Agenda of Corporate and Strategic Committee

	Agenda Item	Follow-up / Request	Person Responsible	Due Date	Status Comment
1	Matters Arising	Update on Wairoa office upgrade	M Adye	Immed	Detailed design and engineering assessments progressing. Expect to seek building consent and tender for the building works during August. Lease negotiations with DoC expect to be completed late July.
2	Follow-ups from previous meetings	Circulate councillors updated Declaration of Interests forms	E Lambert	30/04	Circulated at 30 April Regional Council meeting
3	Follow-ups from previous meetings	Clarification sought: of the percentage of shareholding guidelines for councillors’ declarations	E Lambert		Provided via email and confirmed at 30 April Regional Council meeting

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 16 July 2014

SUBJECT: Establishment of HBRIC Ltd Board of Directors - Composition and Recruitment

Reason for Report

1. The Transition Board of the Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) will be concluding its term after financial close on the Ruataniwha Water Storage Scheme. At that time an ongoing Board will replace the transition Board, with the Transition Board directors being eligible for re-appointment.

2. The role of HBRIC Ltd is limited to:

2.1. Owning and managing the investment assets and liabilities transferred to it by the Council from time to time

2.2. Making new investments and disposing of current investments in pursuit of the Company’s objectives

2.3. Investing in, and managing, a range of financial and physical assets including, but not limited to, property and infrastructure in the Hawke’s Bay Region (as defined in the Local Government Act 2002) and elsewhere in New Zealand, shares and equity investments in public listed and unlisted companies; equity in, and loans to, joint ventures; bonds, term deposits, mortgages and other fixed interest securities; and other financial instruments

2.4. Raising funds for investment by selling bonds, mortgages, preference shares and other debt instruments or by reducing its holdings in equity investments (for example by way of part sales of shares in Port of Napier Limited), its subsidiary or associated companies

2.5. Assisting its subsidiary and associated companies to increase shareholder value and regional prosperity through growth and investment

2.6. Applying best practice governance procedures within the Company and its subsidiaries and other investments

2.7. Enhancing the Council’s capability to manage an active investment policy

2.8. Providing flexibility of operation and access to financial tools not otherwise available to Council directly

2.9. Helping achieve the Council’s regional strategic economic development objectives by investing in assets that will benefit the Hawke’s Bay Region as a whole, namely that, the Company will use all investments and use all income derived from these investments, for Regional Council purposes and functions as defined in statute, that is, they must generate financial and economic and, where appropriate, environmental, social and cultural benefits for the Hawke’s Bay Region.

3. The purpose of this paper is for the Committee to give direction to the staff on two matters relating to the establishment of the ongoing Board.

3.1. The composition of the Board in relation to the mix of Council directors and independent directors, and

3.2. The process for the recruitment of directors for the new Board.

Board Composition

4. The Constitution of HBRIC Ltd provides for a minimum of three directors and a maximum of seven directors. The appointment of any and all directors is the responsibility of the Hawke’s Bay Regional Council as the shareholder. There is no minimum or maximum number of Independent or Councillor directors. Only a current Councillor may be appointed as a Councillor Director of HBRIC Ltd.

5. The Constitution further states that the appointments shall be made in accordance with HBRC’s Policy concerning Director appointments. This Policy was adopted by HBRC on 26 March 2014.

6. Paragraph 16 of HBRC’s Policy on the Appointment and Remuneration of Directors states that it is intended that the Board of Directors comprises a mix of Councillor and independent directors, as a composition which is capable of maintaining the confidence of both the Council and subsidiary companies is critical to the success of the Board.

7. The appointment of Councillor Directors is not mandatory but is anticipated by the Policy. Committee members will be aware of the political issues raised in 2013 around the perception of predetermination for Councillor Directors on the Transition HBRIC Ltd Board, working on the RWSS scheme. While the Directors of the permanent Board would not face the same complexities it is worthwhile noting the key points of the legal commentary provided to Council by Sainsbury Logan & Williams in relation to perceived conflict of interest and predetermination issues for Councillor directors.

7.1. One of the specific exceptions to participation in decision making under the Local Authority (Members’ Interests) Act 1968 (s 6 (1A)) relates to councillors which have been elected by, or are appointed to represent, any activity, industry, business, organisation or group of persons and their pecuniary interest is not different in kind from the interests of others in the activity, industry business, organisation or group by which the councillor is elected, or in respect of which they are appointed.

7.2. That point is reinforced in the Officer of Auditor General’s Report on Governance Issues involving subsidiary companies (2001) that states:

7.2.1. Although councillor directors face potential conflicts of interest, they may also provide a useful service by:

· Being a council voice;

· Providing a local community perspective; and

· Ensuring that the objectives of the board are aligned with those of the local authority

7.2.2. The presence of councillor directors also enables the Board to explore the likely response of the shareholding local authority to board proposals

7.2.3. The OAG recommends (as in its 1994 report), that the boards of holding companies include councillor directors.... while the holding company is the legal owner of operating subsidiaries, the local authority is ultimately accountable to the community for the performance of the subsidiaries. Councillor directors on the holding company are a means of ensuring that commercial decisions have appropriate regard to the wider interests of the local authority shareholder.

7.2.4. In determining the balance of councillor and external directors on the board of the holding company, the local authority should consider:

· The desired mix of skills and experience for the holding company’s role as the local authority’s professional investment manager;

· The nature of the local authority’s investment portfolio; and

· The relationship between the holding company and the local authority.

8. The Chairman of the HBRIC Ltd Board is nominated by HBRC in accordance with a selection process which is the prerogative of HBRC and shall be appointed from amongst the Directors appointed to the Board.

9. Staff now seek a recommendation from the Committee, to be formalised at Council, as to the number of directors to be appointed to the Board, and the Independent-Councillor Director mix.

Recruitment Process

10. The HBRC Policy on Appointment and Remuneration of Directors sets out a process for appointments to the HBRIC Ltd Board. This process is based upon the establishment of a Council Appointments Committee to recommend directors to Council. The committee is to comprise four members who are not seeking appointment to the HBRIC Ltd Board and, where possible, will include the current chair of HBRIC Ltd, a current Councillor, a recently retired councillor and an external experienced director.

11. Following the consideration of a draft of this policy in March 2014 Councillors were invited to put forward names for the Appointments Committee to be confirmed at the March Council meeting. There was some confusion around this request and the timeframe for the putting forward of names was extended to mid-April for a decision at the April Council meeting.

12. Given the wide divergence of views on potential appointees staff are proposing that Council consider one of two options:

12.1. Consideration of appointments to the Appointments Committee in a public excluded session at the July Council meeting; or

12.2. Council resolves to bypass the Appointments Committee for the establishment of the first permanent Board of Directors and engages with a recruitment agency experienced in the process of identifying, evaluating and recommending suitable directors to carry out this task.

Decision Making Process

13. 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:

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

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

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

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

13.5. 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

The Corporate and Strategic Committee recommends that Council:

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

2. Resolves that the Board of the Hawke’s Bay Regional Investment Company Ltd to replace the current Transition Board comprises (insert number) ___ directors in total.

3. Resolves that the Board of the Hawke’s Bay Regional Investment Company Ltd comprises (insert number)_____Independent Directors and (insert number)___ Councillor Directors.

Either:

4. Confirms the membership of the Appointments Committee at the meeting of Council on 30 July 2014.

5. Instructs staff to engage a consultancy to undertake the identification and assessment of independent and councillor directors of the Board of HBRIC Ltd, and recommend the preferred directors to HBRC.

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 16 July 2014

SUBJECT: Board of Inquiry Decision on Tukituki Plan Change 6

Reason for Report

1. The final Decision of the Board of Inquiry (Board) on the Tukituki Catchment Proposal was released on 26 June 2014. The purpose of this report is to summarise the Board of Inquiry’s response to HBRC’s comments on the draft decision for Plan Change 6. The final decision on the Ruataniwha Water Storage Scheme applications is being addressed separately by HBRIC Ltd.

2. This paper sets out:

2.1. The main concerns identified by staff regarding the Board’s draft Decision

2.2. How the Board has responded to those concerns in its final Decision

2.3. Staff comments on the Board’s response.

3. It also addresses some concerns raised by councillors at an earlier briefing.

Main Concerns with the Draft Decision

4. There were a number of concerns with the technical aspects of the Board’s draft Decision on Change 6, and these were set out in detailed comments to the Board. Specific wording amendments to Change 6 were sought to address those concerns.

5. The main concerns related to:

5.1. The imposition of a DIN (dissolved inorganic nitrogen) limit of 0.8 mg/L. Firstly, there was concern that the figure of 0.8 mg/L was not based on robust science that was applicable in the Tukituki catchment. Secondly, the imposition of the DIN limit would have resulted in all farms within the catchment requiring land use consent as the 0.8 mg/L DIN limit is currently exceeded above Shag Rock and may soon be exceeded above Black Bridge.

5.2. The imposition of LUC (land use capability) based nitrogen leaching limits^{^[1]} for production land which had not been sought by HBRC. The limits imposed by the Board were derived using Version 5 of Overseer and compliance with them would need to be measured using the current version of Overseer (Version 6). We know that Version 6 predicts higher nitrogen leaching than Version 5 due simply to changes in the Overseer model’s algorithms.

5.3. The requirement for all farms greater than 4 ha in area to complete FEMPs (farm environmental management plans) by 1 June 2018. This will require 1062 FEMPs to be produced at a cost to farmers of between $3000 and $5000 each. It has been estimated that an additional 12 qualified and experienced FEMP practitioners will need to be sourced immediately to ensure that the FEMPs are completed by the target date.

5.4. The requirement to determine maximum allowable zone loads (MAZL) for nitrogen and phosphorus and compare these to on-farm losses, even though the imposition of the LUC based nitrogen leaching rate limits negated the need to set and monitor catchment loads.

6. In addition, staff and their advisors had numerous concerns regarding the detailed wording of various policies and rules, particularly with regard to the clarity, consistency and workability of some provisions. In HBRC’s comments to the Board, 41 specific and detailed wording amendments were suggested to resolve those concerns.

The Board’s Response

7. The Board accepted 39 of the 41 requested changes in full or in part. This paper does not address those matters. The few suggested wording changes not accepted by the Board relate to the following matters.

DIN Limits

8. After 31 May 2020, any farms contributing to exceedences of nitrogen water quality limits will require land use consents under Rule TT2 (restricted discretionary activity consents).^{^[2]}

9. The Board has retained the DIN (dissolved inorganic nitrogen) limit/target of 0.8 mg/L. However, Change 6 has been amended to state that if a farm is meeting the Table 5.9.1D LUC based nitrogen leaching limits then it will be deemed not to be contributing to an exceedence of the DIN limits.^{^[3]} In this regard, the Board accepted that HBRC’s assessment of the effect of the draft Decision was correct (that it would require every farmer above Shag Rock to apply for a resource consent) and confirmed that HBRC had been right to surmise that such an outcome had not been intended and was an error.

10. The Board’s amendment to Rule TT1(j) now means that even if the DIN limit is exceeded in a river, farms in that river catchment will not be required to seek a land use consent if they are meeting (not exceeding) the Table 5.9.1D LUC based nitrogen leaching limits.

LUC based nitrogen leaching limits

11. The Board has not amended the Table 5.9.1D LUC based nitrogen leaching limits to include updated numbers generated using Version 6 of Overseer. The Board’s reasoning is that they received no evidence on that during the hearing. However, the Board has inserted a new provision which states that the application of Overseer is to be set out in a procedural guideline prepared by HBRC.^{^[4]}

12. This will enable HBRC to develop a procedure whereby on-farm leaching rates modelled using Version 6 of Overseer (or whatever other new versions are promulgated in the future) can be adjusted (or scaled) so that they are directly comparable to the Table 5.9.1D LUC based nitrogen leaching limits that are based on Overseer Version 5. The development of this procedural guideline should be a priority for HBRC.

13. The Board has also usefully amended the Change 6 provisions in three other ways.

13.1. The leaching rates are now to be assessed on a whole of farm basis which will allow for ‘unders and overs’ within the farm.^{^[5]}

13.2. Compliance with the Table 5.9.1D LUC based nitrogen leaching limits is to be assessed on a four year rolling average of the nutrient losses predicted by on-farm nutrient budgets (essentially Overseer modelling).^{^[6]} This will allow for year to year ‘unders and overs’ resulting from climatic variations or minor changes in on-farm practices.

13.3. If for an individual farm the Table 5.9.1D LUC based leaching limits are exceeded by less than 30% then land use consent for that farm is required as a restricted discretionary activity under Rule TT2.^{^[7]} Non-complying activity land use consents under Rule TT2A are only required if the modelled leaching exceeds the Table 5.9.1D LUC based nitrogen leaching limits by more than 30%. This change was made by the Board to acknowledge the fact that Overseer has a modelling accuracy of plus or minus 30%.

Farm environment management plans

14. The Board has retained the requirement for all farms greater than 4 ha in area to complete FEMPs (farm environmental management plans) by 1 June 2018. This has cost implications for farmers and resourcing implications for HBRC, as has previously been outlined to Council. However, Board amendments allow the scope and extent of FEMPs to be scaled to the size and complexity of each farm.

Maximum allowable zone loads

15. The Board has amended the monitoring provisions in Change 6 such that HBRC is no longer required to determine maximum allowable zone loads (MAZLs) for nutrients and compare these to on-farm losses.^{^[8]} Instead, the Council is now required to monitor instream water quality at its existing SOE (state of environment) monitoring sites to evaluate whether or not the instream water quality limits and targets (including the DIN target) are being met.

Staff Comments on the Board’s Decision

16. Staff remain of the view that the DIN (dissolved organic nitrogen) limit of 0.8 mg/L is not based on robust science applicable in the Tukituki catchment. While the Board appears to have accepted that the reason it was given by the expert it relied on (Dr Death from Massey University) for discounting the evidence of Council expert witnesses may be incorrect, it continued to prefer his evidence for reasons that are not clearly stated. However, the implications that this had for existing farms (the need to seek land use consent) has been addressed provided that by 1 June 2020 farms meet the Table 5.9.1D LUC based nitrogen leaching limits.^{^[9]}

17. Preliminary legal advice is that an appeal on the DIN limit would be unlikely to succeed (appeals are limited to points of law) and given the availability of a workable route for existing farms going forward, staff do not recommend an appeal on this point.

18. OBJ TT1 states the instream outcomes that are sought for the Tukituki catchment. These include maintaining or enhancing the habitat and health of aquatic ecosystems, macro-invertebrates, native fish and trout. The plan effectiveness monitoring that will need to be undertaken by HBRC will show whether or not those instream outcomes are being achieved. This will enable the appropriateness of all of the numerical limits and targets set in Tables 5.9.1A and 5.9.1B of Change 6 to be reviewed over time. If necessary, amendments to those limits and targets can be promulgated by way of future Plan Changes if robust monitoring and science demonstrates that any of those limits and targets are either too lax or too strict.

19. This pragmatic ‘monitor and review if necessary’ approach is reflected in the Board’s final Decision which states [para 357]:

“As water quality science advances a different DIN limit may emerge as a more appropriate level. In the meantime the Board sees the DIN limit of 0.8 mg/L as a pragmatic level that appropriately protects ecological health while enabling more intensive land use.”

20. The Table 5.9.1D LUC based nitrogen leaching limits are not based on the current version of Overseer and HBRC staff consider this aspect of the Board’s final Decision to be flawed and potentially challengeable. However, this deficiency can be addressed in the procedural guideline that HBRC is required to produce so that the results of future on-farm nutrient budgets (Overseer modelling results) are adjusted when compared to the Table 5.9.1D limits so that we are genuinely ‘comparing apples with apples’. Because of the availability of a practical solution staff do not recommend an appeal on this point. However, it is possible that other primary sector parties may appeal on this issue.^{^[10]} If a third party takes this matter forward on appeal, staff would recommend Council considering at that time whether or not it would support that party at the hearing.

21. Regarding the 1062 FEMPs to be produced by 1 June 2018, HBRC will be working through the business process for developing these and managing the compliance and consent requirements associated with them in order to assess additional staff requirements. HBRC will also be working with the consulting industry to facilitate additional ‘on the ground’ resources (farm planning personnel) being made available as soon as possible. Further information on this will be brought to the Council through the Long Term Plan process.

22. While staff believe this aspect of the Board’s decision to be questionable (the Board declined to consider evidence provided in the comments phase as to the cost and practicality of producing this many FEMPs in the timescale, but failed to identify any evidence it had relied on to impose the requirement and staff have not been able to identify any) staff do not recommend an appeal on this point alone.

Minor Corrections

23. There are several wording errors in the Board’s final version of Change 6 that will need to be corrected.^{^[11]} This can be achieved by asking the Board to make those corrections under clause 16(2) of the First Schedule to the RMA prior to Council adopting Change 6 under clause 17 of that Schedule.^{^[12]}

Implications for RWSS

24. The RWSS consents have been granted by the Board, subject to conditions, in light of the final version of Plan Change 6. It is those conditions that will govern the operation of the RWSS and the exercise of the resource consents. In that regard, HBRIC Ltd does not need to consider Plan Change 6 any further.

Overall Conclusions and Recommendations

25. Overall the Board has responded positively to the comments received on its draft decision.

26. The result is a policy framework that is workable in the short to medium term. Ongoing monitoring and research will need to be undertaken by HBRC to assess plan effectiveness and whether any further amendments are required to the policy framework to ensure that the freshwater objectives for the Tukituki Catchment are met by 2030.

27. Consequently, staff recommend that Council does not consider filing a High Court appeal on the Board’s final Decision.

28. If any other party decides to appeal Plan Change 6, HBRC is the respondent. Following receipt of anyone else’s appeal HBRC would have 10 working days to lodge a notice to appear. Such a notice does not require that HBRC sets out its position on the points of appeal; this would be determined at a later date by the Council.

29. Staff recommend that Council authorises staff to lodge a notice to appear on any appeals lodged to the High Court on Plan Change 6. Accordingly, Council approval for this will be sought at the Council meeting on 30 July 2014.

Financial and Resource Implications

30. Financial and resource requirements for the implementation of Tukituki Plan Change 6 will be considered by Council as part of the Long Term Plan development process.

Administering the Plan in relation to the DIN limits and LUC leaching rates

31. When Councillors were informally briefed on the Board’s final Decision, there was some concern expressed about the disconnect between the ability to meet the DIN target by 2030 at the limits set for the leaching rates. Some councillors were concerned that they might breach their ‘fiduciary’ responsibility either in relation to how HBRC adopts and administers Plan Change 6 or in relation to one or more of the conditions precedent for the RWSS.

32. On the first point, HBRC has no choice but to adopt Change 6 as amended by the Board (section 149W RMA).

33. As to the second point, section 84(1) of the Resource Management Act requires the council to observe and to the extent of its authority, enforce the observance of the plan. The provisions of Change 6 are clear – so long as a farming enterprise is meeting Table 5.9.1D LUC-based leaching rates on a whole of farm basis, it is deemed not to be causing or contributing to any exceedance of the DIN limit (Rule TT1(j)). If it cannot meet Table 5.9.1D LUC-based leaching rates by 2020 it requires resource consent under Rule TT2. Even if DIN limits are breached, consent may be granted as a restricted discretionary activity if the LUC-based leaching rates are breached by up to 30%.

34. The Board’s expectation appears to be that the imposition of Change 6’s Table 5.9.1D LUC based leaching rates will assist with moving the catchment towards the DIN limit (even though they had no evidence on that).

35. HBRC must administer Change 6 and check over time whether its Objectives are being achieved. This includes in-river ecosystem health with the DIN limit being imposed by the Board as a proxy for a healthy aquatic ecosystem. The DIN limit is therefore a means to an end and not an end in itself. HBRC’s responsibility is to review all of the Change 6 water quality limits over time and to amend them as necessary to achieve the Plan’s objectives. It may be that a healthy ecosystem can be achieved with a different DIN limit. Only time will tell.

36. In summary, the objective and policy framework of Plan Change 6 as per the final decision and the decision making, monitoring and review provisions of the RMA enable the Council to administer the plan change in a way that meets the requirements of section 84 of the RMA. By law, the Tukituki Plan Change will need to be reviewed again in 10 years’ time. Also by law, plan effectiveness monitoring must be reported 5 yearly. It is not uncommon to undertake subsequent plan changes to address a particular issue or if there was concern that the objectives were not being achieved. The Board’s decision appears to contemplate the setting of a more appropriate DIN limit in the future.

37. In terms of the RWSS, the Board is the consent decision-maker, not HBRC. The Board made its decision on Plan Change 6 and then made its decision on the RWSS applications in light of the Plan Change provisions as amended by the Board. The Board gave considerable weight to Plan Change 6 and was satisfied that the RWSS was consistent with the provisions of Plan Change 6 (paras 840 - 842). The Council is entitled to rely on the Board’s decision in that regard.

38. Importantly, when the Board granted the RWSS consent it was aware that the DIN limit was already exceeded in the majority of the catchment. The conditions of the RWSS in respect of leaching rates are the same as those specified in the Change 6 permitted activity Rule TT1. The RWSS overall must meet the Table 5.9.1D LUC-based leaching rates, and so is deemed not to be causing or contributing to an exceedance of the DIN limit. Thus the Board’s decision to grant consent is consistent with Change 6.

39. In conclusion, staff do not consider the DIN limit to be an issue for the RWSS or for councillors’ fiduciary responsibilities. The RWSS has conditions it must meet and it is HBRIC Ltd’s responsibility (and HBRC’s as regulator) to ensure that occurs.

Decision Making Process

40. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendation

1. That the Corporate and Strategic Committee receives the report titled “Board of Inquiry Decision on Tukituki Plan Change 6”.

Helen Codlin

Group Manager

Strategic Development

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 16 July 2014

SUBJECT: National Policy Statement for Freshwater Management 2014

Reason for Report

1. The purpose of this report is to provide a brief summary of the 2014 amendments to the National Policy Statement for Freshwater Management (NPSFM) gazetted on 4 July 2014 and coming into effect on 1 August 2014.

2. A more detailed overview will be given to the Regional Planning Committee at its August meeting.

3. A list of frequently asked questions and answers from the Ministry for the Environment’s website is provided in Attachment 1.

What Changes have been Made to the NPSFM?

4. The NPSFM has been amended to include:

4.1. a specified process (the national objectives framework) for setting objectives, based on managing water bodies to meet community and tāngata whenua values, and providing a set of water quality measures (attributes) that must be used to meet the objectives.

4.2. a requirement that all water bodies must be managed so they are suitable for ecosystem health and human health for recreation. Ecosystem health and human health for recreation are compulsory national values and the NPSFM includes set minimum acceptable states for these values called national bottom lines.

4.3. scientifically-informed attributes tables and national bottom lines for several key attributes of water quality. These are Nitrogen, Phosphorus and phytoplankton (trophic state) in lakes, periphyton (slime), nitrate and ammonia toxicity in rivers, E.coli in both lakes and rivers, planktonic cyanobacteria (toxic algae) in lakes and lake-fed rivers, and dissolved oxygen levels downstream of discharges.

4.4. a requirement that councils put in place measures to better account for the water taken out of water bodies, and the contaminants going in.

4.5. clearer articulation of iwi values for fresh water.

4.6. a requirement to monitor progress towards achieving freshwater objectives.

5. Staff consider that all changes improve the clarity and effectiveness of the NPSFM.

Giving Effect to the Implementation Plan

6. The changes now require the NPSFM to be implemented by 2025 (was 2030), but does not specify timeframes by which councils and communities must adjust their activities to meet their freshwater objectives.

7. Councils will be required to adopt a programme of staged implementation and publicly notify it by December 2015.

8. This staged implementation will be considered as part of the Strategy and Planning group of activities in Long Term Plan process.

National Objectives Framework (NOF)

9. A key element of the amendments is the National Objectives Framework (as described in section CA of the NPSFM 2014). This section contains an objective and policies which provide a nationally consistent approach to establishing freshwater objectives for national values and any other values (based on freshwater management units) and an approach that recognises regional and local circumstances.

10. It is not dissimilar to the approach used in for the Tukituki Plan Change and being used for the Greater Heretaunga / Ahuriri Plan Change.

11. Supporting this approach is the Attributes Tables in Appendix 1, developed from work undertaken by specialist science panels involving more than 60 freshwater scientists from leading research institutions, universities, private institutes and regional councils. Their recommendations were considered by a science review panel and tested for workability by a reference group of stakeholders. Updates to the framework are proposed for 2016 and 2019.

12. So far, attributes have been selected for measures of Ecosystem Health and Human Health for Recreation.

13. The framework comprises four bands, A, B, C and D. The national bottom line for each attribute is the threshold between bands C and D. Bands A, B and C can be applied to different freshwater management units as determined through regional or catchment based planning processes.

14. The list of attributes will no doubt continue to develop over time. As a first priority, we understand more work is planned to determine how the Macro-Invertebrate Community Index (MCI) can be used as a performance measure for ecosystem health.

Tukituki Plan Change 6 and the NPSFM

15. The Board of Inquiry determined that, with the changes that it made to Plan Change 6 in the draft and final decisions, Tukituki Plan Change 6 gives effect to the NPSFM 2011. The 2014 amendments were not considered as part of that decision.

16. The material change that is relevant to Plan Change 6 is the National Objectives Framework and the attributes table. In terms of setting freshwater objectives, defining freshwater management units, and setting water quality limits to meet the objectives, Plan Change 6 is not inconsistent with the intent of the framework.

17. The NOF attributes for ecosystem health in rivers includes periphyton (trophic state), ammonia (toxicity) and nitrate (toxicity) and Dissolved oxygen (below point discharges). Plan Change 6 includes limits for each of those attributes.

18. For periphyton objectives, Plan Change 6 also set nutrient limits for Dissolved Reactive Phosphorus (DRP) (in all water management units) and Dissolved Inorganic Nitrogen (in Water Management Unit 4).

19. The Board also determined to set a Dissolved Inorganic Nitrogen (DIN) limit as a target concentration in the other Water Management Areas. That target has been set to achieve an appropriate Macro-invertebrate Community Index (MCI), which is widely used and accepted as a performance measure for Ecosystem Health. Whether DIN is an appropriate attribute to use as an enforceable limit for Ecosystem Health is an area where there is still much debate in the wider scientific community.

20. It is relevant to point out that Plan Change 6 does contain MCI as an indicator and that will be a significant element of Council’s monitoring to see whether the policies, particularly around stock exclusion and phosphorus management, result in a trend towards improvement MCI as a measure of a health ecosystem.

21. Attachment 2 compares the water quality limits, targets and indicators in Plan Change 6 to the attribute bands contained in the National Objective Framework. It can be seen that many limits fall into the higher level of protection (Band A and B). It is also noted that for Nitrate (Toxicity), the limit for Zone 2 and 3 is set near the upper bound of Band C, that is, it’s closer to Band B than the bottom of Band C.

Conclusion

22. The 2014 National Policy Statement for Freshwater Management provides greater guidance for the approach to setting objectives and a framework for communities to use to consider the desired level of protection for ecosystem and human health.

23. In general the Tukituki Plan Change 6 process was not inconsistent with the intent of these amendments and the Greater Heretaunga / Ahuriri process will benefit from it.

Decision Making Process

24. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendation

1. That the Corporate and Strategic Committee receives the “National Policy Statement for Freshwater Management 2014” report.

Helen Codlin

Group Manager

Strategic Development

Liz Lambert

Chief Executive

Attachment/s

1	Extract from MfE Website - National Policy Statement for Freshwater Management 2014 - Questions and Answers
2	Comparison of PC6 Water Quality Limits and Targets with NOF Attributes

Extract from MfE Website - National Policy Statement for Freshwater Management 2014 - Questions and Answers

Attachment 1

Extract from MfE website

National Policy Statement for Freshwater Management 2014 – questions and answers

This page provides answers to frequently asked questions relating to the National Policy Statement for Freshwater Management 2014 which takes effect on 1 August 2014.

What is the NPS-FM?

National policy statements are issued under the Resource Management Act for matters of national significance. Central government can use national policy statements to direct regional, district and city councils on how they manage these matters in their regional and district plans or when considering resource consent applications. The National Policy Statement for Freshwater Management 2014 (NPS-FM) directs regional councils to consider specific matters about fresh water in regional planning.

What does the NPS-FM require?

Councils and their communities are required to set freshwater objectives and water quality and quantity limits in their regional plans. ‘Objectives’ are set for specific water quality measures to achieve ‘values’, which can be either intrinsic values of a water body, or the things that communities want their water to be used for (eg, swimming, irrigation, mahinga kai). ‘Limits’ are the maximum amount of water that can be taken from a water body or the maximum amount of contaminants or nutrients that may be discharged into the water. An overriding requirement of the NPS-FM is that fresh water is managed so that the overall water quality in a region is maintained or improved. It also requires a process for councils and communities to consider the economic and social impacts of proposed limits.

Why has the NPS-FM 2011 been replaced by the NPS-FM 2014?

The NPS-FM 2011 was amended in 2014 to provide greater direction and support to help regional councils apply the requirements of the NPS-FM in a consistent way across the country. This will give everyone more certainty about the requirements around water quality that affect their use of the water, and provide a common language for describing or measuring water quality.

What changes have been made to the NPS-FM?

The NPS-FM has been amended to include:

· a specified process (the national objectives framework) for setting objectives, based on managing water bodies to meet community and tāngata whenua values, and providing a set of water quality measures (attributes) that must be used to set objectives

· a requirement that all water bodies must be managed so they are suitable for ecosystem health and human health for recreation

· scientifically-informed national bottom lines for several key attributes of water quality. These are Nitrogen, Phosphorus and phytoplankton (trophic state) in lakes, periphyton (slime), nitrate and ammonia toxicity in rivers, E.coli in both lakes and rivers, planktonic cyanobacteria (toxic algae) in lakes and lake-fed rivers, and dissolved oxygen levels downstream of discharges

· a requirement that councils put in place measures to better account for the water taken out of water bodies, and the contaminants going in

· clearer articulation of iwi values for fresh water, and

· a requirement to monitor progress towards achieving freshwater objectives.

What are the key changes to what was proposed during consultation?

The Government consulted on proposals to amend the NPS-FM 2011 at the end of 2013. It has made several key changes in response to points raised in more than 7000 submissions:

· A statement at the start of the NPS-FM expresses the national significance of fresh water and te mana o te wai (the mana of the water).

· The human health values for wading and boating have been merged with swimming into one value. The national bottom line remains unchanged at a level suitable for wading and boating. Communities can choose to manage water in rivers and lakes to the higher standard for swimming if they wish.

· The ground for allowing an exception to meeting the bottom lines for historical activities is deleted because consultation did not identify any situations where this might apply.

· The amended NPS-FM allows exceptions to national bottom lines where any of the existing infrastructure listed in Appendix 3 of the NPS-FM contributes to freshwater quality that is below the national bottom line. Appendix 3 is currently empty but the Government intends to consult on a list of existing infrastructure later in the year. Councils proposing means to implement the national bottom lines should be mindful that some areas may soon be eligible for an exception, for example where there is existing hydro-electricity generation infrastructure.

· A definition for “naturally-occurring processes” is included to clarify that only things that happened prior to the arrival of humans are eligible for objectives to be set below a national bottom line eg, the effects of introduced water fowl, gorse, or domesticated animals will not trigger eligibility for an exception on this ground.

· The deadline for regional councils to implement the NPS-FM has been moved forward to 2025. Most regional councils say they will have completed implementation by 2022. The Government has decided they can only take until 2030 if the 2025 deadline would be impracticable or result in lower quality planning.

What are the benefits of amending the NPS-FM?

The amendments will:

· reduce costly replication of scientific studies by different councils and result in fewer challenges on water quality science during plan development

· lead to better water quality in degraded rivers and lakes

· reduce litigation by setting statutory requirements for national bottom lines

· ensure consistency in describing and measuring freshwater values

· encourage community engagement in freshwater planning and decisions

· ensure consistent accounting for all water takes and sources of contaminants so we know how much water is available and how it might be used more efficiently.

When will the amended NPS-FM come into force?

1 August 2014.

Will the reforms mean all our rivers and lakes will be swimmable?

Communities will be able to make choices about whether particular rivers and lakes should be suitable for swimming. This will need to take into account the existing quality of the water, and if it is not currently suitable for swimming, the cost of improving the water quality so that it is suitable for swimming when and where they want.

Will water quality be able to degrade to the national bottom lines?

No. The NPS-FM requires that water quality be maintained or improved overall across a region. That means regional councils can’t let water quality decline in one river or catchment without equally improving it elsewhere within the region. Any decision to do this must be made through their RMA plan development process so communities will be involved in any proposals involving changes to water quality.

What will national bottom lines cost regional economies?

Case studies in Canterbury, Southland and Waikato show that economic growth can still be achieved, although future growth opportunities in some areas are likely to be reduced or come with higher costs. The results for the case studies cannot be extrapolated to other regions because land uses, geology and hydrology are unique to their catchments. The size of any impacts will depend on what policies councils choose to adopt and which water bodies they prioritise for action. The costs imposed on councils, resource users and communities can be met incrementally over time. Although a plan for implementing the NPS-FM is due by 2025, the NPS-FM does not prescribe timeframes within which councils and communities must adjust to ensure freshwater objectives are met.

How were the attributes chosen for the national objectives framework?

The list of attributes (eg, total nitrogen, nitrate toxicity, E.coli etc) in this first version of the framework have been selected based on the advice of specialist science panels involving more than 60 freshwater scientists from leading research institutions, universities, private institutes and regional councils. Their recommendations were considered by a science review panel and tested for workability by a reference group of water users. Updates to the framework are proposed for 2016 and 2019.

Will more attributes be added?

Yes, they will – as the science becomes more settled and confidence grows in the usability of other attributes in limit-setting. Thriving aquatic insect communities (Macro-invertebrate community index or MCI) are a widely supported measure of river health, and many councils already monitor it. Officials are looking at how MCI can be used as a performance measure of ecosystem health. It is not yet included in the national objectives framework because many things affect MCI making it a challenge to use in limit-setting. Also, the costs and impacts of using MCI in limit-setting are not well known enough to be nationally-applicable.

How does the NOF reflect a dual nutrient approach to water quality?

Regional councils will need to set an objective for periphyton (slime) in their regional plans, and adopt appropriate management options to achieve that objective. Councils will need to identify and account for contaminants in water, including nitrogen and phosphorous if they are contributing to periphyton growth. They will need to consider the need for limits on nutrients (nitrogen and phosphorus) and manage other factors that promote weed growth such as shade, temperature and flow levels.

Why is the bottom line for nitrate toxicity set at 6.9mg/litre?

This level protects aquatic species from toxic effects. In most cases nitrogen levels for managing periphyton will be much lower than 6.9 mg/litre. In rivers where periphyton is not a problem the nitrate toxicity bottom line provides a backstop for ensuring the water is safe for aquatic species.

When will regional councils have the NPS-FM fully in place?

Implementation of the NPS-FM was originally due by 2030 but this has been brought forward to 2025 because of public concern about the length of time councils might take to implement the NPS-FM requirements. Thirteen of the 16 regional councils have indicated they will have it in place by then. Of those 13, ten expect to have it in place by 2022. The NPS-FM does not prescribe timeframes within which councils and communities must adjust to meet their freshwater objectives.

Comparison of PC6 Water Quality Limits and Targets with NOF Attributes

Attachment 2

Comparison of Plan Change 6 water quality limits and targets with NOF attributes

Table 5.9.1A: – Catchment Wide Limits and Targets

These tables have been extracted from Plan Change 6 and annotated to indicate which ones are NOF attributes. Some parameters in Plan Change 6 that are not attributes have been assigned a likely band based on the NOF framework.

Key to colour coding

A Band

B Band

C Band

Parameter

Limit or Target

Temperature

(not a NOF attribute)

The temperature of the water shall be suitable for sustaining the aquatic habitat.

Dissolved Oxygen

(a NOF attribute but different unit used)

The concentration of dissolved oxygen shall exceed 80% of the saturation concentration except in areas of groundwater upwelling including the Porangahau, Maharakeke, Kahahakuri, Mangaonuku, Papanui sub-catchments.

E. coli

(a NOF attribute)

260 Escherichia coli per 100 millilitres for the 1 November to 30 April bathing season (for flows below the median flow).

550 Escherichia coli per 100 millilitres for the 1 November to 30 April bathing season (for flows between the median flow and three times the median flow).

550 Escherichia coli per 100 millilitres for the rest of the year (for flows below three times the median flow).

The methodology for compliance is a maximum 95^th percentile calculated as a minimum of 20 sampling points.

Total Ammoniacal Nitrogen (TNH₃-N)

(a NOF attribute)

99% species protection level for total ammoniacal nitrogen (TNH₃-N) as stipulated in the most recent version of the Australian and New Zealand Guidelines for Fresh and Marine Water Quality (the ANZECC guidelines) and as tabulated in Schedule XXIII.²⁷

Other Toxicants

(not a NOF attribute)

95% species protection levels for toxicants (other than nitrate-nitrogen and total ammoniacal nitrogen) as stipulated in the most recent version of the Australian and New Zealand Guidelines for Fresh and Marine Water Quality (the ANZECC guidelines) for Water Management Zones 1, 2, 3 and 5.

99% species protection levels for toxicants (other than nitrate-nitrogen and total ammoniacal nitrogen) as stipulated in the most recent version of the Australian and New Zealand Guidelines for Fresh and Marine Water Quality (the ANZECC guidelines) for Water Management
Zone 4.

Table 5.9.1B – Water Management Zones 1 and 2

Water Management Zone	Mainstems/ Tributaries	Periphyton Limits and Targets				DRP Limits and Targets	Nitrate-nitrogen Limits and Targets		DIN Limits and Targets	Indicators
Water Management Zone	Mainstems/ Tributaries	(a) (a NOF attribute)	(b)	(c)	(d)	DRP Limits and Targets	(a) (a NOF attribute)	(b) (a NOF attribute)	DIN Limits and Targets	Water Clarity	MCI (not a NOF attribute – likely bands based on MCI guidelines)
Zone 1 Lower Tukituki and Waipawa Rivers and Tributaries (excluding Papanui Stream catchment)	Mainstems	120	30	60	50	0.010	2.4	3.5	0.8	2.8	100
	Tributaries	120	30	60	50	0.015	2.4	3.5	0.8	1.6	100
Zone 2 Middle Waipawa River and Tributaries above SH2	Waipawa River	120	30	60	50	0.010	3.8 (national bottom line is 6.9)	5.6 (national bottom line is 9.8)	0.8	3.0	120
	Mangaonuku Stream					0.010				4.0	120
	Tributaries					0.015				1.6	100

Table 5.9.1B Water Management Zones 3,4 and 5

Water Management Zone	Mainstems/ Tributaries	Periphyton Limits and Targets				DRP Limits and Targets	Nitrate-nitrogen Limits and Targets		DIN Limits and Targets	Indicators
Water Management Zone	Mainstems/ Tributaries	(a) (a NOF attribute)	(b)	(c)	(d)	DRP Limits and Targets	(a)	(b)	DIN Limits and Targets	Water Clarity	MCI (not a NOF attribute – likely bands based on MCI guidelines)I
Zone 3 Middle Tukituki River and Tributaries above Tapairu Road	Mainstems	120	30	60	50	0.010	3.8 (national bottom line is 6.9)	5.6 (national bottom line is 9.8)	0.8	3.0	120^{^[13]}
	Tributaries	120	30	60	50	0.015	3.8 (national bottom line is 6.9)	5.6 (national bottom line is 9.8)	0.8	1.6	100
Zone 4 Upper Tukituki and Waipawa Rivers	All	50	30	60	50	0.004	n/a	1.5	0.150	3.3	120
Zone 5 Papanui Stream	All	120	30	60	50	0.015	2.4	3.5	0.8	1.6	100

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 16 July 2014

SUBJECT: Developing Strategic Priorities for the Long Term Plan Development

Reason for Report

1. The purpose of this item is to summarise some of the key outcomes from the Council’s strategic planning workshops that have been held so far, so that the community and stakeholders are informed of the strategic initiatives that Council is exploring.

Purpose, Vision and Values

2. As the Council comprises six new Councillors, councillors spent some time reviewing the Council’s current Vision, Values and Purpose Statement, and the question ‘why the Council exists’.

3. With a few amendments, councillors reached agreement on a revised Council purpose, vision and values as follows.

Our purpose

We enable wise use of the region’s natural resources.

We achieve this via our leadership role in the following areas:

ü Natural resource knowledge and management

ü Natural hazard assessment and management

ü Regional strategic planning

ü Regional scale infrastructure and services

ü Economic Development

Our Vision

A connected and vibrant region with resilient communities, a prosperous economy and a clean, healthy environment.

Our Values

Excellence – we aim high and take pride in everything we do

Leadership – we anticipate and prepare for the future

Innovation – we are open to change and seek better ways of doing things

Integrity – we demonstrate openness, honesty and respect in our relationships

Partnerships – we seek strong collaborative partnerships to achieve common goals

Developing Strategic Priorities

4. Councillors have also spent time over the last few months thinking about what Council’s strategic priorities should be in light of Council’s purpose and vision statements.

5. Key areas that the Council wants to give some attention to through the strategic planning and Long Term Plan development process include:

5.1. Energy use and development (including oil and gas exploration)

5.2. Regional economic development (including optimising agri-business, promoting diversification, supporting Wairoa growth opportunities)

5.3. Optimising regional infrastructure (including transport networks, Napier Port, leveraging off RWSS if it proceeds)

5.4. Climate change adaptation and resilience (including coastal hazards and erosion, land use planning, impacts on urban communities, adaptation of farming systems (dry land farming, crop selection, water storage)

5.5. Multi-cultural society and relationships (including Maori, Pakeha, and Pacific Island communities), and

5.6. Water and land management (a core area of business that will be a significant area of activity for both Council and the community over the term of the Long Term Plan).

6. Council intends to prepare a brief, largely on-line consultation document and provide opportunities for informal comments to be made through various social media.

Decision Making Process

7. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendations

1. That the Committee receives the “Developing Strategic Priorities for the Long Term Plan Development” report.

Helen Codlin

Group Manager

Strategic Development

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 16 July 2014

SUBJECT: Public Transport Update

Reason for Report

1. This agenda item provides the Committee with an update on Council’s public transport operations.

General Information

2. The overall performance of the bus service continues to be positive, with passenger growth still increasing. From January to May this year there were 8063 more passenger trips than the same period last year, an increase of 2.4%.

3. While passenger numbers have been increasing, the cost of operating the service has increased significantly. In order to improve the efficiency of the bus service and ensure that it operates within budget in 2014-15, it has been necessary to make some adjustments to services which will take effect on 1 September. The changes are:

3.1. Removing The Park Hastings from the route taken by Routes 12, 16A, 16B and 17, due to low patronage. Routes 20 and 21 will continue to travel via The Park enabling passengers to transfer to or from other services if required.

3.2. Route 12 - Changing the 15 minute peak-time weekday frequency to 20 minutes. For most passengers, this will alter the arrival or departure time of their service by five minutes. Twelve overload services will continue to run on this route, ensuring that all passengers can be carried at peak times. Some adjustments have also been made to the advertised times on this route to better reflect actual arrival times.

3.3. Route 12 - Cancelling the last trip (6.30pm) of the day due to very low patronage.

3.4. Route 17 - Cancelling the 4.15pm trip due to very low patronage, however this will be replaced with a 5.10pm trip which will be more convenient for passengers travelling home from work.

3.5. Route 20 – minor adjustments to the afternoon timetable for operational reasons.

4. These changes will result in significant cost savings and better utilise the capacity of the bus fleet with minimal disruption to passengers. Along with fare increases from 1 September (previously approved by Council) these measures will help to ensure the PT network operates within budget, more efficiently and more economically.

5. Preliminary work on the new Regional Public Transport Plan is currently underway.

Total Passenger Trips

6. The following graph shows total passenger trips from February 2009 to May 2014.

Diagram 1 – Total Passenger Trips – February 2009 – May 2014

7. Since 2009 the total numbers of trips per year and monthly averages have trended steadily 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

2014 (Jan-May) 339,576 67,915

Capacity

8. The following graph outlines the seat capacity utilised on a monthly basis from May 2013 to May 2014.

Diagram 2 – Capacity May 2013 – May 2014

SuperGold Card Trips

9. SuperGold cardholders, who travel free of charge between 9am and 3pm on weekdays and anytime during weekends/public holidays, continue to make very good use of this scheme. The graph below shows the number of SuperGold cardholder trips made from May 2013 to May 2014.

Diagram 3 – SuperGold Card Trips – May 2013 – May 2014

Infrastructure

Bus Stops

10. Hastings District Council recently purchased 14 bus shelters for Hastings bus stops. Regional Council provides funding to NCC and HDC for 2 new bus shelters per year.

11. Regional Council staff are keen to work with Napier City Council staff to implement a staged programme of formalising Napier bus stops, however there has been no progress to date.

Bikes on Buses

12. Bike racks on buses continues to prove popular, with approximately 350 bikes being carried each month.

Total Mobility

13. 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.

14. The following table shows the Total Mobility Scheme statistics and expenditure from May 2013 to May 2014.

Diagram 5 – Total Mobility Statistics – May 2013 – May 2014

Decision Making Process

15. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendation

1. That the Corporate and Strategic Committee receives the July 2014 Public Transport Update report.

Megan Welsby

Sustainable Transport Coordinator

Anne Redgrave

Transport Manager

Attachment/s

There are no attachments for this report.

[5] This means that one part of the farm could exceed the Table 5.9.1D leaching rates provided another part of the farm leached less than those rates such that overall, or on average across the farm, compliance was achieved.

[8] POL TT4(2) and POL TT5(2). As a consequence Schedule XIX has been deleted (as was sought by HBRC)

[10] Federated Farmers appealed the One Plan on a similar point

[11] For example the last line of Rule TT1(j) refers to Table 5.9.1D and it should refer to Table 5.9.1B

[13] Except that in the Maharakeke and Porangahau sub-catchments the MCI target is 100.

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