Agenda of Corporate and Strategic Committee

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 24 May 2017

Subject: Ruataniwha Water Storage Scheme Next Steps

Reason for Report

1. Following the completion of the review of the Ruataniwha Water Storage Scheme, Council staff seek direction from the Council on next steps arising from the findings of the review.

Background

2. On 14 December 2016 the Council initiated a review of the Ruataniwha Water Storage Scheme (RWSS), with the purpose that “the costs and benefits of the scheme, as well as risks and opportunities with decisions to proceed, abandon or shelve the scheme, are clearly identified and articulated in order to facilitate informed decision making.” The review was reported back to the Council at an extraordinary meeting on 10 May 2017.

3. The review considered legal, economic, financial, engineering and environmental matters relevant to the scheme. Further analysis on the economic or engineering elements of the scheme are not recommended for further work at this time, except for engineering advice related to the dam’s capacity for greater flushing flows. Further financial, legal and environmental work is discussed following.

Next steps – financial

4. The Review identified that the key financial risk to the Council relates to the timing and quantum of returns to the Council arising from the uptake of water sales. The principal financial advisor to the review, Mr John Palairet, recommended a revision of the existing Condition Precedent of 40 million m³ to a higher level of 48 million m³ pre-financial close. Subsequently the Board of HBRIC Ltd has recommended this Condition Precedent be revised upward further, to 50 million m³.

5. A revised uptake figure is expected to increase confidence in the RWSS generating sufficient cashflows to meet the return requirements of capital providers and accelerate the arrival of returns to HBRC. Therefore, it is recommend that the Committee agrees to a revised uptake Condition Precedent of 50 million m³.

Next steps – PC6 and RWSS consent legal issues

6. The Review identified that the key environmental risk to the Council in progressing the RWSS relates to uncertainty that management of nitrogen losses from land use under the scheme could compromise progress in achieving the objectives of Plan Change 6 (PC6). The scheme also identified that similar risks and uncertainty around nitrogen management exist if the scheme does not proceed.

7. The Review has highlighted the limitations of PC6 in managing nitrogen through the Land Use Capability (LUC) leaching rate mechanism, particularly that the rates set by the Board of Inquiry enable an increase in nitrogen losses in many cases and that the Plan provides no mechanisms to reduce the LUC rates in sub-catchments exceeding in-stream DIN limits. Furthermore, analysis suggests that achieving the in-stream DIN limit of 0.8 mg/l by 2030 is likely to be unachievable in all Tukituki sub-catchments, both with and without the RWSS.

8. The Review has also highlighted that there is uncertainty about what might constitute compliance in practical terms for the RWSS with its land use consent conditions, in particular the requirement for the scheme to “operate in a manner consistent with” achieving the in-stream DIN limits of 0.8 mg/l by 2030. The Board of Inquiry that issued the RWSS resource consents has noted that the Plan cannot frustrate the exercising of the consents for the scheme. However, there is legal and scientific uncertainty about how the Council can interpret the consent conditions and what performance standards the Council can require of the scheme. Changes to the conditions of the RWSS resource consents may be warranted if clarity can be achieved around the legal and scientific matters.

9. The Environmental Defence Society and Fish and Game NZ have indicated to the Council they would like to join with it in making an application to the Environment Court to seek a declaration on the definition of ‘operating in a manner consistent with achieving the in-stream DIN limits of 0.8 mg/l by 2030’. The two organisations have indicated that it is likely that they will seek this declaration regardless of whether the Council joins the application.

10. Staff note that the Environment Court’s own policies preclude consideration of hypothetical matters of legal interpretation. Given that the RWSS land use consents have yet to be exercised it is possible that the Court will not grant leave for such an application to be heard at this time. Therefore, it is recommended that should the Council wish to further consider the merits of joining with the Environmental Defence Society and Fish and Game NZ, or make its own application for a declaration to the Environment Court, that legal advice is sought on the likelihood of the Court granting leave for an application to be heard. The time it may take for the Court to hear the case and issue a declaration will be between 4 and 9 months, depending on the number of matters to be determined, their complexity and the willingness of the Court to prioritise deliberation.

11. In light of the issues identified with PC6 in the course of the review, and the looming deadlines within the Plan, it is the view of Council staff that a plan change to clarify matters of uncertainty in the Plan’s operation is desirable sooner rather than later. However, given the investment by the Council and stakeholders in the development for PC6 and the Board of Inquiry process, changes to the Plan and/or the conditions of the RWSS consents are likely to be contentious. Therefore, should legal advice indicate that the Court may grant leave for an application for a declaration to be heard then staff consider that there is merit in progressing an application in parallel with the preparation of advice on a draft plan change. This would enable the Regional Planning Committee, and in turn the Council, to then consider both the findings of the Court and advice on the merits of a plan change together.

Next steps – RWSS environmental management

12. The RWSS review highlighted areas of environmental management on land supplied by the scheme that may warrant additional development to aid decision-making and assessment of risks associated with the RWSS proceeding. It is recommended that Council staff work with HBRIC Ltd as the RWSS consents holder to review the existing Environmental Management Package (the sum total of environmental management activities proposed by the RWSS) for the RWSS, including approaches to managing nitrogen under Farm Environment Management Plans and flushing flows, and invite HBRIC Ltd to recommend any changes to the Council. This advice will include an assessment of what the scheme’s land use will deliver in terms of nitrogen losses to surface and groundwater under a range of land use and land management scenarios. It is proposed that this advice is provided in sufficient time to enable the Council to determine whether the package meets the satisfaction of the Council at least two months prior to financial close.

13. The RWSS review has highlighted the strong linkages between the RWSS and the implementation of PC6, including that the implementation plan will need to be revisited in the event the RWSS does not proceed. Given these dependencies there is merit in the Council considering how both the proposed Environmental Management Package for the RWSS and the Council’s implementation plan for PC6 together could achieve the objectives of PC6. It is therefore recommended that Council staff provide advice to the Council on the implementation plan for PC6 across the wider catchment, in parallel with HBRIC Ltd’s recommended Environmental Management Package.

14. It should be noted that the Council has a critical role as regulator of the RWSS consents and needs to maintain a separation in its role overseeing the operation of the consents, and in its role as a co-investor in the scheme. It is therefore recommended that report backs on the recommendations contained within this paper involve separate lines of advice from the Council’s regulatory arm, and that of HBRIC Ltd. As with any resource consent holder it is appropriate for HBRIC Ltd to liaise with council staff and discuss the proposed approach to exercising the consents. Any changes to the proposed Environmental Management Package can be offered by HBRIC Ltd and cannot be arbitrarily imposed upon the scheme except by review of the consent conditions if sound legal grounds for doing so can be established.

Next steps – moratorium on HBRIC expenditure

15. The moratorium on further expenditure by HBRIC Ltd is due to expire 31 May 2017. In light of ongoing delays in resolution of the DoC land transfer, and the need to undertake the further work identified in this paper, it is recommended that the Council seeks agreement from the Board of HBRIC Ltd that the moratorium be extended until one month after the land transfer is resolved. In addition, it is recommended that the Council indicates its support for HBRIC Ltd incurring expenditure to roll over Foundation Water User Agreements, due to expire on 30 June 2017, and to work with HBRC staff on a review of the RWSS environmental management package for Councillor consideration.

Financial and Resource Implications

16. The preparation of a plan change for the Tukituki catchment, and legal representation for any Environment Court application, will have resource implications for the Council which are not currently planned or budgeted. It is proposed that these implications are estimated, to the extent practicable, and reported to the Regional Planning Committee meeting on 7 June.

17. In initiating the RWSS Review, the Council approved the Group Manager Strategic Development incurring expenditure of up to $170,000 (excluding HBRIC Ltd costs and staff time) to be capitalised into the Ruataniwha Water Storage Scheme, on external costs for the purposes of completing the review work programme agreed by the Council.

18. At the outset all external advice was procured and contracted within budget. However, in the closing stages of the review completion, additional costs were incurred in four areas, which were not anticipated at project initiation; being:

18.1. Advisor travel to, preparation for and participation in two Council workshops and meetings with the Community Reference Group (estimated at $28,965)

18.2. Interactions between different work streams to reconcile analytical assumptions and findings in draft reports

18.3. Additional analysis to address questions and areas of further enquiry raised by Councillors and the Community Reference Group

18.4. New economic modelling to consider the economic impacts of the RWSS with no additional horticulture, lower levels of farm EBIT and lower scheme reliability ($11,932).

19. Total costs for external advice to complete the review are $185,665.

20. A further $7450 was incurred for remuneration of the Community Reference Group, less than the $10,000 budgeted; noting some members chose not to be recompensed for their time. Project management support to the Review incurred $24,225, which had been significantly underestimated at $10,000 at project initiation. From 1 July 2016 to 7 May 2017 a total of 933.25 staff hours have been dedicated to this RWSS Review project.

Decision Making Process

21. Council is required to make every decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements in relation to this item and have concluded:

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

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

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

21.4. The persons affected by this decision are all citizens and ratepayers in the Hawkes Bay community.

21.5. Options that have been considered include doing no further work on the legal, financial and environmental issues arising from the RWSS review for Plan Change 6 or the RWSS resource consents. This option is considered to be unacceptable given the risks to the Council and the community.

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

21.7. Given the nature and significance of the issues 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

1. That the Corporate and Strategic Committee receives and notes the “Ruataniwha Water Storage Scheme Next Steps” staff report.

2. The Corporate and Strategic Committee recommends that Council:

2.1. 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 be affected by or to have an interest in the decision.

2.2. Requests the Board of HBRIC Ltd considers extending the moratorium on further RWSS investment to one month after the DoC land transfer matter has been resolved.

2.3. Requests that the existing agreement between HBRIC Ltd and HBRC relating to the moratorium is modified to include Council’s support for HBRIC Ltd incurring necessary expenditure to roll over Foundation Water User Agreements and to review the existing RWSS Environmental Management Package.

2.4. Agrees to modify the condition precedent for investment in the RWSS on water sales from 40 M m³ to 50 M m³ by financial close.

2.5. Agrees to the introduction of a new condition precedent that:

2.5.1. Council investment in the RWSS is subject to the further review of the existing Environmental Management Package for the RWSS, including approaches to managing nitrogen under Farm Environment Management Plans and flushing flows, and that any proposed changes to the Environmental Management Package for the RWSS meet the satisfaction of the Council at least 2 months prior to financial close.

2.6. Requests staff provide advice on the implementation plan for Plan Change 6 across the wider catchment, in parallel with the further review of the existing Environmental Management Package for the RWSS, to enable the Council to consider how both plans together might achieve the objectives of Plan Change 6.

2.7. Requests staff provide advice to the Regional Planning Committee on 7 June 2017 on the implementation issues arising for Plan Change 6 and the costs and benefits of a plan change to Plan Change 6, including an assessment of the financial and work programme implications for the Council.

2.8. Requests that staff engage with the Environmental Defence Society and Fish and Game New Zealand on the scope of a potential application to the Environment Court for a ruling on the interpretation of any Plan Change 6 provisions and/or any Ruataniwha Water Storage Scheme consent conditions, and seek legal advice on the likelihood of the Environment Court granting leave for such an application to be heard, and report to the Regional Planning Committee on 7 June 2017.

2.9. Seeks feedback from HBRIC Ltd on the recommendations contained in this paper for Council consideration alongside the Corporate and Strategic Committee RWSS recommendations of 31 May 2017.

Authored by:

James Palmer

Group Manager
Strategic Development

Approved by:

Liz Lambert

Group Manager
External Relations

James Palmer

Group Manager Strategic Development

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 24 May 2017

Subject: 2017-2021 Strategic Plan

Reason for Report

1. This report seeks the Corporate and Strategic (C&S) Committee’s approval of the attached Draft Strategic Plan 2017-2021 subject to refinement of the strategic goals and targets and the insertion of whakataukī and Te Reo Maori translations. This version incorporates comments on an earlier draft made by the C&S Committee at its meeting on 15 March as well as general feedback from staff.

2. The next step is to take the Draft Strategic Plan to Tāngata Whenua members of the Regional Planning Committee (RPC) and Māori Committee for their input. Following feedback, the finalised Strategic Plan will be submitted to the 28 June Council meeting for adoption.

3. The Strategic Plan is a non-statutory document that sets out the vision, mission, purpose, and values of the organisation and its strategic priorities for the next five years. It is important as it will influence what activities and service levels will be funded in the 2018-28 Long Term Plan, which may require re-prioritisation of existing work and/or changes in the way HBRC delivers its functions.

Project Background

4. In October 2011, the Hawke’s Bay Regional Council adopted a Strategic Plan to outline the strategic priorities for HBRC over the next ten years. It is a non-statutory document that informed the development of two long term plans (2012-22 and 2015-25).

5. Since it was adopted five years ago, a number of significant factors have changed that influences what and how council makes decisions. Factors include new policy, strategies and plans as well as external factors such as changes to legislation, economic climate and community values and expectations. In light of these changes, the Executive team considered it timely to recommend to the Council that the Strategic Plan be refreshed.

6. The project to refresh the current Strategic Plan 2011 was initiated in June 2016. The emphasis on a “refresh” rather than starting from scratch reflected the ongoing relevance of themes within the existing Strategic Plan, which was consulted on externally. However, many staff were either not aware of it or did not recall what it contained. Of those who were aware, many felt the document was developed without staff input, did not reflect what they did, sat on a shelf, and/or didn’t translate in a tangible way into the long term plan.

7. The refreshed Strategic Plan 2017-2021 is a shorter, crisper articulation of what our organisation aspires to be. The Strategy on a Page, in particular, has been designed to be communicated in a variety of forms and therefore kept front of mind. It also provides staff with a clear line of sight from the high-level vision to the work they do on the ground.

8. The document has a strong focus on core business (rather than a blue-sky thinking exercise) and shifts the organisation from measuring and reporting outputs to delivering for impact and outcomes.

Project Process

9. To improve ownership and buy-in to this strategic plan an inclusive and participatory development process was followed. It comprised a combination of workshops and surveys to gather information on the current state of the organisation and draw on staff and elected member’s knowledge, experience and ides for new and innovative ways of doing thing (e.g. SWOT and PESTLE* analysis).

Figure 1: Project Timeline

When	What	Detail
June 2016	Project initiation	Cross-functional project team established
July	Staff workshops	SWOT (strength, weaknesses, opportunities and threats) workshops with all staff
May - Aug	Staff surveys	Current state of knowledge and experience working with Māori
Sept-Oct	Councillor survey	Taken up by two exiting councillors.
14 Oct	Resilience workshop for staff	Facilitated by Paul Ryan, Director of the Australian Resilience Centre
Oct	NEW COUNCIL ELECTED
Nov	Executive workshop	Off-site strategy day
13 Dec	C&S Committee meeting	Process and approach to develop the Strategic Plan approved by the committee
1 Feb 2017	Council workshop	Green Shed councillor-only workshop
22 Feb	Council workshop	Strategic drivers paper and current state (Finance, Coms, ICT, T/W, Workforce plus socio-economic profile) considered by council
March	CEO RESIGNED AND INTERIM CEO APPOINTED
22 Mar	Council workshop	Early draft considered by council
9, 11 May	Staff presentations	All-staff presentations on the draft with feedback incorporated into the version for C&S Committee
24 May	C&S Committee meeting	To approve Draft Strategic Plan for T/W input
June	RPC/Maori Committee	To provide feedback on Draft Strategic Plan
28 June	Council meeting	To Adopt Strategic Plan

10. At the Council workshop on 22 February 2017, councillors considered a suite of papers on the current state of the organisation’s finances, technology, communications, workforce and culture, and capability and capacity to work with Tāngata Whenua. At the workshop, it was proposed that each of the themed papers be brought back to a future C&S meeting for more in-depth consideration in the lead up to development of the 2018-28 Long Term Plan. The focus for these papers will be on the changes and resourcing required to give effect to the new Strategic Plan in each of these areas. It is proposed to take these papers to the September C&S Committee meeting.

New vision, purpose, focus areas and values

11. The new vision statement builds on the councillors’ desire for a “remarkable environment” articulated at the councillors’ workshop at the Green Shed on 1 February 2017 and puts the environment front and centre as council’s core business. Likewise the proposed mission “Enhancing our Environment – Kaitiaki tuku iho” reinforces our role in environmental management and deliberately takes a more proactive, forward looking, and aspirational approach that speaks to restoration and development, than the previously used “safeguarding”.

12. The new purpose statement introduces the concept of working together with others that was not as prominent in the previous purpose or Strategic Plan. It explicitly recognises that we cannot achieve the desired enhancement without building good relationships with people outside the building.

13. The new values are similar to the previous set but associate ‘forward thinking’ and ‘innovation’ with excellence as a value and express these more specifically in the new “Our Approach” part of the strategic plan as they are arguably not values in and of themselves. The other key difference is a greater focus on accountability and transparency in terms of delivering results, as part of efforts to build trust and confidence in HBRC. This outcome and results focus is a flavor throughout the Strategic Plan and demonstrates a desire by council to shift from reporting activity or outputs delivering for, and reporting on impact and outcomes, the things that matter to the community.

14. The new Strategic Plan identifies four strategic focus areas - for the next five years and beyond - to deliver stronger leadership on behalf of our remarkable environment. These four focus areas or strategic priorities are in addition to the other business-as-usual work we do but signal where more attention is needed in the short to medium term. The priority focus areas will be given highest priority for new or more funding in the 2018-28 Long Term Plan.

15. Differences from the previous Strategic Plan include a shift away from the resilience framework which was not well understood or meaningfully implemented, a shift to a five year plan rather than a 10 year plan, and the introduction of goals and targets for each of the four focus areas.

16. The outcome measures will enable the Council to evaluate how successful council’s interventions are at delivering on outcomes. The goals and targets will also be used to drive integrated thinking within the organisation as the targets become a driver of organisational alignment and effort. The goals and targets are a work-in-progress and need further consideration by HBRC staff in the relevant fields.

17. The Strategy on a Page includes two new sections “Our approach” and “Our organisation”. These sections are common to all staff regardless of the type of work they do and are the place that support functions, such as IT and HR can best relate to.

Figure 2: Comparison between 2011 and proposed 2017-2021 Strategic Plans

	OLD	NEW
Vision	A connected and vibrant region with resilient communities, a prosperous economy, and a clean and healthy environment.	Hawke’s Bay will be renowned for its remarkable environment, at the heart of productive landscapes, rich quality of life and a prosperous export-led economy, supporting a healthy and resilient community.
Mission	Safeguarding our Environment (dropped in May 2014) To grow our region (proposed to council in Dec-Feb 2017)	Enhancing our Environment – Kaitiaki Tuku Iho
Purpose	Hawke’s Bay Regional Council has a long term focus and we exist because of our statutory role in four core functions – · Natural resource knowledge and management · Natural hazard assessment and management · Regional strategic planning · Regional scale infrastructure and services.	We work …With our community and partners to protect and manage the region’s precious taonga of rivers, lakes, soils, air, coast and biodiversity for enhanced environmental, economic, social and cultural wellbeing and connectivity
Focus areas	RESILIENT ECOSYSTEMS 1. Land 2. Water Quality 3. Water Allocation RESILIENT ECONOMY 4. Water Security 5. Natural Hazards and Infrastructure RESILIENT COMMUNITIES 6. People and Communities	1. Smart, sustainable land use 2. Water certainty, security and quality 3. Healthy, abundant marine life 4. Sustainable, growth-enabling regional infrastructure and services
Vales	· Partnerships · Integrity · Forward thinking · Innovation · Excellence	· Partnership and collaboration · Accountability · Transparency · Excellence

Strategic Drivers

18. The new Strategic Plan includes a section on strategic drivers for HBRC. It is essentially a horizon scan of the major external factors (e.g. economic, social, technological, legislative) that are driving change to Council’s operating environment. It recognizes that council does not exist in isolation and that its strategy needs to be outward-looking. This analysis will feed into the LTP content, including the infrastructure and financial strategies, consultation documents and funding policies. This section replaces the 2050 scenario that featured in the 2011 Strategic Plan.

Next step - Engagement with Tāngata Whenua

19. Unforeseen delays in developing the Strategic Plan have delayed our engagement with our Tāngata Whenua partners. To date, the Strategic Plan has been informed by:

19.1. HBRC staff surveys conducted in 2016 that provided a snap shot of the current level of understanding by staff of te reo me ona tikanga (Māori language and protocols); and current or recent projects that involved working with Māori

19.2. Reviews of Treaty settlements including Agreement in Principle (AIPs), in particular identifying Council obligations and responsibilities

19.3. Stocktake of MoUs, Relationship Agreements and Mana Enhancing Agreements that the Council has with Treaty entities

19.4. Reviews of Iwi/Hapū Management Plans.

20. These were brought together in a briefing paper entitled “Working with Tāngata Whenua” considered at the council workshop on 22 February. The briefing paper provides context for our ongoing relationship including history, demographics, legislative obligations, treaty settlements, workplace statistics and options for capacity building.

21. The next step is to engage directly with RPC Tāngata Whenua members and the Māori Standing Committee on the change in focus and approach articulated in the new Strategic Plan. In particular, targeted feedback is sought on:

21.1. How can we achieve success together and what does success look like?

21.2. What should HBRC do differently to meet expectations?

Decision Making Process

22. Council is required to make every decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements in relation to this item and have concluded:

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

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

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

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

22.5. 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

1. That the Corporate and Strategic Committee receives and notes the “HBRC 2017-2021 Strategic Plan” staff report.

2. The Corporate and Strategic Committee recommends that Council:

2.2. Approves the Council’s Draft Strategic Plan 2017-2021 and seeks input from the Tāngata Whenua members of the Regional Planning Committee (RPC) and the Māori Committee.

Authored by:

Desiree Cull

Programme Leader

Approved by:

James Palmer

Group Manager
Strategic Development

Attachment/s

⇩1

Our Strategic Plan 2017-2021

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 24 May 2017

Subject: Capital Structure Review – Scope and Process

Reason for Report

1. Councillors, at the 26 April Regional Council meeting, requested a formal, documented process for the nomination of candidates as independent members of the Capital Structure Review Advisory Committee so that there are opportunities for nominations to be made and the integrity of the process is transparent. This item provides the process undertaken to date, to identify potential nominees for independent membership, and the opportunity for further debate on nominations.

2. Further, the Finance Audit and Risk Sub-committee meeting on 10 May resolved:

2.1. recommends to the Corporate and Strategic Committee, that the following is added to the Review Scope and Terms of Reference:

2.1.1. Examines the arguments for and against retaining ownership of Napier Port in HBRIC Ltd or moving to direct ownership by Council, with such arguments to include but not be limited to tax considerations.

2.2. recommends that the Corporate and Strategic Committee reconsiders the membership of the Capital Structure Review Advisory Committee.

3. This item enables the addition of the Napier Port ownership examination to the scope of the review by way of a recommendation for resolution of Council.

Sponsorship and Governance of the review

4. Council, on 29 March 2017, resolved:

4.1. Forms a Capital Structure Review Advisory Committee comprising the HBRC Chairman, Rex Graham, Chairman of the HBRC Corporate & Strategic Committee, Neil Kirton, the Chairman of Hawke’s Bay Regional Investment Company Ltd Board of Directors, the Chairman of the Napier Port Board of Directors and two suitably qualified independent members to be confirmed by Council at its 26 April meeting.

5. Concerns have since been raised about the level of ‘elected representation’ on the Advisory Committee, with the suggestion that Council considers whether there should be more than two elected representative members on the Committee.

6. The process undertaken to appoint two independent members has been:

6.1. The Chairman of the Corporate and Strategic Committee emailed councilors in April 2017 requesting that they consider nominations of suitably qualified candidates.

6.2. At the Council meeting on 26 April, councilors left the matter of appointments of the independent members of the Advisory Committee to lie on the table pending provision of a proper process for appointment of the independent membersto ensure suitably qualified candidates were appointed and to allow potential appointees to be considered formally by Council.

6.3. An additional 2-3 weeks has been provided to councilors so as nominations could be secured from possible candidates

6.4. A public excluded agenda paper is included on the Agenda today to enable receipt of candidate nominations from councilors and to formally resolve recommendations for appointment of 2 independent members of the Capital Structure Review Advisory Committee to Council.

Timing

7. It is anticipated that the Review will be initiated by the end of May with a view to providing inputs to the LTP process by no later than August of 2017.

Decision Making Process

8. Council is required to make every decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements in relation to this item and have concluded:

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

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

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

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

8.5. 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

1. The Corporate and Strategic Committee receives and notes the “Capital Structure Review – Scope and Process” staff report.

2. The Corporate and Strategic Committee recommends that Council:

2.2. Amends the Capital Structure – Scope and Process document to include:

2.2.1. Examines the arguments for and against retaining ownership of Napier Port in HBRIC Ltd or moving to direct ownership by Council, with such arguments to include but not be limited to tax considerations.

Either

2.3. Confirms the membership of the Capital Structure Review Advisory Committee comprises the HBRC Chairman, Rex Graham, Chairman of the HBRC Corporate & Strategic Committee, Neil Kirton, the Chairman of Hawke’s Bay Regional Investment Company Ltd Board of Directors, the Chairman of the Napier Port Board of Directors and two suitably qualified independent members

2.4. Appoints an additional elected representative to the Capital Structure Review Advisory Committee, being Councillor x, and bringing the membership to a total of seven.

Authored by:

Paul Drury

Group Manager
Corporate Services

Approved by:

Greg Woodham

Interim Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 24 May 2017

Subject: Operational Efficiency Review Report

Reason for Report

1. The key findings of the Operational Efficiency Review undertaken, recommendations, observations and comments made in the Report are provided for consideration by the Committee.

Background

2. In early February 2017 I met with Andrew Newman, Neil Kirton and Paul Drury to discuss the terms of reference and scope of an Efficiency and Effectiveness review.

3. The terms of reference were agreed on 15 February and on 23 February Andrew Newman announced his resignation with his last day being 31 March.

4. I commenced work on this review on Monday 27 of February.

5. On Tuesday 14 March, after a candidate selection and interview process, I was offered (and accepted) the job of Interim CEO to commence on Monday 3 April.

Comments

6. The terms of reference for the review stated that its first draft would be given to the CEO for discussion and feedback.

7. As I was now the Interim CE I provided the first draft to my executive team and the councillors for discussion and feedback.

8. Based on feedback received (mainly from my executive) I changed my report to account for errors of fact and other suggestions for emphasis or de-emphasis.

Decision Making Process

9. Council is required to make every decision in accordance with the requirements of the Local Government Act 2002 (the Act). Staff have assessed the requirements in relation to this item and have concluded:

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

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

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

9.4. The persons affected by this decision are all of the ratepayers of Hawke’s Bay

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

9.6. 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 can exercise its discretion and make a decision without consulting directly with the community or others having an interest in the decision.

Recommendations

1. That the Corporate and Strategic Committee receives and notes the “Operational Efficiency Review” report.

2. The Corporate and Strategic Committee recommends that Council:

2.2. Accepts the recommendations made by the Operational Efficiency Review report and, where appropriate, initiates the work programmes necessary to implement the efficiencies or benefits to be achieved.

Authored and Authorised by:

Greg Woodham

Interim Chief Executive

Attachment/s

⇩1

Effectiveness & Efficiency Review Report

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 24 May 2017

Subject: Quarterly Council Communications Update

Reason for Report

1. This report provides a regular update on Council’s communications activities, as requested, focused on the third quarter (Q3) of 2016-17 with the inclusion of April due to the timing of this item.

Background

2. Communications activities focus on three key areas, being:

2.1. what HBRC does - its various projects, Council and Committee meeting outcomes

2.2. who HBRC is, i.e. the face of Council – Councillors and staff

2.3. why HBRC carries out its role, i.e. for healthy air, water, sustainable land use, etc.

2.4. The bulk of the Council’s work can be related back to water, land and lifestyle, supported by key messages that recur in external communications:

2.4.1. We help care for Hawke’s Bay’s environment and economy on your behalf

2.4.2. We work with you to grow and care for our region

2.4.3. We love Hawke’s Bay as much as you do

3. Communications during Q3 have followed a plan with a shifting monthly focus. In January this was wetland water margins, February was water quality and ecology, March was climate, and April was the Annual Plan 2017-18. Communications staff also monitor and act on emerging issues as they occur, in dialogue with Executive, staff and Councillors.

4. There are 4.5 FTE in the Communications team comprising manager (1), specialist (.75), senior coordinator (1), digital media (.8) and educator (1). An externally-led communications review is currently under way.

Quarterly Summary: January – March 2017

Media coverage

5. Media ran 133 articles on HBRC activities in Q3. The tone of all articles in Q3 was either neutral or positive.

6. The main media were Hawke’s Bay Today (101) and The Wairoa Star (10). The remainder were TVNZ (3), RadioNZ (3), CHB Mail (3), DomPost (2) and Stuff (2); miscellaneous (9). In April, Hawke’s Bay Today (19) and The Wairoa Star (4) also published the majority of articles (25).

7. The key themes of Q3 media reporting related to water quality (16 articles), council matters (15 - five to the CEO’s resignation), Havelock North water investigation (12) and transport matters (10).

Tāngata Whenua

8. Staff maintain an integrated approach to communication for Tāngata Whenua. However a bi-monthly newsletter in Hawke’s Bay Today’s Tihei Kahungunu and The Wairoa Star is a direct channel from the Regional Planning Committee co-chairs, which is shared using email.

9. Staff maintain a healthy relationship with Māori Television for targeted news opportunities.

Print and Media

10. Staff deliver a monthly update to the region’s community newspapers known as Our Place. A new Our Place Country was rural delivered in March.

11. Communications staff wrote and issued 41 media releases during Q3, with 7 in April. While media releases cover the full range of the Council’s activities, themes of particular interest to the community are evident.

Media Releases – issued by HBRC Communications team
Theme/ Month	January	February	March	April
Water	5	4	2	3
Coast/ Marine	2	3	2
CEO			2
Monthly TOTAL	10	16	15	7

Social media – Facebook: HBRegionalCouncil

12. Communications staff actively generate content on Facebook with a current base of 2250 Likes (16/05/17). Staff use social media to communicate HBRC news, events, to share updates and actively respond to community queries.

13. The Communications team has active ownership of Facebook for hbemergency (19,293 Likes), hbparkstrails (388 Likes), HB Youth Environment Council (362 Likes) and HB Funders Forum (22 Likes).

Facebook Activity - HBRegionalCouncil
	January	February	March	April
HBRC posts	58	90	74	47
Total reach		70,000	81,194	120,000

Website – hbrc.govt.nz

14. The Council website was refreshed with new content and structure in April 2016. Performance against the old site indicates that ratepayers are using the site more, increasingly from mobile devices (around 50% in April).

Old site April 2015 - April 2016 276,027 sessions; 118,678 users

New site April 2016 - April 2017 323,552 sessions; 132,803 users

Website Use – HBRC.GOVT.NZ
	January	February	March	April
Site users	16,279	15,895	14,895	14,814
Page views	70,083	64,086	57,621	54,316

Video

15. Communications staff support the webcasting/ live-streaming via Facebook of all Council meetings, the Regional Planning, Corporate and Strategic, and Environment and Services committees.

16. In addition, staff coordinate regular videos to promote the work of the Council and inform on key issues. Four videos between February and April covered climate, dry wells, an oil spill exercise and the Annual Plan 2017-18.

E-Newsletters

17. Communications staff write and coordinate regular newsletters, increasingly using email delivery tools like MailChimp. These include the TANK Plan Change, State of the Environment reporting, Leaders Briefing, Hawke’s Bay Trails, East Coast LAB, Enviroschools, Environmental Education, and internal communication (SnapShot, ICT and Communications).

Events

18. The Council supports a small number of external events each year. During Q3 these included the Ballance Farm Environment Awards, Napier Port Ocean Swim, EastCoast Farming Expo, and Country to Coast.

Environmental Education

19. Staff operate a very active education programme, assisted by two part-time Enviroschool programme facilitators. There are 51 Enviroschools in Hawke’s Bay; 31 schools (25% of all schools) and 20 kindergartens (9% of the ECE sector).

20. Ongoing programmes include the Youth Environment Council, freshwater programme, Kids 4 Drama, Clearing the Air, beach cleanups and planting programme assistance.

Looking Ahead – the next three months

21. The planned focus for the coming months is on the Water Symposium, coastal projects and activities in June, water science in July, and land management in August. Communications staff continue to respond to emerging issues as they occur, in dialogue with Executive and Councillors.

22. Key activities under action include the State of the Environment Annual Report, the Coastal Marine Strategy, the monthly issue of Our Place and state of environment reporting. The next Our Place Country will be rural-delivered in August.

23. Focus remains on core projects including the collaborative TANK Plan and Coastal Hazards, Tukituki Plan and LAWA development, with ongoing attention to all other areas of the Council’s work.

24. The HBRC-sponsored National Horticultural Field Day takes place on 29 June 2017.

Decision Making Process

25. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision-making provisions do not apply.

Recommendation

That the Corporate and Strategic Committee receives and notes the “Quarterly Council Communications Update” report.

Authored by:

Drew Broadley

Community Engagement and Communications Manager

Approved by:

Liz Lambert

Group Manager
External Relations

Attachment/s

There are no attachments for this report.

⇩1	HB Tourism Quarter 3 2016-17 Report
⇩2	HB Tourism Quarter 3 2016-17 Financial Report

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Capital Structure Review Advisory Committee - Appointment of Independent Members	7(2)(a) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to protect the privacy of natural persons.	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

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