At last Wednesday’s Regional Council meeting, two groups, presenting back-to-back, asked the HBRC for money.

First up was Transparent Hawke’s Bay (of which I am a founding member).

We along with HB Fish & Game, Friends of the Tukituki, and Ngati Kahungunu have requested a 3-6 month ‘time out’ in HBRC’s progressing of its $600 million dam scheme. And, together with that request, last Wednesday, in our allotted 10 minutes, we asked HBRC for $25,000 to help us pay, during that ‘time out’, for independent assessment of the key environmental and financial assumptions being used by HBRC to support its proposal.

Keep in mind this context:  HBRC has spent about $8 million to bring its project to this stage, and proposes to spend $6 million more to progress its plan in 2013-14.

Then, next up was Chairman Andy Pearce, representing the directors of the Hawke’s Bay Regional Investment Company (HBRIC), the council-controlled organisation owned by HBRC and charged with advancing the dam project.

Mr Pearce was asking for increases in the directors’ fees paid to him (a raise of $44,125, to $65,625 per annum) and fellow directors Jim Scotland and Sam Robinson (raises of $22,500 each, to $37,500 each per annum), as well as fees for three expert “committee members”.

The proposal would increase such fees from an annual level of $51,500 to $365,625. The increase is sought on the basis of the heavy workload on directors as a result of their responsibilities for progressing of the Ruataniwha water storage scheme. The proposal also urged the council to consider compensating the three councillor-director members of the HBRIC Board — Fenton Wilson, Alan Dick and Christine Scott.

During the discussion, it became clear that the recommendation was being tabled directly by the chairman of HBRIC, in a memo co-signed by the council’s chief financial officer, who admitted under questioning that he had never read or considered the memo.

Councillors were appalled at this process, noting that it raised serious questions about the interaction between HBRC and HBRIC and officer oversight, to say nothing of concerns about information and recommendations falsely appearing to be endorsed by a senior officer, as well as the core credibility of HBRC/HBRIC advocacy of the project.

The ensuing debate showed that councillors were not even clear about the present status of HBRIC and its directors – was HBRIC permanent? Were the directors still transitional? Why did they not foresee the level of effort that would be required when they initially signed on? Had HBRIC directors (or HBRC officers) sought legal counsel on whether HBRIC’s charter even permitted increasing the fees on an ad hoc basis? Had HBRIC considered where the funds for such an increase would come from? Where was the HBRC/HBRIC chief executive (one and the same person) in all this?

On and on they harrumphed.

The scale of councillors’ bewilderment at an operation we expect them to smartly and knowledgeably oversee was shocking. Hardly surprising that they can’t get a waterproof roof on their council building. Oversee a $600 million dam scheme?

And then, fiscal stewardship aside … how could HBRC officers and sophisticated HBRIC directors be so politically tone deaf?!

As Councillor Tim Gilbertson observed, when the entire dam project teeters on knife’s edge because financially strapped farmers are unable to invest in the scheme, along come HBRIC directors seeking raises that are more than the average income in Central Hawke’s Bay!

The proposal was set aside for the moment.

This episode stunningly illustrates the lack of financial due diligence and transparency that has permeated HBRC’s (and now HBRIC’s) handling of financial issues related to the water storage scheme. And gives further weight to Transparent Hawke’s Bay’s request for an Auditor-General review of transparency and conflict of interest issues surrounding the dam scheme.

But as disturbing as all this sounds, who do YOU think will get the Regional Council’s money when the dust settles and you’re not watching?

The citizens behind Transparent Hawke’s Bay — $25,000 to independently assess the scheme on behalf of ratepayers?

Or the big guns at HBRIC — $365,625 to sell it!

Call up or email your favourite Regional Councillor … ask which way he or she is chipping in your dollars.

Tom Belford

P.S. Fortunately, this entire discussion has been videotaped, as this HBRC meeting is the first session to be recorded for online webcasting. It will be viewable within days at this address: You have to see it to believe it.

Join the Conversation


  1. One does not have to look far to see a shinning example of a council mismanaging FUNDS and an associated project;
    Kaipara District Council ring any Bells?

  2. Tom, I was induced to attend the meeting in question.
    What a disaster!
    Apart from officers not reading nor understanding the agenda items, the level of so-called debate was beyond pathetic.
    All the more appalling was the quality of council representatives on the board of HBRIC which is charged with managing hundreds of millions of dollars of ratepayer money.
    It beggers belief that they appear to have little or no experience in running one of the largest businesses in the Bay.
    I challenge the 3 — soon to be highly paid — council directors to provide evidence that they have ever run a successful business on which one can determine their business acumen.

  3. Update conversation via HBRC facebook page – you won’t believe it – they had a problem transmitting the webcast.

    Megan Rose Hawke’s Bay Regional Council
    Hi HBRC Comms team, it appears the webcast from Wednesday’s council meeting has been linked incorrectly to film of a completely different organisation. When do you expect to have the right clip up? Have you considered making it available on this facebook page? That would be handy.
    12 hours ago
    You like this.

    Hawke’s Bay Regional Council Hi Megan. Staff became aware 10 minutes into the meeting on Wednesday that the meeting was not transmitting to our provider and this is being addressed. We plan to ensure all systems are good to go before we advise the public that our meetings are available on line.
    2 hours ago · Like

    Megan Rose Oh. I was at that meeting at the time. Why was it not announced at the meeting? And why has it not been made public since?
    22 minutes ago · Like · 1

    Hawke’s Bay Regional Council Hi Megan, Wednesday was due to be a soft launch of the webcasting service, as such we didn’t make any public announcement prior. We will be happy to do so once we’re happy with it.
    17 minutes ago · Like

    Megan Rose Hi. Interesting. There was an extremely public announcement made by the Chair, Fenton Wilson and GM Liz Lambert, who also informed the councillors, media, public and presenters including Transparent Hawke’s Bay and HBRIC Chair Andy Pearce, that the video would be edited in ChCh before being uploaded on to the HBRC website on Friday, due to Anzac Day, but that we could look forward to 24hr turnaround in future. I’m wondering what time was someone at the council table notified the webcast was not transmitting? And what time will your provider have on record of being notified that what turned out to be the webcast of the century was not transmitting?
    4 minutes ago · Like

  4. Tom,

    the report of this incident in HB Today suggested that it was the “electronic signature” of the chief financial officer that was attached to the directors proposal, it had been prepared without consulting him and he had seen it only shortly before the HBRC meeting.
    This incident raises a number of questions about the competence and intent of the independent directors. It is a crime to falsely use a document for pecuniary purposes. Who attached the Chief Financial Officer’s “electronic signature”? Why did the independent directors not consult the Chief Financial Officer over such a substantial increase? Why so much confusion over the status of the interim board of the HBRC Investment Company, didn’t the regional council employ a lawyer or law firm to advise on such matters at the time the Board was created? How many people have the ability to append the Chief Financial Officers “electronic signature” to documents?
    The whole affair suggests a truly astounding level of incompetence at the best interpretation. These people are entrusted with managing hundreds of millions of dollars of public and private funds? Ha, ha, ha, ha,ha, snort! This is better than Dilbert!

  5. As an aside Tom, please notify the Law and Business faculties of our Universities of the availability of the meeting video. I predict that it is going to become a “classic” teaching aid.

  6. Even without a full dam some people are out of their depth.
    But I ask myself -will amalgamation [in some form or other] ever recitfy the problems of local government?

  7. Hey,

    has anyone else received a letter from Dr Pearce explaining this chapter of errors?

    He wrote that he consulted fully, a draft of his fees proposal going to Mr Newman, Ms Lambert, Mr Fenton on 30 March. Additional data (and a typo correction) was emailed to Mr Newton and Ms Lambert on 31 March. On 18 April a further emailed copy went to Mr Newman, Mr Heath Caldwell and Ms Diane Wisely, the last named requesting him on 22April to attend the meeting to present the paper, (request copied to Ms Lambert).
    He maintains that he was not asked about, and had no part in deciding, who would countersign the paper for HBRC! That leaves the question, who decided that Mr Drury’s signature should be used when he had not been involved in the process of preparation or consultation? What a hospital pass. What an organisation.

    Transparency Hawkes Bay certainly has an uphill battle to fight.

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