Agenda of Regional Council Meeting

Follow-ups from Previous Regional Council Meetings

Attachment 1

Follow-ups from previous Regional Council Meetings

Meeting Held 28 November 2013

	Agenda Item	Action	Responsible	Due Date	Status Comment
1	Follow-ups from previous meetings	LGOIMA statistics – how many requests for costs, and is this a barrier to requests	L Hooper		Email sent to Councillors 2/12/13 and appended
2	Follow-ups from previous meetings	Request Council receives a full briefing on the state of RWS and how project is progressing before the end of the year. Suggest the region’s mayors be invited to such a briefing.	E Lambert		Region’s mayors invited to attend 18 December Regional Council meeting in order to hear the latest HBRIC Ltd / RWSS update on the status and progress of the RWSS
3	Proposed 2014 Schedule of meetings	Add a strategy workshop in some time in March Add field trips to Wairoa, CHB, Taranaki & Horizons Add LTP strategy workshop in September RWSS special consultative process dates to be added when confirmed	E Lambert / L Hooper		Updated schedule to be distributed to Councillors as additional dates confirmed.
4	Annual Plan Progress Report	Amendments to financial reporting to Council	P Drury	Feb14	Paper to 18 December RC meeting to seek agreement to proposed amendments to take effect for February 2014 (7 mos end 31/1/14) next progress report
5	Annual Plan Progress Report	Session for new councillors on Council accounts and how they operate	P Drury
6	Annual Plan Progress Report	Briefing on progress of the development of a regional and lower North Island spatial planning framework	H Codlin
7	Annual Plan Progress Report	Investigate – during Annual Plan process – whether the fund set up to help TLA led upgrading of community wastewater systems in unsewered communities can be re-allocated or whether there are potential opportunities where it might actually be used.	H Codlin / E Lambert	April 14
8	Annual Plan Progress Report	For each of the HBRC flood & drainage schemes: Riparian enhancement – how much potential in the Region; how much has been done previously; how much still to go - a map showing completed, underway, potential future work	M Adye	Feb 14	To be included and responded to as part of action list for the next E&S Committee meeting 12 February 2014.
9	Annual Plan Progress Report	Where is the grass forage trial (establish economic impacts of rabbits on pastoral farming) being carried out?	C Leckie		The forage trial was carried out on Opouahi station, (Maungaharuru/Tutira area). The report is being written by Landcare research and is expected to be completed February 2014.
10	Minor Items not on the Agenda	Provide costs associated with building on-farm water storage dams – including engineering, consents, construction etc	I Maxwell		A paper will be developed and brought to the first E&S meeting in 2014.

Reference Follow-up item #1

From: Leeanne Hooper
Sent: Monday, 2 December 2013 4:15 p.m.
To: Alan Dick; Christine Scott; Dave Pipe; Debbie Hewitt; Fenton Wilson; mmohi@doc.govt.nz; Peter Beaven; Rex Graham; Rick Barker; Tom Belford
Subject: LGOIMA information requested

Good afternoon Councillors,

Following is the information requested in relation to LGOIMA requests and those requests assessed for costs (s13) where substantial collation of information is required.

In the period 19 June 2012 through 28 November 2013, HBRC received 140 LGOIMA requests. Of those, 8 involved considerable staff time for the collation of substantial information and were therefore assessed for costs (lowest estimated $200, and highest $27,000). Of the requests for costs – (a deposit to be paid in advance) the results were:

o 4 - no response by deadline advised, therefore information not provided in line with letter, which states:
“Please note that Council will consider the request closed should this payment not be made by the due date and no further correspondence is received.”

o 1 requestor clarified/specified information requested, costs were withdrawn & information provided

o 1 withdrew the request after receiving the cost estimate

o 2 paid the assessed amount and information subsequently provided

As per the HBRC Annual Plan:

Charges for the Provision of Information

The Regional Council (HBRC) shall charge for the provision of any information including the Regional Policy Statement, regional plans and resource consents as follows.

· The first hour of time spent actioning a request for information on each or any occasion relating to the same general matter shall be provided free of charge.

· HBRC reserves its rights under section 13 of the Local Government Official Information and Meetings Act 1987 (LGOIMA) to charge for the provision of information above one hour. HBRC delegates the decision for treating requests made by the same person and in quick succession as one request, to the Chief Executive.

· Staff time spent actioning any request over and above the time provided free of charge shall be charged at the rates set out in Table 6. HBRC may also choose to require payment in advance.

· The first 20 pages of black and white photocopying on standard A4 or A3 paper shall be provided free of charge.

· Where the total number of pages of photocopying is in excess of 20 then the rates set out in Table 6 will apply.

· In alignment with the LGOIMA, HBRC does not consider requests for explanations in its definition of information requests.

Table 6: Charge rates (excl GST) for the purpose of calculating actual costs per hour
Item	Per Hour
Executive	$121.83
Asset Management	$96.27
Environmental Science	$89.75
Strategic Direction	$93.18
Environmental Regulation Resource consent processing Resource consent administration Management input into resource consent processing including attendance at hearings and during deliberations Compliance/impact monitoring of consents and Approving, monitoring & auditing of Tier 1 Marine Oil Spill Contingency Plans, and monitoring of Resource Management Act regulations All other tasks, consent processing All other tasks, compliance monitoring	$118.45 $80.75 $123.85 $104.00 $79.33 $81.90
Environmental Information	$68.46
Land Management	$83.82
Disbursement costs shall be charged at the rates of: Accommodation Public notification Photocopying External laboratory testing Consultant fees	$120 a night per person Actual advertising costs 20c per A4 page B&W 40c per A4 page colour 30c per A3 page B&W 70c per A2 page B&W actual cost actual cost

Regards,

Leeanne Hooper
Governance & Corporate Administration Manager

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 18 December 2013

SUBJECT: Affixing of Common Seal

Reason for Report

1. The Common Seal of the Council has been affixed to the following documents and signed by the Chairman or Deputy Chairman and Chief Executive or a Group Manager.

Seal No.

Date

1.1

Leasehold Land Sales

1.1.1 Lot 581

DP 2497

CT 55/126

- Transfer

1.1.2 Lot 4

DP 7422

CT C4/323

- Agreement for Sale and Purchase

- Transfer

1.1.3 Lot 39

DP 6391

CT E2/1453

- Agreement for Sale and Purchase

1.1.4 Lot 10

DP 4488

CT 56/282

- Agreement for Sale and Purchase

- Transfer

1.1.5 Lot 98

DP 13378

CT F1/568

- Transfer

3739

3741

3747

3742

3744

3745

3746

22 November 2013

28 November 2013

9 December 2013

28 November 2013

6 December 2013

1.2

Deed of Variation

Local Authority Environmental Monitoring Group Production of EMS for freshwater data

3740

25 November 2013

1.3

Change 4 of Regional Resource Management Plan

Adopted at Council meeting 28 November 2013

3743

5 December 2013

Decision Making Process

2. Council is required to make every decision in accordance with the provisions of Sections 77, 78, 80, 81 and 82 of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within these sections of the Act in relation to this item and have concluded the following:

2.1 Sections 97 and 88 of the Act do not apply;

2.2 Council can exercise its discretion under Section 79(1)(a) and 82(3) of the Act and make a decision on this issue without conferring directly with the community or others due to the nature and significance of the issue to be considered and decided;

2.3 That the decision to apply the Common Seal reflects previous policy or other decisions of Council which (where applicable) will have been subject to the Act’s required decision making process.

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.

2. Confirms the action to affix the Common Seal.

Diane Wisely

Executive Assistant

Liz Lambert

General Manager (Operations)

Attachment/s

There are no attachments for this report.

HBRIC Ltd and RWSS Monthly Update Report

Attachment 1

HAWKE’S BAY REGIONAL INVESTMENT COMPANY LTD (HBRIC Ltd)

Report to Hawke’s Bay Regional Council

18 December 2013

Summary

This report covers developments over the October - November 2013 period for the following:

· HBRIC Ltd

· RWSS Execution

HBRIC Ltd

Key operational activities undertaken by the HBRIC Ltd Board in October - November 2013 included:

· Appointment of one non-executive Director to the Board of Napier Port as approved by Council.

RWSS Execution

Critical Deadlines

It is important to note that the following deadlines are critical from this point onwards.

Investment Recommendation to HBRC

Ÿ Subject to draft consent conditions, finalisation of Design & Construction (D&C) terms, consolidation of the financial base case, and investor positions, HBRIC Ltd is considering tabling the business case and with appropriate recommendations to HBRC by late February 2014.

EPA and consenting

Ÿ The Tukituki proposal is well advanced with the likelihood that there will be some hearing days early in the New Year. Draft consent conditions could potentially be available mid/late February 2014 with final consent conditions expected 6 April 2014.

Design & Construction

Ÿ Finalisation of contractual costs and terms finalised by 14 February 2014. Contract end of March 2014.

Water uptake

Ÿ Farmer Investment Memorandum targeted release in late January 2014.

Ÿ Water contract and refined price by late January 2014 – this will depend on material progress with Crown Irrigation Investments Ltd (CII) and D&C negotiations.

Financing

Ÿ Formation of the investor consortium – next Investor Representative Committee meeting was scheduled for 12 December 2013.

Ÿ CII terms sheet to be developed in January 2014.

Ÿ Draft Concession Deed terms sheet developed. Depending on the timing of other critical deadlines this could be available to Council in late January 2014.

Ÿ Limited partnership formation - post D&C Decision and depending on Crown position – possibly March 2014.

Design and Construction

Overview

Ÿ Submissions from the 2 shortlisted D&C consortia, Bouygues and OHL-Hawkins were received on 19th August 2013. Since that time a formal evaluation process was undertaken culminating in the production of a D&C RFP Evaluation Report which provided a recommendation for HBRIC Ltd and Investor Representative Committee approval.

Ÿ The D&C RFP Evaluation report and process was described and presented to the Investor Representative Committee on 30th October 2013. Through this process and on recommendation from the Project Evaluation team it was resolved to accept the recommendation to move to a Preferred Respondent position with OHL-Hawkins and a Reserved Respondent position with Bouygues, as part of moving to the next phase of negotiations.

Ÿ Further negotiations are currently being undertaken with OHL-Hawkins on costs and contractual terms which are expected to be confirmed by mid February 2014.

Risks

Risk	Rating	Mitigation
Construction price driving above 22-25c per m3	Medium - high	D&C process – minimising interface risk – cost and price optimisation – costs and revenue
Extra site and geotech issues identify fatal flaw	Medium – trending lower	Additional GNS final seismic completed. Provision in D&C capex build budget for further geotech investigations as part of final design phase.
Landowner objections	Medium, if not proactively managed	Sales and purchase options agreements work strand continuing

Investors

· Investor discussions are making good progress with the Investor Representative Committee now established and all aspects of the project being discussed in this forum.

· Crown negotiations are ongoing with more details to be available in January 2014.

Risks

Risk

Rating

Mitigation

Failure to secure adequate public investment

Medium

Leveraged deal HBRIC Ltd/Crown

Meeting the Crown’s investment criteria

Failure to secure adequate private investment

Medium

Risk increases with less uptake

Iwi and farmer equity and intergenerational equity

Financial model and uptake

Uptake

· There are currently 103 EOI’s signed for a total of 42.5M m3 of water covering 12,900ha of land. A breakdown of these EOI’s by land use will be presented to Council at the meeting.

· Information Memorandum work stream is currently underway with a targeted release at the beginning of 2014.

· Refinement of the water price to be completed once the D&C work assessment has been completed.

Risks

Risk	Rating	Mitigation
Rate of uptake varies from base case	Medium	Education Incentives Sales team
Price escalation	Low	Price tagged to CPI or similar indice adjustment in deed
Water user agreement – take or pay – volumetric charge versus capex charge disincentivises uptake	Medium	Contractual form needs careful pitch towards the end of a sale process Intergenerational equity and option to invest
Distribution and commissioning	Medium	Optimisation with D&C process User groups

EPA Consent application and plan change & related matters

· The EPA Board of Inquiry is into its fifth week. After three weeks of hearings in Hastings it moved to Waipawa Town Hall last Monday (9 Dec) where it will sit for two weeks hearing a range of submitters including Fish & Game, other environmental groups, local farmers, and Irrigation New Zealand.

· HBRC & HBRIC Ltd’s case was presented over the first nine days of the hearing and outlined the RWSS process, Maori consultation, the science behind Plan Change 6 and the TRIM conceptual models of the Tukituki Catchment, developed for RWSS to predict nitrogen and phosphorus concentrations in streams.

· In week three the focus moved to verbal submissions. There was plenty of discussion around the methodology used to determine seasonal allocations and the proposed maximum groundwater allocation. Horticultural interests say their only outstanding matter is the minimum flow increase from 4,300 litres per second to 5,200 litres per second in 2023.

· Further informal expert conferencing continues to discuss outstanding issues in Plan Change 6.

· Environmental groups have raised concerns about the effects of RWSS on water quality through land use intensification, aquatic ecology, terrestrial ecology and recreation.

· The hearing will adjourn for the year on 20 December 2013 and resume on 15 January 2014 at Hawke’s Bay Opera House. It is anticipated the hearing will finish on 20 January 2014.

Risks

Risk	Mitigation
Not obtaining required resource consents	Draft consent conditions and strategic partner support – Iwi, DoC, Pan sector
Nutrient management regime and limits made more stringent through BoI/EPA	Leading science on: Nitrate toxicity and Tukituki in-stream management model Provision of periphyton freshes – flow optimisation
Dam design envelop constrained removing innovation and optimisation
Consent granted is less than 35 years, or other constraints imposed e.g. smaller dam

Communications

· The Communications Activity Plan for HBRIC Ltd is outlined below.

COMMUNICATION ACTIVITY PLAN – November 2013 Update

TO WHOM	WHAT	OWNER	DATE ACTND
Farmers CHB Community General Public Media & Public Business General	November 2013 § Quarterly Farmer Update § Central HB A & P Show – 8-9 Nov (TBC) § Our Place – RWSS story § Media Release – Preferred D & C consortia named § Article in Hawke’s Bay Chamber of Commerce bi-monthly newsletter § Daily summaries from Tukituki Catchment Proposal EPA Board of Inquiry	Helen Andrew/Graeme Helen Helen Helen Helen	Mid-Nov 8-9 Nov Mid-Nov Completed Completed 18-29 Nov

General Public Media & Public Media & Public Media & Public General	December 2013 § RWSS Newsletter Update § Media Release - Concession Deed § Media Release – D&C announcement § Media Release – Confirm water price after D& C announcement § Daily summaries from Tukituki Catchment Proposal EPA Board of Inquiry	Helen	Early Dec TBC TBC TBC 2-20 Dec

General Public General Public General Public Business Leaders General Public General Public General Public	January 2014 – May 2014 § Communications Campaign (TBC) § Library display – rotating to HB libraries § Community forums/Roadshow § Leaders Briefing – Feb 2014 § Article in Hawke’s Bay Chamber of Commerce bi-monthly newsletter § RWSS Newsletter – Feb/March 2014 § RWSS Newsletter – April/May 2014 § Public consultation – April/May 2014	Helen	TBC TBC TBC Feb 2014 Feb 2014 TBC TBC TBC

Financials

Table 1 sets out the November 2013 Financial Report for HBRIC Ltd.

The report sets out the actual costs incurred for both the month and the year to date against the full year budget to 30 June 2014 (operating) and full project budget to April 2014 (capital).

A summary of the key elements outlined in the report for the month of November is as follows:

Operating Income and Expenditure

· There was a total of $39,940 of operating expenditure in the month of November with a breakdown of these costs set out as follows:

- $9,500 for Board Fees for the Chairman and two non-executive Directors.

- $13,016 for Management Services provided by HBRC staff.

- $13,040 for Consultancy Fees which includes taxation services in relation to the preparation of the 2013 income tax return as well as fees for the three independent RWS Board Committee members for the month of November.

- $4,384 for other miscellaneous expenditure.

RWS Phase 2 Costs ($374,676)

· The $31,949 of HBRC internal staff time for November covers a number of work streams including:

- Ongoing landowner liaison meetings with dam, reservoir and Zone M landowners, including headrace canal and pipe landowners within the distribution network.

- Attendance and presentation at the Board of Inquiry hearing.

- Ongoing negotiations with Investor Representative Committee including meeting with Crown Irrigation Company.

- Ongoing project management.

· The $214,172 of Other Consultants costs covers off a number of pieces of work including:

- Completion of D&C evaluation tender process, including D&C evaluation report.

- Commence further evaluation and negotiation with preferred D&C candidate (OHL-Hawkins).

- Water contract and sales advisory costs.

- Completion of updated demand forecast model.

- Various landowner meetings and negotiations for November.

· $128,555 for Commercial Legal & Tax Advisory services for November.

EPA Process Costs ($530,031)

· $10,194 of HBRC internal staff time for November covering project management for the Board of Inquiry hearing and witness evidence preparation.

· The $149,039 of costs for Project Team Consultants for November covers a number of work streams including:

- DOC land exchange consultations.

- Finalising preparation of 42 statements of rebuttal evidence for Board of Inquiry hearing.

- Preparation for and attendances at Board of Inquiry hearing commencing on 18 November 2013.

- Ongoing project management.

· $131,447 of costs for witnesses covering off the finalisation of rebuttal evidence, and preparation for and attendances at Board of Inquiry hearing commencing on 18 November 2013.

· The $239,351 of EPA Expenses relates to the costs incurred by the Environmental Protection Authority for November.

Project Reforecast

· A process is currently being undertaken to identify additional budget requirements for the RWSS through to financial close. The key areas where there additional budget are likely to be required are:

- HBRC internal staff time

- D&C evaluation costs

- Consents

- EPA Expenses

· Once completed this reforecast will be assessed by the Investor Representative Committee, including the Ministry for Primary Industries, with finalisation and approval of this reforecast scheduled for January 2014.

· It is important to note that all development costs incurred by HBRIC Ltd prior to financial close will form part of its total investment quantum in the RWSS.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 18 December 2013

SUBJECT: Ruataniwha Water Storage Scheme Investment - Proposed Evaluation Process

Reason for Report

1. Hawke’s Bay Regional Investment Company Limited (HBRIC Ltd), HBRC’s wholly owned investment company, is developing a proposal to invest up to $80 million in equity as a minority shareholder in a company to be formed to implement and operate the Ruataniwha Water Storage Scheme (RWSS).

2. The size and nature of the proposed investment is likely to have a substantial impact on the structure and performance of the Council’s investment portfolio and potentially on its operating position over a considerable period. Council will therefore conduct its own independent evaluation of the proposal to inform its decision making about any investment.

3. This report outlines the evaluation process in relation to the proposal to invest, for Council to consider in order to prepare a Statement of Proposal for a Special Public Consultative Process and final decision. Also set out are the key issues to be addressed by the proposed independent peer review of the RWSS business case.

Background

4. The new company will be responsible for designing, constructing and operating a dam and reservoir and distribution system to collect and store water from the Makaroro River in Central Hawke’s Bay and supply it to farmers and other stakeholders on the Ruataniwha Plains. It will charge users for its services and is intended to become commercially viable and generate financial returns to its investors over time. At the same time the scheme is expected to boost economic development of the region and add to its regional GDP.

5. Design and construction of the infrastructure, development of the business case for investment in the scheme and establishing funding for it is the responsibility of and is managed by HBRIC Ltd. Council and HBRIC Ltd are jointly seeking the appropriate resource management plan changes and resource consents required to enable the scheme to be implemented, through the Environmental Protection Authority (EPA).

6. HBRIC Ltd has already secured investor interest, and both Ngai Tahu Holdings and Trustpower Limited have joined with HBRIC Ltd to form an investor group in which all three parties are contributing funds towards the costs of design and consenting processes.

7. In addition, Crown Irrigation Investments Limited (CIIL), a state owned enterprise, has formally notified its interest in investing in the scheme and is working with HBRIC Ltd and the investor group to progress its interest to a final decision whether or not to invest and the level of this investment.

8. Financial provision for the proposed investment estimated at $80m has been presented and consulted on in the LTP 2012-2022 and included in HBRC’s Annual Plans for 2012/2013 and 2013/2014. In addition Council is committed to undertaking a Special Public Consultative Process on the proposed investment once its terms have been finalised and all conditions satisfied.

Evaluation Process

9. HBRC assumes HBRIC Ltd’s expert advisers will have resolved all design and construction matters and the Environmental Protection Agency (EPA) Board of Inquiry consent process will resolve environmental and social and cultural matters. HBRC will therefore only be called upon to consider strategic, financial and economic issues and any legislative requirements in making its decision about its own investment in the RWSS.

10. It is expected HBRIC Ltd will initiate the key steps in the evaluation process by submitting a comprehensive proposal to HBRC containing its outline of the development of the appropriate infrastructure, its costs and proposed funding, corporate structure and business case and estimated economic benefits and costs of the project for the Hawke’s Bay region and New Zealand as a whole.

11. The Council’s evaluation of HBRIC Ltd’s proposal is expected to be carried out in five major steps which are:

11.1. Testing the financial feasibility of the scheme by commissioning an independent Peer Review of the RWSS Business Case.

11.2. Evaluating the potential impacts of the investment on Council’s future balance sheet, operating position and rates.

11.3. Identifying, evaluating and comparing options for alternative investment of the funds now held for the RWSS investment as required by the Local Government Act 2002, including assessment of their economic and financial benefits and costs.

11.4. Strategic Evaluation of investment in RWSS or alternatives addressing matters such as fit with Council’s LTP objectives and economic development strategy, equity between ratepayers and risk management.

11.5. Public Consultation on Council’s Provisional Decision using a special consultative process as provided for by the Local Government Act 2002 and final decision by Council following consideration of the evaluation and results of the special consultative process.

Crown Irrigation Investments

12. As noted in paragraph 7 above Crown Irrigation Investments Limited, the Government’s company tasked with implementing government policy to increase irrigated land in New Zealand by co-investing in off-farm irrigation schemes, is considering investment in the new company. It too will follow its own evaluation process to guide its final decision about this proposed investment.

13. HBRC officers met with CIIL’s officers to discuss our respective approaches to evaluating investment in RWSS. This meeting revealed similar views between HBRC and CIIL about requiring an independent peer review of the RWSS business case and a willingness to consider jointly undertaking it with HBRC and sharing costs correspondingly. The Terms of Reference for the independent peer review of the Business Case and the process of selection and appointment of an appropriate consultant is proposed to be jointly agreed and managed by HBRC and CIIL.

14. This plan is subject to further discussions with CIIL as both parties fully determine their requirements for evaluation.

Next Steps

15. On receipt of HBRIC Ltd’s recommendation the assessment proposed to be undertaken by Council includes:

Item	Estimated Time Required
An independent peer review of the RWSS business case	3 – 4 weeks
Assessment of potential impacts of Council’s investment in RWSS on rates, its operating position and balance sheet
Identification and evaluation of alternative options in terms of economic and financial returns for investing Council’s funds – (this study will take place in the first few months of the 2014 calendar year).
Preparation of a summary paper for HBRC covering the HBRIC Ltd proposal and the subsequent advice and evaluation undertaken as outlined in the three points above, and making recommendations about investing in the RWSS.	1 week
Councillors receiving and reading papers.	1 week
Preparation, approval and issue of a Statement of Proposal for the Special Public Consultative Process already announced	1 week
A Special Public Consultative Process period of at least four weeks	4 weeks
Receipt of submissions and staff review and reporting of them	2 weeks
Councillors receiving and reading submissions/staff responses	1 week
Council’s hearing of public submissions	0.3 weeks
Council’s final decision on the proposed investment and summary paper to Council.	1 week

16. HBRC will obtain independent advice on the proposal from consultants who have not been employed by HBRIC Ltd or parties associated with the preparation of its proposal. The timeline assumes the appointed consultants will be able to complete their contracted tasks by the completion dates specified (3 – 4 weeks allowed for this assessment), however these dates may change depending upon the availability of consultants and the issues they may find during the course of their work.

17. In order to make the evaluation process as quick and efficient as possible it is proposed to determine the Terms of Reference for reviews to be done by independent external advisors (as suggested in 11.1-11.3 above) and identify, recruit and appoint appropriate advisers over the December 2013 to February 2014 period so that they are in position to start their work as soon as the HBRIC Ltd final proposal is available.

18. It is proposed to prepare Terms of Reference for the independent peer review of the business case (11.1 above), and agree it with CIIL in December 2013 if the work is to be jointly commissioned.

19. Terms of Reference for the identification and evaluation of alternative investments called for in 11.3 above will also be developed over a similar period. This step is an HBRC only requirement (in accordance with the provisions of the Local Government Act 2002).

20. It is important the key issues addressed by any Terms of Reference are the ones Council wants to consider. We have therefore drafted an initial outline of these in 21.1 through 21.3 below for review and comment by Council. Comments will be fed into the final version of the terms of reference. Also it is the intention for draft terms of reference for the business case as well as the terms of reference covering the evaluation on alternative investments to be distributed at this Council meeting.

Terms of Reference for Peer Review of Business Case – Key Issues

21. The key issues for HBRC in evaluating HBRIC Ltd’s business case are:

21.1. Financial feasibility – is HBRC’s investment supported by a sound business case?

21.2. Returns on investment – what financial returns can HBRC expect from its investment and over what time period are these expected to occur?

21.3. Business Risks – what risks does the company face and how will these be managed or mitigated?

22. These issues are expected to be addressed by the independent peer reviewer by reviewing the business case projections and assessing impacts of changes in a range of market, management and financial variables.

Decision Making Process

23. 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 the following:

23.1. Sections 97 and 98 of the Act do not apply as these relate to decisions that significantly alter the service provision or affect a strategic asset.

23.2. Sections 83 and 84 covering special consultative procedure do not apply.

23.3. The decision does not fall within the definition of HBRC’s policy on significance.

23.4. The persons affected by this decision are those members in the community who want clarity on the issues and timeframe for HBRC’s RWSS review.

23.5. No options have been considered as the requirements of a special consultative process are covered by the Local Government Act 2002.

23.6. Section 80 of the Act covering decisions that are inconsistent with an existing policy or plan does not apply.

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

Recommendations

That Council:

2. Notes this Evaluation Process for the proposed Ruataniwha Water Storage Scheme investment is limited to consideration of strategic, economic and financial issues and that other external processes and HBRIC Ltd’s own implementation process will resolve design, construction, environmental and social and cultural issues to the satisfaction of Council.

3. Notes the proposed joint management of the independent peer review process with Crown Irrigation Investments Limited is in the process of negotiation.

4. Delegates authority to Council’s Chief Executive to undertake the identification, recruitment and appointment of an independent peer reviewer following the procurement process outlined in the timeline and, if possible, to conclude an agreement with Crown Irrigation Investments Limited to jointly conduct the proposed peer review of the HBRIC Ltd business case on terms satisfactory to Council by the end of January 2014.

Paul Drury

Group Manager

Corporate Services

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 18 December 2013

SUBJECT: HBRIC Ltd Board of Directors Membership and Constitution

Reason for Report

1. The following recommendations were made by the Corporate and Strategic Committee to Council.

Recommendations

The Corporate and Strategic Committee recommends that Council:

2. Confirms that it has considered the potential solutions for the perceived conflict of interest, and resolves to appoint Danelle Dinsdale and David Faulkner as Directors to replace the three Councillor Directors on the Transition Board of Hawke’s Bay Regional Investment Company Limited for the period to 30 June 2014, noting that the number of Directors will be reduced from seven to six.

3. Agrees that Clauses 8.1 and 8.3(a) of the Constitution be amended to:

“8.1 Minimum and maximum numbers: The minimum number of Directors shall be three (3) and the maximum number of Directors shall be seven (7).

8.3 Appointment of Directors and Chairperson:

a. HBRC shall appoint at least three (3) and up to seven (7) Directors to the Board of the company (including the right to appoint and remove and nominate alternates) in accordance with HBRC’s Policy concerning Director appointments of existing Council Members (Councillor Directors), and Directors who are independent of the Council (Independent Directors). HBRC shall appoint a Chairperson from amongst the Directors so appointed;”

4. Agrees that Clause 2.4 of Schedule 2 of the Constitution be amended to:

“2.4 Chairperson: In accordance with clause 8.3 of the Constitution, HBRC shall appoint a Chairperson of the Board from amongst the Directors.”

5. Notes that a policy on the appointment and remuneration of Directors is to be developed and presented to the next (12 March 2014) Corporate and Strategic Committee meeting.

2. At the Corporate and Strategic Committee meeting during discussions on Board membership an issue was noted around the timing of the changes to the Constitution of HBRIC Ltd set out in Recommendation 3 and it was also noted that a consequential change of the removal of Councillor Directors to the Transition Board would need to be a change to the quorum provision.

Additional Recommendations and Changes to Constitution

3. The change to Clause 8.1 could take effect immediately upon adoption of the recommendations by Council.

4. The changes to Clause 8.3 could take effect immediately upon the adoption of a policy concerning Director appointments. This would allow for confirmation of the appointment of Ms Dinsdale and Mr Faulkner. Following the Corporate and Strategic Committee, and upon the advice of legal counsel, it is proposed that an Interim Policy be put to Council for consideration and adoption at this meeting, to be in place for a period of 3-4 months until the full Policy is considered by Council in March 2014. The proposed Interim Policy is as follows.

Proposed Interim Director Appointment Policy

Purpose: The purpose of this policy is to set out Council’s intentions for the appointment of directors to the Board of the HBRIC for the period from 18 December 2013 until 30 June 2014.

Appointment of Directors

The Hawke’s Bay Regional Council shall not appoint any of its members (Councillor Directors) to the Board

The Hawke’s Bay Regional Council shall appoint up to seven Directors who are independent of the Council to the Board (Independent Directors)

If the need arises, in addition to those already appointed, directors will be appointed based on merit.

Managing Director Role

5. For the purpose of clarification, the Managing Director will no longer be a formal Board member of HBRIC Ltd but will continue to provide oversight of the execution of HBRIC Ltd strategy and issues related to its activities.

Quorum

6. An amendment is required to Clause 2.2 of Schedule 2 of the Constitution “Proceedings of Board Members” to address the anomaly of the quorum where there are no councillor directors.

7. The recommended amendment is:

7.1. “A quorum for a meeting of the of the Board, other than an adjourned meeting, is a majority of the Directors who are entitled to vote at that meeting to include not less than ~~two (2) Councillor Directors~~ three (3) Directors.”

Conclusion

8. In addition to the recommendations passed by the Corporate and Strategic Committee meeting in respect of HBRIC Ltd Board membership there are two additional recommendations in this paper, these being:

8.1. A Proposed Interim Policy on the Appointment of Directors; and

8.2. An amendment to the meeting quorum provision in the Constitution.

9. These are recommendations 4 and 5 below.

Decision Making Process

10. 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:

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

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

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

10.4. The persons affected by this decision are the members of the HBRIC Ltd Board of Directors.

10.5. Options that have been considered are discussed in the related briefing papers.

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

10.7. 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:

3. Agrees that Clause 8.1 of the HBRIC Ltd Constitution be amended, for immediate effect, to:

“8.1 Minimum and maximum numbers: The minimum number of Directors shall be three (3) and the maximum number of Directors shall be seven (7).”

4. Adopts the interim policy on the appointment and remuneration of Directors as follows.

Hawke’s Bay Regional Council

Interim Policy on Appointment of Directors

[Adopted 18 December 2013]

Purpose

The purpose of this policy is to set out Council’s intentions for the appointment of directors to the Board of the HBRIC for the period from 18 December 2013 until 30 June 2014.

Appointment of Directors

1. The Hawke’s Bay Regional Council shall not appoint any of its members (“Councillor Directors”) to the Board

2. The Hawke’s Bay Regional Council shall appoint up to seven Directors who are independent of the Council to the Board (“Independent Directors” )

3. If the need arises, in addition to those already appointed, directors will be appointed based on merit

5. Notes that the final HBRC Appointment and Remuneration of Directors Policy is under development and will be presented to the 12 March 2014 Corporate and Strategic Committee meeting for consideration, and for adoption at the 26 March 2014 Regional Council meeting.

6. Agrees that Clause 8.3(a) of the HBRIC Ltd Constitution be amended to:

“8.3 Appointment of Directors and Chairperson:”

7. Agrees that Clause 2.4 of Schedule 2 of the HBRIC Ltd Constitution be amended to:

“2.4 Chairperson: In accordance with clause 8.3 of the Constitution, HBRC shall appoint a Chairperson of the Board from amongst the Directors.”

8 Agrees that Clause 2.2 of Schedule 2 of the HBRIC Ltd Constitution be amended to:

“2.2 Quorum: A quorum for a meeting of the Board, other than an adjourned meeting, is a majority of the Directors who are entitled to vote at that meeting to include not less than three (3) Directors.”

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 18 December 2013

SUBJECT: Reformatting of Financial Reporting for Council

Reason for Report

1. At the Council meeting on 28 November 2013 when the financial report for the four months ending 31 October 2013 was discussed, Council requested that consideration be given to a reformat of the financial information provided to Council with an increased emphasis on provision of management information on trends and variations from budget. This report sets out a reformatted financial report for Council’s consideration which, if adopted, will take effect for the next financial report to Council in February 2014.

Objectives of Improved Financial Reporting Content and Format

2. The content of the financial report as covered in this paper has been reformatted to achieve the following objectives:

2.1. More focus on management comment on variances from budget in the operating statement.

2.2. Fewer figures provided and more narrative.

2.3. Management comments more closely aligned to the financial statements being commented on.

2.4. Improved projections of pro-rata for expenditure/revenue to be assessed and to be used in financial reporting:

2.4.1. For 2013/14 continue with the pro-rata budgets being based on equal monthly split.

2.4.2. For 2014/15 pro-rata budgets to be based on management assessment of when expenditure/revenue will occur in each month during the financial year.

2.5. Provision of cashflow information with pro-rata budgeted cashflows and management comment on variations.

Proposed Format of Revised Financial Reporting to Council

3. Section A – Operating Account

3.1. Summary operating statement.

3.2. Management comment on variances from pro-rata budgets.

3.3. Heatsmart report and report on non-recoverable costs covering appeals/ referrals direct to Environment Court.

3.4. Movement on special scheme reserves.

3.5. Management comments on variances from projected scheme closing balances.

3.6. Projected income and expenditure.

4. Section B – Balance Sheet

4.1. Summary balance sheet.

4.2. Consolidated balance sheet.

4.3. Comments on balance sheet movements from the financial year commencement.

4.4. External and internal borrowing.

4.5. Comments on borrowing.

4.6. Reserve funding.

4.7. Financial assets – maturity profile and allocation by institution.

5. Section C – Cashflow

5.1. Cashflow statement.

5.2. Comments on variations from pro-rata budgets.

6. Section D – Capital

6.1. Capital activity summary.

6.2. Comments on variations from pro-rata budgets.

7. A specimen report based on the four months to 31 October 2013 is appended as Attachment 1 for clarification. Please note that the non-financial portion of the 31 October 2013 report has not been included.

Decision Making Process

8. 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:

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

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

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

8.4. The persons affected by this decision are all persons in the community that have an interest in clarity on financial information presented to Council.

8.5. Options that have been considered include the status quo and the proposed format changes.

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

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

Recommendations

That Council:

2. Approves the changes made to the financial reporting format and content to be provided to Council, noting that this revised format will be effective for reporting on the seven months to 31 January 2014 which will be presented to Council on 26 February 2014.

Paul Drury

Group Manager

Corporate Services

Liz Lambert

Chief Executive

Attachment/s

1 View

Reformatting of Financial Reporting for Council

Reformatting of Financial Reporting for Council

Attachment 1

NB: Red text – example information only

Management Comments on Variances from Pro-Rata Budgets
Note Ref	Activity/Revenue	Variation from Pro-Rata $000 (F) or (U)	Management Comment (variances over $50,000)
1	Strategic Planning	$80 (U)	Manager of Strategic Planning to complete the explanation
2	Land Drainage & River Control	$49 (U)	Manager of Land Drainage & River Control to complete the explanation
3	Regional Resources	$612 (F)	Manager of Regional Resources to complete the explanation

Heatsmart Progress Report

1. The following is an update on progress made in the allocation of Clean Heat grants and loans, and loans for insulation as part of the Heatsmart programme.

2. The first four months for the year reflect the last of the winter activity peak.

3. The demand for Clean Heat and insulation support is expected to reduce over the summer months and increase again in the last quarter of the year.

VOLUMES
Loan Type	2013/14	4 Months to 31 October 2013
	Ann Plan	Pro Rata		Actual
	Budget	Budget	Actual	Over Budget
	Volumes	Volumes	Volumes	Target 33%
Insulation Loans	735	245	277	38%
Clean Heat Loans	600	200	220	37%
Clean Heat Grants	660	220	486	74%
TOTAL	1,995	665	983
EXPENDITURE (EXCL GST)
Loan Type	2013/14	4 Months to 31 October 2013
	Ann Plan	Pro Rata		Actual
	Budget	Budget	Actual	Over Budget
	$000	$000	$000	Target 33%
Insulation Loans	1,558	519	611	39%
Clean Heat Loans	1,771	590	672	38%
Clean Heat Grants	402	134	307	76%
TOTAL	3,731	1,244	1,590

Non recoverable costs re appeals and referrals direct to the Environment Court

4. The reason for providing information on the non-recoverable costs of appeal is because in previous financial years HBRC has been exposed to costs (which are not controllable by HBRC) that have substantially exceeded budget. For the 2013/14 financial year external cost of $21,372 have been incurred. This is 40% of the budget provided of $53,000. The following details are provided for information only to clarify the status of ongoing appeals.

5. For the current financial year to date (to 31 October 2013), costs for appeals to the Environment Court have amounted to $23,002. This covers staff time and external costs and includes a write-off of $16,500 settled via an appeal to the Environment Court.

6. There is only one current appeal. This is the appeal of Mahanga E Tu vs HBRC and WDC. This is against decisions granting consent to Mexted, Williams and Malherbe. Issues include the risk of coastal erosion at or adjacent to the site and the mitigation options required depending on the risk. An appeal hearing has been set down for 14 March 2014. Coastal scientists have met and discussed their evidence recently. This caucusing has identified points of agreement and points of difference. Staff evidence is to be finalised. The applicant has now sought a delay of the evidence exchange pending amendments to their proposal.

7. A second appeal has been resolved. This appeal was lodged by Mr J A Bridgeman against the costs of consent LU110254 to erect a coastal protection wall at Haumoana. Mr Bridgeman initially objected to the costs and it was recommended by Commissioner Adrienne Williams that costs be reduced by $9,950.54. This was not accepted by Mr Bridgeman and he appealed this decision to the Environment Court. This was settled by negotiation with an agreed reduction of $16,500. There were no legal or other external costs associated with this appeal. Staff time has amounted to an estimated $500 this financial year, and $1000 in total, to address this matter.

8. The following table summarises costs for appeals that were still ongoing at the start of this financial year. Costs for the 2013/14 year to date are shown in the shaded column. Costs for previous years are also shown to provide a running total for each appeal.

Appeal Summary as at 31 October 2013
Appeal Name	Date of lodgement	Actual Costs of Appeal			Comments
Appeal Name	Date of lodgement	2010/13	2013/14 to date	Total to date	Comments
Mexted, Williams and Malherbe (402051)	10 June 2010	$76,661 ext $94,032	$4,872 ext $6,002	$81,533 ext $100,034	Appeal ongoing - Environment Court now scheduled for 10 March 2014. Expert caucusing has occurred on coastal issues. Further change to the application now proposed.
Bridgeman	24 May 2013	$500	$16,500 ext $17, 000	$16,500 ext $17,500	Appeal against costs. Settled by agreeing to a reduction of $16,500 following a cost objection hearing that recommended
*External costs			$21,372		The sum to date for external legal and consulting advice and write-offs.
Total costs			$23,002		Total includes internal staff time plus external costs.

MANAGEMENT COMMENTS ON SCHEME BALANCES

Scheme revenue for the most part is derived from targeted rates. This revenue is accrued on a monthly basis so therefore revenue for the majority of these schemes is recognised equally for each month.

The majority of expenditure on these schemes is for development works covering flood and drainage schemes and for major Biosecurity programmes and will, for the most part, occur in the summer months of the year.

Accordingly, in the early months of the year, the scheme balances will be more favourable than the forecasted year end scheme balance position.

Exceptions to above principles:

1. Healthy Homes Initiatives Schemes

1.1. Operating

The revenue to fund Healthy Homes operating activities is derived from the targeted rate set in Napier and Hastings airsheds to cover subsidy on loans, payment of grants and the administration for the Heatsmart programme. These rates are accrued on an equal monthly basis. On the other hand expenditure is higher in the winter months than in the summer months. Accordingly the suspense balance at the end of the four months to 31 October 2013 shows a deficit that is higher than the projected position at the end of the year.

1.2. Capital

The scheme reserve at the end of the four months is in deficit, this deficit will be funded from borrowings which will be drawn down in December 2013.

2. Water Initiatives Scheme

Expenditure for water initiatives which relate to the provision of telemetry services show expenditure occurred evenly throughout the year, however revenue from charges to consent holders are charged at the end of the financial year. The suspense will therefore show a higher negative balance in the earlier part of the year than that projected for the year end position.

HB Tourism Quarterly Report for July - December 2013

Attachment 1

Hawke’s Bay Tourism Ltd – Quarter 1 and Quarter 2 Report July - December 2013

Prepared by Annie Dundas, GM Hawke’s Bay Tourism

Overall

Hawke’s Bay Tourism Limited was officially formed in July 2011 and began a three year strategy for implementing visitor growth to the region supported by a three-year funding commitment from the Hawke’s Bay Regional Council as well as privately pledged funds and membership fees. A set of KPI’s were developed and Hawke’s Bay Tourism has completed all KPI’s to date.

Membership is critical to the running of the organisation and a change in our membership structure October 1, 2013 will provide a stronger and more sustainable funding model for the future. It is a tiered structure that allows any tourism operator or business to be part of the wider Hawke’s Bay tourism industry at no cost. For those needing more support and want to be more active they pay higher levels of membership. As at the end of November we have approximately 220 members, the majority being financial members of the organisation. A number of new businesses have come on board with the change in structure.

This report will focus on the July – December 2013 period.

1. Visitor Statistics

In an effort to take a broader industry view of what is happening within Hawke’s Bay we will use the following measures to record visitor arrivals and economic impact.

· Regional Tourism Estimates – reflecting visitor spend. The RTEs provide regional stakeholders with absolute dollar estimates of tourism expenditure at a detailed regional level (i.e. by regional council, territorial authority, visitors’ country of origin and industry). Dollars spent is measured by dollars spent in accommodation, food and beverage services, retail sales, retail sales fuel, other tourism products and other passenger transport.

· International Visitor Survey – international visitor arrivals

· Commercial Accommodation Monitor – hotels, motels, holiday parks and backpackers

· Private Household Monitor – a measure of friends and family staying in Hawke’s Bay

Overall, Hawke’s Bay has seen a gradual increase in both domestic and international visitors staying in the region and in visitor spend since 2008. International visitors have spent $80m in the region since 2008 (year end March 2013) and domestic visitors have spent $480m over the same period. (Source Regional Tourism Estimates) – MBIE.

Arrival results for Hawke’s Bay year end September 2013 combining Commercial Accommodation and Private Household guest nights show a positive result with an estimated 14,400 extra guest nights year on year spent in Hawke’s Bay. Commercial nights rose 3.5% year end September and private stays are up 5% year on year. Length of stay in the region has also risen.

Hawke’s Bay Tourism, 19 Waghorne Street, Ahuriri, Napier. PO Box 12009, Ahuriri, Napier 4144, New Zealand

WEB: www.hawkesbaynz.com TWITTER: www.twitter.com/visitorHB

FACEBOOK: www.facebook.com/hawkesbaynz

Commercial Accommodation and Private Household Monitor - Hawke's Bay

Commercial Accommodation Monitor Hawke’s Bay

Commercial Accommodation Monitor (CAM) year end September 2013 shows Hawke’s Bay guest nights up 3.5% compared to the same period year end September 2012. This equates to just over 32,000 more visitor nights spent in commercial accommodation in the region over this period. Average length of stay increased to 2.16 nights. Commercial accommodation results have been positive in March, April, May, July August and September compared to the previous year.

Private Household Monitor

The Private Household Monitor estimated 45,229 visitors to the Hawke's Bay Region stayed 175,688 nights in private accommodation during September 2013. This was an increase of 11,491 guest nights on the previous September. Visitors stayed 3.9 nights. Note this excludes those who stayed in holiday homes and baches, but includes children aged 15 or under. The major reasons for visiting Hawke's Bay were visiting friends and family (76.3% of total nights stayed), and general holiday or leisure (16.5%) of total nights stayed.

International visitor arrivals into New Zealand saw another positive result for year end September +2.9% compared to the previous period. Australian arrivals were up 2.0%, USA up 6.3% and China +26.5% for the 12 month period. The UK market while improving is still recording -3.8% year on year.

International Visitors to NZ	September 2013		Year end September 2013
Total	191,056	+6.7%	2,670,048	+2.9%
Australia	101,936	+2.2%	1,195,712	+2.0%
China	21,200	+50.9%	236,336	+26.5%
USA	9,152	+5.0%	191,472	+6.3%
UK	7,120	-4.3%	190,880	-3.8%
Commercial Accommodation	September 2013		Year end September 2013
Hawke’s Bay
Total visitors	28,233		441,521
Total guest nights	57,878	+5.3%	959,801	+3.5%
International guest nights	10,969	+13.8%	256,303	+6.3%
Domestic guest nights	46,908	+3.5%	703,498	+2.6%
Average length of stay	2.05	Up from 2.04	2.16	Up from 2.06
Overall occupancy rate	26.6%	Up from 23.9%	32.5%	Up from 31.1%
Occupancy excl Holiday Parks	38.2%		45.1%
Hotels	10,323	+12.8%	153,674	+1.1%
Motels	33,164	+9.5%	487,217	+5.0%
Backpackers	5,339	-14.5%	115,404	-1.9%
Holiday Parks	9,051	-2.6%	203,506	+5.2%
Napier guest nights	35,207	+1% (33,741 in 2012)	535,153	+2%
Hastings guest nights	19,486	+1% (18,595 in 2012)	356,831	+6.6%
Wairoa and Central Hawke’s Bay	3,184	+1.2%(2,633 in 2012)	74,186	+8.2%
Other Regions Total Guest Nights
Coromandel	27,952	+11.2%	717,258	+1%
Bay of Plenty	71,917	+17.8%	1,020,970	+1%
Rotorua	126,866	+6.0%	1,766,563	+5%
Taupo	66,464	-0.1%	963,617	+3%
Gisborne	17,799	+9.9%	319,923	+1%
Wellington	171,297	-10.1%	2,413,600	+5%
Nelson	55,839	+5.4%	1,202,317	0%
Wanaka	42,471	+6.4%	667,452	0%
Queenstown	194,317	+5.4%	2,721,073	+9%
Private Household Monitor	September 2013		Year end September 2013
Total Visitors	45,229	+11.2%	639,871	+3.5%
Total Visitor nights	175,688	+6.5%	2,716,099	+5%

Key Performance Indicators for Hawke’s Bay Tourism

The organisation has been working towards the goals and objectives set out in the Strategic Plan signed off by HBRC in May 2011.

In the first and second quarters of 2013 2014 financial year the following KPI’s have been met;

1. Hawke’s Bay Tourism - the Regional Tourism Organisation is well established and has almost completed two and a half years of operation. The organisation continues to gain traction with sector groups within Hawke’s Bay.

2. Brand – The “Hawke’s Bay” brand is now well established and has been consistently used in all marketing activity. Many Hawke’s Bay entities such as Business Hawke’s Bay, Food Hawke’s Bay, Central Hawke’s Bay, Havelock North Business Association, and Education Hawke’s Bay have adopted the brand for their own representation. The brand will continue to evolve and be amended depending on the channel used. Regional collateral also carries this brand which covers the Hawke’s Bay Visitor Guide, The Art Guide, The Food Trail Map, The Hawke’s Bay Trails Map, The Wine Trail Map and the new Hawke’s Bay Summer Guide.

3. Consumer Marketing -

· Advertising - “Get me to Hawke’s Bay”

“The Get me to Hawke’s Bay” is the tagline used in all campaign activity.

Video/TV content has continued to be the main advertising creative used to promote the region to consumers. Hawke’s Bay Tourism, Napier Tourism Services and Hastings District Council have combined resources to develop a series of new Hawke’s Bay video content for use online and on television. We have created a series of three ads – created in 15 and 30 second formats that we have been using since April 2013. To date over 240,000 views of the TV have ads have occurred. The ads are themed to the family, independent and active boomer markets. Channels used include Youtube, Facebook and TVNZ On Demand as well as important sites such as Stuff.co.nz and nzherald.co.nz.

Hawke’s Bay Tourism’s media schedule through this period has focused on the family market predominantly.

· Search engine marketing also continues

· Public relations - Media and PR visits to Hawke’s Bay

1. Tourism New Zealand IMP Famil x 2

2. Sunday Star Times, NZ

3. Dom Post, NZ (x 2)

4. NZ Herald (Direct, Bite, Weekend)

5. Uberding Germany (blogger)

6. Irish News, 40 000 readers

logo

7. Icon Malaysia 51 000 readers

8. Chicago Tribune, USA 700 000 readers

9. San Antonio News, USA 137 000 daily readers

10. Robb Report + Modern Magazine, USA 84 500 readers

11. Australian Women’s Weekly

12. News International, Australia

13. Nuvo Magazine, Canada 45 000 readers

14. Globe and Mail, Canada 372 000 readers, 1.5 million unique users per month
Dallas Morning News, USA 253 772 daily readers, 4 million unique users per month

15. + F.A.W.C! Press Trip= 8 media (North America, Australia, Singapore, France)

Results

1. Urbis Magazine, NZ, 72 000 copies, 17 page feature

2. Journey Magazine NZ, 2 page cycling feature

3. Panorama Magazine, Indonesia , 7 page feature

4. Food Pornographer, Australia

5. 4000 page views per day, 4300 likes on FB, 4300 followers on Twitter

6. 7 x blog posts and social media posts (so far)

7. Travel Agent Central, USA,

8. 1 x Feature online

9. Kia Ora Magazine, November

10. Luxury Travel Advisor, USA, 12 000 unique users per month (travel agent specific)

11. Avid Golfer, USA 150 000 monthly copies

12. Canadian Living 750 000 unique users per month

13. Berliner, Germany 156 937 readers

Digital Strategy

www.hawkesbaynz.com	December 1st 2011 – November 30th 2012	December 1st 2012 – November30th 2013	+/-
Visits to site	225,551	233,517	+3.53%
Unique Users	157,987	171,775	+8.73%

· Top search terms within google for www.hawkesbaynz.com - hawkes bay (9,142), hawkes bay new Zealand (3,895), napier (2,608), hawkes bay tourism (1,943), napier new Zealand (1,663), hawkes bay wineries (1,004), things to do in hawkes bay (1,001), hawkes bay accommodation (912), hawkes bay nz 851

Research

The quarterly visitor performance monitor has been established to accurately report on all aspects of tourism for Hawke’s Bay, this is communicated to industry quarterly. A research dashboard is also being developed as a monthly tourism snapshot for all stakeholders.

4. Trade Marketing

Explore Central North Island Marketing Alliance

· Explore Central North Island (three touring routes – Thermal Explorer Highway, Pacific Coast Highway and the Volcanic Loop) is made up of eight central North Island regions. Each contributes an annual marketing fee to be represented at Tourism New Zealand run events in our key visitor markets. This is a far more cost effective way for Hawke’s Bay to have presence in international markets. Every two years a trade manual is produced, this year 36 Hawke’s Bay tourism operators advertised in the manual which is distributed to 2000 trade contacts globally.

· Hawke’s Bay was represented at Kiwi Link India in August by the alliance

China

· Hawke’s Bay attended Kiwilink China on behalf of Explore Central North Island (Pacific Coast Highway) – 84 appointments were had over three days

· In addition to visiting China as part of Kiwi Link China, HBT has produced its first China handbook, a fully translated Hawke’s Bay tourism product manual which was distributed at Kiwi Link China.

· Hawke’s Bay via the marketing alliance is part of the “Love North” Campaign in China. This is a North Island promotion in conjunction with Auckland International Airport to promote the North Island to the China market.

Travel Agent & Conference Buyer familiarisations

· Frogs In NZ – 2 agents from French travel agency seeking new Hawke’s Bay tourism product

· Discover The World NZ UK - 2 agents - http://www.discover-the-world-blogs.co.uk

· AIA conference Organiser(Aviation Industry Assn)

· Ice works (Incentive House Xtn) Prevue Magazine – Incentive Magazine USA

· Seven Tourism New Zealand Business Event Managers representing India, China, USA, North America visited Hawke’s Bay to better acquaint themselves with conference and incentive venues.

Conference Activity

Business won in this period –

· New Zealand Hockey AGM –to dovetail The Festival of Hockey in April 2014 – 80 pax/240 nights

· Cruise NZ AGM – Hawke’s Bay will host this event in August 2014 – approx 180 pax/360 nights

· Infection Prevention and Control Conference – 200 pax (2015)

· Bus and Coach Conference – Oct 2015 – 300 pax

5. Events

Regional Events Strategy

The Regional Events Strategy is the foundation for Hawke’s Bay Tourism’s approach to events. The key objective is to increase visitor nights in the region, particularly in the off-season.

Event Activity in this period

· Phoenix Football to Hawke’s Bay – HBT heavily involved with the build up and organization of this event with Sport Hawke’s Bay

· HBT completed the bid document alongside HBRU to host the All Black Vs Argentina test match in September 2014.

· HBT worked alongside the Art Deco Trust to secure funding from Major Events totaling $530k in order to grow the international profile of Tremains Art Deco Weekend.

· HBT worked alongside organizers to assist with accommodating teams for the International Hockey Tournament – April 2014

· HBT worked with NZ Indoor Bowls to confirm their tournament in July 2014 – 1000 pax for nine days.

· Tough Guy/Tough Gal challenge June/July 2014– secured to Clifton Station Hawke’s Bay – this event attracts 6000 pax in Rotorua. Also includes Tough Kid Challenge, a new addition to the event.

Events in development for the region

· The Colour Run –approached NZ promoter to secure for HB, course plan produced and sent to promoter

F.A.W.C! Food and Wine Classic Hawke’s Bay – November 1-10 2013

Event Statistics

· 68 events in 10 days. (58 events in 2012)

· 47 featured chefs & winemakers. (35 in 2012)

· 4,397 tickets available. (2,770 in 2012)

· 3,530 tickets sold – (80% of those available) this represents a 21% increase in ticket sales

· 36 sold out events. (16 events sold out last year)

· 13 events in Napier, 35 in Hastings & 20 in Havelock North.

· 15,876 F.A.W.C! website visits

· 30,000 Book of F.A.W.C! Programmes distributed , 400 posters & 2,500 DLE’s distributed, 2,000 DLE’s on Air New Zealand

Media Results

· 69 printed editorial features with more to come

· 15 radio interviews

· 20 media were hosted in region

· TNZ Media; Saveurs, France; 75, 624 printed copies, Intermezzo, USA; 300,000 circ & 30,000 page views/month, Globe and Mail News, Canada; 372,468 printed & online 1,521,432 unique visitors per month, News Limited, Australia

· NZ Herald + Bite + Life Supplements

· Dominion Post + Living Magazine

· Wine New Zealand Magazine

· Australian Women’s Weekly

Profile of the F.A.W.C! Visitor

· Approximately 35 - 40% were from outside Hawke’s Bay.

· Wellington, Auckland, Bay of Plenty & Christchurch.

· Australia, England, Canada & USA.

· Locally; Havelock North, Napier and Hastings as well as Tutira, Norsewood & Waipukurau.

· 28% of locals brought tickets for visiting family & friends, particularly large group bookings.

· 80% of visitors stayed 2 nights or more, with 24% staying 4 or more nights.

F.A.W.C! Satisfaction

· 53% stayed with family & friends, 17% in motels, 14% in B&Bs, 10% in hotels, and 6% in self-contained.

· 81% of FAWCers are confirmed to return next year and 60% will also attend Winter F.A.W.C! 14% are yet to confirm.

· 94% will recommend F.A.W.C! to their family & friends.

Hawke’s Bay Tourism – Financial Statement

Hawke’s Bay Tourism Ltd is tracking favourably half way through the financial year.

Income is tracking above projections for F.A.W.C! as ticket sales exceeded expectations, please note with F.A.W.C! that Hawke’s Bay Tourism receives all ticket income and then reimburses individual event managers.

Changes to membership will result in initial changes to cash-flow, this was instigated in October 2013.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 18 December 2013

SUBJECT: Monthy Work Plan Looking Forward Through January 2014

Reason for Report

1. The table below is provided for Councillors’ information, to provide them with an indication of issues and activities coming up over the next month in each area of Council.

Group	Area of Activity	Activity Status Update
Asset Management & Biosecurity	Land Management Rivers and Streams Upper Makara Scheme Open Spaces Forestry Coastal	- Focus on Papanui catchment as a pilot for implementation of Plan Change 6. - Application to Hill Country Erosion fund successful for continuation of hill country erosion work in Wairoa district and initial work in Tukituki catchment successful. Project implementation to be undertaken early January. - Flood damage which occurred in the 29 November 2013 storm event on the Upper Tukituki Scheme Rivers is being assessed. Initial repair work undertaken, but some damage has occurred that is unlikely to be able to be funded from current Scheme budgets. Staff will report back if extent of work requires additional funding. - Construction work to repair the dam is programmed to commence January 2014. - The development of individual management plans for Pekapeka, Tutira and Pakowhai Regional Parks initiated with objective of completing to draft stage for consultation by 30 June 2014. - A review of Council’s forestry portfolio is being undertaken and will be reported back to Council early in 2014. - A review of the Tangoio Soil Conservation Reserve Management Plan has been commenced. The review process will include consultation with a number of stakeholders. Once the consultation process has been completed it will be brought to Council for consideration and adoption. - Harvesting of Stands 2.01 and 2.02 in the Reserve will shortly commence and be completed during summer. - Komar report to be completed. Draft strategy for coast between Clifton and Tangoio being developed. These will be brought to Council before 30 June 2014.
Corporate Services		- Annual Plan Workshop – 11 February 2014. - Financial reporting for seven months to 31 January 2014 to be considered by Council at its meeting on 26 February 2014.
External Relations/ CE’s office	Communications Strategic Alliances HeatSmart CE’s Office	- Attendance at Board of Inquiry Hearing to provide daily update for website - Work continuing on drafting of targeted newsletters: Our Place, Our Place minis for CHB, Napier, Hastings and Wairoa - Continue engagement with Office of Treaty Settlements (OTS) on draft Regional Planning Committee Bill - In discussion with OTS, Mana Ahuriri and other parties on proposal for future management of Ahuriri Estuary - Review of communications plan with focus on advising of process simplification and target dates. - Prepare submission to Local Government Commission Draft Proposal on Local Government reorganisation in Hawke’s Bay
Resource Management	Client Services Compliance	- Consolidation of processes within the Hydro area (largest amount of processes within the group) - Review and working on improvement of S36 zoned based water science science charging system including invoice layout and mailing options - Consents & Compliance invoicing project - A risk based approach to picking important problems [or harms] and fixing them, to be finalised with view to implementation early next year. - A review of the current cost recovery model is underway. The same model has been operative for over 8 years yet the makeup of the work undertaken by the Compliance team has changed substantially. The new model needs to reflect the work currently done and taking into account future requirements.
Resource Management continued	Consents Science	- Ongoing consent processing - HDC Wastewater consent – further prehearing meeting to be held in New Year then may or may not require hearing. - Science investigations for the Greater Heretaunga and Ahuriri management zone continue - Expert meeting to review proposed development of a coupled surface-groundwater model to be held 13/12/2013. - Conduct of fieldwork associated with Greater Heretaunga and Ahuriri management zone plan change continues – surface water quality, estuarine water quality and spring-fed streams. - Training to guide modification of existing database software platforms and to ensure improved use of existing software continues. - Workstreams associated with the Tukituki Plan Change implementation continue, with emphasis on phosphorus mobilisation. - Routine seasonal monitoring programmes continue, including recreational water quality monitoring, while preparation for summer-focused ecological, groundwater and hydrological monitoring commences. - Preparation of “Mohaka River catchment characterisation report” continues. Delivery of first draft subject to delays because of conflicting work demands.
Strategic Development	Resource Management Planning	- Environment Court likely to issue directions on next steps for dealing with appeals on Change 5. - Board of Inquiry hearing on ‘Tukituki Catchment Proposal’ continues. - TANK Group meeting scheduled for 10 Dec 2013. Group to consider members’ feedback ‘Interim Agreements’. Next TANK Group meeting scheduled early 2014. - Taharua/Mohaka stakeholder discussions continuing in parallel to science investigations. - Statutory advocacy project involving reviews of, and potential submissions on: 1. CHBDC Coastal Areas discussion document (close 20 Dec) 2. MfE’s discussion document on ‘proposed amendments to the NPS for Freshwater Management’ (close 4 Feb). Staff report to be presented to Council in January. 3. Proposed Hastings District Plan (close 14 Feb) 4. Proposed Change 10 to Napier District Plan (close 14 Feb 2014) - Report to 11 Dec Corporate and Strategic Committee meeting regarding process options for development of a policy for oil and gas exploration in HB. Further report proposed to be presented to Corporate and Strategic Committee in March 2014.
Strategic Development	Transport	- The second consultation stage of the New Zealand Transport Agency Funding Assistant Rate (FAR) review will be carried out between December 2013 and March 2014.

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 required in terms of the Local Government Act’s provisions, the decision making procedures set out in the Act do not apply.

Recommendation

1. That Council receives the Monthly Work Plan Looking Forward Through January 2014 report.

Mike Adye

Group Manager

Asset Management

Helen Codlin

Group Manager

Strategic Development

Paul Drury

Group Manager

Corporate Services

Iain Maxwell

Group Manager

Resource Management

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

Management Comments on Cash Flows
Note Ref	Activity	Management Comment
1	Receipts from Customers	Manager to complete the explanation

1 View	HB Tourism Quarterly Report for July - December 2013
2 View	HB Tourism Financial Report for period to 30 November 2013