Agenda of Regional Council Meeting

	Agenda Item	Action	Person Responsible	Due Date	Status Comment
1.	Ruataniwha Plains Water Storage Project	Regular updates on milestones achieved	AN/ GH	ongoing	Provided on September Council agenda.
2.	Financial Report	Check Councillor meeting attendances	LH	Sept 1	Attendance records double checked and amended to include HPUDS Implementation Committee and absence advised by Councillor Rose. Note made that attendance recorded for ‘ordinary’ Council and Committee meetings only, not fieldtrips, workshops, Hearings or stakeholder group meetings.
	Financial Report	Insert more information in the Transport section of the Right Debate to include the adoption of the Regional Land Transport Strategy and Regional Public Transport Plan.	LL/CG	Sept 12	Detail has been included in the updated Right Debate section.
3.	August Work Plan	Insert appropriate comment around compliance for CHB Wastewater	IM	Sept 12	CHBDC have been written to twice requesting the final design details of their proposed scheme. The final deadline for this document is the end of September 2012. Correspondence with them has stressed the need to satisfy us they will meet the 2014 consent standards.
4.	Ruataniwha Water Storage Project	Provide draft feasibility report to Councillors	AN	Sept 12	Feasibility report provided to Councillors with 26 September Regional Council Agenda
5.	Air and Climate	Explain why a camera will be installed on the roof of the Council’s building for the photo diary of urban air quality.	IM	Sept 12	The camera is to be installed on the HBRC building primarily for security reasons. A camera was previously installed on Bluff Hill but was stolen. Staff are comfortable that sea spray will not compromise the investigation.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 September 2012

SUBJECT: Affixing of Common Seal

Comment

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

		Seal No.	Date
1.1	Leasehold Land Sales 1.1.1 Lot 284 DP 11194 CT B3/96 - Transfer 1.1.2 Lot 457 DP 2451 CT 55/11 - Transfer 1.1.3 Lot 189 DP 10775 CT C1/696 - Transfer 1.1.4 Lot 3 DP 7414 CT B4/446 - Transfer 1.1.5 Lot 40 DP 4488 CT 55/140 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.6 Lot 2 DP 11990 CT D1/756 - Transfer 1.1.7 Lot 1 DP 11990 CT D1/755 - Transfer 1.1.8 Lot 174 DP 12548 CT D2/1522 - Transfer 1.1.9 Lot 8 DP 7310 CT B2/73 - Transfer 1.1.10 Lot 176 DP 13217 CT E4/431 - Agreement for Sale and Purchase (discount 17.5% resides at property) - Transfer 1.1.11 Lot 117 DP 6481 CT C2/429 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.12 Lot 124 DP 12692 CT E1/74 - Agreement for Sale and Purchase (discount 17.5% resides at property) - Transfer 1.1.13 Lot 18 DP 7872 CT 200/31 - Transfer 1.1.14 Lot 458 DP 9059 CT E2/347 - Transfer 1.1.15 Lot 206 DP 2172 CT 55/231 - Agreement for Sale and Purchase (cross-lease 1 x 10% discount landlord and 4 x 17.5% discount resides at property) 1.1.16 Lot 278 DP 11194 CT CB3/92 - Agreement for Sale and Purchase (cross-lease 2 x 10% discount landlord and 2 x 17.5% discount resides at property) 1.1.17 Lot 156 DP 12611 CT D4/1095 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.18 Lot 1 DP 7422 CT C4/320 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.19 Lot 18 DP 7872 CT 200/31 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.20 Lot 51 DP 13898 CT F4/415 - Agreement for Sale and Purchase (discount 17.5% resides at property) - Transfer 1.1.21 Lot 3 & 73 DP 10182 CT 195/31 - Transfer 1.1.22 Lot 117 DP 6481 CT C2/429 - Transfer 1.1.23 Lot 95 DP 11780 CT M1/1213 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.24 Lot 33 DP 14447 CT G2/660 - Agreement for Sale and Purchase (discount 17.5% resides at property) 1.1.25 Lot 40 DP 4488 CT 55/140 - Transfer 1.1.26 Lot 1 DP 13896 CT F4/374 - Agreement for Sale and Purchase (discount 17.5% resides at property) - Transfer	3539 3540 3541 3542 3543 3544 3545 3546 3547 3548 3549 3550 3551 3552 3553 3554 3555 3556 3362 3363 3364 3366 3367 3368 3369 3370 3371 3372 3373 3374	24 August 2012 24 August 2012 24 August 2012 24 August 2012 27 August 2012 27 August 2012 27 August 2012 27 August 2012 27 August 2012 28 August 2012 28 August 2012 28 August 2012 30 August 2012 30 August 2012 30 August 2012 31 August 2012 3 September 2012 4 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 18 September 2012 19 September 2012 19 September 2012
1.2	Vesting of reclaimed land – Port of Napier Limited Lots 3,5 and 7 being a subdivision of Lot 4 DP20975 and Pts Pacific Ocean This document was sealed on 30/5/2007 under Seal 2641. It is now out of time to be deposited with the Registrar-General of land so has been resealed under 3557)	3557	6 September 2012
1.3	Staff Warrants 1.3.1 Dan Heaps (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)) 1.3.2 Oliver Wade (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) 1.3.3 Shane Gilmer (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) 1.3.4 Vicki Lyons (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)	3358 3359 3360 3361	12 September 2012 12 September 2012 12 September 2012 12 September 2012

Decision Making Process

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

2.1 Sections 97 and 88 of the Act do not apply;

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

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

Recommendations

That Council:

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

2. Confirms the action to affix the Common Seal.

Diane Wisely

Executive Assistant

Andrew Newman

Chief Executive

Attachment/s

There are no attachments for this report.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 September 2012

SUBJECT: Election of the Corporate and Strategic Committee Chairman

Reason for Report

1. The Council committee structure implemented in July 2012 includes the recently established Regional Planning Committee which is chaired by Council’s Chairman.

2. Given the additional workload assumed by the Council’s Chairman as Chairman of the Regional Planning Committee, it is proposed that Council reassess the distribution of Committee Chair workloads among Councillors, and this paper covers the proposal that the Chairman’s role of the Corporate and Strategic Committee be moved from the current Chairman of this Committee (the Council’s Chairman) to another Councillor.

Discussion

3. The Corporate and Strategic Committee meets every second month throughout the year, and he Terms of Reference for the Committee is attached for Councillors’ reference.

Remuneration Authority Determination

4. The Local Government Elected Members (2012/13) Determination 2012 provides for remuneration levels for four Committee chairs. As the Council’s Chairman is to chair the Regional Planning Committee and will not be paid a Committee Chair allowance, the determination will cover the following Committee Chairs.

4.1. Hearings Committee

4.2. Regional Transport Committee

4.3. Environment and Services Committee

4.4. Corporate and Strategic Committee

Voting

5. The Local Government Act 2002 provides direction for the election of a Chairperson. This must be done in accordance with the voting requirements contained in Schedule 7, Part 1, sections 24 and 25. The relevant matters from these sections state:

Section 24(3)

“An act or question coming before the local authority must be done or decided by open voting.”

Section 25

“Voting systems for certain appointments—

(1) This clause applies to—

(a) the election or appointment of the chairperson and deputy chairperson of a regional council; and

(b) ….

(c) the election or appointment of the chairperson and deputy chairperson of a committee; and

(2) If this clause applies, a local authority or a committee (if the local authority has so directed) must determine by resolution that a person be elected or appointed by using one of the following systems of voting:—

(a) the voting system in subclause (3) (`system A'):

(b) the voting system in subclause (4) (`system B').

(3) System A —

(a) requires that a person is elected or appointed if he or she receives the votes of a majority of the members of the local authority or committee present and voting; and

(b) has the following characteristics:—

(i) there is a first round of voting for all candidates; and

(ii) if no candidate is successful in that round there is a second round of voting from which the candidate with the fewest votes in the first round is excluded; and

(iii) if no candidate is successful in the second round there is a third, and if necessary subsequent, round of voting from which, each time, the candidate with the fewest votes in the previous round is excluded; and

(iv) in any round of voting, if 2 or more candidates tie for the lowest number of votes, the person excluded from the next round is resolved by lot.

(4) System B —

(a) requires that a person is elected or appointed if he or she receives more votes than any other candidate; and

(b) has the following characteristics:

(i) there is only 1 round of voting; and

(ii) if 2 or more candidates tie for the most votes, the tie is resolved by lot.”

6. The Council has previously adopted System A and this is again being recommended to Council for adoption.

7. If System A is adopted the actual vote will be conducted as follows:

7.1. Nominations for the position of Chairman will be called for which must be supported by a seconder (being a different person) both of whom cannot be the person being nominated. A Councillor can nominate more than one person.

7.2. Nominations will then be closed.

7.3. The first round of voting will then be undertaken by show of hands and with only one vote per Councillor (i.e. 9 in total).

7.4. If there are three or more nominees and a majority of Councillors (i.e. 5) does not support one nominee then the candidate with the fewest votes will be excluded from the next round. If 2 or more candidates tie for the lowest number of votes, the person excluded from the next round will be resolved by lot. In this instance the names of the 2 candidates will be placed in a suitable container and the Council’s Electoral Officer will draw a name from the container and this person will be excluded from the next round.

7.5. A second and further round(s) of voting will be conducted if necessary in the same way as described above.

7.6. In the event of an equality of votes for the 2 remaining candidates the person excluded from the next round will be resolved by lot, and the remaining candidate will be declared to be the Chairman.

8. If System B is adopted the actual vote will be conducted as follows.

8.1. Nominations for the position of Chairman will be called for which must be supported by a seconder (being a different person) both of whom cannot be the person being nominated. A Councillor can nominate more than one person.

8.2. Nominations will then be closed.

8.3. The only round of voting will then be undertaken by show of hands and with only one vote per Councillor (i.e. 9 in total).

8.4. If 2 or more candidates tie for the most votes, the tie is resolved by lot(s) and the remaining candidate will be declared to be the Chairman.

Decision Making Process

9. Under the Local Government Act 2002 (LGA) Council has a specified power and mandate to establish such committees, sub-committees and other subordinate decision making bodies that it considers appropriate. Therefore, staff do not believe that the decision making process contained within the LGA apply in such instance.

Recommendations

That Council:

2. Resolves to adopt voting system A for the election of the Chairman of the Corporate and Strategic Committee as detailed in Schedule 7 Part 1 Section 25(3) of the Local Government Act 2002.

3. Confirms that in the case of determination by lot the method used shall be for the Governance and Corporate Administration Manager (Leeanne Hooper) to draw the name of the person to be excluded from the next round of voting from a suitable container with the Group Manager Corporate Services acting as scrutineer during this process.

4. Appoints Councillor______________ as Chairman of the Corporate and Strategic Committee.

Leeanne Hooper

Governance & Corporate Administration Manager

Paul Drury

Group Manager

Corporate Services

Attachment/s

1 View

Corporate & Strategic Committee Terms of Reference

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 September 2012

SUBJECT: Adoption of the Audited 2011-12 Annual Report

Reason for Report

1. The purpose of this paper is for Council to resolve to adopt the 2011/12 audited Annual Report, and to authorise the signing of this report.

Background

2. The draft Annual Report 2011/12 was considered by Council on Wednesday 29 August 2012 and adopted for audit. Now that the audit has been completed it is necessary for Council to consider the 2011/12 Annual Report, for formal adoption and publication.

3. The draft ''printer's proof'' of the Annual Report (attached under separate cover), includes a shorter version of the Chairman and Chief Executive’s report, as the progress against the main strategic issues is included in the new section reporting on the “Right Debate” issues.

4. This draft ''printer's proof'' will be proof-read over the next week and subsequent to Council approval will be printed in-house, and will be covered and bound externally by a printer. About 75 copies will be sent out to interested parties during mid October 2012.

5. Section 98 of the Act states:

(4) A Local Authority must, within one month of the adoption of its Annual Report, make publicly available:

(a) its Annual Report; and

(b) a summary of information contained in its Annual Report

(5) The summary must represent, fairly and consistently, the information regarding the major matters dealt with in the Annual Report.

6. Section 99 (2) states that the summary Annual Report must contain the Auditor's report on whether the summary represents, fairly and consistently, the information regarding the major matters dealt within the Annual Report.

7. The Summary Annual report covering the previous financial year ending 30 June 2011 was included in the daily newspapers. This approach is considered to be an effective method to advise the public on Council’s performance against the Plan and it is proposed to again include this year, the Summary Annual Report for year ending 30 June 2012 in the daily newspapers – on Saturday 20 October 2012. This date is within the statutory timelines for publication of Annual Report results after approval by Council.

8. Both the Annual Report and Summary Annual report will be published on Council’s website no later than Tuesday 24 October 2012.

Hawke’s Bay Regional Investment Company (HBRIC)

9. At its Board meeting on 20 September 2012 it is proposed that the HBRIC Board will approve the audited annual statements for year ending 30 June 2012. HBRIC’s group accounts which include the Port of Napier Limited (PONL) have already been included in Council’s Annual Report.

Audit

10. Discussions with Audit New Zealand have established it is their expectation to be able to present a finalised audit report to Council at its meeting on Wednesday 26 September 2012.

Favourable Operating Variance 2011/12 and the impact on operating cash balances

11. Council’s general funded operating statement (attached) shows the actual operating result for the financial year ended 30 June 2012 to be $69,000 surplus. This compares to an Annual Plan budgeted deficit of $309,000.

12. The following points are worth noting after analysing the figures and notes in the general funded operating statement.

12.1. Funds needed to be set aside to fund the carry forward of expenditure of $287,000 from 2011/12 to 2012/13.

12.2. Council resolved at the meeting on Wednesday 29 August 2012 that $187,253 representing the profit on external work undertaken by Council's Operations Group for the year ending 30 June 2012 would be transferred to Council as a dividend. This amount increased the funding available in Council’s cash operating balances.

Decision Making Process

13. Council is required to make every decision in accordance with provisions of Part 6, sub‑part 1 of the Local Government Act 2002 (the Act). Staff have assessed requirements contained in the sections of the Act in relation to this item and have concluded that the decision making provisions of the Act do not apply as the Annual Report is a statutory report required to be adopted by Council no later than 31 October 2012, under Section 98 of the Act.

14. Council must, within one month after adoption of its Annual Report, make copies available to the public.

Recommendations

That Council:

1. Adopts the 2011/12 Annual Report, under Section 98 of the Local Government Act 2002, and to authorise the Chairman and Chief Executive to sign the Annual Report on behalf of Council.

2. Amends the Council's Policy Handbook Section 2.2.2 to reflect the above resolutions.

John Peacock

Corporate Accountant

Paul Drury

Group Manager

Corporate Services

Andrew Newman

Chief Executive

Attachment/s

1 View	Reconciliation of Favourable Variance from Annual Plan to Actual Underlying Surplus/(Deficit) at 30 June 2012
2	HBRC 2011-12 Annual Report for Adoption		Under Separate Cover

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 September 2012

SUBJECT: Recommendations from the Corporate and Strategic Committee

Reason for Report

1. The following matters were considered by the Corporate and Strategic Committee on Wednesday 12 September 2012 and are now presented to Council for consideration and approval, along with additional financial information relating to the Trees on Farms proposal.

2. At the 12 September Corporate and Strategic Committee meeting, the provision to invest in the first year of Regional Afforestation Project was confirmed subject to further financial information being provided to justify the Scheme. This paper provides that further information.

Supplementary Financial Information on the Trees on Farms Proposal

3. This report therefore seeks Council’s endorsement of the resolutions adopted by the Corporate & Strategic Committee.

Background

4. The September committee report outlined the cumulative impact on projected Long Term Plan (LTP) returns. On the basis of Farmer feedback undertaken as part of the due diligence process staff propose that a fair rate of return for the project in the current financial environment should be 5.5%. This compares with 6.5% provided for in the LTP 2012/22 budgets for the 2012/13 year. The financial impact of the reduction in return was $3000 and that this could be met by the investment risk reserve.

Trees on Farms Regional Afforestation Project

5. The Trees on Farms investment currently assumes Council makes a return from selling carbon for the first ten years from forests established. If the required investment return is not made due to a sustained very low carbon price then there is the option for Council to take a share in the harvest stumpage.

6. Both the current carbon price and the likely costs of money to fund the Trees on Farms investment are linked to global and New Zealand economic conditions. When economic conditions are slow or recessionary the cost of money and the carbon price are more likely to be low. If economic conditions are buoyant then both indicators are likely to be higher.

7. The financial strategy in the LTP 2012-22 allows for the provision of an investment risk reserve which could be used by Council to cushion the difference between the actual returns achieved on investments and those returns assumed by the LTP. This investment risk reserve is able to offset a reduction in returns of between 1% - 1.5%.

8. It is proposed that Trees on Farms contracts with land owners will include a periodic rate of return review clause. This is a risk management option that will allow an assessment of market rates of return to ensure that the Council will continue to receive its investment return should the cost of money alter significantly over time. Should the cost of money to Council go above the Trees on Farm rate of return plus 1.5% (the maximum available through the investment risk reserve) the Trees on Farms contractual review would take place.

Winter 2013 planting targets

9. To deliver the winter 2013 planting targets staff intend to assist forest establishment on 2-3 larger farming operations with which staff have had ongoing discussions over the last 12-18 months.

10. Budget provision has been made for establishment for the winter 2013 planting programme at the $2000 per hectare establishment cost. However where possible for the winter 2013 planting programme forest establishment investments will be made with establishment costs of $1000-1500/ha. This will allow the ToF programme to get underway and also increase the likelihood of Council’s successful return on investment for the first years planting programme.

Financial impact of failing to achieve a 5.5% rate of return

11. There are a wide range of factors that will influence Council’s ability to achieve its targeted return for Trees on farms projects. The more significant of these include global economic and political factors that Council cannot influence.

12. The table below outlines what the potential returns are from the forest investment based on certain assumptions at different carbon prices. The assumptions include a 300 ha planting program in 2013, future silviculture costs paid for by farmer, a 5.5% IRR and a $10,000/ha stumpage after roading, logging, management and transport costs.

	10 year carbon price static ($5.00/tonne)		10 year carbon price increasing ($5 to $10/tonne)		10 year carbon price increasing ($5 to $15/tonne)
	Principal owing Yr 10	Share of stumpage Yr 30	Principal owing Yr 10	Share of stumpage Yr 30	Principal owing Yr 10	Share of stumpage Yr 30
		($10,000/ha stumpage)		($10,000/ha stumpage)		($10,000/ha stumpage)
Establishment Cost
$ 1,250.00	(350,000)	34%	(105,000)	10%	140,000	0%

$ 1,500.00	(477,700)	47%	(234,000)	23%	10,000	0%

$ 1,750.00	(605,000)	60%	(362,000)	36%	(118,000)	12%

$ 2,000.00	(734,000)	73%	(490,000)	48%	(247,000)	24%

13. The modelling shows that project returns and therefore Council’s need to possibly take a share of the stumpage to meet its 5.5% portfolio IRR are very sensitive to carbon price and forest establishment costs.

14. Where carbon revenue does not make Council’s return on investment target then unless the land user exercises their option to pay back Council’s investment early, the investment and holding costs will need to be carried to harvest.

15. The modelling shows that Council will achieve a 5.5% rate of return on investment based on the assumptions set out in 12, through the sale of carbon and or harvest stumpage share.

Confirmation of Winter 2014 (year two LTP) forest establishment budgets

16. The long lead times to have sufficient land users signed up to the programme (3-6 months) mean that staff will need to be engaged and sign up beginning in January – February 2013 in order to have land confirmed for seedling orders in August 2013 to allow planting to proceed for the year two planting programme in the winter of 2014.

17. Staff will come back to Council in November with the financial impact analysis and staffing options for the investment proposed in year two of the LTP.

Decision Making Process

18. These items have all been specifically considered at the Committee level.

Recommendations

That Council:

Trees on Farms

2. Having considered the further financial information provided in this paper:

2.1 Endorses the Operational Plan for the 2012/13 financial year.

2.2 Endorses the finalisation of a Carbon Trading Strategy and Policy based on the framework presented in “HBRC – An implementation approach and plan for market risk management for trees on farms programme from C02 NZ Ltd Partnership”.

2.3 Confirms the 2012-13 Trees on Farms budget provisions for planting and engaging staff.

2.4 Agrees an average rate of return of 5.5% across the Trees on Farms portfolio for contracts that will be negotiated for planting that is to occur in the 2013 winter, reflecting Council’s cost of money and the significant environmental benefits of the programme.

Hawke's Bay Local Authority Shared Services

3. Instructs the Chief Executive to liaise with staff from the region’s territorial authorities in developing the initial documentation for the establishment of a Hawke’s Bay Local Authority Shared Services company, and to bring this back to Council for further consideration.

National Policy Statement for Freshwater Management – Implementation Programme

4. Adopts the Implementation Programme for the National Policy Statement for Freshwater Management.

Campbell Leckie

Manager Land Services

Mike Adye

Group Manager

Asset Management

Andrew Newman

Chief Executive

HAWKE’S BAY REGIONAL COUNCI

Wednesday 26 September 2012

SUBJECT: Ruataniwha Water Storage Project Feasibility

Reason for Report

1. The purpose of this briefing paper is to present the Ruataniwha Water Storage Project: Feasibility Report to Council. The report brings together the findings of a wide range of specialist reports that have looked at aspects of technical feasibility, environmental, social and cultural studies and the economic viability of water storage options in the Ruataniwha Plains.

2. The Feasibility Report is presented to Council at today’s meeting for the purpose of allowing Council to formally receive the information. It is expected that decisions will be made at the Council meeting of 31 October 2012. This allows a five-week period (until the 31 October Council meeting) for the Feasibility Report, and subsidiary reports, to be considered by Councillors.

3. The Ruataniwha Water Storage Project: Feasibility Report to Council is circulated under separate cover.

4. At its 31 October meeting Council will be asked to decide on whether or not the Ruataniwha Water Storage project should proceed to the resource consenting stage. When making this decision Council should be particularly mindful of the technical, environmental, social and cultural aspects for the Feasibility Report as these will be critical considerations in determining resource consent approval under the Resource Management Act. An assessment of the economic viability of the water storage project has been completed also and is part of the Feasibility Report. Should the project proceed to consenting, there will be subsequent opportunities for stakeholder and community engagement in the formal phases associated with that statutory process.

5. This briefing paper provides a summary of the findings of the four teams that have examined in detail various aspects of the proposed project:

5.1. Hawke’s Bay Regional Council Core Project Team

5.2. Ruataniwha Water Storage Leadership Group

5.3. Ruataniwha Water Storage Stakeholder Group

5.4. Hawke’s Bay Regional Investment Company.

6. The paper sets out the background to the project, overviews the conclusions of the three foundations for feasibility, and then reports on each of the teams’ findings, before identifying the next steps in the process.

Background

7. It has become apparent over the past few years that there is an issue in the Tukituki catchment with the availability of water for irrigation at times of the year when it is most needed. The occurrence of four consecutive drought years in 2006-2009 exacerbated the challenge for Hawke’s Bay Regional Council of sustainably meeting demand for water, at the same time as managing water quality in the catchment.

8. In 2007, 153 water take consents in the Tukituki catchment were renewed through the public notification process. Due to uncertainty over the sustainability of these takes the consents were granted for relatively short durations of five years, meaning they are due for renewal through 2013-2015. Furthermore no new water take consents have been granted since 2007 within the Tukituki catchment.

9. The economic impact of a four-year drought, together with a lack of available water, has meant little or no prospect of additional land development in the catchment, constraining the potential for economic growth for a substantial area of Hawke’s Bay. As climate change forecasts are for a drier Hawke’s Bay HBRC recognised the need to take a lead in identifying approaches to managing water for the long term benefit of both the community and the economy, while protecting or enhancing environmental values.

10. HBRC talked to a wide range of people and this culminated in the development of the Hawke’s Bay Land and Water Management Strategy 2011, setting out the non-statutory framework for how water should be managed in the region. At a similar time the National Policy Statement on Freshwater Management was introduced and is being incorporated into the regional planning framework.

11. In addition to these higher level considerations, since 2008 HBRC has focussed significant human and financial resources and attention on the Tukituki catchment and Ruataniwha Basin. This is because HBRC acknowledged that the existing situation is not sustainable and is impacting upon not only the economic potential for the area but also on the water quality of the Tukituki River

12. HBRC has undertaken a full range of studies within the Tukituki catchment and Ruataniwha Basin:

12.1. The Pre-feasibility Study of Water Augmentation Opportunities, completed in June 2009, determined that it was possible to capture or store surplus water falling in the Ruataniwha Plains and flowing in the rivers during the wetter times of the year, for use during the drier times.

12.2. An Advanced Pre-Feasibility Study saw the number of potential dam sites decrease and a shift from considering only land-based storage options to consideration of in-tributary options also. It was during this stage that the Leadership and Stakeholder Groups were established.

12.3. The full Feasibility Study began in January 2011. The purpose of this study has been to undertake sufficient investigation and assessment of effects to be able to establish the technical and environmental feasibility, and commercial viability, of the development of a storage dam at the Makaroro site; and the associated supply distribution to the farm gate across the proposed irrigation zones making up the likely Ruataniwha Plains service area.

13. HBRC staff are preparing a Change to the Regional Resource Management Plan for the Tukituki catchment that will be considered by Council for public notification in a separate agenda paper in November 2012. This plan change will include allocation limits for surface water and groundwater, revised minimum flows and limits for water quality. Should Council adopt the Proposed Plan Change in November it will proceed to public submission, irrespective of any decisions that are made on the water storage project, as the matters covered in the plan change need to be reviewed in any event.

14. At this time HBRC staff consider that sufficient investigations have now occurred to provide comprehensive, high quality information for Council to decide whether or not the water storage project should proceed to the detailed design and consenting phases. This paper provides an overview of these investigations, ahead of Council decisions in October.

Feasibility Study – at a glance

15. The full feasibility phase of the Ruataniwha water storage investigations encompasses three broad categories: technical feasibility; environmental, social and cultural feasibility; and economic viability. In order for the project to finally proceed all three categories must be investigated and Council must be satisfied that issues are addressed and/or mitigation options identified. A synopsis of the conclusion for each category is described below, with more comprehensive information available in the full feasibility study. The technical and environmental, social and cultural aspects will be of most relevance in determining whether or not the water storage project obtains the required resource consents.

Technical Feasibility

16. These studies have encompassed the geotechnical and design options for the Makororo Dam site. Details of the structure include construction of a Concrete Faced Rockfill Dam design, providing for a dam structure approximately 83 m high. This would create a 6 km long reservoir with a storage volume of 90 million m³. A reservoir outlet structure will provide for a peak irrigation release of 11.1 m³/s, with the ability to release a flushing flow of up to 21 m³/s. The spillway configuration proposed will cater for all reasonably foreseeable flood events (e.g. events exceeding a 200 year Annual Exceedence Probability). A single hydro electric power station at the base of the dam is proposed to provide a generation capacity of 6.5MW. A single irrigation intake located on the Waipawa River, approximately 22 km downstream of the dam, will collect flows released from the dam and distribute the water via a headrace to a secondary distribution network.

17. The Core Project team and their consultants have addressed seismic risk, optimal storage capacity of the dam and reservoir and the distribution system for the stored water.

18. Overall, the Core Project Team and Project Engineers consider that an appropriate level of site and geotechnical investigations have been undertaken for this phase of feasibility and that those investigations have shown the proposed Scheme, as presented in the Technical Feasibility Study Report, to be technically feasible.

Environmental Feasibility

19. The environmental impacts of the water storage project will be at the heart of the resource consenting process under the Resource Management Act. A number of environmental studies were carried out as part of the feasibility phase of investigations, providing a comprehensive analysis of the environmental, social and cultural issues associated with the project.

20. The studies can be grouped into five distinct areas:

20.1. Modelling studies – land use intensification, water quality and groundwater/surface water interaction

20.2. Ecology assessments – aquatic and terrestrial

20.3. Cultural effects assessments

20.4. Other effects assessments – road infrastructure and traffic, noise, archaeological, social impacts, recreation, landscape and visual effects

20.5. Integrated mitigation and offset options.

21. Further work is needed to confirm the conclusions reached in some areas, but no fatal flaws are anticipated that would call the entire project into question. These additional works will be carried out prior to the lodging of resource consents.

22. The Ruataniwha Stakeholder Group was established in April 2010 with representation from a wide range of organisations, tasked with providing guidance to the development of the storage project in a collaborative way, with specific emphasis on environmental, social and cultural elements of the project. Commentary from the Stakeholder Group is covered in a section below headed ‘Ruataniwha Stakeholder Group – Project Assessment’.

23. Overall, the Core Project team considers that the water storage project is environmentally feasible. Subject to clear regulatory limits of water allocation and nutrient input limits the water storage project can deliver improved summer river flows, and land use intensification can be accommodated within a limits setting regime; recognising that there are cost implications associated with achieving environmental gains. These have been factored into the overall project budget.

Economic Viability

24. An assessment of the financially feasible water distribution price is critical from both a water supply and water demand perspective. On the supply side the water distribution price needs to be at a level such that returns from the dam and distribution infrastructure are sufficient to attract investment to fund the initial construction cost and ongoing operational costs of off-farm infrastructure. On the demand side, the water distribution price needs to be assessed such that farmers can afford to purchase the water to intensify and convert farmland in the Ruataniwha Plains, unlocking regional economic benefits.

25. The wider economic benefits of the Project to Hawke’s Bay are important to understand to foster well informed support for the project. Direct on-farm and indirect financial, economic resilience and employment benefits to the region are a key component of the social benefits also.

26. The Hawke’s Bay Regional Investment Company (HBRIC) has monitored, reviewed and guided financial feasibility for the Project and their findings are presented in a section below headed ‘Hawke’s Bay Regional Investment Company – Project Assessment.’ HBRIC has been supported in this by BNZ Advisory, whom they appointed as the financial advisers to the RWS Project. The BNZ Advisory team have brought significant capacity, with expertise in complex infrastructure assessment and financing associated with water infrastructure projects.

27. The Core Project Team has assessed that the Project is financially feasible from a combination of supply side cost assessment, on farm economics, investor assessment and modelling and demand assessment, provided the ultimate price of water to the farm gate operates within a zone of 20-30 cents per cm³.

Hawke’s Bay Regional Council Core Project Team – Project Assessment

28. The Hawke’s Bay Regional Council Core Project Team (the ‘core team’) was established in mid 2009 to enable an explicit focus on various development initiatives, including the Ruataniwha Water Storage Project. Reporting to HBRC’s Chief Executive, the core team has been lead since January 2011 by Graeme Hansen and has focussed on the engineering, infrastructure costs and environmental aspects of water storage.

29. The core team directly assisting Graeme Hansen has included Larissa Coubrough and Monique Benson of HBRC, Stephen Daysh of EMS Ltd., Olivier Ausseil of Aquanet Consulting Ltd. and David Leong and Mark Taylor of Tonkin and Taylor Ltd. In addition Andrew Newman, Grant Pechey and Michael Bassett-Foss of HBRC have maintained a focus on the initial economic and business development tasks associated with the project. Andrew Newman, Graeme Hansen and Larissa Coubrough have managed the relationship with the Ministry of Primary Industries relating to central government funding.

30. The Core team has coordinated the strands of work required to bring together the full feasibility study for such a large project and has reached a series of conclusions regarding the Project that will be presented to Council at its 31 October meeting as recommendations. While the final wording may differ slightly in the 31 October agenda paper the Core Team recommendations will broadly be along the following lines (with additional recommendations to be added should the team determine):

30.1. An appropriate level of site and geotechnical investigations have been undertaken for this phase of feasibility and have shown the proposed Scheme, as presented in the Ruataniwha Plains Water Storage Project: Feasibility Report to Council (September 2012), to be technically feasible.

30.2. The Core team concurs with the recommendation from Tonkin and Taylor Ltd that a number of further works and optimisation opportunities need consideration as part of the next phase of work, post feasibility. These refinements will either be considered as part of a discrete section of work or form part of a procurement process that may be undertaken concurrently with the resource consenting process.

30.3. The Ruataniwha Water Storage Project is feasible from an environmental perspective. Areas requiring additional investigations ahead of the resource consenting process are:

30.3.1. Discussions with Te Taiwhenua o Tamatea and Te Taiwhenua o Heretaunga on opportunities for realising the potential social and economic benefits for tangata whenua and their ongoing involvement in monitoring;

30.3.2. Further assessment of the environmental effects relating to sediment retention and the consequent interruption of downstream gravel supplies; and development of an Erosion and Sediment Control Plan

30.3.3. Refinement and confirmation of the irrigation command area

30.3.4. Planning assessment of relevant provisions of the District Plans of Central Hawke’s Bay and Hastings

30.3.5. Further analysis of land use intensification effects on water quality in the catchment and evaluation of on-farm measures to manage phosphorous effectively

30.3.6. Additional work to identify the margin of error the SPASMO and OVERSEER inputs have contributed to modelled nutrient predictions for land use intensification

30.3.7. Further scenario testing focussing on extent that current surface water and groundwater consent holders may move to stored water, and development of incentives package to assist potential movement

30.3.8. Refinement of offset and mitigation package proposed, particularly as it relates to pest management in identified enhancement areas.

30.4. The Core team notes that the outcomes/findings of this additional work are not anticipated to identify any environmental flaws that would affect the feasibility of the project.

30.5. The Core team recommends the retention of the Ruataniwha Stakeholder Group as an important community-based reference group throughout the consideration of the Tukituki Choices document, the development of the Tukituki Plan Change and any resource consent applications that are prepared through the balance of 2012 and 2013.

30.6. Ongoing engagement is recommended with the Land-use Intensification Working Party, the Pan Sector Group, and with all affected landowners through the balance of 2012; and, where appropriate, into the detailed design and consenting phases.

30.7. The Ruataniwha Water Storage Project is feasible from a financial perspective.

Leadership Group – Project Assessment

31. The Leadership Group was established in April 2010 as an independent advisory group to champion, govern and guide the feasibility project; and to ensure that the correct market, economic, commercial, risk and benefit/cost questions were asked and systematically addressed. Members of the Group include representatives of the business and farming communities, iwi and HBRC elected officials. The Group is chaired by Sam Robinson, a Central Hawke’s Bay farmer and Chair of AgResearch, and has met ten times to advise on process at key points.

32. The Leadership Group held a final meeting on 19 September 2012 and concluded that:

Following a high-level review of

· Water demand modelling,

· Technical feasibility,

· On and off farm economic viability,

· Regional economic impacts,

· Some understanding of the environmental issues,

· AND considering potential investing parties to the scheme,

· SUBJECT to both Crown and HBRC “patient capital” being invested in the scheme,

the RWS Leadership Group agree that there is a business case for a water storage scheme in the Tukituki Basin and recommend that the HBRC proceed to consent the proposed scheme.

33. Concurrent with the consenting process the Leadership Group also recommend that:

33.1. work continue to fine-tune the technical, operational and business case for the scheme

33.2. work continue developing an ideal ownership and investor model

33.3. initial work be undertaken to attract appropriate investors to fund the proposed scheme.

Ruataniwha Stakeholder Group – Project Assessment

34. The Ruataniwha Stakeholder Group was established in April 2010 to share information and identify and explore community expectations on water management for the various uses in the Upper Tukituki Catchment, specifically on the Ruataniwha Plains. The groups’ role has included assisting with identification of the value of water to the whole community and in coordinating more effective stakeholder input into water management decision-making processes for the Plains in a collaborative way, with specific emphasis on environmental, cultural and social elements of the storage project.

35. The Stakeholder Group is chaired by Debbie Hewitt, a Director for Horticulture NZ and a Central Hawke’s Bay landowner, and includes representatives from Fish and Game, Forest and Bird, the Department of Conservation, Central Hawke’s Bay District Council, and the Tukituki Liaison Group, as well as Iwi, landowner, recreation club and water user group representatives. They met seventeen times up until 31 August 2012 throughout the full feasibility phase of the project.

36. At its 31 August meeting the Group confirmed its understanding of the methodology used for assessing environmental effects, and acknowledged the range of studies undertaken and their review and input into the scope of the studies programmed.

37. A summary of the stakeholder matrix that was agreed upon at their final meeting is attached.

38. Group representatives from Fish and Game, Forest and Bird, Te Taiao Environmental Forum and the lower Tukituki, making up approximately 20% of the Stakeholder Group, expressed the opinion that a decision on project feasibility should be deferred until the further monitoring work identified is completed. The Core Project team does not support this recommendation. The results of the further modelling work proposed will be known before any resource consent applications are lodged and will be included in the information accompanying the resource consent applications.

39. A sub-group of nominated members of the Ruataniwha Stakeholder Group, together with HBRC staff and consultants, was established in November 2011 as the Land Use Intensification Working Party, specifically to:

39.1. Provide an interactive forum to follow the development and application of the Ruataniwha Land Use Intensification Model;

39.2. Provide input into the development and testing of potential on-farm and off-farm means of managing and mitigating the effects of existing land use and intensification.

40. The Working Party prepared a report summarising their key findings and recommendations for future work around land use intensification. This was presented to the Stakeholder Group on 31 August 2012 and is attached.

Hawke’s Bay Regional Investment Company – Project Assessment

41. As part of its adoption of the 2012-2022 Long Term Plan (LTP), Council adopted the following resolutions in regard to the Ruataniwha Water Storage (RWS) Project.

37. Makes a provision of $80M for an equity stake in the Ruataniwha Water Storage infrastructure project. The final decision to invest will be subject to decisions as follows.

37.1 the project is recommended as being commercially feasible by the Hawke’s Bay Regional Investment Company and clearly meets the Council’s environmental objectives

37.2 Council has approved feasibility and undertakes further consultation with the community before proceeding

37.3 the project is consented, and the project is bankable as demonstrated by the financial commitment from other investment partners compatible with HBRIC.”

42. The views and recommendations from the Hawke’s Bay Regional Investment Company Ltd (HBRIC Ltd) are attached.

Next Steps

43. There will be a five week period between this meeting and the next Council meeting on 31 October 2012 for Council to consider its position in respect of the advice it has received in terms of:

43.1 the full feasibility report

43.2 the full range of technical reports underpinning the feasibility report, and

43.3 comments received on the Tukituki Choices document.

44. There will also be a further consideration period through the remainder of 2012, to consider, refine and where necessary optimise aspects of the scheme prior to the more formal Resource Management Act processes in 2013. This will provide the opportunity to consider all of the information obtained though the feasibility study, prior to applications for resource consent being lodged in early 2013 if the Project is approved by Council to move on to the next phase.

45. Advice from the Project’s legal counsel suggests that an Environmental Protection Authority (EPA) process, whereby the necessary resource consents are “called in” by the EPA and advanced jointly with the Tukituki Plan Change, would be the most efficient way for the project to be consented within the desired timeframe, should Council approve project feasibility.

46. While the EPA option requires the consent of the Minister for the Environment, it is believed that there are good prospects to secure her consent. Unless extended by the Minister for the Environment the EPA process follows a 9-month timeline, meaning Council would likely have a final resource consenting decision by November 2013, subject only to potential appeals on points of law to the High Court.

47. The EPA process will therefore provide certainty of outcome, one way or another, for the Ruataniwha Water Storage Project by the end of 2013.

Decision Making Process

48. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendation

1. That Council receives the Ruataniwha Water Storage Project Feasibility report.

Andrew Newman

Chief Executive

Graeme Hansen

Group Manager

Water Initiatives

Liz Lambert

Group Manager

External Relations

Attachment/s

1 View	Stakeholder Group - Summary Matrix
2 View	Land Use Intensification Working Party Final Report
3 View	HBRIC Ltd Financial Feasibility Assessment
4	Ruataniwha Water Storage Project Feasibility Report	Under Separate Cover

Stakeholder Group - Summary Matrix

Attachment 1

Ruataniwha Plains Water Storage Project Stakeholder Group

Record of Discussion on the Draft Council Feasibility Report Environmental, Social and Cultural Studies and Community Engagement Sections

31 August 2012

Forest and Bird’s preference would have been for an out-of-stream dam, but acknowledge that economic and geotech issues meant that this was not feasible.

Record of 31 August 2012 Discussion
Draft Report Section	Topic	Stakeholder Group Comments / Position
1.1	Methodology	The Stakeholder Group understands the methodology utilised for assessing and reporting on the environmental, social and cultural elements of the project feasibility.
1.2	Studies Undertaken	The Stakeholder Group acknowledges the range of studies undertaken and confirms their review of, and input into, the scope of these studies.
*Note:* From this point forward (1.3.1) Fish and Game have abstained and will advise their position at a later date, in writing.
1.3.1 & 1.3.2	Feasibility Project Description	The Stakeholder Group understands the scope of the Feasibility Project Description document developed by Tonkin & Taylor to includes the design and operational proposals for the project and that this document has been used as the basis for the various environmental, social and cultural expert assessments reported to Council.
1.3.3	Sedimentation Assessment	The recommendations of Tonkin & Taylor in their sediment assessment report are understood and supported.
1.4.1	Reservoir Water Quality Modelling	The recommendations of NIWA in their reservoir water quality modeling report are understood and supported.
1.4.2	Groundwater / Surface Water Modelling	The Stakeholder Group acknowledges that this is a modelling report which does not include any recommendations for further work, but that the HBRC Core Team is suggesting further flow analysis be undertaken (refer to comments under 1.10 below).
1.4.3	Land Use Intensification Modelling	The Stakeholder Group acknowledges that further work is being undertaken by NIWA and the wider modeling team as set out in Section 1.4.3 and understands that this will be reported prior to any resource consents being lodged for the project. Tom Belford, Grenville Christie, Vaughan Cooper and John Cheyne consider the additional modeling work should be undertaken prior to deciding on project feasibility.
1.5.1	Terrestrial Ecology Assessment	The recommendations of Kessels and Associates in their terrestrial ecology assessment reports are understood and supported.
1.5.2	Aquatic Ecology Assessment	The recommendations of the Cawthron Institute in their aquatic ecology assessment report are understood and supported. Tom Belford and Grenville Christie reserve their support. Dave Carlton does not support the trap and transfer system proposed.
1.6	Cultural Effects Assessment	The recommendations of Te Taiwhenua O Tamatea and Te Taiwhenua O Heretaunga in their cultural effects assessment are understood and supported.
1.7.1	Road Infrastructure and Traffic Assessment	The recommendations of Opus International Consultants in their road infrastructure and traffic assessment report are understood and supported.
1.7.2	Noise Assessment	The recommendations of Marshall Day Acoustics in their noise assessment report are understood and supported.
1.7.3	Archaeology Assessment	The recommendations of Clough & Associates in their archaeology assessment report are understood and supported.
1.7.4	Social Impact Assessment	The recommendations of Taylor Baines in their social impact assessment report are understood and supported.
1.7.5	Recreation Assessment	The recommendations of Opus International Consultants in their recreation assessment report are understood and supported.
1.7.6	Landscape and Visual Assessment	The recommendations of the Isthmus Group in their landscape and visual assessment report are understood and supported.
1.8	Integrated Mitigation and Offset Report	The Stakeholder Group acknowledges that HBRC has developed and costed an Integrated Mitigation and Offset proposal involving four identified projects in this report and the Group understands that there are further opportunities for interested parties to be involved in the focus and implementation of these projects if the Ruataniwha Water Storage project proceeds.
1.9	Land use Intensification Working Party Report	The Stakeholder Group thanks the Landuse Intensification Working Party for the work it has undertaken between January and August 2012 and supports the recommendations of the Working Party as recorded in their report.
1.10	HBRC Core Team Findings and Recommendations	The Stakeholder Group acknowledges the findings of the HBRC Core Team and agrees that their recommendations as outlined below be implemented if project feasibility is confirmed by Council and the project proceeds to a resource consenting phase: That further discussions should be held with Te Taiwhenua O Tamatea and Te Taiwhenua O Heretaunga in relation to: a) How to realise potential social and economic benefits for tangata whenua b) Engagement of tangata whenua in monitoring, improving and enhancing Mauri c) How best to define and recognise any unregistered wahi tapu / wahi taonga; and d) Historic Places Act authority requirements including the development of appropriate Accidental Discovery Protocols. Given the extensive areas of earthworks involved and the critical importance of controlling sediment run off to waterways we recommend that a detailed ESCP be prepared as part of the suite of documents to support resource consent applications if these are lodged. It will be necessary to undertake a full planning assessment if the project is to proceed to a resource consenting phase. The Core Team recommends that: a) The land use/nutrient/periphyton model be expanded to the whole of the Tukituki catchment to provide more detailed outputs, particularly within the Ruataniwha Plains area b) The above expanded model be applied to the current and future land use scenarios developed as part of the feasibility study c) If a decision is made to extend the irrigation area to Zone M, the land use/ nutrient/ periphyton model will need to be extended to that zone, to assess the potential effects of irrigated land uses. d) A comprehensive assessment of the following be undertaken: · the options to mitigate phosphorus losses from land, including livestock exclusion, and · the likely water quality and periphyton outcomes resulting from the implementation of the above mitigation options within the irrigation command areas. Council consider favourably an economic incentive package which enables existing irrigators to transfer to the storage scheme (if it is built) on a cost effective basis for their businesses. In conjunction with development of such incentives, we recommend further work be undertaken on the construction of the “no migration” water flow scenario. The constant residual flow from the dam of 90% of MALF combined with the proposed flushing flow volume provision of 1.5 million m³ per annum is a significant amount of water and we recommend that Cawthron and Tonkin & Taylor be jointly tasked with assessing the most effective utilisation of this water volume in terms of overall river ecology. Tom Belford reserves his position.
2.1 to 2.7	Sections Recording Community Engagement	The Stakeholder Group acknowledges and confirms the record of community engagement processes undertaken by HBRC as set out in these sections.
2.8	Recommendations for Further Community Engagement	The Stakeholder Group ratifies the following recommendations: a) That the Ruataniwha Stakeholder Group be maintained as an important community based reference group through-out the consideration of the Tukituki Choices document, the development of the Tukituki Plan Change and any Ruataniwha Storage Project resource consent applications that are prepared through the balance of 2012 and 2013. Consideration should be given to the addition of other key parties such as representatives of Te Taiwhenua O Heretaunga, Hastings District Council, Te Taiao Hawke’s Bay Environment Forum, and the Ministry of Primary Industries, if it is decided to maintain the group through this period b) That the Land Use Intensification Working Party be reconvened to provide input into the resource consent condition drafting process associated with land use intensification management and monitoring conditions if the project proceeds through to the consenting phase later this year. Consideration should be given to expanding this group, recognising that additional expertise may be required. c) That Council engage further with the Pan Sector Group if the project develops past feasibility into a consenting phase, in particular to seek input and assistance with the development of appropriate land use intensification management and monitoring conditions. d) That detailed one-on-one meetings are held with all landowners affected by the dam/reservoir and distribution headrace canal so that issues can be discussed and addressed in the design of the scheme prior to any application for resource consent being lodged.

HAWKE’S BAY REGIONAL COUNCIL

Wednesday 26 September 2012

SUBJECT: September 2012 Work Plan - Looking Forward

Reason for Report

1. This report is provided in order to update Councillors about significant work activities under way over the next month in each area of Council.

Group	Area of Activity	Activity Status Update
Asset Management	· Biosecurity	Regional Pest Management Strategy and Regional Phytosanitary Pest Management Strategy Hearing held 15 February 2012. Council adopted Hearings Panel recommendations 29 Feb. One reference made to Environment Court. Mediation held 12 September 2012. Further mediation agreed to. Staff working through options for possible resolution.
	· Land Management	A proposal for how the Land management team will influence the uptake of best farming practices in intensive land use areas is being developed and will be brought to Council for their consideration in October. The proposal will include the alignment of a proportion of the RLS subsidy scheme to support the initiative.
	· Infrastructure disaster insurance	A review of infrastructure disaster insurance arrangements is underway. LAPP held meetings of Members in May & July. Staff expect to report to Council on the issue by November 2012.
	· Tutira Properties	Staff are progressing discussions with a number of parties on various options. Staff expect significant activity on this during September.
	· Regional Forestry project	Commitment to year 1 of the project to be considered by Council at this meeting. Further work on future years ongoing and expected to be grought to Council for consideration in November.
	· Regional open spaces review	A project to identify and record HBRC open space sites and their values, articulate the management principles and levels of service for those spaces, and identify opportunities for the development of those spaces for public enjoyment is underway.
	· Upper Makara Scheme	Review of options for flood protection of the Makara valley and associated funding expected to be brought to Council for consideration in October. It is expected that agreed works will be constructed over the 2012/13 summer.
	· Ohuia Scheme	Ongoing problems are being experienced with outlet pipes from the Ohuia Pump Station. Staff have discussed options with the key ratepayer. It is likely that the preferred option will be replacement of the pump station. A proposal will be prepared for consideration by the ratepayers and Council in October.
	· Collaboration with Department of Conservation, Greater Wellington & Horizons	A number of opportunities for improved service delivery and for cost savings have been identified. Work plan next 12 months agreed by CE’s on 4 September. Staff progressing a number of opportunities. Report to Council planned for October.
Resource Management	· Appeal mediation processes underway for	Twyford This appeal has been withdrawn and the file is now closed. Separately HBRC is working on an MOU to support investigations into global consent/ water sharing strategies that can assist in more efficient / effective use of the available water.
		AFFCO Appeal settled between parties but still to be signed off by Environment Court.
		Mexted & Williams Environment Court hearing is still pending. There has been discussion between parties with suggested changes being made to the proposed development. This would lessen some of the impacts. The appellants have not signalled their response to these changes. Lawyers for the applicant have lodged an appeal to the High Court on the permissibility of the coastal hazard evidence, which may or may not be pursued.
		NCC BTF plant The High Court has delivered its decision on the Church Appeal. It has returned the matter to the Environment Court to reconsider the question of whether the appeal was lodged on time. The appeal is not live at this time but if it is accepted as having been lodged on time, or if the time limit for lodging is waived then it will become live and the matter can then proceed to the Environment Court. A meeting was held between parties on 14 September 2012 in response to a request that Mr Church be heard on his concerns. While some agreement was found on the monitoring following flushes of the BTF, Mr Church did not change his stance at the meeting.
	· Large Consent processes/applications	Poukawa Discussions ongoing with applicants and stakeholders pre notification decision. Limited notification pending.
		Tukituki and Karamu surface water takes Common expiry date for these catchments of 31 May 2013. Advice of the need to apply for new consents has been sent out. S 124 applies if these are lodged before 1 December 2012.
Resource Management	· Science Activities	Groundwater Staff continue to work closely with the planning team to develop policy associated with water allocation and water quality management for the Tukituki plan change. Groundwater scientists are working collaboratively with experts from GNS Science to undertake water quality modelling within the Ruataniwha Basin, using Council’s groundwater flow model.
		This work focuses on use of the model to identify contaminant transport pathways and travel times. This work is a key component of the wider nutrient modelling work for the Tukituki Plan Change and Ruataniwha storage projects.
		Surface Water Quantity Staff are continuing to support the Planning team with the Tukituki, Mohaka and Heretaunga Plan Change. The “hundred point” nitrate survey is planned before the end of the month in the Ruataniwha Plains. Concurrent water quality and gauging results will inform a flow/loading model that will be developed for the Ruataniwha plains to support the plan change. Reports 12 and 9 have been completed for the Tukituki Choices. Work is frantically underway to complete hydrology procedures within Promapp for ISO application. Thomas Wilding is progressing developing a plan on how to manage low flow setting within the Heretaunga Catchment.
		Rob Christie is project managing the eight national environmental monitoring standards currently under development. These are due for completion at the end of the year (under budget). Rob Christie has been drafted to project manage the modelling inputs and outputs required for the RWS and plan change. The field team continue to collect rainfall, climate and river flow data from across Hawkes Bay. .
Resource Management	Plan change · Tukituki Choices · Heretaunga Plan Change Field work · Rivers · Lakes · Coastal	Surface Water Quality and Ecology Staff are continuing to support the Planning team with the Tukituki, Mohaka and Heretaunga Plan Change. Tukituki Choices public launch was successful with a lot of valuable feedback in Waipawa (11/09/2012), Havelock North (12/09/2012) and Waipawa (13/09/2012). The team is still working on the main report and collating and writing all supporting documents. The “hundred point” nitrate survey is planned before the end of the month in the Ruataniwha Plains. Concurrent water quality and gauging results will inform a flow/loading model that will be developed for the Ruataniwha plains to support the plan change. Field sampling has been progressing monthly and the team is on target and successfully finishing the runs on schedule. The SoE lakes programme for Lake Oingo and Runanga will finish in October 2012 and bimonthly water quality sampling will start in Lake Waikaremoana and Lake Waikareiti. The Waikaremoana monitoring buoy gets upgraded with a deep dissolved oxygen probe and in October 2012. The nearshore water quality monitoring programme is extending north to Mahia this year. This will be implemented in the next sampling round. The coastal ecology projects are ongoing and progressing well. Coastal buoy mooring has been developed and deployment is expected at the end of October 2012. The effects of the recent algal bloom (red tide) are being investigated, divers collected infauna cores and sediments for analysis. The results are still to come.
Resource Management		Air & Climate A presentation of the results of air quality monitoring for this winter compared to previous years is planned for the October meeting of the Environment and Services Committee. Preparation is underway to do PM₁₀ screening monitoring in Waipawa. Waipawa Primary School has agreed to host the equipment and the instruments are currently undergoing servicing. New PM₁₀ mobile monitoring equipment (DustTrak) has been purchased and will be temporarily installed at the Marewa monitoring site to compare readings with beta attenuation monitors. Climate and climate change information is being provided to support plan changes and water storage work as and when needed. Co-ordination and input to the monthly SoE reports is ongoing.
		Land Science Ongoing regional soil mapping (S Map). Currently mapping south eastern coastal strip. Ongoing Taharua catchment investigation. Awaiting report on loss of ecosystem services investigation arising from April 2011 storm. May provide some insight into the value of ‘Trees on Farms’ Fiona Cameron has begun characterisation of wetlands in the Heretaunga catchments. Regional soil quality monitoring project to continue as part of Land SOE requirement. This year looking at intensive pasture. Ongoing biodiversity characterisation of Ngaruroro catchment.
		Ongoing assistance to policy with biodiversity strategy development. Ongoing assistance with water storage programme and Tukituki Choices document (plan change) and Mohaka plan change. Planning for upcoming work in the Heretaunga catchment (Ngaruroro and Tutaekuri catchments)
Resource Management	· Biodiversity Strategy	The core staff team have met several times now and have approached a range of people to gauge interest in participating in the strategy development. We intend to run a small collaborative process that involves a working group of core staff and external technical expertise from key local agencies and stakeholders who report regularly to a wider reference group with broader community representation. The reference group would be the key advisory panel to HBRC in the development of the strategy. An initial meeting of the working group is scheduled for early October which will begin developing a framework and approach. This meeting will also be used to guide any technical investigations that are required.
Strategic Development	· Land and Water Management Strategy	Strategy implementation to be ongoing, including via 2012-22 LTP.
	· RPS Change to incorporate elements of Land and Water Management Strategy (Change 5)	Revised version of RPS Change 5 presented to workshop and Regional Planning Committee on 19 September. Work programmes aiming to publicly notify Change 5 in early October 2012. Refer to recommendations from the Regional Planning Committee elsewhere in this agenda.
	· Implementation programme for giving effect to 2011 NPS for Freshwater Management	NPSFM Implementation Programme presented to Corporate and Strategic Committee on 12 September. Refer to recommendations from that Committee meeting elsewhere in this agenda Programme must be adopted and published before 12 November 2012. Programme will be reported on annually as part of Council’s future Annual Reports.
	· Plan Change for freshwater management in Tukituki River catchment	Ongoing. Tukituki Choices released for public comment in early September and number of public presentations held. Comments on Tukituki Choices close 5 October. Project programme as per July 2012 Council decision.
	· Plan Change for freshwater management in Greater Heretaunga / Ahuriri catchment	Ongoing. Update presented to Regional Planning Committee on 5 September. Stakeholder engagement initiatives underway as per project programme in August 2012 Council decision.
	· Rivermouth Hazard Areas in proposed Regional Coastal Environment Plan (Variation 1)	Schedule 1 RMA process. Decisions issued 6 June 2012. No appeals lodged. Report to Council alongside whole Regional Coastal Environment Plan approval.
	· Onsite Wastewater change (Change 3 + Variation 3)	Schedule 1 RMA process. Change 3 to become operative from 1 October 2012. Variation 3 pending merging with, and approval of, proposed Regional Coastal Environment Plan.
	· RPS Change to incorporate HPUDS and wider infrastructure matters (RPS Change 4)	Schedule 1 RMA process. 45 submissions and 6 further submissions received. Hearing by end of 2012.
Strategic Development	Ÿ Taharua Strategy and Mohaka plan change.	Ongoing. Update presented to Regional Planning Committee meeting on 5 September. Committee supported in-principle the concept of a ‘catchment management plan’ being a key component of the Taharua plan change. Committee also noted plan change could be ready for Council’s approval mid-2013. Immediate next steps involve further negotiations between major landowners about N mitigation options and responsibilities. For wider Mohaka catchment, supporting science progressing, stakeholder engagement about to be initiated late 2012.
	Ÿ Proposed Regional Coastal Environment Plan plus Change 1 to RRMP	Ongoing. Still pending Environment Court processing to ratify settlement of all appeals. RCEP, plus Variations to be directly reported to Council for approval following Environment Court’s ratification of appeal settlements. Council-approved RCEP plus Variation 1 then referred to Minister of Conservation for approval of provisions relating to coastal marine area.
	Ÿ Heretaunga Plains Urban Development Strategy (HPUDS)	Ongoing implementation as it relates to other actions where HBRC is a lead agency or a partner agency via HPUDS Working Group.
	· Joint Land Use and Natural Hazards Strategy	Ongoing. Draft Joint Strategy Implementation Plan to be discussed by Hawke's Bay Council Planners Forum (mid October), then presented to Hawke's Bay CDEM Group Joint Committee (tentatively scheduled for November 2012 meeting).
	Ÿ Regional Land Transport Programme	The 3 year Regional Land Transport Programme was submitted to the New Zealand Transport Agency on 29 June 2012. Decisions advised from NZTA largely support the RTC’s programme and priorities.
	Ÿ Bus Services	Bike racks have been fitted to a number of buses during the months of August and September. Identification of bus stops on the extension to Route 17 (Hastings, Parkvale, Akina) is being worked through with Hastings District Council. Once this has been agreed to, it is planned that the new service will commence in October/November.
	Ÿ Tech NZ R&D funding as part of the Regional Business Partner partnership with HB Chamber of Commerce	To date from 1^st July 2012 MSI Regional Partner has brought in $501,028.50 grant funding into Hawke’s Bay working with 24 businesses.
	Ÿ Strategic Farming Initiative	Recent focused has been with individual Pan Sector organisations to progress scoping R&D projects and to actively involve in the RWS commercial model.
Strategic Development	Ÿ The Advanced technology Institute (ATI)	The Advanced Technology Institute (ATI), the new high-tech HQ for innovative New Zealand businesses, recently appointed a seven-member Establishment Board. The ATI will be a one-stop shop to help high-tech firms become more competitive by better connecting them with innovation and business development expertise within the institute, around New Zealand and overseas. It will focus on industries with high growth potential such as food and beverage manufacturing, agri-technologies, digital technologies, health technologies, therapeutics, and high-value wood products. The Government has committed $166 million over the next four years to create the ATI, which will be named after the late Sir Paul Callaghan. It will be located in Auckland, the Hutt Valley and Christchurch. Industrial Research Limited (IRL) will be an integral part of the ATI but the ATI’s focus will be broader in scope than the current IRL. The ATI “go live” date has been postponed from 1^st December 2012 and will now be operational 1^st February 2013. The impact on the MSI Regional Partner model in unknown.
	Ÿ Massey Strategic Relationship	HBRC and Massey have agreed a draft MoU that will trigger the recruitment of the jointly funded person to develop the relationship and exploit mutual opportunities. Discussions are planned with the newly created Water Initiatives Centre at Massey.
Corporate Services	· Assessment of selling cash flows from Napier leasehold land	October 2012
	· Financial report covering three months to 30 September 2012	Council meeting October 2012
	Constituency Review: · Public consultation ends · Council to consider submissions	18 September 2012 24 October 2012
External Relations	· Statutory advocacy and liaison	Liaison with consultant on Phase 2 of the Prosperity Study Engagement with Productivity Commission on Local Government Act Reform
	· Liaison with Treaty claimant representatives on Regional Planning Committee	Regional Planning Committee focus on Land and Water Management Strategy insertion into Regional Policy Statement
External Relations	· Community engagement / environmental education	External Relations staff developing the refresh of Council’s Intranet for completion by November 2012. External relations staff liaising with CDEM staff on National Civil defence “Shake Out” Exercise scheduled for 9:26 am on September 26 (during September Council meeting). Work underway on development of promotional material for the launch of the “Wineries Ride” on November 4th. Finalising of technical requirements for webcasting of Council and Committee meetings
	· HeatSmart	Contingency planning for scenario in event that EECA withdraws from clean heat funding. EECA has yet to secure future funding, and existing funding likely to run out next March. HBRC needs alternative incentives in place in order to meet targets.
Operations/ Water Group	Ruataniwha Water storage	· All work programmes across the technical feasibility, environmental feasibility and financial feasibility now complete
		· The final Project Feasibility report will be presented to Council for consideration on 26 September. · A range of further works and optimisation has been identified to be undertaken prior to the end of the year.
	Ngaruroro Water Storage	· The on-farm economic analysis section of work for this project is now to be integrated into a wider application to MPI incorporating the Heretaunga and Karamu plan change project as part of work identified for the 2012/13 year.
	Ÿ Hawke’s Bay Trails	Ÿ The final section of the Landscapes Ride which is on-road cycle lanes on Waimarama Rd from River Road to Craggy Range winery is due to start Sept/Oct with Dec 2012 finish.
		Ÿ NCC out to tender for Taradale/Knightsbridge Taipo Stream concrete section of the Water Ride for Dec 2012 completion. Construction of minor remaining sections during Sept/Oct including Bay View SH2 crossing.
		Ÿ Completion of SH50 & Stock Rd sections of Wineries Ride expected in Sept. Completion of link from Mere Rd to Fernhill expected to be resolved by Dec 2012.
		· Installation of distance & direction signposts, marker bollards and gateway signage being rolled out through Sept-Nov.
		· Clip-on on Maraetotara Bridge in Te Awanga expected in Sept.
		· Wineries Ride opening 4^th November.
Operations/ Water Group		· Continue with support for HDC Iway sections of trail in Hastings and Clive.
CE’s Office	Ÿ Represent Regional Sector on Land and Water Forum “Small Group”	Reports on allocation frameworks and water quality limits due for finalisation by end of September A task group focussed on the subject of populating national limits is now underway and that involves both Central Government and Regional Sector staff.
	Ÿ Regional Prosperity study	Phase one report completed and considered by a Steering Group including Mayors/Chair and CEOs. Direction provided by Steering Group for Phase 2.
	Ÿ Ruataniwha Water Storage	Series of public meetings have been held to present Tukituki Choices document. September and October are very significant months for assessing both the feasibility project for water storage as well as the proposed plan change for the Tukituki catchment.
	Ÿ Hill Country Afforestation Proposal	Further oversight of business plan under way.
	Ÿ Continue work with Regional Sector CEs at Horizons and Greater Wellington plus Government Department CEs as appropriate on southern North Island partnership	Detailed business plan being devoted to clarify respective joint activity responsibilities
	Ÿ Continue involvement with Ministry for Primary Industries Peak Group for Implementation of the ETS	Ongoing
	Ÿ Advisory Committee on Official Statistics	Ongoing

Decision Making Process

2. Council is required to make a decision in accordance with Part 6 Sub-Part 1, of the Local Government Act 2002 (the Act). Staff have assessed the requirements contained within this section of the Act in relation to this item and have concluded that, as this report is for information only and no decision is to be made, the decision making provisions of the Local Government Act 2002 do not apply.

Recommendation

1. That Council receives the August 2012 Work Plan Looking Forward report.

Andrew Newman

Chief Executive

Mike Adye

Group Manager

Asset Management

Liz Lambert

Group Manager

External Relations

Helen Codlin

Group Manager

Strategic Development

Graeme Hansen

Group Manager

Water Initiatives

Paul Drury

Group Manager

Corporate Services

Attachment/s

There are no attachments for this report.

Members:	All Councillors Two appointed members of the Maori Committee being: the Chairman of the Maori Committee (Mr M Mohi) and one other nominee from the Maori Committee (Mrs J Aspinall).
Chairman:	A member of the Committee as elected by the Council being: Councillor Fenton Wilson
Deputy Chairman:	The Chairman of Council, or in his absence the Deputy Chairman of Council
Meeting Frequency:	Generally on the fourth Wednesday of every second month
Staff Executive:	Chief Executive, Group Manager Strategic Development and Group Manager Corporate Services and other staff as required.

Hawke's Bay Regional Council
Reconciliation of Favourable Variance from Annual Plan to
Actual Underlying Surplus/(Deficit) at 30 June 2012

	(Revised 18 September 2012)
		Variance
		($'000)

	Budgeted underlying result / (deficit)	(309)
	Actual underlying result / (deficit)	70

	Underlying result variance [surplus / (deficit)]	379


	Carry forward of expenditure from 2011/12 to 2012/13	287
	(Approved 12-13 June 2012 Council Meeting)

	Cash required to settle year-end net working capital payables and
	fund other reserve transfers	1,102

	Decrease in available cash operating balances	(1,768)

		(379)

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