Agenda of Regional Council Meeting

	Agenda Item	Action	Person Responsible	Status Comment
1	Follow-ups from Previous Regional Council meetings	Seek legal advice confirming liability lies with Waikato Regional Council as consent issuer	I Maxwell	Information paper on Building Act Responsibilities and Liabilities on 24 June 2015 Council Agenda
2	Follow-ups from previous Regional Council meetings	Public information workshops and Council workshop on water consenting issues to be organised	E Lambert / I Maxwell	Hui held at Taiwhenua o Heretaunga 15 June 2015, and further hui to be arranged.
3	Recommendations from E&S	Infrastructure Insurance – further information to be provided to enable decision on delegation for final sign-off	M Adye	Paper on 24 June Council agenda
4	Minor Items not on the Agenda	Appoint alternate to the Clifton to Tangoio Coastal Strategy Development Joint Committee	E Lambert	Paper on 24 June 2015 Council agenda

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 24 June 2015

Subject: Affixing of Common Seal

Comment

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

Seal No.

Date

1.1

Leasehold Land Sales

1.1.1 Lot 188

DP 13217

CT E4/435

- Transfer

1.1.2 Lot 84

DP 13055

CT E2/128

- Agreement for Sale and Purchase

- Transfer

1.1.3 Lot 171

DP 13217

CT E4/428

- Agreement for Sale and Purchase

- Transfer

1.1.4 Lot 126

DP 11027

CT 3/1367

- Transfer

1.1.5 Lot 105

DP 10572

CT E2/395

- Agreement for Sale and Purchase

1.1.6 Lot 61

DP 14451

CT G2/749

- Agreement for Sale and Purchase

1.1.7 Lot 54

DP 13216

CT E4/374

- Transfer

3849

3850

3854

3851

3856

3852

3853

3855

3857

27 May 2015

3 June 2015

11 June 2015

8 June 2015

15 June 2015

8 June 2015

9 June 2015

15 June 2015

17 June 2015

1.2

Staff Warrants

1.2.1 P. Train

(Delegations under Resource Management Act 1991; Soil Conservation and Rivers Control Act 1941; Land Drainage Act 1908 and Civil Defence Act 1983 (s.60-64); Civil Defence Emergency Management Act 2002 (s.86-91) and Local Government Act 2002 (s.174)

3858

18 June 2015

Decision Making Process

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

2.1 Sections 97 and 88 of the Act do not apply

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

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

Recommendations

That Council:

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

2. Confirms the action to affix the Common Seal.

Diane Wisely

Executive Assistant

Liz Lambert

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 24 June 2015

Subject: Alternate Councillor Member on the Clifton to Tangoio Coastal Hazards Strategy Joint Committee

Reason for Report

1. This report seeks agreement from Council for the appointment of alternate member to the Clifton to Tangoio Coastal Hazards Strategy Joint Committee.

Background

2. In April 2014 the HBRC agreed to become a Partner Council of the Clifton to Tangoio Coastal Hazards Strategy Joint Committee, and to appoint two Council members to the Committee.

3. The Terms of Reference of the Joint Committee provide that where a member cannot attend a meeting, he or she may, with the prior approval of the Partner Council which appointed them, send an alternate representative in his or her place.

Current Situation

4. The two Council appointees to the Joint Committee are Councillor Beaven and Councillor Scott, however no alternate member has have been selected, should one or other not be able to attend.

5. As only Council members may vote at the Committee meetings any absence of one or both of the appointed members may result in HBRC not having adequate input to any discussions. It is suggested that the Council make provision for this eventuality by appointing an alternate member. HBRC Chairman is however an ex-officio member of the Committee and therefore may attend any meeting.

6. The purpose of the Joint Committee is to develop a strategy which will provide a framework for assessing coastal hazards risks, and options for the management of those risks for the next 105 years from 2015 to 2120.

7. The long term vision for the strategy is that coastal communities, businesses and critical infrastructure from Tangoio to Clifton are resilient to the effects of coastal hazards.

8. While the terms of Reference indicate that best endeavours will be to achieve decisions on a consensus basis and that the Chairman will not have a casting vote, the Committee will function best when all Partner Councils have an equal voice.

Options

9. The Council has two options:

9.1 Option 1 is to appoint an alternate to be available in the event that one of the “permanent” members is unavailable.

9.2 Option 2 is to have the Chairman as ex-officio member, as the alternate HBRC member.

Decision Making Process

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

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

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

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

10.4. No persons are affected by this decision.

10.5. Options that have been considered are included in this paper.

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

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

Recommendations

That Council either:

1. Appoints an alternate Councillor Member on the Clifton to Tangoio Coastal Hazards Strategy Joint Committee; being ………………………………………………….

1. Advises the Joint Committee that in the absence of Councillor Beaven or Scott, Council Chairman Fenton Wilson will act as HBRC alternate member.

Mike Adye

Group Manager
Asset Management

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 24 June 2015

SUBJECT: Adoption of the Long Term Plan 2015-2025

Reason for Report

1. The purpose of this paper is to set out the final amendments to the Long Term Plan 2015-2025 (LTP). These amendments were made subsequent to the decisions Council made at its meetings held on 8, 9 & 10 June 2015 on the LTP Consultation Document. Further, to formally adopt this Plan which, as required by the Local Government Act 2002, is to be adopted not later than 30 June 2015.

Background

2. Reflecting the recent amendments to the Local Government Act 2002 (the Act) Council, at its meeting on Wednesday 25 March 2015, was not required to formally adopt a draft LTP for 2015-2025, however it was required under the Act to adopt an LTP Consultation Document and LTP supporting accountability documents.

3. The Consultation Document was delivered to all households as part of Council’s publication “Our Place” and the supporting accountability documents were available on Council’s website. These supporting accountability documents represented approximately 95% of what will ultimately be required to be included in a published LTP.

4. Even though the Act does not require a draft LTP to be issued, it does require under Section 93 that the final LTP is to be adopted no later than 30 June 2015, the approval of the final LTP being subsequent to the consultation and consideration of submissions on the LTP Consultation Document.

Consultation

5. During the Council meetings on 8, 9 and 10 June 2015 Council considered 153 written submissions and considered presentations from 53 submitters.

6. Subsequent to the adoption of this Plan, letters or emails will be sent to all submitters to communicate Council’s resolutions and decisions in response to the submissions.

Plan Changes in Response to Internal/External Submissions

7. Amendments have been made to the LTP to reflect the resolutions passed and decisions made at the abovementioned Council meetings on both the internal and external submissions.

8. A number of Council’s resolutions addressed the issues raised in the Consultation Document as “Our Plan” issues, on which feedback was specifically sought. The final LTP (Part 1 Introduction) includes, under each of the “Our Plan” topics, the resolutions made by Council in response to the consultation.

Final 10 Year Plan Financials

9. The LTP financials and associated rating implications have been amended to reflect the following:

9.1. The internal submission to the Plan which covered a number of carry forwards of expenditure from 2014-15 and an increase of expenditure to provide funding for the Poll on local government amalgamation.

9.2. The impacts of resolutions made by Council when considering the external submissions to the Consultation Document:

9.2.1. The main resolution that gave rise to adjustments in financials and rating covered the resolution to provide additional funding to Hawke’s Bay Tourism (HBT) to fund an enhanced campaign to attract more visitors to Hawke’s Bay. The adjustments required in the financials and rates that were included in the Consultation Document were to increase funding to HBT by $300,000 in 2015-16, $600,000 in 2016-17 and $900,000 in 2017-18 and subsequent years of the Plan.

9.2.2. The Plan now reflects the revised rate increase of 5.87% (2015-16), 5.69% (2016-17) and 5.51% (2017-18).

9.3. Other financial adjustments were required to take account of external market factors. Most of these adjustments are beyond the control of Council – firstly, the delay in the Ruataniwha Water Storage Scheme (RWSS) financial close and in the cash drawdowns required from HBRC due to additional time required for appeal processes and, secondly, in the reduced interest rates paid on term deposits due to the lowering of the Official Cash Rate (OCR). These unfavourable financial pressures have been partly offset by the firming up of lower insurance premiums and the use of the Dividend Equalisation Reserve to offset adjustments to dividend flows.

9.4. In spite of these major pressures on the levels of regional income, the impact on Council’s underlying deficit has been limited to an increase to $89,000 from the level of $12,000 deficit included in the Consultation Document.

9.5. These adjustments are shown in Attachment 1 which reconciles the underlying deficit/surplus from the Consultation Document/supporting accountability documents adopted by Council on 25 March 2015, to the final deficit/surplus to be included in the LTP 2015-2025.

Audit of LTP

10. Under Section 93 of the Act which covers the issue and content of the LTP Consultation Document, there is a requirement that the Consultation Document must contain a report from the Auditor General. This was completed in March 2015.

11. Section 94 of the Act covers the Audit requirement for the final LTP. Section 94(1) states:

“The Long Term Plan must contain a report from the Auditor General on:

(a) Whether the Plan gives effect to the purpose set out in Section 93(6); and

(b) The quality of the information and assumptions underlying the forecast information provided in the Plan.”

12. Information has already been sent to Audit New Zealand covering the policies and HBRC activities etc adopted by Council for the consultation process. Further, they have worked through the adjustments made to the Supporting Accountability documents with Council staff, both from a financial and wording perspective. They have also been provided with a copy of the final LTP documents.

13. The audit clearance from Audit New Zealand for the LTP will be available for tabling at the 24 June Council meeting.

Final LTP

14. Copies of the final LTP documents are attached to this paper for Councillors. This Plan is still being proofread and grammar/spelling and other minor adjustments may be made.

15. The content of the final LTP is divided up into seven parts, being:

15.1. Part 1 – Introduction (including the Chairman/Chief Executive report and Council’s decisions on the options set out in “Our Plan”).

15.2. Part 2 – Financial Strategy

15.3. Part 3 – 30 Year Infrastructure Strategy

15.4. Part 4 – HBRC Activities (including Strategic Goals, Service Levels and Performance Targets)

15.5. Part 5 – Financial Information (including RMA and Navigation Safety charges)

15.6. Part 6 – HBRC’s Policies (including Investment and Significance & Engagement policies)

15.7. Part 7 – Related Information (including Governance and Management structures)

16. Where amendments have been made in the final Plan from the supporting accountability documents approved by Council on 25 March 2015, these are shown in the documents by coloured italics. It is hoped that, for the most part, this will make it easier for councillors to determine what changes have been made. However this does not apply to Part 1 as most of this material is new and was not included in the supporting accountability documents, and for Part 5 as the adjustments made affect a significant number of financial figures.

17. The in-house production and printing of the final LTP 2015-2025 will commence after approval of this Plan (with amendments, if any) from this meeting.

18. Under the Act 2002, the final LTP must be sent out no later than one month after Council’s formal approval. It is envisaged that this Plan will be completed over the next few weeks and sent out by mid July 2015.

Decision Making Process

19. Section 93(A) of the Act provides for the use of a special consultative procedure in relation to the adoption of a Long Term Plan as prepared under Section 93 of the Act. This section further provides that for the purposes of Section 83(1)(a), a Consultation Document must be prepared and adopted and will replace the need for a statement of proposal and a summary of the information contained in the statement of proposal.

Recommendations

That the Council:

1. Agrees the decision is to be made under Section 93 of the Act which specifies the adoption of the Long Term Plan, and also under sections 83 requiring a special consultative process which includes consideration of submissions on the Plan from members of the community, and that this process has been undertaken.

2. Agrees to fund the underlying deficits in the years where the deficits are shown in the Plan, from cash operating balances which are estimated to be at a level which is sufficient to provide such funding.

3. Adopts the following resolutions pursuant to Section 12 of the Local Government Act 2002:

3.1. Council raises a loan or loans or facilitate loan funding through banks to fund the borrowing set out in the LTP 2015-2025 for the purposes of funding clean heat/ insulation/solar hot water advances to householders, flood and drainage schemes, public good capital assets, systems integration programme, building extensions and investment assets. These loans to be drawn down when required to fund the approved capital programmes.

3.2. Delegates to the Chief Executive, authority to negotiate and agree on the terms of the loan including:

3.2.1. Any future financing needs within the overall terms of borrowing, the interest rate payable by Council.

3.2.2. The frequency of interest payments.

3.2.3. The timing of drawdown.

3.2.4. The institution(s) who will provide the loans.

3.2.5. The number of loans which will make up the borrowing.

3.2.6. All other terms and conditions of such loans and facilities as may be necessary in obtaining such loans and facilities in accordance with the Council’s Liability Management policy to execute any agreements, documents, and certificates in respect of such loans and facilities on behalf of Council.

4. Adopts the audited LTP 2015-2025, in accordance with Section 93(A) and Section 83(1)(a) of the Local Government Act 2002, noting that the LTP Consultation Document and supporting accountability documents issued in March 2015 for public consultation were amended:

4.1. by Council at the meetings held on 8, 9 & 10 June 2015.

4.2. by Council at its meeting on 24 June 2015.

5. Approves, in accordance with sections 83 and 150 of the Local Government Act 2002, the resource consent and user charges as adopted in the LTP supporting accountability documents issued for public consultation and amended by Council at its meetings on 8, 9 & 10 June 2015, and today, 24 June 2015.

6. Instructs staff to make any necessary final amendments to the LTP 2015-2025 to reflect the changes agreed at the meetings on 8, 9 & 10 June 2015, and today, 24 June 2015, and then to issue the published Plan in its final form.

Manton Collings

Corporate Accountant

Paul Drury

Group Manager
Corporate Services

Liz Lambert

Chief Executive

Attachment/s

1	Underlying Surplus-Deficit LTP 2015-2025
2	2015-25 LTP Part 1 - Introduction	Under Separate Cover
3	2015-25 LTP Part 2 - Financial Strategy	Under Separate Cover
4	2015-25 LTP Part 3 - 30 Year Infrastructure Strategy	Under Separate Cover
5	2015-25 LTP Part 4 - HBRC's Activities	Under Separate Cover
6	2015-25 LTP Part 5 - Financial Information	Under Separate Cover
7	2015-25 LTP Part 6 - HBRC's Policies	Under Separate Cover
8	2015-25 LTP Part 7 - Related Information	Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 24 June 2015

Subject: Infrastructure Asset Insurance

Reason for Report

1. At its meeting on 13 May 2015 the Environment and Services Committee considered a paper regarding the Insurance of HBRC’s Infrastructure Assets. The paper advised that the work was yet to be completed regarding infrastructure Asset Insurance options and sought Council’s agreement to delegate the finalisation of insurance arrangements for providing insurance to HBRC infrastructure from 30 June 2015 to the Chief Executive. The Committee decided that Council should be the body that makes a decision regarding infrastructure insurance and decided to leave the paper on the table with instructions to staff to return to Council once the options had been assessed.

2. This paper advises Council of the status of the work for determining options on HBRC’s Infrastructure Insurance and seeks from Council a decision regarding the preferred provider.

Background

3. A copy of the paper presented to the Environment and Services Committee as its meeting on Wednesday 13 May 2015 is attached for Councillor Information.

Since the 13 May meeting

4. HBRC has received the completed “Natural Hazard Loss Estimate Analysis for River Management Asset Report June 2015”. This report was prepared jointly by Aon and Tonkin & Taylor. This report was unfortunately received too late to be provided to the Insurance Industry for background information and assessing the risk and therefore insurance premium quotes. However preliminary information was able to be provided as set out in the next paragraph below.

5. Staff have received quotations from Insurance Broker Aon, and Insurance Broker JLT.

6. Staff have also received updated information from the Local Authority Protection Programme (LAPP).

7. The report Natural Hazard Loss Estimate Analysis for River Management Asset concluded that a maximum concluded earthquake event will cause between $11-59 million worth of damage to HBRC owned assets as set out in the Loss Summary below. The high level of loss is because of the significant concentration of assets on the Heretaunga Plains area and therefore the risk from a significant earthquake of damage to those assets.

Scenario	ARI (Years)	Loss Estimate ($m)
Scenario	ARI (Years)	Low	Medium	High
Earthquake Scenario 1	2,100	11.0	24.1	59.0
Earthquake Scenario 2	110 - 400	4.5	7.7	17.0
Earthquake Scenario 3	26 – 110	2.7	4.1	7.8
Flood Scenario (3 main schemes)	100	16.5
	200	27
	500	37.1
Volcano	500	4.6
Tsunami	500 (50th Percentile)	9.6
	500 (84th Percentile)	14.4
	2,500 (50th Percentile)	22.4
	2,500 (84th Percentile)	35.5

8. The quotations received are as follows.

Aon

8.1. Insurance is taken out under the Horizons LASS.

8.2. Loss estimates as per the report provided. The earthquake maximum probable loss is based on a > 1 in 2000 year event.

8.3. Sub-limit for HBRC of 40% of $60m (to provide an additional safety margin over and above the earthquake loss estimate). The overall loss limit for the group (Horizons LASS) policy is $125m.

8.4. Cover includes 2 earthquake events up to the $60m during the period of insurance (with the reinstatement at NIL premium)

8.5. The excess is $1.5m.

8.6. The premium will be $144,700

8.7. The two year rate hold option has been agreed by underwriters

8.8. Optimised replacement cost / modern equivalent value is the basis of valuation

JLT

8.9. Deductible is $1,500,000 for any one loss event, or series of losses arising out of any one loss event.

8.10. Insurance is for a 40% ($24m) part of the $60m any one loss in excess of the deductible

8.11. The premium is $140,000

8.12. It is not clear at this stage whether live tree edge protection is covered. This needs to be further clarified with JLT

LAPP

8.13. Contribution is $251,200 with an excess of $2,027,000

8.14. HBRC contribution to LAPP is being affected by the agreed functional replacement of ‘trees for rocks’. (Optimised replacement value). The additional rating relating to the ‘trees for rocks’ agreement is costing HBRC $50,000.

8.15. Therefore the indicative contribution for HBRC could be amended to $200,000 plus $50,000 if you want to retain the tree/rock (betterment) agreement.

Assessment

9. LAPP was established in the early 1990’s at a time when insurance for “otherwise uninsurable assets” was not available commercial insurers on the open market. LAPP therefore filled this gap and provided a cost effective insurance option for all local government organisations.

10. The risks associated with a mutual insurance arrangement were highlighted by the Christchurch earthquake events and their impact on the LAPP fund. A significant portion of the annual contribution quoted by LAPP is to enable LAPP to rebuild its fund so that it is able to go to the reinsurance market seeking reinsurance with a significant excess amount which would be funded through the LAPP fund.

11. It is clear from the quotations received from Aon and JLT who have gone directly to reinsurers, that insurance arrangements can now be made directly through commercial insurers with an excess determined through consideration of the risks directly associated with the insuring party, in this case HBRC.

12. The quotations provided through the commercial market are based on a thorough understanding of HBRC risks, it is now a safe bet that ongoing cost effective insurance cover can be obtained through the commercial providers. This paper therefore recommends that HBRC withdraw from LAPP and negotiate suitable infrastructure asset insurance directly with the commercial market.

13. Two quotations have been obtained from insurance brokers operating within New Zealand. Reports from insurance brokers indicate that reinsurers are keen to provide insurance into New Zealand where they believe risks are well assessed and understood. Note that Aon have indicated that they have received a commitment from the insurance market that they are prepared to commit to a two year agreement at a fixed annual premium.

14. At the time of writing this report staff have had in-depth discussions with Aon regarding the wording of a possible insurance contract to ensure that the insurance cover does provide for the realistic replacement cost of assets including, where necessary, substantially revised design and construction techniques than those assets currently in place e.g. replacement of live tree river edge protection with a mixture of concrete and rope and rail groynes similar to that undertaken during the sawfly remediation work; and the replacement of Makara Dam following the damage incurred during the 2011 flood. Staff expect to have a similar conversation with JLT over the next fortnight. Staff therefore seek from Council agreement to delegate to the Chief Executive authority to finalise the insurance supplier and enter into an appropriate agreement prior to 30 June 2015 to provide infrastructure asset insurance for the 2015-16 and 2016-17 year.

Decision Making Process

15. 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:

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

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

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

15.4. There are no persons affected by this decision

15.5. Options that have been considered have been presented in this and pervious papers.

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

15.7. 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

Recommendations

That Council:

2. Agrees to withdraw from the Local Authority Protection Programme (LAPP).

3. Delegates to the Chief Executive to finalise and enter into an agreement for the provision of infrastructure asset insurance with the commercial sector for 2015-16, and 2016-17 year, should the Chief Executive consider a two year agreement appropriate.

Mike Adye

Group Manager
Asset Management

Attachment/s

Infrastructure Insurance - Enivronment & Services Committee paper

Reason for Report

1. On 30 January 2013 the Corporate and Strategic Committee of Council considered a detailed paper regarding insurance for HBRC‘s infrastructure assets. This paper is attached for background information.

2. Since that time staff have worked with an insurance broker and consultants to better quantify the potential risk of an extreme event damaging HBRC infrastructure assets.

3. This work is yet to be completed but preliminary results from that work have enabled staff to investigate commercial and/or mutual insurance options for mitigating the financial risk to Council of meeting the cost of repairs and reinstatement of its assets following a major disaster. Those discussions are ongoing but will need to be finalised as soon as possible to enable Council to secure insurance for the 2015-16 year.

4. This paper outlines the work being undertaken and seeks Council agreement to delegate the finalisation of insurance arrangements for providing insurance to HBRC infrastructure from 30 June 2015 to the Chief Executive.

Discussion

Value of infrastructure assets for insurance purposes

5. Since providing the report to Council in January 2013, staff have reviewed the value of infrastructure assets which HBRC is responsible for. The replacement value of those assets is now estimated to be $182m. The reasons for the significant difference between that reported in January 2013 ($140m) and the current value are:

5.1. This estimate reflects the estimated cost of repair and reinstatement of assets for insurance purposes. The value is higher because if current assets are severely damaged it would be important that new assets are constructed that provide a similar level of protection to that provided by the existing assets as quickly as possible. The cost of achieving this for some assets is significantly greater than the value of the current asset.

5.2. The most significant difference in estimated value between 2013 and today is for replacement of river edge protection. The new estimate is for a design similar to the sawfly remediation work which included strengthening the live tree edge protection with concrete groyne structures.

5.3. The current estimate also reflects the estimated cost of replacing the flood detention dams to modern building code requirements. A significant discrepancy between the estimated value of these structures found as a result of the reinstatement work associated with the Makara Dam has been rectified.

6. It should however be noted that the value of infrastructure assets ($200m) includes the value of pump stations and land. Pump stations are insured under Council’s policy covering buildings (material damages policy) and is therefore not included as part of the discussions on infrastructure, and land is uninsurable. The replacement cost of assets under the infrastructure asset insurance policy is $182m.

Estimated costs of asset damage

7. Over the course of the 2014/15 financial year staff have worked with brokers for commercial insurance and consultants to better quantify the risks to HBRC infrastructure assets from a range of disaster events. This work has determined the following potential cost of reinstatement following a major disaster:

7.1. A flood event exceeding a 600 year return period event (0.016% chance of occurrence in any one year) will result in repair and reinstatement costs of an estimated $37m.

7.2. An earthquake event with a return period of between 1,000 and 2,000 years will result in repair and reinstatement costs of an estimated $55m.

8. It should be noted that for a major disaster central government policy is that they will assist a community with up to 60% of the cost of repair, with the remaining 40% being met by the local community. HBRC therefore seeks to secure insurance for its infrastructure assets to cover 40% of the estimated cost of repair and/or reinstatement.

LAPP

9. LAPP is a mutual Scheme set up for local authorities. LAPP currently has 33 local authorities as members. LAPP determines the size of its fund and what reinsurance it requires based on its risk across NZ. In some regions there is more than one member and it therefore needs to take into account the potential loss of infrastructure of all of its members with the potential to be affected by a single event. Eg in Hawke’s Bay both HBRC and HDC are members and a significant event affecting the Heretaunga Plains would result in damage to both Council’s infrastructure.

10. HBRC are currently insured against the costs of recovery from a significant disaster through the Local Authority Protection Programme (LAPP). LAPP is a mutual scheme established specifically for insurance of local government infrastructure assets in New Zealand. In the 2014-15 year HBRC contribution to LAPP is $364,000 + GST with a deductible of $2,027,000.

11. The LAPP Trust deed requires that members are committed to remain a member of LAPP until the end of the financial year after which they notify LAPP of their intention to withdraw from the programme. That notice is however able to be withdrawn at any time up until the end of the year following notification. HBRC provided notification to LAPP of their intention to withdraw from the programme prior to 30 June 2014 and therefore have the option of remaining with the programme or withdrawing from it after 30 June 2015.

12. LAPP is however currently preparing the structure of their fund for the 2015-16 financial year and has requested the HBRC provide confirmation of Council’s position as soon as possible.

13. The LAPP contribution is relatively high because they are currently rebuilding their fund following the Christchurch earthquakes. This contribution can be expected to reduce over time. LAPP have indicated the possibility of a 20% reduction in the 2015-16 contribution compared to the 2014-15 year. Further reductions can be expected in future years provided that there are no significant disaster events.

14. In the 2015-16 year LAPP expects to seek reinsurance cover to enable the Scheme to cover an event causing $125m of damage. Costs would then be met 40% LAPP ($50m) and 60% central government ($75m).

Aon

15. Aon representatives have, over the course of the 2014-15 financial year, assisted staff in better quantifying the financial exposure of HBRC infrastructure assets to a major disaster. The preliminary outcome of that work is set out in section 7 of this report. Unfortunately a report setting out the work to reach these estimates has yet to be completed and is therefore not available to be considered in detail by Council.

16. Preliminary outputs from this project have however been made available to Aon who expect to be able to provide detailed proposals to HBRC staff by mid-May for infrastructure asset insurance commencing 30 June 2015.

17. An indicative proposal has however been provided. This proposal is:

17.1. Annual premium $150,000 + GST

17.2. Deductible of $1,500,000

17.3. Maximum sum insured 40% of $60m for 2 events up to the $60m during the period of insurance.

17.4. There is a possibility that the annual premium fixed for two years will also be an option.

18. The Aon representative is travelling to London in mid-May to meet with reinsurers. Upon his return it is expected that the proposal can be formalised.

Staff delegation

19. It is proposed that the Group Managers - Asset Management and Corporate Services continue to work with insurance providers and prepare for the Interim Chief Executive a final proposal for her consideration prior to any commitment being made.

Financial and Resource Implications

20. Flood Control and Drainage Scheme budgets for the 2015-25 Long Term Plan have been prepared assuming an insurance premium of $200k per year will be distributed between them.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 24 June 2015

Subject: Building Act Responsibilities and Liabilities

Reason for Report

1. In response to a request from Council staff have outlined the history of the decision to transfer the Regional Authority functions, duties and powers to the Waikato Regional Council in relation to the consenting process for the building of dams, and to outline the situation in relation to this Council’s exposure to liability through the transfer of this function.

Background

2. The Building Act 2004, required all regional authorities to be accredited and registered as building consent authorities [BCAs] by 30 November 2007. If a Council did not wish to undertake all or part of its statutory building control functions, it was able to contract out or transfer some of its functions to another regional council that was both accredited and registered to undertake functions as a BCA.

3. For reasons of efficiency, all Regional Councils and Unitary Authorities agreed to work together to determine how best to achieve accreditation and registration as required by the Act.

4. It was agreed that all North Island regional councils would transfer their BCA functions to the Waikato Regional Council and all South Island regional councils would do the same to the Otago Regional Council. Canterbury Regional Council would carry out the functions themselves.

5. A major consideration, when determining what course of action was to be taken, was the issue of indemnity and insurance.

6. At the time Councils obtained an analysis of risks and liabilities from DLA Phillips Fox [summarised at the back of the 11 July 2007 portion of Attachment 1] that outlined a preferred option and addressed the risks and liabilities associated with that in detail. This legal opinion is still relevant as the legislation has not materially changed.

7. Approval to transfer the BCA functions to the Waikato Regional Council was granted via the Environmental Management Committee in July 2007 and updates were provided in February and July 2008. [Attachment 1].

8. Waikato Regional Council is an accredited and registered building consent authority under the BCA.

9. Those documents did not outline in any great detail the issues surrounding liability, but the subsequent Memorandum of Understanding and Deed of Transfer between this Council, all other North Island regional councils and the Waikato Regional Council do so.

10. Attached as Attachment 2, is the most recent Memorandum of Understanding and Deed of Transfer. Matters of Insurance and Indemnity are contained from item 11 to item 19.

11. Waikato Regional Council will have public liability and professional indemnity insurance against all actions, claims, proceedings and demands made by any third party. The premium payments for this insurance is covered equally between this Council, Waikato Regional Council and all North Island Transferring Regional Councils.

12. In terms of uninsured damages, losses, costs and expenses incurred by Waikato Regional Council, where they might be attributed to them by judgement of the courts; this Council will share those costs evenly with the other 6 transferring regional councils and Waikato Regional Council.

13. This Council has liability insurance to cover such an eventuality. The limit for both Public liability and Professional Indemnity is $200 million.

Decision Making Process

14. 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 Council receives and takes note of the “Building Act Responsibilities and Liabilities” report.

Wayne Wright

Manager Resource Use

Iain Maxwell

Group Manager
Resource Management

Attachment/s

1	Environmental Management Committee 2007 and 2008 Papers Relating to Transfer of Building Act Functions
2	Transfer of Building Act Functions Memorandum of Understanding

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 24 June 2015

SUBJECT: Monthly Work Plan Looking Forward Through July 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		- Preparation of Regional Planning Committee and July Council agendas - HPuDS and Sports Council meetings - Publication of July edition of “Our Place” - Publication and distribution of adopted Long Term Plan
Corporate Services		- Final LTP published and available for distribution by 23 July 2015.
Civil Defence & Emergency Management	Emergency Readiness & Response Reduction	- Some significant hazard research projects will be completed over the next few months. These include updated tsunami inundation and evacuation zones mapping and new liquefaction maps. Briefings to Councillors will be held before any information is publically released. - A detailed Group Work Programme to implement Group Plan will be completed over the next couple of months. - Planning for major Group exercise 11-12 November 2015 is progressing well. Training of staff in preparation for exercise has commenced. - Ministry of Civil Defence Emergency Management monitoring and evaluation of the Hawke’s Bay Group commences has commenced
Asset Management & Biosecurity	Coastal Biosecurity	- Coastal strategy development continues. The next milestone is the completion of hazards assessment to draft stage. This is programmed for early July and is expected to be completed in accordance with the project programme - The Cape to City widescale predator control project is underway. Interest in the project is building both regionally and nationally with significant activity across all workstreams. - HBRC staff continue help lead a collective Regional Pest Management Plan process with other RC staff with a workshop to be held in early July. - High performance manuka PGP progresses with the 15-16 annual plan for Manuka Research Partnership limited being finalised. - The first tranche of biosecurity contracts for the 15-16 financial year will be assessed and awarded
Asset Management & Biosecurity	Engineering	- The gravel resource and supply and demand assessment reports expected to be completed and circulated to gravel extractors once they are to hand. Meeting to be organised August/September. - A programme for levels of service reviews for the Heretaunga Plains drainage areas is progressing. - Upper Tukituki Scheme review programme is being progressed.
Asset Management & Biosecurity	Land Management	- MPI have agreed to continue funding work currently underway in the Whakaki and Whangawehi catchments following on from a project proposal recently submitted to the Hill Country Erosion Fund. The finer details of this work is currently being considered in collaboration with MPI. - A Dairy Liaison Group meeting has been scheduled for early July and will be discussing compliance results for the season, compliance monitoring charges and an update on RWSS and PC6. - A PC6 Implementation steering group meeting comprising of land holders outside of the RWSS footprint has been organised for July. The aim of this meeting is to seek opinions and feedback from those affected by PC6 to help inform and test the implementation processes and approaches currently being considered for the Tukituki. - A 2 day symposium to consider the long term opportunities and threats to the sustainability of hill country is being planned for the 29-30th of October and will be held in the Focal Point Theatre in Hastings. There has been significant support for the theme and relevance of the event from the majority of speakers approached to participate to date. - The Land Management Operational Plan is currently being prepared for consideration by Council in August.
Resource Management	Compliance	- The Central Hawke’s Bay District Council Wastewater Treatment plant at Waipawa is required to have a new clarifier refitted and installed by 8th May. This has been done. An independent engineers report on the performance is to be provided by 8^th July 2015. - The Central Hawke’s Bay District Council Wastewater Treatment plant at Waipukurau is required to have the installation of a new clarifier by 19 June. This has been delayed for 1 week because of a supplier issue beyond the control of CHBDC. This will not delay the independent engineers report on the performance that is to be provided by 19^th August 2015. - Te Mata Mushrooms have ongoing odour discharge problems and have not completed the construction of an enclosed building as required by their resource consent. 6 charges have been laid against the company for unlawful odour discharges and both parties are awaiting a Court date to be set. - Work is continuing on a region wide risk assessment and review of the current navigational safety work programme due for completion by 1 July 2015.
Resource Management	Science	- Planning work continues to reconfigure the Awatoto and St John’s College PM₁₀ monitoring sites to allow additional PM_2.5 monitoring. - An Envirolink study looking at the drivers of extreme weather events (droughts, heavy rainfall) and should be completed in June. - Work on the 5 year State of the Environment Air Quality report continues. - Land use and land use change mapping continues in the TANK catchments - Ngaruroro Biodiversity report being reviewed - S-mapping (soil mapping) continues in the TANK catchments - Sediment modelling continuing in the TANK catchments - The land-science sections of the Mohaka Characterisation report are under review - Land science’s regional wetland inventory continuing into the Mohaka catchment. - Upgrade of iQuest loggers continues - Tukipo gauging weir will be repaired and refurbished - Upgrade of Modems to Radio telemetry continues - Upgrade Climate sites with HBRC loggers and radios - Mohaka at Raupunga site to be transferred from NIWA to HBRC - Install new Raingauge site at Poporangi - Envirolink medium advice grant focused on developing a decision support system for management of intermittently open and closed lake/lagoons (ICOLLs), specifically directed at Whakaki Lake to be delivered on - Preliminary results of model simulations from University of Waikato Lake Tūtira work, investigating alternative management scenarios for the lake will be received - Ongoing trials will occur to test potential ramps for overcoming fish barriers – looking at designs for pre-fabricated fish ramps. A fish ramp install at the Lake Poukawa radial will be completed - Cawthron Institute is continuing to work on MCI regional optimisation, improving current MCI predictive models to suit regional studies and regional limit-setting - Cawthron will complete analysis and report on impacts of Taharua outflows on trout food availability in the upper Mohaka River - Fieldwork investigating water quality and salinity of Whakaki Lake will continue - Work on State of Environment 5 year Water Quality and Ecology technical reports will continue - Targeted study of the Ahuriri estuary identifying sources of high phosphorus and looking at salinity and dissolved oxygen fluctuations will continue - Work continues on developing the TANK steady-state groundwater model, including updating to a coupled groundwater/surface water flow model - The report on groundwater level changes, part of the 5 yearly SoE technical reporting is in draft form for review
Resource Management	Consents	· NCC Thames Tyne stormwater consent application process – 13 submissions received. Prehearing held 26 February. Parties’ conferencing on conditions. Looking at a second prehearing in July. · Twyford Global consent applications. Raupare semi-confined global issued. Ngaruroro – unconfined aquifer limited notified received 2 submissions. Placed on hold. An alternative application has been lodged which has removed the provision for emergency water. Issued on 19^th May. Applicants have asked that the emergency water application be proceeded with. A further report is being carried out to assess the impact of the emergency water take. A hearing may follow completion of this report. · Pan Pac application to extend their outfall from 440m to over 2,000 m off shore limited notified and received 3 submissions. Two prehearing meetings were held in March. A third was held in June. Arising from these Pan Pac are undertaking tests of mussels found on, and in the vicinity of the current pipeline and have commissioned a Cultural Impact Assessment. The reports are being prepared and due in June. A further prehearing is anticipated in July. · “Tranche 2” water. Applications have been received from HBRIC, Bostocks, Te Awahohonu Forest Trust (Gwavas Station), Ingleton Farms and R Jensen for Tukituki Tranche 2 water and are on hold. · Replacement and review of Ruataniwha groundwater consents is in process. 10 have requested a review of annual volumes calculated. This has been completed and annual volumes determined for each consent. Notices of review will be sent in May and July. · Ngaruroro catchment consents that have Ngaruroro River minimum flow conditions are expiring at the end of May. All current consent holders have lodged applications to replace these. Staff will process these as a group. The consents have been notified with submissions closing 1 July. · CHBDC, Waipukurau and Waipawa wastewater treatment consents change of conditions and review in process but awaiting detail on additions to treatment. · NCC application for coastal protection structure at Whakareri Ave remains on hold. · TAG application for an oil exploration bore at Boar Hill remains on hold.
Strategic Development	Resource Management Planning	- Board of Inquiry’s final decision on Tukituki Plan Change 6 expected before July. 15 working day period would follow for appeals to be lodged in High Court by any party. - In relation to last points of Hawke's Bay Fish and Game’s appeal on Change 5 regarding wetland provisions, a wetland expert is to undertake mapping extent of six ephemeral wetlands in July/August. - Work continues on PC6 Implementation Plan across Council groups. - TANK Group meeting #16 scheduled for 30 June 2015. Further meetings are currently being scheduled to fit work programme. ‘Drop-in’ workshop on identifying and mapping values was held on 19 May at HBRC offices. - Annual report on HBRC’s progressive implementation of the NPS for Freshwater Management will need to be prepared for consideration by the Regional Planning Committee at its meeting on 15 July 2015. - Annual report on the Regional Planning Committee’s activity will need to be prepared for consideration by the RPC at its meeting on 15 July 2015. - Work programme and funding deed ($80k) now signed by MfE for project to develop criteria and methodology for the identification of ‘outstanding freshwater bodies’ in the context of the NPSFM2014. Project team in procurement phase for consultant to lead project. - The Biodiversity Strategy has been reviewed and re-circulated to the Steering Group for final comment. We are hopeful that comments will be such that no further meetings of the Steering Group are required. If so the strategy can be brought to Council for endorsement prior to an official launch later in the year. - Hastings DC’s district plan hearings continue. HDC’s decisions on all plan topics and submission are anticipated late August. - Napier CC District Plan Change 10 hearing held 23 March. NCC’s decisions are anticipated to be issued in July. - All parties involved in HBRC’s appeal against Hastings DC’s decision to grant consent for 15 lot subdivision at Whirinaki have agreed to participate in Environment Court-assisted mediation. No date for mediation has been scheduled yet. - Online mapping tool called ‘Pataka’ is undergoing final user testing and should be ready for public release in early August following presentations to the Maori Committee (June) and Regional Planning Committee (July). ‘Pataka’ is HBRC’s record of iwi authorities, hapu groups, hapu planning documents, marae contacts and various other forms of information about tangata whenua areas of interest etc. - Heretaunga Plains Urban Development Strategy (HPUDS) Implementation Working Group meeting is scheduled for 25 June. This will be the first meeting of the Group’s new membership since 2013 local body elections.
Strategic Development	Economic Development	REDS – Governance Group has been established and convened. The project team has completed approximately 30 interviews to date. Innovation Café to be held on Friday 19 June. Central Government has recently shown an interest in the initiative but with its own outcome in mind. Presentation to Intersectoral forum on 22^nd June. Maori Economic Development – First draft of proposal for engagement of facilitator to conduct interviews with Maori organisations in a manner aligned with the REDS process completed but requires further refinement. This data will feed into REDS as well as being the subject of a summary workshop with those organisations, with a view to identifying the preferred pathway (and resourcing requirements) to establish a regional Maori Economic Development Strategy. Wairoa Agribusiness –Final stages of establishing terms with the Wairoa Horizon Trust’s request to fund a regional business development project. Project expected to commence next week Strong interest in Infant Formula (Non-bovine Dairy) – Symposium to be held in Napier on 2 July. BHB leading the management of this initiative. RWSS – continue supporting RWSS workstreams where appropriate.

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 July 2015 report.

Mike Adye

Group Manager
Asset Management

Paul Drury

Group Manager
Corporate Services

Gavin Ide

Manager, Strategy and Policy

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.

Request Status	DateReceived	Response Due	Requested By	Request Summary
Active	15/06/2015	13/07/2015	Dave Head	1. Any info HBRC has or obtains relating to probably/ possible Live Sheep shipments due or booked into Napier Port. 2. Who at the Port removed the pending arrival of the Nada, or similar vessel, from the official web sites page of pending arrivals and departures, should that be the case. 3. Any other information, whatsoever that pertains to the Live Sheep [& cattle] shipping from the Port of Napier.
Active	5/06/2015	3/07/2015	Paul Bailey	In a recent RNZ interview you stated "But certainly for a number of them in recent years the dam, because of its national profile, has been raised in interviews but it's most certainly not a vetting tool," Can you please advise in what month and year the dam question started being asked in interviews
Completed	25/05/2015	24/06/2015	Ian McIntosh	1. Who are the members of the Group calling themselves "HBRC (regulatory)" who have lodged a submission with the BOI seeking amendments to their draft decision? 2. Who is the staff member in charge of "HBRC(Regulatory)"? 3. Under what authority are they able to act independently of the Regional Council? and on what matters? 4. If they wanted only to amend parts of the RWSS Resource Consents why were the Councillors on the Environment and Services Committee not informed of that intention rather than being left with the impression that HBRC supported the BOI draft decision?

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Draft Interim Audit Findings for Annual Report Year Ended 30 June 2015	7(2)(g) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to maintain legal professional privilege.	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

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