Agenda of Regional Council Meeting

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 20 February 2013

SUBJECT: Recommendations from the Corporate and Strategic Committee

Reason for Report

1. The following matters were considered by the Corporate and Strategic Committee on 30 January 2013 and are now presented to Council for consideration and approval.

Decision Making Process

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

Recommendations

The Committee recommends that Council:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted policy on significance and that Council can exercise its discretion under Sections 79(1)(a) and 82(3) of the Local Government Act 2002 and make decisions on this issue without conferring directly with the community and persons likely to be affected by or to have an interest in the decision due to the nature and significance of the issue to be considered and decided.

Local Government Reform - Productivity Commission Draft Report

2. Agrees to lodge the attached submission to the Productivity Commission subject to amendments arising from feedback at the meeting.

Infrastructure Asset Insurance

3. Rescinds its notice of intention to withdraw from LAPP.

4. Notes, within its accounts, the contingent liability associated with being part of a mutual insurance scheme.

5. Continues to maintain a level of self insurance through Scheme disaster reserves and the Regional disaster reserve.

6. Does not renew its commercial insurance for infrastructure assets effective from the 2013/14 financial year.

7. Continues to work with LAPP to improve estimates of flood risk to HBRC infrastructure assets and therefore reduce the LAPP deductible, and to develop optimised replacement valuations for all assets.

8. Reviews its self insurance arrangements to provide the most cost effective cover for all HBRC infrastructure assets.

RMA Delegations

9. Pursuant to section 34A (1) of the Resource Management Act 1991, the Hawke’s Bay Regional Council delegates the powers, duties and functions of the Chief Executive Officer, as set out in the Delegations Register approved by Council on 18 April 2012, to the General Manager (Operations).

10. Pursuant to section 34A (1) of the Resource Management Act 1991, the Hawke’s Bay Regional Council delegates the powers, duties and functions of the Acting Chief Executive under sections 316, 329, 330-331 of the RMA to the General Manager (Operations).

11. Notes that the following reports were received at the meeting held on 30 January 2013:

12.1 Public Transport Update

12.2 Findings of the Local Government Efficiency Taskforce.

Liz Lambert

General Manager (Operations)

Attachment/s

1 View

Productivity Commission Submission

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 20 February 2013

SUBJECT: Local Body Elections 2013

Reason for Report

1. The Local Body Elections are being held this year on Saturday, 12 October 2013. There are a number of issues, outlined below, relating to these Elections that Council needs to be aware of and that require input from Council. This report also outlines proposed changes to the current legislation.

Legislation

2. The Local Electoral Amendment Bill was considered late last year, with submissions closing on 21 December 2012. The Bill is due to be reported back on 11 March 2013 and expected to be enacted in May 2013. The main purposes of the Amendment Bill are to improve provisions for the conduct of local body elections; increase transparency and accountability of electoral donations; and to strengthen the integrity and efficiency of the local election system.

3. Electoral Officials supported the changes proposed which will, among other technical amendments, provide for all nomination material to be lodged together; the Electoral Officer (EO) will be able to make the decision to process voting documents early; the allowance of an additional week between the close of nominations and the start of the voting period; and provides a consistent date for candidates to take office.

4. Another area included in the Bill is clarification around electoral donations. Once the legislation is enacted there will be a limit on the size of any anonymous donation, of $1500 per donation. Anything received over and above the $1500 limit must be given to the Electoral Officer and retained by the relevant Council. More than one anonymous donation can be made but must not be more than $1500 per donation.

5. There is a high level of confidence that the Amendment Bill will be enacted in May and therefore apply for the 2013 elections.

6. Listed below, for the Council’s information, are the key dates for the 2013 Elections. If changes to the legislation are not put in place the dates that will apply are shown in italics.

17 July 2013 (24 July if no legislative change)	Public Notice of election, calling for nominations
19 July 2013 (26 July if no legislative change)	Nominations open
16 August 2013 (23 August if no legislative change)	Nominations close (12 noon)
21 August 2013 (28 August if no legislative change)	Public Notice of Day of Election and Candidate Names
By 16 September 2013	Electoral Roll Certified by Territorial Authority Electoral Officer
20 – 25 September 2013	Delivery of Voting Papers
20 Sept – 12 October 2013	Early Processing Can Commence
12 October 2013	Election Day – Voting closes 12 noon. Preliminary results available as soon as practicable after closing of voting.

Appointment of Electoral Officials

7. Under section 12 of the Local Electoral Act 2001 the Council must at all times have an Electoral Officer appointed by the Council to exercise the powers and carry out the duties conferred on the Electoral Officer by the Act. Mrs Carol Gilbertson currently holds this position.

8. The Electoral Officer may delegate any power or duty under the Act and must appoint a deputy Electoral Officer. The Electoral Officer and Deputy Electoral Officer must complete a declaration relating to the 2013 Elections on or after 1 February 2013.

9. The Electoral Officer is responsible for coordinating every election (or poll) within the Council’s area. The general duties of an Electoral Officer for a Regional Council are:

9.1. The publication of any public notice relating to elections and polls and the calling of nominations, required to be given;

9.2. Receiving nominations, candidate profile statements and deposits required to be paid;

9.3. The declaration of results;

9.4. Receiving returns of electoral expenses;

9.5. Investigating possible offences and reporting alleged offences to the police.

10. Electoral Officers exercise their power independent of the Council.

11. With these factors in mind it is proposed that Mrs Carol Gilbertson continue in her role as Electoral Officer. Mrs Gilbertson is familiar with legislation and the electoral process which are two of the fundamental requirements for an Electoral Officer. It is further proposed that Mrs Gilbertson appoint Mrs Leeanne Hooper, Governance and Corporate Administration Manager, to the position of Deputy Electoral Officer and that Council note this appointment.

Voting Papers and Candidate Profile Statements

12. Section 31 of the Local Electoral Regulations 2001 allows a local authority to determine by resolution the order each candidate will appear on a voting paper, choosing between alphabetical order of surname, pseudo-random order or random order. It is necessary for this Council to resolve the order they wish to show on voting papers. It should be noted that it is the intention of Territorial Local Authorities within Hawke’s Bay to use the alphabetical option. It is useful also to note that all candidate profile statements will be shown in alphabetical order of a candidate’s surname.

Early Processing of Votes

13. Section 79 of the Act authorises local authorities to determine, by resolution, to process voting documents during the voting period. This means that the Regional Council is now required to make a formal decision on whether to allow voting documents to be processed early.

14. This decision needs to be the same as the Territorial Authorities (TAs) conducting the election, as they are the key decision-makers on this. It is understood that the TAs will be asked to resolve to process votes during the voting period. Consequently, Council needs to resolve to do likewise.

Other Matters

15. A regional meeting is being held on 13 March 2013 between all Electoral Officers and Deputy Electoral Officers from Napier, Hastings, Central Hawke’s Bay and Wairoa councils and representatives from the District Health Board to ensure publicity coordination and provide support to EO’s from all Hawke’s Bay councils.

16. A Memorandum of Understanding (MOU) is being drafted by the Society of Local Government Managers (SOLGM) for use by Regional Councils and TLAs to determine election costs paid to TLAs. It is not compulsory to adopt this MOU and this Council has chosen to develop agreements with all the TLAs based on past arrangements.

Decision Making Process

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

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

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

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

17.4. It would be unrealistic for Council not to resolve to count votes prior to the election, as the territorial authorities who conduct the election made the decision to allow early processing of voting papers.

17.5. The persons affected by this decision are all voting members of the public, as they have a vested interest in an efficient and accurate electoral process.

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

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

Recommendations

That Council:

2. Reconfirms the appointment of Mrs Carol Gilbertson as the Hawke’s Bay Regional Council Electoral Officer and notes the appointment of Mrs Leeanne Hooper as the Deputy Electoral Officer pursuant to Section 12 of the Local Electoral Act 2001 and requests Mrs Gilbertson and Mrs Hooper complete the necessary declarations for these appointments.

3. Resolves that the order of each candidate will appear on a voting paper:

(a) in alphabetical order of surname, or

(b) in pseudo-random order, or

4. Resolves to allow voting documents in the Local Body Elections 2013 to be processed during the voting period.

Carol Gilbertson

ELECTORAL OFFICER

Paul Drury

Group Manager Corporate Services

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 20 February 2013

SUBJECT: 159 Dalton Street Building Repairs

Reason for Report

1. At a meeting on 12 December 2012, the Tender’s Committee of Council considered tenders received for remedial work on Council’s building at 159 Dalton Street. A copy of the briefing paper and attachment “Tender Report for reclad and remedial works at 159 Dalton Street” is attached for Council information and background.

2. The Tenders Committee instructed staff to enter into further negotiations with Mackersey Construction Limited as the preferred contractor for the remediation of the HBRC building at 159 Dalton Street, Napier in accordance with the report by remediation consultant Nick Hickling of Koru Vocational Services Ltd and to report back to the Committee at the conclusion of those negotiations.

3. These negotiations have now been completed and an Addendum to the Tender Report (Attachment 2) outlining the outcome of those discussions has been provided by Council’s consultants, Koru Vocational Services Ltd (KVS), who are experts in this sort of work and are project managing the remedial works process.

4. This paper seeks Council agreement to award the contract for remedial work on HBRC’s building at 159 Dalton Street, Napier.

Financial and Resource Implications

5. Provision has been made in Council’s LTP 2012-22 for remedial work on its building at 159 Dalton Street including:

5.1. $650,000 for the 2012/13 year, and

5.2. $350,000 in the 2013/14 year.

6. This estimate was based on a rough order cost estimate provided by Kevin Longman of KLHB Building Consultants Ltd, who is a New Zealand Institute of Building Surveyors accredited weather tightness specialist and expert in Leaky Building Assessments. KLHB undertook the initial assessments on water ingress into the building, and is retained by HBRC to provide expert evidence to support Council’s legal claim.

7. A number of differences between this original rough order estimate and the tender prices received are outlined in the attached “Tender Report for reclad and remedial works at 159 Dalton Street”.

8. KVS has provided additional information on the differences in the letter (Attachment 3). Mr Kevin Longman will be present at the Council meeting to answer questions Councillors may have on the difference between the original estimate and the preferred tenderer’s tender price.

9. It should be noted that the scope of work in the remedial contract will be closely scrutinised by the defendants and will need to be justified both to them and through the legal process to recover the cost of the works. The scope of the remedial works included in the contract is in the opinion of the remedial consultant (KVS) necessary to ensure the building has an effective life of at least 50 years.

10. The estimate upon which the provision included in the LTP was based is set out in the table below.

Description	LTP Provision
Assessment of cladding defects	$60,000
KLHB rough order cost: - Professional and consent fees - Remediation specialist fees - Remedial works	$110,000 $30,000 $615,000
Legal fees	$100,000
contingency	$85,000
Total	$1,000,000

11. An updated estimate including the revised contract cost for the remedial work is:

Description	Revised Estimate
Assessment of cladding defects	$60,000
Professional and consent fees to tender stage	$50,000
Remedial works	$1,922,000
Remediation contract management	$30,000
Legal fees	$120,000
Remediation specialist fees	$30,000
Total	$2,212,000

12. To date the following approximate costs have been incurred:

Description	$
Assessment of cladding defects	$60,000
Professional and consent fees to tender stage	$50,000
Legal advice and fees associated with progressing the HBRC claim against Herbert	$65,000
Total	$175,000

13. Council’s LTP provides for recovery of $700,000 of the cost of remediation through legal action with that income provided for in the 2014/15 year. At this stage it is too early to determine what level of recovery is likely, however advice provided by Council’s remedial experts is that, on average, 70% of remedial repair costs (including professional fees but excluding legal fees) are recovered through the legal process. On this basis staff propose that the provision for recovery in the 2013/14 financial year be revised to $1,400,000. Council’s legal advisors believe that this recovery could be realised in the 2013/14 year.

Funding and Operating Cost Implications of the Remedial Work for Dalton Street

14. The LTP included a proposal to use internal borrowing from the infrastructure renewal reserve to fund the remedial work required on the Council’s Dalton Street building. As at 30 June 2012 the balance of this reserve was $2.6m. In the liability management policy in the LTP 2012-22, Council set out its intention to fund items in the capital programme by way of internal borrowings from accumulated reserve funds.

15. The table below identifies the costs and funding for the Dalton Street building as included in the LTP, and compares those to the revised costs and funding proposed to be included in the reforecast for 2012/13 and in the Annual Plan 2013/14. The revised costs for the 2012/13 year provide for remediation work totalling $800,000 to be completed by 30 June 2013.

LTP 2012-22

2012/13

$000

2013/14

$000

2014/15

$000

Total

$000

Capital:

- Cost

- Recovery

650

350

(700)

1,000

(700)

Total

650

350

(700)

300

Funding:

- Infrastructure renewal reserve

650

350

(700)

300

Revision

2012/13

$000

2013/14

$000

2014/15

$000

Total

$000

Capital:

- Cost

- Recovery

975

1,237

(1,400)

2,212

(1,400)

Total

975

(163)

812

Funding:

- Infrastructure renewal reserve

975

(163)

812

16. The net loan required under the revised figures from the infrastructure renewal reserve increases from $300k to $812k. This internal borrowing will be repaid over a 15 year timeframe. The effect on Council’s operating costs will be an increase in interest payable to the reserve for the use of funds, with the impact on the LTP being as high as $25,000 in the 2015/16 year to a low of $16,000 in year 2021/22.

Decision Making Process

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

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

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

17.4. No persons are directly affected by this decision.

17.5. While an option is not to proceed with any remedial work, HBRC will lose its ability to recover any of the costs if the remedial works are not carried out. If the work is not carried out, then depreciation on the building should be increased as ongoing deterioration will reduce its useful life.

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

Recommendations

That Council:

2. Awards the remedial works contract to Mackersey Construction Ltd for the sum of $1,922,022.00.

3. Approves an increase in the internal loan provision from the infrastructure renewal reserve from $300k to $812k, to be drawn down during the 2012/13 and 2013/14 financial years.

4. Notes that staff are working with legal advisors to pursue recovery of the costs of the remedial works from the main contractor for the construction of the building, Herbert Construction Ltd.

Mike Adye

Group Manager

Asset Management

Liz Lambert

General Manager (Operations)

Attachment/s

1 View	December 2012 Reclad and Remedial Works Report
2 View	January 2013 Reclad and Remedial Works Report Addendum
3 View	February 2013 Letter re Differences in tender sum and budget estimate

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