Agenda of Regional Council Meeting

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 15 July 2020

SUBJECT Submissions on the HBRC 2020-21 Annual Plan

Reason for Report

1. This item provides the submissions and feedback, as attached, received during consultation on the Regional Council’s 2020-21 Annual Plan for Councillors to read in advance of the Hearing and Deliberations on 15 July 2020, as well as an outline of the consultation process undertaken.

Background

2. The focus of this year’s Annual Plan is: Climate. Smart. Recovery. - due to COVID-19, its effect on Hawke’s Bay people, and the significant ongoing impacts of the drought in Central HB and Heretaunga.

3. Consultation on the 2020-21 Annual Plan ran over three weeks, from Monday 8 June until Sunday 28 June.

4. The channels used to inform the public of this consultation included the Regional Council’s website, radio, newspapers, digital (Stuff, hbtoday.co.nz and nzherald.co.nz in Hawke’s Bay), social media (Facebook posts and two Facebook Live virtual public meetings), a ratepayer postcard mail-out, media reporting, email, at libraries and Regional Council offices.

5. All information relating to this consultation was available online via hbrc.govt.nz and consultations.nz/hbrc, and physically at Regional Council offices and libraries throughout the region.

6. Due to the recent lifting of COVID-19 social restrictions, this consultation was weighted to digital engagement over physical engagement, but used a number of traditional channels to ensure the opportunity to give feedback reached the target audience, including a new option of submissions by phone message.

Channel	Reach or Frequency
Newspaper advertising	2 adverts each in HB Today, CHB Mail, Napier Courier, Hastings Leader and Wairoa Star; 1 public notice in HB Today, between 6-25 June
Radio advertising	A total of 195 x30-second adverts on HB Coast, HB Hits and HB ZB from 10-26 June
Facebook posts	24 Facebook posts with a total of 53,602 views; 11,740 total video views; total post engagement of 960, Reaction/ Comments/ Shares = 227
Ratepayer postcard mail-out	54,449 households, 173 ‘Returned to Sender’ (0.32%)
Digital impressions	100,004 impressions, 338 clicks for a click-through rate of 0.34% - more than 4 times the average NZ click-through rate
Totals Submissions: 118	Online: 95 Physical: 3 Email: 16 Phone messages: 2 Text messages: 1 Social media: 1

Next Steps

7. Submission Hearings are scheduled to begin at 9.00am on 15 July, and the timetable will be confirmed and provided with the agenda.

8. Deliberations will follow the verbal submissions. The deliberation reports will be distributed as part of the agenda for the 15 July meeting, and councillors will make recommendations for adoption of the Annual Plan at Council’s 29 July meeting.

Decision Making Process

9. Staff have assessed the requirements of the Local Government Act 2002 in relation to this item and have concluded that, as this report is for information only, the decision making provisions do not apply.

1. Recommendations

That Hawke’s Bay Regional Council receives the “Submissions on the HBRC 2020-21 Annual Plan” staff report.

Authored by:

Drew Broadley

Community Engagement and Communications Manager

Mandy Sharpe

Project Manager

Approved by:

Jessica Ellerm

Group Manager Corporate Services

Attachment/s

⇨1	All Submissions Received to 2020-21 Annual Plan		Under Separate Cover
⇨2	Social Media Feedback on 2020-21 Annual Plan		Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 15 July 2020

SUBJECT 2020-21 Annual Plan Submissions Hearing Process

Reason for Report

1. This report outlines the process to be undertaken to hear and consider submissions received on the 2020-21 Annual Plan.

Background

2. The focus of this year’s Annual Plan is Climate. Smart. Recovery. – it responds to the effects of COVID-19 on Hawke’s Bay people and the significant ongoing impacts of the drought in Central Hawke’s Bay and Heretaunga.

3. Consultation on the 2020-21 Annual Plan ran over three weeks from Monday 8 June until Sunday 28 June, on the two topics of:

3.1. Rates Approach for 2020-21

3.2. Recovery Fund for 2020-21

4. On 3 July Councillors received all submissions and Facebook posts in their entirety. On 10 July these were made available online and at reception.

Verbal Submissions

5. The submissions hearing is scheduled to begin at 9am. All submitters are allocated ten minutes to present, including questions and answers. Submitters may be an individual or a group and may be representing an organisation.

6. The timetable is attached.

Deliberations and Decision Making

7. After all verbal submissions have been heard Councillors will move into deliberations and decision making.

8. Councillors will be asked to receive and consider the two deliberation staff reports in order to arrive at decisions on:

8.1. Council’s rates approach for 2020-21

8.2. Whether to establish a $1 million Recovery Fund for 2020-21.

9. Attached to the reports are the submissions related to the consultation topic sorted by the option chosen.

Topics and Issues Raised Not Related to Consultation Topics

10. The two deliberation reports focus on community feedback provided on the two consultation topics only as these are the focus of decisions to be made by Councillors for the upcoming financial year.

11. It is not intended to provide specific responses to submitters who have provided feedback on matters outside of the consultation topics, unless requested by Councillors. All submitters have received acknowledgement of their submissions.

Adoption

12. Subsequent to Council’s decisions on 15 July, the 2020-21 Annual Plan will be finalised, incorporating any amendments necessitated by the decisions made, for adoption on 29 July 2020.

Post-adoption

13. Following the adoption of the Annual Plan on 29 July, each submitter will be provided with Council’s resolutions (decisions) in regards to the two consultation topics.

14. The Annual Plan will then be made available to the public within one month of the date of adoption as required under Section 95 of the Local Government Act 2002.

Decision Making Process

15. The 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 the following:

15.1. Council has a statutory obligation to adopt an Annual Plan under Section 95 of the Act.

15.2. The persons affected by the Annual Plan have been consulted and today’s meeting will consider the issues raised by those members of the community that have submitted to Council on the Annual Plan.

Recommendations

That Hawke’s Bay Regional Council receives and considers the verbal and written submissions received in response to the Climate. Smart. Recovery. 2020-21 Annual Plan consultation document.

Authored by:

Leeanne Hooper

Governance Lead

Mandy Sharpe

Project Manager

Approved by:

Jessica Ellerm

Group Manager Corporate Services

Attachment/s

⇩1

15 July 2020 Verbal Submissions Timetable

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 15 July 2020

Subject: Deliberation Report on the Rates Approach for 2020-21

Reason for Report

1. This report provides Council with officers’ analysis of the feedback received from the community for options on Council’s rate approach for 2020-21 as part of the 2020-21 Annual Plan consultation document. Community consultation was held from 8-28 June 2020.

2. The report identifies and considers key themes, comments and suggestions raised in order to assist Council in its decision making regarding the Rates Approach.

Officers’ Recommendation

3. Council staff recommend that, having considered all submissions and the officers’ analysis of submissions, that Council chooses its preferred option for the rates approach for 2020-21.

Options Analysis – Topic 1: Rates Approach for 2020-21

4. Three options were provided on Council’s rates approach for 2020-21, submitters were asked to indicate which option they supported.

5. The options selected by submitters were:

OPTIONS	Number that chose this option	% that chose this option
Option A Status Quo for rates – proceed with the planned 7.3% rate increase in line with the Council’s 2018-28 Long Term Plan.	15	14% *
Option B Cushioning the Impact – Keep the rates revenue at the same level as 2019-20 and borrow the required funding – a 0% rates revenue increase.	66	62% *
Option C Mid-Point – Proceed with a 3.6% rate increase for 2020-21 and borrow the balance of required funding.	26	24% *
No option chosen	11
TOTAL	118

* excluding those that did not choose an option

6. Attached to this report is the data above represented as a bar graph.

7. This report provides analysis of the responses by each option. Related comments made by submitters who did not select an option are also included in the analysis, which covers:

7.1. Key themes

7.2. Analysis of themes

7.3. Direct quotes from submitters (extracts only)

7.4. Officers’ response.

OPTION A: STATUS QUO FOR RATES

Key themes

8. Fifteen submitters selected this option. The following key themes were identified.

8.1. Essential work that needs to be done

8.2. Concern about borrowing

8.3. Affordable for most

8.4. Target those in need

Analysis of themes

9. There was sentiment that proceeding with the 7.3% rate increase as planned in the 2018-28 Long Term Plan will enable the work to be done, and that the planned projects are essential.

10. Other submitters commented that rates are affordable for most and the work should be paid for now, rather than borrowing for it and affecting future rate levels.

11. Targeting those in need was also suggested, by building in assistance or offering targeted rebates.

Direct quotes from submitters (extracts only)

12. “…Proceed with 2018-28 projects outlined in the long term plan to benefit the citizens of Hawke's Bay now and for the younger generations in the future. We need more development now to make HB a preferred region to live and work in so to increase regional population and economic growth.” (sub #18)

13. “… It doesn't seem to me to be a very good idea to put us in debt given the Covid 19 situation…” (sub #6)

14. “…You could instead offer targeted rebates aimed at low income households…” (sub #44)

Officers’ response to the key themes expressed in Option A

15. Officers agree that the work programme for the 2020-21 year should proceed in line with the proposed levels of service consulted on in the 2018-28 LTP. The work is essential, and the organisation has an important role to play in supporting the regional economy through its work and expenditure.

16. Officers acknowledge that while it is deemed necessary to continue to maintain existing levels of service, cost efficiencies should and will be sought to reduce the borrowing requirement and burden on future rate-payers.

17. Whilst acknowledging submitters’ concerns about borrowing, officers consider the cost of borrowing to be extremely low. It is planned to be repaid over 10 years, which has a relatively low cost impact on servicing costs.

18. While many in the community may have not been financially impacted as a result of current events, many have been, and borrowing to fund a zero percent rates increase will provide some financial relief in the coming year particularly to large landholders.

OPTION B: CUSHIONING THE IMPACT

Key themes

19. Sixty-six 66 submitters selected this option. The following key themes were identified.

19.1. Affordability

19.2. Live within your means

19.3. Need another option

Analysis of themes

20. Affordability was a strong theme for why people chose Option B. Some submitters stated they are already seriously affected financially by COVID-19, and others, while not themselves affected, felt others already are, or will feel the financial impacts.

21. Comments were also made about high or rising rates, which are compounded by central government charges

22. Whilst not choosing a preferred option, general comments made by Federated Farmers included concern “…about the impact that this debt will have on rural rates, both now and in future years. Rural rates have been increasingly significantly year by year, albeit without any increase in farmer/rural rate payer ability to pay…..” They are also concerned about Council opting to borrow the entire forecasted shortfall (income gap from drop in investment income).

23. Strong sentiment was expressed that Council should work within its existing budgets just like other people have had to, rather than increase rates.

24. Several submitters encouraged Council to review spending. Tangible suggestions included:

24.1. Focus solely on core district infrastructure

24.2. Reallocate the budget tagged to additional office space and updated facilities for field staff to general rates and/or the Uniform Annual General Charge to offset the amount needed to pay or borrow for rates

24.3. Every Council should have a plan for when their financial plan falls apart

24.4. Droughts are common in H.B if there isn't a plan already in place for situations like this then why not!?

24.5. Stick to the basics, stop overspending, and those earning over $100,000 should take a pay cut.

25. Four submitters were keen to see a different approach for rates that wasn’t provided for in consultation. Three submitters were keen to have a 0% rates increase (as per the first part of option B) but do not want Council to borrow (the required funding). Suggestions instead included; cut back on projects, cut back on spending, defer capital expenditure, and a pay cut for those earning over $100,000. The fourth submitter didn’t explicitly articulate the rate level they preferred but was also of the similar sentiment in terms of how to implement it – keep expenditure at the current level, or at best cap it (at either inflation of the local GDP factor).

26. Similar sentiments were provided by another submitter who chose a different rates approach (Option C - Mid Point) – that submitter wanted to see rates revenue kept at the same level as 2019-20 and reduced costs to match.

27. One submitter added they wanted Council to consider adding additional options to future consultations, and commented that the options provided may have the unintended consequence of the Council believing that rate payers are happy to borrow the funds to cover the shortfall.

Direct quotes from submitters (mostly extracts only)

Affordability

28. “… Some rural ratepayers are not only facing the economic consequences of Covid 19 and the worst drought in "113 years". They are also dealing with the costs of the governments National Freshwater policies, the MPI Mycoplasma bovis eradication programme, environmental development work and their FEMPs. Some of these new costs for our businesses are being incurred voluntarily as we are all invested in improving environmental outcomes. They are however still new expenses for our businesses to manage. All these issues are combining to be a tsunami of extra expenses for a district that is already one of the most expensive areas in the world to produce food…” (sub #115)

29. “It is good to see that the preferred option on rates is a zero rise in the 2020-21 year. People on limited financial income who own their own homes cannot afford rates rises. It's hard enough to pay power/phone plus food without additional expenses being added…” (sub #59)

30. “It is time council recognise household incomes do not rise inline with council rating expectations. Many households will suffer a decline in income this year. It would be irresponsible for there to be an increase…” (sub #52)

31. “Rates should not increase at all!! Reduce all your burocratic overheads first, get back to dealing with core issues, pest management, vegetation control etc. Far too many managers and people who produce nothing. Rates have increased threefold in last 5 years, services provided dropped to minimal. Council should be looking to reduce rates and cut the deadwood out from Dalton St. NO INCREASE!!!!” (sub #53)

32. “…In just five years, the regional council rates on our property has increased by over 100%. This is a highly unsustainable rate of increase…” (sub #4)

33. “…Given the acute state of the New Zealand economy as a whole currently, it would be remiss of the HBRC to entertain pursuing a raft of activity that is "nice to have yet not necessary" during the next 2 years; particularly where such activity mostly relies on rates as the main funding source. Instead, I suggest that only "essential" work (i.e. "core business") should be undertaken by the HBRC to ensure that no increase in rates is required for at least the next 2 years…” (sub #74)

Live within your means

34. “Year on year rate increases have to stop. Councils have to learn to live within their budgets…” (sub #32)

35. “The Council needs to be operated as private business and must work within current funding levels. In private enterprise you would stop any essential spending and staff numbers must be greatly reduced to reduce spending on wages…” (sub #84)

36. “…What happened to all of the proceeds of selling the port? Why is the council asking for so much more money after so significantly raising rates in the past few years as well as selling essential assets? The HBRC needs to learn fiscal prudence…” (sub #4)

Need another option

37. “Option D: Keep the rate revenue the same and DO NOT BORROW extra funding. Cut back on projects. Debt is bad money management whatever way you look at it.” (sub #67)

38. “I submit that the rate increases should be 0%.I would like the council to consider adding additional options to future consultations. The above options may have the unintended consequence of the council believing that rate payers are happy to borrow the funds to cover the shortfall. I have selected B since it is the best option out of those listed above. However I would prefer the council instead cut back on spending and defer capital expenditure in order to accommodate the 0% rate increase.” (Sub #79)

Officers’ response to the key themes expressed in Option B

39. We’re proposing to work with ratepayers on a case by case basis, and as noted in the consultation document – our rating team will operate with greater flexibility (i.e via Rates Remission and Postponement Policy). HBRC recognises the rural community’s ability to pay is greatly affected and that specific consideration will be given to rural ratepayers facing the double whammy of COVID and the drought.

40. In response to submitters who queried the apparent lack of a contingency plan for such situations, Council did establish a Reserve Fund using the ring fenced capital released from the Napier Port Initial Public Offering, but it has not had sufficient time to provide for operating returns. Over time this will build a Reserve Fund to protect the Council from the fluctuation / impact of financial markets.

41. Council is also undertaking a review of its Financial Strategy with the intent to reduce our reliance on investment income to subsidise operating costs to provide greater resilience to respond to extraordinary events.

42. Staff consider that a case for debt funding is appropriate as the beneficiaries for much of Council’s work are future generations (in exceptional circumstances).

43. In relation to the theme of “live within your means” it is noted that prior to COVID-19 budgets had been reviewed and tightened to remain within the planned 7.3% rate increase for 2020-21, as forecast in Council’s Long Term Plan 2018-18. Organisational costs and spending continue to be under tight scrutiny, in particular travel and training for staff. We will also be revisiting our needs for additional office space, with our experiences during the lock down providing new opportunities for working. A flexible working policy is currently being finalised. Vacancies are being tightly managed and only replaced if considered essential.

44. As a final point it is worth noting that Council can not introduce new options that we haven’t consulted on as we are constrained by the provisions in the Local Government Act 2002.

OPTION C: MID POINT

Key themes

45. Twenty-six submitters selected this option. Most of the feedback provided could be categorised into the following two themes.

45.1. A balanced approach

45.2. Concern about borrowing.

Analysis of key themes

46. The submitters that chose this option saw it as a considered approach that responds to the immediate hardship felt by the community post COVID and the drought, but with the least ongoing financial impact related to paying back the interest costs on borrowing. Some noted that the full impacts of COVID are yet to be felt so this was a sensible mid -way point given the uncertainty.

47. Comments reflected that people chose this mid-point option as they weren’t keen on the costs associated with a higher level of borrowing and could live with a more modest 3.6% rates increase.

Direct quotes from submitters (mostly extracts only)

A Balanced Approach

48. “Cushion the financial impacts but not fully absorb them so they become a future problem.” (sub #64)

49. “The financial impact of Covid is relatively unknown but unlikely businesses will have recovered for two or three years. to add funding cost to projected rates increase next year, resulting in an increase close to 10% Criminal. This will push many business owners out of business, especially tourism businesses. Yes it is only a few dollars, but combined with all the other increases, it adds up.” (sub # 75)

50. “…In considering Option 3 however, is there any magic about the 3.6% or could it just as easily be 2.5% (and bearing in mind interest rates are now at historically low levels)?...” (sub #71)

51. “Recognize thing have changed, but no overreation.” (sub #112)

Concern about borrowing

52. “Prefer not to pay for costs incurred today by fully loan funding - discounts / relief could be provided to those who need it.” (sub #93)

53. “Despite the financial impacts post COVID on organisations and individuals, a modest 3.6% increase on quite a reasonable annual rates bill rather than relying totally on debt funding seems more reasonable.” (sub #65)

Officers’ response to the key themes expressed in Option C

54. As this a combination of mid point of Options A and B the officers’ points are covered above.

Decision Making Process

55. Section 95 of the Local Government Act 2002 prescribes the statutory requirements in relation to annual plans, including that Council must consult in a manner that gives effect to the requirements of the section 82 principles of consultation. The consultation process has been undertaken and reflects the high degree of significance associated with adopting the 2020-21 Annual Plan to specifically respond to the impacts of the Covid-19 pandemic and the drought.

Recommendations

That Hawke’s Bay Regional Council:

1. Receives and considers the “Deliberation Report on the Rates Approach for 2020-21”, including the officers’ analysis and responses to submission points.

2. Agrees its preferred option for 2020-21 is to

2.1. (Option A) proceed with the planned 7.3% rate increase in line with the Council’s 2018-28 Long Term Plan

2.2. (Option B) keep the rates revenue at the same level as 2019-20 and borrow the required funding

2.3. (Option C) proceed with a 3.6% rate increase for 2020-21 and borrow the balance of required funding.

Authored by:

Leeanne Hooper

Governance Lead

Mandy Sharpe

Project Manager

Approved by:

Jessica Ellerm

Group Manager Corporate Services

Attachment/s

⇩1	Topic 1 Options Results Table
⇩2	Topic 1 Submissions by Option Chosen

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 15 July 2020

Subject: Deliberation Report on the Recovery Fund for 2020-21

Reason for Report

1. This report provides Council with officers’ analysis of the feedback received from the community on the proposal to establish a recovery fund as part of the 2020-21 Annual Plan Consultation Document. Community consultation was held from 8-28 June 2020.

2. The report identifies and considers key themes, comments and suggestions raised in order to assist Council to make a decision on which option to progress.

Officers’ Recommendation

3. That Council, having considered all submissions and the officers’ analysis of submissions, chooses its preferred option in regards to establishing a recovery fund for 2020-21.

Options Analysis – Topic 2: Recovery Fund for 2020-21

4. Submitters were provided with two options on Council’s proposal to establish a recovery fund for 2020-21, and asked to indicate which option they supported.

5. The options selected by submitters were:

OPTIONS	Number that chose this option	% that chose this option
Option A No, do not establish a Recovery Fund of $1 million.	29	28%*
Option B Yes, establish a Recovery Fund of $1 million.	76	72%*
No option chosen	13
TOTAL	118

*Excluding those that did not choose an option.

6. Attached to this report is the data above represented as a bar graph.

7. This report provides analysis of the responses by each option. Related comments made by submitters who did not select a preferred option are also included in the analysis, which includes:

7.1. Key themes

7.2. Analysis of themes

7.3. Direct quotes from submitters (extracts only)

7.4. Officers’ response.

OPTION A: No, do not establish a Recovery Fund of $1 million

Key themes

8. 29 submitters selected this option. A range of reasons and comments were given as to why submitters do not support the establishment of a recovery fund. These included:

8.1. Affordability

8.2. More information needed

8.3. Work with what you already have

8.4. Delay setting up the fund

8.5. Fund is not needed

8.6. Concern around who benefits.

Analysis of themes

9. There appears to be some confusion around the recovery fund, including how it will be funded and the work it would support. Some submitters were concerned establishing this fund would increase rates or borrowing, which would impact rates affordability. One submitter believed “Council needs to stick to core business”. This is despite the consultation document outlining that the proposed $1 million would be reallocated from the budget tagged for additional office space and would be focusing on accelerating Council capital projects.

10. Specific details were requested, including what projects would be initiated. This was a sentiment expressed by those that both did and did not support establishment of a fund.

11. There is a sentiment of “work with what you already have”, including that Council should have reserves to draw on for future projects.

12. Sentiment was also expressed that Council should delay setting up the fund, until COVID-19 was in control or eliminated, and to “…Stop any and all non essential projects for at least 1-2 years.” Survival was key and there is no guarantee that there will be further financial impact on people. This sentiment was echoed by another submitter who suggested that only “essential” work be undertaken in the next two years, to ensure rates would not increase in that time. “…Given the acute state of the New Zealand economy…”

13. Sentiment was also expressed that the fund was not needed, with one submitter inferring the impact of COVID-19 will not be as severe as expected.

14. There was some concern expressed about who the fund would benefit, one submitter not wanting ratepayer money spent “…on bailing out drought affected farmers please” and another saying there needed to be proof that all people benefit.

15. One submitter suggested that the $1 million instead be used to, in part, offset the reduction in rate increases. This sentiment was also made by another submitter, who caveated their preference for establishing a recovery fund on the $1 million be reallocated to general rates/and or Uniform Annual General Charge to offset the amount needed to borrow if rates are kept at the 2019-2020 level.

Direct quotes from submitters (mostly extracts only)

Affordability

16. “Not best time to be trying to get more money from ratepayers to help climate…” (sub #20)

17. “Bad timing re establishing a Recovery Fund. Specifics please. $52 added to the annual bill is quite a sizeable amount…” (sub #114)

18. “… and can't afford a rates increase at the moment.” (sub # 87)

More information needed

19. “Please define just what this plan will entail before establishing any funding for the plan.”(sub #4)

Work with what you already have

20. “Work with what you already have. It's just too easy for you to spend other people's money…” (sub #12)

21. “In council long term financial management you should have reserves for future projects which can be drawn upon. This is a time if the priorities are there to utilise these funds…” (sub #52)

Delay setting up the fund

22. “Please delay for 2 years until business is back to normal. Survival is key at the moment in 2 years could be a good time to start…”(sub #76)

23. “…Stop any and all non essential projects for at least 1-2 years.” (sub #84)

Fund is not needed

24. “I believe we will naturally recover quickly.” (sub #55)

Concern around who benefits

25. “There needs to be more proof that there is a benefit to ALL PEOPLE of the region, not just a select few…” (sub #67)

Officers’ response to the key themes in Option A

26. The funding of the proposed recovery fund does not have any impact on the 20-21 financials as the capital spend is a redeployment from an existing project, this therefore has no impact on rates. The original funding, and the subsequent recovery fund was planned to be debt funded and capitalised which means it wouldn’t be able to offset operational and rates funded expenditure.

27. Further, the fund is proposed to be used to accelerate existing work, and / or leverage external third party funding. Any use of the fund will be for work that is Council’s core business.

28. In response to a request for more detail, a policy for governance of the fund is being developed and will be complete for adoption alongside the Annual Plan on 29 July 2020.

29. Officers believe there is a benefit to the community to create this fund for use in the 2020-21 year, a key aspect of the fund will be to create and support jobs in the region. The economic effects of Covid-19 will continue to impact Hawke’s Bay particularly as the government’s wage subsidy programme comes to an end.

30. In response to Forest & Bird’s submission, officers agree that climate change will mean that weather events will become more common in the future, and Council’s existing, and 2021-31 work programme must continue to address the medium to long-term issues experienced in the region.

OPTION B: Yes, establish a Recovery Fund of $1 million

Key themes

31. 76 submitters selected this option. The following key themes were identified.

31.1. We need this now

31.2. Supportive – with a caveat

31.3. Leverage government funding

31.4. Suggestions

Analysis of themes

32. There appears to be a strong sense of urgency and need to establish the recovery fund amongst several submitters. It was felt it was important to get such projects underway as soon as possible to address climate change, with the sentiment this was a very real and serious issue, and to help with the economic recovery of the region following the COVID-19 restrictions.

33. Several supported the establishment of a recovery fund, but outlined caveat/s for this. These included:

33.1. If the fund can be established without borrowing.

33.2. If the capital projects have a positive environment effect and are carbon negative.

33.3. If employment opportunities are created.

33.4. If the fund can be justified (ahead of - and even at the expense of) other Council spending.

33.5. As long as it is used to leverage central government funding.

33.6. Assuming that the extra borrowing is agreed on a fixed-rate basis.

33.7. Only if the budget tagged for additional office space and updated facilities for field staff was reallocated to general rates and/or the Uniform Annual General Charge (UAGC) to offset the amount needed to borrow (if rates are kept at the same level as 20190-2020).

34. There was a keenness and encouragement to make use of and leverage central government funding for the shovel-ready projects.

35. Some suggestions were made for the recovery fund, including that it would be better to fund it by taking a loan out of Napier Port rather than ratepayers having to pay for it, and that erosion control/flood mitigation projects shouldn’t be delayed.

36. Whilst not choosing a preferred option, Forest & Bird expressed strong opinions on the type of projects to be considered for Council’s Climate.Smart.Recovery “…it will be important to ensure that the way in which interventions respond to climate change are progressive, sustainable and genuinely transformational. We strongly oppose approaches to drought resilience such as building dams that will simply perpetuate environmentally unsound land use, or enable intensification of water needs in a region where that is inappropriate…”

37. While not choosing a preferred option, it is noted that Federated Farmers would like to work closely with Council on the scope and detail of the projects to be implemented though a recovery fund, to ensure they align with rural HB activities and realities.

Direct quotes from submitters (mostly extracts only)

We need this now

38. “Time is of essence with our climate change and environmental issues…” (sub #118)

39. “While we have a downturn due to Covid 19 we also have a serious climate emergency and for the sake of refurbishment of offices, not to proceed wit that, would be unwise in my view…” (sub #101)

40. “we are already so late adapting to climate emergency. we need far stronger action and far sooner than existing plans dictate…it makes absolute sense to put money into smart climate saving projects that happen to stimulate the economy at same time.” (sub #73)

Supportive – with a caveat

41. “If the Fund can be justified, ahead of - and even at the expense of - other Council spending then it should proceed on its merits.” (sub #45)

42. “As long as it is used to leverage central government funding - otherwise $1million won't go a long way.” (sub #93)

Leverage government funding

43. “…Whilst central government is loosening it’s purse strings we should try and take advantage of that.” (sub #72)

Suggestions

44. “The erosion control/flood mitigation etc projects shouldn't be delayed. We could end up paying much more in future for trying to save money now by halting these projects.” (sub #70)

Officers’ response to the key themes in Option B

45. Officers recommend further detail of the intended use and objectives of the recovery fund be outlined within the policy under development, proposed for adoption alongside the Annual Plan on 29 July.

46. The objectives within the policy confirm the Council’s intention to leverage government funding as much as possible, use the fund to progress Council’s core environmental works which achieve not only environmental outcomes but which also respond to Climate Change. Another key objective of the fund is to support the regional recovery and the creation of jobs.

47. Officers recommend borrowing is a suitable funding mechanism for this fund given the intergenerational nature of the proposed use of the fund.

48. Regarding the repurposing of the accommodation project funding, officers believe this is reasonable given the review currently being undertaken intends to incorporate and respond to employees desire to have more flexible working arrangements. Further, alternative accommodation options may now be available and more suitable given the current economic conditions. Officers believe the remaining $1mil in the accommodation project funding is enough to progress the project through to a preferred option within the 2020-21 financial year.

Decision Making Process

49. Section 95 of the Local Government Act 2002 prescribes the statutory requirements in relation to annual plans, including that Council must consult in a manner that gives effect to the requirements of the section 82 principles of consultation. The consultation process has been undertaken and reflects the high degree of significance associated with adopting the 2020-21 Annual Plan to specifically respond to the impacts of the Covid-19 pandemic and the drought.

Recommendations

That Hawke’s Bay Regional Council:

1. Receives and considers the “Deliberation Report on the Recovery Fund for 2020-21” staff report, including the officers’ analysis and response to submission points.

2. Agrees to

2.1. (Option A) not establish a Recovery Fund of $1 million for 2020-21

2.2. (Option B) establish a Recovery Fund of $1 million for 2020-21.

Authored by:

Leeanne Hooper

Governance Lead

Mandy Sharpe

Project Manager

Approved by:

Jessica Ellerm

Group Manager
Corporate Services

Attachment/s