Minutes of Regional Council Meeting

1. Welcome/Prayer/Apologies/Notices

The Chairman welcomed everyone to the meeting, and Councillor Pipe offered the prayer.

2. Conflict of Interest Declarations

There were no conflict of interest declarations.

3. Confirmation of Minutes of the Regional Council Meeting Held on 28 October 2015

Resolution

Minutes of the Regional Council Meeting held on Wednesday, 28 October 2015, a copy having been circulated prior to the meeting, were taken as read and confirmed as a true and correct record.

Scott/Dick

CARRIED

4. Matters Arising from Minutes of the Regional Council Meeting Held on 28 October 2015

There were no matters arising from the minutes.

Follow-up Items from Previous Regional Council Meetings

Mrs Liz Lambert spoke to all item status updates provided in the report attachment, except 5 Annual Plan progress.

Mr Paul Drury advised that a review of the management of HBRC investments will be undertaken through the annual plan workshops.

In response to a query, Mr Iain Maxwell advised that the Otane wastewater consent renewal application is on hold until January while awaiting further information on additional groundwater sampling from CHBDC, identified through the technical review of the application, and that an update on the functioning of the CHB clarifiers at Waipawa and Waipukurau will be provided to the Environment and Services Committee on 9 December.

In relation to LGOIMA requests, Mrs Lambert advised that HBRIC Ltd, as a Council Controlled Organisation, is subject to LGOIMA. Further, in relation to information requested about HBRC staff, LGOIMA does not require the release of information that identifies or breaches the privacy of natural persons and this includes HBRC staff.

RC4/15

Resolution

1. That Council receives the report “Follow-up Items from Previous Regional Council meetings”.

Scott/Belford

CARRIED

Call for any Minor Items not on the Agenda

Recommendation

That Council accepts the following minor items not on the Agenda, for discussion as Item 19:

1. Ahuriri Estuary (Cr Belford)

2. Wairoa Fieldtrip (Cr Beaven)

3 Port Building opening (Cr Dick)

Affixing of Common Seal

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 1

DP 464306

CT C2/363

- Agreement for Sale and Purchase

- Transfer

1.1.2 Lot 2

DP 13208

CT E4/1024

- Agreement for Sale and Purchase

1.1.3 Lot 71

DP 13096

CT E3/516

- Agreement for Sale and Purchase

1.1.4 Lot 71

DP 14225

CT G1/8

- Transfer

1.1.5 Lot 156

DP 10775

CT B2/1137

- Agreement for Sale and Purchase

- Transfer

1.1.6 Lot 18

DP 13066

CT E3/399

- Transfer

3712

3713

3714

3715

3716

3717

3719

3718

27 October 2015

28 October 2015

29 October 2015

30 October 2015

4 November 2015

5 November 2015

4 November 2015

1.2

Staff Warrants

1.2.1 C Tyler

S Lambert

J Raihania

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)

1.2.2 C Tyler

P Train

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

1.2.3 P Rakete-Stones

(Delegations under Biosecurity Act 1993; Civil Defence Act 1983 (s.60-64); Civil Defence Emergency Management Act 2002 (s.86-91)and Local Government Act 2002 (s.174))

3720

3722

3723

3724

3720

3724

3721

18 November 2015

1.3

Agreement for Sale and Purchase

(carpark – map attached)

1A Bedford Road, Napier

Lot 12 DP 8979

CT E2/327

3725

18 November 2015

Ms Trudy Kilkolly provided, in response to a query, background information on the leasehold land (vacant dirt carpark) near Marewa shops which HBRC recently sold. She also providing a summary of recent sales of leasehold land and, if the pattern continues, projected sales at 40-45 each year over the next five years or so until the core of approximately 200 is reached, which, for various reasons, will likely remain in Council ownership.

Mr Drury provided an explanation of the impacts of sales on the ACC cashflow investment, being that a proportion of the sales of leasehold land is paid to ACC and the cashflows ‘return’ to ACC is then lowered accordingly.

Mrs Lambert provided an explanation of the delegations and warrants required for staff to carry out their job responsibilities.

RC5/15

Resolutions

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.

Scott/Beaven

CARRIED

Report and Recommendations from the Regional Planning Committee

The report was taken as read.

RC6/15

Resolutions

The Regional Planning Committee recommends that Council:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy 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.

NPS for Freshwater Management Progressive Implementation Programme Revision

2. Adopts the updated 2015 Progressive Implementation Programme for the National Policy Statement for Freshwater Management as attached.

Mohaka Water Quality and Ecology

3. Adopts the “Mohaka River Catchment State and Trends of River Water Quality and Ecology” report for publication.

4. Adopts the “Influence of the Taharua River on the Upper Mohaka River Food Base for Adult Trout” report for publication.

Reports Received

5. Notes that the following reports were provided to the Regional Planning Committee meeting:

5.1. Ngaruroro Water Conservation Order Proposal

5.2. September-October 2015 Statutory Advocacy Update

5.3. November 2015 Resource Management Planning Project Update

5.4. Petroleum Exploration Proposed Block Offer 2016

Wilson/Graham

CARRIED

Report and Recommendations from the Corporate and Strategic Committee

The paper was taken as read.

RC7/15

Resolutions

The Corporate and Strategic Committee recommends that Council:

Public Transport Fare Review

2. Agrees that bus fares remain at current rates for the remainder of the 2015-16 financial year, and to review fares again in 2016-17.

Reports Received

3. Notes that the following reports were provided to the Corporate and Strategic Committee meeting:

3.1. Business Hawke’s Bay Update

3.2. Report and Recommendations from the Finance Audit & Risk Sub-committee, including Costings, Scope and Priorities for Internal Audits

3.3. November 2015 Public Transport Update

3.4. Health and Safety Update Report for the Period 1 July 2015 to 30 October 2015

3.5. Recording of Councillor Attendance, including resolution for draft Policy to be brought to February 2016 Committee meeting for consideration

3.6. Objectives for Inter Council Cooperation.

Hewitt/Barker

CARRIED

10.

Panpac Appeal Delegations

Mr Iain Maxwell and Mr Malcolm Miller provided the rationale for seeking staff delegation to negotiate a mediated agreement or Consent Order to resolve the appeal against the Panpac Hearing Panel decisions without having to go to an Environment Court hearing. Mrs Lambert advised that there has been at least one meeting of the parties to discuss the issues.

Mr Maxwell, in response to a query, explained basic the issues underlying the appeal relate to the cultural impact assessments and investigations into the best option for the discharge.

Mr Miller, in response to a further query, advised that 4 pre-hearing meeting were held in an effort to resolve some issues prior to the hearing.

RC8/15

Resolutions

That Council:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, 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.

2. Delegates full authority to the Group Manager Resource Management to negotiate a Consent Order or mediated agreement to resolve the appeal against Pan Pac resource consent decisions CD960330Wf CL120058Oa, CL140317C and CL140330D.

3. Delegates to the Group Manager Resource Management the authority to sign a mediated agreement on behalf of Council that upholds the substantive decision of the Hearing Panel.

Scott/Graham

CARRIED

11.

Heretaunga Plains Groundwater Management and Investigations

Mr Iain Maxwell, in response to a query, explained why this report was not presented first to the Regional Planning Committee even though it related to an RMA plan change process; which was a matter of timing and that it was written in response to a request from Council. The information would also be provided to the next RPC meeting in 2016.

Mr Malcolm Miller advised that, in light of the previous legal advice relating to review conditions on water take consents, Matt Conway, of Simpson Grierson, has been requested to provide further advice in relation to possible wording that might be used.

Dr Stephen Swabey provided an overview of the work carried out to determine whether the drilling of additional deep bores to establish the full extent and capacity of the aquifer and its sub-aquifers, and their relationships to surface water is necessary, to better inform water modelling related to the Heretaunga aquifer and the TANK programme.

Mr Dougall Gordan provided the current scientific information and understanding of the HP aquifer system including connected surface water bodies, advising that deep drilling investigations carried out to date confirm that the Heretaunga Plains system is a multi-layered, hydraulically interconnected alluvial aquifer that needs to be managed as one resource in line with international best practice due to its interconnectedness.

Discussions traversed:

· Alternative methods for determining the depth, geography and extent of aquifers

· Drill logs from bores drilled for different purposes contain variable levels of information that can be used for council’s purposes

· The technical advisory groups (Technical Advisory Group dealing with current modelling and investigation work plus higher level Technical Advisory Panel) involved in the process and their roles in advising staff. TAP comprises international experts, peer reviewing science, and testing whether the science investigations to inform the TANK process are ‘fit for purpose’

· balancing the costs of deep drilling programmes and the amount of beneficial, substantive additional information provided

· HP aquifer system multi-billion dollar asset

· as immediacy of the need for this work is not apparent to TAP or HBRC staff, however more information is always useful, so in order to continue with the TANK process suggest longer term investment into deeper bore drilling programme over the next 10 years – scoped out and developed with appropriate technical advice

· deeper aquifer not currently being exploited (partially due to high costs of drilling and extracting – pumping – deep water), so additional ‘deep bore’ investigations will not provide information that’s significant to inform policy to manage the current use of the aquifer (mostly at varying depths less than 50 m) being considered through the TANK process

· cost of well drilled to depth of 130m at Hill Road cost HBRC close to $165k in 2014

· qualifications, experience and expertise of science staff and technical experts peer reviewing and providing advice on the science programme outlined

· costs associated with deep drilling science investigations include costs for project management and planning, technical advice, drilling, data collection, and scientific data analysis and interpretation

· robust science is imperative for a successful plan change, and science programme to inform TANK is considered ‘cutting edge’ having benefitted from learnings through the plan change 6 Board of Inquiry process.

RC9/15

Resolutions

That Council:

1. Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that Council can exercise its discretion 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.

2. Receives and takes note of the “Heretaunga Aquifer Investigations” report

3. Instructs staff to bring before Council multiple options for further research including a deep well drilling programme option.

Belford/Barker

For: Dick, Hewitt, Graham, Beaven, Barker, Belford

Against: Scott, Pipe, Wilson

CARRIED

The meeting adjourned at 10.55am and reconvened at 11.10am

15.

Napier Port Verbal Presentation

Mr Alasdair MacLeod, Chairman, and Mr Garth Cowie, Chief Executive, provided an overview of the Napier Port’s operations and results over the last year before presenting on “positioning for the future”.

RC10/15

Resolution

1. That Council receives the Napier Port Verbal Presentation.

Scott/Graham

CARRIED

14.

HBRIC Ltd November 2015 Update

Dr Andy Pearce introduced the update, confirming HBRIC satisfaction with the Napier Port results as presented including capital expenditure, investments and future development plans.

Messrs Duncan Macleod, Jim Scotland, Andrew Newman, Sam Robinson and Graeme Hansen responded to queries in relation to:

· water uptake condition precedent expected to be met by financial close, recent increase in uptake and the influence of the 11 November deadline, no dairy conversions included in the uptake figures to date, highest uptake to date is in operations with mixed cropping and red meat combinations

· the possible underwrite of water sales by commercial parties for a period of 10 years

· the CHBDC proposal to take water from the scheme, subject to special consultative process with decision expected by March 2016

· actual water sales reflect different landuses than initially modelled, however the changes do not necessarily change the underlying economic profile of the scheme

· the judicial review of the DoC land exchange decision is solely of the process undertaken by DoC in reaching its decision

· meetings between potential investors and CIIL are underway and HBRIC expects to determine a ‘preferred’ investor before the end of January

RC11/15

Resolution

1. That Council receives the “HBRIC Ltd November 2015 Update” report.

Dick/Beaven

CARRIED

The meeting adjourned at 12.30 and reconvened at 1pm

12.

RWSS Design and Construction Contract Condition Precedent

Dr Andy Pearce outlined the reasons why HBRIC Ltd is recommending that the condition precedent for a “bankable construction contract which adequately addresses construction risk allocation through a fixed-time, fixed-cost arrangement” has been met.

Mr Dave Roberts joined the meeting via telephone to confirm the Piperhouse Advisory and BNZ conclusion that the Design & Construction contract is in a form that meets the condition precedent requirements.

Information around price remains confidential until all negotiations are completed. The Contractor still requires two elements in order to provide a final price, and any disclosure of a price at this stage will compromise those negotiations to achieve the best possible outcome for HBRIC Ltd. It was clarified that the final price is not a determinant of whether the contract is ‘bankable’ and contains appropriate clauses addressing risk allocation.

Risk allocation negotiated in accordance with NZ PPP procurement guidelines, to achieve outcome which is consistent with market precedent and confident that the contractual framework is and will be bankable.

Mr Graeme Hansen provided an overview of the process undertaken to reach this point in the negotiations for the fixed-time, fixed-price contract with OHL Hawkins.

Mr Roberts advised that key elements of Piperhouse Advisory and BNZ letter, which deem the contract bankable (capable of raising private sector funding against the contract), include: agreed joint Guarantor between parent companies of OHL and Hawkins Ltd, a fixed time schedule to achieve practical completion date with penalties for the constructor for missed deadlines, and contractor performance bonds in place until the end of the defects liability period (24 months after practical completion).

Further he advised that the D&C contract has been reviewed by the independent technical advisor SMEC, on behalf of senior lenders, CIIL and institutional equity investors, who confirmed that the key risk conditions are appropriate and consistent with market precedent.

RC12/15

Resolutions

That Council:

1. Agrees that the decisions to be made are in accordance with the criteria contained in Council’s adopted Significance and Engagement Policy, 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 having consulted directly with the community through the 2014 Special Consultative Process.

2. Accepts the HBRIC Ltd recommendation that condition precedent 4 has been met, consequently meeting 8.3.4 of the following resolution of Council, being:

“That Council:

8. Resolves to invest up to $80 million in RWSS subject to Council being satisfied with:

…

8.3. advice from HBRIC Ltd that all Conditions Precedent to Financial Close of the investment by all investing parties in the Ruataniwha Water Storage Scheme Limited Partnership (RWLP) have been either satisfied or waived by agreement of the parties. These Conditions Precedent are:

…

“8.3.4. Obtaining a bankable construction contract which adequately addresses construction risk allocation through a fixed-time, fixed-cost arrangement.”

Scott/Hewitt

For: Dick, Hewitt, Scott, Pipe, Barker, Wilson

Against Graham, Beaven, Belford

CARRIED

13.

RWSS Financing Request of the Regional Council

Dr Andy Pearce and Mr Andrew Newman outlined the reasons for HBRIC Ltd seeking additional funding in order to continue working toward financial close, given the delays experienced through the Board of Inquiry decisions appeal process and the judicial review of the DoC land exchange decision. In particular, funding is required for essential geotechnical investigations that must be completed in January in order to meet the D&C contract closure date of September 2019.

RC13/15

Resolutions

That Council:

2. Approves an increase in the RWSS budget by $1,354,000, of which $922,000 is being sought from the MPI Irrigation Acceleration Fund.

3. Approves HBRIC Ltd being able to increase its approved borrowing level from $2.0m to $2.5m.

4. Notes that, if the proposed borrowing is approved by Council, HBRIC Ltd will report on the extent of drawdown of debt finance and the purpose for which it has been used as part of its regular reporting to Council.

Dick/Scott

For: Dick, Hewitt, Scott, Beaven, Pipe, Barker

Against: Graham, Belford

CARRIED

Item - 14. HBRIC Ltd November 2015 Update – was considered immediately following item 15 and prior to adjourning the meeting at 12.30pm.

Item - 15. Napier Port Verbal Presentation - was considered at 11.10am, following item 11.

16.

Guidance Notes for Hearing Panel Members for Time Cost Recovery

Mrs Liz Lambert advised that this paper resulted from a review by the Remuneration Authority having raised inconsistencies in Council’s cost recovery policies.

RC14/15

Resolution

1. That Council receives the “Guidance Notes for Hearing Panel Members for Time and Cost Recovery” report.

Pipe/Beaven

CARRIED

17.

Enviroschools Hawke's Bay

Mrs Sally Chandler provided an update and presentation about the Envirschools programme in the region, and the activities that the schools are involved in.

RC15/15

Resolution

1. That Council receives and takes note of the Enviroschools presentation and report.

Hewitt/Graham

CARRIED

18.

Monthly Work Plan Looking Forward through December 2015

There was discussion around the upcoming HB Local Government Leaders Forum; Regional Research funding available to private industry initiatives; workshops with landowners to bring them up to speed with requirements of Plan Change 6; and progress on Napier-Gisborne rail re-establishment proposals.

Mrs Helen Shea also advised that the Me Noho Takatū project has won the local government category of Ngā Tohu Reo Māori – The National Māori Language Awards. Me Noho Takatū meaning 'Be Prepared' was developed by a Hawke's Bay collaborative working group providing bilingual resources for Hawke's Bay Kōhanga Reo and Early Childhood Education kaiako/teachers, whānau and children, to support their knowledge of planning for local civil defence emergencies.

RC16/15

Resolution

1. That Council receives and takes note of the “Monthly Work Plan Looking Forward through December” report.

Beaven/Graham

CARRIED

19.

Minor Items not on the Agenda

Item	Topic	Councillor / Staff
1.	Ahuriri Estuary Queried the impact on the Ahuriri Estuary of the consent application from Napier Airport to discharge storm water, and storm water discharge from NCC.	Cr Belford
2.	Wairoa Fieldtrip Several councillors went on a trip yesterday, looking at key issues of closing/mechanical opening the river mouth, forestry harvesting practices/issues, and the opening the refurbished HBRC Wairoa office.	Cr Beaven
3.	Port Building opening New office building opened by Stephen Joyce yesterday, included looking at the newly purchased Crane Simulator. Cr Dick also noted that demolition of the old building allows for extension of the rail facilities.	Cr Dick

20.

Chairman's Monthly Report for October-November

The Chairman sought feedback on his report, which had been prepared in an effort to put some of the issues into the public forum. Councillors suggested they would still like to see some coverage of meetings having been attended and upcoming key meetings as well as discussion around key issues.

RC17/15

Resolution

1. That the Chairman’s report for October-November 2015 be received.

Barker/Beaven

CARRIED

21.

Confirmation of Public Excluded Meeting Held on 28 October 2015

RC18/15

Resolution

That the Council exclude the public from this section of the meeting being Confirmation of Public Excluded Minutes Agenda Item 21 with the general subject of the item to be considered while the public is excluded; the reasons for passing the resolution and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution being:

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Maori Committee Chairman's Remuneration	7(2)(a) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to protect the privacy of natural persons	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

Beaven/Dick

CARRIED

22.

Appointment of Napier Port Directors

RC19/15

Resolutions

1. That Council excludes the public from this section of the meeting, being Agenda Item 22 Appointment of Napier Port Directors with the general subject of the item to be considered while the public is excluded; the reasons for passing the resolution and the specific grounds under Section 48 (1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution being:

GENERAL SUBJECT OF THE ITEM TO BE CONSIDERED	REASON FOR PASSING THIS RESOLUTION	GROUNDS UNDER SECTION 48(1) FOR THE PASSING OF THE RESOLUTION
Appointment of Napier Port Directors	7(2)(a) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to protect the privacy of natural persons.	The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

2. That Dr Andy Pearce is in attendance for this item as the HBRIC Ltd representative recommending the appointment.

Beaven/Dick

CARRIED

The meeting went into public excluded session at 3.06pm and out of public excluded session at 3.20pm

Closure:

There being no further business the Chairman declared the meeting closed at 3.20pm on Wednesday 25 November 2015.

Signed as a true and correct record.

DATE: ................................................ CHAIRMAN: ...............................................