Late Agenda of Regional Council Meeting

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

SUBJECT 2018-28 Long Term Plan Submissions Hearing Process

Reason for Report

1. To outline the process to be undertaken to hear and consider submissions received on the 2018-28 Long Term Plan.

Background

2. Consultation on HBRC’s 2018-2028 Long Term Plan closed at 4.00pm on Monday 23 April 2018. A total of 569 submissions were received, of which 91 submitters indicated they wish to present their submission in person.

Verbal submissions

3. Submissions Hearings are scheduled to run from 9am Tuesday, 22 May to 4pm Wednesday, 23 May 2018, with Council deliberations and decision-making on Thursday 24 May. The Principal Governance Advisor is in the process of contacting these submitters to arrange a suitable date/time. Submitters will typically be given five to ten minutes to present, including questions and answers, for individuals and groups respectively.

4. The timetable will be circulated separately once all submitters have been confirmed.

5. A block of time will be set aside to hear submissions on the Hawke’s Bay Tourism funding proposal. This part of the Hearing will be a more informal forum. Submitters will be invited to attend and participate in the forum without a fixed time allocated. HB Tourism will be invited to lead the discussion followed by contributions from the sector. This will ideally avoid repetition and allow more time for questions to enable ideas to teased out with interested parties.

Deliberation Report

6. After all verbal submissions have been heard, staff will consider the Deliberation Reports and the Council staff internal submission. This is scheduled for Thursday, 24 May.

7. The Deliberation Reports are by topic. There is a Deliberation Report for each of the seven key consultation topics, plus catch-all reports by Group (e.g. Regulation, Strategic Planning, Regional Assets) and a report for all miscellaneous requests for funding. In this way all submissions are covered.

8. Each Deliberation Report has the relevant submissions and staff responses attached.

9. Council will be asked to consider the submission points relating to the topic and any comments made by Council officers; and to agree or not agree to the proposal as consulted on through Facing Our Future 2018-28.

10. Staff will keep a running action list during the 3 days to log any questions as they arise and will endeavour to provide answers prior to decision-making. Staff will also track the financial implications as decisions are made. These will be preliminary until the financial model is finalised.

Adoption

11. Subsequent to Council’s decisions on the submissions, the 2018-28 Long Term Plan will be collated, incorporating incorporate any amendments necessitated by the decisions made. Council will then adopt the final documents on 27 June 2018.

Post-adoption

12. Following the adoption on 27 June, each submitter will receive a letter from Council setting out Council's resolution(s) pertinent to their specific submission(s), and the reasons for those resolution(s).

13. The Long Term Plan documents will then be distributed within one month of the date of adoption as required under Section 93 (10) of the Local Government Act 2002.

Decision Making Process

14. Council is required to make every 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:

14.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

14.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That Council:

1. Agrees that the decisions to be made on issues submitted on “Facing Our Future 2018-28” are made after the provisions included in sections 83 and 85 of the Local Government Act 2002 have been followed.

2. Receives and considers the verbal and written submissions.

Authored by:

Leeanne Hooper

PRINCIPAL Governance ADVISOr

Drew Broadley

Communications Manager

Desiree Cull

Programme Leader

Approved by:

James Palmer

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Financial Overview

Reason for Report

1. To provide the Council with an overview of the 2018-2028 Long Term Plan (LTP) operational financials, specifically those expenses which are included as ‘base level services’ to implement Council’s step change proposals.

Background

2. Councillors requested staff develop an ambitious 2018-2028 Long Term Plan, which would deliver demonstrable and accelerated positive change in the Hawke’s Bay environment within the next 10 years.

3. The first stage of the LTP financial analysis was to address an existing 2015-2025 LTP budget shortfall for the coming 2018/19 year of $2.3 million, which had occurred as result of forecast investment returns on the failed Ruataniwha Water Storage Scheme not being realised.

4. This review explored and challenged the basis for current rating policies, existing user charges and fees, investment returns from HBRC’s balance sheet assets (via the Capital Structure Review), Port of Napier Ltd dividend negotiations, funding the ‘gap’ with short term borrowing, and alternatives to commercial bank lending such as the Local Government Funding Agency to provide access to lower interest rates.

5. An analysis of all existing project expenditure was also undertaken to review the relevance of existing projects and identify changes necessary to the scope of activities, timing, resources and funding required over the LTP to achieve the desired outcomes. This pinpointed opportunities for staff and Council to prioritise existing spend on merit, alignment to strategic priorities and against other business needs.

6. The review also focused on Council’s internal efficiencies, and ensuring cost savings were made where possible and that operations are delivered in the most cost-effective manner, resulting in $500k of cost savings.

7. Business cases were then developed for new activity, with a focus on land and water management and biodiversity, with material benefits for terrestrial, freshwater and marine environments. Business cases were also developed to do more in the areas of Sustainable Homes, Civil Defence and to build on community partnerships including with Tangata Whenua.

8. A decision to refocus on Council’s core activities resulted in the proposal to reduce the funding for Hawkes Bay Tourism by $300k per annum over 3 years, which returns the funding to its original value of $920k per annum in year 4.

9. Given the scale of investment required to achieve a step change in the impact of Council operations, the challenge for Council is to fund its new strategic agenda whilst maintaining a balanced operating budget and also giving consideration to the affordability of its plans for ratepayers.

10. Fundamentals of the new financial strategy include an increasing emphasis on user pays, a more aggressive investment strategy, and borrowing to front load funding of initiatives which future generations will benefit from.

Financial and Resource Implications

		Additional spend
	Yr1 % 2018-19	Yr1 $’000 2018-19	Yr2 $’000 2019-20	Yr3 $’000 2020-21	Cumulative over 3 years
Incentives to Change	1.9%	$366	$578	$1,115	$2,059
Partnerships for Change	4.7%	$894	$994	$994	$2,882
Regulation	2.9%	$564	$1,325	$1,596	$3,485
Civil Defence	5.2%	$990	$990	$990	$2,970
Tangata Whenua Engagement	2.0%	$384	$384	$384	$1,152
Base level services	2.3%	$441	$816	$1,473	$2,730
Total rates increase		$3,639	$5,087	$6,552	$15,278
Movement from previous year		$3,639	$1,448	$1,465
Total rating impact from previous year	19.0%	19.0%	6.4%	6.1%

11. The financial impact of the total package of initiatives proposed in the consultation document, results in a 19% increase in total rating in Year 1, with increases of 6.4% and 6.1% in years 2 and 3. Total new revenue collected through rates, which has the most significant impact on ratepayers, exceeds $15m over the first 3 years.

12. Significant investment will also be funded from borrowing. This LTP includes a forecast of $71m in borrowing over the ten years. This aligns with Councils financial strategy to leverage the balance sheet which currently has very low debt ($23m), to front load and fund initiatives which future generations will benefit from. Council has consulted on joining the Local Government Funding Agency which would provide access to lower interest rates, and in turn provide savings on interest payments on the forecast borrowing to ratepayers.

13. Whist borrowing is significant, forecast debt levels remain moderate. After repayments debt will increase to $38m by year ten of the plan. This equates to 6.8% of equity which is still relatively conservative and well below our debt limit of 28%.

Base-line /Support Staff

14. This LTP, which signals a step change in direction and activity for the HBRC, will require more operational staff, the tools they need to do their job and administrative support to enable delivery.

15. In this plan, we forecast up to a 15% increase in staff in year 1 to deliver on the activities consulted on. The majority of these staff are operational, on the ground and out in the field, however this plan does also include a scaling up of support staff to enable the increase in activity.

16. The base-line increase of 2.3% covers new corporate services and support staff, salary inflation and performance increases, recruitment costs, new vehicles for additional field staff and costs related to providing office space to house the larger workforce. This additional expense is partially offset by the proposed reduction in HBT. It also includes a coastal hazard rate for Napier/Hastings to align the cost of this activity to those who benefit most. This is a new rate to fund Council’s ongoing involvement in the Coast Hazards Joint Committee, which was previously funded out of the general rate.

17. A number of key new positions have been included in corporate services, including a senior finance position, which will increase the capability of the finance team and allow for a greater focus on financial reporting and analysis, internal treasury management, and to support the organisation as it grows in size and complexity. Other planned new hires include a significant but necessary investment in the human resources function (1.5), ICT (2), communications (.7) and corporate support (.5).

18. In addition to planning for these new positions, an organisational wide restructure has taken place, which has better aligned teams to work more collaboratively and with shared common capability, and provided an appropriate structure that supports stronger project management and the move to an integrated catchment approach.

19. As a result of the restructure a new cost centre called the Office of the CE and Chair ‘OCEC’ has been created to specifically support the Chief Executive, Chair and governors and acknowledges the scale of growth and reach required by the CE. This will also enable a focus on more rigorous performance monitoring and reporting of outputs and outcomes from across the organisation to councillors and the public with the proposed appointment of a Principal Advisor Performance and a manager of the OCEC. Tighter and more proactive management of information and advice to councillors, as well as media and internal communications, are also proposed for the OCEC.

20. Currently the Dalton Street office is at capacity within the existing layout. Given the proposed growth in staff we have included both a short and longer term solution to accommodation requirements in the LTP. A short term lease of 2+1 years on office space in Station Street which will accommodate up to 25 staff and allow for some reconfiguring of the Dalton street office to a more open plan design. A placeholder of $3m has been included in Year 3 of this LTP for a more permanent solution and a project to review a number of options, including the possibility of expanding the depot at Guppy Road, will be developed and presented to Council for consideration in due course. Provisions have been made for minor refurbishments to provide suitable accommodation for the expected growth in Waipawa and Wairoa.

Officers’ Analysis

21. This LTP is premised on significant additional public investment and in turn placing a financial demand on the community. In response, Council is accountable for delivering on its promises. Good public accountability requires Council’s vision and community expectations to be clearly and directly linked to a well-balanced performance framework. The community need to be better able to assess the progress being made towards those goals, and the value for money they receive from rates and other charges they pay. The Executive Leadership Team have arranged the operating model of the organisation to meet this challenge and placed additional emphasis on performance and accountability, which are key organisational values adopted in the 2017-2021 Strategic Plan.

22. Whilst a significant number of new staff have been budgeted for to ensure the organisation is appropriately resourced to execute the LTP, financial pressures from external factors, most noticeably salary inflation, will need to be monitored closely to ensure expenditure remains within budget. Salary inflation has been budgeted at 2%, which was in-line with early expectations, however the most recent Strategic Pay survey information indicates salary inflation is approximately 2.5% on average across the local government sector. In light of the proposed increase in rates the Executive Leadership Team have agreed to maintain the 2% budgeted allocation and to apply a disciplined approach to managing the overall payroll expense.

23. A shift towards greater de-centralising of staff and an expanded presence across the region with more staff based in Waipawa and Wairoa puts a greater demand on centrally located support staff. These staff provide services such as fleet and facilities management, HR and IT support. This LTP sees the HBRC located across 6 facilities with an increased number of field staff.

24. Staff believe they have developed a plan that can deliver on the Council’s strategic objectives, but this will require an ongoing focus on delivery and better management of staff and resources. As a percentage of total Council spend, internal support staff including the Executive Leadership Team, HR, ICT, finance and external relations represents 9.4% of total expenditure in Year 1 of the LTP, but reduces to 9% in year 3 against planned growth in the organisation. Currently these costs are 8.6% of total spend. Staff believe this additional investment is needed to provide the support mechanisms for the stronger organisational performance, maturity and accountability required for Council to successfully respond to the challenges it faces. Growing the organisation’s frontline capability without additional investment in internal support would create unacceptable risks in areas such as financial management and reporting, staff support, health and safety, information technology and security, and quality of service delivery.

Additional Funding Requests

25. The following tables are additional funding requests which have not been taken into account in the analysis and commentary of this paper. These further requests for funding will be in addition to those initiatives consulted on in the consultation document. The impact to ratepayers of this funding is included in the tables below.

26. Staff proposals as a result of submissions are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Coastal permit for re-nourishment of Westshore Beach - Project 322 (General Fund)	$25,000	$25,000	-	$50,000
Waikato Regional Council’s joint fish passage initiate - Project 288 (Targeted rate – HP Scheme)	$30,000	$30,000	$30,000	$90,000
Total rating impact $	$55,000	$55,000	$30,000	$140,000
Total rating impact %	0.29%	0.23%	0.10%

27. Funding requests received through the consultation process that Councillors will consider are:

28.	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Coastguard Eastern Region	$10,000	$10,000	$10,000	$30,000
Waiohiki Marae Board of Trustees	$12,984	$21,844	$21,094	$55,922
Cranford Hospice	$173,125	$291,250	$281,250	$745,625
Total rating impact ($)	$196,109	$323,094	$312,344	$831,547
Total rating impact (%)	1.03%	1.35%	1.14%

Decision Making Process

29. 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.

Recommendations

That the Hawke’s Bay Regional Council receives and notes the “Financial Overview” staff report.

Authored by:

Jessica Ellerm

Group Manager
Corporate Services

Approved by:

James Palmer

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Regulation Group of Activities

Reason for Report

1. To provide the Council with an analysis of submissions received in relation to the “Regulation” group of activities through the Facing our Future 2018-28 Long Term Plan consultation period.

Background

2. In order to achieve desired environmental improvements and encourage significant changes in environmental behaviour HBRC recognises that it needs to provide not only incentives for good actions but also continue to provide deterrents for negative actions or non-actions.

3. The regulatory arm of HBRC encompasses both the issuing of consents, and the monitoring of those consents and enforcement of compliance with conditions. HBRC currently has over 4000 resource consents on its books.

4. Increased regulation through amendments to the Regional Resource Management Plan (RRMP) and as a result of central government requirements means that more people are required in the Consents Team to ensure that statutory timeframes for decisions on consents are met.

5. Increased community expectations around dealing with unauthorised environmental activities (including pollution) also necessitates further investment in staff to ensure that complaints can be followed up promptly, that priority is given to the monitoring of high impact potential non-compliance, and that appropriate mediation or enforcement measures can be followed up.

6. The regulation arm of Council is supported by both planning and science. Collectively it is proposed that these three parts of Council be provided with greater capacity to speed up the changes sought to the environment.

7. No specific option was consulted upon in the Long Tem Plan as the status quo is not an option.

Submissions Received

8. 25 submissions were received on this topic (see attached).

9. Key themes expressed by submitters included:

9.1. Support for greater attention to key role of protecting and enhancing the region, and increased regulatory support

9.2. Require the polluter to pay not the ratepayer

9.3. Concern that too strong a “stick” may have unintended consequences

9.4. Several submissions specifically opposed water bottling

9.5. Opposition to increase in costs to cover increased regulation

9.6. A reminder of HBRC’s obligations under the Hazardous Substances and New Organisms Act 1996

9.7. Several submissions detailed activities for further focus:

9.7.1. Forestry slash

9.7.2. Irrigation from groundwater

9.7.3. Dumping of material in riverbeds

9.7.4. Ahuriri Estuary/Pandora Pond

9.8. Submissions on consent processes including:

9.8.1. That all resource consents be publically notified

9.8.2. That all objections to resource consents must be received within specified time limits and limited to those directly affected.

Officers’ Analysis of Submissions

10. Regulatory activities align with HBRC’s priority areas of water quality, safety and certainty, and smart, sustainable land use. This underpins HBRC’s desire for all of its water users to have knowledge on what water is available to meet their needs and ensuring our aquatic ecosystems are monitored and reported on for the benefit of the community.

11. Regulation is a statutory activity under the Resource Management Act. In the case of resource consents applicants have responsibilities but also have legal rights under the process. There are a range of provisions within the Act that limit the ability of HBRC to require full public notification of activities or to modify time limits.

12. Consents and compliance activities have significant roles to play in the management of some of HBRC’s key risks – for example, human health impacts from the contamination of drinking water and the risk of a contaminated site affecting an aquifer.

13. These activities have a continually growing workload and the purpose of the Long Term Plan is to ensure that they are adequately resourced to respond to this workload:

13.1. The Consents Team requires additional personnel to process the increased number of resource consents that are arising from the expiry of existing consents including in the TANK catchments, new consents as a result of Plan Change 6 (the Tukituki catchment) and new consents required because of the new National Environment Standards for Plantation Forestry (NES-PF).

13.2. The Compliance Team requires additional personnel to adequately monitor its current and anticipated workload. An increase in reported pollution incidents of 95% over the past five years has necessitated a new fulltime staff member to assist in responding to these. In addition to an increasing number of consents to be monitored for compliance the contamination of the Havelock North public drinking water network highlighted the need for HBRC to carry out additional inspections of bores, as well as compliance with the NES-PF.

14. Applicants for resource consents are required to pay the full (100%) costs incurred in obtaining their consents from HBRC. Similarly the costs of consent monitoring are recoverable from the consent holder. Costs incurred beyond that, e.g. in the Environment Court, may not be fully recovered.

15. Overall the Regulation team is charged by Council with recovering 80% of its project costs in the new Long-Term Plan.

16. In its assessment of risks to the organisation HBRC has identified the risk of contamination of freshwater from hazardous substances sorted on contaminated sites as an area that continues to require strong oversight by the Council. In addition to maintaining a register of contaminated sites (the HAIL database) HBRC will look to use part of the additional resources sought for compliance work to further advance the ongoing management of at-risk sites.

17. Several specific matters raised in submissions are covered as follows:

17.1. Water bottling – the prohibition of this would necessitate a change to the HBRC Resource Management Plan and would go through a plan change process before having effect. Similarly charging for the water taken for water bottling requires a law change.

17.2. Activities for further focus – where activities such as those referred to in various submissions and listed in para 9.6 occur the degree of response from HBRC will depend in some part on the nature of the offence, the level of evidence to support proof of an offence, and the degree to which the activity is a breach of a rule, resource consent condition or national environment standard.

Financial and Resource Implications

18. The financial impacts of the preferred option are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Additional staff	$320,000 4FTE 2 compliance 2 consent Staff	$240,000 3FTE 2 compliance staff	-	$1,440,000
Additional fees and charges (income)	($256,000)	($192,000)	-	($1,152,000)
Net cost	$64,000	$48,000		$288,000
Total rating impact	0.3%	0.2%

Decision Making Process

19. Council is required to make every 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:

19.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

19.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Regulation Group of Activities” staff report.

2. Considers the submission points made relating to “Regulation” and any comments made by Council officers.

3. Agrees to a 2.9% increase in rates for 2018-19 to cover increased costs in Regulation (planning, consents, compliance and science) as consulted on through Facing Our Future 2018-28

4. Does not agree to a 2.9% increase in rates for 2018-19 to cover increased costs in Regulation (planning, consents, compliance and science) as consulted on through Facing Our Future 2018-28

Authored by: Approved by:

Liz Lambert

Group Manager
External Relations

James Palmer

Chief Executive

Attachment/s

⇩1

Submitter Comments made relating to Regulation Group of Activities

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Land Water and Biodiversity - Incentives to Change

Reason for Report

1. To provide the Council with an analysis of submissions on the “Incentives to Change” proposal to fund farm plans, riparian and reforestation initiatives through borrowing as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. Incentives to Change was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28 consultation document. As shown in the following extract from the consultation document, Council’s preferred option was to borrow $35M over 10 years to:

2.1. Speed up Farm Plan completion by removing the up-front costs to landowners in the form of an interest free loan, and

2.2. Fund riparian fencing, planting and maintenance of planted areas and plant trees (reforestation) on highly erodible land unsuitable for commercial forestry.

Financial and Resource Implications

3. The financial impacts of these initiatives are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Farm plans	$102,000	$116,000	$139,000	$357,000
Riparian and reforestation	$264,000	$462,000	$976,000	$1,702,000
Total for Incentives to Change	$366,000	$578,000	$1,115,000	2,059,000
Total rating impact	1.9%	0.9%	2.2%	5%

4. The other option provided in the consultation document was the status quo, which had no additional spend or impact on rates or debt. Under the status quo, farm plans and riparian/reforestation initiatives will occur but at a much slower rate, relying on landowners and backed by regulation.

Submissions Received

5. A total of 373 submissions (attached) were received on this consultation topic. Of those submitters who clearly specified an option, 233 of the submitters supported Option 2 (Council’s preferred option – to fully fund); and 128 preferred Option 1 (the status quo). This equates to 64.5% for the proposal and 35.5% for the status quo (no additional spend).

6. Key themes or unique points expressed by submitters included:

6.1. The majority of those in support of the proposal noted that the scale and pace proposed was required to deal with the challenges.

6.2. A large portion of those opposed to the proposal were concerned about equity and who pays for this work. The theme of ‘polluter pays’ was common.

6.3. A smaller group of those opposed considered the pace of change was unwarranted and that the current pace was sufficient.

6.4. Some of those opposed considered insufficient evidence had been presented to demonstrate a problem that required the proposed response.

6.5. A mixture of those in support and opposition considered that additional regulation was required either in place of the proposal or to support it.

6.6. Some considered that we should be making great efforts to secure central Government funding.

6.7. Support for Council’s proposed science investment.

Officers’ Analysis of Submissions

7. The primary issue for those opposed to the proposal was the equity of where the costs fell and a view that those creating the problem (landowners) should carry the full cost of remediation. This issue is central to the approach proposed by Council. The proposal seeks to address the effects of activities that were created many decades ago, often under taxpayer-funded incentives during a phase of land clearance and development. The benefit of hindsight now tells us that many of the choices about which areas of land to clear were unwise from a sustainable land management perspective, but at the time were accepted and encouraged by successive governments. Relatively recent developments in our understanding of the drivers of water quality and impacts on things like sediment on our freshwater and marine environments has shifted community expectations about how land should be managed. Given the historic or legacy nature of these issues it is equally inequitable to expect the rural community to now solely pay to rectify the issues created historically. Staff support an approach that has both urban and rural ratepayers contributing to the cost of the programme.

8. It is clear that those in support like the scale and pace that is proposed for this work. There is a recognition that the sheer scale of the challenge requires a significant shift back to more historical levels of investment that were enjoyed under the previous Catchment Board regime. There is also an acknowledgement that the approach proposed to engage directly and work one on one with landowners is appropriate and likely to be more successful than regulation alone.

9. There is an alternate view on the speed of change in that some consider the scale and space to be unwarranted or unnecessary. They consider that there is progress occurring and that this is sufficient to match expectations and to halt and manage water quality declines. Staff do not support this view

10. A few submitters challenged the evidence base for this proposal indicating that the science was not ‘done’ or that they could not see a link between the issue and the proposed approach. Staff consider that no further science investment is required to understand the nature or scale of the issues. Council has invested significantly in recent years in land science and ecological programmes that form the basis for this proposal. The entire region has been modelled using the Landcare Research SedNet soil erosion model and this has been instrumental in understanding the current effects of land clearance as compared to historical scenarios. We have also invested in Zonation investigations to understand where the high value ecological sites are that will be targeted for protection or restoration. It is acknowledged that this programme is not intending to drive catchments back to pre-human levels of soil loss but to significantly reduce the anthropogenic load that is detrimentally impacting both our freshwater and marine environments. Ultimately, the final goals for each catchment will be developed in collaboration with the catchment communities to reflect the balance required between a working landscape and an acceptable level of protection of terrestrial, freshwater and marine values.

11. Some submitters advocate either new regulation to replace the proposed approach or new regulation in support of this approach. Regulation through national and regional policy is continually under development. Council continues to invest significantly in its policy development programme. Regulation is not required to support or direct this programme. Council has a sufficiently deep understanding of the issues and drivers to allow it to begin this programme and address known issues. Regulation in time will support this.

12. Some submitters advocate engagement with central government in this programme for financial assistance. Staff agree this is important and so are already deeply engaged with various government ministries to leverage support into the programme. Leverage of available funding is only possible with Council investment.

13. Staff note several submitters supported the investment in science and monitoring to support Council’s integrated package of work.

Decision Making Process

14.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Land Water and Biodiversity - Incentives to Change” staff report.

2. Considers the submission points made relating to the “incentives to change’ proposal and any comments made by Council officers.

3. Agrees to include borrowing of $35M over 10 years in the 2018-28 Long Term Plan, to provide incentives to change in the form of interest free loads for Farm Plans and subsidies for riparian and reforestation as consulted on through Facing Our Future 2018-28

4. Does not agree to the inclusion of borrowing for incentives.

Authored by: Approved by:

Iain Maxwell

Group Manager
Resource Management

James Palmer

Chief Executive

Attachment/s

⇩1

Incentives to Change LTP Topic Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Land Water and Biodiversity - Partnerships for Change

Reason for Report

1. To provide the Council with an analysis of submissions on the “Partnerships for Change” proposal to support the establishment and operation of an independent farmer and grower-led initiative to lead on-farm research and innovation, and to provide additional funding for implementation of the HB Biodiversity Action Plan and Regional Pest Management Plan as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. Partnerships for Change was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28 consultation document (as shown in the following extract from the consultation document):

Financial and Resource Implications

3. The financial impacts of these initiatives are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Future Farming	$150,000	$250,000	$250,000	$650,000
Biodiversity & Biosecurity	$744,000	$744,000	$744,000	$2,232,000
Total for Partnerships for Change	$894,000	$994,000	$994,000	$2,882,000
Total rating impact	4.7%	0.4%	0%

4. The other option provided in the consultation document was to maintain the status quo.

Submissions Received

5. A total of 371 submissions (attached) were received on this consultation topic.

6. Of those submitters who clearly specified an option, 241 of the submitters supported Option 2 (Council’s preferred option – to fully fund); and 117 preferred Option 1 (the status quo). This equates to 67.3% for the proposal and 32.7% for the status quo (no additional spend).

7. Key themes or unique points expressed by submitters included:

7.1. The majority of those in support of the proposal noted that the scale and pace proposed was required to deal with the challenges.

7.2. A large portion of those opposed to the proposal were concerned about equity and who pays for this work. The theme of ‘polluter pays’ was common.

7.3. A smaller group of those opposed considered the pace of change was unwarranted and that the current pace was sufficient.

7.4. Some submitters questioned Council efficiency and were asking if all steps have been taken to fund the work from existing budgets.

7.5. Concerns were raised about the ability to manage deer and goats within the newly planted areas.

7.6. Some submitters raised concerns with the Future Farming Trust (FFT) and were asking that the funding be reallocated to support tourism.

Officers’ Analysis of Submissions

8. As with the Incentives for Change section, the primary issue for those opposed to the proposal was the equity of where the costs fell and a view that those creating the problem (landowners) should carry the full cost of remediation. This has been addressed in the ‘Land Water Biodiversity – Incentives for change’ paper within this agenda.

9. It is clear that those in support like the scale and pace that is proposed for this work. There is a recognition that the sheer scale of the challenge requires a significant shift back to more historical levels of investment that were enjoyed under the previous Catchment Board regime. There is also an acknowledgement that the approach proposed to engage directly and work one on one with landowners is appropriate and likely to be more successful than regulation alone.

10. There is an alternate view on the speed of change in that some consider the scale and space to be unwarranted or unnecessary. They consider that there is progress occurring and that this is sufficient to match expectations and to halt and manage water quality declines. Staff disagree and have the view that the scale and pace of change has been significantly short of what is required to make a meaningful impact on water quality and to protect our most vulnerable soils. Staff consider that Council has a large body of biophysical science that confirms that.

11. Council will be aware that there have been a number of recent reviews that have positively contributed to the efficiency of Council’s operations. Staff do not consider that there is any further gain to make here that would be sufficient to realise the required level of funding. If the funding was to be provided within existing budgets Council would need to undertake a line by line review of projects and make choices about what work it wished to cease to release the funding.

12. There have been a number of submitters concerned about the impact of grazing pest animals on revegetated areas. This is a valid concern. Staff do not consider that this prevents the proposal proceeding. Staff are working on a grant policy design that will look to ensure existing Regional Pest Management Strategy (RPMS) tools are fully utilized and also to ensure that the landowner obligations are clear on the control of plant and animal pests. Staff also note that the current RPMS has enhanced rules specifically for goat control and additional resource for the implementation of this is included with the proposed LTP.

13. Submitters raise a number of concerns with the FFT:

13.1. That the FFT was going to be a body that told them how to farm

13.2. That the FFT would be a group of people to whom the mainstream farming population would not engage

14. Council is reminded that the proposal was for an independent farmer and grower led initiative. Staff are of the view that therefore that the FFT will by necessity require a self-selection process that ensures the people on the trust are leaders in the farming community and who will identify with the broad landowner interests across the region. Staff are also of the view that the FFT should be given clear deliverables Council wishes to see from its work and a clear understanding that the funding provided within the proposed LTP is a ‘one off’ and that after the end of the three year LTP cycle the FFT will needed to have secured sufficient ongoing financial support to maintain its operations without ongoing Council funding support. Staff would also suggest that the FFT be asked to present a three year business plan that demonstrates both the delivery of Council’s deliverables as well as ensuring that the FFT does not compete with or duplicate existing groups like it.

Decision Making Process

15. Council is required to make every 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:

15.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

15.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Land Water and Biodiversity - Partnerships for Change” staff report.

2. Considers the submission points made relating to the “Partnerships for Change’ proposal and any comments made by Council officers.

3. Agrees to fund the ‘Future Farming’, biodiversity and biosecurity initiatives as consulted on through Facing Our Future 2018-28.

4. Does not agree to fund the ‘Future Farming’, biodiversity and biosecurity initiatives as consulted on through Facing Our Future 2018-28.

Authored by:

Iain Maxwell

Group Manager
Resource Management

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

Partnership to Change LTP Topic Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Civil Defence

Reason for Report

1. To provide the Council with an analysis of submissions on the “Civil Defence” proposal take responsibility for collecting a Regional Rate for Civil Defence as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. Civil Defence was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28 consultation document. As shown in the following extract from the consultation document, Council’s preferred option was to:

2.1. Take responsibility for collecting a single regional rate for Civil Defence.

Financial and Resource Implications

3. The financial impacts of this initiative are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Total for Civil Defence	$1M			$1M
Total rating impact	5.2%	0%	0%

4. The other option provided in the consultation document was the status quo, which has no additional spend or impact on rates or debt for HBRC. Under the status quo, the Territorial Authorities in Hawke’s Bay (Wairoa, Napier, Hastings and Central Hawke’s Bay councils) will continue to rate their residents and be invoiced by HBRC for their share of civil defence work.

Submissions Received

5. A total of 362 submissions were received on this consultation topic (see attached). Of those submitters who clearly specified an option, 242 of the submitters supported Option 2 (Council’s preferred option – to transfer to HBRC); and 106 preferred Option 1 (the status quo). This equates to 69.5% for the proposal and 30.5% for the status quo (retain with each TA).

6. Key themes expressed by submitters included:

6.1. Concerns over the HBRC control of Hawke’s Bay Civil Defence Emergency Management (CDEM) and loss of local control.

6.2. Concerns that there will be no corresponding reduction in TLA rates.

6.3. Expression that CDEM is currently working well and there is no need for change.

Officers’ Analysis of Submissions

7. As mentioned in the proposal, Hawke’s Bay CDEM Group is currently being managed by taking a shared service approach which is consistent with the intent of the CDEM Act 2002. The CDEM Group is governed by all of the five Hawke’s Bay councils as equal partners through the Joint Committee made up of the HBRC Chair and the TLA mayors. The Joint Committee is supported by the Coordinating Executives Group (CEG) who are made up primarily of the:

7.1. Local Authority Chief Executives,

7.2. Police Eastern District Commander,

7.3. Fire and Emergency NZ Hawke’s Bay Commander,

7.4. CEO Hawke’s Bay DHB, and

7.5. MSD Regional Director.

8. The HBRC is but one participant in the governance and management of Hawke’s Bay CDEM, however it does have an existing mandated role as the administrating authority. As such the Group office (or full-time CDEM staff) are employed by the HBRC. Each TLA has an assigned and imbedded CDEM staff member who acts as a local subject matter expert and provides initial support in an emergency. These embedded staff also work within their specific area of expertise across the Hawke’s Bay Group.

9. Under the governance of the Joint Committee, the CEG set the Group work programme. This includes projects which deliver across the region and projects which are delivered at a district or individual community level.

10. This structure acknowledges that while Hawke’s Bay CDEM is best managed and resourced centrally, where appropriate there still needs to be local delivery. This approach also allows for securing specialist staff expertise, which would not normally be available to individual local authorities.

11. Some submitters have also raised concerns about the local level of service reducing, particularly in the smaller TLAs. Prior to taking a shared service approach smaller councils usually had half a full time equivalent working on CDEM. This changed in 2012 with the HBRC through the CDEM Group funding these positions to full time.

12. In the last 18 months a more regional approach has been embedded with staff working under one dedicated organisation. The level of service for smaller councils has increased with access to all of the expertise in the Group office. The funding arrangements however, have not changed.

13. By bringing the funding for CDEM under one rate this will further enable expertise and resources to be used in an effective way which benefits the entire region and individual councils. Furthermore, by increasing the transparency of the CDEM funding and identifying efficiencies, additional capability in the Public Information Management and Education area can be provide for.

14. The reduction of TLA Rates as a result of this proposal has been raised as an issue by some submitters. While individual councils are responsible for their level of rating, each of the TLAs have identified the amount of money they will be saving from this proposal and if this will be returned as a saving to the ratepayer or not. All TLA LTPs propose a rate increase for matters other than CDEM.

15. The key point is there is no increase in overall CDEM funding across the region, it is the distribution of the rating that has changed.

16. Some submitters have expressed that Hawke’s Bay CDEM is currently working well and there is no need for change. In 2011, Hawke’s Bay CDEM was rated in the bottom three CDEM Groups in NZ by a Ministry of Civil Defence Emergency Management sponsored national capability assessment. In 2012 the Joint Committee and CEG decided additional resourcing was needed, complimented by a more regional approach through a strengthened Group office. As a result steady progress has been made in consolidating this activity to the point where the Group’s capability and coordination in response and work across community resilience is now having a positive impact.

17. The shared service approach to regional CDEM has developed to the point where good progress has been made, increasing the overall resilience of the Hawke’s Bay community. This proposal to consolidate CDEM funding will strengthen this approach and provide for further improvements.

Decision Making Process

18. Council is required to make every 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:

18.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

18.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Civil Defence” staff report.

2. Considers the submission points made relating to the “Civil Defence” proposal and any comments made by Council officers.

3. Agrees to take full responsibility for collecting a single regional rate for Civil Defence as consulted on through Facing Our Future 2018-28

4. Does not agree to regionally rate for civil defence and instead retains civil defence rating with each respective city/district council in Hawke’s Bay.

Authored by:

Ian Macdonald

Group Manager/Controller

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

Civil Defence LTP Topic Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Working with Tāngata Whenua

Reason for Report

1. To provide the Council with an analysis of submissions on the “Working with Tāngata Whenua” proposal to increase Council’s capability to partner with Tāngata Whenua through increased funding as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. Working with Tāngata Whenua was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28 consultation document. As shown in the following extract from the consultation document, Council’s preferred option was to:

2.1. Spend an additional $384,000 in year 1 of the LTP to grow capacity and partnerships for co-governance and co-management with Tāngata Whenua to better meet Council’s obligations.

Financial and Resource Implications

3. The financial impacts of this initiative are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Total for Working with Tāngata Whenua	$384,000	$384,000	$384,000	$1,152,000
Total rating impact	2%	-	-

4. The other option provided in the consultation document was the status quo, which had no additional spend or impact on rates or debt.

5. Under the status quo, current Council expenditure on tangata whenua engagement is $257,000. This funding provides for the current costs for tangata whenua representation on the Regional Planning Committee, for the members of the Maori Committee, for limited enhancement of internal capability around tangata whenua engagement, and for the engagement of independent technical advisers to the Regional Planning Committee.

6. Under Option 2 an increase of $384,000 per annum is planned. The total funding of $641,000 will be utilised as follows.

6.1. RPC membership remuneration 126,000

6.2. RPC membership travel and accommodation 15,000

6.3. Maori Committee remuneration 88,000

6.4. Maori Committee travel and accommodation 15,000

6.5. Independent technical advisers 100,000

6.6. Contributions to iwi (project by project) 50,000

6.7. Staff to work in engagement/capacity building 247,000

Submissions Received

7. A total of 383 submissions were received on this consultation topic (see attached). Of those submitters who clearly specified an option, 159 of the submitters supported Option 2 (Council’s preferred option – to fully fund); and 212 preferred Option 1 (the status quo). This equates to 43% for the proposal and 57% for the status quo (no additional spend).

8. Key themes expressed by submitters included:

8.1. Of those that prefer Option 1 (status quo) two common themes are:

8.1.1. We are all one people and there should be no additional funding based on race

8.1.2. Little or no explanation is provided of how and where the money will be spent

8.2. Of those that prefer Option 2 common themes include:

8.2.1. Support for the alternative perspectives that tangata whenua can offer to decisions on the environment

8.2.2. The relationship between HBRC, tangata whenua and stakeholders is of great importance and needs to succeed

8.2.3. More consideration for the external capacity building of Maori to assist them in engagement

8.3. Commentary on Māori seats on Council

Officers’ Analysis of Submissions

9. The Hawke’s Bay Regional Council (HBRC)’s Strategic Plan states the purpose of the council is “to work with our community to protect and manage the region’s precious taonga of rivers, lakes, soils, air, coast and biodiversity for health, wellbeing and connectivity”. While “working with our community” is at the heart of how Council operates it is particularly relevant to Council’s relationship with tangata whenua in terms of co-governance and co-management. Successful relationships involve building trust, which in turn enables the parties to support each other to respond to new challenges as they arise.

10. HBRC, as with all councils, has legal responsibilities to tangata whenua when carrying out its activities. These responsibilities are enshrined in legislation including the Local Government Act and the Resource Management Act and includes specific obligations for consultation.

11. In addition to these HBRC is a party to the Hawke’s Bay Regional Planning Committee Act 2015. This law is unique in New Zealand and provides for the co-governance of the region’s natural and physical resources through the joint development of resource management plans. It recognises the status of tangata whenua as a partner with HBRC in the governance of air, land, coast and water.

12. The Regional Planning Committee (RPC) comprises equal number of representatives from the Treaty settlement entities within Hawke’s Bay and the Regional Council. At present all nine regional councillors and nine representatives from eight treaty settlement entities form the RPC. Any plans or plan changes developed by the RPC are forwarded to the Council for adoption but the Council cannot make changes to the document without referring back to the RPC for approval.

13. In establishing the RPC the Crown provided $100,000 as a one-off payment to meet the costs for tangata whenua meeting fees ($126,000 per annum), and the costs of travel and accommodation ($15,000). This fund has now been spent and HBRC is responsible for meeting the costs of tangata whenua participation in the committee. The additional costs proposed in the Long-Term Plan are partly to meet these costs. HBRC also provides the tangata whenua members of the RPC with independent technical advice and this is estimated to cost approx. $100-1200k per annum. The costs of staff time supporting the committee are not included.

14. In addition to the RPC since 1981 HBRC has supported a Maori Advisory Committee. This committee is not a statutory one but does provide a conduit between the broad range of Council’s activities and the wider Maori community with twelve representatives from all four of the region’s taiwhenua areas on the Committee. The annual cost of the Maori Advisory Committee is $88,000 for fees, plus costs for travel and accommodation where required ($15,000). These costs exclude the cost of staff supporting the committee.

15. The ability of tangata whenua to engage with HBRC is very dependent on their capacity and capability within their iwi or hapu. HBRC provides some support in the form of assistance with funding, or with technical advice to groups for the development of iwi/hapu management plans. Iwi/hapu management plans (IHMP) are tools for understanding the concerns of tangata whenua that may relate to resource management and council planning.

16. An IHMP is generally a policy statement that formalises the intent of tangata whenua regarding their social, economic, cultural and environmental development. It puts this intent into a form where, once recognised by the Iwi Authority and lodged with a council, it must be considered in council statutory processes under the Resource Management Act 1991 (the Act).It provides clarity on issues of significance to tangata whenua, including clarifying the desired process of engagement for the specific hapu. It is proposed that funding be made available to assist in the development of IHMPs ($50,000 per annum) and that criteria be developed for the allocation of these funds.

17. HBRC recognises the need to enhance its own internal capability within the organisation in order to have a more successful and meaningful relationship with tangata whenua. It is proposed to employ a Tumuaki, (a “Head”) to lead the organisation in its tangata whenua engagement. This person will be part of the Executive Leadership Team. The current Senior Planner Governance and Iwi Liaison will report to the Tumuaki.

18. The issue of Maori seats on the Regional Council was considered in 2017 as part of a required six-yearly review, and the decision made is effective for the 2019 local body elections. As is usual HBRC practice, as a first step in the process the Council’s Māori Committee was asked to consider the matter of Māori constituencies. In the past the Māori Committee has always responded with “no we don’t want Council to pursue this” but this time the answer was “we want to hear the views of iwi and hapu and offer a collective view/recommendation to Council”.

19. As a result of the Māori Committee resolutions, the Committee invited staff and Regional Planning Committee Tangata Whenua representatives to a workshop to discuss how best to collect Māori views, resulting in the holding of four Hui-a-Iwi in October 2017.

20. Following the feedback from the hui-a-iwi HBRC had a range of options to consider and resolved to not establish Māori constituencies for the Hawke’s Bay Region for the 2019 local body elections.

21. However further advice is being sought from the Māori Committee and the RPC tangata whenua representatives about the option of Council further considering holding a poll on Maori constituencies at the next election in 2019.

Decision Making Process

22. Council is required to make every 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:

22.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

22.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Working with Tāngata Whenua” staff report.

2. Considers the submission points made relating to the “Working with Tāngata Whenua” proposal and any comments made by Council officers.

3. Agrees to spend an additional $384,000 in year 1 of the LTP to grow capacity and partnerships for co-governance and co-management with Tāngata Whenua to better meet Council’s obligations (Option 2 as consulted on through Facing Our Future 2018-28).

4. Does not agree to spend an additional $384,000 in year 1 of the LTP to grow capacity and partnerships for co-governance and co-management with Tāngata Whenua to better meet Council’s obligations (Option 1 as consulted on through Facing Our Future 2018-28).

Authored by: Approved by:

Liz Lambert

Group Manager
External Relations

James Palmer

Chief Executive

Attachment/s

⇩1

Working with Tangata Whenua LTP Topic Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Hawke's Bay Tourism

Reason for Report

1. To provide the Council with an analysis of submissions on the “Hawke’s Bay Tourism” proposal to step back funding over three years and adjust the rating split to become more weighted to the commercial sector as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. The Hawke’s Bay Tourism (HBT) proposal was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28 (as shown in the following extract from the consultation document).

Financial and Resource Implications

3. The financial impacts of this initiative are:

	Additional spend (saving)
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Hawke’s Bay Tourism	-$300,000	-$600,000	-$900,000	-$1.8M
Total rating impact	-1.6%	-1.3%	-1.2%

4. The other option provided in the consultation document was to hold the HBT funding at the current level (the status quo), which had no additional spend or impact on rates or debt.

Submissions Received

5. 499 submissions were received on this consultation topic (see attached). More submissions were received on this consultation topic than any other topic.

6. Some submissions had multiple signatories, notably a petition to “Protect the Hawke's Bay Visitor Industry” (submission #564) and a joint submission from the Hawke’s Bay Hospitality Businesses in favour of holding the current funding with 93 signatories (submission #677).

7. Of those submitters who clearly specified an option, 224 of the submitters supported Option 2 (Council’s preferred option – to reduce funding); and 261 preferred Option 1 (to hold current levels of funding for HBT). This equates to 46% for the preferred proposal and 54% against.

8. Key themes expressed by submitters included:

8.1. Support for adjusting the rating split to be more weighted to the commercial sector.

Submissions in support of reducing funding (Council’s preferred option)

8.2. The overwhelming majority of submitters in this category supported Council’s signalled intention to get back to core business and prioritise activities focussed on improved environmental outcomes. While a large number of submitters expressed the view that an improved environment would also lead to better opportunities and outcomes for the visitor sector, submitters also expressed a concern that the sector was in some cases either having a negative environmental effect (e.g. freedom camping), or requiring additional ratepayer funding to support investment in the infrastructure required to manage increased visitor numbers.

8.3. Many also supported the narrative that the tourism industry had benefitted from increased investment and that the industry should be in a position to self-fund the proposed reduction. Some expressed concern that there was a lack of empirical evidence linking HBT funding with the industry’s quoted improved regional performance.

8.4. Some considered that alternative funding models should be considered, such as contestable funding.

8.5. Only one submitter proposed that HBT be amalgamated with other regional business development or economic development agencies.

Submissions in support of holding funding (not Council’s preferred option)

8.6. Many submitters expressed concern that reduced funding would jeopardise the industry’s gains and achievements over recent years. In particular, many were concerned that the market signal of a funding reduction would see an immediate reduction in investment and/or job growth, and were concerned that the loss of momentum would far outweigh the proposed reduction in funding. The calibre of the leadership and governance HBT had been able to secure and retain via a stable funding platform was also noted.

8.7. Some submitters argued that the tourism industry is a competitive global market where brand awareness and presence is critical and where falling off the radar is potentially catastrophic. In a cyclical industry there is a real risk that complacency in an “up” market could be painful in a “down” market. They felt it is critical to invest in and build permanence in the HB regional brand.

8.8. The case was made that tourism investment is aligned with improved environmental outcomes because of consumer pressure for operators to have strong environmental credentials to remain in business. The Farmer’s Market for example, was used to showcase the link between environmentalism and tourism.

8.9. A concern was raised that the need for industry contributions will adversely affect smaller operators who cannot spare the resources (in-kind or financial). This may favour larger industry players which will lead to consolidation and a reduction in choice for visitors.

8.10. A joint submission was received from the Mayors of Wairoa, Napier, Hastings and Central Hawke’s Bay councils urging HBRC to retain HBT’s funding due to the value that tourism has on the social, environmental, cultural and economic well-being of the people they serve.

8.11. Central Hawke’s Bay District Council noted the positive impact of HBT’s increased activity in its district. The Council expressed concern about the impact of reduced funding on their small tourist operators and Council’s co-funded local co-ordinator that sits within HBT.

8.12. A concern that the true quantum of current industry contribution was not appreciated given the significance of in-kind support that is not captured or recorded.

8.13. A call for the funding reduction to either be postponed so that the industry was given the opportunity to develop alternative funding models and/or stepped back by a smaller amount.

8.14. Miscellaneous alternative funding models proposed:

8.14.1 Visitor levy collected at airport, hotels etc.

8.14.2 HBT coordinates event funding with NCC and HDC to maximise impact.

8.14.3 A portion of existing funding diverted to mitigate the impact of increased tourist numbers.

8.15. Both Air New Zealand and Jetstar expressed their support for existing regional funding and noted that regional support was a factor they took into account when reviewing regional networks.

8.16. Hawke’s Bay Tourism’s submission:

8.16.1 highlights the case for retaining the current funding arrangement and details the range of activities it leads to support regional promotion.

8.16.2 points to what are significant contributions to regional GDP via visitor expenditure.

8.16.3 provides a comprehensive proposal setting out a pathway to a new funding model. The 3 phase proposal is:

8.16.3.1 Phase 1 – Change the Residential/Commercial targeted rating split from 70/30 to 50/50.

8.16.3.2 Phase 2 – Undertake an assessment of “Peer to Peer” properties (e.g. AirBnB) and adjust their residential rate contribution upwards so that these properties are treated on a either a quasi-commercial or full commercial basis for the purposed of this targeted rate.

8.16.3.3 Phase 3 – Research and analyse options for the introduction of a visitor tax at a regional level, while noting that this debate is being had at a national level right now.

8.16.4 indicates its preference to transition to a sustainable funding model and believes that identifying and moving to the preferred pathway will require close partnership with HBRC.

8.17. Several prominent businesses, wineries in particular, emphasised the link between the success of their products and services and the success and profile of the regional brand.

8.18. The need to support a regional industry that has in the past suffered in the absence of the HBRC’s regional leadership role in relation to regional tourism was also raised.

Officers’ Analysis of Submissions

9. The balance of submissions are in favour of holding funding (Option1) which is not Council’s preferred option.

10. While those in favour of reducing funding tended to support Council’s rationale, those in favour of holding funding identified a broader range of reasons to support their position.

11. A number of submissions for both options focussed on the issue of Maori tourism. While some existing Maori tourism businesses supported both the retention of funding and the activities of HBT, other stakeholders expressed a view that a percentage of Council’s tourism funding should be directly supporting the growth of Maori tourism. In terms of the latter, while these submitters selected Option 2 (preferred) it should be noted that their intention might be for the funding quantum to remain but for the allocation model to change. It is unclear from the submissions and may be a matter that can be clarified when parties speak to their submissions.

Decision Making Process

12. Council is required to make every 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:

12.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

12.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Hawke’s Bay Tourism” staff report.

2. Considers the submission points made relating to the “Hawke’s Bay Tourism” proposal and any comments made by Council officers.

3. Agrees to step back funding to HB Tourism over three years and adjust the rating split to become more weighted to the commercial sector as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

4. Does not agree to reduce funding to HB Tourism and holds it at the current level.

Authored by:

Tom Skerman

Group Manager
Strategic Development

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

HB Tourism LTP Topic Submissions

HB Tourism LTP Topic Submissions

Attachment 1

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Sustainable Homes

Reason for Report

1. To provide the Council with an analysis of submissions on the “Sustainable Homes” proposal as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. Sustainable Homes was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28. As shown in the following extract from the consultation document, Council’s preferred option was to extend the HeatSmart programme to include region-wide sustainable homes initiatives such as solar water heating, domestic water storage and septic tank replacement.

3. The estimated uptake is up to 1300 homes over the 10 years. External borrowing of $13 million will be matched to actual demand. There is no impact on rates as the scheme is fully cost recovered.

Financial and Resource Implications

4. The financial impacts of this initiative are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Total for Sustainable Homes	$0.5m	$0.6m	$0.72m	$1.82m
Total rating impact	Nil	Nil	Nil	Nil

5. The other option provided in the consultation document was the status quo, which had no additional spend or impact on rates or debt. Under the status quo, the HeatSmart programme will run until 2023, providing financial assistance for clean heat and insulation as per the current programme. Costs are met by a combination of debt repayment and for clean heat, a targeted rate applied to the airsheds.

Submissions Received

6. A total of 371 submissions were received on this consultation topic (see attached).

7. Of those submitters who clearly specified an option, 224 of the submitters supported Option 2 (Council’s preferred option – to extend the HeatSmart programme); and 147 preferred Option 1 (the status quo). This equates to 60% for the proposal and 40% against.

8. Key themes expressed by submitters included:

8.1. Of the 147 who wished to maintain (option 1) 33 submitters assumed that option 2 would result in a general rate increase where option 2 indicates full cost recovery against borrowing,

8.2. A significant number of submissions supported the user pay principle as a reason not to extend the programme, option 2 however is based on user pay principles.

8.3. As above many did not want to subsidize costs for rental properties but did want grants to encourage higher standards on new build properties.

Officers’ Analysis of Submissions

9. From the views expressed there was clearly a misunderstanding of the funding stream for this proposal. When these anomalies are taken out the balance in favour of extending the programme is 70% in favour, 30% against.

Decision Making Process

10. Council is required to make every 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:

10.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

10.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Sustainable Homes” staff report.

2. Considers the submission points made relating to the “Sustainable Homes’ proposal and any comments made by Council officers.

3. Agrees to include borrowing of up to $13 million over 10 years in the 2018-28 Long Term Plan, to provide 1300 financial assistance packages as consulted on through Facing Our Future 2018-28

4. Does not agree to extend the HeatSmart programme.

Authored by:

Mark Heaney

Manager Client Services

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

Sustainable Homes LTP Topic Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Local Government Funding Agency - LGFA

Reason for Report

1. To provide the Council with an analysis of submissions on the “Local Government Funding Agency” proposal to join the LGFA as an unrated guaranteeing local authority as consulted on in the Facing our Future 2018-28 Long Term Plan consultation document.

Background

2. Local Government Funding Agency was one of the seven key consultation topics Council sought public submissions on through the Facing our Future 2018-28 consultation document. As shown in the following extract from the consultation document, Council’s preferred option was option 3 to join as an unrated guaranteeing local authority with unlimited borrowing.

Financial and Resource Implications

3. The financial impacts of this initiative are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Local Government Funding Agency	$10,000	Nil	Nil	$10,000
Total rating impact	Nil	Nil	Nil	Nil

Submissions Received

4. A total of 322 submissions were received on this consultation topic (see attached).

5. Of those submitters who clearly specified an option, 117 of the submitters supported Option 3 (Council’s preferred option – to join as an unrated guaranteeing local authority); 127 preferred Option 2 (joining as a non-guaranteeing local authority) and 78 preferred Option 1 (the status quo).

6. This equates to 36.34% for joining as unrated; 39.44% for non-guaranteeing and 24.22% for the status quo (not joining). A total of 76% supported joining in some form.

Key themes expressed by submitters included:

7. Submissions opposed to joining the LGFA entirely

7.1. Of those who oppose joining the LGFA entirely, the key concerns were in relation to the risk involved with joining as a guarantor.

7.2. Some submitters expressed concern about whether joining the LGFA would enable councillors to borrow recklessly and over and above the amounts as disclosed within the consultation document.

7.3. Another concern in regards to borrowing to fund long term projects, is the burden of borrowing on future generations and the possibility of interest rate increases.

7.4. There were some concerns regarding the costs involved with joining, and had sufficient analysis been completed to evaluate the cost vs benefit.

7.5. Questions arising to the reallocation of the $80 million which had been ring-fenced for the RWSS and why that would not be used to fund the initiatives consulted on.

7.6. One submitter urged Council to look at alternative methods to fund infrastructure development and environmental enhancement. These alternative methods include the establishment of a complimentary local currency.

8. Submissions in support of joining the LGFA but non-guaranteeing local authority

8.1. The majority of submitters who provided comments did so in relation to the taking of un-necessary risk in regards to joining as a guarantor and the potential for a call on rate payers should another LGFA borrower default.

8.2. Many raised concern over the use or the phrase of “unlimited” borrowing, which was used to refer to the limits on membership of the LGFA where as an un-guaranteeing member you can only borrow up to $20 million. The term “un-limited” refers to the amount possible to borrow from the LGFA, there are no limits on levels of borrowing for guaranteeing members, however application for borrowing will still require strict financial management and borrowing metrics and financial covenants must be adhered to

9. Submissions in support of joining the LGFA as an unrated guarantor

9.1. Submitters support joining as a guarantor, which provides the most flexibility and enables borrowing above $20 million if required, but under no commitment to do so.

9.2. These submitters considered that the proportionate risk is appropriate and balanced in favour of the cost savings that can be achieved by accessing borrowing at reduced rates.

9.3. They agreed that it seems prudent to access borrowing at the lowest rate possible however a common theme was that submitters thought the level of borrowing should be closely monitored and that borrowing needs to be responsible and should always consider the impact on future generations.

Officers’ Analysis of Submissions

10. The financial strategy of the 2018-28 LTP has been developed to enable accelerated investment in our environment now. The challenge for Council is to provide funding for its new strategic agenda whilst maintaining a balanced operating budget. Along with reviewing operational efficiencies, increasing an emphasis on user pays, and a more aggressive investment strategy we believe it is appropriate and complementary to our financial strategy to fund initiatives which future generations will benefit from, through borrowing, which spreads the cost over many years. This LTP includes borrowing of $71 million over 10 years, and joining the LGFA scheme as a guaranteeing member would provide access to lower interest rates and more favourable terms and conditions on borrowing up to and above $20 million.

11. The LGFA delivers cost-savings of $20 million each year to its members, which would otherwise need to be funded by higher rates. Forty-five councils have currently signed the (joint and several) guarantee with LGFA, which guarantees LGFA, and not individual council borrowings.

12. Staff believe the benefit to ratepayers outweighs the minimal risk and in joining this scheme as a guarantor. While the risk is low, there is potential liability associated with a call under the guarantee. We have considered this and believe there is very low probability due to the strong performance of New Zealand’s local authority sector, rates security, LFGA’s financial covenants, capital, governance and government relationship to name a few. If we become a guaranteeing council, our share of the guarantee would be 0.37%. For example, if a $100 million call was made under the guarantee, Hawkes Bay Regional Council’s total exposure would be $370,000.

13. There has never been a default by a New Zealand Council. In addition, there is strong oversight of the sector by the Office of the Auditor General (OAG) and the Department of Internal Affairs (DIA).

14. Similar financing vehicles operate in Denmark, Sweden, Norway, Finland, Netherlands, France, United Kingdom, Japan and Canada. They all use a cross-guarantee structure by member councils similar to the structure of LGFA. There has never been a call under the guarantee in any of these countries.

15. In regards to excessive or reckless borrowing, joining does not guarantee access to unlimited or inappropriate borrowing. The LGFA can decline any application for borrowing based on a range of financial covenants. Member councils that borrow from LGFA need to comply with these financial covenants on an annual basis. The covenants restrict the amount of money a council can borrow. In addition, Council has its own debt affordability limits which must be complied with.

16. The cost of joining the LGFA is a one off expense of $10,000. Given the level of forecast borrowing the potential cost savings from access to lower interest rates far exceeds the cost of joining.

In regards to the use or reallocation of the $80 million which was ring-fenced for the RWSS. $15 million was expensed on the project, of the remaining $65 million, $15 million is currently invested in Wellington leasehold property and the remaining $50 million is proposed to be invested to be preserved and to provide investment income to help fund the increase in Council’s operating activities. Both the Wellington property and the $50 million are forecast to return a higher yield than current borrowing rates.

Decision Making Process

17. Council is required to make every 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:

17.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

17.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Local Government Funding Agency” staff report.

2. Considers the submission points made relating to the “Local Government Funding Agency” proposal and any comments made by Council officers.

3. Agrees to join the LGFA as an un-rated guarantor as consulted on through Facing Our Future 2018-28

4. Does not agree to join the LGFA.

5. Agrees to join the LFGA as a non-guaranteeing authority.

Authored by:

Jessica Ellerm

Group Manager
Corporate Services

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

LGFA LTP Topic Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Regional Assets Group of Activities

Reason for Report

1. To provide the Council with an analysis of submissions received in relation to the “Regional Assets” group of activities through the Facing our Future 2018-28 Long Term Plan (LTP) consultation period.

Background

2. Analysis of submissions received related to Regional Assets functions of the Council.

Submissions Received

3. 17 submissions were received on this topic (see attached).

4. Key themes or unique points expressed by submitters included:

4.1. Support for coordinated planning involving community for coastal hazards.

4.2. Comprehensive plan to reduce region’s contribution to climate change and support best practice that works with the changes in our environment, rather than fighting against changes.

4.3. Assistance for hazard relocation options.

4.4. Some support for hard engineered coastal protection.

4.5. Request that HBRC’s LTP includes funds to prepare and obtain a coastal permit to allow disposal of sand for the purpose of re-nourishing Westshore beach.

4.6. Support for water quality and land management.

4.7. Request from Waikato Regional Council for $30,000 per year for three years to fund joint research into fish passage through flood control and drainage infrastructure.

Officers’ Analysis of Submissions

5. The submissions in relation to coastal hazards are, or can be, dealt with under the Coastal Strategy implementation phases. There is still much more work to be done here and community involvement before decisions can be made.

6. Staff support the submission to obtain a coastal permit for the purpose of re-nourishing Westshore Beach. There will need to be investigations, expert advice, assessment of environmental effects, notification and community engagement as part of the information to obtain the permit. We do not expect this to be too big a task, but our estimate is $100,000 to cover costs, excluding staff time. The expectation would be that NCC share half the costs i.e. $50,000 each. This would likely take say 2 years to prepare and obtain a permit and the cost could be spread over 2 or maybe 3 years. This would be subject to the Napier Port being granted a new dredging consent related to its proposed new wharf.

7. Staff support the request from Waikato Regional Council for $30,000 over 3 years to carry out the fish passage investigation.

Proposals for Consideration

8. That $25,000 is added to the 2018/19 and 2019/20 budgets (total $50,000), in Project 322 Coastal Processes, to obtain a coastal permit to discharge sand at Westshore Beach for the purpose of re-nourishment, with the proviso that NCC contribute an equal amount.

9. That $30,000 is added to the 2018/19, 2029/20 and 2020/21 budgets (total $90,000), in Project 288 Special Projects, for the purpose of supporting Waikato Regional Council to carry out the fish passage initiative.

Financial and Resource Implications

10. The financial impacts of these submissions are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Coastal permit for re-nourishment of Westshore Beach - Project 322 (General Fund)	$25,000	$25,000	-	$50,000
WRC fish passage initiative - Project 288 (Targeted rate – HP Scheme)	$30,000	$30,000	$30,000	$90,000
Total rating impact $	$55,000	$55,000	$30,000	$140,000
Total rating impact %	0.29%	0.23%	0.10%

Decision Making Process

11. Council is required to make every 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:

11.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

11.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Regional Assets” staff report.

2. Considers the submission points made relating to the “Regional Assets Group of Activities” and any comments made by Council officers.

3. Agrees to the staff recommendation that $25,000 funding is included in the 2018-19 and 2019-20 budgets (Total $50,000), (Project 322 Coastal Processes) to obtain a coastal permit to discharge sand at Westshore Beach for the purpose of re-nourishment.

4. Agrees to the staff recommendation that $30,000 funding is included in the 2018-19, 2019-20 and 2020-21 budgets (Total $90,000), (Project 288 HP Scheme), to support the Waikato Regional Council to carry out the fish passage initiative.

5. Does not agree to include $25,000 funding in the 2018-19 and 2019-20 budgets to obtain a coastal permit to discharge sand at Westshore Beach for the purpose of re-nourishment.

6. Does not agree to include $30,000 funding in the 2018-19, 2019-20 and 2020-21 budgets to support Waikato Regional Council to carry out the fish passage initiative.

Authored by: Approved by:

Gary Clode

Acting Group Manager
Regional Assets

James Palmer

Chief Executive

Attachment/s

⇩1

Submitters Comments & Officer's Responses related to Regional Assets Group of Activities

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Integrated Catchment Management Group of Activities

Reason for Report

1. To provide the Council with an analysis of submissions received in relation to the “Integrated Catchment Management” group of activities through the Facing our Future 2018-28 Long Term Plan consultation period.

Background

2. Analysis of submissions received related to Integrated Catchment Management functions of the Council.

Submissions Received

3. 41 submissions (attached) were received on this topic.

4. Key themes or unique points expressed by submitters included:

4.1. General – Some submitters raised concerns about the costs and potential rates impact. There was a request for an expanded Regional Park at Tutira. There was a request for a contestable fund for environmental education. That resourcing was made available to support water security within the Tukituki catchment.

4.2. Biosecurity – Concerns were raised about the level of biosecurity funding and the species of interest in this programme. Wish to prohibit the use of 1080 poison.

4.3. Biodiversity – support was expressed for the proposed programme and the level of resourcing.

4.4. Catchment Management – support was expressed for the proposal including the scale and pace of the reforestation proposal. Concerns raised that the planting should be all native. Concern that the commercial forestry should be left to the private sector. Concern about the broader social and infrastructural impacts as a result of forestry. The inclusion of environment specific performance targets.

4.5. Environmental Science – support was expressed for the proposed work to investigate our groundwater resources. Desire for additional resourcing for cultural or matauranga monitoring.

Officers’ Analysis of Submissions

General

5. Consistent with the specific sections on the detailed proposals submitters to this group of activities section raised concerns about equity of where the costs fell and a view that those creating the problem (landowners) should carry the full cost of remediation. For the reasons noted in both of the Land/Water/Biodiversity sections, staff support an approach that has both urban and rural ratepayers contributing to the cost of the programme.

6. HB has 4 Regional Parks recognised by the Hawke’s Bay Regional Council through the HBRC Regional Park Network Plan since December 2013 (Pekapeka, Pakowhai, Waitangi and Tutira). The idea of creating a larger regional park at Tutira than what is there presently was proposed informally around 2015 through the Tutira Maungaharuru Forum. The thinking at the time was to include HBRC land (the existing Tutira Regional Park plus Waihapua), Guthrie Smith and Lake Tutira. Due to the complexity of ownership issues relating to the lake the idea was “parked”. Staff consider that establishing a “Super” regional park at Tutira has merit and could be progressed by omitting the lake Tutira footprint initially. Additional work will be required confirming the benefits of a larger, multiple ownership, Regional Park at Tutira. Investigations would need to be resourced. Currently nothing is allocated for work along these lines and staff do not consider this issue should be advanced at this time.

7. Council will continue to support and guide the landowners within the Tukituki catchment affected by the new policy to support the successful implementation of the policy. A $5 million dollar capital fund has been included in the LTP to support investigation and feasibility of water storage/augmentation/aquifer recharge, some of which is anticipated to be invested in the Tukituki catchment.

8. Environmental Education and facilitation of the Enviroschools Programme have current focus in the Community Engagement team of HBRC. A more coordinated approach to education for sustainability is currently under discussion, between HBRC and other local agencies, including the region’s city and district councils, Sustaining HB Trust/ Environment Centre HB, EIT, the Department of Conservation, Fish and Game, etc. While not publicly referenced in the Facing our Future document, a stronger focus on environmental education and coordination is proposed. This objective will become the sole focus of one member of staff in the Community Engagement team, with effect from 1 July 2018.

Biosecurity

9. Hawkes Bay regional Councils spends a significant amount of resource managing plant pests including biodiversity plants such as Old Mans Beard, Japanese Honeysuckle and Pinus Contorta. Plant pests do require a considered commitment before committing to control programmes however as the seed beds often mean control programmes need to continue for decades to have enduring impact. HBRC also invests collectively with other regional councils in Biocontrols which are an effective long term solution to plant pests.

10. HBRC supports communities who want to undertake Argentine ant control through bait subsidies and advice. Mothplant is not currently on the regional pest management plan but HBRC have received submissions and are reviewing its pest status.

11. The animal pest rates fund a range of directly available services for our farming community including subsidised baits and material, up to 50% of the cost of larger rabbit control operations, support for on farm biodiversity programmes and advice and support for possum control.

12. Hawkes Bay Regional Council makes very limited use of aerial 1080 for pest management and does so with the agreement of the landowner. The Regional Pest Management Plan process which is being reviewed concurrently to the Long Term Plan includes a cost benefit analysis as part of the process to determine if pests should be included.

Biodiversity

13. Staff acknowledge and appreciate the support for the proposed activity to improve the regions biodiversity

Catchment Management

14. There is majority support for the scale and pace that is proposed for this work. Submitters have also confirmed the need to direct landowner engagement as a factor for success.

15. A minority consider the scale and space to be unwarranted or unnecessary. Staff disagree and have the view that Councils monitoring confirms that the scale and pace of change has been significantly short of what is required.

16. Staff acknowledge the desire for all native plantings as part of the reforestation initiative. In many situations natives would be entirely appropriate. In many situations they will not. Ultimately the decision on this will lay with the landowner. Staff will be promoting the use of native species where appropriate and supported but not at the cost of reforestation occurring on a property.

17. Commercial investment by Council into forestry is not subject to consultation in the current LTP.

18. Staff acknowledge the potential impacts of land use change, including forestry on communities. In this current year financial year work is already underway to understand this and therefore set strategies to minimise the impact of any land use change.

19. The development of catchment specific objectives and outcomes for the Catchments team will be developed in each catchment over time through a community driven non-statutory Integrated Catchment Management plan. Supporting this is Council’s non-statutory Strategic Plan that has set a range of goals for water quality and sustainable land use. Staff consider that an approach that engages the broad catchment community in setting outcomes is a critical factor for successful implementation of this programme.

Environmental Science

20. Council is currently supporting the development of a matauranga monitoring framework with Te Taiwhenua O Heretaunga. This work is being completed from with existing budgets. Staff consider that the implementation of any approaches that come from this can be accommodated within existing budgets. Staff also anticipate approaching this in a partnership model with tangata whenua and supporting them to undertake their own monitoring.

Decision Making Process

21. Council is required to make every 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:

21.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

21.2. The issues to be considered in this paper are those issues raised by members of the community that have submitted to the Council on the Consultation Document “Facing Our Future 2018-28”. All submissions are an integral part of the special consultative processes set out in Section 83 and 85 of the Local Government Act 2002.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Integrated Catchment Management” staff report.

2. Considers the submission points made relating to “Integrated Catchment Management” and any comments made by Council officers.

Authored by:

Iain Maxwell

Group Manager
Resource Management

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

Integrated Catchment Management Group of Activities related submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Strategic Planning Group of Activities

Reason for Report

1. To provide the Council with an analysis of submissions received in relation to the “Strategic Planning” group of activities through the Facing our Future 2018-28 Long Term Plan consultation period.

Background

2. Analysis of submissions received related to Strategic Planning and Transport functions of the Council.

Submissions Received

3. 43 submissions were received on this topic (see attached). A small number of submissions (or parts of them) related to issues beyond the responsibility of a Regional Council.

4. Key themes or unique points expressed by submitters included:

4.1. Napier Port: a number of submitters addressed the ownership of the Port and will be advised that no decision has been made or will be made until full public consultation takes place.

4.2. Transport: Consistent with previous years there remains a degree of confusion about HBRC’s role in public transport and/or the funding model that sits behind the operation of passenger transport programmes.

4.3. Freshwater Management Policy: A small number of submissions addressed Council’s activities in freshwater management policy and planning, some concerned that the changes are too onerous and others concerned that more needs to be done. Submitters supported the extension of the $5m Ngaruroro water storage feasibility funding to whole-of-region initiatives.

4.4. Climate Change: A number of submitters felt that this subject did not have sufficient prominence in the LTP.

4.5. Funding for Socio-Economic Development: A small number of submitters felt that while the LTP is environmentally aspirational, more leadership is required around both social and economic well-being. It was felt that sustainability can best be achieved when the three pillars - social, environmental and economic or often referred to as people, planet and profit - enjoy equal priority.

Officers’ Analysis of Submissions

5. Neither Strategic Planning nor Transport were matters for specific consultation. Apart from Port ownership, the matters raised by submitters are broadly consistent with the issues that staff deal with in relation to their day to day activities.

6. The submissions on Port ownership, highlights the need for Council to have a comprehensive and well organised public communication and consultation plan on this issue.

7. The LTP represents a modification to the economic development role it has played, in tandem with other local authorities and regional stakeholders, in recent years. This reflects the desire by Council, as set out in its Strategic Plan 2017-2021, to focus resourcing on addressing a wide and complex range of environmental issues as proposed throughout the LTP.

8. In doing so, however, staff do not agree with the view that it is scaling back its commitment to regional economic development. Staff perceives HBRC’s primary role in the realm of regional economic prosperity as not so much to target new growth initiatives (as has traditionally been the case across all agencies across the region), rather to first and foremost ensure that the economy does not shrink as a result of poor resource management and stewardship. This approach is supported by research that demonstrates that “improved long run economic performance has occurred primarily through a decline in the rate and frequency of shrinking, rather than through an increase in the rate of growing” (source: https://www.nuffield.ox.ac.uk/users/Broadberry/Growing%20Shrinking%20v3.pdf). That is to say, avoiding losses by ensuring the long-term sustainability and certainty of the region’s resource platform will have a longer term positive impact on the region growth.

9. In terms of supporting the growth side of the equation, HBRC activities in the space include: its support of Business Hawke’s Bay and the Business Hub, the management of the Regional Business Partner Contract, participation in Matariki REDS, and long-term support for the good management and growth of the Port of Napier.

Proposals for Consideration

10. The final Long Term Plan document to include a specific section detailing Council’s approach to addressing Climate Change across its groups of activities as well as its commitment to support the region’s future ambition for carbon neutrality.

Decision Making Process

11.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Strategic Planning” staff report.

2. Considers the submission points made relating to the Strategic Planning group of activities and any comments made by Council officers.

Authored by:

Tom Skerman

Group Manager
Strategic Development

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

Strategic Planning Group of Activities submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Corporate Services Group of Activities - including Rates Affordability

Reason for Report

1. To provide the Council with an analysis of submissions received in relation to the “Corporate Services” group of activities through the Facing our Future 2018-28 Long Term Plan consultation period.

Submissions Received

2. 189 submissions (attached) were received on this topic. A small number of submissions (or parts of them) related to issues outside the responsibility of a Regional Council.

3. Key themes expressed by submitters included:

Affordability

3.1. Many ratepayers on fixed incomes are concerned about the proposed increase, and the size and scale of the average 19% increase compared to inflation, with 99 submissions commenting on the affordability of the rate increase.

3.2. Many comments included an overall agreement of the direction and strategy the council is taking, and agree the environment needs investment and attention, but they simply believe Council’s ambitions are unaffordable.

3.3. Some thought the commentary or ‘story-telling’ of $1 per week was misleading and a PR spin given some ratepayers, particularly rural land owners, will have a significantly higher increase than $52 per annum.

3.4. Members of the community who are on a fixed income will struggle to afford a rates increase which is considerably higher than inflation.

3.5. There were many submitters who thought there should be greater emphasis on user pays and targeting the recovery of expenditure from those who are the greatest polluters, and for those who use the environment for commercial gain.

3.6. Some expressed a view that Council should live within its means, and are concerned about future year increases and whether these will be restricted to the amounts outlined in the consultation document given the significant increases of the last two years.

3.7. There were questions about whether Council could achieve further savings through its own operational efficiencies to ensure Council is operating in the most cost effective manner given the increasing burden on the community, and urged staff to look for more cost savings internally. Specific mention was made of the suggestion to wind up the Hawke’s Bay Regional Investment Company Ltd to reduce governance expenses.

Rates Review

3.8. Some submitters requested a review of rating policies to ensure that allocation of expense is ‘fair’, and would like to express support for the full package proposed but would like to see some phasing of the initiatives into further years to spread the impact.

3.9. Others would like to see a review of fairness of the current rating mechanisms with specific view to implement a possible remission or rebate for those on a fixed income and more specifically, pensioners.

3.10. There was also concern expressed about the significant increase of the general rate which is based on land value and whether the types of costs allocated via this mechanism are appropriate, specifically governance and strategic planning.

3.11. The District Health Board has asked that consideration be made of the impact that funding policies can have on household budgets, and that for the most financially disadvantaged households these impacts can be significant. The DHB further recommends that HBRC reviews its rating policy to ensure that the planned rates and other subsidies will contribute to reducing inequity across the region.

Governance

3.12. There was strong feedback about the leadership and governance of the Council. Overall there were 72 submissions in this area, 44 of which signalled strong support for the vision and leadership shown by the Council with many submitters thanking management and governors for showing clear leadership and also supporting the focus on core business. Twenty-eight did not agree with the direction of Council and did not support the narrowing of focus.

3.13. One submitter thought that Hawke’s Bay is continuing to contract economically relative to most other regions across NZ and therefore suggested that “business as usual” isn’t an appropriate approach from an economic development point of view. They suggested a review of Council’s non-environmental activities is now (urgently) required.

3.14. Submissions included some comments and concerns about a lack of gender and cultural diversity of councillors, and would like to see greater diversity in the future.

3.15. It was asked that consideration to the viability of the economy in some of the rural areas be made and had enough analysis been completed. An example given was the proposal to plant trees in Wairoa, and possible future impact on the Wairoa economy.

3.16. Other comments relating to governance and vision included support in divesting risk in the Port of Napier Limited, and it was requested that education be given more emphasis in the next 10 year plan given this plays a key role in the promotion of change.

Process

3.17. 11 submitters commented on the process of the LTP consultation with some expressing appreciation for the user friendly methods to provide feedback, and some thought there was an increased level of engagement. Others expressed a dissatisfaction and the need to do more, to allow a wider cross section of the community to express their views. This included a request to have a variety of town-hall meeting times including daytime, to allow parents and nightshift workers to attend.

3.18. Some of the Wairoa community thought they was insufficient time allowed to submit following the town-hall meeting, and requested the process be refined in future.

Track-record

3.19. Concerns were made about the ability of this council to deliver on its promises given its recent track record, with specific mention to the Ruataniwha Water Storage Scheme and the subsequent significant write off of funds expensed on the project.

3.20. The question was also asked “what have previous councils been doing”, with some of the community requesting further explanation as to why such significant invested is required now, what have we been doing?

Officers’ Analysis of Submissions

4. Given the scale of the proposals in the 2018-28 LTP and the ambition of this plan, we are asking the community to help fund this step change through an increase in the General Rate.

5. This LTP includes a move to more directly charge users of our services. For example, we have proposed significant changes to the way we allocate and collect our Economic Development rate, shifting a larger percentage of the cost to commercial ratepayers. This is intended to align the cost of the activity to those who benefit the most.

6. HBRC acknowledges that this LTP requires a significant contribution from the community, particularly those on low or fixed incomes. The affordability of the proposed increase was given significant consideration. Whilst we understand that for some ratepayers the increase will be much higher than $1 per week, this is the exception, with our modelling showing the average increase for 49,522 or 70% of the community will be $1 per week or less. Furthermore, half of all ratepayers will pay 60 cents or less per week.

7. We believe we must accelerate our efforts and therefore our investment, to see major changes across the region in the next 10 years. This requires scaling up particularly in year one of the long term plan to support a step change in activity.

8. The submissions requesting Council review the fairness of its rating allocation highlights the need for Council to continue its comprehensive review of all rating policies. There is room for better organised communication regarding this issue.

9. All comments regarding possible improvement to the process of the long term plan consultation will be taken into consideration. It is our goal to be both as transparent as possible reach as many in the community as possible and we will continue to look at ways of achieving this.

Decision Making Process

10.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Corporate Services Group of Activities” staff report.

2. Considers the submission points made relating to “Corporate Services Group of Activities” and any comments made by Council officers, and makes no changes to the 2018-28 Long Term Plan as a direct result of those.

Authored by:

Trudy Kilkolly

Financial Accountant

Jessica Ellerm

Group Manager
Corporate Services

Approved by:

James Palmer

Chief Executive

Attachment/s

⇩1

Corporate Services Group of Activities Submissions

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Submissions Requesting Financial Assistance / Grants

Reason for Report

1. To provide the Council with an analysis of submissions requesting financial assistance and/or grants through the Facing our Future 2018-28 Long Term Plan consultation period.

Submissions Received and Officer’s Analysis

2. Five submissions were received requesting funding (see attached). Two of these are for funding that is already in our baseline financials being, Business Hawke’s Bay and Toimata Foundation (i.e. Enviroschools). The other three funding requests were received from Coastguard Eastern Region; Waiohiki Marae Board of Trustees; and Cranford Hospice.

Business Hawke’s Bay (572)

3. This submission requested a continuation of the HBRC’s support and funding of Business Hawke’s Bay (BHB) of $100,000+gst per annum. Its programme of work from 2018 onwards, with a focus on specific projects and clearly identified deliverables and outputs, is to be presented (presumably as part of its verbal submission at the Hearings).

4. HBRC's funding of BHB is almost entirely predicated on BHB’s continued support for regional economic development collaboration. It was through this mandate that HBRC supported BHB's request to join a comprehensive review of the regional economic development strategy, culminating in Matariki REDS. Due to the delays in establishing the preferred Matariki REDS delivery model, HBRC has rolled forward BHB's existing $100,000pa funding. HBRC's current funding agreement with BHB provides for an adjustment to the quantum of funding should the final model require it. For example, if a third party is engaged to provide support services for Matariki REDS the HBRC would consider diverting a part of its funding to BHB in favour of that third party.

5. Regional Council actively supports the Business Hub through locating the Regional Business Partner Programme at the Hub.

Toimata Foundation (702)

6. This submission is not a funding request per se, rather it advocates for continued support from HBRC. Toimata Foundations’ submission covered the following three points:

6.1. Explains “what is Enviroschools” and its uptake in Hawke’s Bay. The Enviroschools Programme is an action‐based education programme where young people plan, design and implement sustainability projects and become catalysts for change in their communities. The aim is to foster a generation of people who instinctively think and act sustainably. The programme operates nationwide through partnerships with Councils. There are 50 Enviroschools in Hawke’s Bay – 22% of all schools and 10% of the early childhood education (ECE) sector.

6.2. Thanks HBRC for its many years of regional leadership of Enviroschools (partners since 2003) and acknowledges the excellent job that Sally Chandler does as the Regional Coordinator. It also highlights synergies between the Enviroschools network and three of HBRC’s consultation proposals, namely Land, Water and Biodiversity; Sustainable Homes and Working with Tangata Whenua.

6.3. Further describes the value to council partners. Council’s cornerstone investment equates to 20-25% of the total annual investment in Enviroschools, with the balance being funded by other contributors.

7. HBRC values its relationship with Toimata Foundation and continues to work collaboratively to build the Enviroschools network in Hawke’s Bay. To this end, HBRC has submitted on the Long Term Plans of the territorial authorities within Hawke’s Bay to secure an ongoing funding partnership. Both Hastings District Council and Napier City Council provided financial support for the Enviroschools programme in 2017/18. A proportionate funding request has or will be made to Central Hawkes Bay District Council and Wairoa District Council respectively.

8. The base level of service increase as consulted on in Facing our Future 2018-28 Consultation Document includes an increase in internal resourcing from 0.3 to 1 FTE to coordinate environmental education. This was acknowledged and supported by the Toimata Foundation.

Coastguard Eastern Region (381)

9. This submission proposes the creation of a three-year partnership arrangement in which HBRC would make a contribution to the Coastguard’s operating costs. In return the Coastguard is interested in exploring ways to lend assistance to HBRC such as bolstering emergency management capacity for oil spills etc. Along with other funding sources, this would more sustainably meet the costs of Coastguard operations in Hawke’s Bay.

10. In the Hawke’s Bay Region, 'Coastguard' consists of 1 unit. This unit is a charity registered with NZ Charity Services. The unit is staffed entirely by volunteers who commit to providing continuous, year-round Search and Rescue services on Hawke’s Bay's coasts and waterways.

11. Coastguard takes a multi-pronged approach to saving lives at sea that includes:

11.1. Providing highly trained rescue vessel crews and equipment to respond to life-threating marine incidents;

11.2. Providing year-round safety and communications services to Hawke’s Bay's marine users;

11.3. Educating boats owners and users to maximise their enjoyment and minimise risk;

12. The Coastguard has made similar requests to other regional councils and currently receives support from Waikato Regional Council. It is engaging with BOP Regional Council and Gisborne District Council for funding for the Eastern Region.

13. The submission did not specify a funding amount. However, it is not likely to be a large amount based on a previous arrangement whereby HBRC funding of around $10,000 was given to coastguard. This arrangement ended around three to five years ago.

14. If Council wishes to support this request it could be funded through an increased deficit in net funding position or general rate increase.

Waiohiki Marae Board of Trustees (485)

15. This submission requests funding support of $150,000 from HBRC towards the rebuild of the Waiohiki wharenui (meeting house) and ablution facilities. The Marae is adjacent to the Tūtaekurī River and sits at the foot of Ōtātara Pā.

16. The rebuild is necessary after an electrical fault destroyed the whare, Te Huinga in 2002. The traditional wharenui (meeting house) is 70% constructed. The Waiohiki Trustees are seeking part funding for the remaining 30%. Positive discussions are underway with both Hastings District Council and Napier City Council to commit a further $150,000 each to see the project through along with other funding sources.

17. If Council wishes to support this request it could be funded through debt funding and repaid via the general rate over a period of ten years. It should be noted that any funding could create precedent issues and expectations for funding support to other such initiatives.

Cranford Hospice (623)

18. This submission requests support for the Cranford Hospice new building project through a funding contribution to the value of $2,000,000. This could be a combination of cash and in-kind.

19. Cranford Hospice is a registered charity providing essential care for the HB community. Demand for specialist palliative care services have risen by 40% over the last 5 years. In addition to this, the existing facilities are no longer adequate and so new purpose built facilities are proposed. Land at Chesterhope Station (between Napier and Hastings) has been gifted for this purpose. Cranford Hospice invite HBRC to participate in their vision for larger and better fit for purpose facilities.

20. If Council wishes to support this request it could be funded through debt funding and repaid via the general rate over a period of ten years.

Financial and Resource Implications

21. The financial impacts of these submissions are:

	Additional spend
	Yr1 2018-19	Yr2 2019-20	Yr3 2020-21	Cumulative over 3 years
Coastguard Eastern Region	$10,000	$10,000	$10,000	$30,000
Waiohiki Marae Board of Trustees	$12,984	$21,844	$21,094	$55,922
Cranford Hospice	$173,125	$291,250	$281,250	$745,625
Total rating impact ($)	$196,109	$323,094	$312,344	$831,547
Total rating impact (%)	1.03%	1.35%	1.14%

Decision Making Process

22.1. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under section 93 of the Act.

Recommendations

That the Hawke’s Bay Regional Council:

1. Receives and notes the “Submissions Requesting Financial Assistance / Grants” staff report.

2. Considers the submissions requesting financial assistance and/or grants and any comments made by Council officers.

3. Agrees to fund the following requests and amends the 2018-28 Long Term Plan accordingly:

3.1 …………………………………………….

4. Does not agree to fund the requests and makes no change to the 2018-28 Long Term Plan.

Authored by:

Jessica Ellerm

Group Manager
Corporate Services

Approved by:

James Palmer

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Tuesday 22 May 2018

Subject: Staff Internal Submission to the 2018-28 Long Term Plan

Reason for Report

1. This report sets out a number of items that, in the opinion of staff, require inclusion in the 2018-28 LTP

Carry forward of expenditure and revenue from 2017-18 to 2018-19

Operating

Strategic Policy

Project 192 – Strategy and Planning (Energy Futures)

2. Seek a total of $89,000 to be carried forward from project 192. These funds were initially provided in 2014-15 to fund an oil and gas related RRMP plan change, and then in 2015-16 for the development of an Energy Futures Strategy for Hawke’s Bay and a review of the RRMP’s effectiveness for controlling oil and gas activities. In 2016-17 and 2017-18, the funds remaining from the original $200,000 have been used for preliminary phases of preparing a draft plan change to regulate oil and gas exploration activities in specified parts of the region.

3. These funds were not spent due to the timing of the project planning for the oil and gas plan change work stream (as presented to the Regional Planning Committee during 2017-18). Preparing a robust draft plan change takes time. The project plan envisaged the work would occur during 2017-18 and into 2018-19.

Effect on plan

4. An increase in funding for project 192 in 2018-19 funded from unexpended funds in 2017-18.

Recommendation

5. That Council approves the carry forward in project 192 of $89,000 from 2017-18 to 2018-19 to cover costs associated with preparation of the oil and gas regulation plan change should this continue.

Regional Resources

Project 350 – Regional Hot Spots - Tutira

6. Seek a total of $135,000 to be carried forward from project 350 (Tutira Hot Spot). These funds were originally intended to fund the regional hot spot work at Lake Tutira along with funding from MfE Freshwater Improvement Fund (FIF).

7. It was anticipated that this project would commence earlier in the year but the deed between MfE and HBRC was only signed in March 2018. Staff have avoided expenditure ahead of this date to maximise the leverage available from the FIF. The delay has subsequently meant that the majority of the programmed work has been unable to be completed. The funding is requested to be carried forward to allow the completion of the project.

Effect on plan

8. An increase in funding for project 350 in 2018-19 funded from unexpended funds in 2017-18.

Recommendation

9. That Council approves the carry forward in project 350 of $135,000 of expenditure from 2017-18 to 2018-19 to cover costs associated with the Lake Tutira hot spot work.

Capital

Transport Capital

Bus Service Ticketing System Project

10. Seek a total of $210,000 to be carried forward from the 2017-18 transport capital budget for the Bus Service Ticketing System to 2018-19.

11. The 2017-18 Annual Plan provided for an amount of $250,000 (after NZTA subsidy) for the purchase of a replacement bus ticketing system through a joint procurement process with eight other regional councils. The implementation of the new system has been slower than expected and will now take place during the 2018-19 year.

Effect on plan

12. An increase in funding for the bus service ticketing system in the 2018-19 year funded from unexpended funds in 2017-18.

Recommendation

13. That Council approves the carry forward of $210,000 from 2017-18 to 2018-19 to cover the costs associated with the bus service ticketing system. Noting that this is to be funded through internal loan funding.

Science Capital

Regional Groundwater Research Bores and SkyTEM

14. Seek a total of $380,000 to be carried forward from the 2017-18 science capital budget to 2018-19. These funds were originally set aside for drilling of groundwater monitoring bores and a SkyTEM airborne aquifer survey. This carry forward is requested because:

14.1. $280,000 capital budget for drilling. The position of Principal Scientist – Groundwater Quality has been vacant since July 2017 and will be filled 30 April 2018. A priority task for the Principal Scientist will be to review the groundwater monitoring network and develop a robust monitoring strategy. The strategy is required to ensure the monitoring network is fit for purpose and will identify sites that are now unnecessary, along with new sites required for successful State of the Environment and investigative monitoring. Deferring the capital expenditure will allow time to strategically design and execute the drilling programme.

14.2. $100,000 capital budget for SkyTEM. Bulk funding for the airborne aquifer survey has been deferred (in the proposed LTP). Therefore, the $100k contribution set aside in 2017-18 is requested to be carried forward to align with the LTP funding.

Effect on plan

15. An increase in funding of 2018-19 science capital expenditure funded from unexpended funds in 2017-18

Recommendation

16. That Council approves the carry forward of $380,000 from 2017-18 to 2018-19 to cover costs associated with drilling of groundwater monitoring bores along with a contribution to the SkyTEM aquifer survey. Noting that this is to be funded through internal loan funding.

Papakiri Flow and Water Quality Site

17. Seek a total of $90,000 to be carried forward from the 2017-18 science capital budget to 2018-19. These funds were set aside to construct and install a water level and water quality monitoring site on the Papakiri Stream to help monitor progress of the Tutira hotspot and Freshwater improvement fund projects. The carry forward is requested because delays with forest harvest has meant the expected installation site, a to-be-installed bridge over the Papakiri stream, has not yet been completed. It is prudent to wait for this bridge to be installed first so that the monitoring station makes use of the stable physical features that a bridge structure will provide.

Effect on plan

18. An increase in funding of 2018-19 science capital expenditure funded from unexpended funds in 2017-18

Recommendation

19. That Council approves the carry forward of $90,000 from 2017-18 to 2018-19 to cover costs associated with the Papakiri Flow and Water Quality Site. Noting that this is to be funded through internal loan funding.

Building Capital

20. Seek a total of $90,000 to be carried forward from the 2017-18 building capital expenditure budget to 2018-19. These funds were originally set aside for:

20.1. Replace the Raffles Street roof and ceiling ($40,000). This has been delayed as remediation repairs have been made on the roof which in the interim have stopped any immediate need for replacement but this may need to be permanently replaced in the future. This will also allow time to review the requirements of accommodation for the whole of Council and decide whether the Raffles Street building is still required.

20.2. Upgrade of the Dalton street laboratory ($50,000), which has been put on hold while the accommodation requirements for the whole of Council have been evaluated. The draft LTP has provision for a new building in year 3 which will probably include laboratory facilities for which this funding might be better allocated.

Effect on plan

21. An increase in funding of building capital expenditure in 2018-19 funded from unexpended funds in 2017-18.

Recommendation

22. That Council approves the carry forward of building capital expenditure of $90,000 from 2017-18 to 2018-19 to cover building costs going forward.

ICT

Systems Integration Project - IRIS

23. Seek a total of $500,000 to be carried forward from 2017-18 system integration budget to 2018-19 to cover costs associated with the IRIS project.

24. The rescheduling of key milestones for the IRIS project have resulted in the stretching of the timeframe in which expenditure will occur. The delivery of two key functional areas have shifted from April 2018/September 2018 to November 2018/February 2019.

Effect on plan

25. An increase in funding for project 913 system integration in 2018-19 funded from unexpended funds in 2017-18.

Recommendation

26. That Council approves the carry forward of $500,000 in project 913 from 2017-18 to 2018-19 to cover costs associated with the IRIS project. Noting that external loan funding to fund this capital has been drawn down in the 2017-18 year.

Computer Hardware

27. Seek a total of $50,000 to be carried forward from the 2017-18 computer hardware budget to 2018-19 to cover costs associated data storage.

28. Due to resourcing constraints and unplanned project work, the implementation of a replacement SAN (all corporate data and systems storage) has been delayed until later in the 2018 Calendar Year. The provision for this is $50,000 and this will need to be carried forward to 2018-19.

Effect on plan

29. An increase in funding for computer hardware in 2018-19 funded from unexpended funds in 2017-18.

Recommendation

30. That Council approves the carry forward of $50,000 in computer hardware from 2017-18 to 2018-19 to cover costs associated with data storage. Noting that this is funded through the depreciation reserve.

Other Amendments Required to the LTP

Water Conservation Order (WCO) – Ngaruroro and Clive Rivers

31. Seek a total of $100,000 to be added to the 2018-28 LTP for the 2018-19 year to cover the residual costs of opposing the WCO including legal and expert witness costs of presenting submissions to the tribunal.

Effect on plan

32. An increase in funding for the WCO in the 2018-19 year, funded from reducing expenditure in other areas of the business or rate increase.

Recommendation

33. That Council approves the additional cost of $100,000 in project 196 in the 2018-19 year of the LTP to cover costs for submission to the tribunal funded from reducing expenditure in other areas of the business or rate increase.

Biodiversity Capital

34. The draft LTP included provision for the development of a new Biodiversity project that formed part of the public consultation.

35. This new project will help to protect, enhance and restore priority ecosystem sites that are identified by Ecosystem Prioritisation work. Ecosystem Prioritisation has identified 900 sites that are top 30% priority, and this guides HBRC where to allocate resources for the largest biodiversity gains for the coming LTP period. Ecosystem prioritisation and implementation of management on priority sites are one of the top six priority actions that are addressed in the HB Biodiversity Action Plan.

36. The project requires one new FTE and $100,000 in operating costs per year as well as $200,000 each year for the first 4 years as a contribution to the HB Biodiversity Foundation. These costs have all been included in the draft LTP.

37. There is also a capital budget of $100,000 in year one of the LTP which provides for fencing, new forest establishment, constructed wetlands and land. In finalising the LTP to has been revealed that this capital expenditure should also be an annual cost rather than just in year one. Therefore it is proposed that an amendment is made to the final LTP which takes into account the extra $100,000 capital expenditure per year.

Effect on plan

38. The bottom line effect and consequential rate increases are shown below:

Recommendation

39. That Council approves the amendment to the draft LTP to include $100,000 of extra biodiversity capital expenditure each year from year 2 to 10.

Summary of Effect of this Submission on the LTP Year 1 General Funded Surplus/(Deficit)

OPERATING	Expenditure	Associated Revenue (Loans /Fees /Reserves etc)	General Funded Surplus/(Deficit)
2018-19 Draft LTP Surplus/(Deficit)			$710
Proposed Carry Forwards
Strategy & Planning (Energy Futures)	($89,000)	$89,000	-
Regional Hot Spots - Tutira	($135,000)	($135,000)	-
Total Operating	($224,000)	$224,000	$710
Proposed Additional Costs to LTP
WCO Costs	($100,000)	($100,000)	-
2018-19 Revised LTP Surplus/(Deficit)			($710)

CAPITAL	Expenditure	Associated Revenue (Loans /Fees /Reserves etc)	General Funded Surplus/(Deficit)
Proposed Carry Forwards
Transport – Bus ticketing	($210,000)	$210,000	-
Drilling and SkyTEM	($380,000)	$380,000	-
Papakiri Flow and Water Quality Site	($90,000)	$90,000	-
Building Capital	($90,000)	$90,000	-
Systems Integration Projects – IRIS	($500,000)	$500,000	-
Computer Hardware	($50,000)	$50,000	-
Total Capital	($1,320,000)	$1,320,000	-

Decision Making Process

40. 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:

40.1. Consultation on the Draft Annual Plan has been consistent with section 82(a)(3) of the Act which sets out the level of consultation required where there are significant or material differences between the proposed Annual Plan and the content of the Long Term Plan for the financial year to which the Annual Plan relates.

Recommendations

That Council:

1. Agrees that the decisions to be made on the issues submitted to the 2018-28 Long Term Plan are made after the provisions included in section 82(a)(3) of the Local Government Act 2002 have been followed.

2. Receives and considers the “Staff Internal Submission to the 2018-28 Long Term Plan” report.

3. Approves:

4. the carry forward in project 192 of $89,000 from 2017-18 to 2018-19 to cover costs associated with preparation of the oil and gas regulation plan change should this continue.

5. the carry forward in project 350 of $135,000 of expenditure from 2017-18 to 2018-19 to cover costs associated with the Lake Tutira hot spot work

6. the carry forward of $210,000 from 2017-18 to 2018-19 to cover the costs associated with the bus service ticketing system. Noting that this is to be funded through internal loan funding

7. the carry forward of $380,000 from 2017-18 to 2018-19 to cover costs associated with drilling of groundwater monitoring bores along with a contribution to the SkyTEM aquifer survey. Noting that this is to be funded through internal loan funding.

8. the carry forward of $90,000 from 2017-18 to 2018-19 to cover costs associated with the Papakiri Flow and Water Quality Site. Noting that this is to be funded through internal loan funding

9. the carry forward of building capital expenditure of $90,000 from 2017-18 to 2018-19 to cover building costs going forward

10. the carry forward of $500,000 in project 913 from 2017-18 to 2018-19 to cover costs associated with the IRIS project. Noting that external loan funding to fund this capital has been drawn down in the 2017-18 year

11. the carry forward of $50,000 in computer hardware from 2017-18 to 2018-19 to cover costs associated with data storage. Noting that this is funded through the depreciation reserve

12. the additional cost of $100,000 in project 196 in the 2018-19 year of the LTP to cover costs for submission to the tribunal funded from reducing expenditure in other areas of the business or rate increase

13. the amendment to the draft LTP to include $100,000 of extra biodiversity capital expenditure each year from year 2 to 10.

Authored by:

Manton Collings

Corporate Accountant

Jessica Ellerm

Group Manager
Corporate Services

Approved by:

James Palmer

Chief Executive

Attachment/s

There are no attachments for this report.