MINUTES OF An extraordinary meeting of the Regional Council
Date: Wednesday 15 June 2016
Hawke's Bay Regional Council
159 Dalton Street
A J Dick
In Attendance: M Mohi – Chairman – Maori Committee
E Lambert – Chief Executive
J Palmer – Group Manager Strategic Planning
P Drury – Group Manager Corporate Services
L Hooper – Governance & Corporate Administration Manager
D Dinsdale – HBRIC Ltd Director
A Newman – HBRIC Ltd Chief Executive
The Chairman welcomed everyone present to the meeting, and Councillor Scott offered the prayer.
Councillor Dick tendered his apology for the Corporate and Strategic Committee meeting at 1pm today.
2. Conflict of Interest Declarations
Councillor Debbie Hewitt stated her conflict with item 4 pending advice from the Auditor General in regards to substantive issues and sought Council’s leave to be excused when the item is discussed.
There were no further conflict of interest declarations.
Chief Executive Appointment
The Chairman introduced the item, which is required for appointment of the Chief Executive upon expiry of the current employment contract.
1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that Council can exercise its discretion and make decisions on this issue without conferring directly with the community and persons likely to have an interest in the decision.
2. Agrees to commence the process of advertising a vacancy for the position of Chief Executive.
3. Delegates the appointment process to the councillor members of the Finance, Audit and Risk Sub-committee.
4. Approves the appointment of Mike Mohi to the appointment Sub-committee.
5. Confirms that all Councillors will be involved in interviews of short listed candidates.
6. Confirms that all Councillors will be involved in establishing an appropriate Employment Agreement including relevant KPIs.
7. Confirms that the Finance, Audit and Risk Sub-Committee members will be delegated to negotiate a remuneration package and appropriate employment agreement with the successful candidate.
Update on the Ruataniwha Water Storage Scheme Business Case
Councillor Hewitt left the meeting at 9.07am – having stated a conflict of interest in this item.
Councillor Barker left the meeting at 9.10am
Mrs Danelle Dinsdale, HBRIC Ltd director and Andrew Newman responded to queries in relation to:
· contracted amount of uptake replacing deep groundwater extraction currently between 2.7 and 3 million cubic metres
· the required release of water from the dam at 1.23 m3/second will contribute to river levels and assist in maintaining minimum flows, however no regulatory obligation for the scheme to maintain water levels above minimum flow
· Minimum flow at Red Bridge was lifted by PC6 and adjusted all the way back up the system, and RWSS is required to augment flows in the river at specific volumes
· surface water take consent holders on the Waipawa with pre-existing rights and RWSS has to ensure by way of managed releases, that they are not materially effected
· “other pre-conditions” in relation to Council’s investment, in addition to the four conditions precedent, include the certificate from HBRIC Ltd’s legal advisers summarising the terms of all executed WUAs and explaining the enforceability or otherwise of those, and the Council obtaining its own legal advice
· Local capital raising (i.e. irrigators, iwi, local investors) through the uptake curve will be via fixed paid coupon which at a specific point converts to ordinary equity
· principle of scheme to create a space to enable iwi investment as part of the local investment, underwritten by CIIL and the institutional investor
· call option for the Institutional investor to purchase up to 20% of HBRIC’s equity will be agreed before final documents/agreements are signed, and HBRIC is negotiating a price that will be as fiscally neutral as possible
Councillor Barker re-joined the meeting at 9.38am
· financial details and terms information will be made public once finalised and if release is approved by the parties involved as normal commercial practice
· the investor fee and how that is paid as a way of ordering cashflows
· the Design & Construction fixed price, fixed time contract is made up of separable portions for the dam, primary distribution network, for hydro and the secondary distribution network for future uptake.
· Distribution to zone N via designed and costed network is subject to consents (3) – with delivery options (via Lake Whatuma or directly to Mangatarata Stream)
· Hydro generation could be provided by a third party and that ‘third party’ could theoretically be a separate subsidiary of HBRIC Ltd or Council itself. Structure will be built and it is not expensive or complicated to retrofit the generator and high voltage transmission line. There is approximately another megawatt of generation in the headrace.
· Availability of the additional 4 M m3 to Council for environmental benefit was present in the original business case, however under a different mechanism
· RWSS covers 17 tributaries which could benefit from additional environmental flows, which are not otherwise provided for by the scheme and/or its consent conditions which, in the main, provide benefits to the main tributaries – Tukituki tributary, Waipawa tributary, Mainstem of Tukituki, Papanui Stream, and if Zone N is consented Mangatarata Stream.
· Risk analysis is being and has been done on an ongoing basis by HBRIC, CIIL and institutional investor and was thoroughly traversed through the pre-feasibility and feasibility phases. Final risk analysis will be done again prior to HBRIC making its recommendation to Council.
· RWSS originated as a solution to a problem - the economic crisis that would be faced by the region and more specifically CHB with the implementation of Plan Change 6 without any support for farmers or the environmental benefits provided by the scheme
· Investors and irrigators pay for the scheme in the end, through contracts to take water, on-farm infrastructure investment and equity investment.
· Minimum uptake threshold (40 M m3) set to ensure scheme achieved positive cashflow (ability to pay its bills) before being given the ‘green light’ to proceed
· Opportunity for electricity generation should be considered further by Council
That Council receives and notes the “Update on the Ruataniwha Water Storage Scheme Business Case” report.
Napier-Wairoa Log Freight Service
1. That Council excludes the public from this section of the meeting, being Agenda Item 5 Napier-Wairoa Log Freight Service with the general subject of the item to be considered while the public is excluded; the reasons for passing the resolution and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution being:
2. That Nick Cornwall, Starboard Group, Council’s representative in the negotiations under discussion be in attendance for this item.
Confirmation of Public Excluded Meeting Held on 25 May 2016
That the Council excludes the public from this section of the meeting being Confirmation of Public Excluded Minutes Agenda Item 6 with the general subject of the item to be considered while the public is excluded; the reasons for passing the resolution and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution being:
The meeting adjourned at 10.30am and reconvened at 10.50am in Public Excluded session.
The meeting went into public excluded session at 10.30am and out of public excluded session at 12.20pm
There being no further business the Chairman declared the meeting closed at 12.20pm on Wednesday 15 June 2016.
Signed as a true and correct record.
DATE: ................................................ CHAIRMAN: ...............................................