Who will get the money?

Thu, Apr 25 2013

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: http://meetings.hbrc.govt.nz. You have to see it to believe it.

ENDS

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