Agenda of Extraordinary Council Meeting - Thursday, 9 December 2021

Council Meeting Minutes

17 November 2021

MINUTES OF Central Hawkes Bay District Council
Council Meeting
HELD AT THE Council Chamber, 28-32 Ruataniwha Street, Waipawa
ON Wednesday, 17 November 2021 AT 9.00am

PRESENT: Mayor Alex Walker

Deputy Mayor Kelly Annand

Cr Jerry Greer

Cr Exham Wichman

Cr Brent Muggeridge

Cr Tim Aitken

Cr Gerard Minehan

Cr Kate Taylor

Cr Pip Burne

Kaiārahi Matua Roger Maaka

IN ATTENDANCE: Monique Davidson (Chief Executive)

Brent Chamberlain (Chief Financial Officer)

Nicola Bousfield (Group Manager, People and Business Enablement) - Zoom

Doug Tate (Group Manager, Customer and Community Partnerships)

Joshua Lloyd (Group Manager, Community Infrastructure and Development)

Bridget Gibson (Governance and Support Lead)

PUBLIC: Vicki Berkahn of Te Rangihaeata Oranga Trust

1 Karakia

Introduced Brierley Brown

Introduced Melissa Wiggins

2 Apologies

Apology from Cr. Annand for lateness was received. Cr. Annand joined the meeting at arrived at 9.35 am.

Apology from Cr. Aitken for lateness was received. Cr. Aitken joined the meeting at arrived at

9:06 am.

3 Declarations of Conflicts of Interest

Nil

4 Standing Orders

Resolved: 21.104

Moved: Cr Kate Taylor

Seconded: Cr Pip Burne

THAT the following standing orders are suspended for the duration of the meeting:

21.2 Time limits on speakers

21.5 Members may speak only once

21.6 Limits on number of speakers

And that Option C under section 22 General procedures for speaking and moving motions be used for the meeting.

Standing orders are recommended to be suspended to enable members to engage in discussion in a free and frank manner.

Carried

5 Confirmation of Minutes

Resolved: 21.105

Moved: Cr Gerard Minehan

Seconded: Cr Kate Taylor

That the minutes of the Ordinary Council Meeting held on 23 September 2021 as circulated, be confirmed as true and correct.

Carried

6 Reports from Committees

6.1 Minutes of the Strategy and Wellbeing Committee Meeting held on 21 October 2021

Resolved: 21.106

Moved: Cr Brent Muggeridge

Seconded: Cr Pip Burne

1. That the minutes of the meeting of the Strategy and Wellbeing Committee held on 21 October 2021 be received.

Carried

6.2 Minutes of the Finance and Infrastructure Committee Meeting held on 7 October 2021

Resolved: 21.107

Moved: Cr Brent Muggeridge

Seconded: Cr Exham Wichman

1. That the minutes of the meeting of the Finance and Infrastructure Committee held on 7 October 2021 be received.

Carried

Recommendation from Committee:

Resolved: 21.108

Moved: Cr Kate Taylor

Seconded: Cr Jerry Greer

That the resolution of the Finance and Infrastructure Committee regarding report 6.7 Review of Terms of Reference for the Hawkes Bay Drinking Water Governance Joint Committee;

That having considered all matters raised in the report:

a) That the Committee receives the “Review of Terms of Reference for the Hawke’s Bay Drinking Water Governance Joint Committee” report.

b) That the Committee Recommends to Council that:

a. The Hawke’s Bay Drinking Water Governance Joint Committee be disestablished, having concluded the functions for which it was set up, and that governance oversight of drinking water safety be transferred to the Regional Leaders’ Forum.

b. The Hawke’s Bay Drinking Water Joint Working Group be retained and report directly to the Regional Leaders’ Forum, with a report on its future institutional and administrative support to be prepared for consideration and approval by the Regional Leaders’ Forum.

be received.

Carried

7 Report Section

7.1 Resolution Monitoring Report

Purpose

The purpose of this report is to present to Council the Resolution Monitoring Report. This report seeks to ensure Council has visibility over work that is progressing, following resolutions from Council.

Resolved: 21.109

Moved: Cr Gerard Minehan

Seconded: Cr Exham Wichman

That, having considered all matters raised in the report, the report be noted.

Carried

Monique Davidson presented the report.

7.2 Adoption of Meeting Schedule 2021

PURPOSE

The purpose of this report is for Council to confirm the Council Meetings and Hearings Schedule for 2022. Also included in the Schedule are the 2022 District Plan hearings and deliberation dates for Councillor reference.

Resolved: 21.110

Moved: Cr Brent Muggeridge

Seconded: Cr Jerry Greer

That having considered all matters raised in the report:

1. That the Council Meetings and Hearings Schedule for 2022, as amended, be adopted.

Carried

Requested that a Risk & Assurance Committee meeting be considered for addition to the schedule between May and September.

Noted that the Meeting Schedule 2022 has been amended as follows:

3rd March 2022 - Council Workshop - moved to 2^nd March 2022.

7^th April 2022 - Ordinary Council Meeting – moved to 6^th April 2022.

24th November 2022 – Council Workshop – moved to 23^rd November 2022.

7.3 Retirement Housing Policy - Review for Adoption

PURPOSE

The matter for consideration by the Council is the adoption of the Retirement Housing Policy.

Resolved: 21.111

Moved: Cr Tim Aitken

Seconded: Cr Exham Wichman

That having considered all matters raised in the report:

a) The new Retirement Housing Policy be adopted, and the existing retirement housing policy be deleted.

Carried

Jennifer Leaf presented the report.

That amendment is made to the Policy to change the wording to” “consider” increasing the number of units over time”.

7.4 Creation of Publicly Contestable Private Water Supply Fund

PURPOSE

The matter for consideration by the Council is the adoption of a new policy (the Private Water Supply Fund Policy) for a publicly contestable fund to support Private Water Supplies (the Private Water Supply Fund).

Resolved: 21.112

Moved: Cr Kate Taylor

Seconded: Cr Gerard Minehan

That having considered all matters raised in the report:

a) Council ADOPT the Private Water Supply Fund Policy as amended that ensures the criteria gives effect to prioritising funding to community groups, community service providers, and marae that fall within the Water Services Act.

b) Council NOTE the detail within the Private Water Supply Fund including the delegations for approving access to the fund, the eligibility criteria and the application process.

C) That Council give the Chief Executive delegations to finalise the detail of the criteria within the Private Water Supply Fund Policy.

Carried

In Favour: Crs Alex Walker, Kelly Annand, Jerry Greer, Exham Wichman, Tim Aitken, Gerard Minehan, Kate Taylor and Pip Burne

Against: Cr Brent Muggeridge

carried 8/1

Josh Lloyd presented the report.

The Council adjourned for a refreshment break at 10:33am.

The Council reconvened at 10:50am.

7.5 Waipukurau Second Supply/ Waipawa Link - Project Update

PURPOSE

The matter for consideration by the Council is to receive a further update on the progress of the development of the investigation, design and construction for the Waipukurau Second Water Supply/ Waipawa Link project.

Resolved: 21.113

Moved: Deputy Mayor Kelly Annand

Seconded: Cr Jerry Greer

That, having considered all matters raised in the report, the report be noted.

Carried

7.6 Review of Local Alcohol Policy

PURPOSE

The matter for consideration by the Council is the review of the Local Alcohol Policy.

Resolved: 21.114

Moved: Cr Gerard Minehan

Seconded: Cr Pip Burne

That having considered all matters raised in the report:

a) That the current Local Alcohol Policy is retained, and that the Policy is not reviewed until 2023/2024.

Carried

Lisa Harrison presented the report.

7.7 Adoption of Class 4 Gambling and Board Venue Policy

PURPOSE

The matter for consideration by the Council is to present received submissions to the Class 4 Gambling and Board Venue Policy Statement of Proposal for Councils consideration, as part of considering the adoption of a reviewed Class 4 Gambling and Board Venue Policy.

Resolved: 21.115

Moved: Cr Kate Taylor

Seconded: Cr Exham Wichman

That having considered all matters raised in the report:

a) That the submissions on the Class 4 Gambling and Board Venue Policy Statement of Proposal be received.

Carried

That having considered all matters raised in the report:

b) That Council thank submitters for taking the time to provide feedback on the Class 4 Gambling and Board Venue Policy Statement of Proposal.

c) That Option Two – the more restrictive option of the Class 4 Gambling and Board Venue Policy Statement of Proposal be adopted.

In Favour: Cr Alex Walker, Kelly Annand, Jerry Greer, Exham Wichman, Kate Taylor and Pip Burne

Against: Cr Brent Muggeridge and Gerard Minehan

Abstained: Cr Tim Aitken

carried 6/2

Lisa Harrison presented the report.

Vicki Berkahn of Te Rangihaeata Oranga Trust at 11:00am spoke to submission regarding report 7.7. Adoption of Class 4 Gambling and Board Venue Policy.

Cr Taylor requested that a representative of Te Rangihaeata Oranga Trust be invited to meetings of the Safer CHB group.

Declarations of conflict of interest:

Cr Tim Aitken declared a non-pecuniary conflict of interest regarding association with the Horse of the Year organisation and Cr. Tim Aitken abstained from voting.

Cr Kelly Annand declared a non-pecuniary conflict of interest that the Trust she is General Manager of receives funding.

7.8 Financial Reporting - First Quarter 2021/2022

PURPOSE

The purpose of this report is to provide the Committee with a summary of Council's financial performance and highlight the key financials for the first three months of 2021/22 financial year.

Resolved: 21.116

Moved: Cr Tim Aitken

Seconded: Cr Brent Muggeridge

That, having considered all matters raised in the report, the report on Council's financial performance for the first three months of the 2021/22 financial year be noted.

Carried

Brent Chamberlain presented the report.

7.9 Annual Plan Direction Endorsement

PURPOSE

The purpose of this paper is to seek endorsement from Council on the direction of travel in regards to the preparation of the 2022/23 budget.

Resolved: 21.117

Moved: Cr Tim Aitken

Seconded: Mayor Alex Walker

a) That, having considered all matters raised in the report, the report be noted.

b) That Council endorses the direction taken in preparing the Draft Annual Plan 2022-23, and endorse the Levels Services set out in the Long Term Plan 2021-2031.

c) That in endorsing the direction, Council note that it is unlikely that the Draft Annual Plan 2022 – 2023 will trigger significance therefore formal consultation won’t be recommended, however, community engagement will be recommended.

Carried

7.10 Quarterly Non-Financial Performance Report July - September 2021

PURPOSE

The purpose of this report is to present to Council the Quarterly non-financial performance report for the period 1 July – 30 September 2021.

Resolved: 21.118

Moved: Cr Kate Taylor

Seconded: Cr Exham Wichman

That having considered all matters raised in the report:

That the Quarterly Non-Financial Performance Report 1 July – 30 September 2021 be received.

Carried

7.11 Amendment to Committee Terms of Reference

PURPOSE

The matter for consideration is the adoption of amendments to the Committee Terms of Reference 2019-2022 specifically outlining the quorum of Council and standing Committees.

Resolved: 21.119

Moved: Deputy Mayor Kelly Annand

Seconded: Cr Pip Burne

That having considered all matters raised in the report the proposed amendments to the Committee Terms of Reference 2019-2022 establishing Committee quorum as:

a) Half of the members physically present, where the number of members (including vacancies) is even; and

b) A majority of the members physically present, where the number of members (including vacancies) is odd.

be adopted.

Carried

8 Mayor and Councillor Reports

8.1 Mayor's Report for November 2021

EXECUTIVE SUMMARY

The purpose of this report is to present Her Worship the Mayor’s report.

Recommendation

That the Mayor’s report for November 2021 be received.

The report was not tabled and therefore not received.

8.2 Strategy and Wellbeing Committee Chair Report

purpose

The purpose of this report is to present the Strategy and Wellbeing Committee Chair Report.

Resolved: 21.120

Moved: Deputy Mayor Kelly Annand

Seconded: Cr Kate Taylor

That the Strategy and Wellbeing Committee Chair Report for November 2021 be received.

Carried

Councillor Annand presented the report.

8.3 Finance and Infrastructure Committee Chair's Report

Purpose

The purpose of this report is to present the Finance and Infrastructure Committee Chair Report.

Recommendation

That the Finance and Infrastructure Committee Chair Report for November 2021 be received.

The report was not tabled and therefore not received.

8.4 Ruataniwha Ward Report

Purpose

The purpose of this report is to present the Ruataniwha Ward Report.

Resolved: 21.121

Moved: Deputy Mayor Kelly Annand

Seconded: Cr Kate Taylor

That the Ruataniwha Ward Report for November 2021 be received.

Carried

Councillor Annand presented the report.

8.5 Aramoana/Ruahine Ward Report

Purpose

The purpose of this report is to present the Aramoana/Ruahine Ward Report.

Recommendation

That the Aramoana/Ruahine Ward Report for November 2021 be received.

The report was not tabled and therefore not received.

9 Chief Executive Report

9.1 Bi-Monthly Organisation Performance Report October - November 2021

PURPOSE

The purpose of this report is to present to Council the organisation report for August - September 2021.

Resolved: 21.122

Moved: Deputy Mayor Kelly Annand

Seconded: Cr Brent Muggeridge

That, having considered all matters raised in the report, the report be noted.

Carried

Monique Davidson presented the report.

10 Public Excluded Business

RESOLUTION TO EXCLUDE THE PUBLIC

Resolved: 21.123

Moved: Cr Pip Burne

Seconded: Cr Exham Wichman

That the public be excluded from the following parts of the proceedings of this meeting.

The general subject matter of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48 of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48 for the passing of this resolution
10.1 - Resolution Monitoring Report - Public Excluded	s7(2)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
10.2 - October Key Project Status Report - District Plan Review	s7(2)(f)(i) - free and frank expression of opinions by or between or to members or officers or employees of any local authority s7(2)(g) - the withholding of the information is necessary to maintain legal professional privilege	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
10.3 - Contract Extension - C1059 & C1060	s7(2)(f)(i) - free and frank expression of opinions by or between or to members or officers or employees of any local authority s7(2)(h) - the withholding of the information is necessary to enable Council to carry out, without prejudice or disadvantage, commercial activities s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7

Carried

The meeting was adjourned 12:25pm and reconvened in public excluded forum at 1.45pm.

11 Date of Next Meeting

Resolved: 21.124

Moved: Cr Exham Wichman

Seconded: Cr Pip Burne

THAT the next meeting of the Central Hawke's Bay District Council be held 9th December 2021.

Carried

12 Time of Closure

The Meeting closed at 2.40pm.

The minutes of this meeting were confirmed at the Council Meeting held 9 December 2021.

...................................................

CHAIRPERSON

Extraordinary Council Meeting Agenda

9 December 2021

6 Report Section

6.1 Three Waters Reform Position

File Number:

Author: Monique Davidson, Chief Executive

Authoriser: Monique Davidson, Chief Executive

Attachments: 1. 3 Waters MOU between Partner Councils Final November 2021 ⇩

2. 3 Waters Reform Final Letter to Government September 2021 ⇩

3. Letter from Mayor Alex Walker to Prime Minister re: 3 Waters Reform November 2021 ⇩

4. Letter from Mayors of Hawke's Bay to Minister Mahuta. ⇩

5. Letter from Mayors of Hawke's Bay to Prime Minister and Minister of Local Government ⇩

Recommendation

a) That the report from the Chief Executive dated 9 December 2021 concerning Three Waters Reform next steps be received, and

b) That Council re-endorse the position of Council as outlined in Attachment No. 2

c) That Council in continuing its advocacy approach which opposes the reform, delegate to the Chief Executive to undertake necessary steps to ensure Council is reform ready and able to constructively contribute to the work of the National Transition Unit.

d) That Central Hawke’s Bay District Council do not become a Partner Council and signatory to the Memorandum of Understanding, and instead focus on its own advocacy approach through the range of mechanisms already underway.

e) That Central Hawke’s Bay District Council approve becoming a Partner Council and signatory to the Memorandum of Understanding, nothing this as an additional tool to add to Councils existing advocacy mechanisms.

f) That it be noted the total cost to join the campaign is $10,000, and the Chief Executive will find the funds for this purpose from existing operational budgets.

PURPOSE

The purpose of this report is for Council to decide on whether to become a Partner Council and formally join the Three Waters Campaign through signing of the Memorandum of Understanding (MoU). (Attachment No. 1), noting that in joining Council would be adding this as a tool to its existing range of advocacy mechanisms.

The signatory councils oppose the Government’s intention and will agree to work cooperatively with other councils to campaign and convince the Government to reconsider its position in favour of other options that better deliver a set of reform proposals that meet the needs of communities, councils, and Government.

The purpose of the MoU is to:

· Set the objective of the campaign.

· Specify the governance arrangements in respect of the campaign’s management and operation.

· Specify the basis on which Partner Councils agree to participate, and continue to participate, in the campaign.

· Specify the cost-sharing arrangements; and

· Set the process by which councils other than the initial Partner Councils may sign-up to join these arrangements.

This report provides the MOU for Council consideration.

significance and engagement

This report is provided for information purposes only and has been assessed as not significant.

BACKGROUND

On Wednesday 27 October 2021 the Minister for Local Government announced that the Three Waters Reform process would become mandatory for all councils. The Government intends to introduce legislation into the House before Christmas which would in effect force councils to hand over control and effective ownership of their water assets to one of the four new water entities.

Government had previously promised that, as part of a signed Memorandum of Understanding (MoU), councils would have an option whether to join (opt-in/opt-out). Many councils have objected strongly to the Government’s decision to remove the ability of councils to opt out.

On 30 September 2021 Central Hawke’s Bay District Council sent a formal letter giving feedback to the Government on its Three Waters proposal (Attachment No. 2). In November Council also sent a formal letter to the Prime Minister outlining our disappointment at the Government’s decision to mandate 3 Waters Reform, in the absence of any community engagement (Attachment No.3)

Central Hawke’s Bay District Council, alongside its regional partners Hastings District Council, Napier City Council and Wairoa District Council have jointly advocated, as outlined in Attachment 4 and 5.

The Minister’s announcement has left many mayors and councils extremely disappointed, and many members of the community have also expressed their dissatisfaction. Mayors of a several number of councils met informally to canvass ideas about what they could do to resist the proposal. The councils are engaging Malcolm Alexander (former Chief Executive of LGNZ) to oversee and co-ordinate the campaign.

Councils have been asked to give their intention to join as a Partner Council by Friday 19 November 2021, however councils can join after this date. Additionally, councils can decide to leave the ‘group’ at any time. The MOU is the mechanism in which Councils can join existing signatories.

Subsequent to the Minister’s announcement Cabinet has established a working group made up of Local Government and iwi representatives to recommend strengthened governance and accountability arrangements for the Three Waters Reform Programme. Further information on the working group and its scope can be found here https://www.beehive.govt.nz/release/working-group-ensure-local-voice-three-waters-reform

Council are already engaged with the working group, in advocating for the Hawke’s Bay model.

DISCUSSION

There is considerable public interest in the Three Waters Reform and the decision to mandate the proposed model has not been well received by many parts of the community.

Councils who have signed and partnered through the MOU believe each Three Waters asset owner has the right to determine with their community how best to meet those standards and that there are a number of alternative and viable delivery models that would be supported by councils and ratepayers across New Zealand. There is a view that ‘one size does not fit all’.

Most councils agree that quality drinking water and better environmental outcomes are essential, but some have a genuine difference of opinion with the current Government on the structural solution. For these reasons, those councils that disagree with the Government and would like the ability to come together collectively to oppose the Government on behalf of their communities.

The attached MoU sets out the proposed objectives, how the group operates and the financial commitment to participate. The attachment is Council’s open invitation to join the group in opposing the Government’s decision on the Three Waters reform model. There is acknowledgement that councils are in a range of positions in respect to their Three Waters infrastructure.

However, the group in opposition to the proposal wish to be inclusive and transparent. The request from the group is to respond to this email/proposal once Council has had an opportunity to consider the invite and they will organise for the Mayors signatures to be added to the master document.

In terms of this report there are two options for Council to consider.

The first option is to join as a Partner Council and sign the MoU. The financial costs for this are $10,000 and will be sourced from an existing operational budget.

The second option is for Council not to become a Partner Council and therefore not sign the MoU.

If Council decides not to join as a Partner Council engagement would continue to occur through the many advocacy mechanisms Council are already participating in ie: LGNZ, Steering Committee, Working Group. If Council opted to become a member Council, it would be on the basis that Council would be adding the work of collective Councils through the MOU to that range of tools.

Regardless of whether Council choose to become a Partner Council and signatory to the Memorandum of Understanding, as the reforms process has been announced as being legislatively mandated, it is prudent for the CE to prepare the organisation for a transition. The Three Waters Reform as they are currently proposed will have a significant impact on the organisation and preparing for the impact is critical to ensure Council has the capacity and capability to continue to deliver three waters services. Not with standing Council’s position on Three Wates Reform and the advocacy position that Central Hawke’s Bay District Council will take, the Chief Executive is seeking endorsement from Council to interact in the reform programme.

Implications ASSESSMENT

This report confirms that the matter concerned has no particular implications and has been dealt with in accordance with the Local Government Act 2002. Specifically:

· Council staff have delegated authority for any decisions made;

· Council staff have identified and assessed all reasonably practicable options for addressing the matter and considered the views and preferences of any interested or affected persons (including Māori), in proportion to the significance of the matter;

· Any decisions made will help meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses;

· Unless stated above, any decisions made can be addressed through current funding under the Long-Term Plan and Annual Plan;

· Any decisions made are consistent with the Council's plans and policies; and

· No decisions have been made that would alter significantly the intended level of service provision for any significant activity undertaken by or on behalf of the Council or would transfer the ownership or control of a strategic asset to or from the Council.

Next Steps

The Mayor and Chief Executive will implement the decisions of Council, and report back to Council as is deemed appropriate.

RECOMMENDATION

a) That the report from the Chief Executive dated 9 December 2021 concerning Three Waters Reform next steps be received, and

b) That Council re-endorse the position of Council as outlined in Attachment No. 2

f) That it be noted the total cost to join the campaign is $10,000, and the Chief Executive will find the funds for this purpose from existing operational budgets.

Extraordinary Council Meeting Agenda

9 December 2021

6.2 Regional Economic Development Agency

File Number: COU1-1400

Author: Monique Davidson, Chief Executive

Authoriser: Monique Davidson, Chief Executive

Attachments: 1. Final Report - Stage 2 Review of Local Government Investment in Business and Industry Support in HB ⇩

2. Summary of Survey Responses ⇩

3. Survey Responses - Verbatim Comments ⇩

PURPOSE

The matter for consideration by the Council is the establishment of an independent regional development entity in Hawke’s Bay.

This report presents the findings and recommendations of the Stage 2 Review of Investment in Business and Industry Support across the Hawke’s Bay Region undertaken by Gus Charteris Consulting for the five Hawke’s Bay councils.

This report also presents subsequent joint recommendations by the five councils with respect to the preferred option, structure and funding.

A briefing on the draft report was provided to Council in a workshop on 20 October 2021 and subsequently the 2 December 2021.

A briefing on how the proposed Regional Economic Development Agency will work with and complements local economic development efforts was also provided to Council on 2 December and is further outlined in this report.

RECOMMENDATION for consideration

That having considered all matters raised in the report:

a) Receives and considers the report titled Stage 2 Review of Local Government Investment in Business & Industry Support across the Hawke's Bay Region dated 9 December 2021, and accompanying Gus Charteris Consulting report dated November 2021.

b) Agrees that the decisions to be made are not significant under the criteria contained in Council’s adopted Significance and Engagement Policy, and that Council can exercise its discretion and make decisions on this issue without conferring directly with the community or persons likely to have an interest in the decision.

c) Supports the Stage 2 Review recommendations for priority activities/services and the focus for ratepayer investment in business and industry support.

d) Supports the establishment of an independent regional development entity in Hawke’s Bay.

e) Supports the recommended funding split and notes the financial implications for Central Hawke’s Bay District Council.

f) Endorses a partnership approach with Hawke’s Bay iwi and hapū.

g) Agrees to accommodate Council’s funding contribution for the new entity from a combination of additional rates and existing operational budget reallocation.

h) Notes that formal decisions of Council would be subject to the other four councils joint support and endorsement.

i) Notes that Council’s participation in the new entity will not impact current committed levels of service or economic and social development activity delivery locally.

EXECUTIVE SUMMARY

In August 2020 the five Hawke’s Bay councils commissioned a review of business and industry support across the region. The review presented a clear case for change – highlighting a range of inefficiencies and missed opportunities with current ratepayer-funded activities and services.

The five councils endorsed participation in a second stage review process to further investigate recommendations and focus on what priority activities and services should be funded, what the best option for delivering this in Hawke’s Bay would be, and the required cost of investment.

Key recommendations were:

· Focus ratepayer investment in areas where there are gaps or at a ‘macro’ level (e.g. working with groups of companies or sectors and developing regional strategies to help marshal and direct scarce resources to areas of agreed regional priority).

· Support other organisations to lead on ‘micro’ level activities and services - given this space is crowded and competitive.

· Support a ‘by Māori for Māori’ approach to regional economic development given this is an area where Hawke’s Bay has not delivered on well in the past.

· Continue to support the HB Business Hub and Matariki Regional Development Strategy.

· Develop programmes and an area of focus for industry and sector development, investment and talent attraction, HB brand strategy and activation, and coordination of skills and employment initiatives.

· Consider funding the establishment of a regional development entity with the appropriate scale and mandate.

· If the preferred option is not accepted, at minimum consider funding the establishment of a regional economic development team that would be hosted by the councils.

Prior to the second stage of the review being finalised, the key findings and recommendations were workshopped with all five councils, and feedback sought from iwi/hapū - via Te Kāhui Ōhanga o Takitimu (TKO), and business.

Based on feedback received from these sessions and the review findings, the five councils are jointly recommending the preferred option of establishing an independent regional development entity. The final structure would be dependent on legal and tax advice, however this entity would take the form of a non-CCO and the governance structure would represent an equal co-governance model between business, iwi/hapū and Local Government.

The minimum option was not supported by iwi/hapū, business/sector representatives or some councils. There was a widespread view that if Hawke’s Bay is going to do this, it needs to be done properly - and a minimum viable option would not deliver to meet the needs or potential of the Hawke’s Bay economy. Therefore, this option has not been considered further.

The five councils will be receiving the Stage 2 report and a similar paper between 17 November – 9 December. Any decisions made are subject to all councils’ joint support and endorsement of the recommendations.

Officers presented in workshop on 2 December a presentation outlining how the development of the Regional Economic Development Agency supports local efforts to boost economic performance already underway as part of the Economic Development Action Plan and support other Council priorities.

BACKGROUND

In August 2020 the five Hawke’s Bay councils commissioned a review (Stage 1 Review) in business and industry support across the Hawke’s Bay region, stemming from a Local Government Act (2002) s.17A requirement to review the cost effectiveness of council arrangements for delivering services on a periodic basis.

Key reasoning for commissioning the review was the request for additional funding by Business Hawke’s Bay (BHB) – the region’s business development agency at the time, and recognising the opportunities to improve regional coherence of economic development investments funded by ratepayers. Councils wanted a clearer picture of funding commitments to inform Long Term Plan processes starting from late 2020.

The focus of the Stage 1 Review was activities undertaken and services provided by BHB, Hawke’s Bay Tourism (HBTL) and individual councils. Insights developed in relation to Hawke’s Bay’s Regional Development Strategy (Matariki RDS) were also incorporated, however not reviewed in detail.

The Stage 1 Review presented a clear case for change - highlighting a range of inefficiencies and missed opportunities with current ratepayer-funded activities and services and found there was an opportunity to do something that better met the region’s needs and potential.

During this review period BHB made the decision to wind down with formal closure taking effect on 30 June 2021.

Councils received and considered the Stage 1 Review in early 2021. All councils endorsed participation in a second stage review process (Stage 2 Review) to further investigate recommendations and explore options in relation to effective delivery of business and industry support for Hawke’s Bay.

As a result of BHB’s wind down councils also endorsed re-directing the joint economic development funding for a 12-month period to support the HB Business Hub remaining operational and continuation of two sector development initiatives (food & fibre and hi-tech & agri-tech) at a scaled back level. These activities were considered at minimum necessary to retain an important regional asset and momentum in two areas of economic development focus for the region while the Stage 2 Review progressed.

The Business Hub operations and staff and industry programme contractors were formally transitioned to Hawke’s Bay Regional Council oversight on 1 July 2021 on behalf of the five councils. This arrangement and associated operations/agreements are in place to 30 June 2022.

Economic Development in Central Hawke’s Bay

Central Hawke’s Bay has worked hard to develop a local economic development approach and regional presence from a low base, to now be recognised as a Regional Leader in the economic development activity.

Prior to 2018, Council had no economic development strategy or operational economic development presence. In 2019, through funding from the Provincial Growth Fund, the District developed its first Economic Development Action Plan. The Plan has seven workstreams of:

· Water Security

· Transport

· Growth and Development

· Land Use Diversification

· Business Development and Attraction

· Skills

· Tourism

Locally, while we have achieved a number of successes, to truly enable long-term success of the many of the workstreams of the Central Hawke’s Bay Economic Development Action Plan, including water security, land use diversification and business development and attraction, regional leadership, collaboration and support is critical. Without this wider support and collaboration, Central Hawke’s Bay alone will not be able to achieve the long-term enablement of economic outcomes.

DISCUSSION

The Stage 2 Review process involved both direct engagement (with business and iwi/hapū) and desktop analysis, focussing on key three areas:

· The priority activities/services for ratepayer investment.

· Options for the most effective way to deliver these for Hawke’s Bay.

· The estimated cost of investment.

Detailed findings, insights and recommendations can be found in the attached report.

Prior to the Stage 2 Review being finalised, these findings and recommendations were workshopped with all five councils. In addition, TKO were formally sent the draft report to provide feedback as our iwi/hapū partner in this process and a number of businesses engaged with to ensure they were on board and supportive of the planned direction.

Summary feedback from Councils included:

· General support for the direction and recommendations.

· Understanding of the rationale of focusing investment where gaps needed to be filled and any future entity ‘sticking to its appropriate lane’.

· Widespread acknowledgement and concern regarding the tumultuous history with Hawke’s Bay economic development agencies and historic under-funding, and unclear purpose and mandate.

· Aligned feedback that if Hawke’s Bay is going to do this - it needs to be done well. The plan forward needs to be sustainable and enduring, and an outcome or reporting framework to guide activities and hold the entity to account for delivery for the region (and individual districts) is critical.

Summary feedback from iwi/hapū via TKO included:

· Acknowledgement that there is merit across the options presented and support for the ‘by Māori for Māori’ approach to regional economic development.

· The importance of an outcomes or performance framework that references to the current Hawke’s Bay Strategy – Matariki RDS.

· General support for direction and seeking in summary:

1. Commitment to a partnered approach

2. A co-governance model and active involvement in the strategic leadership.

3. A co-managed operational model.

4. A ‘by Māori for Māori’ regional economic development approach (delegated to TKO or nominee).

Summary feedback from business included:

· Widespread endorsement and support for the preferred option recommendation – a fully funded regional development entity, seeing this as a big step forward for Hawke’s Bay. Acknowledged the critical need for Hawke’s Bay to speak with one voice nationally – be unified and seen to be unified, with some concern raised with a July 2022 start date being too late.

· Agreement with respect to the focus of investment – lifting out of the cluttered business advice space and focussing on the transformational opportunities and activity that won’t happen unless there is coordination, advocacy, funding support and collective action.

· Noted that the proposal would only be supported by business (including potential financial or in-kind support by some) if councils commit to getting in behind the entity and not running parallel strategies or undermining it.

· Noted the need for any entity to focus effort very tightly and avoid taking on all the region’s problems and achieving nothing.

· Agreement to keep Hawke’s Bay Tourism separate but noted the expectation they work closely to complement each other’s activity and give greater effect to the region’s priority areas. In addition, a future opportunity may be to co-locate the two entities to maximise collaboration.

· Acknowledged the importance of Matariki RDS and thinking about economic development from an ‘every whānau and every household’ perspective – however noted that it needs a refresh and refocus.

· A desire to ensure governance is light touch, with clusters of industry participants working together on specific programmes.

· Supportive of a tripartite co-governance model and independent non-CCO entity.

From a local perspective, Central Hawke’s Bay forms a key part of the wider regional economic development scene, now being recognised as a key and valued leader in supporting economic development opportunities in the wider region.

As part of the Central Hawke’s Bay economy, Central Hawke’s Bay is closely linked as a contributor to the wider Hawke’s Bay economy. As a locality, over a quarter of those living in the District are employed by companies in the wider Hawke’s Bay Region, relative to some 39% of employees that derive their income from employment with Central Hawke’s Bay Businesses. In 2018, a quarter of the District commuted outside of the District for work, predominantly in the wider Hawke’s Bay region.

The District currently has the highest areas of employment in the sectors of agriculture, forestry and manufacturing, and with a future focus on a shift from volume to value – the need to support a shift into value adding services and products will need to be a continued focus. As a District, our best opportunity to achieve this will be through a regional approach, rather than the District going alone.

For the District to have the best opportunity to achieve its seven workstreams of the Economic Development Action Plan, the development of a Regional Economic Development Agency will provide a unique collaborative environment for Council. Currently a clear regional voice, where local voices and economic priorities can be heard is currently missing. At a local level, Council will continue delivering its local economic activities, with the development of a Regional Economic Development Agency providing the opportunity to strengthen the delivery and capability and capacity of services locally.

FOUR WELLBEINGS

Economic and Social

The establishment of an independent regional development entity in Hawke’s Bay will support a greater ability to meet the overarching outcome of the Matariki Strategy “every whānau and every household is actively engaged in and benefiting from growing a thriving Hawke’s Bay economy”.

To support both regional and local economic growth there needs to be a focus on and significant investment in - existing business (assisting them to overcome challenges and create greater value through doing things differently and better over time) and creating new platforms for growth (either by growing new activity or by encouraging new activity) – across the entire region.

Social development is intertwined given we cannot succeed at one without the other. The impact of a high performing and growing economy will have direct correlation and impact to social development challenges such as skills, employment and wellbeing.

Cultural

Tangata whenua have a significant stake in the regional economy and are key partners for regional economic development support activity. Councils have partnered with TKO (on behalf of Hawke’s Bay iwi/hapū) throughout this review process. TKO have endorsed the key findings and recommendations subject to ongoing partnership and co-design around future service delivery.

A commitment has been made to a partnered approach and it is intended that collaboration will continue to occur as the next phase progresses. The proposed governance model for the preferred option comprises equal co-governance across iwi/hapū, business and local government.

Environmental

Climate change is expected to create barriers and opportunities for future economic development within the region and it will be important that any new delivery model for the region is responsive to these change drivers. Water security has been an existing pillar of Matariki RDS as one component of ensuring there is climate resilience to support the future wellbeing of the regional economy.

The Hawke’s Bay Regional Council is the regional lead agency on climate change and have committed to ensuring that any new model is informed about these barriers and opportunities in due course – as part of their active involvement and contribution.

sIGNIFICANCE AND ENGAGEMENT

In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as low significance.

In undertaking both the Stage 1 and Stage 2 reviews, the Consultant has surveyed and interviewed key stakeholders involved in economic development across the region. Feedback was also sought on key findings, recommendations and the proposed way forward.

The recommended option and funding mechanism will not trigger consultation requirements under the Local Government Act 2002 or Council’s Significance and Engagement Policy with respect to form/structure, increased investment or delivery model.

Council will inform and communicate any agreed changes to the community as part of the 2022-23 Annual Plan, however it will not be a separate consultation topic.

OPTIONS Analysis

The Stage 2 Review initially considered 5 options for delivery - detailed in the attached report. Options were analysed and rated against key criteria with the assessment resulting in the best option for Hawke’s Bay being an independent regional development entity. This formed the preferred option and final recommendation in the report.

Preference for this model over other options is based on the degree to which this option is most able to create an enduring platform that provides Hawke’s Bay with the appropriate scale and mandate to:

· Better guide and direct activity to priority areas/issues

· Support a culture of sharing, connection and collaboration, and

· Support Hawke’s Bay to be greater than the sum of its parts (e.g. by presenting a strong and united voice and vision to external investors, talent and Central Government), and by helping to attracting the resources of others.

A minimum option comprising a regional economic development team hosted by councils was also presented in final recommendations, acknowledging if the preferred option was not accepted that there would be increased investment required to ensure the status quo and current state remained viable and of value to the region. This option was not supported by iwi/hapū, business/sector representatives or some councils. There was a widespread view that if Hawke’s Bay is going to do this, it needs to be done properly - and a minimum viable option would not deliver to meet the needs or potential of the Hawke’s Bay economy. Therefore, this option has not been considered further.

As a result, the five councils are jointly recommending:

· The preferred option of an independent regional development entity. This option equates to a regional increase of 200%+ and $1.2M on the current joint investment of $513,000, and a 400%+ and $1.4M increase on the $330,000 that previously went to BHB.

· A non-CCO independent entity with the legal form (i.e. Trust, Incorporated Society or Company) to be confirmed upon legal and tax advice.

· An appropriate governance structure with an independent chair that incorporates equal co-governance across business, iwi/hapū and Local Government.

Whatever legal form is chosen, councils could influence priorities through yearly Statement of Intent and Service Level Agreement (SLA)/Contract for Service (CfS) setting discussions. This entity would also need to be supported by an effective measurement and reporting framework which helps track the relationship between activities, outputs, and outcomes. This would help to provide greater transparency and accountability around whether ratepayers’ money is being invested and used effectively.

The recommended funding split has taken into account previous funding arrangements across the five councils, gross domestic product and population. The below table outlines the current and proposed new split:

The regional cost of investment represents:

· Estimated cost of investment per annum of $1.706m

· One-off investment in CAPEX of $50,000

· This represents an operational increase of $1.193m per annum on the existing joint investment of $513,000 across the five councils

Central Government funding has been secured to support Matariki RDS programme management for 2022 and 2023. This totals $155,000 (year 1) and $130,000 (year 2). This would therefore decrease the total funding requirement for either option over these two years, given Matariki RDS programme management support has been built into the overall budget.

The financial impact of the preferred option is set out in the tables following. The first table presents total funding commitment for a three year period. The second table presents the increased funding commitment (total funding required less the previous BHB funding and other direct economic development expenditure) for the same period:

Table

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Based on the joint recommendations across the five councils discussed above, options for Council to consider are:

1. Option 1 – Preferred Option: Participate in the Regional Development Entity

2. Option 2 – Status Quo: Do not Participate in the Regional Development Entity

Option 1 – Preferred Option: Participate in the Regional Development Entity

The preferred option is Council’s participation in the independent regional development entity.

Financial implications for this option:

· 8% contribution of the proposed $1.7M per annum.

· Required increased investment (in addition to existing budget) of $94K - $107K per annum over the next three years.

· Other than the existing budget of $30K that has already been taken into account, there are no other internal budget savings or reallocation of overheads that could contribute to this investment without impacting current commitments to service delivery or operations.

· It is therefore recommended that the increased investment required is funded by additional rates.

· The increase would be applied to the uniform annual general charge (UAGC) and have a $13.76, $14.05, and $15.55 impact respectively per household, per year.

· The total rates impact is 0.4% per year based on the current LTP budget.

Advantages for this option:

· Enables Central Hawke’s Bay to have an active voice and advocacy at the regional table.

· Presents a strong and united voice and vision to external investors, talent and Central Government.

· Positions Hawke’s Bay - and by default Central Hawke’s Bay, in the best possible position to receive future government funding (Central Government have communicated a clear message that they want regions to unite around shared objectives and priorities, and that future funding will be directed at this level).

· Primary sector, food production and productivity through technology and innovation have been highlighted as key regional priority areas, and will be a key focus for the new entity. These areas directly align with a dominant portion of the Central Hawke’s Bay local economy and we would have a lot to gain with the potential growth factor or ability to share and leverage from regional resource.

· Supports a culture of sharing, connection and collaboration.

· Empowerment of Māori economic development.

· Supports the region to focus on and direct activity/resource to strength or competitive advantage areas – to ultimately support growth and productivity across the entire regional economy.

· Targets and utilises ratepayer funding in a more effective, cohesive and appropriate way – allowing local authorities to focus on core business and local delivery.

· Supports a partnership approach and tripartite governance with local government, iwi/hapū and business.

· Ensures ongoing and coordinated engagement, and a clear point of contact on economic development issues for business and industry.

· Provides the structure and level of resource to give regional economic development delivery appropriate scale and mandate.

Disadvantages for this option:

· Increased financial impact for ratepayers and/or potential level of service impact if existing budgets are adjusted or reallocated.

· Regional priority areas may not always align with local needs or challenges.

· Council may have less influence over how a non-CCO entity spends and directs funding provided.

· Regional entity with varied governance obligations may not be able to work at the speed required to respond to changes in economic conditions.

Option 2 – Status Quo: Do not Participate in the Regional Development Entity

The alternative and status quo option is Council not participating in the independent regional development entity.

Financial implications for this option include:

· No increased investment on existing budgets, or impact on rates.

· Council’s current budgeted funding of $28K could be re-directed to local economic development activity or other areas of service delivery.

Advantages for this option:

· No additional financial impact on ratepayers or Council operations.

· Ability to focus all economic development spend and activity locally – and act with speed.

· Direct accountability to ratepayer.

Disadvantages for this option:

· Central Hawke’s Bay would not have an active voice or advocate at the regional table, resulting in less say or input with regards to regional priority areas.

· Our local economy is significantly representative of primary sector and food production activity, and impacted by related sector challenges such as water security. These areas have already been highlighted as regional priorities and will be a strategic focus for the new entity. We would miss the opportunity to provide local insights, direct or guide activity and leverage value that could drive local economic growth.

· Many of our businesses operate regionally and rely on the connectivity outside of Central Hawke’s Bay – i.e. the airport and port. These businesses and sector organisations have championed a unified and cohesive approach across the region and will be actively involved in the new entity. If we are not a participant or at the table, there may be negative impact for our local businesses or economy.

· Potential to miss out on the full value of future Central Government funding opportunities.

· May be less attractive to future talent and investment considering or approaching Hawke’s Bay, given we would not be actively involved in these discussions or strategies.

· Potential negative impact on the relationship and other regional initiatives with partner Hawke’s Bay councils.

· The local economy not reaching its potential due to not having the opportunity to share or leverage the regional, collective approach.

Recommended Option

This report recommends option 1 – participate in the regional development entity for addressing the matter.

NEXT STEPS

If the preferred option is endorsed and supported by all councils, a project and transition plan will be developed to facilitate the process over the coming six months. Budgets and funding composition will also be finalised for individual councils.

If the preferred option is not endorsed and supported by all councils, or any recommendations are not jointly agreed - it is likely the approach will need to be re-considered and presented to all councils at the next meeting date.

Council will be provided an update at the Council meeting in February.

RECOMMENDATION

c) Supports the Stage 2 Review recommendations for priority activities/services and the focus for ratepayer investment in business and industry support.

d) Supports the establishment of an independent regional development entity in Hawke’s Bay.

e) Supports the recommended funding split and notes the financial implications for Central Hawke’s Bay District Council.

f) Endorses a partnership approach with Hawke’s Bay iwi and hapū

g) Agrees to accommodate Council’s funding contribution for the new entity from a combination of additional rates and existing operational budget reallocation.

h) Notes that formal decisions of Council would be subject to the other four councils joint support and endorsement.

i) Notes that Council’s participation in the new entity will not impact current committed levels of service or economic and social development activity delivery locally.

Extraordinary Council Meeting Agenda

9 December 2021

6.3 Council Appointed Trustee Vacancy - Central Hawke's Bay District Community Trust

File Number: COU1-1400

Author: Bridget Gibson, Governance and Support Officer

Authoriser: Monique Davidson, Chief Executive

Attachments: 1. Appointment of Council Representation Policy - Adopted 14 November 2019 ⇩

PURPOSE

The matter for consideration of the Council is the appointment of a Trustee to the Central Hawke’s Bay District Community Trust (the Trust) due to a recent vacancy. Officers seek Council’s direction as to whether the Council prefers to appoint a Trustee via nomination either of members of the public and/or elected members or to seek expressions of interest from the Central Hawke’s Bay community through the process set out in the attached Appointment of Council Representation Policy.

RECOMMENDATION for consideration

That having considered all matters raised in the report that:

1. OPTION 1

The Council nominate and appoint by way of resolution Councillor (X) of the Central Hawke’s Bay District Council as Trustee of the Central Hawke’s Bay District Community Trust.

2. OPTION 2

(a) In accordance with the Appointment of Council Representation Policy, expressions of interest are publicly sought for the role of Council appointed Trustee to the Central Hawke’s Bay District Community Trust.

(b) That Councillor (X), Councillor (Y) and Councillor (Z) form a subcommittee to consider applicants for appointment to the Central Hawke’s Bay District Community Trust.

(c) That following their deliberations the Selection Panel recommend a preferred candidate to the Council for appointment to the Central Hawke’s Bay District Community Trust.

EXECUTIVE SUMMARY

Following notification that Libby Tosswill has stood down from her role as one of two Council appointed Trustees to the Trust, the Council need to appoint a Trustee to fill the vacancy.

The Council may opt to either:

1. seek expressions of interest from the public via the process outlined in the Council Representation Policy (attached to this report)

2. or nominate and appoint by way of resolution an elected member of the Central Hawke’s Bay District Council or other person directly as their representative to the Central Hawke’s Bay Community Trust.

If expressions of interest are sought it is recommended that the Council form a subcommittee of three elected members to interview applicants. Following the interview process, the subcommittee would recommend a preferred candidate to the Council for appointment to the Trust.

BACKGROUND

The Central Hawkes Bay District Community Trust was established in 1994 and is the owner and operator of the indoor heated pool at Russell Park, Waipukurau. Council provides funding to the Trust under a Service Contract to enable the Trust to provide community access to modern recreational swimming and fitness facilities.

The Trust Deed provides that:

· there shall be no more than 10 Trustees, nor less than 6.

· the Trustees shall include two (2) Trustees appointed by the Central Hawke’s Bay District Council.

· Elections are held three (3) yearly.

· Trustees appointed by the Central Hawke’s Bay District Council may have their appointment revoked by giving written notice to the Trust Secretary.

· Council review appointments to the Trust after each triennial election.

Councillor Pip Burne is currently appointed by Council as one of the two Council appointees Trustees of the Trust. One vacancy requires filling.

DISCUSSION

Councillor Pip Burne is currently appointed by Council as Trustee of the Central Hawke’s Bay Community Trust. Her appointment as a Trustee predates her election to the Central Hawke’s Bay District Council.

The Council may appoint an elected member or member of the public to represent Council as Trustee of the Trust directly or alternatively, the Council may opt to publicly call for expressions of interest for appointment as Council’s representative (Trustee) to the Trust. The Appointment of Council Representation Policy adopted on 14 November 2019 outlines the Council representative to Council-Community organisations appointment process and is attached to this report for reference.

The Policy critically sets out that Council ensures any person appointed to a Council-Community organisation possesses the knowledge, skills, and experience relevant to the activities of the organisation, and that they are familiar with the Council policy, programmes, and activities relevant to the organisation.

If the Council opts to seek expressions of interest from the community, interest would be sought via public advertising outlining those applicants possess:

· An understanding of governance issues

· Either business experience or other experience that is relevant to the activities of the organisation

· Sound judgement

· A high standard of personal integrity

· The ability to work as a member of a team

· Experience or knowledge directly relevant to the diverse range of functions required of the specific organisation of which they would represent Council.

· Business acumen backed up by enthusiasm, energy, and new ideas.

· A demonstrated commitment to the Central Hawke’s Bay District.

It is further proposed that a subcommittee consisting of 3 elected members form to consider candidates for the current vacancy and subsequently recommend a preferred candidate to the Council for appointment.

If the Council chooses to appoint an elected member as Trustee of the Trust, this could be confirmed by way of Council resolution.

RISK ASSESSMENT and mitigation

There is no obvious risks associated with this matter.

FOUR WELLBEINGS

An appointment to the Trust will enhance the work of the Trust and ultimately the value they add to the Central Hawke’s Bay District, recognising the Trusts assets contribute to the four wellbeings of Local Government in its widest sense.

Delegations or authority

Council have delegation to make this decision.

sIGNIFICANCE AND ENGAGEMENT

In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as of low significance, therefore, community engagement is not required.

Options

There are primarily two options available to Council, being:

Option 1 – to not follow the Representation Policy and directly Appoint

That the Council seek expressions of interest from the public via the process outlined in the Appointment of Council Representation Policy and form a subcommittee to consider applicants before recommending a preferred candidate to the Council for appointment

Option 2 – follow the Appointment of Council Representation Policy and seek expressions of interest

Council nominate and appoint by way of resolution an elected member of the Central Hawke’s Bay District Council as their representative to the Central Hawke’s Bay Community Trust.

Recommended Option

Officers recommend that Council deliberate and resolve in favour of Option 2 - being to follow the Appointment of Council Representation Policy and seek expressions of interest

NEXT STEPS

Should Council resolve that Officers seek expressions of interest for the vacancy on the Trust, Officers will arrange public advertisement seeking expressions of interest. In this eventuality, Officers have been approached by the newly appointed Chair of the Trust Claire Murphy, to jointly advertise for the appointment of Trustees, however individually shortlist and appoint them.

The Elected Members appointed to the selection panel will meet to interview applicants with the intent of recommending a preferred candidate to Council for appointment to the Trust.

Should Council nominate and appoint an elected member to the Trust, public notification of the appointment will be issued, and the Trust Chairperson and their members appropriately notified.

RECOMMENDATION

That having considered all matters raised in the report that:

OPTION 1

1. The Council nominate and appoint by way of resolution Councillor (X) of the Central Hawke’s Bay District Council as Trustee of the Central Hawke’s Bay District Community Trust.

2. OPTION 2

(b) That Councillor (X), Councillor (Y) and Councillor (Z) form a subcommittee to consider applicants for appointment to the Central Hawke’s Bay District Community Trust.

(c) That following their deliberations the Selection Panel recommend a preferred candidate to the Council for appointment to the Central Hawke’s Bay District Community Trust.

Extraordinary Council Meeting Agenda

9 December 2021

6.4 Recycling Drop off Centres

File Number: COU1-1400

Author: Josh Lloyd, Group Manager - Community Infrastructure and Development

Authoriser: Monique Davidson, Chief Executive

Attachments: Nil

PURPOSE

The matter for consideration by the Council is the decision to remove or retain the recycling drop off centres in the townships of Otane, Takapau, Tikokino and Ongaonga.

RECOMMENDATION for consideration

That having considered all matters raised in the report:

a) That Council retain the DOCs in Otane, Takapau, Tikokino and Ongaonga and alter the rural recycling trailer schedule to focus on those communities without DOCs and kerbside services

BACKGROUND

As part of the 2021 Long Term Plan (LTP), Council resolved to remove the recycling drop off centres (DOCs) in the townships of Otane, Takapau, Tikokino and Ongaonga and replace them instead with weekly kerbside recycling collections in these townships as well as a newly built and customised rural recycling service offered through the provision of two portable recycling trailers to visit these communities (and others) on fixed schedules.

Reasons behind the decision to remove the DOCs and replace them with the kerbside collection method and rural recycling trailer scheme included:

· Known high contamination rates in the DOCs causing whole contaminated loads of recycling to be taken to landfill

· The costs of maintaining DOCs, while providing the new kerbside collection and the trailer scheme would have resulted in higher rates

· The trailer scheme was seen to be able to target more rural areas that did not currently have easy access to a service

· There was considered to be duplication between services if kerbside, trailers and DOCs were all to remain in a single township

Council received a number of submissions on the wider topics of solid waste, with some submissions specific to the use of DOCs vs kerbside collections. There was general support among submitters for a kerbside option when given the choice of DOCs or kerbside with a 56% - 44% comparison of submissions.

Following the adoption of the LTP, and the resolution referred to above, Council have since rolled out the kerbside recycling service and the rural trailer service and are now in an informed position to make a final decision about removing the DOCs.

A group of people standing in front of a van

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DISCUSSION

While it was intended to remove the DOCs in Otane, Takapau, Tikokino and Ongaonga following the roll out of the kerbside collection service and rural trailer scheme, Officers have learned more about community demand and about the benefits and costs of various service offerings during the past 12 weeks. Officers now wish to present a recommendation to retain the DOCs for the reasons described below.

Strategic Alignment – Objectives of the WMMP

Councils over-arching and directional document for the management of waste services for the District is the Waste Management and Minimisation Plan 2019 (WMMP). The WMMP provides a range of actions and initiatives that together seek to achieve listed objectives/targets. These objectives/targets are:

· Increase diversion from landfill to 70% by 2040

· Increase diversion from landfill to 48% for 2025

· Increase participation in kerbside recycling services to 60% by 2025 (as measured through set-out rates).

Diversion from landfill was most recently measured at 42% across the district in September 2021.

As the objectives listed above are fundamental to the design and provision of waste and recycling services in the District, they have guided much of the recent LTP discussions/decisions and are used now to test the effectiveness of current service offerings.

Officers consider that based on the reasons provided below, the recommendation of this report (to retain DOCs) is most likely to direct align with the objectives of the WMMP above. Specifically, it is considered that retaining the DOCs will ensure more people recycle in total, thereby increasing diversion from landfill.

Demand for services. Over recent weeks where kerbside services have been rolled out and the trailer scheme has been utilised alongside the existing DOCs, Officers have monitored continued high demand for the DOCs. Along with the evidenced demand at the DOCs, measured through tonnages and emptying rates, Officers have also heard consistent feedback from community members about a need to retain the DOCs. Key messages from those requesting retention of the DOCs include:

· The kerbside collection scheme is not available to those living outside of the townships

· The trailer scheme is only available for limited days/hours and places an inconvenience on those families with busy routines

· The trailer scheme does not cater for large loads of recycling (particularly cardboard and plastics) that may have been stored at home by a family for some time

The feedback received is strongly in support of the voice heard from those in rural communities during the Long Term Plan engagement process that a fixed Drop off Centre has advantages over a mobile scheme with limited availability.

Officers have also recorded varying uptake of the rural trailers with relatively low uptake in those communities that receive a kerbside collection service.

Contamination. A key part of the reasoning for removing DOCs was the high and increasing contamination rates meaning loads were needing to be taken direct to landfill and not recycled. Over recent months, Officers and our contracting partner Smart Environmental have noted lower contamination at DOCs and in kerbside collections. This is ideally attributable to continued efforts on education and awareness and has perhaps been reinforced via recent messaging through the LTP engagement campaign that contamination can/will lead to removal of the DOCs. Further to the reduction in contamination occurrences, Councils contractor Smart Environmental have also implemented new sorting systems and processes which allow contaminated DOC bins to be manually sorted (safely) via a cost-effective means so that whole DOC loads are not taken to landfill and instead can be sorted and recycled even if contaminated (to a point).

Cost. The implementation of new services over the past 12 weeks has allowed Council to more fully understand the true cost of new service offerings. At the same time, Council and its Contractor Smart Environmental have been able to review previous pricing assumptions and methodologies and look to squeeze out further efficiencies in approach to reduce costs. The summary of the above learnings and realised savings is:

· The cost of running the trailer scheme is lower than originally anticipated

· The true cost of the new kerbside services is lower than budgeted

· A means of lowering DOC costs has been identified should they be retained by optimising the servicing schedules

· Demand for trailers in the rural townships is very low. Should the DOCs be retained and the trailers used then to only focus on remote communities excluding those with DOCs, significant cost savings could be found

With the above factors taken into consideration, while some detail is still to be worked through with contractors and schedules, Officers are now confident that DOCs can be retained with additional measures in place to separate out contamination within existing budgets.

RISK ASSESSMENT and mitigation

This report seeks to make a final decision about removing or retaining DOCs. There are no significant risks considered with retaining the DOCs as these are proven to be able to be retained within budget and within the current capacity and capability of Councils operational teams.

The key risk considered with removing the DOCs is the potential misalignment with WMMP outcomes/strategic direction as feedback has been provided loudly and consistently that the trailer scheme, while excellent for many, is not appropriate for some and will likely lead to a number in the community not recycling and instead sending additional product to landfill.

FOUR WELLBEINGS

This report deals primarily with a decision rooted in environmental outcomes but one that is also being driven by community needs and social outcomes. Officers consider that the recommendation provides the best available approach to managing environmental well-beings by providing a full range of services that will maximise recycling uptake within the district. Officers have heard loudly about communities social connection to recycling centres and perceived, real or otherwise ability to use alternate services.

Economic impacts/outcomes are considered minor and there are no specifically considered cultural implications either positively or negatively.

Delegations or authority

A decision of Council is required as the recommendation seeks to alter a previous decision of Council.

sIGNIFICANCE AND ENGAGEMENT

In accordance with the Council's Significance and Engagement Policy, this matter has been assessed as being of some importance.

OPTIONS Analysis

	Option 1 Council retain the DOCs in Otane, Takapau, Tikokino and Ongaonga and alter the rural recycling trailer schedule to focus on those communities without DOCs and kerbside services	Option 2 Council remove the DOCs from Otane, Takapau, Tikokino and Ongaonga
Financial and Operational Implications	Operationally these can be serviced within existing contracts and contractors. Schedules have been optimised to reduce cost and increase efficiency. Cost savings have been found across a range of solid waste activities meaning that the DOCs can be retained within existing budgets set in the LTP. There is no rating increase overall from retaining the DOCs.	Removing the DOCs will afford Council the ability to make further savings beyond those that were budgeted for the LTP.
Long Term Plan and Annual Plan Implications	This option is considered to be consistent with the LTP as it does not represent a change in levels of service or costs and instead represents a nuanced approach to achieve set levels of service within budgets.	This option is in line with the LTP.
Promotion or Achievement of Community Outcomes	This option is considered most likely to achieve community outcomes/expectations as they relate to the provision of effective recycling services. This option also considered to be most aligned with the objectives of the WMMP and CHBDCs wider aspirations for waste management in the District.	This option is considered likely to be misaligned with community outcomes as targeted by the WMMP.
Statutory Requirements	NA	NA
Consistency with Policies and Plans	This option is most consistent with relevant Council policies and plans, specifically the WMMP as it is considered most likely to achieve the greatest waste diversion / reduction measures.	This option is considered to be misaligned with the landfill diversion targets of the WMMP.

Recommended Option

This report recommends Option 1, Council retain the DOCs in Otane, Takapau, Tikokino and Ongaonga and alter the rural recycling trailer schedule to focus on those communities without DOCs and kerbside services, for addressing the matter.

NEXT STEPS

Following direction from Council, Officers will take necessary steps to operationalise the measures. Should a decision be made to remove the DOCs, it is considered preferable that this happen after the busy Christmas holiday period where recycling facilities are typically highly utilised.

RECOMMENDATION

a) That Council retain the DOCs in Otane, Takapau, Tikokino and Ongaonga and alter the rural recycling trailer schedule to focus on those communities without DOCs and kerbside services

Extraordinary Council Meeting Agenda

9 December 2021

6.5 Progress Report and Direction of Draft Annual Plan 2022 - 2023

File Number: COU1-1400

Author: Brent Chamberlain, Chief Financial Officer

Authoriser: Monique Davidson, Chief Executive

Attachments: Nil

Recommendation

That, having considered all matters raised in the report, the report be noted.

PURPOSE

The purpose of this report is to provide an update on the progress and direction of travel of the Draft Annual Plan 2022 – 2023.

significance and engagement

This report is provided for information purposes only and has been assessed as not significant, however it should be noted that the Draft Annual Plan 2022 – 2023 does trigger significance, and when Officers present a report for the adoption of the Draft Annual Plan 2022 – 2023 in June 2022, the item will be identified as significant.

BACKGROUND

All Councils are required by section 95 of the Local Government Act 2002 (LGA) to adopt an Annual Plan each financial year.

Local government exists to meet community needs and wants effectively, efficiently and in a way that meets those needs and wants now and in the future. If done properly, annual planning helps make the present and future consequences of decisions and trade-offs clear to all – for example that this decision to defer maintenance reduces the rate requirement now, but at a loss of service potential long-term.

The Annual Plan pairs the Council’s vision and ambition for the future and the status quo, and articulates how we bridge the gap in between. This is done by setting out Council’s assets, activities, plans, budgets and policies. It must be adopted before the beginning of the year it relates to.

Central Hawke’s Bay District Council has an already established vision that was first articulated through Project Thrive in 2017. This vision and comprehensive community engagement and feedback formed the basis of both the 2018-2028 LTP and 2021-2031 LTP. The draft annual plan has been prepared on the basis of year 2 of the 2021-2031 LTP.

DISCUSSION

Preparing for the adoption of an Annual Plan is a long and complex process, and for Central Hawke’s Bay District Council preparation for the Annual Plan began in October 2021. Successful delivery of an Annual Plan relies on many moving parts working together and lining up to tell a coherent story to the community about how Council is going to deliver its vision for the future.

Progress to date

At the time of writing this report, Council has made significant progress on the Draft Annual Plan 2022-2023. Throughout the year Council have had a number of workshops, as well as discussions and at times decisions in Council, achieving key milestones that have allowed the development of the Draft Annual Plan 2022-2023.

The starting point for developing the Annual Plan was what Council had already signalled in Year 2 of the Long Term Plan 2021-2031, that was an average rate increase of 6.8%.

Since the LTP was developed a number of risks have developed, namely supply chain issues, rising inflation, tight labour market, rising interest rates, and a change in assumptions around the receipt of Development Contribution revenues.

In addition a number of changes to our business have occurred:

· There has been a review of the delivery of Economic Development across the entire Hawkes Bay Region (impacts all 5 Hawkes Bay Councils)

· The Government has disbanded the District Health Board structure which impacts our Local Election Cost Sharing model (impacts CHBDC and HBRC)

· We have been successful in getting a MfE grant for 50% of the construction of a Weighbridge at our Waipukurau Transfer Station which has necessitated bringing our 50% share forward from year 4 of the Long Term Plan

· Growth in the District has required the establishment of a satellite administration office in Waipukurau

· The change to Solid Waste Services (particularly the recycling drop off centres) signalled in the Long Term Plan is being rethought

These changes, when layered on top of the original 6.8% increase saw the average rate increase lift to 7.4%.

Through previous Council workshops 3 main concerns have been raised:

1. Concern that a 7.4% rate increase is too much

2. Concern that the way rates are collected, the burden falls too heavily on the rural sector (they make up 19% of our ratepayers but pay 43% of our rates)

3. Concern what impact the 3 yearly Quotable Value District revaluation will have (it won’t impact the quantum of rates collected but might impact who pays what if the revaluation increase isn’t evenly spread across the district).

The Quotable Value impact is out of the control of Council, and won’t be known until February 2022, so officers have been concentrating on the first two items.

The obvious answer to the second concern is by adjusting the split between what is rated as a Uniform Annual Charge (fixed charge per property) and what is rated for as a General Rate (based on a properties capital value). A number of items in Councils budget are currently split between the two rates types and these splits can be amended without changing Councils existing Revenue and Financing Policy. This doesn’t decrease the amount of rates required, but does change the split between urban and rural slightly.

To reduce rates, one of two things needs to occur – first is a reduction in the levels of services (ie do less), the second is use alternative funding mechanisms (such as 3^rd party funding or the use of debt). A number of options have been considered such as delaying asset replacements for a year, or debt fund rather than rate fund their replacement (which was consulted on and agreed to as part of the Long Term Plan particularly for water assets).

Through the careful selection of options Officers are able to get the average rate increase back to 6.8% (the same increase as signalled in the original Long Term Plan). This is dependent on the outcome of decisions made at the Council meeting to be held post writing this report on the 9^th December.

Impact of the Draft Annual Plan 2022-2023

At the time of writing this report, the Draft Annual Plan 2022-23, presents a proposed average rates increase of 6.8% (the same increase as signalled in year two of the Long Term Plan).

Table

Description automatically generated

Rate Type	2021/22 Budget	2022/23 Long Term Plan	2022/23 Annual Plan	Annual Change %
General Rate (Includes Portion of Stormwater and Solid Waste)	6,597,821	7,034,552	6,848,579	3.8%
Uniform Annual General Charge	1,848,324	2,079,566	2,217,123	20.0%
3 Waters (Targeted Portion Only)	7,530,048	8,259,635	8,259,456	9.7%
Land Transport	6,967,319	7,122,495	7,124,055	2.2%
Solid Waste (Kerbside Collection Targeted Portion Only)	398,986	430,849	477,885	19.8%
Total	23,342,498	24,927,097	24,927,097	6.8%

The above budgets are subject to decisions on the Regional Economic Development proposal and retention of Drop Off Centres.

Assuming the above budgets are confirmed, below is the expected impacts on four sample rate payers:

1. Urban Resident Connected to Town Water Supplies

2. Urban Resident with no Water Supply

3. Lifestyle Property

4. Farm Property

Urban Connected Household	2021/22	2022/23 Annual Plan	Var $ to 21/22	Var % to 21/22
Land Value	116,000
Capital Value	455,000

UAGC	309	372	63	20.0%
General	598	621	23	3.8%
Land Transport	257	263	6	2.2%
Refuse/Recycling	117	141	23	19.8%
Sewerage	837	882	45	5.4%
Stormwater	398	480	82	20.6%
Water Supply	848	940	92	10.8%
Total	3,364	3,697	333	9.9%

Urban Non Connected Household	2021/22	2022/23 Annual Plan	Var $ to 21/22	Var % to 21/22
Land Value	50,000
Capital Value	315,000

UAGC	309	372	63	20.0%
General	414	430	16	3.8%
Land Transport	111	113	2	2.2%
Refuse/Recycling	117	141	23	19.8%
Sewerage	-	-	-	-
Stormwater	-	-	-	-
Water Supply	-	-	-	-
Total	951	1,055	104	10.9%

Lifestyle	2021/22	2022/23 Annual Plan	Var $ to 21/22	Var % to 21/22
Land Value	205,000
Capital Value	650,000

UAGC	309	372	63	20.0%
General	854	887	32	3.8%
Land Transport	455	465	10	2.2%
Refuse/Recycling	-	-	-	-
Sewerage	-	-	-	-
Stormwater	-	-	-	-
Water Supply	-	-	-	-
Total	1,618	1,723	105	6.5%

Farm	2021/22	2022/23 Annual Plan	Var $ to 21/22	Var % to 21/22
Land Value	4,240,000
Capital Value	4,880,00

UAGC	309	372	63	20.0%
General	6,413	6,656	244	3.8%
Land Transport	9,401	9,608	207	2.2%
Refuse/Recycling	-	-	-	-
Sewerage	-	-	-	-
Stormwater	-	-	-	-
Water Supply	-	-	-	-
Total	16,123	16,636	513	3.2%

The above rate samples are an estimate only. They are premised on the number of properties across the district remaining unchanged from 2021/2022 and the Quotable Valuation for each property remaining unchanged. However we know that both these premises will change between now and when the rates are struck in June 2023.

Communications and Engagement

It is expected that the 3 yearly property revaluation undertaken by Quotable Value will have a significant impact on Councils Rating Database.

Over April/May 2022 it is proposed that Council will engage with its ratepayers on 3 topics:

1. The basis for the Annual Plan Budget 2022 – what was originally budgeted in year two of the Long Term Plan, and what changes have occurred since then

2. What does the quotable revaluation mean for your properties rates, and why this change has occurred

3. What is the 3 Waters Reform, what does it mean for the region, future rates, asset ownership, existing 3 Waters debt, and future 3 Waters governance.

It is not expected that this engagement be in the form of formal consultation where Council is seeking formal submissions, but rather be an educational process.

Implications ASSESSMENT

This report confirms that the matter concerned has no particular implications and has been dealt with in accordance with the Local Government Act 2002. Specifically:

· Council staff have delegated authority for any decisions made;

· Unless stated above, any decisions made can be addressed through current funding under the Annual Plan;

· Any decisions made are consistent with the Council's plans and policies; and

· No decisions have been made that would significantly alter the intended level of service provision for any significant activity undertaken by or on behalf of the Council, or would transfer the ownership or control of a strategic asset to or from the Council.

Next Steps

At present following is the proposed timeline leading up to the adoption of the Annual Term Plan.

9 December 2021 Decisions on Regional Economic Development and Retention of Recycling Drop Off Centre’s

10 February 2022 Council Workshop – Understand Impact of QV Adjustment

2 March 2022 Council Workshop – Final direction for budget settings

7 April 2022 Endorse Draft Annual Plan and community engagement plan

April/May 2022 Community Engagement on budgets and 3 Waters

9 June 2022 Adoption of the Annual Plan and set Rates

RECOMMENDATION

That, having considered all matters raised in the report, the report be noted.