Unconfirmed

 

MINUTES OF A meeting of the Corporate and Strategic Committee

 

 

Date:                          Wednesday 24 May 2017

Time:                          9.00am

Venue:

Council Chamber

Hawke's Bay Regional Council

159 Dalton Street

NAPIER

 

Present:                     N Kirton - Chairman

P Bailey

R Barker

P Beaven

T Belford

A J Dick

R Graham

D Hewitt

M Paku

F Wilson

 

In Attendance:          G Woodham – Interim Chief Executive

J Palmer – Group Manager Strategic Development

L Lambert – Group Manager External Relations

L Hooper – Governance Manager

B O’Keeffe – HBRIC Ltd Acting Chief Executive

S Daysh – Mitchell Daysh Ltd

A Dundas – HB Tourism General Manager

G Hickton – HB Tourism Chairman

 

 


1.       Welcome/Apologies/Notices

The Chairman welcomed everyone to the meeting, and Mr Michael Paku offered a karakia.

The Chairman advised that a Regional Planning Committee tangata whenua representative to replace Dr Roger Maaka on this committee has yet to be appointed.

Councillor Dick advised that he needs to leave at 4pm, and Councillor Barker at 3.45pm.

Resolution

C&S10/17     That the apology from Mr Mike Mohi for absence is accepted.

Barker/Graham

CARRIED

Councillor Hewitt tabled the Auditor General’s declaration under the Local Authorities’ Members Interests Act 1968; being to: “grant a declaration to Councillor Hewitt to cover decisions of the Council or its committees about whether to proceed with the Council’s proposed investment in the (RWSS) scheme”. Councillors requested a copy of the Auditor General’s declaration.

Resolution

C&S11/17     That Councillor Hewitt’s notice is received.

Hewitt/Wilson

CARRIED

 

The Chairman sought and was granted agreement to consider the Agenda items out of order, specifically items 6 and 8 which will be considered following all other items of business.

 

2.       Conflict of Interest Declarations

There were no conflict of interest declarations.

 

3.       Confirmation of Minutes of the Corporate and Strategic Committee meeting held on 15 February 2017

C&S12/17

Resolution

Minutes of the Corporate and Strategic Committee meeting held on Wednesday, 15 February 2017, a copy having been circulated prior to the meeting, were taken as read and confirmed as a true and correct record.                                     Beaven/Paku

CARRIED

Secretarial note:       As there are no provisions under Council’s Standing Orders for discussion of the minutes other than confirmation of their correctness, “matters arising” discussions are recorded as part of item 4 Follow-ups from Previous Strategic Committee meetings.

4.

Follow-ups from Previous Corporate and Strategic Committee Meetings

 

Councillor Bailey advised that he has yet to meet with staff to receive further explanations about the sale of the leasehold land cashflows and the associated financials, and a request was made for the total net leasehold land sales proceeds over the period since the cashflows sale to ACC.

Mr James Palmer updated the committee on the follow-up items, suggesting that HB Tourism be asked about the options for organising a famil for councillors.

C&S13/17

Resolution

That the Corporate and Strategic Committee receives and notes the “Follow-ups from Previous Corporate and Strategic Committee Meetings” report.

Bailey/Graham

CARRIED

 

5.

Call for Items of Business Not on the Agenda

 

The Corporate and Strategic Committee accepts the following “Items of Business Not on the Agenda” for discussion as Item 15:

Urgent items for discussion

 

Item Name

Reason not on Agenda

Reason discussion cannot be delayed

1.            

(Belford) meeting with Ombudsman re Butler LGOIMA complaint investigation

No decision required – for discussion only

Ombudsman in HB next week

2.            

(Bailey) HB Today headline re E.coli in Napier water

No decision required – for discussion only

Recent event

3            

(Bailey) received report on Discharge of raw sewerage into Ahuriri Estuary by NCC

 

 

 

Minor items for discussion

Item

Topic

Councillor / Staff

4.   

Annual Plan hearing dates

Cr Hewitt

5.   

Electric Vehicles

Cr Belford

6.

Trenz

Cr Wilson

 

 

 

Item - 6. Chief Executive Appointment - was considered in Public Excluded session, from 2.20pm.

 

7.

Ruataniwha Water Storage Scheme Next Steps

 

Mr James Palmer tabled two documents, being an HBRIC Ltd letter dated 4 May as previously provided to Councillors on 10 May; and legal advice that the Environmental Defence Society (Gary Taylor) shared in relation to seeking a declaratory judgement from the Environment Court on compliance with Plan Change 6 DIN requirements.

Discussions and queries traversed:

·      Matters that HBRIC needs to consider as consent holder must be kept separate from HBRC considerations as regulator

·      Councillors Hewitt and Beaven responsible for considering whether conflict of interest issues arise given their roles as HBRIC Ltd councillor directors

·      Given likelihood of NGOs seeking Environment Court declaration, HBRC should join other parties in drafting the scope of the applications. Expectation that costs would lie where they fall, with parties paying their own costs.

·      Complexities of resource consents and the challenges and limitations of implementing PC6 are well understood as considered and raised through Board of Inquiry and appeal processes, with ongoing discussions continuing since the BoI final decision was released

·      Issue of LUC limits with headroom on-farm while instream DIN limits are already exceeded, and HBRC’s ability to require specific management mitigation measures through a FEMP or through resource consent conditions

·      Council expectation that first landowners are required to use best management practice and meet LUC requirements, then monitor to assess whether limits are being achieved or further mitigation measures required

·      Measures or consent conditions aimed at achieving instream DIN must be reasonable and practical – scientific evidence of the direct effect of mitigation – a plan of how to achieve desired outcomes is laid out through policy

·      Condition precedent for uptake at 50 M m3 suggested by HBRIC Ltd, subsequent to Palairet suggesting, through its review, that a higher level of comfort would be achieved if CP raised to 48 M m3

·      HBRIC Ltd letter tabled – outlining recommendations including adding CP for resolution of the Land Swap, extension of moratorium on RWSS spending, resetting bankable construction contract CP, modelling effects of larger flushing flows and required HBRC 6% annual returns

·      The 0.8 instream DIN is a nutrient level that will be taken up by plants, not a toxicity level

·      Phosphorous management is required by RWSS resource consent conditions, hence not referenced in staff recommendations

·      Transparent expectations for all farmers in the catchment, and tools available for achieving the environmental outcomes

·      Compliance with resource consent conditions is Council’s responsibility to assess, enforce and hold the scheme to account for. RWSS has significant financial risk and reasons to incentivise compliance by water users. By contrast Council presently has virtually no regulation over land use or land practice other than requiring FEMPs in the catchment. RWSS will have stronger levers to manage land use to enforce compliance. Easier for Council to regulate one well resourced party than hundreds of individual consent holders.

·      Environmental management ambiguities to be addressed, partially through seeking Environment Court declaration

·      All farming enterprises over 4ha required to have an approved FEMP by June 2018

·      Request to extend spending moratorium and also asking HBRIC to carry out additional work

·      The $170k cost of the review to be capitalised into Council’s ‘up to $80M’ investment in RWSS

·      Council’s step-in rights over RWSS to ensure compliance with the resource consent conditions as per the Concession Deed

The meeting adjourned at 10.30am and reconvened at 10.45am

HBRIC Ltd presentation by Blair O’Keeffe and Stephen Daysh discussions/queries traversed:

·      Resource consent conditions provide a comprehensive environmental management framework for the scheme

·      Declaration from the Environment Court will be ‘interpretation’ of compliance with consent conditions and would not ‘change’ the RWSS conditions

·      PC6 key objectives to sustainably manage the use and development of land, the discharge of contaminants including nutrients, and the taking, using, damming, or diverting of fresh water in the Tukituki River catchment

·      Board of Inquiry (paragraph 1208) key finding that RWSS mitigation and off-sets package “provide for positive environmental outcomes to offset the unavoidable effects for which there is no feasible mitigation package. … should be viewed together with management plans and other mitigation requirements imposed by conditions. The Board views the proposed offsets involving habitat protection and enhancement, and the control of predators and weed species, as positive effects that counterbalance the inevitable loss of existing terrestrial habitat, flora and fauna.”

·      Query whether it is possible to quantify the mitigation to determine money spent equals x less nitrate leached through modelling

·      RWSS package roughly 50% mitigation and 50% offsets. Mitigation defined by Environment Court as “minimising or making environmental effects less” while off-set is defined as “a direct compensation for a direct effect”

·      Priority spring-fed streams project is a key tool for driving positive changes for ecological health and Macro-invertebrate Community Index (MCI)

·      Comprehensive FEMP process including audit and review processes, stock exclusion and fencing requirements, ability to control Nitrogen losses through ‘approved outputs” for each farm– gives the scheme the ability to ‘turn the water off’ to farms not meeting requirements until they do

·      Consent conditions require RWSS to be Phosphorous neutral on a sub-catchment basis across all farms it services

·      Periphyton historical issue particularly in hot, dry summers to be alleviated by RWSS flushing flows and scheme’s required maintenance of minimum residual outflows

·      Scheme must meet Toxicity limits set with adaptive management conditions –specifically designed for Tukituki catchment

·      MCI monitoring proposed by HBRIC through the BoI process and added to the RWSS resource consents through a change of conditions. MCI monitoring of 15 tributary sites within the RWSS consented area for 2 years prior to and 15 years after the supply of water to identify long-term trends in MCI levels in those sub-catchments.

·      New review condition 30A whereby HBRC as regulator can amend the conditions and the volumes required to provide additional mitigation or off-setting as required

·      PC6 requirement that MCI cannot be degraded – shading, water temperature and sediment key drivers of MCI

·      Mitigation measures can be progressively implemented or added as required

·      detailed monitoring results of mitigation measures through five model farms

·      FEMPs for different land uses, and how to reduce N and P contributions significantly through mitigations were tested through BoI process

·      RWSS conditions framework developed over 3 years with 3 layers of ongoing water quality monitoring and adaptive management. Mitigation and offset projects are extensive and targeted, and flushing flows are unique management opportunity for periphyton control in summer

·      RWSS has substantial building blocks for environmental management

·      Re-set construction and add an environmental management CP

·      HBRIC Board and senior staff worked through all consent conditions throughout the development and BoI processes and are well versed in the requirements

·      Challenge to meet the 2018 FEMP requirements

·      More work to be done on environmental management package and yet suggesting that RWSS spending moratorium be extended up until the land swap is resolved. HBRIC directors and company need to be meeting their legal and financial obligations and the capacity for rolling over the foundation water user agreements

Further discussions covered:

·      suggested amendments of the recommendations

·      review of the existing RWSS environmental management package - PC6 provides the environmental management requirements for the Tukituki catchment

·      confirmation of the status of the June 2014 conditions precedent

·      it was agreed that a new set of recommendations based on discussions be drafted ahead of re-convening this item after lunch.

 

This item was adjourned at 12.12pm

 

Items - 8. 2017-2021 Strategic Plan, 9. Recommendations from the Finance, Audit and Risk Sub-committee, 10. Capital Structure Review – Scope and Process and 11. Operational Efficiency Review Report - were addressed from 3.20pm, following the Public Excluded session.

 


 

12.

HB Tourism Update

 

Mr George Hickton, HB Tourism Chairman introduced the presentation, highlighting the turnaround in growth in the Tourism sector in Hawke’s Bay, the recent HB Marathon event and Unesco heritage food initiative. Annie Dundas spoke to the latest statistics, with discussions and highlights including:

·      data on arrivals in the region from cellphone/ mobile phones being used, still in testing stage

·      contributions from the sector through membership and in-kind contributions to media and advertising campaigns

·      Seasonal growth evident across all seasons, 16% increase in Spring and 10% increase in summer

·      Winter promotion under way, including targeted Ski Season in Hawke’s Bay campaign and winter F.A.W.K

·      Whenua – 2 day festival event celebrating culture and cuisine with music focus

·      Unesco Creative Cities Network opportunity arose through F.A.W.K and looking at applying for a gastronomy designation for the region

·      New website launch September

·      Event management and promotion

C&S14/17

Resolution

That the Corporate and Strategic Committee receives and notes the “HB Tourism Quarterly Update” report.

Beaven/Wilson

CARRIED

 

Items - 13. Quarterly Council Communications Update  and 14. Health and Safety Update Report were considered following the Public Excluded agenda items, from 3.20pm.

The meeting adjourned at 12.55pm and reconvened at 1.15pm

 

15.

Discussion of Items Not on the Agenda

 

Minor items for discussion

Item

Topic

Councillor / Staff

4.   

Annual Plan hearing dates

Request for submissions hearing on Tuesday 13 June instead of Monday 12 June, however advertised so remains on the Monday

Cr Hewitt

5.   

Electric Vehicles

Alerting councillors to electric vehicles working group meeting 10-12 tomorrow

Cr Belford

6.

Trenz

Information about tourism industry ambitions for the upcoming elections have been distributed to all councillors

Cr Wilson

 

 

 


 

7.

Ruataniwha Water Storage Scheme Next Steps

 

On re-convening consideration of the item, an amended set of recommendations was tabled and there was discussion of those as proposed from feedback received during discussions earlier in the day.

The Chairman advised that the recommendations would be dealt with individually and subject to amendment through the process.

C&S15/17

Resolutions

1.      That the Corporate and Strategic Committee receives and notes the “Ruataniwha Water Storage Scheme Next Steps” staff report.

Kirton/Belford

CARRIED

2.      The Corporate and Strategic Committee recommends that Council:

2.1.      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.

Belford/Barker

CARRIED

2.2.      Requests the Board of HBRIC Ltd considers extending the moratorium on further RWSS expenditure to one month after the DoC land transfer matter has been resolved.

Dick/Barker

Hewitt abstained

CARRIED

2.3.      Requests that the existing agreement between HBRIC Ltd and HBRC relating to the moratorium is modified to include Council’s support for HBRIC Ltd incurring necessary expenditure to roll over Foundation Water User Agreements and to review the existing RWSS Environmental Management Package.

Beaven/Wilson

For: Dick, Hewitt, Wilson, Beaven, Barker, Paku, Kirton

Against: Graham, Belford, Bailey

CARRIED

2.4       Requests that staff incorporate the status of the June 2014 Conditions Precedent and any recommended modifications and additions, into the 31 May 2017 recommendations to Council, including:

Belford/Barker

CARRIED

2.4.1   Agrees to modify the condition precedent for investment in the RWSS on water sales from 40 M m3 to 50 M m3 by financial close.

Dick/Wilson

Councillor Bailey moved an amendment, seconded by Councillor Belford, being:

2.4.1    Agrees to modify the condition precedent for investment in the RWSS on water sales from 40 M m3 to 65 M m3 by financial close.

Bailey/Belford

For: Bailey, Belford

Against: Dick, Hewitt, Graham, Wilson, Beaven, Barker, Paku, Kirton

LOST

The amendment was LOST and so the Substantive Motion was put

2.4.1   Agrees to modify the condition precedent for investment in the RWSS on water sales from 40 M m3 to 50 M m3 by financial close.

Dick/Wilson

For: Dick, Hewitt, Wilson, Beaven, Paku, Kirton

Against, Graham, Belford, Bailey

CARRIED

2.4.2Agrees to the introduction of a new condition precedent that “Council investment in the RWSS is subject to the further review of the existing Environmental Management Package for the RWSS, including approaches to managing nitrogen under Farm Environment Management Plans and flushing flows, and that any proposed changes to the Environmental Management Package for the RWSS meet the satisfaction of the Council at least 2 months prior to financial close”.

Dick/Wilson

Councillor Belford proposed an amendment, seconded by Councillor Bailey, being to replace recommendation 2.4.2 with:

2.4.2   Requests that staff prepare a new Condition Precedent that establishes clear environmental parameters to be met agreed prior to the RWSS proceeding

Belford/Bailey

For: Beaven, Graham Belford, Barker, Bailey

Against: Dick, Hewitt, Wilson, Paku, Kirton

LOST

The amendment was LOST and so the Substantive Motion was put:

2.4.2Agrees to the introduction of a new condition precedent that “Council investment in the RWSS is subject to the further review of the existing Environmental Management Package for the RWSS, including approaches to managing nitrogen and phosphorus under Farm Environment Management Plans and flushing flows, and that any proposed changes to the Environmental Management Package for the RWSS meet the satisfaction of the Council at least 2 months prior to financial close”.

Dick/Wilson

For: Dick, Hewitt, Wilson, Beaven, Paku, Kirton

Against: Belford, Bailey

Abstention: Graham

CARRIED

2.5.      Requests staff provide advice on the implementation plan for Plan Change 6 across the wider catchment, in parallel with the further review of the existing Environmental Management Package for the RWSS, to enable the Council to consider how both plans together might achieve the objectives of Plan Change 6.

2.6.      Requests staff provide advice to the Regional Planning Committee on 7 June 2017 on the implementation issues arising for Plan Change 6 and the costs and benefits of a plan change to Plan Change 6, including an assessment of the financial and work programme implications for the Council.

2.8.      Seeks feedback from HBRIC Ltd on the recommendations contained in this paper for Council consideration alongside the Corporate and Strategic Committee RWSS recommendations of 31 May 2017.

Beaven/Wilson

CARRIED

2.7.      Requests that staff engage with the Environmental Defence Society and Fish and Game New Zealand, and invite HBRIC Ltd to participate, on the scope of a potential application to the Environment Court for a ruling on the interpretation of any Plan Change 6 provisions and/or any Ruataniwha Water Storage Scheme consent conditions, and reports to the Regional Planning Committee on 7 June 2017.

Beaven/Wilson

For: Dick, Graham, Wilson, Beaven, Belford Barker, Bailey, Paku, Kirton

Against: Hewitt

CARRIED

 

The Chairman sought, and was granted, agreement to move to the Public Excluded agenda items this time and return to the remainder of the Agenda following resolution of those items.

 

6.

Chief Executive Appointment

 

It was considered that this item should be conducted in Public Excluded session, under LGOIMA with the reason stated..

C&S16/17

Resolution

That the Council excludes the public from this section of the meeting being Chief Executive Appointment Agenda Item 6 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

Chief Executive Appointment

7(2)(a) That the public conduct of this agenda item would be likely to result in the disclosure of information where the withholding of the information is necessary to protect the privacy of natural persons

The Council is specified, in the First Schedule to this Act, as a body to which the Act applies.

 

Dick/Graham

CARRIED

 

16.

Confirmation of Public Excluded Minutes of the Corporate and Strategic Committee meeting held on 15 February 2017

C&S17/17

Resolution

That the Council excludes the public from this section of the meeting being Confirmation of Public Excluded Minutes Agenda Item 16 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

Recommendations from the Finance Audit & Risk Sub-committee

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.

 

Belford/Barker

CARRIED

 

17.

Capital Structure Review Advisory Committee - Appointment of Independent Members

C&S18/17

Resolution

That Council excludes the public from this section of the meeting, being Agenda Item 17 Capital Structure Review Advisory Committee - Appointment of Independent Members 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

Capital Structure Review Advisory Committee - Appointment of Independent Members

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.

 

Belford/Barker

CARRIED

 

The meeting went into public excluded session at 2.20pm and out of public excluded session at 3.00pm

 

The meeting adjourned at 3.00pm and reconvened at 3.20pm

 

8.

2017-2021 Strategic Plan

 

It was suggested that this item be deferred to a future meeting, once Council has had the opportunity to discuss the draft at a workshop. Feedback welcome via email in the meantime – to James Palmer.

C&S19/17

Resolution

That the Corporate and Strategic Committee refers this item to the Regional Council for consideration and decision subsequent to a workshop being held.

Wilson/Bailey

CARRIED

Council Chairman Rex Graham announced the appointment of Mr James Palmer to the role of HBRC Chief Executive

9.

Recommendations from the Finance, Audit and Risk Sub-Committee

C&S20/17

Resolution

That the Corporate and Strategic Committee defers this item to the 31 May 2017 Regional Council meeting for decision.

Wilson/Bailey

CARRIED

 

10.

Capital Structure Review – Scope And Process

C&S21/17

Resolution

That the Corporate and Strategic Committee defers this item to the 31 May 2017 Regional Council meeting for decision.

Wilson/Bailey

CARRIED

 


 

11.

Operational Efficiency Review Report

C&S22/17

Resolution

That the Corporate and Strategic Committee defers this item to the 31 May 2017 Regional Council meeting for decision.

Wilson/Bailey

CARRIED

 

13.

Quarterly Council Communications Update

 

The item was taken as read.

C&S23/17

Resolution

That the Corporate and Strategic Committee receives and notes the “Quarterly Council Communications Update” report.

Hewitt/Barker

CARRIED

 

14.

Health and Safety Update Report for the Period1 January through 30 April 2017

 

The item was taken as read, while highlighting the importance of the subject matter.

C&S24/17

Resolution

That the Corporate and Strategic Committee receives and notes the “Health and Safety Update Report for the Period 1 January through 30 April 2017”.

Dick/Bailey

CARRIED

 

15.

Discussion of Items Not on the Agenda

 

Urgent items for discussion

 

Item Name

Councillor/Staff

1             

HB Today headline E.coli reading in Napier & water to be chlorinated

Found out through the media, and seeks assurance that there is a process in place for HBRC to be advised

Were staff advised directly by NCC? No, learned from media as well

Was Notification process followed? - Agreement with NCC to immediately notify HBRC of any positive E.coli result relating to the drinking water source (aquifer). Queries lodged with NCC, however as not notified suggests reading from some other part of the reticulation network, not source itself. Reading was a single result of 1 on a scale 1-10, could be sampling error, and NCC action ‘precautionary’

Cr Bailey

Councillor Barker left the meeting at 3.45pm

2             

Received report from NCC this week on sewerage discharge into Ahuriri Estuary

Fully inform all councillors about significant events

Controlled discharge of raw sewerage into Ahuriri Estuary during significant rainfall event to prevent sewerage back-up to residential areas, as response to a public health risk.

NCC and Lancorp advised of resource consent requirements for currently unconsented discharges. Note significant issues with stormwater infiltration into the NCC sewage system

Cr Bailey

Councillor Wilson left the meeting at 3.55pm

 

 

Item Name

Councillor/Staff

3             

Meeting with Ombudsman

Ombudsman in HB next week and has requested a meeting 1 June with Cr Belford in relation to the Butler LGOIMA complaint investigation. Suggests other councillors may wish to meet with Ombudsman to discuss ‘wider’ principles at issue. Councillors Graham, Kirton and Beaven expressed interest in meeting.

Cr Belford

 

 

 

 

Closure:

There being no further business the Chairman declared the meeting closed at 4.05pm on Wednesday 24 May 2017.

 

Signed as a true and correct record.

 

 

 

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