Agenda of Regional Council Meeting

	Agenda Item	Action	Responsible	Due Date	Status Comment
1	Minor Items not on the Agenda	Provide copies of the “Maori Charter” to all councillors and Maori Committee members	L Hooper	Immed	Current Charter provided to Maori Committee members on 25/2/14 and to Councillors via Dropbox on 13/3/14. Also available on the HBRC website on the Council & Committees Structure page.

Request Status	Date Received	Response Due	Requested By	Request Summary	Group Manager Responsible
Active	10/03/14	4/04/14	P Brian Webby	2-3060 Paeria Drainage Class B What is this levy or scheme for? What area in Wairoa does it cover? Summary of the total levy collected for this scheme? List of what work if any Council has paid for under this levy in recent time?	Mike Adye
Complete	6/03/14	1/04/14	Pauline Doyle	Seeking a more recent map showing the full permit area which apparently encroaches right down into Napier City	IM, Drew Broadley
Complete	5/03/14	2/04/14	Julianna Dawson (NCIF Wairoa)	The results of recent PM10 monitoring at Tiaho School in Wairoa	Iain Maxwell
Active	4/03/14	2/04/14	Luke Stewart	1. How much has Hawke’s Bay Regional Council spent on: - the resource consents associated with the Ruataniwha Water Storage scheme proposal? - the Ruataniwha Water Storage scheme proposal? - the Tukituki Plan Change proposal? - the Tukituki Catchment proposal? - resource consents associated with the Ruataniwha Water Storage scheme proposal? - the Ruataniwha Water Storage scheme proposal? - the board of inquiry process associated with the Tukituki Catchment Proposal, Tukituki Plan Change and Ruataniwha Water Storage Scheme? 2. How much has Hawke’s Bay Regional Investment Company spent on: - the Tukituki Plan Change proposal? - the Tukituki Catchment proposal? - the board of inquiry process associated with the Tukituki Catchment Proposal, Tukituki Plan Change and Ruataniwha Water Storage Scheme?	Helen Codlin Andrew Newman
Complete	3/03/14	31/03/14	David Noakes	How many Incident response officers HBRC have and on average (per month and annually) how many incident reports HBRC has	Iain Maxwell
Active	27/02/14		Luke Stewart - Green Party	Titles & Dates of any economic reports relating to RWSS HBRC contribution to Irrigation NZ conference	Andrew Newman & Graeme Hansen
Complete	24/02/14	24/03/14	Rex Graham Also on behalf of councillors Barker, Belford and Bevan	The release of HBRIC ltd CEO Salary increase	Liz Lambert

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 March 2014

SUBJECT: Hawke's Bay Regional Investment Company Ltd (HBRIC Ltd) Business and Investment Case for the Ruataniwha Water Storage Scheme

Reason for Report

1. Following consideration of a full feasibility study in October 2012 the Hawke’s Bay Regional Council (Council) resolved to transfer the responsibilities for progressing the Ruataniwha Water Storage project to the conclusion of the resource consent application phase to Hawke’s Bay Regional Investment Company (HBRIC Ltd), including those responsibilities as the applicant for the required resource consents.

2. As part of that transfer of responsibilities HBRIC Ltd undertook to report back to Council at the end of the consent process with a recommendation on whether or not Council should proceed to invest further in the Ruataniwha Water Storage project and, if so, under what terms and conditions further investment should be made. Council decided that if, at this point, it was to continue investing in this project then its decision would be subject to a special consultative process.

3. HBRIC Ltd has now progressed its investigations to the point of delivering a business case as the basis for Council to consider its preferred option as part of the special consultative process.

4. A copy of the business case is circulated under separate cover.

5. The Chairman and members of the Board of HBRIC Ltd will present the business case to Council.

Background

6. The Tukituki catchment is subject to low flow events in both major tributaries of the main stem of the river on a regular basis through the summer period. Significant irrigation utilising both surface and ground water resources takes place during the times of the year when the water has highest value for the environment, river ecology and recreational users. This has resulted in all values being compromised.

7. Water storage has been considered as part of the potential framework for overall water management in Hawke’s Bay for generations; however the drought years of 2006-2009, and the pressure of both current irrigation and demand for more, brought the issue to a head in 2008.

8. In 2008, Council initiated a number of projects in parallel, including substantial investment in the water resource science area, establishment of water user groups and water demand management, establishment of significant community engagement process both at a regional and catchment scale, and investment in water storage pre-feasibility and feasibility processes in two catchments.

9. The clear intention of Council from the outset has been to seek to deliver both environmental and economic wins for the catchment, its residents, and for the region.

10. In the case of the Tukituki Catchment, the prefeasibility study was undertaken between 2008 and 2009. The results of this high level assessment suggested a storage scheme was worth progressing to a further feasibility stage. Subsequently in December 2009, Council with initial support from the Sustainable Farming Fund, committed to an advanced prefeasibility phase with the initial stage of that project being to assess in detail the storage sites.

11. Of significance at the completion of that process was that storage at the scale identified in prefeasibility (multiple off-river storage dams) was problematic from a geotechnical and energy cost perspective. The highly fragmented nature of the foundation material throughout the area and the need to pump water into storage sites called into question the immediate and long-term economic viability of that project configuration. Commencing in January 2010, two in-tributary sites were then investigated through the full feasibility phase, with one being discounted on the basis of foundation geotechnical issues.

12. The full feasibility study was then referred on to HBRIC Ltd as the basis for the development of the business case which is now presented to Council. Council has previously appointed Deloitte to peer review the business case and their findings will be reported back to Council in April.

Decision Making Process

13. 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.

Recommendations

That Council:

1. Receives the Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) report entitled “Business and Investment Case for the Ruataniwha Water Storage Scheme”.

2. Notes that Deloitte is undertaking an independent per review of the HBRIC Ltd Business and Investment case and will report back to Council in April.

3. Notes that investment by Council, via HBRIC Ltd, in the RWSS to a quantum of up to $80 million is essential, together with a large level of Crown Irrigation Investment Ltd (CII) debt funding, in order for the project to set a water price that is financially viable for both water users and investors.

4. Notes that the RWSS will make an important contribution to achieving Council’s strategic environmental objectives for the Tukituki river and catchment as set out in Land Water Us 2050 and Proposed Plan Change 6, by:

4.1. ensuring a sustained minimum flow on the Makaroro River below the dam of 1.23 cumecs, which will sustain more than 20% of the 7-Day Mean Annual Flow of the Tukituki at Red Bridge;

4.2. providing for up to four flushing flows per year of up to one million cubic metres each to assist Council to manage and mitigate periphyton build-up in the lower Tukituki in particular, thus enhancing the ecological and recreational status of the river;

4.3. providing water to sustain minimum flows set for the Waipawa River at the RDS gauging site and Tukituki River at Tapairau Rd (also ensuring that current consent holders linked to those flows are not adversely affected by the scheme);

4.4. enabling existing water users supplied by run-of-river and connected groundwater takes (which negatively affect the low flows of Waipawa and Tukituki rivers) to be supplied with stored water as an alternative; and

4.5. there are six substantial environmental management, mitigation and offset projects included in the RWSS project ranging from the catchment headwater to the lower estuary.

5. Notes that the RWSS Consents will require, at their own cost, Ruataniwha Water Limited Partnership (RWLP) and Ruataniwha Water GP Ltd (RWGP) as the entities, respectively, owning and operating the Scheme, to undertake comprehensive water quality monitoring of 15 variables monthly and two variables annually at 16 sites throughout the catchment, commencing 24 months before any water is supplied, and that the data from these measurements will be integrated with Council’s own environmental monitoring programmes.

6. Notes that the proposed Production Land Use Conditions of the RWSS consents:

6.1. requires that production land water users being supplied by the RWSS must prepare Farm Environmental Monitoring Plans (FEMP) which must be regularly audited;

6.2. ensures the limits for nitrogen/nitrate management set in Proposed Plan Change 6 (which are based on site-specific toxicity guidelines developed by NIWA) and phosphorus emissions (no net increase in emissions at a sub-catchment level) are met;

6.3. requires E coli levels in surface and groundwater, and a range of other environmental monitoring and management requirements that are, individually and collectively, at least as stringent and generally more stringent than are applied to irrigated land use elsewhere in New Zealand;

6.4. requires that stock are excluded from all lakes, wetlands, permanently or intermittently flowing rivers on any property supplied by the RWSS.

7. Notes that the RWSS will make substantial contributions to Council’s strategic regional economic development objectives, and that:

7.1. the RWSS is projected to generate $250 million per year of ongoing value-added (i.e. not gross) economic benefits in total, and the one-off benefit of the construction project is estimated as being $410 million over the construction period;

7.2. the value added on-farm is projected to be $73 million/year; the value added to farm support and services industries is projected to be $63 million/year; and the value added to processing and processing support industries is projected to be $120 million/year;

7.3. the regional economic multiplier of the value added on-farm is 3.4, and thus the added-value economic benefits of the RWSS are distributed through the wider regional economy, consistent with the findings of ex-post studies of the economic benefits of the Opuha water storage dam; and

7.4. the ongoing economic impact of value added from the RWSS is estimated to have a Net Present Value of $3.7 billion, discounted at 5% over 70 years.

8. Notes that the RWSS is projected to have substantial employment and social benefits, and is projected:

8.1. to generate more than 2,500 full-time equivalent jobs, widely distributed over the agriculture, manufacturing, wholesale and retail trade, transport and communications, rural contracting, utilities and construction, and other services employment sectors; and

8.2. to generate ongoing household income of $60 million/year in farming and farm-support industries (likely to be significantly concentrated in Central Hawkes Bay) and $67 million/year in processing and processing support industries (likely to be more widely distributed throughout the region).

9. Notes that, in relation to engagement and agreements with mana whenua and kaitiaki:

9.1. HBRIC Ltd has entered into an agreement with Te Taiwhenua o Tamatea (Tamatea) that provides for ongoing close engagement between RWLP, the intended owner of the RWSS, and Tamatea through the life of the RWSS and that both the Concession Deed between Council and RWLP and the Project Agreement between HBRIC Ltd and RWLP require acknowledgement of and adherence to this agreement;

9.2. Council and HBRIC Ltd have entered into two Joint Memoranda with Ngati Kahangunu Iwi Incorporated (NKII) and Te Taiwhenau o Heretaunga with Te Taiwhenua o Tamatea (ToHTT) a party to the first and confirming their agreement to the second, which, inter alia, provides for engagement of all the Memoranda parties in a Kaitiaki Runganga (expanding the membership of the Mana Whenua Working Group of the Tamatea Agreement) and for additional monitoring activities in the lower Tukituki, both of which have been added to the proposed RWSS Consent Conditions presented to the Board of Inquiry (BoI); and

9.3. the Joint Memoranda noted in 9.2 above are also acknowledged in the Concession Deed and the Project Agreement documents in the same manner as the Tamatea Agreement, requiring adherence to what is agreed in the Memoranda.

10. Notes that, in regard to Council’s Proposed Plan Change 6:

10.1. the BoI must decide on Plan Change 6 first, then decide whether the Resource Consents sought for the RWSS are in conformance with its decisions on Plan Change 6;

10.2. the key decision to be made by the BoI that could affect the RWSS is likely to be between what Council has proposed as nitrate limits for the Tukituki which are based on nitrate toxicity to fish, OR much lower nitrate limits as sought by a range of submitters (15% to 20% of Council’s proposal); and

10.3. if the BoI decides to impose lower nitrate limits than proposed by Council there would be significant consequences for the RWSS in regard to whether, and how, it could manage nitrate emissions within a lower set of limits.

11. Notes that, in regard to the consents sought for the RWSS via the BoI process:

11.1. no expert engineering evidence was submitted that contested the design, location, foundation conditions, engineering geology and seismology in regard to the dam and related infrastructure or the proposed operation of that infrastructure;

11.2. no expert engineering evidence was submitted that contested the design, location or proposed operation of the distribution system and its infrastructure such as canals, pipelines, outfalls etc.

12. Notes that, in relation to the Environmental Protection Authority (EPA) decision-making process:

12.1. a Draft Decision on Proposed Plan Change 6 and the RWSS Consents is expected on 15 April 2014; and

12.2. a Final Decision must be made by 28 May 2014.

13. Notes that HBRIC Ltd and co-investors in the intended RWLP, are finalising a Design and Construction contract that is, to the maximum extent practicable, on a fixed cost fixed time basis for the Dam and Distribution infrastructure, which:

13.1. will be subject to expert panel oversight in the final design stage prior to application for building consent from Waikato Regional Council;

13.2. is able to deliver an increased volume of 104 million cubic metres of water per year (a significant increase from the 91 million cubic metres projected at Feasibility stage) without affecting the residual or flushing or other environmental flows required in the RWSS Consents;

13.3. provides water to all users on piped distribution at a pressure of 3.5 bars at the farm gate (a significant improvement on nil pressure and supply up to 2km from farm gate projected at Feasibility stage); and

13.4. enables a contracted water price of 23 c/cubic metre plus a variable charge for pressurization of up to 3 c/cubic metre (in the mid range of 22-25 c/cubic metre projected at Feasibility stage).

14. Notes that:

14.1. HBRIC Ltd has received Expressions of Interest (EoI) for 47 million cubic metres of water/year to be purchased, and that HBRIC Ltd is now engaged on a process of seeking confirmed contracts for purchase under a standard Water User Agreement that requires compliance with all Land Use Conditions of the RWSS Consents submitted to the BoI process; and

14.2. achieving a target level of 40 milllion cubic metres/year of contracted water, or such other volume as is agreed by the parties investing in RWLP, is a Condition Precedent for Financial Close

15. Notes that:

15.1. the RWSS is intended to be owned and operated as a modified Build, Own, Operate and Transfer project over a 70-year Concession Period, governed by a Concession Deed between Council and RWLP, the intended Owner of the RWSS Assets and Infrastructure during the Concession Period, and also by a Project Agreement between HBRIC Ltd and RWLP;

15.2. Ruataniwha Water GP Ltd, the General Partner of the RWLP, will be the Operator of the RWSS Assets and Infrastructure during the Concession Period;

15.3. investors in RWLP will hold shares in RWGP in the same proportions as their ownership in RWLP;

15.4. local eligible investors, including farmers who have contracted for water from the RWSS, will have their investment aggregated by another Limited Partnership (Tukituki Investment LP) which will invest the aggregated amount in RWLP. It is also expected that, to the extent that there is local iwi investment in the RWSS, a similar separate LP (or LPs) will make any local iwi investment in RWLP;

15.5. at the end of the Concession Period ownership of the RWSS Assets and Infrastructure will be handed back to Council/HBRIC Ltd or successor, except that, to the proportional extent of ownership of the RWLP by local investors LP, and any local iwi LP, such owners will have continuing proportional ownership of the Assets and Infrastructure, or of the entity succeeding RWLP that owns the Assets and Infrastructure.

16. Notes that in regard to the capital structure and capital raising process:

16.1. equity ownership in RWLP is expected to be subscribed for, at Financial Close, by a combination of HBRIC Ltd, a number of institutional investors, Tukituki Investment Limited Partner (TILP), and possibly by an Iwi LP;

16.2. the capital raising process will continue until Financial Close and will not be confirmed until all Conditions Precedent are satisfied and/or waived by agreement of the investor parties;

16.3. it is expected that HBRIC Ltd will subscribe for up to $80 million of equity in RWLP, with a current likely investment amount of $72 million, of which $63 million will be in cash and $9 million of already expended development expenditure and intellectual property which will be recognized by the allocation of equity interests;

16.4. it is expected that CII will provide debt financing to the RWLP subject to their investment terms being met, the conditions precedent being met and shareholder approval;

16.5. the different equity investors will have different terms reflecting, inter alia, their different target rates of return, priority for cash-flows generated from water sales, and whether they have interests terminating at the end of the Concession Period or have ongoing equity interest beyond the Concession Period;

16.6. the terms negotiated and agreed between the investor parties, at Financial Close, have been (or will have been) negotiated and agreed between the parties on an arms-length, commercial basis.

17. Notes that in relation to the terms under which HBRIC Ltd proposes to invest in RWLP:

17.1. HBRIC Ltd will accept a low priority for cash-flows during the uptake period before the exit of CII, in order to ensure an acceptable water price and to encourage uptake;

17.2. during the uptake period, HBRIC Ltd will make a lower rate of return (base-case modelled at 5% post-tax internal rate of return (IRR), from both cash yield and incremental increase in value of interests) than institutional investors over that period;

17.3. after the uptake period, for the remainder of the Concession Period, HBRIC Ltd will make the same return as all other investors (base-case modelled as 10% post-tax IRR) – a good rate of return for a “brownfields” infrastructure investment);

17.4. the lower rate of return and slower rate to profitability that HBRIC Ltd proposes to accept on its investment in RWSS/RWLP are consistent with the provisions of its Statement of Intent (SoI) with Council, when the investment is intended to “Help achieve Council’s regional strategic economic development objectives by investing in assets that will benefit the Hawke’s Bay Region as a whole.” (Pages 3 and 4 2013/2014 SoI)

17.5. As noted in 7 above, the RWSS is projected to make substantial contributions to Council’s regional strategic economic development objectives.

18. Notes that the Directors of HBRIC Ltd have given detailed consideration to extensive negotiations with counterparties in regard to investment quantum, risk and return, and have exercised their judgment, in particular, on the following key points:

18.1. the quantum proposed of up to $80 million to be invested by HBRIC Ltd (depending in part on the amount of capital raised via TILP) is appropriate and necessary (together with the large amount of CII funding) to achieve a water price that is viable for users, that will encourage uptake, and will also make the project viable for commercial investors;

18.2. the 5% post-tax IRR on HBRIC Ltd’s investment that is modelled in the base case over the uptake period is necessary (together with the low interest rate on CII debt) both to set an appropriate water price and to enable early cash-flows to be prioritised to institutional investors (delaying these cash-flows would be more expensive for the project and for HBRIC Ltd overall);

18.3. the HBRIC Ltd rate of return during the uptake period is less than a commercial rate of return, but this is acceptable under HBRIC Ltd’s Statement of Intent in order to achieve regional economic development;

18.4. the HBRIC Ltd rate of return during the uptake period being less than a commercial rate of return also reflects environmental contributions noted in 4 above;

18.5. the 10% post-tax IRR return that is modelled in the base case for HBRIC Ltd (and all investors) after the uptake period and CII has exited the project is an appropriate and good commercial rate of return on the investment;

18.6. HBRIC Ltd’s low rate of return during uptake and commercial rate of return post the uptake period mean that HBRIC Ltd should be a long-term investor in the project, at least until significantly more than halfway through the first consent period;

18.7. there is some level of risk that, under a slow uptake scenario, a significant fraction of the CII debt will have to be repaid as a lump sum under a “hard exit” by CII, after about year 15 of the project. In such a situation, which is considered unlikely, HBRIC Ltd could be required to fund in the order of $12-24 million of that payback. HBRIC Ltd has a number of options to fund such a payment, if that eventuates, or to avoid making its contribution by allowing other local investors to take up or expand their equity interests in RWLP; and

18.8. the level of governance representation that HBRIC Ltd will have in the Ruataniwha Water General Partner Ltd (which will operate the project) is considered appropriate for the proportion of equity interests held by HBRIC Ltd.

19. Notes that discussions have been held between HBRIC Ltd and Council management regarding the level of dividends HBRIC Ltd can forecast in comparison with reduced cash flows to Council from interest and other cash yields from its current investments, and:

19.1. Council's cash investment into HBRIC Ltd is projected to be in two tranches – circa $22 million in 2014/15 and circa $41 million in 2015/16;

19.2. Discussions to date indicate that in the years after 2015/16 there is unlikely to be significantly less cash-flow from HBRIC Ltd to Council's operating budget than would be received by Council if the current investments were maintained;

19.3. In 2014/15 there may be a shortfall of circa $400,000 between forecast dividend payments and the reduction in Council's cash-flow from its existing investments as a consequence of withdrawing $22 million from cash-generating investments, and a shortfall of circa $2,750,000 in 2015/16 as a consequence of withdrawing a further $41 million from cash-generating investments;

19.4. HBRIC Ltd holds the view that these cash-flow differences for Council in 2014/15 and 2015/16 cannot be prudently met by HBRIC Ltd requiring a higher level of dividend from Napier Port than is currently projected in Napier Port's Statement of Corporate Intent, particularly in 2015/16; and

19.5. Council and HBRIC Ltd management will continue to discuss how to mitigate the impact on Council's cash flows of changing $63 million of Council's investment portfolio from cash-generating investments to growth investments from which cash-flow can not be expected for a period of time.

19.6. HBRIC Ltd’s cash distributions from the RWSS become more reliable after the three to five year period post-construction, and increase significantly after the uptake period which will enable HBRIC Ltd to meet shareholder dividend requirements.

20. Notes the following Conditions Precedent that must be either satisfied or waived by agreement before Financial Close:

20.1. Granting of resource consent for RWSS, which in turn is recommended as being workable by all investors;

20.2. Subscription of a minimum of 40 million cubic metres (m³) of water contracts (Water User Agreements);

20.3. Securing the private and public funding required to build Scheme infrastructure;

20.4. A bankable construction contract with construction risk allocation adequately addressed through a fixed-time, fixed-cost arrangement;

21. Notes, in the counter-factual situation where the RWSS does not proceed either because of BoI decisions or because Council declines to make the investment proposed in the RWSS, that:

21.1. Plan Change 6, in whatever form is decided by the BoI, will become effective, without the RWSS, including increased minimum flows, water allocation limits, nutrient management limits etc.

21.2. the environmental minimum and flushing flows set out in 4.1 to 4.3 will not be provided;

21.3. existing water users linked to minimum flows on Waipawa at the RDS gauging site and Tukituki at Tapairau Rd will not be shielded from the increased minimum flows set out in Proposed Plan Change 6;

21.4. existing water users supplied by run-of-river and connected groundwater takes will suffer economic impacts from the increased minimum flows in the catchment set out in Proposed Plan Change 6;

21.5. the contributions to strategic regional economic development , amounting to more than $4 billion, set out in 7.1 to 7.4 will not be generated; and

21.6. the employment (>2,500 jobs) and household income benefits (>$125 million/year) set out in 8.1 and 8.2 will not be generated.

22. HBRC advises HBRIC Ltd that subject to:

22.1. having received and being satisfied with its own legal advice on the RWWS documents and all related legal matters;

22.2. having received and being satisfied with its advice from the RWSS Business Case Assessment process and advisers;

22.3. having received and being satisfied with its advice from the Alternative Investments Analysis process and advisers;

22.4. having received the Draft and Final Decisions of EPA Board of Inquiry processes on Plan Change 6 and the RWSS Resource Consents and being satisfied that the RWSS can proceed as proposed under the decisions made;

22.5. having undertaken a Special Consultative Procedure of public consultation regarding whether or not to invest in the RWSS via HBRIC Ltd, and having made its determination to make such an investment; and

22.6. receiving confirmation from HBRIC Ltd that all Conditions Precedent to Financial Close of the investment by all investing parties in the RWLP have been either satisfied or waived by agreement of the parties;

it will confirm to HBRIC Ltd its decision to invest up to $80 million (projected level of $72 million) of new equity in HBRIC Ltd by subscription for additional shares at one share per $1 invested, for the purpose of HBRIC Ltd subscribing for up to $80 million (projected level of $72 million) of interests in Ruataniwha Water Limited Partnership and matching shares in Ruataniwha Water GP Ltd to implement the Ruataniwha Water Storage Scheme.

Liz Lambert

Chief Executive

Attachment/s

HBRIC Ltd RWSS Business Case

Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 March 2014

SUBJECT: Recommendations from the Corporate and Strategic Committee

Reason for Report

1. The following matters were considered by the Corporate and Strategic Committee on 12 March 2014 and are now presented to Council for consideration and approval, with additional information provided to assist Council on the two topics set out below.

Top 10 Corporate Risks Assessment

2. Various amendments were agreed at the 12 March Corporate and Strategic Committee meeting. These have been incorporated in updated documentation attached.

HBRC Appointments Committee

3. At the Corporate and Strategic Committee it was recommended that Council determines the membership of an Appointments Committee to recommend the appointment of directors to the permanent Board of HBRIC Ltd effective from 1 July 2014.

4. The Appointments Policy suggests that this Appointments Committee should, where possible, comprise the Chairman of HBRIC Ltd, a current councillor, a recently retired councillor, and an external experienced director. The current chair of HBRIC Ltd is ineligible to be part of the Committee so two external experienced directors have been sought.

5. The following persons are recommended to form the Appointments Committee: Cr Alan Dick (current councillor); Mr Neil Kirton (recently retired councillor), Mr John Newland and Mr Neville Smith (experienced independent directors).

6. The expectation is that the Appointments Committee will inform the Council of its recommendations for HBRIC Board membership by 28 May 2014.

Decision Making Process

7. 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:

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

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

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

7.4. 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.

Strategic Planning Process for 2015-25 Long Term Plan

2. Adopts the Proposed Strategic Planning Programme for the development of the Long Term Plan; being:

Phase	Period	Method/output
What will HB look and feel like in 2050? Identification / review of key issues Review purpose, vision and values, strategic framework	April to June	Council / staff workshops 7-8 May 12-13 June
Produce a branded document for public engagement (i.e. Embracing Futures Thinking yellow book, Strategic Plan discussion document)	July	Document adopted at 16 July 2014 C&S meeting, then Council
Informal engagement – Councillor / community level	August - October	Stakeholder meetings Speaker series?
Finalise Preferred Strategic Direction	November	C&S Comm / Council paper
Adopt Draft Long Term Plan	March 2015	Draft Long Term Plan
Consultation	April-May	Engagement Strategy
Hearings	Early June 2015	Officers Reports and recommendations
Adopt Long Term Plan	June 2015	Council paper / LTP

Top 10 Corporate Risks Assessment

3. Adopts the Hawke’s Bay Regional Council Risk Management Policy and Framework, March 2014.

4. Approves the risk mitigation approach to each of the ten risk issues.

Oil and Gas Exploration Policy Development

5. Defers formation of a multi stakeholder group (and its associated tasks) and incorporates a proposal for preparation of a “Regional Oil and Gas Exploration and Renewable Energy Strategy” into the 2015-25 Long Term Plan development process.

HBRC Appointment and Remuneration of Directors Policy

6. Adopts a final Policy subject to the inclusion of any amendments agreed at the Corporate and Strategic Committee meeting (the final version with amendments is attached)

7. Determines the membership of the Council Appointments Committee which will recommend to Council the appointment of Directors to the permanent Board of HBRIC Ltd in accordance with the Policy; that being:

“The Council will establish a Council Appointments Committee after the triennial Council election to recommend to the Council the appointment of Council and independent directors to HBRIC Ltd. This committee will be comprised of four members who are not seeking appointment to the HBRIC Ltd Board. Where possible the committee members will include the current chair of HBRIC Ltd, a Councillor, a recently retired Councillor and an external experienced director.”

8. Appoints the following persons to the Appointments Committee: Messrs Alan Dick, Neil Kirton, John Newland and Neville Smith.

Local Governance Statement 2013-15

9. Adopts the Local Governance Statement as amended in response to feedback provided and agreed at the Corporate and Strategic Committee meeting, and notes that the Statement will be made available to the public by 11 April 2014.

HBRC Wairoa Office

10. Agrees to proceed with improvements of the HBRC Wairoa office at an estimated cost of $225,000, with construction work not committed to until HBRC has a long term lease with Department of Conservation for them to share the property, including office accommodation and storage.

11. Notes that the following reports were received at the Corporate and Strategic Committee meeting:

11.1 Follow-ups From Previous Corporate and Strategic Committee Meetings

11.2 Nga Marae o Heretaunga – Presentation

11.3 HBRC Health and Safety

11.4 HB LASS Half Yearly Report

11.5 Provisional Timeline - RWSS Consultation.

Mike Adye

Group Manager

Asset Management

Liz Lambert

Chief Executive

Attachment/s

1 View	Updated Top 10 Risk Issues
2 View	Final Policy - HBRC Appointment and Remuneration of Directors

Final Policy - HBRC Appointment and Remuneration of Directors

Attachment 2

HAWKES BAY REGIONAL COUNCIL

Policy on appointment and remuneration of directors

FOR ADOPTION 26 MARCH 2014

Purpose

1. The purpose of this policy is to set out, in accordance with Section 57(1) of the Local Government Act 2002 (“the Act”), an objective and transparent process for:

(a) The identification and consideration of the skills, knowledge and experience required of directors of a Council organisation.

(b) The appointment of directors to a Council organisation.

Principles

2. The following principles underlie this policy:

(a) Appointments will be made on the basis of merit.

(b) The Council will follow corporate governance best practice.

(c) Directors of Council-controlled trading organisations will be appointed on the basis of the contribution they can make to the organisation, and not on the basis of representation.

(e) All Council appointed directors must comply with the Council’s Code of Conduct for Directors.

(f) Where organisations are subsidiaries of the Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) or companies directly owned by HBRC, then HBRIC Ltd will act as the interface and monitoring body between the Council and those subsidiaries.

(g) All appointments of directors to the Board of HBRIC Ltd and to any Council Controlled Trading Organisation must be ratified by the Hawke’s Bay Regional Council.

Definitions

3. The term “Council organisation” (“CO”) is used as defined in Section 6 of the Act.

4. The Act also creates two sub-categories of COs – “Council-controlled organisations” (“CCOs”) and “Council-controlled trading organisations” (“CCTOs”).

5. The Council has interests that fall in each of these 2 sub-categories.

6. The following statements used in this Policy are provided for guidance purposes only. Fuller definitions are provided in Section 6 of the Act.

Meaning of “Council organisation”

7. In broad terms, a CO is an organisation in which the Council has a voting interest or the right to appoint a director, trustee or manager (however described). This is a wide-ranging definition, covering a large number of bodies.

Meaning of “Council-controlled organisation”

8. A CCO is a CO in which one or more local authorities control, directly or indirectly, 50% or more of the votes or have the right, directly or indirectly, to appoint 50% or more of the directors, trustees or managers (however described).

Meaning of “Council-controlled trading organisation”

9. A CCTO is a CCO that operates a trading undertaking for the purpose of making a profit.

10. For the purpose of this document only:

(a) Hawkes’ Bay Regional Investment Company Ltd (HBRIC Ltd) is excluded from the definition of a CCTO (there is a separate section in this Policy (page 3) for the appointment and remunerations of directors to HBRIC Ltd).

(b) Napier Port (Port of Napier Limited) is considered for the purpose of this Policy only to be a CCTO, notwithstanding specific exemptions for port companies under Section 6 of the Act.

(c) All associate and subsidiary companies of HBRIC Ltd are consdired to be CCTOs irrespective of whether HBRIC Ltd has a controlling interest in the company.

11. Pages 3- 6 sets out the policy for the appointment and remuneration of directors to the Board of the Hawke’s Bay Regional Investment Company Ltd.

12. Pages 7-11 contains the policy for other Council Controlled Organisations, including CCO’s and CCTO’s currently subject to this Policy. These CCOs are listed in Appendix 1. Any new Council organisations in which the Council will have a voting interest or the right to appoint a director, trustee or manager will be subject to this Policy.

13. On page 12 is the policy for Council Organisations, that are not Council Controlled Organisations, that are currently subject to this Policy. These COs are listed in Appendix 2. Any new Council Organisation will be subject to this Policy.

14. On pages 13-14 is the HBRIC Ltd Chairperson Succession Planning Policy.

HAWKES BAY REGIONAL INVESTMENT COMPANY LTD

Introduction

15. HBRIC Ltd is 100% owned by the Council, and holds shares in the Council’s CCTOs. It monitors the performance of all CCTOs, whether owned directly by HBRIC Ltd or the Council, and recommends new director appointments for these organisations for the Council’s approval.

HBRIC Ltd Director appointment process and Identification of required skills, knowledge and experience

16. The HBRIC Ltd constitution provides for a maximum of seven directors and it is intended that it comprises a mix of Council and independent directors. It is critical to the success of this board that it has a composition which is capable of maintaining the confidence of both the Council and the subsidiary companies.

17. The Council will establish a Council Appointments Committee after the triennial Council election to recommend to the Council the appointment of Council and independent Directors to HBRIC Ltd. This committee will be comprised of four members who are not seeking appointment to the HBRIC Ltd Board. Where possible the committee members will include the current chair of HBRIC Ltd, a Councillor, a recently retired Councillor and an external experienced director.

18. In the process of selecting Council and independent directors the Council Appointments Committee will first determine the required skills, knowledge and experience which is necessary for an effective board. In general terms, the committee will apply similar criteria to potential candidates to those used by HBRIC Ltd in its assessment of candidates for other CCTOs. However, where necessary the committee will also take into account a candidate’s potential to quickly acquire business and financial skills, as well as his or her existing skills and experience. The candidates’ skills must be relevant to the requirements of HBRIC Ltd in terms of its governance and provide as far as possible that there is a suitable cross- section of skills available at the board table which is capable of meeting the normal criteria of good governance.

19. The committee may use the services of a specialist consultant in making an assessment of the suitability of candidates for a Council Director position.

Council Directors of HBRIC Ltd

20. The HBRIC Ltd constitution provides that Council directors must resign on a date specified by the Council being no later than three months after the triennial Council elections, although they may offer themselves for re-appointment. The date selected will be chosen to allow time to select Council directors for appointment as replacement directors in accordance with this policy.

21. Only a Councillor may be appointed as a Council Director of HBRIC Ltd.

22. The Council Appointments Committee will, after the triennial Council elections, interview all Councillors expressing an interest in appointment to the HBRIC Ltd Board. This includes existing HBRIC Ltd Council directors retiring and offering themselves for re-appointment.

23. Following the interviews, the Committee will make its final recommendations in a report to the Council. This report will be considered in the public part of the agenda. The Council will consider the report and make its decision.

24. Public announcement of the appointments will be made as soon as practicable after the Council has made its decision.

25. It is important that the selected Council directors will be able to gain the confidence of the Council and the subsidiary company boards, given the confidential and commercially sensitive nature of much of the business being considered.

Independent directors of HBRIC Ltd

26. The HBRIC Ltd constitution provides that the independent directors will retire by rotation with at least one retiring each year.

27. The HBRIC Ltd governance committee or full board (excluding any retiring director) will give consideration to whether a retiring independent director should be reappointed by rotation and make a recommendation to the Council regarding reappointment where the term of that director will be within the policy for tenure for CCTO directors as provided in this policy.

28. In the case of a vacancy for an independent director appointment, whether it be a casual vacancy or arising from the non reappointment of a retiring independent director, the same procedures will be followed as applies to the appointment of a director to a CCTO.

29. Independent directors will be selected according to the same criteria as used by HBRIC Ltd in its assessment of candidates for other CCTOs. In making appointments every endeavour will be made to ensure that a range of good governance skills will be available to the HBRIC Ltd board as a whole.

30. An independent Director of HBRIC Ltd may be a person who is neither a Councillor nor an employee of the Council.

Chairperson

31. The Council shall nominate who will be the chair of the HBRIC Ltd board and take account of the experience and appropriate skills of the existing board. This nomination will be made in accordance with the policy adopted by Council on 26 March 2014 regarding HBRIC Ltd Chairperson succession. The policy is to ensure that there can be continuity of knowledgeable and capable leadership of the HBRIC Ltd Board. The policy envisages that work commences to identify a successor to the chairperson at least a year before the planned retirement of the incumbent and that in making any replacement board appointments that consideration be given to whether there is sufficient potential on the board for a replacement chairperson should that be needed unexpectedly.

32. The Council Appointments Committee is responsible to make a recommendation to the Council on the nomination of the HBRIC Ltd Chairperson.

All directors of HBRIC Ltd

33. It is expected that all appointees to the HBRIC Ltd Board will undergo, or already have undergone, formal corporate governance training, or have the requisite experience in this area. HBRIC Ltd will generally pay for at least part of any such training.

Length of tenure

34. Independent directors will normally be appointed for periods of three years. Subject to a review of the director’s performance after each three year period, the normal tenure for a director will be six years. Following six years of service, a director may be re-appointed for a further three years as decided by Council.

Remuneration of HBRIC Ltd directors

35. Periodically, normally every three years but more frequently if considered appropriate, HBRIC Ltd will review the level of remuneration being paid to the boards of the CCTOs.

36. As part of this function, ~~HBRIC Ltd~~ an independent panel will also review the levels of fees considered appropriate for the HBRIC Ltd board after the triennial Council elections.

37. The fees for HBRIC Ltd directors will be assessed using the same methodology that is used for other CCTOs, with no distinction made between independent and Council directors. It is expected that an element of public service should be reflected in the final agreed fees.

38. HBRIC Ltd will then report to the Council with a recommendation with regard to the level of fees for the HBRIC Ltd board. When the Council considers this issue, those Councillors who are directors of HBRIC Ltd or any other CCTO may not take part in discussions or vote on the issue except where a declaration permitting Councillors to discuss and vote on the issue has been granted by the Auditor-General.

39. HBRIC Ltd will arrange and pay for directors’ liability insurance, and indemnify each of the directors.

Removal of a director

40. The HBRIC Ltd Constitution provides that any director of HBRIC Ltd may be removed from office at any time by notice in writing from the majority shareholder (Council).

41. Without limiting the right of the Council in the constitution, the likely reasons which would justify removal of a director would be where a director:

(a) No longer has the confidence of the board or the Council

(b) Has breached ethical standards and this reflects badly on the board and/or Council

(d) Breaches the confidence of the board in any way including speaking publicly on board issues without the authority of the board

(e) Does not act in accordance with the principles of collective responsibility.

42. Where the HBRIC Ltd board has concerns regarding the behaviour of one of its directors it shall be considered first by the board and where necessary the board may recommend the removal of the director to the Council.

43. HBRIC Ltd may remove a director from any of its subsidiaries for similar reasons as set out above ~~without reference to the Council.~~ following referral to, and approval by, the Council.

Council Controlled Trading Organisations

Introduction

44. The Council has significant shareholdings, direct and indirect, in a variety of CCTOs. These all operate at arm’s length from the Council on a commercial basis.

45. The Council may establish further CCTO’S during the life of the Policy.

46. HBRIC Ltd has been charged by the Council with monitoring and recommending new director appointments for Council approval in respect of the CCTO’s in which HBRIC Ltd directly holds shares.

~~47. CCTOs in which HBRIC Ltd hold shares directly are empowered under this policy to appoint directors to their own subsidiaries or associates in accordance with their own policies.~~

48. No directors will be appointed to CCTO boards other than through the process described in this policy.

Identification of required skills, knowledge and experience of CCTO directors

49. The required skills, knowledge and experience for director appointments to a CCTO board are assessed in the first instance by the Governance, Appointment and Remuneration Committee of HBRIC Ltd, in consultation with the Chairperson of the relevant CCTO. Reference is made to current governance best practice in this area, as encapsulated in the Institute of Directors’ Principles of Best Practice for New Zealand Directors and other relevant material. External assistance may be used by HBRIC Ltd in some cases.

50. The mix of skills and experience on the CCTO board will be taken into account, and consideration given to complementing and reinforcing existing skills and reducing known weaknesses where necessary.

51. In general terms, the following qualities are sought in directors of CCTOs:

(a) Intellectual ability.

(b) Commercial experience.

(d) Sound judgement.

(e) High standard of personal integrity.

(f) Commitment to the principles of good corporate citizenship.

(g) Understanding of the wider interests of the publicly-accountable shareholder.

52. As a general principle, the Council would seek to appoint a person who, while meeting all of the above criteria, has particular strengths in terms of attribute g).

53. It is expected that all appointees to CCTO boards will undergo, or already have undergone, formal corporate governance training, or have the requisite experience in this area.

Appointment process for CCTO directors

54. When a vacancy arises in any CCTO, the HBRIC Ltd Governance, Appointment and Remuneration Committee, having identified the skills, knowledge and experience required for the position (in consultation with the CCTO Chairperson), will then follow the process set out below:

Search

(a) HBRIC Ltd will maintain a database of potential candidates for appointment to CCTO boards. This will be updated on a regular basis, utilising contacts with the business community and other relevant sources. The database and its detail will be confidential to the Board of HBRIC Ltd. A Councillor is eligible to be included in this database on merit.

(b) The database will be the first point of reference in the search process. However, in most cases, a specialist consultant will also be contracted to assist with the provision of names of possible candidates and the initial evaluation. In most cases, the vacant CCTO board position will not be advertised, as this would not normally be expected to add any significant value to the process.

(d) If the HBRIC Ltd Governance, Appointment and Remuneration Committee, after consultation with the chairperson of a particular CCTO board, determines that there is a need for a Councillor on the board of that CCTO to bring the specific skills and relationships of a Councillor Director to the board, then the process of selection of candidates will be varied in the following manner:

i. The HBRIC Ltd Governance, Appointment and Remuneration Committee, assisted by a specialist consultant, will call for nominations from all interested Councillors and will interview all Councillors expressing an interest in an appointment to the CCTO and make an appointment in a manner which is consistent with this policy in all other respects.

ii. If the term of appointment for a Councillor who is appointed under this clause is due for reconsideration in terms of the constitution of the CCTO they may be considered for reappointment by HBRIC Ltd without further consultation with Council under a process consistent with clauses 52 to 55.

iii. Appointments of any Councillor appointed under this clause by HBRIC Ltd shall expire 31 March in the year following a triennial election.

iv. If following the triennial local government election the appointee is not re-elected as a Councillor HBRIC Ltd will commence a process for selection of a new appointee to the board, which may or may not be a Councillor.

v. HBRIC Ltd will re-assess in consultation with the CCTO at no less than three yearly intervals whether there remains a need for a person to be appointed to the board who is specifically an elected Councillor.

vi. If the HBRIC Ltd Governance, Appointments and Remuneration Committee determines there is an ongoing need for a Councillor on the board of that CCTO, the committee shall carry out a process consistent with paragraphs 15 – 22 of this policy to recommend the appointment of a Councillor to the CCTO.

vii. This clause does not apply to appointments where a Councillor is appointed other than in accordance with this sub-clause.

Interview

(a) Following the search process, the HBRIC Ltd Governance, Appointments and Remuneration Committee will draw up a short list of candidates.

(b) Where appropriate the committee will co-operate with other shareholders in the selection process.

(c) Each candidate will be interviewed by the committee. The committee will then decide its preferred candidate, check all references and report back to the full HBRIC Ltd Board for ratification.

Appointment

(a) The HBRIC Ltd Board will then make a recommendation to the Council. The report will be “public excluded” in order to protect the privacy of the individual concerned. The Council will consider the report from HBRIC Ltd and make its decision.

(b) Public announcement of the appointment will be made as soon as practicable after the Council has made its decision.

Reappointment

55. Where a director’s term of appointment has expired and he or she is offering him/herself for reappointment, a representative of the HBRIC Ltd Board (normally the Chairperson) will consult on a confidential basis with the Chairperson of the CCTO with regard to:

(a) Whether the skills of the incumbent add value to the work of the board.

(b) Whether there are other skills which the board needs.

56. The HBRIC Ltd Governance, Appointments and Remuneration Committee will consider the information obtained and, taking into account the director’s length of tenure (see below), form a view on the appropriateness of reappointment or making a replacement appointment.

57. Where reappointment is considered appropriate then the HBRIC Ltd Board is authorised to approve it without further reference to the Council.

58. Where it is not intended to reappoint the existing incumbent, the appointment process outlined above will apply.

Length of tenure

59. CCTO directors will normally be appointed for periods of three years. Subject to a review of the director’s performance after each three year period, the normal tenure for a director will be six to nine years. Following nine years of service, a director may be re-appointed for a further three years in special circumstances.

Chairpersons of CCTOs

60. It is the responsibility of the board of each CCTO to appoint its own Chairperson. However, normally the CCTO board will consult with HBRIC Ltd on the person to be so appointed, and where HBRIC Ltd considers it appropriate, it will give its view on who it considers to be the appropriate person to fill the Chairperson's position.

Napier Port

61. For the purposes of this policy only, Napier Port is defined as a CCTO notwithstanding anything in the Local Government Act or the Port Companies Act.

Remuneration of CCTO directors

62. HBRIC Ltd has been charged with monitoring and, where appropriate, recommending to Council for approval changes in remuneration levels for the boards of CCTOs.

63. Periodically HBRIC Ltd will review the level of remuneration made available to the boards of the CCTOs for distribution amongst directors on each board.

64. The fees will be reviewed on an overall basis for each CCTO, leaving the board of that CCTO to apportion the fee between board members as it sees fit. Under exceptional circumstances, HBRIC Ltd may approve an application from a CCTO for additional fees, for a special project.

65. In performing its review of remuneration, HBRIC Ltd will take account of the following factors:

(a) The need to attract and retain appropriately qualified directors.

(b) The levels of remuneration paid to comparable companies in New Zealand.

(d) Any other relevant factors.

66. In general, it is intended that boards of CCTOs will receive a level of remuneration that is competitive with the general market, while recognising that there will be differences from time to time, particularly in the period between reviews. Professional advice will be sought where necessary.

67. In the event of a Council or HBRIC Ltd staff member being appointed to a CCTO board, the fees for that appointee shall either not be paid or be paid to the Council or HBRIC Ltd, unless there are special circumstances. This reflects the employee being appointed as part of their existing position.

68. The Council also supports the payment by CCTOs of directors’ liability insurance and the indemnification of all directors.

Council-Controlled Organisations

Introduction

69. The Council has an interest in CCOs which are not trading organisation. These CCO’s are Hawke’s Bay Local Authority Shared Services and. These are not-for-profit bodies and, in contrast with the section that deals with CCTOs, Hawke’s Bay Regional Investment Company Ltd has no involvement in monitoring or the director/trustee appointment process.

70. Appointments to a CCO are generally for a three year term, and are made after the triennial Council elections.

Identification of required skills, knowledge and experience of CCO directors, and appointment

71. The Council will determine the required skills, knowledge and experience for each appointment to these Council Controlled Organisations and make its appointments accordingly.

72. In general, the attributes required for directors of CCTOs will be applicable, but the weightings given to each attribute may vary according to the nature of the appointment.

73. In most cases, Councillors will be the appointees, but there may be instances where it is appropriate to appoint external directors or Council staff.

Remuneration of CCO directors

74. After each triennial Council election, the Council will determine whether there are any CCOs that may more properly be classified as CCTOs for the purposes of determining an appropriate level of remuneration. If any CCOs are so classified, the remuneration of their boards will be determined by HBRIC Ltd in accordance with the policy for CCTOs set out on page 6.

75. In all other cases, CO directors appointed by the Council will receive the remuneration (if any) offered by that body. Council staff members appointed to such bodies will not accept any remuneration.

Council Organisations

Introduction

77. The Council has non-controlling interests in numerous COs. These are not-for-profit bodies and, in contrast with CCTOs, Hawke’s Bay Regional Investment Company Ltd has no involvement in monitoring or the director/trustee appointment process.

78. Appointments to COs are made for a number of reasons. These include:

(a) To provide a means of monitoring where the Council has made a grant to that body.

(b) To enable Council involvement where the CO’s activity is relevant to the Council.

(d) Statutory requirements.

79. Appointments to a CO are generally for a three year term, and are made after the triennial Council elections.

80. The Council will endeavour to minimise the number of appointments where the benefit to the Council of such an appointment is minimal.

Identification of required skills, knowledge and experience of CO directors, and appointment

81. The range of reasons for the appointment of Council representatives to COs results in a wider range of desired attributes for appointees to these bodies.

82. The Council will determine the required skills, knowledge and experience for each appointment. Candidates are not restricted to Councillors – in some cases, it may be more appropriate to appoint Council staff or external people with affiliations to the Council.

Remuneration of CO directors

83. CO directors appointed by the Council will receive the remuneration (if any) offered by that body. Council staff members appointed to such bodies will not accept any remuneration.

HAWKE’S BAY REGIONAL INVESTMENT COMPANY LIMITED

CHAIRPERSON SUCCESSION PLANNING POLICY

(This policy is specifically for the HBRIC Ltd Board Chair)

ADOPTED 26 MARCH 2014

Introduction

In line with best practice, and in conjunction with the development of the policy on the appointment and remuneration of directors, this policy has been developed and is presented to Council for consideration and adoption.

Rationale for a succession plan:

To provide for:

· Smooth transition through a planned approach

· Knowledgeable leadership of the board in the event of planned or unexpected retirement of the incumbent Chairperson

· Recognition that the term of any chairperson in that role is limited

· A Chairperson’s desire to step down at any time, knowing that there is a person who is prepared to take over the role

· Appointment of a new Chairperson who should generally have knowledge of the Company.

Principles:

· Directors would generally not be appointed for more than two (3 year) terms on a board

· A person appointed as Chair in their second term may be appointed for a maximum of six years as Chairperson unless in exceptional circumstances as agreed by the Council.

· Council and HBRIC Ltd will generally consider the need for a potential successor as they make each director appointment

· The selection process for all HBRIC Ltd board members, including the Chair, is the prerogative of Hawke’s Bay Regional Council under the appointment policy.

Process:

The Council Appointments Committee (refer Council policy on the Appointment and Remuneration of Directors) will work through succession planning for the Chair of HBRIC Ltd using the following process:

· Ensure that planning starts at least one year before planned retirement

· Discuss with current Chairperson their views on the date of their retirement and who would be a good successor

· Compose a list of required skillsets for the position following discussion (as appropriate) with the Chairperson and individual Board members and ascertain whether there is any obvious leader amongst the existing board

· Agree a timeframe of the new appointment allowing a bedding-in time of at least one year is the newly proposed Chairperson is new to the Board

· Interview/discussions with the preferred candidate to ascertain their availability for the Chairperson role

· Preliminary discussions will not guarantee appointment but give an indication that all things being equal, they will be the next Chair

General Skillsets Required:

· Ability to maintain the trust of the Council

· Ability to maintain close, but independent working relationship with CEO

· Ability to harness the collective skills of the board and executive team to achieve the business objectives and maintain the confidence of the shareholders

· Ability to encourage all directors to have full participation in Board deliberations

· Ability to lead Board evaluation process

· Ability to demonstrate leadership and good interpersonal skills

· Ability to efficiently conduct Board meetings

· Ensure timeliness and relevance of information to the Board

· Ability to be the spokesperson for the company

· Integrity and credibility within the business community

· Ability to retain the confidence of the region and be able to build relationships within the region’s networks.

APPENDIX 1

HAWKES BAY REGIONAL COUNCIL CONTROLLED ORGANISATIONS

As at 26 March 2014

1. Companies in which Hawke’s Bay Regional Council directly owns the shares

· Hawke’s Bay Regional Investment Company Ltd

2. Council Controlled Trading Organisations in which HBRIC Ltd holds shares*

· Napier Port (Port of Napier Ltd)

3. Council Controlled Organisations in which HBRC appoints Board members by virtue of a Company Constitution

· Hawke’s Bay Tourism Ltd

· Hawke’s Bay Local Authority Shared Services Company

· Note that if the Ruataniwha Water Storage Scheme goes ahead Ruataniwha Water Management Ltd will be added to section 2 of Appendix 1, noting however that HBRIC Ltd will not have a controlling interest in that company.

APPENDIX 2:

COUNCIL REPRESENTATION ON OUTSIDE BODIES

COUNCIL APPOINTMENTS AS AT 26 MARCH 2014

Hawke’s Bay Sports Council

TB Free Hawke’s Bay Committee

Hawke’s Bay Drought Committee

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 March 2014

SUBJECT: Communications Strategy for the Draft Annual Plan 2014/15

Reason for Report

1. The Draft Annual Plan enables the regional community to have their say on the work of HBRC proposed for 2014/15. This item outlines how we propose to promote the Draft Annual Plan, encouraging individuals and groups in our community to lodge submissions during the period 2 April to 12 May 2014.

Background

2. For the 2013/ 14 Draft Annual Plan, HBRC delivered a mix of printed advertising, social media and video, supported by press reporting, radio and ‘café chat’ public meetings. With this year’s minor proposed variations against the Long Term Plan, we anticipate the desire for community interaction with HBRC to be less, with a focus on the rating increase of 5.86% and the Napier to Gisborne Railway proposal.

3. The Draft Annual Plan 2014/15 contains no detailed update on the Ruataniwha Water Storage scheme, which will instead be the focus of a significant and separate public consultation programme from 1 May to 3 June 2014. The proposed RWSS Communication Strategy will come to Council as a separate agenda item.

4. This year, we propose a similar mix of printed and radio advertising, supported by library displays, press reporting, social media promotion and a public meeting in each main centre.

5. HBRC will again offer a presentation to any interested group, at their request, to discuss the Draft Annual Plan and encourage any desire to lodge a submission.

Encouraging Submissions

Draft Annual Plan Document

6. HBRC supports the digital provision of planning documents using HBRC’s website, however a limited quantity of the Draft Annual Plan 2014/15 will be printed in-house. Copies will be mailed to key stakeholders on HBRC’s database, including Territorial Local Authorities, HBRIC Ltd, Napier Port, central Government departments, Audit New Zealand and interest groups. Copies are also provided to Hawke’s Bay’s eight public libraries – this year along with a special static display drawing attention to the Draft Plan and opportunity to submit.

Draft Annual Plan Summary

7. The Local Government Act 2002 requires that a Summary of Information be prepared which should be a fair representation of the major matters in the Draft Annual Plan. It is proposed that the April issue of Our Place include a two-page feature containing the summary. Our Place will be delivered to approximately 53,000 households across the region in the week beginning 7 April 2014.

Digital and Social Media

8. HBRC will promote the Draft Annual Plan and submissions using our relevant email databases, the HBRC website, our facebook, twitter, google+ and LinkedIn pages.

9. An electronic version of the Draft Plan Summary will be emailed to stakeholder groups, i.e. Iwi, Councillors, Māori Committee, sector groups, etc. HBRC will encourage this email to be forwarded to other interested recipients.

10. Due to the minor variations contained in this year’s Draft Annual Plan, there is no video promotion proposed in this consultation round.

Advertising

11. The Local Government Act 2002 requires that public notice be given to advise the availability of the Draft Plan. Public notices will be placed in newspapers throughout the region noting the availability of copies of the Draft Annual Plan and Summary of Information, the public opportunities organised for the area covered by the newspaper, and the closing date for submissions.

Hawke’s Bay Today Saturday, 29 March

CHB Mail and Wairoa Star Tuesday, 8 April

Napier Mail and Hastings Mail Wednesday, 9 April

12. Radio advertising on The Radio Network and MediaWorks selected stations will promote the Draft Annual Plan and the submission period: 2 April until 12 May 2014.

13. An advertisement reminding people of the closing date for submissions will be placed in area-specific papers only, due to prior wider notification at the beginning of the consultation period. Closing of Submission Period Reminder ads will appear in Hawke’s Bay Today, CHB Mail and Wairoa Star in the week beginning 5 May.

News Media

14. News media will be invited to engage with HBRC on any matter in the Draft Annual Plan.

15. A media release will be issued to all local newspapers and radio news stations to coincide with the release of the Draft Annual Plan, including Māori media as a matter of course.

HBRC Public Meetings

16. Public Meetings are proposed in the main centres between 10 and 16 April, at:

Wairoa Library – Thursday 10 April, 3.30-5.00pm

HBRC Chamber, Napier – Monday 14 April, 4.30-6.00pm

Hastings War Memorial Library – Tuesday 15 April, 6.00-7.30pm, and

HBRC Waipawa Office – Wednesday 16 April, 6.00-7.30pm
(fits with CHBDC consultation)

Presentations to Groups

17. Dependant on requests or invites from sector and interest groups, HBRC staff and Councillors will attend any group meetings. This offer will be promoted using email and/ or personal letters.

Staff

18. Staff will receive a full briefing on the Draft Annual Plan prior to its release, with opportunity for further Exec-led comment in Snapshot and/ or a CE briefing session.

Budget

19. Printing and promotion costs are estimated as follows.

Draft Annual Plan print $ 1,000

Final Annual Plan print/ digital $ 900

Our Place feature page $ 1,000

Advertising (incl public notices) $ 4,500

$ 7,400

Decision Making Process

20. 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:

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

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

20.3. The persons affected by this decision are all ratepayers in the region.

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

20.5. 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. Endorses the proposed promotion and community engagement programme for the Draft Annual Plan 2014-15.

Drew Broadley

Community Engagement and Communications Manager

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 March 2014

SUBJECT: HBRC Submission on Transport Funding Assistance Rates Review

Reason for Report

1. The purpose of this item is for the Council to review and approve a submission to the New Zealand Transport Agency (NZTA) in relation to the Review of the Funding Assistance Rates (FAR). Funding Assistance Rates reflects the contribution that the government will make, via the NZTA, to the costs incurred by local authorities in delivering transport outcomes.

2. Submissions close on Friday 28 March 2014; this was extended at the request of Local Government New Zealand given the potential significant impact on local authorities, particularly in relation to the operation and maintenance of local roads. The Regional Transport Committee is lodging a submission on the Review from a regional perspective, as are the territorial authorities. This item relates to the implications for HBRC specifically relating to Public Transport, Total Mobility, Road Safety, Transport Planning and Administration.

3. A draft submission is provided in Attachment 1 for the Council’s consideration and adoption following any amendments.

Background

4. The current Funding Assistance Rates have evolved over a number of years and are variable across local authorities as well as across different classes of transport activity (including state highways and local roads (new, renewal and operation and maintenance), demand management and community programmes (including road safety and total mobility), public transport services and infrastructure, walking and cycling facilities and transport planning.

5. While the FARs have been generally acceptable, when adjustments have been proposed in relation to specific aspects of transport funding, the inconsistencies of the current FARs were highlighted. NZTA was instructed to undertake a review of the Funding Assistance Rates.

6. The Funding Assistance Rates Review Options discussion document is Phase 2 of the review process.

7. In terms of the overall transport funding context, there is a National Land Transport Fund (NLTF) whose revenue sources include fuel excise duty, road user charges, motor vehicle registration and licencing fees, Crown appropriations to the NLTF. The Ministry of Transport through its Government Policy Statement document produced every three years, determines how it will distribute the NLTF across the different transport activities.

8. The Funding Assistance Rates determine the contribution central government and local government makes to transport outcomes.

One Rate Approach

9. One of the main differences is that NZTA are proposing a one-rate approach across all transport activities for a council, instead of the variable rate.

10. In relation to activity classes that HBRC delivery, the current FARs are shown in Table 1.

Table 1: Current of Funding Assistance Rates and Total Costs for 2012-15 activities

	RLTP Total costs 2012-15	Current FAR
Public Transport	$10,683,000	50%
Total Mobility	(including in above)	60%
Road Safety Promotion (including overhead costs)	$1,385,000	65%
Transport Planning	$215,600	65%
SuperGold Card allocations	$499,000	100%
Adminstration Fees		2.25% of total costs
Overall effective FAR rate (as determined by NZTA for last 3 years)		58%
Overall effective FAR rate (as determined by NZTA for 2012-13 year)		55%

11. Five options are modelled in the discussion document.

12. The different options reflect a different metric or combination of metrics that could be used as a proxy for councils’ relative ability to raise the local share of land transport costs. The metrics for each option are:

12.1. Option 1 – New Zealand deprivation index as a proxy for relative wealth of residents

12.2. Option 2 – Ratio of net equalised rateable capital value over no. of rating assessments as a proxy of the relative wealth of ratepayers including corporate and non-resident ratepayers

12.3. Option 3 – Uses a combination of Option 1 and Option 2 metrics

12.4. Option 4 – Ratio of lane kilometres of local road over the net equalised rateable capital land as a proxy for the size of the land transport activities and relative wealth of ratepayers

12.5. Option 5 – Uses a combination of Option 4 and Option 1 metrics.

13. Table 2 shows the modelled FARs for each option based on two different overall NLTF co-investment rates – 50% and 53%, the latter being a reflection of status quo.

Table 2: Modelled FARs for HBRC

Overall NLTF co-investment rate

Option 1

Option 2

Option 3

Option 4

Option 5

50%

50%

49%

53%

55%

52%

14. All options result in a reduction of the FAR for HBRC.

15. In terms of metrics, the deprivation metric is probably the most appropriate of the options for regional councils, particularly in relation to public transport services and infrastructure. Option 1 would bring the proposed FAR close to the current FAR for public transport.

16. In terms of Total Mobility, NZTA has encouraged and incentivised regional councils to administer total mobility services on its behalf through higher funding assistance rates and a reduction in funding would see a corresponding reduction in services. Staff consider that a higher funding rate should be maintained for these services and that capital funding of wheel chair hoists should remain at 100%.

17. In terms of Road Safety, there needs to be recognition that the wide range of activities cover state highways and complements national programmes. This is seen as a high priority in terms of national transport outcomes and it is considered that a higher funding rate is warranted.

18. It is acknowledged that variable funding assistance rates makes the allocation of funds across local authorities and across funding activities complex for NZTA to manage but it is considered important that the investment in transport outcomes is targeted appropriately at GPS / NLTF level, as well as when determining local share.

Financial and Resource Implications

19. The new Funding Assistance Rates will be determined by July 2014 and will come into effect for the 2015-2018 National and Regional Land Transport Plans (the latter including the Regional Land Transport Strategy and the Programme of activities). The Hawke’s Bay Regional Land Transport Plan will be developed and consulted on alongside the Long Term Plan 2015-25.

Decision Making Process

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

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

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

20.4. The persons affected by this decision are all residents and ratepayers in the region.

20.5. The only other option is to not make a submission however it is considered appropriate that Council should make a submission on behalf of the regional community.

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

21. 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. Receives the report titled HBRC Submission on NZTA Funding Assistance Rate Review and considers the draft submission prepared by staff.

3. Adopts the submission, including any amendments agreed, for serving on the New Zealand Transport Agency by 28 March 2014.

Helen Codlin

Group Manager Strategic Development

Liz Lambert

Chief Executive

Attachment/s

Draft HBRC Submission on NZTA Funding Assistance Rates Review

Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 March 2014

SUBJECT: Public Transport - Update and Route 12 Capacity Issues

Reason for Report

1. This agenda item provides the Committee with an update on Council’s public transport services and highlights an issue we are currently experiencing on Route 12 (the service which travels between Napier and Hastings) that needs urgent attention. The report contains patronage graphs which are updated each month and provided to the Regional Transport Committee and normally the Corporate and Strategic Committee.

General Information

2. The overall performance of the bus service continues to be positive, with passenger growth still increasing. Passenger trips in 2013 were almost 9% higher than in 2012. Since 2009 passenger trips have increased by 81%.

3. In July 2013 the New Zealand Transport Agency gave approval for a 30 month contract extension. This means that under a contract extension variation agreement Go Bus Transport Ltd will continue to operate the urban bus contract until 30 June 2016. It is anticipated that the contract for the urban bus services will be released for tender in July 2015. The contract extension was necessary to ensure that new legislative requirements are able to be met – these include producing a new Regional Public Transport Plan and Procurement Strategy by 30 June 2015.

4. Work on the new Regional Public Transport Plan is currently underway, with a network review being undertaken by Traffic Design Group. The review will look at accessibility and efficiency of services. Although no significant changes are anticipated, there are some trips which are in decline and it is possible that these resources could be better utilised elsewhere on the network to alleviate overloading and late running.

Total Passenger Trips

5. The following graph shows total passenger trips from February 2009 to December 2013.

Diagram 1 – Total Passenger Trips – February 2009 – December 2013

6. Since 2009 the total numbers of trips per year and monthly averages have steadily trended upwards, as follows.

Total Yearly Trips Monthly Average

2009 434,231 36,186

2010 512,657 42,721

2011 616,198 51,350

2012 726,373 60,531

2013 789,277 65,773

Capacity

7. The following graph outlines the seat capacity utilised on a monthly basis from January to December 2013. Average seat capacity utilised during 2013 was 43%.

Diagram 2 – Capacity – January - December 2013

SuperGold Card Trips

8. SuperGold cardholders, who travel free of charge between 9am and 3pm on weekdays and anytime at weekends/public holidays, continue to make very good use of this scheme. The graph below shows the number of SuperGold cardholder trips made from January to December 2013.

Diagram 3 – SuperGold Card Trips – January - December 2013

Infrastructure

1. Bus Stops

9. Hastings District Council has purchased 14 bus shelters, which are due to be installed in the Hastings district in the near future. Regional Council provides funding to NCC and HDC for 2 new bus shelters per year.

10. Regional Council staff will be working closely with Napier City Council roading staff to implement a staged programme of formalising Napier bus stops.

Bikes on Buses

11. The uptake of bikes on buses continues to increase, with over 3000 bikes carried during 2013.

Total Mobility Update

12. The Total Mobility Scheme, which is funded by regional council, local councils and the NZTA, provides subsidised taxi transport for people who have a permanent illness or disability which prevents them from using public transport.

13. The following table shows the Total Mobility Scheme statistics and expenditure during 2013. Staff continue to look for opportunities to ensure that any budget overspend is minimised for this financial year.

Diagram 5 – Total Mobility Statistics – January 2013 – December 2013

14. At the Regional transport Committee, Cr Barker queried the costs of Total Mobility in relation to the number of trips made and number of passengers. Diagram 6 provides a comparison using monthly averages for the last two years.

Diagram 6: Cost comparison between 2012 and 2013

Year	Total Cost	Cost Monthly average	Trips Monthly Average	Passengers Monthly average	Average cost (subsidy) per trip
2012	$519,296,10	$43,274.67	6514	7285	$7.02
2013	$541,637.96	$45,136.50	6860	7624	$6.67
%change	+ 4.3%	+ 4.3%	+ 5.31%	+4.65%

15. This shows that the average cost per trip shows a marginal decrease in 2013 due to the variable nature of this type of transport. In Hawke’s Bay, much of the regular disability travel is rehab activity that happens in one twin city or other but not both. This can mean regular trips over longer distances. There are many variables that constantly change but overall there was an increase in activity for 2013.

Route 12 capacity issues

16. Due to increased patronage and the withdrawal of some Ministry of Education services, early morning/afternoon Route 12 peak-time services between Napier and Hastings are carrying very heavy loads and running 8-15 minutes late. This is hugely frustrating for the drivers and very inconvenient for passengers, with reports of passengers arriving at work/school/EIT late and missing appointments.

17. A network review is currently underway and the outcome of the review will form part of the new Regional Public Transport Plan. However the issues currently being experienced on Route 12 need to be addressed with some urgency. Go Bus Transport Ltd have offered a solution of 2 extra buses, peak-times, Monday to Friday, term-time only, at a cost of $141,400 per annum.

Options

18. A number of options have been identified as shown below along with a comment as to the appropriateness of that option. The preferred option is Option 3.

Option No	Description	Comment
1	Do nothing and address it as part of the Regional Public Transport Plan review.	While this does not impact on budgets, it does not meet the desired level of service of ‘an accessible bus service.to meet the increasing need for public transport’.
2	Increase capacity in Route 12 only	This will cost $141,400 per annum of which 50% will need to be met by Council and 50% by NZTA. There is no guarantee that NZTA will approve additional funding and there is no current funding provision for the additional costs.
3	Increase capacity in Route 12 and cancel Route 10	As detailed more fully below. Route 10 (Hastings-Napier via the expressway) is under-utilised and therefore heavily subsidised. This route could be cancelled and resources re-directed to Route 12 within existing budgets.

Option 3

19. Currently Route 10 (Hastings-Napier via the expressway) and Route 11 (Havelock North-Hastings via Clive) express services are carrying on average just 5 passengers per trip, making it a very costly service to provide. Passenger trips on Route 10 fell by 12% last year and Route 11 by 8%. The current cost of the express service is in the region of $290,000 per annum (excluding GST and indexation).

20. Existing Route 10 passengers have other options for getting to their destination via Route 12 (albeit not an express service). Route 11 passengers however do not as this is the only service which travels via Clive. It is proposed that Council cancel Route 10 services with one month’s notice and re-direct the money saved to fund the Route 12 overload to start 5 May 2014. This would give existing passengers on Route 10 sufficient notice of the cancellation enabling them to make alternative travel arrangements. Transport staff have worked closely with Go Bus Transport ltd to ensure this would be cost neutral.

21. Staff will advise existing bus users through notices on Route 10 buses, handouts to passengers and users in general through amending the timetable on the website, the mobile bus timetable application and on-street bus timetables, as well as general media releases (paper and radio).

22. A new timetable booklet and on-street posters will be produced in August to coincide with fare increases starting 1 September 2014, in line with the three-year fare increase programme Council approved in 2012. The mobile bus timetable application for smart phone users and the on-line bus timetable continues to be very popular, making up a large percentage of hits on the HBRC website.

Financial Implications

23. There are no financial implications as the cancellation of Route 10 will enable resources to be re directed into extra Route 12 services.

Conclusion

24. With respect to the Route 12 capacity issue, it is proposed that Council agrees to cancel Route 10 services effective 5 May 2014 and also commence overload services on Route 12 on 5 May 2014 (which is the first day of Term 2).

Decision Making Process

25. 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:

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

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

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

25.4. The persons affected by this decision are the existing users of the services for Route 10 and Route 12

25.5. Options that have been considered include doing nothing now but address the issue as part of the review of the Regional Public Transport Plan, or commencing additional services for Route 12 with a resulting budget overspend.

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

25.7. 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. Receives the report titled Public Transport Update and Route 12 Capacity Issues.

3. Agrees to cancel the Route 10 Express Service between Hastings and Napier via the expressway effective 5 May 2014.

4. Agrees to extend services on Route 12 effective 5 May 2014, being two extra buses during peak morning and afternoon periods (7.00am – 9.00am and 2.30pm – 4.30pm) between Hastings and EIT and Napier and EIT.

5. Notes that the above changes can be made within existing budgets.

Megan Welsby

Sustainable Transport Coordinator

Helen Codlin

Group Manager

Strategic Development

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 March 2014

SUBJECT: Monthly Work Plan Looking Forward Through April 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 Biosecurity	- Focus on Papanui catchment as a pilot for implementation of Plan Change 6. - Application to Hill Country Erosion fund for continuation of hill country erosion work in Wairoa district and initial work in Tukituki catchment successful. Project implementation now underway. - Repairs to flood damage from 29 November 2013 storm event on the Upper Tukituki Scheme Rivers is largely complete. - Construction work to repair the Makara No 1 Dam progressing. Expected completion date late April 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 underway. Harvesting is expected to take until May 2014. - Proposal for development of a strategy for coast between Clifton and Tangoio will be on April E&S agenda. Work will continue with NCC and HDC. - Cost benefit analysis for individual pest species under the plan and preparation of broad plan review framework underway. - Cape to City trial underway.
Corporate Services		- Draft Annual Plan for adoption at 26 March 2014 Council meeting. - Draft Annual Plan submissions period 2 April – 12 May inclusive
External Relations/ CE’s office	Communications Strategic Alliances CE’s Office	- Publication of April edition of Our Place - Preparation for public engagement processes around Draft Annual Plan and RWSS Special Consultative Process - In discussion with OTS, Mana Ahuriri and other parties on proposal for future management of Ahuriri Estuary - Oversight of preparation for special consultative procedure for RWSS investment decision
Resource Management	Client Services Compliance	- Contract management process review for Resource Management Group - Preliminary scoping for data systems integration - Science charging process review - Develop with HBDHB a clean heat /insulation programme targeting low decile and rental properties to improve health status - A global consent trial continues with Twyford Irrigators that implements an allocated water sharing model to enable growers to irrigate on a communal basis. The trial is progressing well. - A draft compliance strategic plan has been completed and is currently being peer reviewed. This will be presented to the Executive and Council on completion.
Resource Management	Consents	Ongoing consent processing - HDC Wastewater consent – further prehearing has been held. Consent to be finalised without need for hearing. - Tyreless Co Ltd (tyre pyrolysis plant) discharge to air consent application at Awatoto subject to submissions and to proceed to hearing (27 Feb). Hearing adjourned. Decision pending. - NCC application for coastal protection structure at Whakarire on hold but likely to proceed to a hearing. - Poukawa group of consents on hold while monitoring is identified and a Catchment Management Strategy is considered which may avoid the need for hearing. - Environment Court Appeal re Mahanga et Tu v Mexted et al held 10 – 12 March.
Resource Management continued	Science	- Science investigations for the Greater Heretaunga and Ahuriri management zone continue, including continuing sediment modelling in the Tukituki, and continuing riparian mapping in the TANK area. - Technical Advisory Group formed for the proposed development of a coupled/linked surface-groundwater model has met and decided on the initial approach. - Conduct of fieldwork associated with Greater Heretaunga and Ahuriri management zone plan change continues – surface water quality, estuarine water quality and spring-fed streams. - The Hydrometric Network is currently being reviewed internally. The review includes the potential addition of any NIWA sites and the resulting resourcing required to operate and archive the data according to relevant performance standards. One NIWA site has been adopted by Council to date. - Workstreams associated with the Mohaka Plan Change implementation continue. Hawke’s Bay is working with Environment Bay of Plenty and GNS Science on a collaborative investigation of catchment boundaries. - Workstreams associated with the Tukituki Plan Change implementation continue, with emphasis on phosphorus mobilisation. - Routine seasonal monitoring programmes continue. The recreational water quality monitoring finished on Monday 17 March. Summer-focussed ecological, groundwater and hydrological monitoring is progressing well. - First draft of “Mohaka River catchment characterisation report” delivered. Assessing additional investigations for Taharua/Mohaka and requirements for groundwater flow model. - Collating available data for Lake Poukawa. Assessing additional investigations for modelling requirements. A meeting with stakeholders was held in March.
Strategic Development	Resource Management Planning	- Further engagement with appellants to Change 5 following a second 2 day mediation primarily addressing Fish and Game appeal points. - Board of Inquiry hearing on ‘Tukituki Catchment Proposal’ (including Change 6) completed. Draft decision likely by 15 April 2014, final decision required by 28 May 2014. Work continuing on Implementation Plan - TANK Group to review term of reference and meeting schedule in light of science programme - Taharua/Mohaka stakeholder discussions continuing in parallel to science investigations. Includes hui with iwi representatives. - Assess need to make further submissions in relation to Napier City Council’s Plan Change 10 and the proposed Hastings District Plan.
Strategic Development	Transport	- Consultation on the Draft Government Policy Statement for Transport Outcomes – regional meetings expected early April - Consultation on the One Road Network Classification in late March
Civil Defence & Emergency Management	HB CDEM Group - Draft Group Plan	- Submissions closed on 13 Dec 2013 with eight being received. These will be heard at the next Joint Committee Meeting in April 2014. The outcome of that meeting will be to resolve a final draft plan which will then be sent to the Minister of Civil Defence for her comments.

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 April 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

Ian Macdonald

Group Manager/Controller Hawke's Bay Civil Defence Emergency Management

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Port of Napier Ltd (Napier Port) Director Appointment	7(2)(a) 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 protect the privacy of natural persons.	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

1	Draft 2014-15 Annual Plan - Welcome and Full Contents	Under Separate Cover
2	Draft 2014-15 Annual Plan - Part 1 Introduction	Under Separate Cover
3	Draft 2014-15 Annual Plan - Part 2 HBRC Activities	Under Separate Cover
4	Draft 2014-15 Annual Plan - Part 3 Financial Information	Under Separate Cover