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 |
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
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
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 |
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.
Follow-ups from Previous Corporate and Strategic Committee Meetings |
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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. |
That the Corporate and Strategic Committee receives and notes the “Follow-ups from Previous Corporate and Strategic Committee Meetings” report. CARRIED |
Item - 6. Chief Executive Appointment - was considered in Public Excluded session, from 2.20pm.
Ruataniwha Water Storage Scheme Next Steps |
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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. |
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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.
HB Tourism Update |
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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 |
That the Corporate and Strategic Committee receives and notes the “HB Tourism Quarterly Update” report. 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
Discussion of Items Not on the Agenda |
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Ruataniwha Water Storage Scheme Next Steps |
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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. |
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 2.4.2. Agrees 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 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: 2.4.2. Agrees 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. 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.
Chief Executive Appointment |
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It was considered that this item should be conducted in Public Excluded session, under LGOIMA with the reason stated.. |
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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:
CARRIED |
Confirmation of Public Excluded Minutes of the Corporate and Strategic Committee meeting held on 15 February 2017 |
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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:
CARRIED |
Capital Structure Review Advisory Committee - Appointment of Independent Members |
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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:
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
2017-2021 Strategic Plan |
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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. |
That the Corporate and Strategic Committee refers this item to the Regional Council for consideration and decision subsequent to a workshop being held. CARRIED |
Council Chairman Rex Graham announced the appointment of Mr James Palmer to the role of HBRC Chief Executive
Recommendations from the Finance, Audit and Risk Sub-Committee |
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That the Corporate and Strategic Committee defers this item to the 31 May 2017 Regional Council meeting for decision. CARRIED |
Capital Structure Review – Scope And Process |
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That the Corporate and Strategic Committee defers this item to the 31 May 2017 Regional Council meeting for decision. CARRIED |
Operational Efficiency Review Report |
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That the Corporate and Strategic Committee defers this item to the 31 May 2017 Regional Council meeting for decision. CARRIED |
Quarterly Council Communications Update |
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The item was taken as read. |
That the Corporate and Strategic Committee receives and notes the “Quarterly Council Communications Update” report. CARRIED |
Health and Safety Update Report for the Period1 January through 30 April 2017 |
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The item was taken as read, while highlighting the importance of the subject matter. |
That the Corporate and Strategic Committee receives and notes the “Health and Safety Update Report for the Period 1 January through 30 April 2017”. CARRIED |
Discussion of Items Not on the Agenda |
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Councillor Wilson left the meeting at 3.55pm
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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: ...............................................