The engineering committee meeting was held on 3 March 2016. Apologies were received from Cr Mirfin, Cr Dowler and Cr Edgar (for absence) and myself (for lateness). Cr Higgins also arrived late.
The agenda included: (1) Kaiteriteri wastewater pipeline replacement, (2) Utilities operations and maintenance contract renewals, (3) school zones, (4) NRSBU annual report, (5) engineering services activity update, and (6) chair’s report. I will highlight the main points of interest for me. The Richmond parking survey report was deferred to the next engineering meeting.
There were no public forum presentations. However, Cr Bryant noted that the Council had received a letter from the Murchison & Districts Community Council regarding the poor state of the Tutaki South and Matakitaki Roads.
Kaiteriteri wastewater pipeline replacement
Staff together together with Tonkin Taylor consultants spoke to a powerpoint presentation outlining the Kaiteriteri Wastewater Pipeline replacement project (formerly known as the Tapu Bay pipeline). Essentially the project sought to replace an existing temporary pipe with a larger 280mm pipeline, while catering for projected growth over the next 50 years. The new pipe would have a life expectancy of 90 years. Iwi were fully consulted throughout the project and supported the revised design.
In 2004 a temporary pipeline was installed as a temporary replacement for the existing pipeline (around 8.5km long) with a capacity of 27-35 litres per second. A larger pipeline is required for projected growth. The new pipeline will have a 90 year life. It will run from Cederman drive to Goodall road (around 8.7 km long), with a capacity of 29-38 litres per second. Pump stations at Tapu bay and Stephens bay will also be reconfigured.
The reduction in cost was mainly due to: (1) using a gravity fed system, so no pumps, (2) no significant private land purchases required, and (3) reduced consultancy fees. The design is also staged over two separate financial years. Spreading expenditure over two years reduces the pressure on rates. Had the work been done in one year, further rates increases may have been required to meet the expenditure spike in that year. The design phase will be completed by Q2 of 2016. A public tender is then expected to be called for in mid-2016. Completion of the project is expected by mid-2018.
Council endorsed the project.
For me the main highlight of this presentation was how the project had been revisited and redesigned to bring costs down. The initial cost estimate provided for in the Long Term Plan (LTP) was $4.5 million. However, the revised design was now estimated to cost $3.5 million.
My ambition for TDC is to bring about a culture change within the organisation. One that puts the customer at the centre of everything TDC does. For me, this presentation showed the culture was changing for the better within some parts of TDC. A culture of innovation and challenging cost assumptions. And that needs to be encouraged and complimented.
One of the design challenges with the new pipeline was a windy and steep road. The design also had to cope with variable wastewater flows which peak during the summer holiday period (illustrated below).
Normal flows vs summer flows
Hydraulic capacity – comparison of current route (left) vs redesigned route (right)
Maintenance contract renewals
The current Water Utilities Operations and Maintenance Contract (688) with Downer expires on 30 June 2017. Council approved the staff recommendation that a review be undertaken of the contract methodology and that a new contract be publicly tendered. Council also approved the existing contract being extended 12 months until 30 June 2018, so that the review and tendering process could be undertaken.
The current contract was awarded in July 2007 and was awarded for three operational periods (3 + 3 + 4 years), subject to satisfactory performance. The contract has a value of approximately $5 million per annum.
Staff also considered aligning the end of the new contract with the end of the Nelson City Council’s current utilities contract, held by Nelmac. This was considered a risk and the shorter term of the contract to achieve this would not be cost-effective for Tasman District Council.
It was suggested that a minimum overall term of 9 years 2018-2027 (5 + 2 + 2 years or similar) would be optimum both in terms of cost effectiveness and efficiency. This would also provide possible intervals for future alignment with Nelson City Council’s next procurement round, expected circa 2023 or later.
I support any opportunities for alignment that might generate future cost savings. Although I agree that that alignment must be balanced against ensuring we get good value for money now.
Council approved the installation of a variable speed limit school zone signage for Ranzau School, Motupipi School, and Hope School. Council also approved the installation of standard school warning signs for Central Takaka School and Dovedale School. In addition council, approved the installation of a static “40 when children present” signs for Brooklyn School, Mapua School, Lower Moutere School, and Mahana School. Additional standard school warning signs on Greenhill Road were also approved for Ngatimoti School.
|Ranzau School||Install variable school signs||$21,000|
|Motupipi School||Install variable school signs||$21,400|
|Hope School||Install variable school signs||$24,800|
|Brooklyn School||Install static school zone signs||$13,500|
|Mapua School||Install static school zone signs||$13,400|
|Lower Moutere School||Install static school zone signs||$9,000|
|Mahana School||Install static school zone signs||$9,000.00|
|Central Takaka School||Review location and install additional standard school warning signs||$1,200|
|Dovedale School||Review location and install additional standard school warning signs||$600|
|Ngatimoti School||Review location and install additional standard school warning signs||$400|
Funds of $20,000 were allocated in this financial year with a further $120,000 provided in the next financial year. The funding for these signs would come from the minor improvements budget.
NRSBU annual report
The council received copies of the Nelson Regional Sewerage Business Unit (NRSBU) Annual Report 2014-15 and the Business Plan 2016-17 (attached to the agenda).
The NRSBU reported a surplus of $1,934,722 for 2014-15 (in contrast to a $1,631,099 surplus in 2013-14). Total revenue was $7,568,700, less total expenses of $5,633,978. Equity at year end was $38,849,766.
Several performance indicators are illustrated below. The report included additional performance indicators.
Best Island treatment plant
Three overflow events occurred during the year (as illustrated below).
No odour events were reported during the year.
Average inflow to Bell Island
The graph below shows the application of nitrogen at Rabbit island and Bell Island is within capacity levels of these areas.
|Treatment plant||Operational costs||Daily average inflow m3/ day||Average BOD load mg/L||Power kWh/month||Dry solids||Cost per m3||Cost per kg BOD||Cost per population equivalent|
Capital expenditure (renewals)
|Sludge treatment A-train||$17,186.00|
Engineering activity report
Highlights from the manager’s report include:
- Asset management systems: Waugh Consulting has been engaged to lead a project to review asset management (AM) systems and processes across the council.
- Asset condition survey: Downer are currently undertaking a condition survey of above ground assets at all major sites (pump stations, reservoirs, treatment plants, floodgates). This is the first time that a major condition survey has been completed using digital systems rather than a paper-based system which involved double-handling to enter data.
- Property developments: Stage-3 of the Wahanga Ltd development off Grey Street, comprising 36 fully serviced residential lot is nearing completion. The final stage of Trek Developments Richmond (end of Fairose Drive), compromising 21 residential lots, has been completed. Hart Subdivision Richmond (Corner of Hill Street and Hart Road) comprising 32 residential lots, has begun. Stages 4 and 6 of Mapua Joint Ventures development, comprising 20 residential lots and a reserve is underway. Two new supermarkets are proposed (one at the corner of Salisbury Road and Champion Road, and the other at the corner of SH6 and Bateup Rd (Three Brothers corner). An application in Richmond South at the southern corner of Paton Road and Hart Road\Bateup Road (comprising around 200 to 300 residential sections) was expected (but did not eventuate).
- Water treatment plants: The Richmond Water Treatment Plant has been operating well with only some minor teething issues with electronic programming that were resolved. Prior to Christmas the bore pump at Riwaka failed on the Kaiteriteri water scheme. A spare pump was available from another pump station and was installed urgently over a weekend by the contractor. A spare pump was purchased for this facility as a backup and will be used as the standby pump for the next upgrade. E coli was detected at the Champion Road Reservoir just before Christmas, subsequent sampling for three days provided clear results.
- Stormwater: Pre-storm checks were carried out prior to the start of the Nelson Anniversary-Waitangi Day holiday period and again prior to the recent rain storm event on 17-18 February 2016. The Annual Exceedance Probability (AEP) of the storm event in Richmond was 4% (1-in-25 year) over a 24-hour period. Overall the stormwater system capacities were tested and worked well with no pipe blockages.
- Footpaths: Concrete and Metals have now completed all the footpath rehabilitation and pram ramp sites in Richmond and Wakefield. A new footpath was also constructed in River Terrace Road Brightwater.
- Lighting: Over 1500 LED lights were installed up to the end of January 2016, with around 700 remaining. The total conversion should be completed by the end of March 2016.
- Consents: Engineering Services staff have recently received notification that the Global Spraying Consent has been granted. The Council has a 15 year consent to carry out a variety of activities with regard to weed management.
- Waste: Kerbside recycling volumes continue to climb, with an on-going increase of 22% when compared with last year. This is being driven by growth in non-glass recycling, while glass recycling is slightly down. Regional waste to landfill is illustrated below.
Agenda and minutes
The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/engineering-services-committee-meetings/?path=/EDMS/Public/Meetings/EngineeringServicesCommittee/2016/2016-03-03.
The engineering committee met on 26 February 2015.
Minutes for the meeting have yet to be released. I submitted my apologies for this meeting.
The agenda for this meeting included reports on the following items: (1) funding for the cycle trail between Wakefield and Spooner’s Tunnel, (2) changes to the minor roading improvement programme, (3) an update on planned infrastructure improvements to the Richmond town centre , (4) receipt of the Nelson regional sewerage business unit’s business plan for 2015-16, and (5) an update on the engineering services activities.
Tasman Great Cycle Trail
The council agreed to provide $300,000 in the 2014-15 annual plan for the cycle trail from Wakefield to Spooner’s tunnel, where equivalent funding from the government or other third party was provided.
I always had concerns with the addition of the words “other third parties”, as there was always the possibility, third parties would themselves be funded from council grants. Thus council would effectively be funding more than $300,000, at a time when council needed to apply the brakes to its culture of unbridled spending, and re-prioritise spending to higher priority issues – like protecting peoples homes from storm water flooding, first.
The issue before the council was whether a third party could match the $300,000 with in-kind payments. Staff suggested that they could assess the value of any “in-kind” contribution against market rates to determine a fair value.
In my mind this raised two issues. First, work that would have been volunteered for free would now be valued to extract council funding. There is also the risk that other funding arrangements might adopt a similar strategy. However, the reality is that if businesses raised the money in cash form, they would get it back from doing the work anyway. On that basis I did not see a problem in accepting a fairly determined “in-kind” contribution.
However, in my opinion, the time involvement of staff time (and cost) in determining a fair value was troubling. Troubling in the sense that it was played down in this report, but is often highlighted in other reports (eg the remission of rates for rezoned land) to justify a shorter remission period.
Minor roading improvements
The council’s programme of minor road improvements is estimated to cost $3.2 million.
I note that this value reflects the removal of the proposed $1 million William Street Traffic lights from the minor improvements programme to the long term plan. Something I believe is unnecessary and wrongly prioritises road works over flooding risk.
However, the budget for minor improvements is $2.1 million for the 2014-15 year. This effectively means that some minor improvements will not be done in the 2014-15 year. A prioritised list of minor improvements can be found at page 21 of the agenda.
Changes to the NZTA funding in December 2014 mean that footpaths and cycleway maintenance or improvements could receive subsidies from 2015-16 onwards.
Changes also mean that the under-grounding of power-lines in Motueka (costing council $210,000 and Network Tasman $1.5 million) would also be subject to subsidised funding on the basis of the additional safety benefits. On this basis, staff sought to reclassify the Motueka under-grounding work so it could be funded from the minor improvement budget.
NZTA’s changes to subsidising road safety improvements (like under-grounding power poles) could mean other areas (like Brightwater) might also benefit from under-grounding work. Staff will be recommending changes to the LTP to take advantage of the NZTA changes without increasing councils overall planned expenditure (and thereby not placing pressure on rates).
Staff also sought to defer expenditure on the Motueka high street signalised crossing until 2015-16 due to the need for further consultation with NZTA, who raised concerns over the timing and staging of planned work.
Richmond town centre
Staff reported on progress with the storm water options for the town centre project. The report contains some very useful hydrology modelling and diagrams.
However, the modelling does not include the Richmond south area (eg, Richmond cemetery, Wensley Road, Bateup Road, and Hart Road) which was under water in 2011. Two years on, Richmond south has lost much of the rural grass land to development, that has increased the hard surface area for water run off into the storm water system. And no doubt has contributed to increasing flood risk in the central business district and wider urban areas.
If there is one submission Richmond residents can make to the long term plan (LTP), it is a call for the council to start storm water work now, not later, and ahead of other spending (for example, road or traffic flow improvements). Mitigating flooding risk now, rather than later, just makes sense. Unfortunately, not all councillors see it this way?
Information and submissions on the LTP can be made from http://www.tasman.govt.nz/policy/public-consultation/2015-2025-long-term-plan/.
Tasman sewerage is managed by a jointly owned entity (called the Nelson Regional Sewerage Business Unit or “NRSBU”) with Nelson council. Overall, the operation is running well.
The treatment plant is considered to have adequate capacity for disposal of treated waste and biosolids up to 2025, without further investment. Total operation costs are around $5.8 million, trending up to $6.4 million by 2019-20, and projected to trend towards $6.1 million by 2026-27.
Engineering services activities
It is always reassuring when there is not much to comment on.
The overall financial picture for the engineering department for the year ended January 2015 appears healthy. Operating income and expenditure is better than budgeted forecasts, with a positive variance of $3.5 million at this time.
Generally, there have been no significant issues in the areas of transportation, water, or waste. And any breakages or failures have been fixed promptly and within budgets.
Most projected work is on track with only a few projects experiencing issues (mainly around land ownership issues) that might risk delays. These include:
- Murchison water treatment plant upgrade to bring drinking water up to standard (to be completed in March 2015),
- Champion Road storm water culvert upgrade to Q100 specifications, and
- Richmond water catchment modeling and town centre master plan (behind schedule).
A few items of interest include:
- It is projected that $5.2 million may need to be carried forward into the next financial year to complete outstanding planned capital works.
- New kerbing, storm water improvements, footpaths, and construction of new grass berms have been completed in Angelus Avenue (Richmond). This is a new development off Hill Street. I’ve noticed on walking around the development how some parts (rocks stock to part of the concrete flooring) of the storm water system had already come loose. I understand the storm water system is warranted by the developer for the next three years.
- $1.7 million of LED street lighting will be rolled out in early 2015.
- The narrow bridge replacement contract has been awarded and work is expected to be completed by April 2015.
Agenda and minutes
The agenda and minutes are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/engineering-services-committee-meetings/?path=/EDMS/Public/Meetings/EngineeringServicesCommittee/2015/2015-02-26.
Waimea Weekly “Spooner’s cycle tunnel all go” (4 March 2015). See http://issuu.com/waimea-weekly/docs/040315/1?e=1913941/11709681.
The engineering services committee meeting was held on 15 May 2014.
The agenda included the following topics: (1) sewerage operation and management, (2) driver feedback signs, (3) bridge replacement, and (4) the engineering manager’s report. A confidential session was held to consider a solid waste services proposal.
Unfortunately the report from the Nelson Regional Sewerage Business Unit (NRSBU) was not tabled and instead deferred to the next meeting due to NRSBU staff not being able to present the report to council. Nevertheless the agenda (pp 5 to 30) does contain some useful information on TDC’s sewerage operation that the people from the NRSBU were going to talk too. I look forward to NRSBU’s future presentation.
Driver feedback signs
Speed issues have been a major concern for schools and residents in the region. As part of councils efforts to address the issue, council has decided to purchase three “driver feedback signs” (that are solar powered) at a total cost of $40,000. These are signs that inform the driver of their approaching speed. Studies conducted both in the UK and USA have found radar speed signs to effectively slow traffic down (see http://en.wikipedia.org/wiki/Radar_speed_sign). Six locations have been identified.
A number of trucking businesses are wanting to use the larger High Productivity Motor Vehicle (HPMV) capable trucks and trailers. These new trucks are longer and have more carrying capacity (roughly 20% more) than other trucks. Theoretically, their use should see a reduction in the number of truck trips on our roads and possibly improved safety. Their impact on the roads is also no greater than existing trucks due to their axel configuration. This results in the load weight of the truck being evenly distributed, so that there is no greater impact on road wear and tear than from other trucks. However, narrow bridges pose a problem to cross. Tasman has a number of narrow bridges.
After consultation with the industry, staff identified that the most efficient route for HPMV’s to the rest of the south island was along the Motueka Valley Highway which would involve only one narrow bridge replacement. A map of the route in the agenda (p 47). The estimated cost of the bridge work was $700,000 and would only proceed if it received a New Zealand Transport Agency (NZTA) subsidy of 59%. An effective cost to ratepayers of $287,000. The project was also expected to be completed within the existing approved 2013-14 bridge renewal budget. On this basis, council approved the expenditure.
The engineering manager’s report provided an update of the engineering departments activities, reorganisation, and programme delivery schedule.
Of particular interest for me was the reported savings from the departments reorganisation, although the manager stressed that this could deviate in future quarters. The 2013 third quarter (Q3) showed a total saving of $1,384,000 against plan, compared to the forecast saving of $710,000 for the same period. A positive variance of $674,000. This was a good result but whether this trend continues as the departments activities are reduced (as council strive to make savings from unnecessary capital expenditure) will be interesting to monitor.
Subsidised road renewals appear to be coming in under forecasted budgets of just over $6 million. A possible saving of $100,000-200,000. Although this saving is likely to be taken up by a shortfall of $100,000 in river maintenance activities. River work in the Buller catchment is underway with current costs appearing to be tracking below planned expenditure. Whether this is a timing issue or a trend will be interesting to watch.
Seawater inundation at the Motueka waste water plant has brought forward the decommissioning of one of the wetland ponds. The easter storm raised the risk of waste water overflows in Golden Bay. However, these were avoided due to the efforts of the contractor who tankard the effluent from site to site.
Stormwater networks held up well in March and April. Regular pre-storm inspections and the removal of debris are now being undertaken prior to forecasted heavy rain events. Areas of high risk continue to have sandbags stationed nearby.
The councils resource consent for landfill operations expires in September 2015 and work has begun to ensure consents are in place going forward.
The construction of reservoir and supply pipelines above Champion Road to increase supply for new Richmond east subdivisions are over budget due to road works and land purchases. The upgrade to Champion Road storm water system (to mitigate flooding to a Q100 event) is behind schedule due to resource consenting issues. Other projects behind schedule include: (1) the regions growth model report (now scheduled for June), (2) the regions parking management strategy report (now after May), and (3) the hydraulic modelling of Richmond. Given the size and number of other projects the engineering department is undertaking, some lag might be expected. I certainly do not have any concerns at this point in time.
Reader’s interested in the progress of other engineering projects should refer to the agenda (pp 62 to 70).
Agenda and minutes
The agenda and minutes for this meeting are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/engineering-services-committee-meetings/?path=/EDMS/Public/Meetings/EngineeringServicesCommittee/2014/2014-05-15.
The corporate services committee meeting was held on 13 March 2014. Apologies were received from the Mayor, Cr Norris, and Cr Mirfin. All other councillors were in attendance.
The agenda comprised a number of reports. These included reports on: (1) the local government funding agency, (2) council controlled organisations (ie airport, port, Tasman Bays Heritage Trust, Nelson regional sewerage business unit), (3) a proposal for a revised financial strategy, (4) human resources (staff) update, and (5) treasury report and financial activities. In attendance were officers of PWC, who presented information on the councils treasury management.
The agenda also contains (by way of separate attachment) the December 3013 financial reports. If you want to know where your money was spent, have a wander through this document.
I intend to provide a short snap shot of the contents of the agenda. Much more detail is available in the agenda itself and I recommend readers with an interest in financial matters read the agenda (and attachments) in full.
The local authority protection programme (LAPP) provides 40% of the council’s insurance cover for infrastructural assets. The remaining 60% is covered by central government. A review of local body insurance was published in December 2013 by Local government NZ (LGNZ). That review has recommended the replacement of the LAPP with a local authority owned agency and the replacement of the current 60/40 natural disaster co-funding arrangement, with a tiered\mixed approach to insurance cover involving levels of self insurance, commercial insurance, and taxpayer support.
The council is a member and shareholder of the local government funding agency (LGFA) which provides financial funding for participant councils. For the 2013-14 year, council can expect a 7% return on its founding investment. The dividend will be used to cover interest and debt used to purchase the original shares in the LGFA. The advantage of being a participant in the LGFA is access to funds at a lower interest rate than charged by the major trading banks.
The council is a joint shareholder of several council controlled organisations (CCO’s) with Nelson council. These include: Nelson Airport, Port Nelson, Nelson Regional Sewerage Business Unit (NRSBU), and Tasman Bays Heritage Trust.
Staff recommended the NRSBU adopt a treasury policy in respect of its funding and management activities. Under the policy, treasury management will formally be the responsibility of Nelson council acting on behalf of both councils (which is current practice). Having an treasury policy will also improve our audit rating as the council can show the asset is being prudently managed.
As at 31 January 2014, there was a significant variance to forecasted budgets. Accounting income was $4.9 million ahead of budget and expenditure was $1.6 million above budget. The net position was a year-to-date surplus of 3.1 million and an underlying surplus of $6.3 million. While some of the variance can be attributed to timing, there were very large gains of $3.1 million made from interest rate swaps (ie the refinancing of debt at lower interest rates). Our ability to continue to get good interest rates is a reflection of our credit rating and involvement in the LGFA. Interest rate swaps are managed by PWC. Council received a very good presentation from PWC on their funding and liquidity management and strategy. Together with how they see the market trending. Needless to say the trend on interest rates is a rising one. Generally, council is funded by banks (58% or $92 million) and the LGFA (41% or $65 million). Part of the liquidity strategy is to reduce any finance facilities not being fully used. For example, a bank might provide the council a loan facility of $10 million. The council draw down $9 million and are charged interest on that $9 million. Leaving $1 million available for future drawing (this might be reserved for disaster funding). The availability of the $1 million incurs a bank charge. The bank charge might be higher than borrowing the money elsewhere or it might be cheaper to hold the $1 million in cash reserves? These decision will be based on the interest rates council is able to obtain. Overall, PWC appear to be doing a good job, given the savings council is making on interest rate swaps.
As at 31 December 2013 council had a total staff of 257 people.
|Environment & planning||75||15||1||1|
|Chief executive’s office||3||1||1|
Of course, staff numbers alone do not provide a great deal of insight. However, some benchmarking of staff numbers against other councils who process a similar number of resource consents might show greater insight into the productivity of our environment and planning team. The same comparisons could made for other departments too. If council intends to reduce service levels then that might also mean we may need less staff. The key point here is that productivity is the focus, not just how many staff we have. Although clearly less staff mean less cost, but it might also mean less income. Like any business, its a balancing act.
Revised financial strategy
To address reliance on debt funding staff have recommended a new financial strategy for the long term plan (LTP). This involves setting a fiscal envelope prior to engaging in a review of councils management plans for assets and activities. The focus will be on core infrastructure and debt repayment. This may mean that some projects and service level expectations from the community will have to change. For example, reducing our expenditure of community development initiatives such as upgrading recreational facilities in the short-term until we can get our books back into a healthier state. It might mean, we reduce our service levels of community facilities (parks and reserves) and instead engage with the community and volunteers to take ownership. This is not a new concept. In the past, the community (often Rotary or Lions) funded a number of community facilities or beautification projects in Richmond. Many residents would fund the purchase of a park bench for a favourite spot in a local reserve. As a council we need to enable the community to fund those projects it wants, rather than council trying to anticipate and fund what people may want. As I have said in earlier posts, we also need to contain our total rates bill below the consumer price index (CPI) if we are to make any headway on getting some parity with other councils.
Agenda and minutes
The agenda and minutes for this meeting can be found at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/corporate-services-committee-meetings/?path=/EDMS/Public/Meetings/CorporateServicesCommittee/2014/2014-03-13.