Agenda of Regional Council Meeting

Meeting of the Hawke's Bay Regional Council

Date: Wednesday 28 January 2015

Time: 9.00 am

Venue:

Council Chamber

Hawke's Bay Regional Council

159 Dalton Street

NAPIER

Agenda

Item Subject Page

1. Welcome/Prayer/Apologies/Notices

2. Conflict of Interest Declarations

3. Confirmation of Minutes of the Regional Council Meeting held on 17 December 2014

4. Matters Arising from Minutes of the Regional Council Meeting held on 17 December 2014

5. Follow-up Items from Previous Regional Council Meetings 3

6. Call for any Minor Items not on the Agenda 9

Decision Items

7. Recommendations from the Maori Committee 11

8. Napier-Gisborne Rail Update 13

9. Hawke's Bay Regional Investment Company Board 17

Information or Performance Monitoring

10. Annual Plan Progress Report for Six Months to 31 December 2014 19

11. Monthly Work Plan Looking Forward Through February 2015 87

12. Dalton Street Building Update 93

13. Chairman's Monthly Report (to be tabled)

14. Minor Items not on the Agenda 99

Decision Items (Public Excluded)

15. Dalton Street Building Update 101

16. High Court Decision – Tukituki PC 6 will now be considered in Public

	Agenda Item	Action	Person Responsible	Status Comment
1	Affixing Common Seal	Update on progress of upgrading stopbanks on Awanui Stream	E Lambert/ C Goodier	Follow up transferred to Environment and Services Committee for report in March
2	Update from the Maori Committee	Schedule Robert Consedine Te Reo / Treaty workshop for Councillors	E Lambert	Date yet to be confirmed
3	Update from the Maori Committee	Formalise appointment of Bill Blake	V Moule	Paper to 28 January 2015 Council meeting
3	HB Regional Planning Committee Bill	Submission in support of the Bill to be lodged with Maori Affairs Select Committee	E Lambert/ F Wilson	Submissions close 31 January 2015
4	Recommendations from the Environment & Services Committee	Forward comments to NZ Petroleum & Minerals on the proposed Block Offer 2015	E Lambert/ F Wilson	Comments forwarded 23 December 2015 http://www.hbrc.govt.nz/About-your-Council/Who-we-are/Pages/hbrc-submissions.aspx

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 28 January 2015

Subject: Napier-Gisborne Rail Update

Reason for Report

1. At its meeting on 26 November 2014 HBRC considered an offer made to it by KiwiRail to lease the Napier-Gisborne Rail Line, and resolved to provide funding for the development of a business case for a potential investment in such a lease.

2. The level of funding is set at $250,000 (to be offset against any final investment in the proposal) for the preparation of a business case on an investment in the lease of the Napier-Gisborne rail corridor to be considered by Council prior to 1 March 2015. This funding is comprised of:

2.1. $125,000 – engineering design

2.2. $75,000 – NGR personnel for business case

2.3. $50,000 – strategic advice.

3. For the provision of independent strategic advice HBRC has contracted Nick Cornwall. Mr Cornwall has been asked to report to HBRC on the revenue projections and to provide strategic advice to HBRC on the proposal, including the examination of scenarios that may include the re-establishment of the full length of the line or the Wairoa-Napier component, or a staging programme.

4. Given the tight time frame within which HBRC is required to respond to KiwiRail on its offer, all parties have been working over the summer break to progress the business case.

5. This report provides an update on the situation and seeks direction from Council on a future course of action.

Discussion

6. NGR is using a project team with expertise in rail infrastructure costing, commercial and financial management and private equity to prepare the business case. They have had some challenges in getting timely information from other parties to assist them in progressing the business case.

7. In assisting NGR Nick Cornwall has been engaging with a number of parties including NGR itself, potential customers, potential investors and KiwiRail. He prepared a progress report in late December that provided some signals on the likelihood of a viable business case being completed satisfactorily in time for HBRC to make a decision in February and notify KiwiRail.

8. As part of his Terms of Engagement Mr Cornwall was also asked to:

“where appropriate (and subject to Council approval) investigate any alternative courses of action that would meet Council’s desire to maintain an alternative transport route to northern Hawke’s Bay. This could include for example an examination of scenarios such as the re-establishment of the full length of the line, or the Napier-Wairoa component only, or a staging programme”.

9. Given the tight timeframes imposed by KiwiRail it would be prudent and timely for HBRC to also consider alternative courses of action should the business case not give HBRC the level of certainty that would be needed to make a decision on investment (and therefore a decision on taking up the offer to lease the line). One example of a potential alternative course of action is the investigation of a Joint Venture between Napier Port and KiwiRail for the operation of log freight services between Wairoa and Napier.

10. Under a normal business case process a decision would be made on the business case and, if unfavourable, an alternative action may be investigated. The Napier-Gisborne Rail investigation does not have the luxury of that time due to the requirement for a decision back to KiwiRail by 1 March.

11. There are several areas of concern that have been identified in the draft business case that have caused HBRC staff and our adviser to recommend that other options be investigated ahead of any response to KiwiRail. While it is entirely possible that these concerns may be addressed over the coming several weeks we consider that a prudent approach is to widen the scope for alternative courses of action.

12. The areas of concern are summarised below:

12.1. Mahia-Gisborne section of the line - Half of the costs of preparing the business case have been allocated for an engineering design study to better quantify the costs of reconstruction of the line by a specialist in bridge engineering. Currently the estimate sits between $3.5 and $5million. One of the requirements ahead of releasing these funds was to have high level financials for freight in to and out of Gisborne to at least indicate that there would be sufficient volumes to provide a return on investment for HBRC.

To date the forecast volume of freight from Gisborne is just not sufficient to generate a return on or near this quantum. I therefore advised NGR in December that HBRC would not, at this stage, be providing the funding for the engineering design study. They accepted this decision.

In addition we have asked NGR to provide specific information on the Napier-Wairoa section of the line in their business case (operating and loss figures, etc). for the same reasons as set out above.

12.2. Projected operating losses - As proposed (as at December 2014) the business case generates significant trading losses in the first four years of operation. This could make finding private investors challenging. It is unlikely that NGR could fund the projected trading losses using bank debt, as there are few assets to secure lending against and they would be unlikely to be able to borrow against forecast trading losses.

12.3. Rolling stock - The business case is assuming the sale of locomotives and wagons from KiwiRail to NGR. However there is no guarantee of this. KiwiRail are obliged to tender locomotives and wagons for sale to the highest bidder and expect offshore interest in the sale of their locomotives.

12.4. HBRC investment - The repayment of the initial HBRC investment of $5.5 million is not included in the draft business case. If the lease expires it is unclear if HBRC’s investment would be payable by NGR or written off. If, for example, this is payable after twenty years then a significant provision is required each year to be added to the NGR fixed costs. When allocated across the limited Gisborne cargo opportunities this makes the annual fixed costs of a service very high and could make the service not competitive with road transport.

12.5. Private equity – One area which will be critical to the success or otherwise of the NGR business case will be its ability to attract private investment. The quantum has been indicated as being in the vicinity of $10million and will provide a significant component of the total required investment funding including provision of locomotives, rolling stock, plant and equipment, and working capital to operate the railway.

Alternative proposal investigation

13. There is a significant opportunity to operate a log service to carry export logs from Wairoa and nearby sidings (Raupunga and Kopuawhara) to Napier Port. There is a significant increase in the amount of forest reaching harvesting age (27+ years) on the entire East Coast, particularly in the Wairoa District) from 2018 onwards. Wairoa district forest owners/managers have expressed definite interest in such a service provided it is a cost effective alternative to road transport. Similar services operate between Wairarapa and Centreport (Wellington), and Murupara and Port of Tauranga.

14. There are market risks which will cause fluctuations in harvesting levels but a leading operator has advised that they are bound to generate cash for their investors and therefore intend to smooth harvesting levels out and continue harvesting through market cycles.

15. No major capital investment in the Napier to Mahia section of the line is required initially so a Wairoa service could run on the track in its current condition, according to KiwiRail sources.

16. A significant volume of logs from Wairoa are exported through Gisborne so there is a cargo-gain opportunity for Napier Port. There could be an opportunity for KiwiRail and Napier Port to investigate/negotiate an agreement to the satisfaction of both parties that provides for the hubbing of logs in Wairoa and their subsequent transport to Napier Port at the optimum time for the port. This has the potential to meet the need of ensuring that the line does not close, while providing a much lower barrier to entry and exit for any agreement than a full lease of the corridor.

Conclusion

17. The business case being prepared by NGR is underway and will be presented to Council in February. The business case will provide an opportunity for HBRC to assess the merits of making a financial investment in the restoration of the railway line, (potentially in stages), and it will set out the capital and operating expenditure for the proposal, together with details of private equity and HBRC’s projected return on investment.

18. In addition to the business case there is an opportunity to consider an alternative proposal that would not involve HBRC directly but which would bring together two key regional infrastructure providers (Napier Port and KiwRail) to discuss the possibility of a joint venture on the Napier-Wairoa section of the line. Council approval is sought for this to be facilitated by Nick Cornwall within the current budget approved for the strategic advisor role in November 2014.

Decision Making Process

19. 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:

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

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

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

19.4. The persons affected by this decision are ratepayer of the Hawke’s Bay region and potentially residents of Gisborne district.

19.5. Council has previously consulted upon its proposal to invest in the Napier –Gisborne line in its 2014/15 Annual Plan. This work will assist Council to make a final decision on whether or not to proceed with the investment.

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

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

Recommendations

That Council:

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

2. In addition to the NGR business case, approves the investigation of any alternative course of action that would meet Council’s desire to maintain an alternative transport route to northern Hawke’s Bay, and that any such alternative be presented for Council consideration before 1 March 2015.

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 28 January 2015

Subject: Hawke's Bay Regional Investment Company Board

Reason for Report

1. At its meeting on 30 July 2014 HBRC resolved:

1.1. To retain councillor directors on the permanent Board of HBRIC Ltd

1.2. That the Board of the Hawke’s Bay Regional Investment Company Ltd comprises a maximum of four independent directors and a maximum of three councillor directors, with a minimum of three independent directors

1.3. To instruct 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.

2. The purpose of this report is to establish a commencement date for the permanent Board for the guidance of the consultants appointed to undertake director recruitment.

Background

3. The Transition Board of HBRIC Ltd was appointed in February 2012 and comprised three independent directors (Messrs Pearce, Scotland and Robinson) and three councillors (Councillors Wilson, Dick and Scott). It also approved the appointment of the Chief Executive of the Council as an ex officio member of the Transition Board of the investment company and its Chief Executive Officer and Managing Director.

4. On 18 December 2013 HBRC appointed Danelle Dinsdale and David Faulkner as Directors to replace the three Councillor Directors on the Transition Board of Hawke’s Bay Regional Investment Company Limited for the period to 30 June 2014. At the same time it was clarified that the Managing Director would no longer be a formal Board member of HBRIC Ltd but would continue to provide oversight of the execution of HBRIC Ltd strategy and issues related to its activities.

5. When HBRC approved the 2014/15 Statement of Intent for HBRIC Ltd in June 2014 it clarified that the Transition Board would be replaced with an ongoing Board after the date of the RWSS financial close, with the Transition Board directors eligible for re-appointment.

Discussion

6. An ongoing level of uncertainty around the period of operation of the Transition Board is not a satisfactory arrangement for HBRC, nor for the HBRIC Board, and does not deal responsibly with the succession of directors. A definitive date at which the Transition Board of HBRIC Ltd is replaced with a permanent Board should be put in place by HBRC prior to the recruitment and appointment process commencing.

7. The suggested date for this to occur is 1 July 2015.

8. Irrespective of whether or not financial close has been reached on the RWSS by 1 July a permanent Board can be put in place:

8.1. If financial close is reached within the 2014/15 financial year then:

8.1.1. The Ruataniwha Water Partnership will be formed at financial and contractual close and HBRIC Ltd will appoint some of the directors of Ruataniwha Water Management Ltd; and

8.1.2. HBRIC Ltd can revert to its initial mixed director model from 1 July 2015

8.2. If financial close is not reached by 1 July 2015 because of delays to the RMA process and RWSS goes in to a long delay HBRIC can revert to a mixed director model, with a subsidiary of independent directors only to “hold” the RWSS assets until the final outcome is known.

8.3. If financial close is not reached and the RWSS does not proceed at all HBRIC Ltd can revert to a mixed director model.

9. If Council accepts that the 1 July 2015 is an appropriate date to establish the permanent Board of HBRIC Ltd the consultants will commence the recruitment process by calling for expressions of interest from councillors and from persons interested in being independent directors.

Decision Making Process

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

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

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

10.3. The persons affected by this decision are councillors and independent directors on the HBRIC Ltd Board.

10.4. Options that have been considered are outlined in the paper.

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

10.6. 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. Agrees that the Transition Board of the Hawke’s Bay Regional Investment Company will be replaced by a permanent Board of Directors to take effect from 1 July 2015.

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 28 January 2015

Subject: Annual Plan Progress Report for Six Months to 31 December 2014

Reason for Report

1. This Annual Plan Progress Report covers the first six months of the 2014-15 financial year and consists of commentary on financial results to 31 December 2014 and summarises service levels and performance targets by Group of Activity.

Summary of the Financial Position to 31 December 2014

2. The actual result covering the Council’s general funded operations for the first six months of 2014-15 is a deficit of $61,000. This is compared to the reforecast pro-rata budget deficit of $80,000. The variation for the six months is $20,000 favourable. The variations from pro-rata budgets are covered in this report.

Status of Reforecasting

3. An interim reforecasting exercise was carried out for the financial reports covering the three months to 30 September 2014. This report was presented to Council at the October 2014 Council meeting and reforecast the Annual Plan deficit from $424,000 to $710,000. The increased forecast deficit resulted from the expected increases in the Official Cash Rate (OCR) not being made by the Reserve Bank. The Annual Plan assumed increase in the OCR to 5% by March 2015, the current position is that economic forecasters believe the OCR will only increase to 3.75% by March 2015.

4. A number of other reforecasting items were included in the October Council paper, a number of these issues to be investigated prior to the main reforecasting exercise which is carried out for the nine months to 31 March 2015.

5. The nine month reforecasting exercise will be reported to Council at its meeting on 29 April 2015 and it is the objective of this reforecasting exercise to move the deficit back towards the Annual Plan deficit of $424,000.

Comment on Financial Results for Six Months to 31 December 2014

6. The report is provided in the following format:

Attachment 1: Financial Reports for the Six Months to 31 December 2014:

6.1. Section A – Operating Account

6.2. Section B – Balance Sheet

6.3. Section C – Cashflow Statement

6.4. Section D – Capital

Attachment 2: Group of Activities Summary of Service Levels and Performance Targets.

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.

Recommendation

1. That Council receives the “Annual Plan Progress Report for the first six months to 31 December 2014“.

Manton Collings

Corporate Accountant

Paul Drury

Group Manager Corporate Services

Liz Lambert

Chief Executive

Attachment/s

1	Summary of Financial Position to 31 December 2014
2	Group of Activities Summary

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 28 January 2015

SUBJECT: Monthly Work Plan Looking Forward Through February 2015

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
External Relations/ CE’s office		- Big Six follow up afternoon tea to report back to participants. - Review of Council committee structure for reporting to Council in February. - Continued preparation of LTP especially consultation document for presentation to Council in February. - Regional CEOs meeting, Wellington. - Oversight of NGR Business case for presentation to Council.
Corporate Services		- Continued preparation of LTP documents for presentation to Council workshops on 10 & 24 February, including financial strategy, infrastructure asset strategy, and consultation document.
Civil Defence & Emergency Management	Emergency Readiness & Response Reduction	- Finalise Group Structure and Resourcing Review. - In conjunction with review develop detailed Group Work Programme to implement Group Plan. - Review of the region’s control and coordination facilities including TLA emergency operations centres and Group emergency coordination centre. - Planning commenced for East Coast LAB - multi-agency community resilience initiative Commence planning for major Group exercise November 2015.
Asset Management & Biosecurity	Coastal Biosecurity	- Coastal strategy development continues, with the focus being on progressing technical aspects in preparation for the next governance meeting in March. - A review of tendering and contracting procedures has been completed and a draft document sent out to contractors for comment. This document will be finalised during February. This will be progressed during January.
Asset Management & Biosecurity	Engineering Land Management	- Asset Management Plan peer review is programmed for completion in February. Their adoption by Council will be sought through the E&S Committee meeting in March. - Similarly the 30 year Infrastructure Strategy is programmed for completion during February. - The gravel resource and supply and demand assessment is expected to be finalised. - A programme for levels of service reviews for the Heretaunga Plains drainage areas will be progressed. - February will be a quiet month for formal organised events and activities enabling staff to focus on progressing a number of work programs including, implementation programs to support PC6, undertake field work to map existing RLS projects and identify the extent of riparian protection in the Papanui. - A steering group has been formed and an event planner engaged to initiate the East Coast Hill Country symposium proposed for June/July. The group will meet to start preparing for the event and to discuss initiating the wider East Coast Hill Country Resilience Proposal.
Resource Management	Science	- The weekly Recreational Water Quality monitoring program continues and will run through to mid‑March. Results are being published on the LAWA website as well as Council’s website on a weekly basis. - Analysis and reporting on the ecological health and life supporting capacity of the Karamu Stream continues with the report to finalised by mid-2015. - Development of the Heretaunga Plains model continues. Presentation to TANK TAG group regarding model to be completed January 2015. - University of Waikato is progressing well with development and calibration of the Lake Tutira model. Lake management scenario testing should be possible by mid-2015. - Five yearly ‘State of the Environment’ detailed technical reporting continues, with the summary report substantially complete and the document now being laid out. The summary report is expected to be available in draft form in January 2015 with detailed technical reports being available around mid-2015. - Planning continues to undertake an Air Emissions Inventory this winter and to conduct PM₁₀ monitoring for a period of one year at Port Ahuriri School. - The Mohaka Catchment characterisation report is being completed in sections and reviewed. - 2015 Soil Quality Monitoring sampling will commence in February. Native and commercial forestry plus orchards will be sampled. - Ngaruroro terrestrial biodiversity report will be reviewed. - Satellite mapping of Heretaunga plains continues.
Resource Management	Consents	- NCC application for coastal protection structure at Whakareri Ave remains on hold. - NCC Thames Tyne stormwater consent application process – 10 submissions received. - TAG application for an oil exploration bore at Boar Hill remains on hold. - Applications from HBRIC, Bostocks and Te Awahohonu Forest Trust (Gwavas Station) for Tuktuki Plan “Tranche 2” water are on hold. - Replacement and review of Ruataniwha groundwater consents in process. 10 have requested review of annual volumes calculated. - Twyford Global consent applications. Raupare semi-confined global issued. Ngaruroro – unconfined aquifer limited notified – closing 23 January. - Panpac application to extend their outfall from 440m to 2,000 m off shore has been limited notified. - CHBDC, Waipukurau and Waipawa wastewater treatment consents change of conditions and review in process.
Resource Management	Compliance	- The Central Hawke’s Bay District Council Wastewater Treatment plants at Waipawa and Waipukurau are expected to become non compliant with their resource consents during this month [estimated that they will exceed the allowable number of exceedences granted by the consents]. We are currently working closely with CHBDC to upgrade and/or repair some of the equipment in the plants. Equipment has been purchased and booked in for installation. The matter is a priority for CHBDC and HBRC RMG. - We are also prepared for an increase in the number of water take bans that will be instigated if the dry spell continues. Such preparation includes site visits, water meter audits and aerial observation. - Initial preparation will be made for a region wide risk assessment and review of the current navigational safety work programme due for completion by 1 July 2015.
Resource Management	Client Services	- A series of zone based public meetings will be held in February to brief consent holders on the estimated science charges (under section 36 of the RMA) that will be billed in July.
Strategic Development	Resource Management Planning	- Environment Court hearing took place on 3 and 4 December 2014 on two outstanding appeal points by NKII against Change 5. Court gave no indication as to when the decision might be issued. - Work is continuing on PC6 Implementation Plan across Council groups. - The next TANK Group meeting is scheduled for 10 March 2015. - Setup phases continue for project funded by MfE’s Community Environment Fund ($80K) to develop criteria and methodology for the identification of ‘outstanding freshwater bodies’ in the context of the NPSFM2014. - Regional Biodiversity Strategy Steering Group is working through public feedback received on the Draft strategy. - Whakatu arterial roading designation hearing scheduled for 2 February by commissioner appointed by Hastings DC. - Hastings DC’s district plan hearings continue into the first quarter of 2015. - Napier CC District Plan Change 10 hearings still have not been scheduled.
Strategic Development	Transport	- The draft Regional Public Transport Plan and the Regional Land Transport Plan were released for consultation on 8 December and submissions closed on 23 January 2015. Hearings and deliberations will take place on 13 February 2015. - It is hoped the draft Regional Cycle Plan will be signed off by the governance group in late January, and then forwarded to member organisations for their consideration during February. - The HBRC Transport Procurement Strategy will be finalised during February. This needs to be approved by NZTA before we can commence re-tendering the bus service in mid-2015.
Strategic Development	Economic Development	- Business Hawke’s Bay (BHB) KPI framework to be considered by Council at the Corporate and Strategic meeting in February 2015. BHB will also be reporting back at that meeting. - Staff are promoting and supporting an initiative to produce a HB Maori Economic Development Strategy – aligned with REDS. In discussion with Treaty group members of RPC and CE of TTOH. - Scope use of Te Tumu Paeroa-managed Hereheretau Station for wise land use project in Wairoa. - Monitor progress of Ata Milk market validation study in Wairoa. - As required and where appropriate, support RWSS workstreams.

Group

Area of Activity

Activity Status Update

External Relations/ CE’s office

- Big Six follow up afternoon tea to report back to participants.

- Review of Council committee structure for reporting to Council in February.

- Continued preparation of LTP especially consultation document for presentation to Council in February.

- Regional CEOs meeting, Wellington.

- Oversight of NGR Business case for presentation to Council.

Corporate Services

- Continued preparation of LTP documents for presentation to Council workshops on 10 & 24 February, including financial strategy, infrastructure asset strategy, and consultation document.

Civil Defence & Emergency Management

Emergency Readiness & Response

Reduction

- Finalise Group Structure and Resourcing Review.

- In conjunction with review develop detailed Group Work Programme to implement Group Plan.

- Review of the region’s control and coordination facilities including TLA emergency operations centres and Group emergency coordination centre.

- Planning commenced for East Coast LAB - multi-agency community resilience initiative Commence planning for major Group exercise November 2015.

Asset Management & Biosecurity

Coastal

Biosecurity

- Coastal strategy development continues, with the focus being on progressing technical aspects in preparation for the next governance meeting in March.

- A review of tendering and contracting procedures has been completed and a draft document sent out to contractors for comment. This document will be finalised during February. This will be progressed during January.

Asset Management & Biosecurity

Engineering

Land Management

- Asset Management Plan peer review is programmed for completion in February. Their adoption by Council will be sought through the E&S Committee meeting in March.

- Similarly the 30 year Infrastructure Strategy is programmed for completion during February.

- The gravel resource and supply and demand assessment is expected to be finalised.

- A programme for levels of service reviews for the Heretaunga Plains drainage areas will be progressed.

- February will be a quiet month for formal organised events and activities enabling staff to focus on progressing a number of work programs including, implementation programs to support PC6, undertake field work to map existing RLS projects and identify the extent of riparian protection in the Papanui.

- A steering group has been formed and an event planner engaged to initiate the East Coast Hill Country symposium proposed for June/July. The group will meet to start preparing for the event and to discuss initiating the wider East Coast Hill Country Resilience Proposal.

Resource Management

Science

- The weekly Recreational Water Quality monitoring program continues and will run through to mid‑March. Results are being published on the LAWA website as well as Council’s website on a weekly basis.

- Analysis and reporting on the ecological health and life supporting capacity of the Karamu Stream continues with the report to finalised by mid-2015.

- Development of the Heretaunga Plains model continues. Presentation to TANK TAG group regarding model to be completed January 2015.

- University of Waikato is progressing well with development and calibration of the Lake Tutira model. Lake management scenario testing should be possible by mid-2015.

- Five yearly ‘State of the Environment’ detailed technical reporting continues, with the summary report substantially complete and the document now being laid out. The summary report is expected to be available in draft form in January 2015 with detailed technical reports being available around mid-2015.

- Planning continues to undertake an Air Emissions Inventory this winter and to conduct PM₁₀ monitoring for a period of one year at Port Ahuriri School.

- The Mohaka Catchment characterisation report is being completed in sections and reviewed.

- 2015 Soil Quality Monitoring sampling will commence in February. Native and commercial forestry plus orchards will be sampled.

- Ngaruroro terrestrial biodiversity report will be reviewed.

- Satellite mapping of Heretaunga plains continues.

Resource Management

Consents

- NCC application for coastal protection structure at Whakareri Ave remains on hold.

- NCC Thames Tyne stormwater consent application process – 10 submissions received.

- TAG application for an oil exploration bore at Boar Hill remains on hold.

- Applications from HBRIC, Bostocks and Te Awahohonu Forest Trust (Gwavas Station) for Tuktuki Plan “Tranche 2” water are on hold.

- Replacement and review of Ruataniwha groundwater consents in process. 10 have requested review of annual volumes calculated.

- Twyford Global consent applications. Raupare semi-confined global issued. Ngaruroro – unconfined aquifer limited notified – closing 23 January.

- Panpac application to extend their outfall from 440m to 2,000 m off shore has been limited notified.

- CHBDC, Waipukurau and Waipawa wastewater treatment consents change of conditions and review in process.

Resource Management

Compliance

- The Central Hawke’s Bay District Council Wastewater Treatment plants at Waipawa and Waipukurau are expected to become non compliant with their resource consents during this month [estimated that they will exceed the allowable number of exceedences granted by the consents]. We are currently working closely with CHBDC to upgrade and/or repair some of the equipment in the plants. Equipment has been purchased and booked in for installation. The matter is a priority for CHBDC and HBRC RMG.

- We are also prepared for an increase in the number of water take bans that will be instigated if the dry spell continues. Such preparation includes site visits, water meter audits and aerial observation.

- Initial preparation will be made for a region wide risk assessment and review of the current navigational safety work programme due for completion by 1 July 2015.

Resource Management

Client Services

- A series of zone based public meetings will be held in February to brief consent holders on the estimated science charges (under section 36 of the RMA) that will be billed in July.

Strategic Development

Resource Management Planning

- Environment Court hearing took place on 3 and 4 December 2014 on two outstanding appeal points by NKII against Change 5. Court gave no indication as to when the decision might be issued.

- Work is continuing on PC6 Implementation Plan across Council groups.

- The next TANK Group meeting is scheduled for 10 March 2015.

- Setup phases continue for project funded by MfE’s Community Environment Fund ($80K) to develop criteria and methodology for the identification of ‘outstanding freshwater bodies’ in the context of the NPSFM2014.

- Regional Biodiversity Strategy Steering Group is working through public feedback received on the Draft strategy.

- Whakatu arterial roading designation hearing scheduled for 2 February by commissioner appointed by Hastings DC.

- Hastings DC’s district plan hearings continue into the first quarter of 2015.

- Napier CC District Plan Change 10 hearings still have not been scheduled.

Strategic Development

Transport

- The draft Regional Public Transport Plan and the Regional Land Transport Plan were released for consultation on 8 December and submissions closed on 23 January 2015. Hearings and deliberations will take place on 13 February 2015.

- It is hoped the draft Regional Cycle Plan will be signed off by the governance group in late January, and then forwarded to member organisations for their consideration during February.

- The HBRC Transport Procurement Strategy will be finalised during February. This needs to be approved by NZTA before we can commence re-tendering the bus service in mid-2015.

Strategic Development

Economic Development

- Business Hawke’s Bay (BHB) KPI framework to be considered by Council at the Corporate and Strategic meeting in February 2015. BHB will also be reporting back at that meeting.

- Staff are promoting and supporting an initiative to produce a HB Maori Economic Development Strategy – aligned with REDS. In discussion with Treaty group members of RPC and CE of TTOH.

- Scope use of Te Tumu Paeroa-managed Hereheretau Station for wise land use project in Wairoa.

- Monitor progress of Ata Milk market validation study in Wairoa.

- As required and where appropriate, support RWSS workstreams.

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 February 2015 report.

Mike Adye

Group Manager Asset Management

Helen Codlin

Group Manager Strategic Development

Paul Drury

Group Manager Corporate Services

Ian Macdonald

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

Iain Maxwell

Group Manager Resource Management

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

Corporate and Stratetic Committee Update on 159 Dalton Street - 4 September 2013

Attachment 1

HAWKE’S BAY REGIONAL COUNCIL

Corporate and Strategic Committee

Wednesday 04 September 2013

SUBJECT: Update on 159 Dalton Street

Reason for Report

1. This paper updates Council on:

1.1. Progress with the remedial work on Council’s office building at 159 Dalton Street Napier.

1.2. The legal situation with regard to the High Court proceedings seeking the recovery of the cost of the remedial work.

Remedial Work

2. At a meeting on 20 February 2013, Council awarded the remedial works contract for the Council building to Mackersey Construction. The contract value was $1,922,002 + GST. It was noted at the time the contract was awarded that the full cost of the remedial work would not be known until cladding had been removed and the full extent of damage can be ascertained.

3. The remedial work is now approximately 55% complete. The cost has reduced because it is no longer necessary to remove windows, and a large part of the contingency sum included in the original contract has been deleted because there is now more certainty over the remainder of the work required.

4. However, offsetting this reduction is an increase in professional and legal fees associated with the project. The increased cost of the remediation contract management is a result of the need to provide detailed drawings for remedial work that was found to be different than the original contract drawings. This need arose because it was found that the construction of the original building varied from what was shown on the contract drawings. Additional detailing was also required as a result of the decision not to remove windows.

5. The table below was included in the 20 February 2013 paper to Council. Two additional columns have been added to update the estimate.

Description	Feb 2013 Estimate	Sept 2013 Estimate	Costs to date Sept 2013
Assessment of cladding defects	$60,000	$60,000	$60,000
Professional and consent fees to tender stage	$50,000	$50,000	$50,000
Remedial works	$1,922,000	$1,697,000	$983,000
Remediation contract management	$30,000	$75,000	$56,000
Legal fees	$120,000	$160,000	$102,000
Remediation specialist fees	$30,000	$30,000	$13,000
Total	$2,212,000	$2,072,000	$1,264,000

6. There is uncertainty at this stage in how the legal process will progress. It is therefore impossible to accurately estimate the likely legal costs and the associated costs of a remediation specialist.

7. The contract period for the remedial works is approximately 9 months. The work is currently programmed to be completed prior to Christmas, and the contractor is expecting to achieve this timeframe.

8. Some of the work required will prevent the use of the Council chamber. This work is programmed to be undertaken in late September and October 2013 when there are no Council meetings scheduled.

Legal proceedings

Chief Executive Delegation

9. At their meeting on 21 March 2012 Council resolved to delegate to the Chief Executive settlement through negotiation or mediation at any stage prior to the High Court hearing the case if, in his opinion and taking into account the advice from legal advisors, that negotiation or mediation was appropriate and required that should the Chief Executive exercise this delegation, a full report would be provided back to Council setting out the situation and providing details and justification for that course of action.

10. Since that time staff have continued to work with Council’s legal advisers to progress the case. Kensington Swan lawyers are representing Council on this issue.

Update on proceedings

11. Council filed proceedings against Herbert for breach of contract, negligence, and breach of a contractual warranty that Herbert provided in favour of the Council. Herbert then joined several third parties to the proceedings.

12. In June 2013, a creditor of Herbert made an application to put the company into liquidation. Therefore, on 21 June 2013, Council filed an amended statement of claim joining the following third parties as defendants:

12.1. Opus International Consultants Limited, on the basis that it was negligent in supervising the construction

12.2. Napier City Council, on the basis that it negligently inspected the building and issued the code compliance certificate

12.3. Wynards Masonry Limited, on the basis that it negligently carried out the cladding work

12.4. Toop Aluminium Limited, on the basis that it negligently carried out the aluminium work

12.5. Malcolm Herbert, on the basis that he was personally involved in the construction by way of project management and supervision.

Herbert’s status

13. Herbert was placed into liquidation on 25 July 2013.

14. Herbert’s liquidators have been notified of the Council’s claim against Herbert. Council is recorded as an unsecured (contingent) creditor. This means that if there are any funds to distribute from the company, Council will rank behind the preferential claims (such as liquidator’s cost, petitioning creditors, employee claims, and the IRD) in any distribution. It is highly unlikely that there will be any funds available to the Council.

Next steps

15. The next major step in the legal proceeding is discovery where each party is required to list and provide all relevant documents in their possession or control and inspect all other parties’ documents.

16. At a recent court case management conference, a timetable was set requiring the parties to discuss discovery by mid-September 2013 and update the Court at a further conference scheduled for 30 September 2013.

17. Council’s legal advice is that mediation should be proposed.

Decision Making Process

18. 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 & Strategic Committee receives the “Update on 159 Dalton Street” report.

Mike Adye

Group Manager

Asset Management

Liz Lambert

Interim Chief Executive

Attachment/s

There are no attachments for this report.

Request Status	Date Received	Request ID	Requested By	Request Summary
Completed	22/12/2014	OIR-14-090	Sue Walsh - Dairy Advisory Group	All discharge consents granted in 2014 excl farm dairy effluent
Completed	19/12/2014	OIR-14-089	Kevin Rose	Attendance records of Councillors at all HBRC Council and standing committee meetings from 1 November 2013 - 19 December 2014.

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