Unconfirmed

Minutes of a meeting of the Corporate and Strategic Committee

 

Date:                                    Wednesday 24 August 2022

Time:                                    1.00pm

Venue:

Council Chamber

Hawke's Bay Regional Council

159 Dalton Street

NAPIER

 

Present:                              Cr N Kirton – Chair

Cr R Barker

Cr W Foley

Cr C Foss – Deputy Chair

Cr C Lambert

Cr H Ormsby

K Ropiha (Regional Planning Committee Representative)

Cr J Taylor

Cr J van Beek

Cr M Williams

 

In Attendance:                 J Palmer –  Chief Executive

K Brunton – Group Manager Policy & Regulation

C Dolley – Group Manager Asset Management

P Munro – Te Pou Whakarae Māori Partnerships

S Young – Group Manager Corporate Services

C Comber – Chief Financial Officer

H Saxton – HB Tourism

G Hickton – HB Tourism

T Chaplin –  Senior Group Accountant

T Skerman – HBRIC Commercial Manager

A Siddles – Chief Information Officer

S Bell –Team Leader Strategy and Performance

A Roets –Governance Advisor

 

 


1.         Welcome/Karakia /Apologies/Notices

The Chair welcomed everyone to the meeting and extended a warm welcome to Hamish Saxton and George Hickton, HB Tourism who will be presenting today. Cr Martin Williams opened the meeting with a karakia.

The Chair sought the Committee’s approval to bring Agenda item 12 Hawke’s Bay Tourism forward

Resolution

CS32/22             That the apologies for absence from Mike Paku, Peter Eden and apology for early departure at 2.30pm from Councillor Jacqueline Taylor be accepted.

Foss/ Van Beek

CARRIED

 

2.         Conflict of Interest Declarations

There were no conflicts of interest declared.

 

3.         Confirmation of Minutes of the Corporate and Strategic Committee held on 1 June 2022

CS33/22

Resolution:

Minutes of the Corporate and Strategic Committee held on Wednesday, 1 June 2022, a copy having been circulated prior to the meeting, were taken as read and confirmed as a true and correct record.

Ormsby/Lambert

CARRIED

 

4.

Follow-ups from previous meetings

 

The item was taken as read and all items actioned.

CS34/22

Resolution:

That the Corporate and Strategic Committee receives and notes the Follow-up items from previous meetings.

Barker/Lambert

CARRIED

 

5.

Call for Minor Items not on the Agenda

 

 

Topic

Raised by

No items raised

 

 

 

 


 

12.

Hawke's Bay Tourism six-monthly update

 

Hamish Saxton and George Hickton who gave an update on achievements and key performance over the past six month period.  Discussions traversed:

·         The financial year was particularly challenging due to further Covid-19 lockdowns, travel restrictions and continued border closures. Major events have been postponed to later in 2022 or early 2023

·         HB still managed to maintain its market share

·         The hospitality sector’s biggest challenge is having adequate staffing levels

·         A visitor strategy for tourism in HB is being developed It will be HB’s version of MBIE’s Destination Management Plan programme and will set out a future state for the visitor economy and the work programme required to achieve this

·         Key strategic actions for HB include:

o   Cementing the Food and Wine Country brand, focussing on the wine exports, visitor’s experience and hospitality in HB

o   Great Wine Capitals potential - HB being nominated as the potential wine capital of New Zealand. Only one region per country is chosen

o   Review of HB Trails as a visitor experience - promoting the great trails and sites

o   Te Matau-a-Māui initiative with Ngā Toi Hawke’s Bay - presenting landscape stories for the HB Tourism industry to use

o   Apple Festival feasibility study

·         Key performance indicator results for 2021-2022 were provided. It was noted that visitor spend has decreased, but it is hoped that the tourist industry will regain growth

·         HB Tourism thanked the Council for its continued support.

CS35/22

Resolution:

That the Corporate and Strategic Committee receives and notes the HB Tourism Six-Monthly update report.

Van Beek/Foss

CARRIED

 

6.

Hawke's Bay Regional Council shareholding in the Regional Sector Shared Services Organisation (RSSSO)

 

Susie Young introduced this item with discussion highlights including:

·         Authority sought for CEO to sign the Shareholders’ Agreement

·         Details of the Class A shareholding were provided – this will allow Council to have a position on the RSSSO Board

·         RSSSO purpose is to consolidate existing collaboration programmes between local Councils and to build a structure that allows the sector to respond quickly to common issues and opportunities

·         Collaborative programmes include the Special Interest Group (SIG), Network, EMAR/LAWA, Essential Freshwater Implementation programme, the Regional Sector Office and Regional Software Holdings Limited (RSHL) which has been operating for 10 years

·         RSSSO is structured as a not-for-profit Council Controlled Organisation- it has been agreed to transition RSHL into RSSSO for regulatory purposes

·         Council expenditure will be approx. $185,000 p.a.. Across all Councils-  $3.6m to deliver a wide range of initiatives in the HB region

·         Any significant collective activities that may arise would need to be funded through the Annual Plan and Long Term Plan processes. There are no financial implications for the Council at this stage.

CS36/22

Resolution:

That Hawke’s Bay Regional Council:

1.      Receives and considers the Hawke's Bay Regional Council shareholding in the Regional Sector Shared Services Organisation (RSSSO) staff report.

2.      Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that Council can exercise its discretion and make decisions on this issue without conferring directly with the community or persons likely to have an interest in the decision.

3.      Notes the approach to shareholding and appointments of directors related to establishing the Regional Sector Shared Services Organisation, and as incorporated into the Shareholders’ Agreement and Constitution.

4.      Delegates authority to the CEO to sign the Shareholder’s Agreement - Deed of Accession on behalf of the Council.

Barker/Van Beek

CARRIED

 

7.

2021-2022 Carry Forwards

 

Susie Young and Chris Comber introduced this item noting that the practice of carrying forward expenditure is common amongst councils. It allows unspent funding to be moved in the appropriate financial period, enabling projects to be completed. Discussions traversed:

·         The term ‘carry forwards’ is not a defined term under the Local Government Act (LGA)

·         The carry forwards requested will be utilised in the 2022-2023 year which is in addition to the existing Annual budget for the same year. Any carry forward funding not utilised in the 2022-2023 year will be need to be confirmed in the 2023-2024 Annual Plan process

·         Carry forwards affecting budgets beyond the next financial year will be incorporated into the 2023-2024 Annual Plan process for confirmation

·         The Erosion Control Scheme (ECS) grants workstream was underspent by $2.2m due to various external factors including flooding, extended wet weather periods and fencing contractor shortages. $324k of this underspend is being sought as a carry forward to cover ECS contracts

·         Carry forwards requested total $4.032m for opex and $9.319m for capex

·         Councillors would like an in-depth workshop to provide an understanding of carry forwards process as well as financial strategy and investment revenue.

CS37/22

Resolution:

1.     That the Corporate and Strategic Committee receives and notes the 2021-2022 Carry Forwards staff report.

2.     The Corporate and Strategic Committee recommends that Hawke’ Bay Regional Council:

2.1.   Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that Council can exercise its discretion and make decisions on this issue without conferring directly with the community or persons likely to have an interest in the decision.

2.2.    Approves the carry forward of all expenditure requests from the 2021-2022 to the 2022-2023 budget, being:

Operating expenditure carry forward requests

Activity / Project

Amount Requested

Source of funds

General

Reserve

External

Debt

Integrated Catchment Management (ICM)

 

 

 

 

 

1

Biodiversity

$712,566

 

 

$512,566

$200,000

2

Erosion Control Scheme grants

$324,000

 

 

 

$324,000

3

Predator Free Hawkes Bay

$82,000

$18,224

$42,522

$21,255

 

4

Environmental Enhancement Programme

$293,000

$113,543

 

$179,457

 

5

Air quality science

$10,000

$10,000

 

 

 

Asset Management

 

 

 

 

 

6

  Makara Dam

$100,000

$14,099

$85,901

 

 

Governance & Partnerships

 

 

 

 

 

7

Climate change engagement

$80,000

 

$80,000

 

 

8

Tangata Whenua Partnerships

$300,000

$300,000

 

 

 

9

Corporate sustainability

$33,000

$33,000

 

 

 

Policy & Regulation

 

 

 

 

 

10

Kotahi (policy & planning)

$1,000,000

$1,000,000

 

 

 

11

Enforcement proceeds

$244,000

$244,000

 

 

 

Transport

 

 

 

 

 

12

 On Demand/My way

$124,388

 

$124,388

 

 

Other

 

 

 

 

 

13

Staff remuneration

$729,000

$729,000

 

 

 

Total

$4,031,954

$2,461,866

$332,811

$713,278

$524,000

Capital expenditure carry forward requests

Activity / Project

Amount Requested

Type of funding

Reserve

Debt

Integrated Catchment Management (ICM)

 

 

 

1

3D Aquifer mapping

$294,931

 

$294,931

2

Hydrodynamic modelling

$25,000

 

$25,000

3

SOE Ground water monitoring drilling

$176,903

 

$176,903

4

Right Tree Right Place (RTRP)

$507,000

$507,000

 

5

Ruataniwha ground water model

$325,877

 

$325,877

6

LiDAR Mapping

$187,956

 

$187,956

7

Enviro info technical equipment

$105,000

$105,000

 

Asset Management

 

 

 

8

Clive river dredging

$100,000

$100,000

 

9

Flood warning system (Mt Misery)

$50,000

 

$50,000

10

Forestry (Tangoio)

$30,388

$30,388

 

11

Hawkes Bay Trails/cycleways

$100,000

 

$100,000

12

Heretaunga Plains flood control scheme (HPFCS)

$698,687

$546,437

$152,250

13

IRG HPFCS

$1,583,578

$1,583,578

 

14

Regional Parks

$247,854

 

$247,854

15

Water Security

$1,745,825

$1,745,825

 

Corporate Services

 

 

 

16

Office renovations

$1,375,025

$70,944

$1,304,081

17

Fleet

$55,448

$55,448

 

18

Radio network

$203,686

$203,686

 

19

ICT network & equipment

$306,340

$34,670

$271,670

20

ICT projects

$1,200,000

 

$1,200,000

Total

$9,319,498

$4,982,976

$4,336,522

 

Foss/Barker

CARRIED

 

8.

1 April - 30 June 2022 Financial Report

 

Chris Comber introduced this item which was taken as read. Discussions included:

·         Covid-19 continues to impact Council. Most delivery and levels of service measures are on track to be achieved; larger projects are being affected more

·         Preliminary financial results see an operating deficit of $2.8m - the budget for the period was for a $4m operating surplus. Annual investment income was $7.2m against a budget of $21.6m - 64% below budget. This was primarily due to managed funds having a $9.3m deficit for the period against a budget of $6m - an adverse variance of $15.3m

·         The $6m Managed Funds budget was expected to provide $3.7m for a rates subsidy with the remaining $2.3m intended to be capital growth for the Managed Fund itself. All such expected income is classified as interest in the LTP/Annual Plan

·         At the 10 August 2022 meeting of the FARS Committee it was proposed that the Council reconsiders its investment strategy and SIPO, at the start of the new triennium.

 

Cr Taylor left the meeting at 2.31pm.

CS38/22

Resolution:

That the Corporate and Strategic Committee receives and notes the 1 April – 30 June 2022 Financial Report.

Foley/Taylor

CARRIED

 


9.

HBRIC Quarterly update

 

Tom Skerman introduced this item with noting that Dan Druzianic, HBRIC Chair is not able to attend today, Report was taken as read and discussions included:

·         The operating expenses figure in para 15.2 of the report should read $670,000 rather than $236,000

·         Napier Port financials were released this morning and show growth in revenue, operating activities and net profit after tax. The expected return from operating activities for the y/e 30 September 2022 remains between $38m and $42m

·         A reduction in net assets of +/- $76m year to date is due to a drop in the value of NPHL shares and losses from managed funds. The share price has recently increased $2.75 (30 June) to $3.16 (16 Aug) representing a $45.1m valuation recovery

·         Napier Port is forecasting negative cashflow of $1.85m for the year - existing cash reserves will be able to absorb this loss

·         HBRIC is forecasting that it will be able to fund its annual plan without needing to borrow or utilise any of the overall capital gains from its portfolio

·         HBRIC net assets have increased from $177m to $369m over the past 10 years

·         Managed funds remain challenging with their value reducing 10.88% year to date

·         HBRIC will continue to work with HBRC strategically to collectively optimise investment focus, performance and delivery

·         FoodEast is progressing well - an amended resource consent has been submitted to HDC with development designs underway.

CS39/22

Resolution:

That the Corporate and Strategic Committee receives and notes the HBRIC Quarterly update staff report.

Barker/Foss

CARRIED

 

10.

Organisational Performance Report for the period 31 March – 30 June 2022

 

Sarah Bell introduced this item which was taken as read. Highlights included:

·         No significant changes from the previous quarterly report

·         Better/more positive customer services outcome

·         Customer services area is experiencing a high volume of phone calls, emails and in-person visits following rates invoices being sent out

·         Downward trend in website visits, social media views, media enquiries and engagement

·         High staff turnover and the level of current vacancies is of concern – optimistic that staff turnover will reduce

·         There have been challenges in recruiting in key areas such as ICT, Science and Engineering. With NZ borders now open, HBRC hope to attract more international applicants for critical roles.

CS40/22

Resolution:

That the Corporate and Strategic Committee receives and notes the Organisational Performance Report for the period 31 March – 30 June 2022 staff report.

Barker/Williams

CARRIED

 

 

11.

2021-2022 Annual Report – Interim non-financial results

 

Sarah Bell introduced the item which was taken as read. Highlights included:

·         Report will be presented to the Finance, Audit and Risk Sub-committee in December 2022 for adoption.

CS41/22

Resolution:

That the Corporate and Strategic Committee receives and notes the 2021-2022 Annual Report – Interim non-financial results staff report.

Ormsby/Barker

CARRIED

 

13.

Report from the Finance Audit and Risk Sub-committee meeting 10 August 2022

 

The report was taken as read.

CS42/22

Resolution:

1.      That the Corporate and Strategic Committee receives and notes the Report from the Finance, Audit and Risk Sub-committee meeting 10 August 2022, including the following resolutions:

Quarterly Treasury Report for the period 1 April - 30 June 2022

1.1    Receives and notes the Quarterly Treasury Report for the period 1 April – 30 June 2022.

1.2    Confirms that the performance of Council’s investment portfolio has been reported to the sub-committee’s satisfaction.

Asset Management Group review

2.1  That the Finance, Audit and Risk Sub-committee receives and notes the Asset Management Group review staff report.

2022-2023 Enterprise Internal Audit plan

3.1    Receives and considers the 2022-23 Enterprise Internal Audit Plan staff report

3.2    Confirms the internal audit plan for the 2022-2023 financial year, will include:

3.2.1    Data analytics (as resolved 4 May 2022)

3.2.2    Organisational change consolidation and prioritisation (as resolved 4 May 2022)

3.2.3    Health & Safety management framework

3.3  Receives a regular Asset Management service delivery improvements report to maintain visibility of the various Asset Management improvement actions.

Data Analytics Audit report

4.1  That the Finance, Audit and Risk Sub-committee receives and considers the Data Analytics audit report staff report.

2021-2022 Enterprise Internal Audit Plan status update

5.1    Receives and considers the 2021-22 enterprise Internal Audit plan status update staff report.

5.2    Reports to the Corporate and Strategic Committee, the Sub-committee’s satisfaction that the 2021-22 Enterprise Internal Audit plan has been completed.

Audit Plan for the 2021-2022 Annual Report

6.1    That the Finance, Audit and Risk Sub-committee receives and considers the Audit Plan for the 2021-2022 Annual Report.

Internal Assurance corrective actions update

7.1  Receives and notes the Internal Assurance corrective actions update staff report.

7.2  Confirms that the Internal Assurance Corrective actions update report has provided adequate information on the status of the Internal Assurance Corrective actions.

7.3  Reports to the Corporate and Strategic Committee, that the Internal Assurance Corrective actions update report provides adequate evidence that the actions to respond to findings and recommendations from the internal audits are being undertaken to the satisfaction of the Sub-committee.

Six-Monthly Enterprise Risk report

8.1  Receives and considers the Six-Monthly Enterprise Risk staff report.

8.2  Reports to the Corporate and Strategic Committee that the Sub-committee is satisfied that the Six-Monthly Enterprise Risk Report provides adequate evidence of the robustness of Council’s risk management policy and framework.

 

Foss/Kirton

CARRIED

 

14.

Discussion of Minor Items not on the Agenda

 

There were no Minor Items raised.

 

15.

Section 36 Charges for Water Holdings HB

 

 

CS43/22

Resolution:

 

General subject of the item to be considered

Reason for passing this resolution

Grounds under section 48(1) for the passing of the resolution

Section 36 charges for Water Holdings HB

7(2)7(2)(f)(ii) The withholding of the information is necessary to maintain the effective conduct of public affairs through the protection of such members, officers, employees, and persons from improper pressure or harassment.

The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

Kirton/Ropiha

CARRIED

 

The meeting went into public excluded session at 3.04pm and out of public excluded session at 4.32pm.

 

Closure:

There being no further business the Chairman declared the meeting closed at 4.35pm on Wednesday, 24 August 2022.

 

Signed as a true and correct record.

 

 

 

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