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Wise Water Use's Petition
The HB Regional Council were to decide whether Water Holdings Hawkes Bay Ltd. (WHHB) should pay their $382,956 debt for science charges at the monthly meeting on Wednesday 30th August. This agenda item has since been deferred, with no public announcement of a new decision date as yet - see below. The science charges are levied annually against the water consents WHHB hold to fill the 100 m m3 Ruataniwha dam.
Wise Water Use say this private company should not be given special treatment, especially when other ratepayers are facing rate increases in the aftermath of Cyclone Gabrielle, and that Council must immediately recover the full amount owed, otherwise WHHB must surrender their consents.
This petition closed on Wednesday 30th August 2023 - 363 signatures were collected - thanks to everyone for their support! The petition was presented to HB Regional Council on Wednesday 30th - watch the presentation here
Keep an eye on our website for updates.
Wise Water Use were informed that the unpaid science charges would be on the agenda for the Regional Council's meeting of Wednesday 30th August; however, this has not occurred. We do not know when the Regional Council now intend to address this issue - the can keeps getting kicked down the road!
We have decided to present the petition at the Wednesday 30th August meeting, and will continue to take action until the Council agree to do the right thing by all ratepayers and collect this outstanding and growing debt. No special treatment for a select few!
Wise Water Use advocate, Paul Bailey, also a past Regional Councillor, will present the petition along with an accompanying PowerPoint. Paul has sent an open email to all Regional Councillors in advance of the meeting explaining the group’s reasons for seeking immediate full payment of the debt.
Who are WHHB, and what do they want?
Watch local CHB farmer and 50% shareholder of WHHB, Tim Gilbertson, toss $100 at then-Regional Council CEO James Palmer as a down-payment on his companies' $382,956 science charge debt. This occurred at the end of a Council Meeting held on 31 August 2022 where Councillors narrowly voted 5-4 to allow WHHB to defer payment of their debt until 30 June 2023. This result was not good enough for Mr Gilbertson, who had requested that the debt be deferred indefinitely, along with future charges, until the consents might be exercised.
Instead of paying by the due date WHHB went out and got legal advice and are now challenging that they owe $382,956. There is clearly no shame on the part of the 3 WHHB shareholders (see below) about Council ratepayers having to cover their debt, which has been budgeted for and will need to come out of the Council's general fund.
Wise Water Use opposed deferment of the debt back in August 2022, arguing that Water Holdings HB actually had no intention of paying it, and staged a protest at Council offices during the meeting.
Photo / Paul Taylor (HB Today)
Current sitting Councillors who voted to defer the debt are:
Charles Lambert;
Jerf van Beek; and
Will Foley.
Current sitting Councillors who voted against deferring the debt are:
Hinewai Ormsby (Chair);
Neil Kirton; and
Martin Williams.
Shareholders of Water Holdings Hawkes Bay (WHHB) are:
Timothy Edward GILBERTSON 50%
David Hugh RITCHIE/Bruce WORSNOP* 35%
Bruce Mountfort Bond-Kennedy WORSNOP* 15%
*Director-shareholder of Ruataniwha Water Co. Ltd.
(Source, NZ Companies Register)
How's this debt accrued, what are the 'science charges', and what's WHHB's game?
Q: What are the science charges?
A: The science charges are used to offset the considerable cost of freshwater science monitoring by Council staff. The basis for the charges is that consent holders - who pay nothing for the water they use for their businesses - should contribute since they receive greater benefit from this science than the general public. The charges levied against consent holders are only 35% of the total costs accrued by Council to undertake this work, and are budgeted for each year, so when not paid other budget items must be cut to make up the shortfall.
Q: How has WHHB's $382,956 debt accrued?
A: The water consents to fill the Ruataniwha dam along with the intellectual property (IP) to build it were purchased by WHHB back in July 2018 for $100K, Hawkes Bay ratepayers having spent $20 million on developing them – a hefty discount! The science charges fall due each March, and Wise Water Use understand that WHHB paid the 2018/2019 charges, but that was the first and last time they did so. The following year the 2019/2020 science charges were paid for by CHB ratepayers in a controversial decision by CHB District Council. The current amount owed has accrued over the subsequent 3 years. In other words, WHHB hasn’t paid any science charges for 3 years (4, if you count the year CHB ratepayers footed the bill), while most other water consent holders have been diligently paying their charges each year.
Q: Why can't WHHB exercise their water consents to fill the 100m m3 Ruataniwha dam?
A: Simple - they don't have access to the land they need to fill the Ruataniwha dam! The Regional Council's investment wing and promoter of the dam, Hawkes Bay Regional Investment Company (HBRIC) had arranged a land swap - 22 ha. of pristine Ruahine Forest Park land for some farmland in another part of the catchment. DOC had approved the revocation of the Park's conservation status to allow it to be flooded, but the Supreme Court in July 2017 ruled the land swap illegal. WHHB knew this when they purchased the consents one year later, and are now calling it a 'legal impediment'. It sure is, only an Act of Parliament can override the Supreme Court decision, which would set a dangerous precedent for all of Aotearoa's conservation estate. Our local Regional Council by even allowing the consents to exist are saying "we are happy for our conservation land to be taken and flooded to promote irrigation for intensive farming at some stage down the line".
Q: What's is WHHB's strategy here?
A: One thing's clear, they don't like reaching into their own pockets to pay the annual science charges, but are happy for ratepayers to pick up the tab as occurred in 2019/2020 when the CHB District Council came to the party to the tune of $52K (i.e. the science charge amount due that year). This followed an unsuccessful attempt to obtain a $250K 'suspensory loan' from CHB District Council under the 2019-2020 Annual Plan, which was not granted following strong ratepayer opposition. It's likely WHHB are trying to buy time in the hope that the 14th October election delivers a change of government more sympathetic to their plans. Would a right-wing government come October change the status of the 22 ha. DOC land to enable it to be flooded for a dam? It’s apparent that this side of politics has a fatal attraction to promoting irrigation and intensive dairying – remember how John Key in 2014 sold 49% of our hydro assets in part to fund a $400 million irrigation slush fund for intensive dairying?
Q: What excuse are WHHB using to try and get out of paying their debt?
A: WHHB are complaining that they have been unfairly hit by an increase in science charges since the methodology used to calculate them changed under the 2021 Long Term Plan (LTP). The changes were designed to be fairer by dividing the science charges among consent holders (according to their volume of consented water) across Hawkes Bay as opposed to the previous methodology which calculated them within districts (i.e. Wairoa, Napier, Hastings, CHB etc.). This resulted in the doubling of WHHB’s charges over the last 2 years. Wise Water Use believe their argument is flawed:
Firstly, their consents ring-fence 100 m m3 water - more than the total groundwater take from all users in the Heretaunga Plains in any given year - which other potential consent holders can’t access;
Secondly, 138 other consent holders across Hawkes Bay have had percentage increases greater than WHHB – it just happens that WHHB hold consents to take 100 m m3 water which they would profit handsomely from if the Ruataniwha dam went ahead;
Thirdly, Mr Gilbertson - a past Regional Councillor well versed in council process - was advised in writing in February 2021 that the 2021 LTP contained a proposal to change the methodology, and was invited to submit. Mr. Gilbertson undertook to discuss making a submission with fellow WHHB directors, stating “it would be helpful to all parties”.* WHHB never made a submission, and are now complaining that they have been hard done by.
*Information obtained under Local Government Official Information & Meetings Act
Q: Can WHHB afford to pay their $382,956 debt?
A: It’s not clear what assets WHHB hold besides the consents and IP – this information is not publicly available. However, publicly available information does show that the three WHHB shareholders are all directors and/or shareholders of various companies some of which hold property assets with a likely combined value of several millions of dollars. They certainly have money to reportedly engage lawyers for advice about their liability to pay the science charges, and recently engaged lawyers to lodge an Environment Court appeal against the CHB District Council decision to delete a policy in the proposed District Plan “To recognise the regional social and economic significance of water storage within the Mākāroro Gorge” (i.e. the site of the Ruataniwha Dam). Majority WHHB shareholder Tim Gilbertson is fond of referring to the shareholders as "a group of old age pensioners".
Q: Could WHHB cash in on their consents?
A: Yes, absolutely. This is what the Regional Council call an ‘option value’. An option value is the potential benefit the holder of the consents would get if the Ruataniwha Dam was built. The consents for the water needed to fill the dam would become very valuable and return a tidy profit to WHHB shareholder’s on their $100K investment! Wise Water Use’s Gren Christie recently argued in an open letter to HBRC councillors that the WHHB investors, by gambling that the ‘legal impediment’ to exercising their consents might be removed, are by definition speculators.
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