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Tuesday, 9 September 2025 |
Te Hui o Te Kaunihera ā-Rohe o Heretaunga
Hastings District Council: Council Meeting
Te Rārangi Take
Report to Council
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Nā: From: |
Bruce Allan, Deputy Chief Executive |
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Te Take: Subject: |
Transitional Governance Group Terms of Reference (Hawke’s Bay Water Services Council Controlled Organisation Project). |
1.0 Executive Summary – Te Kaupapa Me Te Whakarāpopototanga
1.1 This report presents the Terms of Reference (TOR) of the Transitional Governance Group (TGG) for the Council’s consideration and adoption.
1.2 The TGG is established under the Regional Water Services Council Controlled Organisation Heads of Agreement (Heads of Agreement) for the purpose of providing transitional governance and oversight of the project to establish the joint operating model for water services delivery for the Central Hawke’s Bay District, Hastings District and Napier City Councils.
1.3 Council endorsed entering into the Heads of Agreement at the meeting of 31 July 2025 and delegated authority to the Chief Executive to sign the Heads of Agreement on behalf of the Council.
1.4 Through the Heads of Agreement, Council delegated on 31 July to the Mayor responsibility to appoint the other member to the TGG and that they both be delegated to represent Hastings District Council on the TGG through to the end of this triennium.
1.5 In accordance with the TOR, the report also notes the appointed Hastings District Council representatives to the TGG are Mayor Hazlehurst and Councillor Fowler.
1.6 The TGG will be a joint committee of the three participating councils, which formalises the arrangements outlined in the Heads of Agreement in accordance with the Local Government Act 2002 (the Act). The TOR for the TGG is prepared pursuant to Clauses 30 and 30A of Schedule 7 of the Act 2002 and set out the responsibilities and delegated authority of the TGG, and its membership and decision-making arrangements. The TGG will not be discharged at the point of the next election, in accordance with Clause 30(7), Schedule 7 of the Act.
1.7 The other parties to the Heads of Agreement, Central Hawke’s Bay District and Napier City Councils are also considering the TOR of the TGG at Extraordinary Council meetings on Tuesday 9 September, 2025.
3.0 Background – Te Horopaki
3.1 As agreed at the meeting on 31 July 2025 Council has agreed to establish a WSCCO with Central Hawke’s Bay District and Napier City Councils as the joint operating model for water services delivery under the Local Water Done Well (LWDW) requirements.
3.2 The Heads of Agreement agreed by Council on 31 July 2025 provides for the establishment of the TGG as a part of the overall governance and implementation of the Hawke’s Bay WSCCO between Central Hawke’s Bay District Council, Hastings District Council and Napier City Council.
3.3 The objectives of the TGG are to:
3.3.1 Oversee the direction and provide governance leadership during the initial establishment and transition of water services to the WSCCO;
3.3.2 Make certain decisions that are required to facilitate the initial establishment and transition to the WSCCO;
3.3.3 Provide direction to the Project Steering Group (PSG) and the Establishment Board (once appointed);
3.3.4 Ensure that the joint Water Services Delivery Plan (WSDP) and WSCCO establishment process reflects the Councils’ objectives and statutory requirements.
3.4 Council endorsement of the TOR and formal establishment of the TGG as a joint committee in accordance with Clauses 30 and 30A of Schedule 7 in the Act is required before the TGG can undertake their work.
4.0 Discussion – Te Matapakitanga
Membership, voting and meetings
4.1 The Heads of Agreement and TOR provide for seven members of the TGG, including:
4.1.1 Two members from each of the Councils (one of which must be the Mayor); and
4.1.2 An Independent Chair appointed at the first meeting of the TGG by unanimous agreement of the other members of the TGG.
4.2 The TGG will use best endeavours to make decisions by consensus decision. Where consensus cannot be reached, the matter will be escalated to the Councils for resolution and may then be referred back to the TGG for a formal decision. Where voting is required, each member (other than the Independent Chair) has one vote.
4.3 The TOR provide for the TGG to meet at least monthly, or a such other times and frequency as it determines.
4.4 Quorum will consist of a majority of members, but there must be at least one member from each council.
Supporting Advice
4.5 In addition to the TGG, the Heads of Agreement outlines the governance and project management model:
4.5.1 A Project Steering Group (PSG), made up of the Chief Executives (or nominee) of each of the councils, responsible for appointing members to the Project Team, approving the Project Plan, approving the Project Budget, and reporting to the TGG.
4.5.2 A Project Team, made up of one named officer/external appointee from each council (with one appointed as Project Team Lead), responsible for preparing the Project Plan and developing documentation for review and approval by the PSG.
Responsibilities and delegated authority
4.6 The TOR provide for the TGG to be responsible for providing governance and oversight, in accordance with Schedule 2 of the Heads of Agreement. This includes:
4.6.1 Overseeing the development of the Project Plan and monitoring progress against key milestones as set out in the Heads of Agreement and WSDP;
4.6.2 Monitoring progress and risks based on reporting from the PSG and Project Team; and
4.6.3 Appointing the Establishment Board for the WSCCO and advising on the appointment of the Establishment Chief Executive.
4.7 By approving the TOR, Council is approving the necessary delegated authority for the TGG to undertake its responsibilities.
4.8 Substantive decisions relating to the final joint operating model foundational documents remain the responsibility of each council separately.
4.9 The TGG will not be discharged at the point of the next election, in accordance with Clause 30(7), Schedule 7 the Act. This means it will be a standing joint committee, as is the case for joint committees such as the Hawke’s Bay Civil Defence Emergency Management Group Joint Committee.
5.0 Options – Ngā Kōwhiringa
Option One - Recommended Option - Te Kōwhiringa Tuatahi – Te Kōwhiringa Tūtohunga
5.1 Approve the establishment of the TGG and adopt the TOR as proposed.
Advantages
· Legal and procedural clarity operating under formal delegations and TOR providing a clear framework to project governance;
· Promotes regional cohesion by aligning councils under a unified governance structure, strengthening strategic direction and credibility;
· Accelerated decision making as delegations will empower the TGG to make decisions more quickly without the need to refer decision back to each shareholding council. This can reduce delays and enable the TGG to respond more quickly to emerging issues and key project milestones.
Disadvantages
· Delegating authority means that decisions may be made without full council input, which could lead to concerns about transparency or accountability;
· There is potential administrative burden as establishing and maintaining the TGG requires ongoing administrative support, which can be resource-intensive. However, this administrative support would be required for any structure.
Option Two – Status Quo - Te Kōwhiringa Tuarua – Te Āhuatanga o nāianei
5.2 Make amendments to the attached proposed TOR of the Transitional Governance Group Joint Committee.
· The advantages of this option are consistent with Option one, however the disadvantage of this option is that there would be potential need for further legal advice on a modified TOR and coordination between other Councils.
Option Three - Do not establish the TGG and therefore not adopt the TOR of the TGG and continue under alternative arrangement such as further Memorandum of Understanding or a Working Group.
· This option is not recommended as these alternative would not be able to operate with delegated authority to allow decision-making by the TGG, as contemplated by the Heads of Agreement.
6.0 Next steps – Te Anga Whakamua
6.1 The Council decisions arising from this report will be advised to the other partner councils, and Council’s Appointment Schedule will be updated.
6.2 Provided all partner councils resolve to appoint the TGG and adopt the TOR, the first meeting of the TGG is yet to be set but anticipated to be in mid-September.
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1⇩ |
TGG Terms of Reference |
CG-17-1-01800 |
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Summary of Considerations - He Whakarāpopoto Whakaarohanga |
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Fit with purpose of Local Government - E noho hāngai pū ai ki te Rangatōpū-ā-Rohe The Council is required to give effect to the purpose of local government as set out in section 10 of the Local Government Act 2002. That purpose is to enable democratic local decision-making and action by (and on behalf of) communities, and to promote the social, economic, environmental, and cultural wellbeing of communities in the present and for the future. Link to the Council’s Community Outcomes – Ngā Hononga ki Ngā Putanga ā-Hapori This proposal aligns with previous decisions Hastings District Council has resolved in its response to LWDW policy most specifically the adoption of a Hawke’s Bay WSCCO as the proposed model for the future delivery of water services on 31 July 2025 and as outlined in the Implementation Plan of the Water Services Delivery Plan that was adopted on 28 August 2025.
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Māori Impact Statement - Te Tauākī Kaupapa Māori The establishment of the TGG is the initial step in the process of appointing the enduring governance of the proposed WSCCO. Under the Heads of Agreement, it is acknowledged that at least one director of the WSCCO is to be appointed with knowledge of Te Ao Māori. To ensure this appointment meets the expectation of mana whenua partners strong engagement will be required. Under the Heads of Agreement, each council will also be responsible for deciding how to reflect their mana whenua relationships within the Shareholders Representative Forum.
As well, at more a project level, a regional approach to mana whenua engagement is commencing to ensure strong alignment in the proposed organisation at an operational level as well as a governance level.
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Sustainability - Te Toitūtanga N/A |
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Financial considerations - Ngā Whakaarohanga Ahumoni The Heads of Agreement outlines the cost share to be borne by each council during the establishment phase of the Project. The costs associated with the administration of and the legal documentation required to establish the TGG will be factored into the establishment phase and shared accordingly.
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Significance and Engagement - Te Hiranga me te Tūhonotanga The formation of the TGG and the delegation of decision-making authority represent a governance shift that may affect Council’s control over strategic matters. While such delegation is procedurally supported under clause 30(1)(b) of Schedule 7 of the Act, the overriding purpose of the TGG, which is to oversee the creation of a new water organisation, elevates the significance of this decision.
This new entity will involve the transfer of strategic water assets and is expected to have material impacts on service delivery, community outcomes, and stakeholder engagement. Given the scale and public interest in water infrastructure, this initiative meets several thresholds under the Council’s Significance and Engagement Policy and is therefore considered significant, warranting appropriate engagement and transparency measures.
However, the preceding decisions regarding LWDW have also been assessed as a high degree of significance. In response to this Council fulfilled a full public consultation in line with the legislated requirements set out in the Local Government (Water Services Preliminary Arrangements) Act 2024. The transfer of strategic water assets and the formation of the new water organisation formed a part of this formal consultation. Although the proposed transitional governance structure, including the TGG were not specifically identified at that stage, it was implicit that there would have to be a mechanism for coordinated decision-making by the participating councils during the establishment phase.
A key workstream currently in development and intended to be presented to the TGG for approval is a formal communication and engagement strategy that will outline the proposed timing and channels for ongoing communications and engagement.
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Consultation – internal and/or external - Whakawhiti Whakaaro-ā-roto / ā-waho This report is in response to the formal consultation conducted on the options investigated in response to LWDW. Across the participating councils, the outcomes of consultation were deliberated and influenced the substantive decisions to establish the Hawke’s Bay WSCCO.
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Risks
While the appointment of the TGG Joint Committee is a formal appointment under Schedule 7 of the Local Government Act 2002, this decision of Council is in line with previous decisions made by Council with regard to the establishment of the HBWSCCO. As such, this decision is a further step to operationalise previous decisions of Council, and therefore no new significant risks have been identified.
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Rural Community Board – Te Poari Tuawhenua-ā-Hapori N/A
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