Hawke’s Bay Regional Council is considering wiping nearly $400,000 of consent debt owed to it by a group of farmers after new legal advice.
But a local environmental group says it would be a decision that would cause widespread “anger”.
Water Holdings Hawke’s Bay, a group of private farmers, owe the council $382,956 for unpaid fees related to Ruataniwha water storage consents they hold for what was formerly known as the Ruataniwha dam.
The amount was due at the end of this week according to Hawke’s Bay Regional Council.
So far just $100 has been paid towards the debt, and the payment came in somewhat comical circumstances.
Water Holdings’ Hawke’s Bay’s largest shareholder Tim Gilbertson threw two $50 notes towards James Palmer and Rick Barker (then CEO and chairman of the council) during a meeting about whether to defer the fees last year.
Councillors at that meeting narrowly agreed to defer the collection of the existing charges to the end of June 2023.
No further money had been paid towards the outstanding debt as of May 1, 2023, but council staff have now put forward a decision to councillors about whether to remit (cancel) the debt based on legal advice, which they will likely consider at a meeting in July.
The Supreme Court found in 2017 that the Minister of Conservation acted illegally by trying to make 22ha of Ruahine Forest Park available for exchange to Hawke’s Bay Regional Investment Company Ltd (HBRIC) for the $330 million Ruataniwha dam project.
The regional council voted unanimously in 2017 to move on from the Ruataniwha Water Storage Scheme and focus its efforts on other priorities, but $20m of ratepayers’ money had already been invested into the project.
Water Holdings Hawke’s Bay wants to make a similar project under a new name, the Makaroro Storage Scheme, using the same consents it bought from the council after the council gave up on the Ruataniwha scheme.
The group is required to pay Section 36 freshwater science charges on the consents annually, however, it has not paid any for nearly three years now.
The way the charges were calculated by the council changed in June 2021 and the new methodology, based on the amount of water consented for, led to significantly higher costs for Water Holdings’ consents.
Susie Young, corporate services group manager, and interim chief executive Bill Bayfield wrote in a meeting agenda for June 28 that officers recommend section 36 charges applied to consents, where legal impediments exist, are remitted based on legal advice from the firm Simpson Grierson.
The fees are based on the idea that the consent holder receives a greater benefit from freshwater science monitoring than the general public, with no distinction made for consents that cannot be exercised due to a legal impediment like in this case.
Regional council officers drafted five options for councillors, their preferred option being to remit all annual freshwater science charges issued since July 2021, leaving $71,380 owed.
The notes said a key representative of Water Holdings had met with Bayfield and agreed with this option.
“Water Holdings has acknowledged that payments will be made for outstanding consent charges prior to 2021,” Young and Bayfield wrote.
Hugh Ritchie, a director of Water Holdings Hawke’s Bay, said the findings of council staff aligned with the legal work Water Holdings had done.
“We’ve always acknowledged the charges there, The only reason we got annoyed about them was the rapid inflation of them far outstripping anything that occurred to anyone else that was a consent holder,” Ritchie said.
“They’ve had legal advice - I suppose if [councillors] go against that advice then it would be interesting as to what we do after that.”
Gren Christie, a founding member of a local environmental pressure group called Wise Water Use, said in a statement sent to councillors and media that Water Holdings should have known their liabilities when purchasing the consents as the legal impediment was in place at the time of purchase.
“WHHB were fully aware of their obligations to pay the science charges but over several years have chosen to try and evade that responsibility,” Christie wrote.
“We ratepayers in HB are all going to face a rate increase because of the impact of Gabrielle. Now is not the time to grant financial relief to a group of business people because of their own business decisions.
“There can be no doubt that such a decision would cause great anger amongst those struggling to come to terms with the emotional and financial costs of Gabrielle.”
The decision was removed from the agenda on Wednesday as staff were unable to present the legal advice to councillors.
Bayfield said at the meeting that he would clarify the legal advice before presenting it to councillors for the next meeting.
James Pocock joined Hawke’s Bay Today in 2021 and writes breaking news and features, with a focus on environment, local government and post-cyclone issues in the region. He has a keen interest in finding the bigger picture in research and making it more accessible to audiences. He lives in Napier. james.pocock@nzme.co.nz