Hastings council's insurance covers lion's share of water prosecution costs

The Hastings District Council's insurance has covered almost all costs associated with the since-dropped prosecution action taken by the Hawke's Bay Regional Council over its water takes.

The Hastings District Council's insurance claim for costs related to the Hawke's Bay Regional Council prosecution action has gone a long way to covering the expenses incurred.

The regional council began action for an alleged breach of resource conditions by the Hastings District Council for its water takes, following the Havelock North water contamination in August last year.

During the first stage of the Havelock North water inquiry, however, it dropped the prosecution after the Hastings council conceded the breach of resource consent conditions and accepted two infringement notices, resulting in two fines totalling $1000.

The Hastings council also faced $71,000 in legal costs and more than $200,000 in technical investigation costs associated with the prosecution.

The Hastings council's risk and audit subcommittee heard yesterday that a claim lodged with the council's insurers resulted in a settlement being reached in July this year, with a payment of $220,705 plus GST approved for the costs incurred.

The claim was made under the council's statutory liability insurance but after wrangling over the payout, the insurance company had since put an exclusion in the policy for such Resource Management Act breaches.

The committee subsequently asked staff to go back to the insurers and to push for the exclusion to be waived, but to no avail at this point.

Although they might review the situation in future if there was evidence to suggest that the approach towards prosecutions under the RMA had improved, the council's broker noted the council would run into the same issue with any other insurer they approached as the exclusion would need to fully disclosed.

Chief financial officer Bruce Allan said that council staff would continue to push the insurer to review its position.

At the committee meeting chief, executive Ross McLeod also gave an update on the review and improvement programme of the council's water activities that arose after the gastro outbreak.

It was designed to ensure water safety and improve systems and performance that included bringing on extra staff and support, changing processes and the introduction of new systems.

He said a key focus was to effectively manage any future risks and that those at the coal-face were equipped to work within the new risk framework.

He said there had been good engagement by staff.

"There's a strong team culture and willingness to engage and embrace changes."

Acting mayor and committee member Sandra Hazlehurst congratulated the team for its efforts.

"We are in a really strong place - what's been done over the last year has gone a long way to helping rebuild the community's trust."