Agenda of Regional Council Meeting

	Agenda Item	Action	Person Responsible	Due Date	Status Comment
16	General Business	Report on options and cost implications for exclusion of stock from HBRC controlled/owned waterways	MA/GH		Stock exclusion fencing now largely in place. Fencing repairs because fences are cut by public is almost a weekly occurrence.
12	Annual Plan 2012-13 Progress Report for Nine Months Ending 31 March, Including Reforecasting	Report on Open Spaces – including how much money is available; how much is being paid for maintenance and enhancement of existing areas, options for further investment and Assessment Criteria	MA/GH	June 2013	To be provided as part of responses on Annual Plan submissions.
12	Annual Plan 2012-13 Progress Report for Nine Months Ending 31 March, Including Reforecasting	Investigate whether possible to include performance of HBRIC Ltd and Port as part of Council’s quarterly progress against Annual Plan reports	PD		The performance measures as stated in the HBRIC Ltd Statement of Intent will be added to the quarterly progress report. The performance on Napier Port is presented to Council on a quarterly basis by the Chairman and Chief Executive of Napier Port.
14	Looking Forward	Confirm the date when all pathways will be completed, and plan a ‘grand reopening’	MA/DB

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 29 May 2013

SUBJECT: Extraordinary Vacancy Following Resignation of Councillor von Dadelszen

Reason for Report

1. The Chief Executive has received and accepted the resignation of Mrs. Eileen von Dadelszen as a councillor for the Hastings Constituency of the Hawke’s Bay Regional Council. This resignation has created an Extraordinary Vacancy on the Hawke’s Bay Regional Council.

2. The purpose of this paper is to enable Council to resolve how it will deal with this extraordinary vacancy.

Legal Requirements

3. The Local Electoral Act 2001 (LEA) is the governing legislation for all matters concerning the election of councillors.

4. Sections 117 – 119 of the LEA are the sections dealing with an Extraordinary Vacancy, the main points being in section 117:

“117 Extraordinary vacancy in local authority or community board

(1) If a vacancy occurs in the office of a member of a local authority or in the office of an elected member of a community board more than 12 months before the next triennial general election, the vacancy must be filled by an election under this Act.

(2) If a vacancy occurs in the office of a member of a local authority or in the office of an elected member of a community board 12 months or less than 12 months before the next triennial general election, the chief executive of the local authority concerned must notify the local authority or community board of the vacancy immediately.

(3) On receiving notice under subsection (2), the local authority or community board must, at its next meeting (other than an extraordinary meeting) or, if that is not practicable, at its next subsequent meeting (other than an extraordinary meeting), determine by resolution—

(a) that the vacancy will be filled by the appointment by the local authority or community board of a person named in the resolution who is qualified to be elected as a member; or

(b) that the vacancy is not to be filled.”

5. The next triennial local government elections are being held on 12 October 2013. Council does not have the option of holding a by-election.

6. In accordance with section 117(3) Council must now resolve to either appoint someone else to the vacancy or resolve that the vacancy not be filled. In either situation Council must give public notice of its decision.

7. If Council resolves not to fill the extraordinary vacancy a final decision to this effect can be adopted at the present meeting and public notice given of Council’s decision to that effect.

8. If Council chooses to appoint someone to the vacancy the following process will occur.

8.1. The Council may identify a proposed appointee at the present meeting

8.2. Public notice is then required to be given of the proposed appointment, including who the person is, and the criteria used by Council to appoint them.

“Qualified to be Elected as a Member”

9. Section 25 of the Local Electoral Act 2001 provides that “every parliamentary elector is qualified to be a candidate at every election held under this Act, if that person is a New Zealand citizen unless they are prohibited in terms of Section 58 of the Act”.

10. Section 58 prohibits a person from being both a regional councillor and a councillor for another council within the region covered by the regional council.

11. This means that the Council can appoint any New Zealand citizen who is a parliamentary elector, unless they are already a district or city councillor of a territorial authority covered by the Hawke’s Bay Regional Council.

Confirmation of Appointment

12. Should the Council decide to make an appointment and proceed to make a decision and pass a resolution to that effect there is a further process required to confirm an appointment.

13. Section 118(2) of the Act reads as follows.

13.1. (2) The local authority or community board must, at a meeting held not later than the expiry of the prescribed period, by resolution confirm the appointment described in the resolution under subsection(1); and the person appointed is for all purposes to be treated as having been elected to fill the vacancy on the date on which that resolution is made.

14. For the purposes of Section 118(2), the expiry of the prescribed period is 30 days after the notification of the original resolution, resolving to appoint a named person. This is a maximum period and not a minimum period.

15. If Council proceeds with this option the next meeting of Council at which it would be possible to confirm an appointment is the meeting scheduled for Monday 10 June 2013.

Additional Information

16. If Council decides to make an appointment, then the Council must decide a selection process. There are no statutory guidelines on the selection process, however there is a longstanding convention that in the event of such a vacancy the appointment goes to the highest polling unsuccessful candidate in the last election in that constituency. Should the Council decide to adhere to that convention, that would be a suitable selection process or criteria.

17. The results for the last election (2010) in the Hastings constituency were as follows:

Eileen von Dadelszen 10841

Liz Remmerswaal 10346

Kevin Rose 10196

Ewan McGregor 9533

Murray Douglas 9425

Tom Belford 8607

Robert Burnside 8280

18. It is understood that the highest polling unsuccessful candidate, Murray Douglas, is available for appointment should the Council decide to proceed to an appointment.

Financial Implications

19. There are no direct financial implications. The salary paid to Mrs von Dadelszen ceased as from the date of her resignation. If the Council chooses to fill the extraordinary vacancy the salary payable to the new member will not commence until after the appointee’s appointment has been confirmed, following the giving of the requisite public notice.

Corporate and Strategic Committee Chairmanship

20. Councillor von Dadelszen held the position of Chairman of the Corporate and Strategic Committee at the time of her resignation from Council. There are two further scheduled meetings of this Committee between now and the Council elections in October. It is appropriate for Council to appoint a Chairman of the Committee for those two meetings.

Decision Making Process

21. 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:

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

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

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

21.4. The persons affected by this decision are the voters of the Hastings constituency.

21.5. Options that have been considered are those prescribed by legislation and set out in the agenda paper.

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

21.7. 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:

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.

Either:

2. In accordance with s.117(3)(b) of the Local Electoral Act (2001) resolves not to fill the extraordinary vacancy in the Hastings constituency caused by the resignation of Councillor von Dadelszen and publicly notifies this decision.

Or:

2. In accordance with s.117(3) (a) of the Local Electoral Act 2001 resolves to fill the extraordinary vacancy in the Hastings constituency caused by the resignation of Councillor von Dadelszen; and further resolves:

2.1. that the vacancy be filled by the appointment of ……………..and

2.2. that for the purpose of section 118(b) of the Local Electoral Act 2001 the criteria by which ………………. was selected for appointment are that ………………………..; and

2.3. that the Council gives public notice of the above resolution.

3. Resolves to appoint Councillor ………………… as Chairman of the Corporate and Strategic Committee.

Liz Lambert

General Manager (Operations)

Attachment/s

There are no attachments for this report.

Hearing Panel Decision Report

Attachment 1

1. Welcome

The Chairman for the Hearing Panel, Commissioner Scott, welcomed members of the community and Councillors Kevin Rose & Tim Gilbertson. She noted apologies had been received from HBRC Chairman Fenton Wilson.

Commissioner Scott outlined the procedures that would be followed for the hearing process. This included the scope of the hearing which is to deal with the contents of the Statement of Proposal.

2. Subject of the Hearing

The subject of the Hearing is the Statement of Proposal dated 1 March 2013 for the:

a. Reinstatement and funding of the flood protection for Upper Makara Scheme

b. Revisions to the rating for Upper Makara Scheme

3. Relevant legislation

The Hearing is part of a special consultative procedure set out under clauses 83 and 84 of the Local Government Act 2002.

4. Notification and Submissions Received

The Statement of Proposal was notified on the 2nd of March 2013 and copies of the Statement were circulated to ratepayers paying targeted rates to the Upper Makara Scheme on the 4th of March 2013 with an invitation for submissions. Copies of the Statement were also available from the offices of the Hawke’s Bay Regional Council, on the HBRC website, and by email on request. Submissions closed on Tuesday the 2nd of April.

By the closing date of Tuesday 2nd of April 2013 four (4) submissions were received on the

proposal with three of the four submissions including a request to speak at the hearing.

	Name	Address	Speaking
1	Mark Williams	Black Dog Cottage, RD 14, Havelock Nth 4295	Yes
2	Robert Addis	Bushside Ltd, c/o R.E. Addis, RD 14, Havelock Nth 4295	Yes
3	Makara Ratepayers Group representing: • Tim Beachen • Ken Scheele • Angus McPhail • Mick Duncan • Mark Williams • Robert Addis • Robert Sanders • Steve Tait-Jamieson • Jim & Yvonne Macaulay • Brian & Shirley Jensen • James & Alison Thomsen • Ian Moorcock • Andrew Thomas	c/- Lawson Robinson, P.O. Box 45, Napier 4140 Attention: Matthew Lawson.	Yes
4	Central Hawke’s Bay District Council	P.O. Box 127, Waipawa	No

5. Procedural Matters

5.1 At the request of the Chairman of the Hearings Panel a legal opinion had been obtained by HBRC from Sainsbury Logan & Williams regarding the scope of the hearing. The legal opinion advises that the matter on which this Hearing is dealing is limited by the Statement of Proposal.

5.2 Whether Council bears any liability for the damage which has occurred to the dam (and there is no suggestion that this is so) has no bearing on those issues.

5.3 The Commissioners adjourned the hearing to seek further information on two issues.

· The potential impact on the dam of a storm event in January 2012 which resulted in the No 1 dam spillway operating

· Sequence of meetings and timing of discovery of second sinkhole.

5.4 And to allow staff to seek legal advice on the interpretation of Council’s Policy on the Regional Disaster Reserve as stated in Council’s Long Term Plan 2012-2022 given by Mr Matthew Lawson, (Lawson Robinson) to complete their Right of Reply.

5.5 We note that this latter issue was not addressed in the written submission but raised at the hearing. We accepted this evidence as an elaboration of points raised in the written submission but acknowledge that staff needed time to properly respond.

5.6 Further information and the Officer’s Right of Reply on this issue was circulated to all submitters by letter dated 26 April 2013. A request was received from Mr Lawson for Council’s legal opinion and this was supplied to Mr Lawson by email on 7 May 2013. Submitters chose not to further submit on the new material, but through Mr Lawson (Lawson Robinson) did submit a further legal opinion on the Officer’s legal opinion obtained to inform their Right of Reply. This was received on 10 May 2013.

5.7 We have chosen to accept this further opinion in the spirit of obtaining the fullest evidence to inform a robust decision.

6. Background

6.1 The Makara dam, built in 1980 has in recent years shown signs of age‐related wear. The rate of wear is believed to have been sharply accelerated by a major flood (estimated to be more than a 1‐in‐ 100 year event) that swept through the District on 25 – 27 April 2011 followed by a second flood event (greater than 1- in -10 years) on 6 January 2012.

6.2 An inspection by staff of the dam, immediately after the April 2011 flood, identified the existence of a sink‐hole at the outlet end of the culvert. This was probably sustained during the flood event. The inspection also found small (1mm – 2mm) holes and associated corrosion along the roof of the culvert, near the outlet, and noted a significant amount of siltation in the ponding area upstream of the dam. The sink‐hole was immediately fixed (the day after it was discovered) but the discovery highlighted that it was timely to consider either entire replacement of the culvert, which was deemed to be at or near the end of its useful life, or to carry out substantial repairs. Investigations to decide on a future replacement of the culvert, and for de‐silting of the dam, were commenced shortly thereafter.

6.3 Staff and members of the Makara Scheme Liaison Committee visited the dam on 2 April 2012, four months after the second flood event. There was no visible evidence of damage.

6.4 A further sink‐hole was discovered on the inlet face of the dam near the crest on a routine inspection on 31 May 2012. On this occasion, because of the size and location of the sink‐hole, rather than attempt to simply repair the hole, the recommendation from the specialist dam engineer (DamWatch) was that an emergency spillway should be excavated in order to ensure that the dam would be made safe.

6.5 The concern was that a substantial cavity (or number of cavities) might have formed around the culvert and that if there was a repeat of the April 2011 rainstorm the dam might not be able to stand up to such an event. A collapse of the dam would have potentially caused significant property damage and risk to people and livestock downstream.

6.6 The current situation of the dam is that the culvert remains in place but the effective spillway height (at the temporary earth spillway) is now considerably lower. The dam is now ‘safe’, and still operating, but only providing a small amount of flood protection for downstream properties (probably against no more than about a 1‐in‐2 year flood).

6.7 A number of options were considered and are summarised below:

Option 1 – Reinstatement of the dam

This option with an estimated project cost of $1,204,000 would reinstate the dam with a new concrete discharge pipe and to similar dimensions to the current dam. This would effectively reduce the level of flood flows in the Makara Stream for the smaller more frequent flood events (estimated to be those events that occur on average once every 5 years);

Three options were presented for community comment.

Option 1a) - Includes the reinstatement of the dam, but does not include any provision to meet the cost of a desilting programme or minor stopbank improvement work.

Option 1b) – Includes reinstatement of the dam and a provision of $25,000 annually for a desilting programme commencing in the 2014/15 year. This is the preferred option. It does not include minor stopbank improvement work.

Option 1c) – Includes the reinstatement of the dam, provision of $25,000 annually for desilting and minor stopbank improvement work.

Option 2 – Decommission the dam and improve stopbanks to provide 5 year flood protection.

This option with an estimated project cost of approximately $1,000,000 would provide substantially the same level of flood protection as that provided by the Scheme when it was designed in 1975. It includes provision of some freeboard allowance for uncertainties in flow and water level.

Option 3 – Decommission dam and improve stopbanks to provide 10 year flood protection.

This option with an estimated project cost of $1,200,000 would provide an increased level of service to that provided by the dam plus an additional margin to cover modelling and flow uncertainties.

6.8 Public meetings and meetings with individual landowners were held prior to the adoption of the Statement of Proposal. A public open day was held at Elsthorpe Hall on 26 March 2013, at which staff outlined the proposal and responded to questions.

6.9 A Statement of Proposal was approved by Council on 27 February 2013.

6.10 The recommendation of the Statement of Proposal was that the culvert should be replaced; the dam reinstated; and that a de‐silting programme, valued at $25,000 per annum should be commenced above the dam. This is referred to as Option 1(b) in the documents. The Statement also set out a proposed funding package (based on current estimates) including contributions from the HBRC Regional Disaster Reserve but also requiring significant increases in the local targeted rate.

6.11 Further background information from the Statement of Proposal and the Principal Officers’ Report can be viewed on the HBRC website.

7. Officer’s Report

Mr Murray Tonks spoke to the Officer’s Report which had been circulated. The report covered the background to the proposal, detailed the consultation undertaken with the community with regard to the Statement of Proposal and addressed matters raised in the written submissions.

As these points are addressed in the Issues section we will not iterate them here.

The one point not covered was direction from submitters on tendering. The report stated this was outside the scope of this hearing and we concur with that.

Mr Mike Adye, Mr Gary Clode and Mr Craig Goodier answered in some detail the panel’s questions with regard a number of issues around insurance programmes, the likely cause of the sinkhole, the sequence of events between the two storm events and discovery of the sinkhole on the inlet face of the dam, alternative levels of flood protection, the public good component of the scheme, the catchment area for indirect rating, proposed changes in the rating classification, and deferral of desilting.

8. Submitters’ Evidence

8.1 Mr Lawson spoke on behalf of the Makara Ratepayers group, supported by Mr Andrew Thomas, Mr Jim Inglis and Mr James Thomsen.

Mr Lawson indicated the support for option 1(b) together with a programme of desilting. He argued that the entire reinstatement of the dam with replacement of the pipe should be funded either by the Regional Disaster Reserve as it was necessitated by storm damage or it should be funded solely by the general ratepayer as it occasioned by a failure to identify and undertake remedial work (negligently) to identify the replacement of the pipe in a timely manner.

He outlined Council’s statutory functions with regard to maintenance of the scheme.

Mr Lawson covered information on Council’s levels and policies on insurance particularly noting the wording in the Council’s Long Term Plan 2012-2022, Part 5.2 which, in his view, indicated full funding of the entire remedial work from Regional Disaster Reserve.

He also covered aspects of sustainability of the proposed rates, including inter-owner and intergenerational issues, and stated that the community did not support the rating review as proposed.

In his opinion on the Council’s advice on the standing of the LTP Mr Lawson addressed issues around Council’s insurance policies and the LAPP policy being unavailable. In the absence of other insurance policies the Regional Disaster Reserve must meet flood damage repairs. In his view the statements in the Long term Plan (LTP) are coherent and unequivocal. Even if the LTP is merely a summary that summary bore little resemblance to the content of the officer’s letter (re response to the submission in Right of Reply). Such a contention would lead to the conclusion that Council had been misleading and inaccurate in the preparation of the LTP.

8.2 Mr Thomas, as a member of the Makara Ratepayers Group submitted on the management of the scheme, which in his view, was not well managed and he did think the stop banking alternatives were well presented. The current proposal would see his rates increasing by $18,000 but he did not favour the option of deferral of desilting as the impact on that rate rise was minimal. Mr Thomas acknowledged that the desilting was a fair charge on the ratepayer. He agreed that a review of the rating scheme was better deferred for a more accurate assessment and that repairing the dam was the current priority.

8.3 Mr Inglis, Business Manager for Landcorp Farming Ltd and a member of the Makara Ratepayers Group, believed the scheme was worth keeping and he wanted to see the job done properly. He acknowledged that once reinstated there would be some improvement but was disappointed that until recently he had understood it was a well-managed scheme with good infrastructure. Mr Inglis commented the proposed rating review would give his farms gains and losses but he felt reviewing the rates at this time confused the issue which was repair of the dam.

8.4 Mr Thomsen, also as a member of the Makara Ratepayers Group, spoke of his opposition to stop banking instead of the dam, as it would fast track water to his property. He relied on the delay to move stock out of danger. While his exposure was a lot less than some in the community, he was uniquely qualified to comment as he had been “locked in” his property many times. He did not support any deferral of desilting but suggested locals be employed to do the job.

8.5 Mr Williams submitted in his own right and while not a ratepayer in the district was a mentor to one of the farms. He spoke of the wider benefit to the region, especially in keeping the roads open providing access to schools and businesses and to Kairakau. While there was an alternative route to Kairakau via Mangakuri Rd this was likely to flood first. His suggestion was that there was a “district’ wide (this district being the area around Elsthorpe, a subdistrict of Central Hawke’s Bay) uniform annual charge of perhaps $30 and that this be consulted on through Council’s next Annual Plan.

8.6 Mr Addis, from Atua Road on another part of the scheme, explained that Number 15 dam was on his property and that he had undertaken a lot of planting to prevent erosion above that dam. He also has done a lot of stream clearance of willows. In his view more needed to be done to clear and maintain the channels, and that extensive erosion planting was needed above Number 1 dam. He was disappointed that Council had stopped the afforestation scheme. He believed earlier intervention would have been cheaper for the scheme payers.

8.7 Mr Duncan, speaking as a member of the Makara Ratepayers Group, was opposed to the rating review at this time. He was concerned with the amount ($300,000) already spent and nothing to show for it.

8.8 Central Hawke’s Bay District Council, who did not appear at the hearing, addressed their support for option 1b and the desilting programme, and that should the tender price be favourable, and /or as part of the tender the silt removed should be used to enhance the stop banks. They were concerned that the proposed rate was unsustainable and that a greater call should be made on the Regional Disaster Reserve.

The submitters’ points are discussed in detail in the section 10 Principle Issues in Contention.

9. Officer’s Right of Reply

Mr Adye addressed issues raised in submissions.

9.1 He explained that although there was a lack of historical documentation, the understanding was that the dam was originally constructed with 15% additional capacity to allow for some silt build up with the expectation that the original scheme ratepayers would not need to desilt the dam for some years. Recent LiDAR assessment on ponding area of dam provides a far more accurate reading. This has shown that original estimates of the storage volume in the dam were probably optimistic.

9.2 The estimated cost of de-silting an average annual volume of 5000m3 per year was $25,000-$35,000.

9.3 HBRC believed that it administered a well-managed fit for purpose scheme with assets in place to provide the level of flood protection expected by the community. A disaster reserve and depreciation reserve were in place, and were based on the valuation of the dam. Hindsight might suggest the dam was undervalued, but there had been changes in the code of practice for the dam. Any replacement dam would be more costly to reflect those changes.

9.4 There had been considerable debate as evidenced in council records, of the private versus public benefit of soil conservation planting in the catchment and while such planting would not stop erosion it would check it to some extent. Only a small number of landowners took advantage of the Government’s Afforestation Grants Scheme for a small area of forest planting. There had been some initial planting as part of the scheme and some additional planting through land management grants.

9.5 In addressing the matter of timeliness of repair it was explained that under the Building Act, and with the classification of a High Impact Dam, the repair would have required a resource consent. The detailed assessment required at the time would have established, with what we now know of the state of the culvert, that sleeving was unlikely to gain consent. The only reliable answer was partial deconstruction, culvert replacement and reconstruction of the dam.

9.6 While it is noted that LiDAR has made a more accurate assessment of the dam possible, and it now has a lower rating, the fact remains that it is unlikely that an engineer would sign off a sleeve repair. The initial 2010 assessment of a sleeving option was a broad brush consideration only. This was done as a result of Council’s monitoring process and the awareness that the pipe needed either repair or replacement in the near future. It was known that the pipe was not aligned and was deformed in shape and that therefore sleeving was going to be difficult.

9.7 Had there been no storm event, the cost of replacing the pipe would have been the same as that in the current proposal. The dam if rebuilt will be to higher standard and a higher value and this will have an impact on the scheme depreciation.

9.8 On the rationale of assessing an appropriate direct and indirect benefit from a scheme it was explained that the protection to public infrastructure and the wider benefit to the regional community of increased productivity of the land was recognised in the 10% public good funding of the scheme.

9.9 The call on the Regional Disaster Scheme for disaster damage repair to the Kopuawhara Scheme and the Heretaunga Plains Rivers was clarified. As this is covered in Principle Issues in Contention we will not iterate it here.

9.10 Following the adjournment staff notified all parties that they had received a legal opinion for Mr Stuart Webster, of Sainsbury Logan & Williams, which advised that the LTP is a summary of HBRC policy, and is informed by the policy itself. The LTP does not say that the whole of the regional disaster reserve is to be applied to the reinstatement cost, the utilisation of the Regional Disaster Reserve is entirely discretionary and that HBRC has no greater obligation to contribute than that which is offered in the Statement of Proposal.

9.11 Mr Webster’s opinion had sourced the Minutes of the Asset Management and Biosecurity Committee (28 February 2007) regarding policy on use of disaster damage reserves, the Council’s Long Term Plan (LTP) 2012-2022, the Statement of Proposal (1 March 2013), the Officers Report (April 2013), Synopsis of Submissions (Makara Ratepayers Group) (April 2013) and the Local Government Act 2002 (Part 6, sub part 1).

9.12 The opinion drew attention to the discretion under s93(8) of the Act with regard the level of detail to be included in the LTP. The LTP is a planning tool not an exhaustive collection of prescriptive rules. Section 96(2) states that a resolution adopting an LTP “does not constitute a decision to act on any specific matter included in the plan” and subsection (4) “no person is entitled to require a local authority to implement the provisions of a long term plan.”

9.13 The opinion states that nowhere in the policy documentation or in the LTP is there a statement that HBRC must fund any shortfall in cover from other sources through the Regional Disaster Reserve and that the reserve is a funding of last resort where funds are available to meet reinstatement to a standard comparable to that which is in place at the time damage was incurred.

10. PRINCIPLE ISSUES IN CONTENTION

10.1. Maintenance of Number 1 Dam

Submitters raised concerns about the maintenance of the dam in particular and of the scheme as a whole. Opinion was expressed that the scheme was either not adequately managed or maintained by Council. Corrosion of the discharge pipe was noted in 1994. Earlier consultation with the community could have avoided the replacement costs now. One submitter acknowledged that once reinstated there would be some improvement.

The officers spoke to the maintenance time line record (attachment 2 of the Officer’s Report). It is noted that further detail is on file. The time line recorded deformation in 1983 with the post construction longitudinal survey of the Armco culvert with corrosion being noted in 1994. The corrosion of the invert was monitored from then on, with periodic “walk throughs” of the culvert. From 1994 (with the exception of 2002 and 2003) the inspections have been at least annual, with sometimes more frequent inspections.

In 2010 a “high level’ option assessment for replacement or rehabilitation of the culvert was commenced.

In 2007 MWH reported on a “Dam Safety Assurance Programme” recommending annual inspection by HBRC, 6 monthly inspections by landowner/lessee/HBRC, comprehensive 5 yearly review and inspections after flood events or earthquakes.

In a routine inspection days before the April 2011 storm slumping at the inlet was noted and in the inspection days after the storm, this slumping was observed to be significant. This was repaired the following day.

Officers clarified that this first “sinkhole” was in fact two “drop outs” either side of the pipe at the outlet and that it was likely to be caused by settling from the vibration of the pipe, as this is considerable in high flows. These high flows were sustained over a long period in this event.

At the time of this inspection, small 1-2mm holes associated with corrosion were noted in the top of the outlet pipe. Significant siltation of the ponding area was also noted. In August that year council obtained a quotation for relining the culvert, noting that further investigations were needed with a view to replacing or rehabilitating the culvert.

In February 2012 cross sections of the dam and analysis of the siltation was undertaken. This was undertaken without the Council being aware that a second storm event that overtopped the spillway had occurred.

On April 2nd 2012, Council met with the Makara Liaison Committee Members to discuss the problems of siltation of the dam and the repair or replacement of the pipe. At that stage a low cost indication (not a quotation) was given of sleeving of the downstream section only of the pipe (the area where the storm damage was observed.) Even then potential difficulties of that solution were raised. The group visited the dam as part of this meeting and no further damage was observed.

In the course of a routine inspection in May 2012 the second sinkhole in the dam wall on the inlet side of the dam near its crest was discovered. Urgent investigations followed.

10.2. Timeliness of the Replacement of the pipe.

Submitters questioned the timeliness of the replacement of the pipeline, thus avoiding a failure. A “stitch in time saves 9.” The submitter makes the argument that because this did not occur, then an alternative funder (if not the Regional Disaster Reserve) should be the general ratepayer.

The inspection reports for the dam indicate that initial investigations for the replacement or rehabilitation of the culvert commenced in 2010. Further investigations were instigated following the inspection by a specialist dam engineer (MWH) after the damage at the outlet of the pipe.

One submitter refers to an understanding that the old drain could be sleeved for $300,000, and had that been done in a timely manner $1.2m of work would have been avoided.

The above section notes the record of the discussion with the Makara Scheme Liaison Committee regarding sleeving of the outlet section only. This was following the April 2011 damage at the outlet and prior to the appearance of the second slump hole in the face of the dam.

The report refers to the consideration of sleeving or other remediation options and the difficulty in getting accurate quotes.

10.3. Siltation

A submitter raised the issue that the need to address the siltation on an ongoing basis was identified from the start of the scheme and questioned why this did not occur. Another considered it the Council’s responsibility because it had not been provided for in the past.

Staff explained that they understood there was an original provision for 15% capacity loss for siltation. Recent LIDAR survey, however, has given a more accurate level of the silting. With this knowledge staff consider that the initial calculation (done with less accurate technology) did not allow for sufficient siltation.

The inspection report post storm event (April 2011) notes significant siltation of the ponding area. The recent storms have highlighted the siltation caused by large flood events.

10.4. Afforestation

One submitter questioned the Council’s role in maintaining the ponding capacity of the dam through afforestation of the catchment. He noted that access to funding for planting had been stopped by council.

Staff agreed that while planting in the catchment would “check” the siltation to some extent it would not stop it. Their records showed there had been considerable debate among the ratepayers about private vs. scheme benefit.

They clarified the different schemes available and that the Government Afforestation Grants Scheme had now ceased. But when it was available only a small number of land owners had taken advantage of the scheme for a small area of forest planting.

The proposed Council Afforestation scheme was on hold until a funding stream was identified.

Staff consider that further afforestation of the catchment is a decision for individual land owners and that there was an expectation that this would be done on farm.

10.5. Level of Service

Maintenance of the whole scheme was questioned with comments about insufficient channel clearance and removal of willows.

10.6. Cause of Damage: Storm Failure or Failure of Maintenance or Wear and Tear

Many submitters have argued as to the cause of the damage to the dam, and therefore the liability or responsibility. Although one submitter suggested that in his view it was not so much Council’s fault as to the failure as Council’s responsibility to ensure the scheme operated.

One submitter contested the analysis of the officer’s report questioning their written submission that a justification of full funding by the region could not simultaneously be from the regional disaster reserve because of flood damage and the regional rate payer because of the condition of the dam. It was he said an either/or.

Staff explained that it was not a case of either/or. Only one element of the dam has failed. And that is a result of wear and tear exacerbated by storm events.

10.7. Insurance

The Statement of Proposal clearly sets out the insurance cover Council carries and the unfortunate timing of any potential claim on the LAPP (Local Authority Protection Programme). On the 13th April 2011 LAPP advised the Council that it was no longer able to provide any insurance for flood damage until at least 30th June 2011 or until Government support was in place due to the Christchurch earthquake.

Staff, in their report corrected the level of excess for a claim on LAPP which at that time was set at $600,000. All other insurance is for a higher level of excess than the cost of the reinstatement of the dam.

Self Insurance is provided through the scheme reserves and the Makara Scheme reserve holds $41,200. Staff referred a submitter to the meeting of the HBRC on the 28th February, 2007 for the setting of policy with regard to the level of individual scheme reserves and on the use of the Regional Disaster Reserve. A formula was given for assessing the desirable level for each scheme, and for Makara this was set at $43,847 to be met by 2010.

As regards the Regional Disaster Reserve, it will meet any extraordinary costs with managing the response and recovery to a disaster event, and meet 60% of any unfunded portion of asset reinstatement cost following a disaster event.

10.8. Role of Subsidies

One submitter raised the criteria that established the scheme under the Hawke’s Bay Catchment Board. The Government, recognising the public benefit from the scheme, contributed 70% of the funding with the scheme ratepayers paying the balance. This should still be reflected in present funding of the scheme.

10.9. Role of Regional Disaster Fund

In the Statement of Proposal and in the Officer’s Report, the recommendation is made that the Regional Disaster Reserve meets 60% of the capital costs less the scheme reserves.

Submitters raised the wording of the LTP 2012-2022. In 5.2 p11 under Insurance of Infrastructure Assets it is stated, “A Regional Disaster Reserve which meets flood damage repair works costs exceeding the Scheme Disaster Reserve…”

Further legal opinions around the interpretation of this statement were received with the Officer’s Right of Reply and in a further opinion from the submitters. On the one hand there is a literal interpretation of the above statement that the Regional Disaster Reserve meets the full cost and on the other the interpretation that the LTP is a summary of HBRC policy and must be read in conjunction with the Policy that informs it.

We sought clarification from staff on any precedence in use of the disaster fund, particularly in regard to the storm damage (twice) in Kopuawhara and the Sawfly disaster on the Heretaunga Plains. Staff clarified the position was inconsistent and that was one of the reasons for establishing a policy on use of funds. In 2002, 73% of a $58,000 storm repair was agreed to be funded from the Regional Disaster Reserve however the full amount was not used. Following a second major event in 2011 Council agreed to fund 44% of a $123,400 cost. This work has yet to commence. With the biological disaster and the destruction of the edge protection of the Heretaunga Plains scheme, the Regional Disaster Reserve met $500,000 out of the $8.8million remediation. The bulk of the cost was funded by loans payable by the targeted beneficiaries.

10.10. Betterment

In the Statement of Proposal, (para 1.1) the option of future flood control on the Makara Stream that was preferred by the community is a reconstruction of the dam with a new concrete discharge pipe in accordance with modern design codes. In discussing the design (para 8.2) it states that concept design for the replacement outlet pipe therefore includes features that are not included in the existing dam, and the estimated cost of replacement is considerably more than the cost of reinstating the dam using the 1980 design. The Officer’s Report (Pg. 5) also refers to the opportunity with reinstatement of the emergency spillway to excavate and repair the existing slump around “this section” of natural ground to the left of the design spillway.

Submitters did not contest any aspect of betterment.

10.11. Scheme Disaster and Depreciation Reserves

A submitter raised the issue of inadequate rating in the past to establish sufficient funds in the depreciation reserve to allow for the replacement of the culvert. The submitter further questioned the valuation of the dam on the council’s books resulting in under insuring.

The Officer’s Report drew attention to the establishment of the depreciation reserve following changes to the Local Government Act 2002 and that the reserve was modest due to the short time since it had been initiated.

10.12. Intergenerational and Inter-owner Equity

Staff expressed the rationale for a loan in terms of intergenerational equity.

Submitters raised other concerns with the intergenerational and inter-owner equity in that the disaster reserve having been underfunded in the past advantaged those land owners who benefitted from the lower rates, but disadvantaged those land owners who had recently bought land in the area.

10.13. Stopbanking

Submitters expressed their view that the option on stopbanking as presented was too limited. One submitter raised the threat to his property where stopbanking would fast track the water thus denying him time to move his stock to safety. The submitters were unanimous in their preference for the reinstatement of the dam as proposed.

Staff acknowledged the benefit of delay of flooding achieved by retaining water in the dam ponding area, which did allow time for preparation such as removing stock. There would only be limited benefit derived from extra stopbanking.

10.14. Deferral of desilting

The Officer’s Report raised an option of deferring the desilting programme until the loan was repaid (ten years), which would make a small reduction in the annual rate.

This was opposed by all submitters who wished to see the desilting commence as soon as possible.

10.15. Review Rating base

A review of the rating base involving an assessment of potential financial benefit was presented with the Statement of Proposal. All submitters expressed a lack of trust in the methodology and had no confidence that it gave a fair and equitable distribution of rates.

The Officer’s report did clarify that use of LIDAR had given a more accurate assessment of the area that benefitted and had shown some anomalies and that there had been some correction of boundaries.

Submitters suggested a wider rating base with increasing the catchment of indirect beneficiaries. And one submitter suggested a district wide (Elsthorpe) Uniform Annual Charge.

Submitters were of the opinion that a number of other people who used the roads for access benefitted from the scheme.

The Officer’s Report drew attention to the 10% public good funding contributed by General rate, and explained that the 20% indirect benefit proposed in the review of the rating scheme was already considered to be at the higher end for such benefit. To spread the catchment area to include more ratepayers in this category would not affect the rate portion for the direct beneficiaries.

The Report noted that the consultation had not been wider than the scheme direct beneficiaries, and to alter rates for anyone outside the scheme would require public consultation with the affected parties.

10.16. Rate Sustainability

Several submitters raised concerns around the sustainability of such high rates as would be required to reinstate the dam, fund loan interest and repayments and allow for desilting. Several different funding options were suggested to spread the cost.

They submitted that as this was a reinstatement of a scheme and not a greenfields development, the options facing the community were limited.

The Officer’s covered an assessment of sustainability in terms of the net benefit to the downstream community. If the benefit in terms of savings from reduced damage to crops, pasture, livestock and property exceed the costs of the dam reinstatement, then it was sustainable.

Staff clarified that this was not the highest cost rating for flood control in the region.

11. MAIN FINDINGS ON THE PRINCIPLE ISSUES IN CONTENTION

11.1. Maintenance

We accept that the maintenance record shows adequate and reasonable monitoring and maintenance where needed. We also acknowledge that monitoring will not necessarily find all the weaknesses.

Hindsight suggests that perhaps an early intervention may have led to a different short term outcome but realistically it eventually meant, as the monitoring reports from 2010 onwards record, a replacement of the culvert that would have involved a deconstruction of the dam in the vicinity of the culvert, replacement of the culvert and a reconstruction of the dam. During this time a stream diversion would be required.

It was only a large event – and in this case two large events – that showed this up.

The first event on April 26, 2011 was greater than a 100 year return event followed by, on January 6, 2012, a greater than 10 year return event. The spillway operated in both events.

The apparent damage, which followed the April storm event was very localised and was repaired promptly and adequately.

Prior to the second sinkhole being discovered during the 31^st May 2012 visit, the advisability of different interventions around the outlet culvert were not really any different than previously. The sinkhole directly over the outlet culvert, from near the top of the dam, changed this, as has recent inspections of the corrosion in the pipe.

We are, though, convinced that a replacement of the culvert would have been needed before the end of the useful life of the dam.

11.2. Timeliness of Replacement

We accept the evidence that investigation of replacement or rehabilitation was under way, but reject the suggestion that the lack of timeliness has impacted negatively on the scheme ratepayers.

What we now know of the state of the culvert, and its performance during storm events, indicates that it is highly probable that a full investigation would have indicated early replacement rather than rehabilitation of the culvert. Even if rehabilitation was an option it would have been a short term solution.

The suggestion that there was an “understanding of $300,000 to sleeve the old drain” is not borne out by any evidence. There is no evidence of a quotation for “sleeving” the entire culvert. While the dam inspection records refer in August 2011 to a quote for relining, the April 2012 liaison meeting refers quite clearly to difficulty in getting “accurate quotations”, to the limit on the proposed relining, and the associated undesirable effects from lining only the outlet portion.

We do not accept that there was an option of a low cost solution that would have sufficiently extended the life of the culvert to avoid replacement.

Replacement of the culvert at any stage, before the storm events, or if the second sink hole had not appeared, sometime in the near future, would have involved deconstruction of the dam in the vicinity of the culvert, replacement of the culvert and reinstatement of the dam. A stream diversion would need to be created through the dam to enable this work to proceed.

Had this been done, as the submitter suggests in a “timely manner”, far from saving the ratepayers, the full cost of the upgrade would have fallen on the scheme with only minor contribution for public good.

We note that the dam did not fail in the storm events, but that the storm event exacerbated the failing performance of the culvert necessitating its earlier replacement.

This has, realistically, been of benefit to the scheme ratepayers in that the proposal under consultation, considering the role of the storm damage, has recommended a significant contribution to the remediation work from the Regional Disaster Reserve.

11.3. Siltation

There is no dispute that the life of the dam is related to the capacity of the ponding area. The dam, if left without desilting would reach a point of decommissioning due to lack of capacity.

But if the capacity was maintained then the culvert would have to be replaced before the dam reached the need for decommissioning.

We note that regular cross section surveys measuring siltation were conducted of the ponding area, and it was only after the April 2011 storm event that it was noted that “significant siltation” had occurred. Details of the amount of siltation are covered in the Statement of Proposal.

We heard there were two significant flood events and in spite of the severity of those events the capacity, while affected, was not overly compromised by siltation.

What these events do show is that major events do trigger the need for desiltation.

11.4. Afforestation

We note in the proposal that in the nineteen eighties soil conservation planting was carried out throughout the catchment to control hill country erosion. The Statement of Proposal identifies that the average annual expenditure on the scheme for soil conservation is 5%. We heard that there has also been Council assistance in soil conservation planting over and above this through the Land Management Scheme.

We consider that the matter is outside the scope of this hearing. But should the Makara scheme ratepayers wish to pursue this option, it is a matter for them to decide with further funding contributions to the scheme.

11.5. Level of Service

We note in the Statement of proposal that the average annual expenditure on stream clearance is not identified but is included under channel and dams. The Silver Range Stream clearance accounts for 5% annual average expenditure. From this we conclude that some clearance and channel maintenance is occurring.

We consider this is a matter of reconsidering the level of service, and that this is outside the scope of this hearing. As above, should the Makara Scheme ratepayers wish to increase the level of service, they need to do so with a commitment to further funding.

11.6. Cause of Damage: Storm Failure or Failure of Maintenance or Wear and Tear

We note the inspection records and the history of storms.

From the very first inspection the lateral deformation and bulges of the culvert is recorded. From 1994 the corrosion is noted and monitored regularly. We accept the officer’s view that it was a case of monitoring that wear and tear until it reached a point of needing replacement or rehabilitation.

The 70 metre long culvert was deformed laterally and no longer lay in a straight line through the dam, and was deformed in shape no longer having a regular circumference.

We note that by 2010 options for rehabilitation or replacement were being considered, with high level assessments. Staff affirmed that there was concern but not to the point of proactive replacement.

Replacement of a culvert after only thirty years of life is, as staff explained, unusually early. We accept that with hindsight the choice of the material for the culvert was not optimal. We have not investigated the known performance of Armco culverts, but we understand that it’s manufacture and use in NZ was relatively new at the time of construction. We also believe this to be outside the scope of this hearing but do note, as recorded in the Statement of Proposal, that the dam met the design requirements of the design codes at the time of construction in 1980 and that it utilised construction techniques relevant at that time.

Following the damage to the dam at the outlet caused by the April 2011 storm event, further investigations were underway on rehabilitation. Specialist dam engineering advice was sought (MWH) and that recommended further investigation with estimates for rehabilitation or replacement.

We heard that there were two significant storm events. The first, an extreme event exceeded a 1 in 100 return event. Within 9 months a second event occurred, that caused overtopping of the spillway. Rainfall records at Waipoapoa show rainfall to have peaked at a 1 in 12 year return period, with sustaining rainfall at or approaching this level for 18 hours.

We note that there was no failure of the dam in these events, and that it performed its job in an extreme event and subsequent significant event in accordance with its design.

We note the evidence of inspections, and damage repair post the April 2011 storm, and heard that the extent of the January rainfall causing overtopping of the spill way was not known to staff, because of lack of telemetry in the area, until meeting with the Makara scheme liaison committee in April 2012. At this stage there was no damage sighted on the dam.

We understand that the second sinkhole, around 3m in diameter at the surface, in the upstream face and toward the crest of the dam, was discovered in a routine inspection in May 2012, and that the cause of this sinkhole, as described in Statement of Proposal, was by the earth embankment of the dam caving in as a result of a cavity formed below the surface.

We heard from staff that the velocity and the turbulent flow through the culvert in the storm events would have “sucked earth out” through holes in the culvert. It is likely to be a combination of both storm events that caused this damage.

We also heard that it would be irresponsible, knowing the condition of the culvert from wear and tear, to only repair the damage to the face of the dam.

It is our conclusion that the damage has resulted from a mixture of causes. That is, the wear and tear in the culvert and the two storm events. We do not accept that there was a failure of maintenance.

11.7. Insurance

We acknowledge the unfortunate timing with the failure of LAPP due to the extreme call on their funds by the Christchurch disaster. There appears to be little likelihood of success with a claim, for the very reasons we give above about the balance of wear and tear and storm damage, and the likely combined contribution of both storm events.

As, however, the damage did not appear until after the second event some argument may be able to be made as to the impact of this storm event on the integrity of the dam.

We believe a claim should be pursued as any contribution is better than no contribution, and while the chances of success may be limited there is some precedence in allowing for betterment as established by claims in the 2004 storms in the Manawatu.

11.8. Role of Government Subsidy

We acknowledge that the underwriting of the original scheme was very generous but those subsidies have long since ceased. The apportionment of costs for any council schemes must be by the policy at the time. In the case of the Makara Scheme the public good apportionment is 10%.

11.9. Role of Regional Disaster Fund

We have considered the legal opinions and find that while the LTP does state “A Regional Disaster Reserve which meets flood damage repair works costs exceeding the Scheme Disaster Reserve…” it must be read in the context of a discussion on different forms of insurance. It does not outline policy for use of the Regional Disaster Reserve.

We accept, however, that it does raise the expectation that flood damage repair work will be met in full. Therein lies a problem. What is the flood damage repair?

After the initial April 2011 storm the damage around the outlet was repaired, within the scheme reserves. Repair to the second sinkhole, which appeared between the April 2012 and May 2012 visits to the dam, could be repaired, albeit as already expressed, “irresponsibly”, by making good the void, along with some rehabilitation of the pipe, to cover existing corrosion. The dam would continue to function but the problem of future damage would remain.

That is where reference to the Council’s Policy (as referred to by Mr Lawson as being that of the council meeting of February 2007) gives clearer direction.

This specifically refers to the apportionment of funds as 60% of any unfunded portion of asset reinstatement cost following a disaster event. The policy states, that reserves will always be a funding call of last resort and that reserves will be used to meet the cost of reinstatement of infrastructure assets (to an equivalent standard to that in place before the damage was incurred.)

This does clarify the intention of “repair.”

We find, however, that it is not helpful to get so tied down in legal semantics and that the broader issue is to consider the degree of repair and betterment; storm damage and wear and tear; and precedence.

There are a few consequential areas of betterment identified in the corresponding issues section, but there can be no doubt as to the major betterment of extending the useful life of the dam with a rebuild of the area around and above the culvert with a long lasting concrete culvert and reinstatement to modern dam specifications.

We also note that there is precedence for contribution to disaster repair (storm and biological) but that it is inconsistent. We note that the degree of funding in these instances varied from 70% (prior to any policy development) and as low as 5%.

A practical decision has to take a view between equivalent and betterment and between replacement from wear and tear and disaster damage. It is a balance.

Therefore arguments around the LTP are not the only guiding factor in apportioning cost.

11.10. Betterment

We have covered this above, but as we received no submissions against this concept we assume we can accept that the Makara Scheme community understand that the dam will be in better condition to the original given better materials in the culvert and higher specification of dam building and safety.

11.11. Scheme Disaster and Depreciation Reserve

We understand with the benefit of hindsight that the current value of the dam was underestimated. But we also accept that the three yearly estimate is reasonable. This was no “dereliction of duty” nor negligence.

Without costing the rebuild it is hard to accurately establish the value. Indeed we note that the Statement of Proposal is an estimate only. So even now the true value is not known and that will have to wait for an actual tender.

We also note the change in safety standards are reflected in the increased valuation. The cost under the new standards will be higher than if the equivalent 1980 dam was built today. The Number 1 dam is the most valuable part of the scheme.

Assessing the value and therefore funding the cost of the reserves is always a balancing act and must be done to the best ability without unreasonable cost. To have dams professionally and independently valued would be a very costly procedure for the ratepayer.

Changes in the Local Government Act 2002 brought about the requirement for a depreciation fund. While the state of the culvert was known, it was not foreseen that its replacement would be required this early. In the ideal world the provision for the replacement would be identified ahead of time and an adjustment (probably very significant) to the level of rates made immediately.

The inspection records indicate that rehabilitation or replacement options were on the drawing board and had the storm events not occurred then the scheme ratepayers would most likely have been considering these options in the immediate future.

We note that the remedial work will result in the Scheme disaster reserve and depreciation reserve remaining in credit but reduced to a near nil balance. We recommend that both of these funds are rebuilt as quickly as is reasonably possible. We suggest that annual Scheme contributions of at least $2,500 to its disaster reserve be provided in future Scheme budgets. The depreciation reserve will be built up over time in accordance with revised valuation and life expectancy of the asset, however we note that the depreciation charge relevant to the No1 Dam will be used to offset loan repayments.

11.12. Intergenerational and Inter-owner Equity

We accept the rationale for loan funding a portion of the costs as a means to gaining intergenerational equity.

The issue of past benefit from the scheme at the lower rate cannot, however, limit the cost of the scheme currently and in the future to the ratepayers. Hindsight can highlight where greater rating earlier may have been beneficial, but if there was no justification at the time then this would not have been accepted. There is no tool for retrospectively gaining that equity but it is important that when scheme rating bases are reviewed the issue of intergenerational equity is allowed for.

11.13. Stopbanking

We recognise the benefit of this scheme, while only mitigating a 1 in 5 year event, does have the added advantage of a time delay in the effects of an event of any size. This does give the community time to prepare.

We note that the dam performed that function through both storm events.

We accept the ratepayer’s views on the value of this time delay and discount the option of stop banking only.

11.14. Deferral desilting

We accept the unanimous view that the savings was insignificant compared with the risk of not desilting, and therefore not justified.

We noted the significant amount of silting through these two storm events, and recommend as earlier start to desilting as is possible, which practically should coincide with the work on reinstating the dam.

11.15. Review of Rating base

We acknowledge that more work is needed on assessing the economic benefit from different land classes and that it needed grounding in the reality of the district. We believe greater community consultation is needed over this aspect of the Proposal.

We do recommend, though, that the anomalies discovered by the LIDAR survey of topography should be corrected now, as should the change in some of the boundary details.

We understand that there are examples of the “district” overlays by other Regional Council and believe this may be worth pursuing.

As this would involve a wider consultation with any affected ratepayers we recommend that this and the review of the Makara Scheme ratepayer base be conducted through the 2014 Annual Plan.

11.16. Sustainability of Rates

We acknowledge the impact the rate shift will have on the individual ratepayers. We are aware, however, that there are other schemes in the region with higher annual rates. We also agree that it is not the same as a greenfield development. To ensure equity across a range of beneficiaries we recommend as above a review of the rate base and the consideration of a suite of rating tools to achieve equity and sustainability.

As we have already stated, this needs to be done in consultation with the 2014 Annual Plan.

12. CONCLUSION

We agree with the officer’s statement “a distinction needs to be made between those portions of work that can be fairly attributed to the repair of disaster or extreme –event related damage and those that are more accurately connected to normal age-related wear and tear.”

But having made that distinction there is no objective formula to apportion the share of those costs.

We note the Officer’s Report also acknowledges that using a less strict approach that there may be scope for attributing some of the costs associated with the wider investigations ($300,000) to the Regional Disaster Reserve. It also adds, though, that these investigations would have been required had the storm damage not occurred because of the state of the culvert.

Given the unfortunate sequence of events, a rapidly aging culvert that would not perform to its original expectations, two significant (one extreme) storm events in the space of a few months, the impact of the Christchurch earthquake on insurance availability, and the timing and the extent of immediate remediation work needed on the Makara Number 1 dam, it is an exceptional case.

We, therefore, believe that, we should take as liberal view as is reasonable, and find as equitable a base to funding the remaining costs as can be achieved.

13. RECOMMENDATION

· Our recommendation is to reinstate the No 1 dam with deconstruction, replacement of the culvert and reconstruction, and to commence in conjunction with this work a desilting programme.

· Once the dam is reinstated to maintain monitoring inspections as recommended by MWH (2007) or as is agreed after reconstruction of the dam, and to report to the Makara Scheme Liaison Committee annually or on a frequency agreed by both parties.

· To fund the reconstruction of the Makara Number 1 dam by the following means:-

Estimated cost of Reconstruction $1, 204,030

Contribution from Regional Disaster Reserve 60% 722,418

Contribution from Scheme Disaster Reserve 41,200

Contribution from Scheme Depreciation Reserve 220,000

Contribution from Scheme ratepayers through loan funding 220,412

Total $1,204,030

· Desilting programme to be funded through scheme rates.

· That the Scheme disaster reserve be rebuilt through annual contributions of at least $2,500 from the Scheme.

· To update the rating data base with corrected boundaries and addition of any areas previously omitted identified through LiDAR as being beneficiaries of the scheme.

· To undertake a rating review with the 2014 Annual Plan.

· The depreciation reserve will be built up over time in accordance with revised valuational life expectancy, however for reasons of interpretational equity the depreciation charge for the No1 Dam should offset loan capital and interest payments.

14. Reasons for Decision

· We recognise the number of the issues above were outside the ability of any party present to influence the course of events.

· The life of the Armco culvert did not meet the expectations of the dam designer at the time of construction. Consequently the wear and tear has become a problem at an earlier stage than was anticipated.

· The over call on LAPP funds as a result of the Christchurch earthquake could not have been foreseen and provided for.

· The scheme will be improved with a dam of higher dam specifications and a longer lasting culvert.

· We therefore have applied a formula that took notice of Council policy and recognising the provisions of LTP have sought to apportion cost to regional self insurance, scheme self insurance and improvement in the life and the safety of the asset.

· We therefore took 60% of the total estimate and funded that from Regional Disaster Reserve.

· The remaining 40% is funded through scheme reserves ($261,200) and loan funding ($220,412). This latter represents the betterment aspect of the aspect and through loan funding addresses some of the intergenerational equity issues.

· We accept the community view that more work is required on any new methodology of recognising comparative benefit and that this combined with any other rate overlays should form part of a review with the next Annual Plan.

Issued this 23rd day of May 2013.

Mrs Christine Scott

Chairman of Hearing Panel

cid:C2CCB7BD-8E7E-45A6-A20F-51F4E28CD2E6

Mr Gary Williams

Member of Hearing Panel

Council's Top 10 Risks as amended 8 May 2013

Attachment 1

Risk Issue 1

Water Quality

Risk Statement

Water quality in some of the rivers of Hawke’s Bay is declining and Hawke’s Bay Regional Council (HBRC) is not quickly and effectively addressing this issue.

Risk Status

The potential for water quality in the region’s water bodies to decline is real without ongoing proactive management by HBRC. HBRC has a major focus on this issue with long term mitigation programmes provided for in the LTP 2012/22.

Assessment

The public of Hawke’s Bay are increasingly concerned at the quality of water in the region’s rivers, and that there could be a decline in the quality of water in our key aquifers.

HBRC monitors water quality at a network of sites throughout the region and reports annually on trends through its State of the Environment report.

Risk Mitigation

Water quality continues to be a focus of HBRC. Provision for the following projects was included in the 2012/22 LTP. These projects will in the long term result in improvements to water quality in water bodies in HB.

· Hill Country Afforestation project (note: this has subsequently been postponed).

· Ruataniwha Water Storage Scheme (RWSS)

· Improved focus for the Regional Landcare Scheme

· Catchment based Plan changes

The National Policy Statement for Freshwater Management came into effect on 1 July 2011. This requires regional councils to set water quality limits and timeframe targets in regional plans. A Plan change for the Tukituki River is progressing. Discussions with stakeholders continue for tackling water quality issues arising in the Mohaka River (particularly the Taharua River) catchment and the Greater Heretaunga/Ahuriri Catchment Area.

HBRC Regional Plans include a policy and regulatory framework for the management of water quality in the region’s water bodies.

The HBRC land management team encourages land owners to fence stock out of waterways and improve farming practice. This is supported by subsidies available through the regional landcare scheme.

The Regional sector is progressing a conversation with owners of “Overseer” regarding its use for regulating nutrient budgeting through Regional Plan rules and policies.

Change since November 2012

· HBRC has focused on the completion of the RWSS as a key element of this risk mitigation strategy.

· HBRC has adopted a programme of time-defined stages required to fully implement the National Policy Statement for Freshwater Management (i.e. the Progressive Implementation Programme).

· HBRC has publicly notified proposed Change 5 to the Hawke's Bay Regional Resource Management Plan. Submissions were heard at a hearing in mid April 2013. Decisions on submissions and further submissions are expected to be received in May 2013.

· A proactive approach continues to be taken on Taharua catchment to reduce farming impact on water quality.

· Construction work for Mahia Beach waste water project has commenced. This project will irrigate waste water from the Mahia Beach Community to the HBRC forest planted last winter.

· MTI Treaty of Waitangi negotiations are now well advanced and provide for a fund to be established using money held by HBRC being proceeds from the Tangoio Soil Conservation Reserve, which may be used for “avoiding remedying or mitigation soil erosion and its effects on the environment and maintaining the physical, chemical and biological qualities of soil in the catchments”. The catchments are the Esk, Arapawanui, Waipatiki and Te Ngarue.

Mitigation actions completed in past 3 years

· HBRC has adopted its 2012/22 LTP which provides for the resources for a programme of work to mitigate this risk.

· Two Water Symposiums held and well attended.

· HBRC Strategic Plan and Hawke’s Bay Land and Water Management Strategy completed and being implemented.

· Ruataniwha and Ngaruroro water storage feasibility projects progressed.

· Science input appropriately targeted to sensitive catchments and risk areas including a review of minimum river flows and allocation limits for ground water and surface water on a targeted catchment basis.

· HBRC led initiative to investigate water harvesting opportunities, water metering and water use efficiency through rationing and rostering.

· Water Initiatives Group established within HBRC to focus on water issues.

· Programme of Regional Plan changes initiated to meet HBRC obligations associated with NPSs initiated.

· Web portal established.

· More holistic approach to HBRC involvement with primary sector being taken by HBRC with objective of reducing impact of sector on water quality.

· Riparian fencing and planting continues to be incentivised and regulated through HBRC’s Regional Landcare Scheme and Fonterra’s Clean Streams Accord.

Risk Issue 2

Water Quantity

Risk Statement

HBRC is failing to appropriately manage the allocation of water with a fair balance between protection of environmental flows and adequate provision for irrigation leading to economic growth.

Risk Status

As for water quality, HBRC has recognised the need for ongoing proactive management of water quantity issues. HBRC has a major focus on this issue with long term mitigation programmes provided for in the LTP 2012/22.

Assessment

The appropriate allocation of water is a balance between the needs of the public and the regional economy, including domestic users and irrigators, with environmental requirements. This requires a robust understanding of environmental and agricultural needs. During Hawke’s Bay’s dry summers there can be insufficient water to provide for environmental needs of the river environment and for agricultural irrigation needs.

The map below shows that the Tukituki, Ngaruroro including the Karamu, Maraetotara and Pouhokio catchments are currently either fully or over allocated.

The RWSS has the potential to enable this issue to be addressed in the Tukituki catchment. If the project proceeds the RWSS will result in increased low flows in the Waipawa River and Tukituki River below its confluence with the Waipawa, and a secure water supply for agricultural irrigation. Increased productivity resulting from irrigation will provide economic benefits to the Hawke’s Bay Region.

In the longer term, HBRC needs to have an effective framework for the management of water allocation for all of the region’s catchments.

This is recognised as a National risk. National Policy Statement for Freshwater Management came into effect on 1 July 2011 to provide direction on the management of the issue. This requires regional councils to set water quality limits/ timeframe targets and water allocation limits and minimum flows in regional plans. It also provides for the involvement of tangata whenua in freshwater planning and management.

Risk Mitigation

The following work has been initiated to reduce this risk:

· HBRC’s Strategic Plan, the Hawke’s Bay Land and Water Management Strategy and the 2012/22 Long Term Plan provides the framework and resources for a programme of work to mitigation of this risk.

· RWSS

· Ngaruroro water storage prefeasibility study

· Catchment based Plan changes

Change since November 2012

· HBRC has focused on the completion of the RWSS as a key element of this risk mitigation strategy in the Tukituki catchment.

· HBRC has adopted a programme of time-defined stages required to fully implement the National Policy Statement for Freshwater Management (i.e. the Progressive Implementation Programme).

· Collaborative engagement has commenced for the Greater Heretaunga/Ahuriri Catchment Area.

Mitigation actions completed in past 3 years

· HBRC has adopted its 2012/22 LTP which provides for the resources necessary to mitigate this risk.

· Two Water Symposiums held and well attended.

· HBRC Strategic Plan and Hawke’s Bay Land and Water Management Strategy completed and being implemented.

· Ruataniwha and Ngaruroro water storage feasibility projects progressed.

· HBRC led initiative to investigate water harvesting opportunities, water metering and water use efficiency through rationing and rostering.

· Water Initiatives Group established within HBRC to focus on water issues. Community water user groups established to ensure community representation and interaction on water issues.

· Programme of Regional Plan changes initiated to meet HBRC obligations associated with NPSs initiated.

· Agreement reached with Twyford water users including environmental enhancement initiative for Raupare Stream. The initiative is coordinated by HBRC on behalf of the community.

Risk Issue 3

The productive capacity of soil

Risk Statement

HBRC is not effectively managing the productive capacity of soil and its potential to impact on water quality in the region’s rivers.

Risk Status

Improving and sustaining the productive capacity of the region’s soils and managing the potential impact of land use activities on the land, on water quality and quantity, are recognised and their ongoing proactive management is provided for in the LTP 2012/22.

Assessment

The Regional Landcare Scheme has been utilised by farmers to retain their soils and enhance their farm environments for over 15 years, however the benefit of this initiative is spread widely across the region.

Erosion of hill country continues throughout the region with major impacts in severe storm events. HBRC proposal to address this issue through its Trees on Farms initiative has however been postponed owning to the low carbon price.

Intensive land use, and particularly dairying, is widely blamed for adversely impacting on water quality in rivers throughout New Zealand. There is evidence of this in parts of Hawke’s Bay through HBRC state of the environment monitoring and reporting. Regional councils have been blamed for failing to effectively manage these impacts.

HBRC is actively working with individual farmers and their industry groups to improve the management of nutrients on the land and reducing their impact on water quality in the region’s rivers.

In addition HBRC has commenced a programme of Regional Plan changes that will deliver a robust approach to reducing the impact of intensive land use

Risk Mitigation

The following has been initiated to reduce this risk:

· HBRC has supported an increased focus on precision agriculture for the arable sector over the past several years.

· The Huatokitoki project, funded by HBRC, Sustainable Farming Fund, Landcorp and Hatuma researched ways to improve farm environmental and economic performance. Projects such as this will continue to be supported where relevant and the science outcomes disseminated.

· Improve the focus of RLS to provide for initiatives to reduce P and N entering waterways – key initial target areas are Taharua catchment and Ruataniwha Plains.

· Taharua and Tukituki Catchment Plan changes are progressing, with the long term plan to undertake further catchment based plan changes.

· The pan-sector primary industry sector group has been established to provide an effective focus group with which to discuss options and approaches for mitigation, and to gain industry support in promoting those approaches.

Change since November 2012

· Two meetings held with pan-sector primary sector group.

· One meeting held with dairy liaison group.

· Work with Taharua and Huatokitoki communities progressing with nutrient balance model being developed for Taharua. Proactive approach continues to be taken on Taharua catchment with positive response from the farming community.

· The mitigation of the impacts of land use intensification continues to be thoroughly researched as part of the RWSS feasibility study. A pilot project to test a mitigation approach was agreed by HBRC in October 2012, and its implementation has commenced.

· HBRC supports, in principle, the Sustainable Dairying: Water Accord and has become a ‘Friend’ of the Dairy Accord.

· Implementation Plan drafted to accompany and assist implementation of proposed Plan Change 6 for the Tukituki Catchment.

Mitigation actions completed in past 3 years

· The Land Management team and its programmes have been refocussed to increase capability of influencing uptake on good practice farming and reducing impact of land use on water quality.

· Strong relationship built with primary sector industry groups and groups of farmers to encourage the use of best practice.

· Identification and prioritisation of sensitive catchments completed and a programme of work established to address catchments in order of priority.

· Regulation is being developed using an adaptive management approach, with standards agreed with community.

· Science input is appropriately targeted to sensitive catchments and risk areas

· The RWSS has been progressed.

· The Regional Landcare scheme is supporting the HBRC approach with significant investment made in Taharua.

· Better alignment of science programme to informing Regional Plan change programme and land management programme to implement Plans.

Risk Issue 4

Co- Governance of Natural Resources

Risk Statement

Effective working relationships are not developed and maintained with Hawke’s Bay Treaty of Waitangi settlement groups.

Risk Status

HBRC continues to develop robust relationships with Māori groups and is working collaboratively towards their increased influence in HBRC decision making. Failure to achieve and maintain an effective working relationship could potentially lead to fragmentation of governance of natural resources locally.

Assessment

Constructive and effective working relationships with Treaty Settlement groups in particular and with Maori in general will enable HBRC to more confidently progress its programmes of work and will in the long term provide opportunities for Hawke’s Bay.

The draft legislation to permanently establish the Regional Planning Committee is about to begin the formal part of its passage through the House. This will provide the ongoing certainty sought by the Treaty claimant for cultural redress through co-governance of natural resources.

Risk Mitigation

The following has been initiated to reduce this risk:

· The Regional Planning Committee has been formally established and is meeting regularly.

· HBRC is proactively involved in negotiations with Treaty claimant groups where this assists in progressing their claims.

· Staff are engaging with a number of hapu groups to improve their understanding of HBRC’s role and work, and to increase their involvement in decision making on environmental enhancement projects and operational activities on the region’s water ways (at this stage focussed on the Heretaunga Plains).

· Staff have been involved in drafting of a protocol for improving integrated local authority planning in Ngāi Tūhoe rohe (this has been initiated, and led, by Bay of Plenty Regional Council staff).

· Strong working relationships are maintained with Ngati Pahauwera and Maungaharuru-Tangitu Inc. who have achieved Treaty settlements or are well advanced in the process.

Change since November 2012

· Development of Deed of Commitment to underpin the long term relationship between HBRC and Treaty Claimant groups.

· Inaugural meeting of the Regional Planning Committee in April 2012.

· RMA and Meeting procedures training sessions held for Treaty claimant representatives on the Committee.

· Regional Planning Committee meetings being held regularly and currently focussing upon a change to the Regional Plan Change and Regional Policy Statement in the area of freshwater management.

· Negotiations with Maungaharuru Tangitu Inc. over Tangoio Soil Conservation Reserve and Tutira progressed.

· HBRC has ‘received’ a hapu management plan from Ngati Hori (titled “Ngati Hori Freshwater Resources Management Plan - Operation Patiki 2009/2012”).

· MTI Treaty of Waitangi negotiations are now well advanced and provide for a fund to be established using money held by HBRC, being proceeds from the Tangoio Soil Conservation Reserve, which may be used for “avoiding remedying or mitigation soil erosion and its effects on the environment and maintaining the physical, chemical and biological qualities of soil in the catchments”. The catchments are the Esk, Arapawanui, Waipatiki and Te Ngarue.

· Tamatea & Heretaunga Taiwhenuas involved in Plan Change and RWSS.

Mitigation actions completed in past 3 years

· Regional Planning Committee established to undertake HBRC’s statutory resource management functions, with equal representation of Councillors & Treaty Claimant representatives.

· HBRC has received central government funding to work on an agreed programme with Ngati Pahauwera around the management of the rivers in their rohe.

· National Policy Statement for Freshwater Management came into effect on 1 July 2011. This requires regional councils to set water quality limits/ timeframe targets and water allocation limits and minimum flows in regional plans. It provides for the involvement of tangata whenua in freshwater planning and management and this will be undertaken primarily, but not solely, through the Regional Planning Committee.

· Negotiations with Maungaharuru Tangitu Inc. have assisted them in meeting their Treaty settlement aspirations.

Risk Issue 5

Investment Portfolio

Risk Statement

HBRC’s investment portfolio is not effectively managed to maximise both long term financial returns and economic development in the Hawke’s Bay Region.

Risk Status

With the establishment of the Hawke’s Bay Regional Investment Company (HBRIC Ltd), this risk has an effective governance and management framework for its mitigation.

Assessment

HBRC holds a portfolio of approx. $265m of investment assets. These include leasehold land in Napier and Wellington, cash reserves, and HBRIC Ltd [which holds the shares in Port of Napier Limited (PONL)]. HBRC’s strategy is to invest in regional scale infrastructure and assets to deliver sustainable regional growth.

HBRC is reliant on income from investments to meet operational costs. There will be a period of several years while HBRC transfers from traditional investments to new investments aligned to its investment strategy of increased investment returns in those areas that will be of direct benefit to growing the Hawke’s Bay GDP.

During this period there needs to be careful management of investment returns and cash flows. The risk to HBRC cash flows arises with the long development phase of large projects such as the RWSS.

The 2012/22 Long Term Plan makes provision for investment into the Ruataniwha and Ngaruroro water storage projects and Rail/Road Hub. It is essential that investment into these initiatives is effectively managed.

Through the LTP consultation process, HBRC sought public feedback on its proposed financial strategy.

There is a risk for HBRC that financial returns on major investments (PONL and RWSS) are now under the governance of HBRIC Ltd.

Risk Mitigation

HBRC has resolved to better utilise the investment portfolio to encourage economic growth in Hawke’s Bay and use the return on these investments as the primary funding sources for new investments.

During 2011/12 HBRC set up an investment company structure including related subsidiaries. This vehicle is being used to improve the diversification of investments and the return on HBRC investments. The Statement of Corporate Intent between HBRIC and HBRC to some extent addresses the cash flow risk to HBRC during the planning and development phase of large projects.

Change since November 2012

· RWSS Feasibility Study – completed and presented to HBRC on 26 September 2012. A further report was made to HBRC on 31 October 2012 where it was resolved to transfer responsibility for the RWSS to HBRIC Ltd.

· HBRC has progressed realising value from the Napier leasehold land portfolio by providing discounts to the lessees of this property.

· The sale of residual cash flows from the Napier leasehold portfolio is to be considered by HBRC at its May 2013 meeting.

· HBRC has resolved to put on hold the first year of the regional afforestation project (i.e., planting for the 2013 winter), and requires a further review prior to agreement on a second year. The decision to defer this project is due to the current low price of carbon.

Mitigation actions completed in past 3 years

· Financial strategy adopted as part of LTP 2012/22 process.

· An Investment Company has been established to support HBRC’s proposed investments in natural infrastructure which will assist with the drive to increase economic development in the region.

· Sell down of Napier investment properties speeded up.

· RWSS prefeasibility and feasibility now completed.

· Ngaruroro water storage prefeasibility completed.

· Regional afforestation project approved in principle as part of LTP 2012/22 process.

· The policy on the evaluation of investment opportunities completed and is being implemented.

Risk Issue 6a

Ruataniwha Water Storage Scheme as a Council investment

Risk Statement

The RWSS does not proceed, or when it does proceed it does not deliver positive economic and environmental benefits to Hawke’s Bay.

Risk Status

Financial risks associated with this project are mitigated through its governance under HBRIC Ltd.

Ongoing risks include;

· Risk of resource consent not being granted, or is granted but with untenable conditions.

· The project is unaffordable resulting in a failure to attract adequate uptake of water

· Investors are not attracted to fund the project.

· A lack of substantial public support for the project.

The project is being assessed for resource consents through the EPA process. This process is considered to be transparent and provide certainty through a clear end date.

If this project does not proceed, HBRC will need to consider either writing off the expenditure incurred on feasibility studies ~~etc. At 31 March 2013 this amount was $5.35 million.~~ or to retain the value on Council’s Balance Sheet .

Assessment

A decision to proceed with applying to the EPA for a resource consent on the RWSS was made by HBRC on 31 October 2012. Whatever the decision there are risks to HBRC.

The rate of uptake of irrigation water, the management of the transfer of existing water take consent holders and management of project infrastructure costs are key risks.

Should the EPA not grant resource consent the ongoing issue of water allocation within the catchment and water quality within the Tukituki River remain issues to be addressed.

The feasibility study has provided significant value through a greater understanding of the importance of water to Hawke’s Bay and strategies to manage potential impact of intensive land use on water quality in the region’s rivers.

Risk Mitigation

· It is proposed that the consent, final design and construction phase be managed and funded through independent governance and organisation, through which HBRC will be involved together with a number of other investors.

· Communication plan to manage dissemination of decisions made regarding future of project, and ensure public feedback is taken into account.

· All potential impacts of the project, (including damming of the Makaroro River and intensification of land use as a result of irrigation) identified and addressed through robustness of the feasibility study work and reports.

· Involvement of HBRIC Ltd independent board members in assessing feasibility and risk management issues.

· Financial advice to assess commercial feasibility in detail has formed part of feasibility study.

· ~~Public comment has been obtained through the Tukituki Choices document.~~

· A promise by HBRC of further public consultation prior to a final decision to commit to construction of the project.

Change since November 2012

· Feasibility study report completed and presented to HBRC on 26 September 2012.

· Tukituki Choices document prepared and public consultation completed.

Mitigation Actions completed in last 3 years

· Prefeasibility study completed.

· Feasibility study initiated and completed.

· Tukituki Catchment Plan change process initiated and being developed concurrently with Storage Project feasibility.

· Public comment has been obtained through the Tukituki Choices document.

Risk Issue 6b

Leasehold Land Portfolio

Risk Statement

HBRC leasehold land portfolio is not aligned to the strategic objective for HBRC investments.

Risk Status

The risk associated with this portfolio is mitigated by the current action to realise the investment from this portfolio and redirect the proceeds to investments providing higher long term returns and to promote regional economic development.

Assessment

· HBRC receives relatively low returns on Napier Leasehold Land investment. There is some restriction on the use of Napier leasehold income through Hawke’s Bay Endowment Land Act.

· Some lessees find it difficult to meet the cost of leases, particularly at the transition from old to new lease periods. This requires HBRC to consider reducing social impacts of leases.

· The leasehold land as an investment does not contribute to economic development of the region.

Risk Mitigation

· HBRC has agreed to divest itself of lease properties both in Wellington and Napier. In order to achieve this HBRC approved a range of discounts available to Lessees of Napier Leasehold property, this action being taken to encourage additional free holding by lessees. These discounts applied to all freeholding leasehold transactions being initiated prior to 30 June 2012.

· Decision by HBRC as part of the Long Term Plan 2012/22 finalisation that the Napier Leasehold land cash flows remaining at 30 June 2012 should be sold by the target date of 31 December 2012.

· The target date for the sell down of Wellington Leasehold properties has been set in the Long Term Plan as 30 June 2013.

Change since November May 2012

· ~~245~~ 296 properties sold during period of discounting up to ~~30 September 2012~~ May 2013 (~~$23m~~ $27.1m realised). 4.7m of discounts provided to lessees over this period

· ~~A further 37 properties ($3.8M) to be accepted and processed under the discounting offer.~~

· After all processed under discounting offer, 440 properties left in the portfolio.

· 2012/22 Long Term Plan adopted by HBRC.

· Sell down of residual cash flows of Napier leasehold land is now timed for 30 June 2013.

Mitigation actions completed in last 3 years

· Sell down of Napier leasehold properties speeded up.

Risk Issue 6c

Regional Forestry Investments

Risk Statement

The lack of resilience in pastoral farms on steep erodible hill country has a potential negative long term impact the Hawke’s Bay economy.

Risk Status

The significant reduction in the carbon price over the past 18 months has adversely impacted on the forecast returns from this investment. A decision to delay the commencement of the Regional Afforestation project limits HBRC’s potential exposure to this.

Assessment

Approximately 150,000ha of steep erodible land is currently under pasture. This land is likely to be of low productivity and poses a risk to more productive lands and waterways during heavy rain events because of the likelihood of erosion. The economic health of the primary productive sector is important for the economic health of Hawke’s Bay.

HBRC wish to increase their influence in encouraging sustainable land management in Hawke’s Bay. Forestry, if integrated into pastoral farming systems, can reduce erosion of the steepest land and provide opportunities for farmers to focus on their more productive land, thereby improving resilience and sustainability.

HBRC approved in-principle as part of their LTP 2012/22 a long term project for the afforestation of steep erodible hill country integrated into farming systems. However due to low carbon price the commencement of this project has been delayed. No planting in the 2013 or 2014 winters is now anticipated.

Risk Mitigation

While the project is targeted at improving the resilience of the primary productive sector in Hawke’s Bay, this is being funded through HBRC investment portfolio. HBRC requires a return on investment for the money invested in the project. The management of financial risks forms part of the overall strategy.

Change since November 2012

· Project now on hold as a result of low carbon prices. Other funding possibilities now being investigated. A block of high WMF Manuka is being planted at Tutira Country Park to determine its feasibility as an alternative approach to grazing.

Mitigation actions completed in last 3 years

· Project concept developed and included in LTP 2012/22. Submissions on proposal generally supportive of initiative.

· Land purchased and forests planted on a number of blocks throughout the region.

· Manuka trial initiated at Tutira Country Park.

Risk Issue 7

Natural Hazards

Risk Statement

A major natural hazard event will have a significant impact on the Hawke’s Bay region and HBRC activities

Risk Status

HBRC is limited in its ability to influence an improvement in resilience of the Hawke’s Bay community to natural hazards. Land use planning decisions are made by the region’s territorial local authorities. HBRC staff continue to work at a national level to seek ways to encourage better interpretation of hazard information and risk mitigation approaches through holistic planning.

Assessment

HBRC is the administering authority for Hawke’s Bay CDEM Group, HBRC are proactive in seeking to improve resourcing of CDEM in HB.

The Hawke’s Bay region is at risk from flooding, earthquake, tsunami, coastal erosion and inundation and volcanic ash fall. The Heretaunga and Ruataniwha Plains are protected from flooding from the major rivers running through them by stopbanks with a 1% annual exceedance probability (100year return period) design standard.

HBRC has an ongoing programme of hazard identification research with new information communicated to the region’s territorial local authorities and emergency response organisations.

Major events, severe flooding and earthquake have impacted on the region in the past and will again in the future.

Resource Management reform proposals released in early 2013 are likely to be introduced in a Bill (release circa late 2013) amending the Resource Management Act. The proposal is likely to elevate, and make more explicit, the need for local authorities to consider the risks associated with natural hazards.

Risk Mitigation

The following has been initiated to mitigate this risk:

· HBRC maintains an incident response structure and procedures which activates with the threat from any significant natural hazard event.

· HB Group CDEM team resource has been increased and now includes a dedicated group controller.

· The HB CDEM Group Plan is currently being reviewed with the work overseen by the Coordinating Executive Group and CDEM Joint Committee.

· Joint Regional Land Use Planning and Natural Hazard Strategy completed, along with a programme to implement the Strategy.

· Insurance to assist in meeting repair costs of infrastructure assets is in place.

Change since November 2012

· Implementation Programme completed to outline projects and priorities to implement the Joint Land Use Planning and Natural Hazard Strategy.

· Change the Regional Policy Statement proposed in the Long Term Plan 2012-22 to improve policy direction on managing the effects of natural hazards on land use.

· The CDEM Group Plan is currently under review.

· A review of HBRC arrangements for insurance of its infrastructure assets is underway.

· Development of a regional GIS Portal as a tool for addressing improved management of Hazard Information endorsed by HB CDEM Coordinating Executive Group.

· HBRC staff involved in a proposal to develop a Natural Hazards Strategy for Local Government in conjunction with Local Government NZ, the Regional Chief Executive forum, and the Natural Hazards Research Platform. This proposal has now been endorsed by the National Council of Local Government and EQC.

Mitigation actions completed in past 3 years

· Ongoing natural hazards and coastal hazard research and is recognised nationally as proactive in these areas.

· HBRC staff are involved in a number of national and local initiatives associated with natural hazards readiness, reduction and response planning.

· Staff facilitates regular meetings with the HB planning group (including TLA and RC planners) to ensure common and thorough understanding of hazards and a common approach for risk reduction through planning mechanisms.

· HBRC has a business Continuance Plan setting out how it will continue to do its business if staff are unable to access the office. The plan is regularly updated.

· HBRC has consulted on proposal to increase the level of protection provided by the Heretaunga Plains Scheme – Rivers to the Heretaunga Plains from the current 1% Annual Exceedance probability (AEP) standard to a 0.2% AEP standard, and committed in its LTP to that project commencing in 2015/16.

Risk Issue 8

Regional Council functions

Risk Statement

Local government reform results in significantly reduced commitment to Regional Council functions.

Risk Status

There is potential for reform of local government in Hawke’s Bay.

The value to the region of an organisation such as HBRC focussing on long term sustainable management of the region’s resources is not well understood by the public. The risk of the loss of this focus and commitment through local government amalgamation is real.

Assessment

Local government reform is currently being considered by the Local Government Commission.

The current focus of HBRC is on

· Natural resource knowledge and management

· Natural hazard assessment and management

· Regional strategic planning

· Regional scale infrastructure and services

This focus may not be as strong under a structure which may result from possible reforms in HB.

Some LG reform could be beneficial to achieving some outcomes in a more collaborative way.

Risk Mitigation

HBRC will continue to advocate for a focus to remain on functions currently undertaken by regional councils and particularly HBRC.

HBRC will continue to advocate that any local government reform should not impact on RWSS.

Change since November 2012

· Council Chair and Chief Executive continue to be active in working with Central Government agencies and politicians to communicate the regional council value proposition in national resource management and economic development, including environmental, cultural, economic and social aspects.

· HBRC continues to maintain very good profile – Government Ministers, Local central government politicians, Government Department CEs, (MPI, MfE, and DoC etc.) The relevance of regional councils continues to be demonstrated and promoted. There is now a much greater awareness of the value of regional councils by central government.

· HBRC has lodged an alternative proposal to local government reform in Hawke’s Bay by the required deadline of 3 May 2013. This alternative is in response to the Local Government Commission’s request for alternative proposals in accordance with their legislative requirements following their receipt of the ‘Better Hawke’s Bay’ proposal.

Mitigation actions completed in past 3 years

· Regional Planning Committee with equal representation of Treaty Claimant Groups reinforcing the resource management role of HBRC has been established and has a regular forward meeting timetable.

· The option of joining a shared services company with the region’s territorial authorities was consulted upon through the Draft 2012/22 Long-Term Plan. Recommendations from this were presented to HBRC in September 2012.

· Submission made to the Local Government and Environment Select Committee on the proposed local government law reforms (Phase 1).

· A shared hazard information web-based portal as endorsed by CDEM Joint Committee has been developed and has the potential for future content covering other local government activities.

· Submission made on “Better Local Government” discussion document.

· Stage 1 of Prosperity Study completed noting that any consideration of local government reform must avoid undermining or compromising the delivery of the RWSS.

· Substantial improvement across regional council sector in collaboration and coordination.

· Establishment of “Nature Central” with central government and other regional councils focussing on the sharing of services and expertise in the areas of natural resource management, community engagement, open spaces and biosecurity.

Risk Issue 9

HBRC planning framework and its flexibility to adapt to new technology

Risk Statement

The impacts of new technologies with the potential to be used in Hawke’s Bay are unable to be effectively managed as they were not foreseen in the development of Regional Plans and/or policies.

Risk Status

New technologies will continue to be developed that challenge established resource management approaches.

Uncertainty around allocation of responsibilities for regulatory management

HBRC Plans may not be sufficiently flexible to enable effective response to environmental, economic, social and cultural risks arising from new technologies

Assessment

The effective management of new technologies may not be effectively covered by Regional Plans. These include hydraulic fracturing and genetically modified organisms

· A report is being prepared by the Parliamentary Commissioner for the Environment on hydraulic fracturing.

· Potential environmental risks from hydraulic fracturing have been investigated through:

o Working closely with other regional councils.

o Investigating approaches taken to regulate the activity internationally.

· Potential environmental and economic risks from genetically modified organisms are addressed under Environmental Risk Management Agency legislation. The potential advantage to the Hawke’s Bay economy of remaining GE free was raised in submissions on HBRC draft LTP 2012/22.

Risk Mitigation Approach

· Maintain an awareness and watching brief on new technologies that could be used in Hawke’s Bay, including out to the 12 nautical mile limit offshore which is within the HBRC area of jurisdiction.

· Support central government’s proposals for legislative amendments that:

o further simplify and streamline preparation and amendments of regional plans and policy statements under the RMA.

o consolidate regulatory intervention via national planning instruments (such as Regulations and/or National Environmental Standards) for effects of activities (including emerging activities) where appropriate

Change since November 2012

There has been no change since November 2012

Mitigation actions completed in past 3 years

· Reference to both of these risks has been included in HBRC LTP 2012/22.

· The outcome of a report being prepared by the Parliamentary Commissioner for the Environment on hydraulic fracturing is awaited before HBRC considers what action if any should be taken.

· HBRC joined with Hastings District Council to host a public forum in October 2012 covering a proposition that Hawke's Bay be ‘GE Free’.

Risk Issue 10

Operational Risks

Risk statement

Financial, health and safety, contractual, and other operational risks are not effectively managed and controlled.

Risk Status

Operational risks are managed through established protocols, procedures and processes. These must be reviewed, and where appropriate improved, to ensure operational risks continue to be effectively mitigated.

Assessment

HBRC is exposed to numerous financial, health and safety, contractual and other operational risks associated with the delivery of its functions.

Risk Mitigation Approach

HBRC has numerous controls and systems for management of operational risks. These include:

· Established corporate structure with clear responsibilities, established levels of expertise and experience, and performance expectations, including for emergency response situations.

· Financial – levels of financial delegation, regular and transparent financial management reporting, and annual audits.

· Health and Safety – Codes of practice for activities commonly undertaken by staff, the provision and use of appropriate personal safety gear, an active Health and safety committee.

· Adequate budget provision to enable an appropriate expertise, review and peer review for projects and activities.

Change since November 2012

· Appropriate personnel appointed to positions where existing staff have left.

Mitigation actions completed in past 3 years

· Tertiary level of WSMP maintained throughout last 3 years.

· 2012/22 LTP completed, consulted on and audited

· 2011/12 Annual report completed and audited and reported to HBRC.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 29 May 2013

SUBJECT: Work Plan Looking Forward through June 2013

Reason for Report

1. This report is provided in order to update Councillors about significant work activities under way over the next month in each area of Council.

Group		Area of Activity	Activity Status Update
Asset Management		Biosecurity	- Finish PCA initial control - Finish annual urban pest work programmed for 2012/13 - Continue to progress Hort/Pip fruit sector biosecurity initiative - Progress S70 analysis for initial cut of RPMP - Review and present to Council 2013/14 operational plans - Commence Cape Sanctuary 900ha rabbit control operation subsidised from HBRC rabbit reserve.
		Land Management	- Complete RLS review - Wrap up end of year RLS projects - Plant 40ha high UMF manuka on Tutira Country Park land and prepare for a further 40ha of planting later in winter. - Plant remaining 50ha of unplanted land on Waihapua. - Review and present to Council 2013/14 operational plan - Continue preparation to assist in LM non regulatory interventions for the Tukituki in line with the plan change - Commence review of TSCR Management Plan
		Engineering/operations	- Continue with reviewing and updating asset management plans. This work is expected to be ongoing for the next 12 to 15 months. - Progress review of infrastructure insurance arrangements including process for establishing Scheme flood loss curves - Develop asset management plans for pathways and regional park areas. - Progress river bed gravel transport modeling, and sediment movement in Karamu and Clive rivers. - Prepare maintenance contracts for 2013/14 year. - Complete ecological management plan for Tutaekuri River and progress same for Tukituki River. - Undertake consultancy work for GDC and HDC. - Subject to Council decision – initiate final design work for Makara Dam. - Continue discussions with Ohuia Scheme ratepayers regarding future of the Scheme and an appropriate level of rating to sustain the Scheme.
Asset Management		Collaboration with Department of Conservation, Greater Wellington & Horizons	- Progress initiative with specific emphasis on potential coordination of Regional Pest Management reviews, and development of broad vision for Ruahine Range including Horizons SLUI initiative, and HBRC RWSS and Upper Tukituki Plan change objectives.
		159 Dalton Street	- Remedial work ongoing.
Resource Management	Appeals / Declarations		Mexted & Williams Environment Court hearing still pending. HBRC looking to facilitate a further caucus of coastal hazard experts to see if issues can be resolved.

			NCC Whakarire Avenue Coastal Protection Structure The Environment Court determination on the activity status has been made. They found in support of HBRC that the Whakariri Avenue coastal protection concept (as proposed) is a non-complying activity.
	Large Consent processes/applications		Poukawa Discussions ongoing with applicants and stakeholders. Limited notification pending.
			Tukituki and Karamu surface water takes Common expiry date for these catchments of 31 May 2013. Notification pending.
	Surface Water Quantity		A very busy low flow monitoring season drawing to a close. Hydrological inputs for the TANK plan change are being assembled. NEMS documents drafted and due for presentation and signoff at an RMG group meeting in June. An informal site review for hydrometric monitoring stations is underway, identifying the FTE’s required to run our sites to a NEMS quality standard level. RWSS modelling project management is now tailing off, with all documents now submitted to the EPA. Finalisation of the RWSS consent application completeness check for the EPA The next phase will be the organisation of expert witnesses and preparation of evidence. Scoping and contracting the auditing and development of key monitoring sites for the TANK plan change. Finalizing Promapp procedures for Hydrological monitoring and addressing corrective actions for the Science ISO QA systems. The submission period for the plan change has invoked a flurry of data requests.
Resource Management	Surface Water Quality and Ecology		Sample analysis of nutrient limitation of algal growth in the Ngaruroro/Tutaekuri Rivers underway – to provide critical inputs to the TANK plan change Scoping of a monitoring program to support development of comprehensive lake model on Lake Tutira progressing. Two surveys of downstream impacts of outflows of the Taharua River on the Mohaka completed. Ongoing support from key members in the team to HB Biodiversity Strategy development. Investigations of suitable data base for housing RMG environmental data underway.
	Groundwater		Preparing evidence for plan change and RWSS. Ongoing technical investigations for Heretaunga groundwater investigations to support the TANK process. Ongoing technical investigations to support Taharua/Mohaka plan change. Collaboration with Bay of Plenty staff underway and synergies with investigations identified and work program alignment underway. Groundwater annual report preparation underway. Finalising contracts for drilling for monitoring wells and groundwater investigation needed to support plan changes. National SIG is currently developing a regional council groundwater research priority needs assessment to guide national groundwater research priorities to be funded at a national level. A research priority report is to be finalised by June 30. Engagement with NIWA groundwater recharge research programme. NIWA are funding further recharge assessment in the regional as part of national funded waterscape research programme. Appointment Matt Parker to the position of groundwater technician after resignation of Neil Berry. Training is underway.
	Air & Climate		· Monitoring of traffic-related NES air quality contaminants will be undertaken over a two month period during winter. Based on an initial investigation undertaken by NIWA, the sites chosen are in the Hastings CBD on Heretaunga St West and the Hyderabad Rd/Taradale Rd corner in Napier. · A project on PM₁₀ offset modelling is due to be completed by the end of June. · Ongoing support (climate information) is being provided for drought assessment.
Resource Management	Land Science		Ongoing regional soil mapping (S Map). Currently mapping south eastern coastal strip. Characterisation of wetlands in the Heretaunga catchments has begun. Aerial investigation of Ngaruroro, Tutaekuri, Ahuriri and Karamu completed. Wetland mapping based on the aerial surveys underway. Ongoing characterisation of biodiversity in the Ngaruroro catchment. Report expected in June.
			Planning for upcoming work in the TANK process. Providing assistance with Envirolink tool ($200,000) to link Smap with land models e.g. overseer. Supporting work for Taharua/Mohaka plan change ongoing. Catchment investigations around Tutira (P sources and land use) and Wairoa (sediment monitoring) on-going. Annual report preparation.
	Biodiversity Strategy		Core working group meetings continue. Further stakeholder meetings to develop strategy detail now over arching objectives have been clarified. Technical discussion group to be formed to advance the inventory development. Biodiversity accord and associated forum detail in development.
	Quality Management System (QMS)		Following successful May audit, ongoing programme of consolidation of processes is being worked on to ensure that our Quality Management System is as effective and efficient as possible. Ongoing internal audits, management team review meetings and process improvements to ensure we maintain ISO9001:2008 certification.
Strategic Development	RPS Change to incorporate elements of Land and Water Management Strategy (Change 5)		Schedule 1 RMA process. Recommendations from Hearing Panel (Commissioners Maaka, Mohi and Nugent) are to be presented to Council meeting on 29 May 2013.
	Plan Change for freshwater management in Tukituki River catchment (Change 6)		Schedule 1 RMA process. Change 6 publicly notified on 4 May 2013. Submission deadline is 31 May. Request has been made to Minister for the Environment to call-in Change 6.
Strategic Development	Plan Change for freshwater management in Greater Heretaunga / Ahuriri catchment area		Ongoing. Six (of seven planned) collaborative stakeholder meetings of the TANK Group held to date (plus a field trip). Developing recommendations for Council for Plan Change. With proposed rescheduling of Plan Change notification date (to December 2016 as in Draft Annual Plan), more meetings will be necessary. This is currently being discussed with the TANK group. Aiming for summary document of key TANK group findings and agreements by September. Supporting science needs and priorities being programmed relative to science team’s other commitments. Update report to be presented to Regional Planning Committee meeting in June 2013.
	RPS Change to incorporate HPUDS and wider infrastructure matters (RPS Change 4)		Schedule 1 RMA process. Decisions issued on 28 March. Appeal period closed mid May. One appeal was lodged by TransPower NZ Ltd. Staff will liaise with the Chairman of Change 5’s Hearings Panel for position to be taken regarding negotiations on TransPower’s appeal.
	Taharua Strategy and Mohaka plan change.		Update report to be presented to Regional Planning Committee meeting in June 2013. Negotiations between major landowners about N mitigation options and responsibilities continuing. Supporting science needs and priorities being programmed relative to science team’s other commitments (esp. Tukituki-related projects).
	Proposed Regional Coastal Environment Plan plus Change 1 to RRMP		Coastal marine area-related content referred to Minister of Conservation for approval. Following that approval, a date will be nominated by the Strategic Development Group Manager and RCEP, plus its Variations 1-3 will become operative.
	Heretaunga Plains Urban Development Strategy (HPUDS)		Ongoing implementation as it relates to other actions where HBRC is a lead agency or a partner agency via HPUDS Working Group.
	Bus Services		Submissions to the new Public Transport Operating Model (PTOM) have been called for. Staff will provide feedback on this proposed new way of operating public transport.
	Tech NZ R&D funding as part of the Regional Business Partner partnership with HB Chamber of Commerce		From 1 July to 31 March 2013, MSI Regional Partner has brought in $2,453,530.64 grant funding into Hawke’s Bay working with 41 businesses.
	Strategic Farming Initiative		The Pan Sector Group is actively involved in the Plan Change and RWS project. For the Plan Change they were involved with shaping the Plan and associated land use conditions and are likely to submit in the consultation process. For RWS they are involved with uptake and extension work around best practise.
Strategic Development	Massey Strategic Relationship		The Massey Business Development Manager, John Bell, started on 4 February. He has come up to speed very quickly and pursuing opportunities between Massey and Hawke’s Bay. There is work on a collaborative initiative between Massey and EIT in support of labour market requirements to support more intensive farming systems as a result of RWS.
Corporate Services	Draft Annual Plan 2013/14.		58 submissions have been received to the draft Annual Plan 2013/14. Consideration of both the external submissions and the staff internal submission will be held 10/11 June 2013.
	Council paper covering proposed sell down of leasehold property in Wellington.		Council meeting – 26 June 2013.
External Relations	Liaison with Treaty claimant representatives on Regional Planning Committee		Draft legislation being finalised with deadline for introduction to the House on 5 June
Operations/ Water Initiatives	Ruataniwha Water Storage		This project pushes on in earnest with two significant milestones reached in May. The first was lodgement of the final consent documents with the EPA on 6 May. This included 34 documents and a range of consent applications. The focus over the next 2 months will be on evidence preparation and supporting the EPA with pre hearing preparation and negotiations. The second was the provision of Request for Proposal detail to the 2 shortlisted consortia. This included substantial information on the project overview, conditions of contract, principal requirements and a wide range of supporting information. The focus of the 2 consortia over the next 15 weeks will be refining the feasibility level of design from Tonkin &Taylor . This includes considering all optimisation potential, reconsidering “whole of life” elements of the project and confirming a “fixed price, fixed time” offer for the project as part of their RFP submission in early August. The project team will be involved in weekly interactive sessions with the consortia as this refinement process proceeds.
Operations/ Water Initiatives	Hawke’s Bay Trails		The Hawkes Bay Trails project is currently undertaking its completeness review by NZCT. Most major works have now been completed with outstanding works being; 1. Blackbridge handrail. 2. Craggy Range road section (HDC) 3. Remaining Taipo Stream section (NCC) 4. Minor signage, furniture and planting. As part of the final project review formality is needed around Safety plans, Operations and maintenance plans and marketing plans which are all currently in hand. A draft report will be presented to the RTC committee in May, with a final report presented to Council in August.
	Works Group		New Business Development Manager appointed (Paul Atkins) to manage Group, following Brendon Walkers recent resignation.
CE’s Office	Ruataniwha Water Storage		Liaison with EPA on call in procedure and awaiting decision
	Constitution conversation		Panel member looking at development of NZ Constitution to attend and present at Regional Planning Committee meeting on 5 June

Decision Making Process

2. Council is required to make a 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 that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendation

1. That Council receives the Work Plan Looking Forward through June 2013 report.

Mike Adye

Group Manager

Asset Management

Helen Codlin

Group Manager

Strategic Development

Paul Drury

Group Manager

Corporate Services

Graeme Hansen

Group Manager

Water Initiatives

Iain Maxwell

Group Manager

Resource Management

Liz Lambert

General Manager (Operations)

Attachment/s

There are no attachments for this report.

[1] The Resource Management Act 1991 requires Council to issue decisions on submissions within 2 years of the notification date.

1	Change 5 Signed Record of Hearing	Under Separate Cover
2	Change 5 Commissioners' Decision Report	Under Separate Cover
3	Change 5 Commissioners' Decision Report Appendix A: Decision on Procedural Issue	Under Separate Cover
4	Change 5 Commissioners' Decision Report Appendix B: Detailed list of submissions and recommendations on each	Under Separate Cover
5	Change 5 Commissioners' Decision Report Appendix C1: Change 5 as recommended - with Tracked Changes	Under Separate Cover
6	Change 5 Commissioners' Decision Report Appendix C2: Change 5 as recommended - Clean Copy	Under Separate Cover

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Sale of Leasehold Land Cashflows	7(2)(i) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to enable the local authority holding the information to carry out, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

Table of Contents	page
1. Welcome	1
2. Subject of Hearing	1
3. Relevant Legislation	1
4. Notification and Submissions Received	1
5. Procedural Matters	2
6. Background	2
7. Officers Report	4
8. Submitters’ Evidence	4
9. Officer’s Right of Reply	5
10. Principle Issues in Contention	7
11. Main Findings on the Principle Issues in Contention	11
12. Conclusion	17
13. Recommendations	18
14. Reason for Decision	19