’s infrastructure functions through annual contracts between the Group Manager Asset Management and the HBRC Works Group.

3. Notes the performance of the HBRC Works Group for the 2014-15 year.

2015-16 Land Management Operational Plan

4. Endorses the Land Management Team Operational Plan for the 2015-16 financial year.

Regional Park Network Improvement Programme

5. Endorses the following projects totalling $141,111 and proposed to be funded from the $160,000 Borrowing Provision budgeted in the 2015-16 financial year; being:

5.1 Pekapeka, $33,000 for

- Western wetland enhancement (tree & rubbish removal)

- Land swap provision (Waireporepo Pa)

- Poukawa Stream riparian planting

- Island Pa fencing

- CANTEEN table installation

5.2 Pakowhai, $22,295 for

- Gateway signage

- Toilet installation

- Tree enclosures

5.3 Waitangi, $58,021 for

- Gateway signage

- East Clive / Tukituki Estuary interpretive signage

- East Clive erosion control plantings (trial)

- Detailed plans for Waitangi Estuary Enhancement

- Bird viewing hide upgrade and pathway

5.4 Tutira, $17,795 for

- Gateway signage

- Walking track directional signage

- Boundary fencing

5.5 Ouepoto Reserve at Aramoana, $10,000 for development of the Reserve.

Reports Received

6. Notes that the following reports were provided to the Environment and Services Committee meeting.

6.1 2015 National Horticultural Field Days Event

6.2 Cape to City project update

6.3 CHBDC Wastewater Treatment

6.4 Clifton to Tangoio Coastal Hazards Committee Update

6.5 HB Hazards Portal

Mike Adye

Group Manager
Asset Management

Iain Maxwell

Group Manager
Resource Management and
Acting Chief Executive

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

Subject: Hearings Committee Terms of Reference

Reason for Report

1. The Terms of Reference were modified in good faith in November 2013 reflecting a significant change in the make-up of the Council following the Local Body elections.

Recommended Amendments

2. One of the ‘terms’ is now proving problematic in that the appointment and convening of a Hearing Panel within tight statutory timeframes is difficult for staff to plan around with the need to convene a Hearings Committee meeting at short notice.

3. In that light staff are requesting that the terms of reference is modified to its previous ‘delegation’ to allow more agility in appointing and convening a Hearing Panel within short timeframes.

4. It is proposed that delegation be given to the Chair of the Hearings Committee and the Chairman of the Regional Council to appoint and convene a Resource Consent Hearing Panel.

5. In addition, discussions at the 18 August Maori Committee meeting around appointments of representatives to the Hearings Committee revealed that, if possible, the Maori Committee would like to appoint up to four representatives. This has come about as more Maori Committee members become accredited through the ‘Making Good Decisions’ course and want to be more involved in resource consent hearing processes.

6. The current Terms of Reference for the Hearing Committee follow, in which the proposed changes are shown using strike-through text for deletions and underlined additions.

Hearings Committee

Terms of Reference

(adopted 6 November 2013)

1. Pursuant to Section 34(1) of the Resource Management Act (RMA) the Hawke's Bay Regional Council delegates the following functions, powers and/or duties under the RMA^{^[1]}:

1.1. To hear and make decisions on applications arising out of the Council's regulatory responsibilities as follows:

1.1.1. notified applications where submissions have been made and submitters wish to be heard;

1.1.2. reviews of conditions (s.128) where consent holder and/or submitters wish to be heard;

1.1.3. notified applications where submissions have been made and where the Committee considers it necessary to hold a hearing;

1.1.4. objections to decisions made under delegated authority by staff, where they wish to be heard (s.357);

1.1.5. where the staff recommendation is to decline any application for reasons other than inadequate information;

1.2. To determine other related discretionary process matters that may be associated with a hearing such as waivers of time, as appropriate under the Resource Management Act 1991.

1.3. To hear and make decisions on objections against costs under Section 36(6) of the Act and objections to the levying of Financial Contributions under Section 108 of the Act.

1.4. To hear and make decisions on lapsing of consents under Section 125 of the Act where a decision of an officer acting under delegated authority is subject to an objection.

1.5. The appointment of Hearings Committee members or independent commissioners to a Hearing Panel to undertake the functions set out above in 1.1 to 1.4 pursuant to s 34A RMA and the appointment of the Chair of the Hearing Panel.

2. Pursuant to section 82 of the Biosecurity Act (BA) the Hawke’s Bay Regional Council delegates the following functions, powers and/or duties under the BA:

2.1. To hear and make decisions on submissions received on any statutory documents prepared by Council which have been subject to a formal submission process under the Biosecurity Act.

2.2. To authorise the resolution and settlement of appeals and references through formal hearings or mediation before the Environment Court or any other judicial body which relate to the preparation of any statutory documents prepared under the Biosecurity Act by the Council and to either generally or from time to time delegate to officers the authority to resolve and settle appeals and references through formal mediation.

3. The Hawke’s Bay Regional Council delegates to ~~the Hearings Committee~~, the Hearings Committee Chairman or Council Chairman, the ability to appoint Hearings Committee members or Independent Commissioners to a Hearing Panel to undertake the functions set out above in 1 and 2 above and the appointment of the Chairman of the Hearing Panel.

Members:	Up to five elected and accredited Members of Council; and up to ~~three~~ four accredited members of the Maori Committee, nominated by the Chairman of the Maori Committee; being: Councillors Christine Scott, Peter Beaven, Dave Pipe, Debbie Hewitt and Rick Barker, and Regional Council Chairman Fenton Wilson (ex officio) Mike Mohi
Hearing Panel Composition:	The Hearing Panel sitting to make decisions relating to 1. and 2. above shall comprise any combination of: The Chairman sitting alone; Up to three members of the Hearings Committee; Up to five ~~accredited~~ Commissioners; If considered advisable in any particular case by the Chairman of the Hearings Committee, a member of the Council’s Maori Committee. Also, when appropriate, the Chairman of the Standing Committee when hearings directly relate to policy originating from that Committee.
	The Hearing Panel Chairman has a Casting vote.
Chairman:	A Chairing Accredited member of the Committee as elected by the Council being: Christine Scott
Deputy Chairman:	A member of the Committee as elected by the Council being:
Meeting Frequency:	As is required
Quorum	The Chairman of the Hearings Committee plus one other member of the Hearings Committee or the Chairman of the Regional Council
Staff Executive:	Group Manager Resource Management and Group Manager Asset Management
Qualifications:	In accordance with s39B all persons appointed to a hearing panel shall be accredited, except that where there is a group, and over half of all the persons in the group are accredited and there are exceptional circumstances that do not provide the time or opportunity to ensure that all persons in the group are accredited.

Decision Making Process

7. Council is required to make a decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained in Part 6 Sub Part 1 of the Act in relation to this item and have concluded the following:

7.1. The decision does not significantly alter the service provision or affect a strategic asset.

7.2. The use of the special consultative procedure is not prescribed by legislation.

7.3. The decision does not fall within the definition of Council’s policy on significance.

7.4. The persons affected by this decision are all persons with an interest in the region’s management of natural and physical resources

7.5. Options that have been considered include retain the status quo

7.6. The decision is not inconsistent with an existing policy or plan.

7.7. Given the nature and significance of the issue to be considered and decided, and also the persons likely to be affected by, or have an interest in the decisions made, Council can exercise its discretion and make a decision without consulting directly with the community or others having an interest in the decision.

Recommendations

That Council:

2. Agrees to modify the Terms of Reference of the Hearings Committee by:

2.1.

Malcolm Miller

Manager Consents

Iain Maxwell

Group Manager
Resource Management and
Acting Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

Subject: Tukituki Plan Change 6 Adoption

Reason for Report

1. On 25 June 2015, the Board of Inquiry released its final decision on the Tukituki Catchment Proposal in respect of the reconsideration of Rule TT1(j) as directed by the High Court decision. No appeals were lodged with the High Court in respect of that decision.

2. The Council must now take the following steps to adopt Plan Change 6 for the Tukituki Catchment and make it operative:

2.1. as soon as practicable amend the Regional Resource Management Plan as per the final decision (s149W(2)(a));

2.2. adopt the amended plan (s149W(2)(b)(i)); and

2.3. make the plan operative by giving public notice (s149W(2)(b)(ii)).

3. There is no discretion to not adopt the amended plan.

Discussion

4. This item represents the end of the ‘Tukituki Catchment Proposal’ process.

5. It started in June 2012 when Council made the decision to integrate the Tukituki Plan Change and the Ruataniwha Water Storage Scheme projects into the Tukituki Water Strategy. Prior to that two separate work streams were being progressed and a significant amount of work had already taken place in terms of the Ruataniwha Water Storage prefeasibility and feasibility. It included Change 5 and the Tukituki Choices consultation process.

6. The Tukituki Catchment Proposal was called in by the Minister for the Environment and Minister of Conservation in June 2013 and the formal process started with notification in July 2013, just over two years ago.

7. From a planning process perspective, this is a very short timeframe with the workload being very intense for a large number of staff and external personnel for the first two years of that process.

8. It is the first of the Council’s catchment based plan changes to be made operative and it brings a number of new provisions into the Regional Resource Management Plan in order to give effect to the National Policy Statement for Freshwater Management. In summary they include:

8.1. Surface and groundwater quality limits and targets

8.2. Regulation around production land use which include requirements around:

8.2.1. Nutrient budgets

8.2.2. Farm environmental management plans

8.2.3. Stock exclusion from beds and margins of rivers, lakes and wetlands

8.2.4. Maximum nitrogen leaching rates

8.2.5. Culverting or bridging stock races

8.2.6. Compliance with instream Nitrate-Nitrogen and Dissolved Inorganic Nitrogen limits

8.3. Groundwater allocation limits

8.4. Managing surface water depletion effects from groundwater abstraction.

8.5. Development of a cultural monitoring framework

9. While not a new provision, the increases in the minimum flow regime, together with these new provisions will significantly change and in most cases will improve the way landowners do business and will improve environmental outcomes. However, it is not without its implementation challenges and it needs to be well planned from both the Council and landowner perspective.

10. A paper will be presented to the Regional Planning Committee in September providing an overview of the implementation plan for the Tukituki Plan Change.

11. In order to give time for the amended Regional Resource Management Plan to be made ready for public viewing, it is recommended that the operative date for Plan Change 6 be Thursday 1 October 2015 with public notice being given at least 5 working days beforehand as required by the RMA.

Financial and Resource Implications

12. Financial and resource implications of making the Tukituki Plan Change 6 operative and implementing it are included in the Long Term Plan 2015-25.

Summary

13. The purpose of this item is for Council to adopt an amended Regional Resource Management Plan including the Tukituki Plan Change 6. It is recommended that public notice be given that Plan Change 6 will become operative on Thursday 1 October 2015.

Decision Making Process

14. Council is required to make a decision in accordance with the requirements of the Local Government Act 2002 (the Act). In this case, the decision to be made is prescribed by the Resource Management Act and is a culmination of a considerable public consultation process.

Recommendations

That Council:

1. Receives and adopts the amended Tukituki Plan Change (Plan Change 6) and consequential amendments to the Regional Resource Management Plan as per the final decision of the Board of Inquiry in accordance with s149W(2)(a) of the Resource Management Act.

2. Makes operative the amended Tukituki Plan Change and consequential amendments to the Regional Resource Management Plan as per the final decision of the Board of Inquiry on Thursday 1 October 2015 by giving public notice in accordance with s149W(2)(b)(ii) of the Resource Management Act.

Gavin Ide

Manager, Strategy and Policy

Helen Codlin

Group Manager Strategic Development

Attachment/s

1	Tukituki Plan Change 6
2	Tukituki Plan Change 6 Schedule XIV – Tukituki River Sub-catchments
3	Tukituki Plan Change 6 Schedule XV – Water Management Zones
4	Tukituki Plan Change 6 Schedule XVI – Surface Water Allocation and Minimum Flow Sites
5	Tukituki Plan Change 6 Schedule XVII – Groundwater Allocation Zones
6	Tukituki Plan Change 6 Schedule XX Slope Classes

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

SUBJECT: Setting of Rates for the 2015-16 Financial Year

Reason for Report

1. Following the adoption of the 2015-2025 Long Term Plan (LTP), the rate requirements have been calculated for the 2015-16 financial year as included in the LTP, and it is now necessary to resolve to set the rates for the period 1 July 2015 to 30 June 2016 as outlined in Attachment 1 to this paper.

Commentary

2. The Local Government (Rating) Act 2002, Section 23 sets out the procedure for setting rates. The main issues are that rates must:

2.1. Be set by a resolution of the local authority

2.2. Relate to a financial year

2.3. Be set in accordance with relevant provisions of the local authority’s Long Term Plan and Funding Impact Statement.

3. Council approved the level of rates to be collected, and calculation factors in the Funding Impact Statement for 2015-16 which was included in the LTP 2015-2025. This plan was adopted by Council on 24 June 2015. The rates included in the plan have been consulted on by a special consultative procedure as part of the LTP process.

4. The Local Government (Rating) Act 2002, sections 13 and 14 (General Rate) section 15 (Uniform Annual General Charge) and sections 16, 17 and 18 (Targeted Rates) clarifies how each such rate should be set.

5. Section 23 of the Local Government (Rating) Act 2002 does not require that the rating resolutions included in this paper be publicly notified, as details of the rates have been included in the Council’s Long Term Plan 2015-2025 for the 2015-16 financial year.

6. The resolutions and Attachment 1 of this paper have been reviewed by Philip Jones of PJ Associates and any issues raised by him have been included in this paper.

7. Council’s lawyers have been requested to provide an opinion on whether the resolutions as drafted in this paper comply with the provisions of the Local Government Act 2002 and the Local Government (Rating) Act 2002. This opinion is appended to this paper as Attachment 2.

Decision Making Process

8. Council is required to make a decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained in Part 6 Sub Part 1 of the Act in relation to this item and have concluded the following:

8.1. The rates for 2015-16 were included in the LTP 2015‑2025 and have been consulted on by the use of a special consultative procedure.

8.2. Council has no option but to set the rates any one financial year in order to ensure that the services the Council provides are fully funded.

8.3. Persons affected by the decision in this paper will be the ratepayers within the Hawke’s Bay region.

8.4. The decision is not inconsistent with an existing policy or plan.

Recommendations

That Council:

1. Agrees that the decisions to be made on the setting and assessing of rates cover information in the Funding Impact Statement for the 2015-16 year which was included in the LTP 2015-2025 as required by Section 95 of the Local Government Act 2002. These decisions require special consultative procedures under Section 83 of the Act, such special consultative procedure having been previously carried out on the 2015-16 year which was included in the LTP 2015-2025.

2. Resolves the setting of rates for the 2015-16 financial year and sets the following rates under the Local Government (Rating) Act 2002, on rating units in the region for the financial year commencing on 1 July 2015 and ending on 30 June 2016. These rates are set in accordance with the Funding Impact Statement 2015-16 which forms part of the Long Term Plan 2015-25.

2.1. A general rate is set under sections 13 and 131 of the Local Government (Rating) Act 2002 on land value as set out in Attachment 1, and this attachment forms part of this resolution.

2.2. A uniform annual general charge is set per separately used or inhabited part of a rating unit, set under section 15(1)(b) of the Local Government (Rating) Act 2002 as set out in Attachment 1, and this attachment forms part of this resolution.

2.3. The following differential targeted rates are set under section 16 of the Local Government (Rating) Act 2002 as set out in Attachment 1, and this attachment forms part of this resolution including:

2.3.1. Subsidised Public Transport

2.3.2. Heretaunga Plains Control Scheme

2.3.3. Upper Tukituki Catchment Control

2.3.4. Central and Southern Rivers and Streams

2.3.5. Wairoa River and Streams

2.3.6. Various Stream and Drainage Schemes

2.3.7. Animal and Plant Pest Control

2.3.8. Sustainable Land Management

2.3.9. Plant Pest Strategy

2.3.10. Healthy Homes – Clean Heat Financial Assistance

2.3.11. Clean Heat and Insulation Loans

2.3.12. Economic Development.

2.4. The following uniform targeted rate is set under section 16 of the Local Government (Rating) Act 2002 as set out in Attachment 1, and this attachment forms part of this resolution:

2.4.1. Emergency Management.

3. Agrees that the due date for payment of rates as set by the Hawke’s Bay Regional Council for the financial year commencing 1 July 2015 and ending on 30 June 2016 be 1 October 2015.

4. Agrees that, under sections 57 and 58(1)(a) of the Local Government (Rating) Act 2002, a 10% penalty be applied to unpaid current rates as at 1 February 2016.

5. Agrees that the rates set for the financial year commencing on 1 July 2015 and ending on 30 June 2016, as set out in Attachment 1, are inclusive of GST.

Paul Drury

Group Manager
Corporate Services

Attachment/s

1	Rates for the period 1 July 2015 to 30 June 2016
2	Legal Opinion on Rates Resolution

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

SUBJECT: Financial Report for 12 Months Ended 30 June 2015
including Draft Annual Report 2014-15 Adoption for Audit

Reason for Report

1. The purpose of this paper is to provide explanations covering variances both from the re-forecast budgets and from Annual Plan budgets for year ended 30 June 2015, and to provide the draft Annual Report for Council to adopt before forwarding to the Audit Office to form the basis of their audit.

Council Financial Overview (Attachment 1)

2. The financial overview for the year ended 30 June 2015 is set out in a similar format as Council receives during the year. The emphasis in this report is to provide explanations for variances (actual compared to reforecast) as:

2.1. Operating Account and Scheme Reserves

2.2. Balance Sheet

2.3. Cashflow Statement

2.4. Capital Activity Summary

3. This overview does not form part of the published Annual Report.

Draft Annual Report Document (Attachment 2)

4. The Chairman and Chief Executive Commentary provides the introduction to the performance overview, and provides the issues raised in the “Right Debate” section of the Long Term Plan and how these have been achieved during the 2014-15 year.

5. The Financial Reporting Benchmarks disclose Council’s financial performance in relation to various benchmarks to enable the assessment of whether Council is prudently managing its revenues, expenses, assets, liabilities, and general and financial dealings. The Local Government (Financial Reporting and Prudence) Regulations 2014 set out the requirements and format of reporting against these benchmarks.

6. The Service Performance – Groups of Activity section of the report covers the extent to which Council has been able to deliver on the levels of service and performance targets set out in the Annual Plan for 2014-15 under each group of activities. Financial variances (Actual to Annual Plan) are included for variances $50,000 and above.

7. The Management Statements section covers Maori Contributions to Council decision making processes, Council Controlled Organisations, implementation of national policy statements and environmental standards and financial reporting benchmarks.

8. The Financial Statements section reports Council’s financial results and notes to the accounts.

9. The Draft Annual Report is provided as Attachment 2, and has only been distributed to Councillors under separate cover. It is available to members of the public electronically only, on Council’s website as part of this Agenda.

Audit

10. The Draft Annual Report appended as Attachment 2 to this paper will, on confirmation by Council at this meeting, be forwarded to Audit for the audit process to be finalised.

11. The final audited Annual Report will be tabled for adoption at Council’s September meeting subsequent to being discussed at the Finance Audit and Risk Committee on Tuesday 22 September 2015.

Regional Disaster Damage Reserve

12. Council resolved during March 2014 that this reserve should maintain a balance of funds of between $2.75 M and $3.75 M. At this time of year Council needs to consider whether to tag operating cash balances to fund a shortfall, if any, in investments for Disaster Damage Reserve.

13. The market value of investments held in the Regional Disaster Damage Reserve is $3.4M at 30 June 2015. At that date the fund is therefore within the reserve limits set by Council and therefore it is proposed that no action should be taken to tag any cash operating balances to increase the value of this fund.

14. The Regional Disaster Damage Reserve has been set up to provide funding for the following:

14.1. Cost of responding to and managing an event.

14.2. Cost of reinstatement of any uninsured assets (eg, pathways on top of stopbanks).

14.3. Any difference between the deductible and the threshold for eligibility for central government assistance (Government covers 60% of the loss in the event of a disaster).

14.4. To fund the policy excess of $1.5 M included in the policy with private insurers to cover 40% of the loss up to $24 M in the event of a disaster.

14.5. The possibility of the cost of reinstating the level of service provided by the asset being considerably more than the optimised replacement value.

15. At 30 June 2015, 68% of this fund was held in New Zealand bonds and short term bank deposits with the remaining 32% invested in New Zealand and overseas equities. The last financial year has seen a substantial uplift in the value of international equities which has resulted in the total funds being able to show a return of 13%.

16. Council’s Investment policy states under section 8.5 that investment in equities in the Regional Disaster Reserve fund are limited to an overall maximum of 30% of that fund and are limited to New Zealand shares (up to 10%) and international shares (up to 22.5%). At the end of 30 June 2015 32% of the fund was invested in equities due to the substantial increases in the value of shares in international equities. These share prices fluctuate and already we have seen a slight weakening in some of the share prices. This position is being monitored and action will be taken to decrease the value in shares if there are further firming of share prices.

Revaluation of Council’s Assets

17. The following Council asset groups are subject to revaluation and have been incorporated where available in the draft Annual Report figures presented to this meeting. These asset groups are:

17.1. Infrastructure Assets: These assets were last revalued as at 30 June 2014; Council's current policy is to revalue these assets every three years, therefore the next revaluation is due on 30 June 2017.

17.2. Hydrological Assets: These assets are revalued every three years and the next revaluation is due on 30 June 2016.

17.3. Operational Assets: These assets include:

17.3.1. Land, buildings, plant and equipment, have been revalued at 30 June 2013. Council’s current policy is to revalue land and buildings to fair value every three years for Annual Report purposes, therefore the next revaluation is due on 20 June 2016.

17.3.2. Council’s administration building and land in Dalton Street, which represents the major asset held within operational assets, is shown in Council’s balance sheet at a book value of $7.6 million. Council’s valuers were asked to provide a fair value for financial reporting purposes to validate this book value. The fair value advised by Council’s valuers is $7.8 million.

17.4. Investment Properties – Leasehold Land

17.4.1. The main investment properties held by Council are the leasehold land in Napier and Wellington. The table below sets out the percentage changes in lessor's interest for both Napier and Wellington leasehold property.

	Napier Leasehold		Wellington Leasehold
	No. of Lessees	$	No. of Lessees	$
Valuation (Lessor's Interest) 30 June 2014	593	43.3m ¹	12	11.9m
Valuation (Lessor's Interest) 30 June 2015	548	40.1m	12	12.3m
Number of lessees freeholding ²	45	4.2m	-	-
Increase in valuation over the 12 months to 30 June 2015 adjusted for sales	-	+1m (2.5%)	-	+0.4m (3%)
Comparative for year ended 30 June 2014	-	+1.5m (3%)	-	+0.5m (4%)

¹ This opening valuation has been adjusted by $2.2 M (net of 18 properties) to reflect properties that were previously freeholded during the busy discounted period but were not removed from the valuer’s figures.

² The number of leasehold properties owned by Council reduced from 386 (30 June 2014) to 350 (30 June 2015), a decrease of 36 properties.

17.4.2. Napier leasehold property values have increased during this year by $1 M (2.5%) and Wellington leasehold property values by $0.4 M (3%). This capital gain is in line with movements in property values. These gains are in addition to the income returns on these properties – Napier leasehold yielding an average 4.36% on valuation and Wellington 6.8%.

17.5. Hawke’s Bay Regional Investment Company Limited (HBRIC Ltd): Council’s shareholding in HBRIC Ltd, which includes as its major asset the Port of Napier Ltd, is revalued every three years. This revaluation was carried out in June 2015 and the next revaluation will be June 2018. At the meeting on 29 July 2015 Council agreed to revalue HBRIC Ltd from $177.5 M to $235.22 M in accordance with the valuation recommendation by Deloittes. This resulted in the value of shares issued from HBRIC Ltd to Council in April 2012 at $1.00 increasing to $1.33 per share.

17.6. Forestry Crops: Under the international accounting standards, biological assets including forestry crops are to be revalued at the end of each financial year. Accordingly, the revaluations as set out in the table below have been received for 30 June 2015.

Forest Location	Block Area (ha)	Valuation 1 July 2014 $000	Valuation 30 June 2015 $000	Variance F (U) $000
Lake Tutira Forestry	114	1,783	2,476	693 F
Tangoio Reserve Forestry¹	550	2,343	2,550	207 F
CHB Wastewater Forestry	173	219	250	31 F
Waihapua Forest Park	174	219	283	64 F
Mahia Wastewater Forestry	36	37	48	11 F
Tutira Manuka Honey Forestry	130	332	277	55 U
Total		4,933	5,884	951 F

¹ The Tangoio Reserve forestry is administered by HBRC but is owned by the Crown.

17.7. The forestry crops have shown positive increases during the year ending 30 June 2015. These increases being due to a rise in log prices since the previous valuation and also an increase in the age of the forests and hence the growth and value.

17.8. The Tutira Manuka honey forest crops show a decrease as this is the first valuation carried out since the Manuka Forestry Estate was established. It is anticipated that in future years the value of the Manuka honey forestry will increase.

Forest Land Valuations

18. The land on which the forestry crops are grown was revalued at 30 June 2013. These revaluations are carried out every three years, so the next revaluation is due on 30 June 2016.

General Funded Operating - End of Year Position

19. Council's General Funded Operating result, subject to final audit processes, for the year ended 30 June 2015 is shown in Attachment 1 as a surplus of $297,000. When this is compared to the forecast end of year deficit of $34,000, the result is a favourable variance from forecast of $331,000.

20. The reasons for this favourable variance are set out in Attachment 1 to this paper.

21. It should be noted that the operating statement set out in Attachment 2 and included as part of the formal Annual Report to proceed to Audit, shows an operating result that differs from the general funded operating end of year position as presented to Council in Attachment 1. There are a number of reasons for this difference, the major reasons being the losses/gains in fair value of Council’s investment properties including Wellington and Napier leasehold properties and forestry assets and also the targeted rates which have been set to fund the capital purposes of Council. The fair value adjustments are included in the Statement of Comprehensive Revenue and Expense in the Annual Report but do not affect the end of year position from a general funded operating perspective. Conversely, the capital rates are included in the general funding reporting but are not included in the Statement of Comprehensive Revenue and Expense in the Annual Report.

Operations Group Profit on External Work

22. The Operations Group carries out work for Council’s flood and drainage schemes and for external parties. A profit is earned on the work for external parties and Council resolves to what extent this profit is held within Council for funding of groups of activities and also to what extent the Operations Group is able to retain a portion of the profit for any extraordinary items that are required to be funded to ensure the integrity of the Group’s activities going forward.

23. Profit on external work for 2014-15 is $180,000 (as against a budget of $104,000). When compared to the profit achieved for 2013-14 of $161,000, this is a pleasing result.

24. The Operations Group advise there is no requirement for them to retain a portion of this year’s profit to provide funding for essential expenditure items/maintenance works etc, and also because the redevelopment work on their administration offices in Guppy Road was completed during the year. Therefore the full amount of profit can be transferred to Council’s operating cash balances.

Decision Making Process

25.1. Section 97 covering significant changes in the intended level of service provision for a group of activity do not apply.

25.2. Section 83 which sets out the procedures to be followed where a special consultative procedure is to be used or adopted does not apply.

25.3. The decision does not fall within the definition of Council's policy on significance and engagement.

25.4. No options are available to Council for this item. The Annual Report is required under Section 98 of the Local Government Act 2002.

25.5. This report, when adopted, is available for any person requiring a copy of this report.

25.6. Section 80 of the Act covers decisions that are inconsistent with existing policy or plan and does not apply.

25.7. Council can exercise its discretion under Section 79 (1)(a) of the Act and make a decision on this issue without conferring directly with the community or others due to the nature and significance of the issue to be considered and decided, and also Council's understanding of the issues that persons likely to be affected by or have an interest in the decisions to be made.

Recommendations

That Council:

1. Confirms the decisions to be made are not significant under the criteria contained in Council’s adopted "policy on significance and engagement", and Council can exercise its discretion under Section 79(1)(a) of the Local Government Act 2002 and make decisions on those issues 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.

2. Adopts the Draft Annual Report for the period 1 July 2014 to 30 June 2015, subject to any adjustments required by Council, for the purposes of audit, with a view to Council adopting the final report at its meeting on 24 September 2015.

3. Resolves that $180,000 profit on external work undertaken by Council's Operations Group during the year ended 30 June 2015 be transferred to Council’s cash operating balances available to fund general funded operating expenditure.

Paul Drury

Group Manager
Corporate Services

Attachment/s

1	Financial Report for Year Ended 30 June 2015
2	Draft 2014-15 Annual Report for Adoption for Audit		Under Separate Cover – Provided in Hard Copy *to Councillors Only*

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 August 2015

SUBJECT: Monthly Work Plan Looking Forward Through September 2015

Reason for Report

1. The table below is provided for Councillors’ information, to provide them with an indication of issues and activities coming up over the next month in each area of Council.

Group	Area of Activity	Activity Status Update
Corporate Services		- Final audited Annual Report for financial year ending 30 June 2015 to go to the 24 September 2015 Council meeting. - Finalise agenda for Finance Audit and Risk Committee to be held Tuesday 22 September 2015.
Asset Management & Biosecurity	Coastal	- Coastal strategy development continues. Risk assessment phase is underway. The next Governance Group meeting programmed for 21 September will receive an update on hazard evaluation which is currently being peer reviewed.
	Biosecurity	- The third tranche of biosecurity contracts for the 15-16 financial year will be assessed. - The Cape to City widescale predator control project is underway. The next stage of wireless predator trapping trials will roll out late September or early October. The 15-16 research programme covering research on toxoplasmosis, social surveys, predator modelling and biodiversity outcomes has been largely finalised with LCR committing significant additional core funding to research. A range of high level key stakeholder meetings will take place in Wellington. - HBRC staff continue to help lead a collective Regional Pest Management Plan process. This is focusing on agreement to a collective RPMP template or shop front, aligning RPMP rules for some RPMP pests and working on collective agreement around good neighbour rules. - High performance manuka PGP progresses. HBRC are participating in a manuka commercialisation discussion along with other Manuka Research Partnership limited shareholders. These include Comvita, Te Tumu Paeroa, Landcorp, and private investors.
	Engineering	- The gravel resource and supply and demand assessment reports expected to be completed and circulated to gravel extractors once they are to hand. Meeting to be organised September. - A programme for levels of service reviews for the Heretaunga Plains drainage areas is progressing. - Modelling work associated with Coastal hazards strategy development underway. - Upper Tukituki Scheme review programme is being progressed. - A programme of consultancy projects for Gisborne District Council is ongoing.
Asset Management & Biosecurity	Land Management	- Phase one of the monitoring, evaluation, reporting and improvement plan for the priority sub-catchment program being piloted in the Papanui catchment to be completed this month. Ian Brown IB-Consulting has been engaged to review the program. - Staff have been asked to present at an Australian International Year of the Soil event in Albury, NSW on 2September. - A workshop to explore opportunities for improving synergies between groups within HBRC in the implementation of PC6 has been organised, using external expertise from Glen Lauder – CommonGround. - A workshop has been organised on 23 September at HBRC, to consider opportunities for a unified HB proposal for the Regional Research Institute funding proposed by MBIE - Planning for the East Coast Hill Country Conference set for October continues to progress.
Resource Management	Compliance	- CHB District Council Wastewater Treatment plant at Waipawa has new clarifier refitted and installed. Independent engineers report on performance has been completed and the terms of the abatement notice achieved. - CHB District Council Wastewater Treatment plant at Waipukurau required to install a new clarifier by 26 June. Not achieved by that date, due to issues with supplier concerning 1 of the 2 clarifiers purchased. One clarifier was installed and working and second installed and working at the beginning of August. Independent engineers report on performance now due 19 September to enable a month’s supply of sampling results data to be used to provide a more robust report. - Te Mata Mushrooms have ongoing odour discharge problems and have not completed the construction of an enclosed building as required by their resource consent. Six charges laid against the company for unlawful odour discharges. Hearing date has not been set at the time of writing this report. 8^th September is when the company is required to make a plea at the Hastings District Court.
Resource Management	Science	- Planning work continues to reconfigure the Awatoto and St John’s College PM₁₀ monitoring sites to allow additional PM_2.5 monitoring. - Work on the 5 year State of the Environment Air Quality report continues. - Land use and land use change satellite mapping continues in the TANK catchments - S-mapping (soil mapping) continues in the TANK catchments - Sediment modelling continuing in the TANK catchments - Land science’s regional wetland inventory continuing into the Mohaka catchment. - Papanui catchment phosphorus investigation continues - Riparian mapping to resume in the Southern Hawke’s Bay - New Land Science strategy document being written - Upgrade of iQuest loggers continues - Tukipo gauging weir will be repaired and refurbished - Upgrade of Modems to Radio telemetry continues - Upgrade Climate sites with HBRC loggers and radios continues - Mohaka at Raupunga site to be transferred from NIWA to HBRC – site preparation continuing - Cawthron Institute is continuing to work on MCI regional optimisation, improving current MCI predictive models to suit regional studies and regional limit-setting. Reference site sampling to occur in early summer 2015/16 - Cawthron have completed analysis and reporting on impacts of Taharua outflows on trout food availability in the upper Mohaka River - Fieldwork investigating water quality and salinity of Whakaki Lake will continue - Work on State of Environment 5 year Water Quality and Ecology technical reports will continue. Mohaka Water Quality SoE technical report going through final review - Targeted study of the Ahuriri estuary identifying sources of high phosphorus and looking at salinity and dissolved oxygen fluctuations continues - Work continues on developing the TANK steady-state groundwater model, including updating to a coupled groundwater/surface water flow model - The report on groundwater level changes, part of the 5 yearly SoE technical reporting is under review - Preparation of data and reviewing of reports for surface water and groundwater State of the Environment technical reports continues
Resource Management	Consents	- NCC Thames Tyne stormwater consent application process – 13 submissions received. Prehearings held 26 Feb & 9 July 2015. Agreement reached therefore Consent to be issued without hearing. Conditions include preparation of a Catchment Management Plan to progressively improve stormwater quality and amenity of stormwater drains. - Twyford Global consent applications. Raupare semi-confined issued. Ngaruroro – unconfined aquifer limited notified received 2 submissions. Placed on hold. Alternative application lodged which removed the provision for emergency water. Issued 19 May. Applicants have asked that the emergency water application now proceed. Prehearing meeting is to be convened. - Pan Pac application to extend their outfall received 3 submissions. Four prehearing meetings held between March & July. From these, Pan Pac has undertaken tests of mussels found on, and in the vicinity of the current pipeline and commissioned a Cultural Impact Assessment. Latest meeting did not lead to agreements so Panpac requested a hearing. Hearing scheduled 20 & 21 August. Hearing Panel is Clrs Scott & Beavan & Dr Roger Maaka. - Application by MLBH Family Trust to take groundwater from the Bridge Pa Pakipaki groundwater area. Hearing held & decision issued granting the take. Hearing panel was Clr Scott and Brian Gregory. - “Tranche 2” water. Applications received from HBRIC, Bostocks, Te Awahohonu Forest Trust (Gwavas Station), Ingleton Farms and R Jensen. HBRIC requested that their application be taken off hold and now proceed. Subsequently officers have issued a s92 request for further information. - Replacement & review of Ruataniwha groundwater consents is in progress. Annual volumes have been determined for each consent & notified to consent holders. Final consents now being issued. - Ngaruroro catchment consents with Ngaruroro River minimum flow conditions expired 30 May. All current consent holders have lodged replacement applications. Consents were notified & submissions closed 1 July. 12 submissions were received. Staff to initiate prehearing discussions. - CHBDC, Waipukurau & Waipawa wastewater treatment consents change of conditions & review in progress but awaiting detail on additions to treatment. - Otane wastewater treatment replacement consents lodged & currently being technically reviewed. - CPM Ashphalt Ltd application to establish an Ashphalt plant at 1438 Omahu Road has been limited notified and a prehearing meeting held. Applicant to decide on alternative options. - NCC application for coastal protection structure at Whakareri Ave remains on hold. - TAG application for an oil exploration bore at Boar Hill remains on hold.
Strategic Development	Resource Management Planning	- The Final Tukituki Plan Change (PC6) to be presented to Council’s August meeting for adoption. PC6 will become operative at a date to be set in September/October. - Work continues on PC6 Implementation Plan across Council groups. - Change 5 wetland mapping project underway to map extent of six ephemeral wetlands to resolve parts of appeal by HB Fish and Game. Mapping project to be completed in October. - TANK Group meeting #17 scheduled for 1 September. Further meetings (Oct & Nov 2015 & into 2016) are being scheduled to fit work programme and refining freshwater objectives for each of the 4 principal catchments. - Report on HBRC’s progressive implementation of the NPS for Freshwater Management during 2014-15 period is drafted for inclusion in HBRC Annual Report consideration at Council’s August 2015 meeting. - Hastings DC’s district plan hearings are now complete. HDC’s decisions on all plan topics and submission are anticipated in mid-September. - Napier CC has issued its decisions on District Plan Change 10. No appeal lodged by HBRC, but HBRC has joined as interested party to an appeal by Surveying the Bay Limited. - Environment Court Judge Thompson issued instructions and timetable for exchange of experts’ evidence in relation to HBRC’s appeal against Hastings DC’s decision to grant consent for 15 lot subdivision at Whirinaki. Environment Court hearing date from 22 Feb 2016. - Pataka is HBRC’s record of iwi authorities, hapu groups, hapu planning documents, marae contacts and various other forms of information about tangata whenua areas of interest etc. ‘Pataka’ has been officially launched with publicity in ‘Our Place’ & a variety of other networks plus a of roadshow demos being delivered to interested groups. - Heretaunga Plains Urban Development Strategy (HPUDS) Implementation Working Group meeting is scheduled for 8 September. This will be the first meeting of the Group’s new membership since 2013 local body elections.
Strategic Development	Economic Development	- Final 25 Regional Economic Development Strategy (REDS) interviews will be completed in the next 2-3 weeks, following which the interview, workshop and literature review data will be analysed and feedback and comment sought from REDS governance group and key regional stakeholders. Concurrent Central Government (MBIE) initiative has commenced looking to establish a Regional Action Plan by October. - Phase 1 of Wairoa Horizon Trust business development scoping project draft report due to be received in early September. - Regional Business Partner RFP in progress. HBRC is seeking a renewed term under the existing partnership model with the HB Chamber of Commerce. - Continued support of RWSS workstreams where appropriate.
	Transport	Tenders for the next nine year bus contract close on 21 August. Tender evaluation will take place on 1-2 September, followed by a Tenders Committee meeting on 9 September.
Hawke’s Bay Civil Defence Emergency Management Group	Developing Capability Hazard Reduction	- The major focus for September is the development of the Group wide Exercise to be held in November. In August the major inter-agency workshops were held - looking at the consequences of a significant earthquake in Hawke’s Bay. - The results of this workshop will be used to provide realistic injects into the exercise and help in the development of earthquake response and contingency plans. - Work continues with TLAs in developing tsunami evacuation zones for the Hawke’s Bay coast line, based on updated inundation modelling by GNS taking into account the learnings from the 2011 Japan Tsunami. - The evacuation zones have now been validated and will be used to provide response planning with impacted local communities.

Decision Making Process

2. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that as this report is for information only and no decision is required in terms of the Local Government Act’s provisions, the decision making procedures set out in the Act do not apply.

Recommendation

1. That Council receives the Monthly Work Plan Looking Forward Through August 2015 report.

Mike Adye

Group Manager Asset Management

Helen Codlin

Group Manager Strategic Development

Paul Drury

Group Manager Corporate Services

Ian Macdonald

Group Manager/Controller Hawke's Bay Civil Defence Emergency Management

Iain Maxwell

Group Manager
Resource Management and
Acting Chief Executive

Attachment/s

There are no attachments for this report.

[1] NOTE: For the avoidance of doubt, the Hearings Committee is not delegated the functions, powers and duties to hear and make decisions on submissions made in relation to a proposed plan, policy statement, plan change or variation under the RMA. Such functions, powers and duties are delegated to a Panel of accredited RMA hearings commissioners appointed by the Council on an as needed basis, based on recommendations from the Regional Planning Committee.