Tagged: Waimea Community Dam

The Dam: Election Update

Given a series of articles have appeared in the papers over the last few months. I thought it might be worth recapping developments with the dam.

Consultation – a 100% funding model

The original proposal had council fully funding (100%) the total dam cost with the question of how ratepayers would be leveraged to fund it all. At the time the dam was estimated to cost around $74.6 million.

The cost was separated into three elements: (1) current consumption (40% of total dam cost: $30 million), (2) future consumption (30% of total dam cost: $22.4 million), and (3) environmental benefit (30% of total dam cost: $22.4 million).

dam-fundingmodel1

TDC currently consumes 15% of current capacity (or water extraction) from the Waimea plains (the aquifer). The remainder (85%), is consumed by irrigators. In terms of the current capacity portion (40% of Dam cost or around $30 million), ratepayers would fund 15% of the current capacity (6% of the total dam cost). This equated to roughly $4.5 million. Irrigators would fund the remaining part of the 40% (ie 34%) which equated to roughly $25.5 million.

The environmental benefit portion (30%) was originally proposed to be fully (100%) funded by the public. This part of the proposal changed after consultation – with 1/3rd of the 30% being paid on the basis of extraction, and remaining 2/3rds fully (100%) funded by the public.

The future capacity portion, contemplated TDC more than doubling it’s existing extraction (or water supply) from 6% of total dam cost (roughly $4.5 million) to 12% of total dam cost (roughly $8-9 million). In effect this would allow Richmond to double in size.

A 100% publicly funded dam was overwhelmingly rejected by the community. As it should have been. I was not surprised. It was totally unrealistic given the already burgeoning debt council was carrying. I suspect those advancing a 100% fully funded model probably knew that and were hoping the community would subsequently welcome a reduced contribution (33% of total dam cost). Moving forward, the public need to also be vigilant against TDC being exposed to an underwriting role – whereby council are left carrying the full cost of the Dam should the other parties evaporate.

Post-consultation – a 33% funding model

After consultation, council rejected a fully publicly funded dam model, but by majority (with Cr Higgins and Ensor moving the resolution, and Cr Bouillir, Canton and myself voting against it) agreed to provide $25 million towards a $74.6 million dam. This equated to roughly 33% of the total dam cost at the time. As Cr Higgins acknowledged in his rebuttal, the 30% environmental benefit portion was consistent with earlier water augmentation projects. However, in my opinion, just because one earlier project adopted such an approach, does not validate that approach.

Interestingly, a 33% level of funding was also consistent with an earlier (unofficial) funding model contemplated by members of WWAC when a dam was first mooted– whereby council would fund 1/3rd, irrigators would fund 1/3rd, and government would fund 1/3rd. So no surprise, where the Mayor, Cr King, and the rest of his flock, wanted the plane to land.

In my opinion, why should ratepayers be funding a disproportionate amount of the environmental benefit? In my opinion, extractors should pay in proportion to the amount extracted. Under this approach, ratepayers would only be funding 15% of the environmental benefit, rather then 66%.

Under this revised funding model – that the council majority arrived at, not the public – a $25 million contribution was proposed that roughly comprised: (1) $8 million for reticulated water (current and future water consumption), (2) $14 million for environmental benefits (being a 66% contribution towards the 30% environmental benefit portion, or 20% of the total dam cost), and (3) $3 million for establishing a council controlled organisation (CCO) and to fund other administration costs in establishing a dam (ie sunk costs).

Under this funding model it was not immediately apparent to the public how much water council was actually buying for the level of funding it was contributing. The focus was on the source of the funding. All the public knew, was they were funding about 33% of the total cost of the dam.

Interestingly, questions about the maximum level of public funds towards the dam (or for that matter, the percentage of environmental benefit to be funded by the public) was never raised in the consultation document. Instead a majority of councillors decided this on the day.

A revised model – design capacity of 34%

Earlier this year, a new model (design capacity) was proposed. Much of it is discussed in the Morrison Report (from page 53 of the Full council agenda of 31 March 2016). This was the first time water supply was explicitly tied to funding. The new model was also given more certainty using a P95 (95% certainty) estimated costing of $82.5 million.

morrisonreport-p95comparison

Under this model, it was much clearer what proportion of the dam council were funding, and what proportion of water council were getting for that level of funding. I supported this model in terms of greater transparency. It also meant, ongoing maintenance and operational costs were allocated on the basis of TDC’s proportion of subscribed (current and future) water capacity (roughly 12-13%). Although this appears to have crept up in the revised model to 18%.

morrisonreport-extractiveallocationmorrisonreport-costallocation

 

Under this model the total cost of the dam is attributed to the total hectares that the dam is capable of irrigating (7,765 hectares) based on the Dam holding roughly 13.4 million cubic metres of water. In hectare equivalents, TDC currently irrigates the equivalent of 620 hectares and was looking to subscribe to an extra 780 hectares.

 

Allocation Dam capacity Funding
Hectares Water supply percentage Funding percentage Total TDC Irrigators and other
Environmental benefit
TDC

2216

0.00%

20.00%

$16.48

Extractors

1112

0.00%

10.00%

TDC (15%)

167

0.00%

1.50%

$1.24

Others (85%)

945

0.00%

8.50%

$7.03

Total

* 3328

0.00%

30.00%

$24.75

$17.72

$7.03

Urban Water Supply
Current

620

8.00%

5.59%

$4.61

$4.61

Future

780

10.00%

7.03%

$5.80

$5.80

Total

1400

18.00%

12.62%

$10.41

$10.41

Other Supply
NCC

515

6.60%

4.64%

$3.83

$3.83

Total urban

1915

17.00%

17.26%

$14.24

$10.41

$3.83

Irrigator Supply
Current

3800

49.00%

34.26%

$28.26

$28.26

Future (direct)

1000

12.90%

9.01%

$7.44

$7.44

Future (indirect)

1050

13.50%

9.47%

$7.81

$7.81

Total irrigation

5850

75.40%

52.74%

$43.51

$43.51

Total Extraction

7765

100.00%

100.00%

$82.50

$28.13

$53.47

[*] The “3,328” hectares is only used for the purposes of allocating funding. Total extraction of “7,765” is based on actual water supply (ie 1,915 + 5,850 = 7,765).

Under this model TDC’s contribution is roughly $18 million for environmental benefit, and $10.4 million for water supply (current and future). A total of $28 million. Irrigators are tasked to find roughly $49 million, with NCC providing roughly $4 million.

The per hectare price for 7,765 hectares based on funding of $57.75 million (ie $82.5 million – $24.75 million, being the environmental benefit portion) is $7,437 per hectare. This is the cost per hectare for subscribers. TDC is subscribing to 1400 hectares at this price (ie around $10.4 million).

The use of the environmental benefit portion and the effect of a disproportionate loading of the environmental benefit portion on TDC ratepayers (roughly 70% of the environmental benefit portion is funded by TDC), results in the funding percentages being lower than the actual water supply percentages.

This means that irrigators are consuming a greater percentage of water (roughly 75%) than they are funding (52%), and in contrast ratepayers are funding a greater percentage of water (34%) than they are consuming (18%).

To put this new model into context, I have transposed the hectare equivalent’s across to the former first round dam consultation funding model (that had a 30:40:30 split in funding).

 

Allocation Dam capacity Funding
Hectares Water supply percentage Funding percentage Total TDC Irrigators and other
Environmental benefit
TDC

2216

0.00%

20.00%

$14.00

Extractors

1112

0.00%

10.00%

TDC (15%)

167

0.00%

1.50%

$0.50

Others (85%)

945

0.00%

8.50%

$7.5M

Total

* 3328

0.00%

30.00%

$22.00

$14.50

$7.50

Water supply (current)
TDC (15%)

620

8.00%

6.00%

$4.00

$4.00

Others (85%)

3800

49.00%

34.00%

$26.00

$26.00

Total

4420

57.00%

40.00%

$30.00

$4.00

$26.00

Water supply (future)
TDC

780

10.00%

7.00%

$4.00

$4.00

Irrigators

2050

26.40%

18.00%

$14.00

$14.00

NCC

515

6.60%

5.00%

$4.00

$4.00

Total

3345

43.00%

30.00%

$22.00

$4.00

$28.00

Total Supply

7765

100.00%

100.00%

$74.00

$22.50

$51.50

*The “3,328” hectares is only used for the purposes of allocating funding. Total extraction of “7,765” is based on actual water supply (ie 1,915 + 5,850 = 7,765).

Under the initial model TDC’s contribution was roughly $14 million for environmental benefit, $8 million for water supply (current and future), and $3 million for establishing a CCO (including admin costs). A total of $25 million – less a share of the already funded sunk costs. Using a design capacity approach the following diagram shows how the 74.6 million dam would have been funded.

20160331-fc-damstruc-74m

On 31 March 2016, the council (by majority) agreed to increase the contribution to $28 million ($25 million plus the sunk cost of $3 million) towards a P95 costed Dam of $82.5 million.

20160331-fc-damstruc-82m

Under this model, TDC’s contribution was roughly $16.5 million for the environmental benefit portion ($13.5 million plus $3 million sunk costs), and $11.9 million for water supply (current and future), which included the extractive contribution of 1.5% – less a share of the already funded sunk costs. Funding for the CCO appeared to have evaporated.

The table below provides a rough comparison.

 Dam (consulted) Dam
(Morrison report)
Dam
(re-proposed)
Total cost  $74.60 $82.50 $82.50
Environmental benefit  $14.00 $18.00 $16.50
Water consumption  $8.00 $10.40 $11.90
CCO  $3.00 ? ?
TDC funding  $25.00 $28.40 $28.00

If the uptake sought by WCDL is fully subscribed (4,500 ha), council staff have estimated there is a $14 million funding gap due to 1350 ha of unsubscribed land (or $20 million if NCC does not subscribe). At of present, around 3800 ha is currently irrigated so it would appear that irrigators are only planning to increase irrigation by an extra 700 ha.

morrisonreport-ha-costs

Given that WCDL only appears to have secure around 2,700 ha of subscribed land (because some of the current 3800 ha of irrigated land do not want to opt in) – the funding gap is even larger, with 3,150 ha of unsubscribed land, which equates to around $33 million (or early $40 million if NCC does not subscribe). Of course this all assumes TDC is happy to fund 34% of the Dam cost. The figures get worse for the irrigators if ratepayers only want to pay for what they are consuming (ie 18%).

morrisonreport-capacity

Key points

The environmental benefit portion is where the ratepayer’s contribution is inflated above what they consume. Had council adopted an extractor pays approach, TDC would only be funding 15-18% of the environmental benefit?

Interestingly, the media did not pick up on the disconnect between funding percentages and water supply percentages – a point I had emphasised several times during the full council meeting (see Nelson Mail, 1 April 2016). I was subsequently told by the Nelson Mail reporter, that they considered the public understood this. I suspect, that is probably what some politicians had led them to naively believe.

My own survey of residents, suggests otherwise. Many residents (but not all) do not realise that they are being asked to pay more for their water, than irrigators are. And when ratepayers become aware of the disconnect between funding the dam (34%) and the water they receive (18%), nearly all do not think it is a very fair deal. That in my book is hardly a fair deal for ratepayers. Especially when the opportunity cost (Plan B) is only around $15 million. And when you consider that ratepayer’s won’t be consuming 18% for some time into the future.

Some might argue that ratepayers benefit from future economic growth and will have the first call on water. However, if the dam is built there will be more than enough water anyway. So having first call, is more academic than reality. Leaving aside whether trickle down economics works (see The Guardian article), those at the top, get even larger benefits, than those down stream. Why should ratepayers be called on to help fund risk when they will not get a proportional reward for underwriting that risk? Surely benefits will still flow if ratepayers pay a fairer portion of the dam cost anyway?

I have no problem with business people risking more and getting handsomely rewarded for that risk taking. But why should ratepayers be asked to to take on more risk than they need too, without an equivalent reward?

Cr King has suggested there are a lot of unknowns with Plan B (eg, water harvesting), but the reality is that a resource consent is hardly going to be more than the $1 million already spent on the dam’s resource consent. In my opinion, its just an attempt to poor political cold water over some reasonable alternatives. So much for reasoned argument?

Irrigators are also getting the benefit of government funding (which reduces their cost). Not to mention the tax deductions that irrigators (as businesses) qualify for, on the interest cost of debt, borrowed to fund the dam. Something ratepayers generally do not qualify for.

Unfortunately, neither the irrigators, nor the mayor, appear very interested in securing a funding deal for the ratepayers contribution. In my opinion, the mayor is more interested in protecting the interests of some irrigators, than the wider community. That impression has come from numerous council meetings on the dam (often in secret), and the arguments and proposals put forward – nearly always in the interests of the dam company (and irrigators) over ratepayers.

So, does this sound like a fair deal for ratepayers?

Who is helping out who here? Lets take a quick reality check. This dam was driven by irrigators (ie, Waimea Water Augmentation Committee (WWAC) comprising stakeholder irrigators who wanted to mitigate the risk of drought) as they needed a consistent supply of water. That position has changed somewhat, now that rule changes proposed by council (affecting both water cut thresholds and water rights) come into force. Now everyone will be affected. WWAC was tasked with finding a solution for irrigators. It explored many options (and locations) but came to the conclusion that a large supply of water (ie a large dam) was the best option (in terms of the unit price of water). And only the lee valley could provide a dam of such a size.

From my own observations, very little research was put into weirs, which were quickly written off as to small (in comparison to a large dam). Yet those advocating the use of weirs have repeatedly asserted that they mainly assist in the recharge of the aquifers (the underground dam). As evidenced from the sudden drop in the aquifer water table, when weirs were removed from the appleby river. What remains unclear from this argument, is whether a weir would top-up the aquifer sufficiently (think a very full dam) to ride out a drought and longer water take reductions under new rule changes.

Another variable is climate change. We are expected to get more rainfall (see table below from NIWA at https://www.niwa.co.nz/our-science/climate/information-and-resources/clivar/scenarios#regional). If this is true, then the trend to date, of more frequent and longer drought periods, is unlikely to continue. In which case, are we over-investing in a dam, when alternative options, might be more cost effective?

Climate variable Direction of change Magnituded of change Spatial and seasonal variation
Mean rainfall Varies around country, and with season. Increases in annual mean expected for Tasman, West Coast, Otago, Southland and Chathams; decreases in annual mean in Northland, Auckland, Gisborne and Hawke’s Bay ] Substantial variation around the country and with season (see Ministry for the Environment, 2008) Tendency to increase in south and west in the winter and spring. Tendency to decrease in the western North Island, and increase in Gisborne and Hawke’s Bay, in summer and autumn.

Another option that was written off early was piping water from the lakes. Again this option was never fully examined nor updated for new technologies, like plastic piping (used in the states), or taking into account the ability for electricity generation (from turbines located within pipes). In my opinion, these options need to be examined more closely, if funding for the dam does not materialise.

More recently, council (led by the mayor) has undertaken to fund 50% of the cost (roughly $1 million) of establishing a future procurement process, should the dam proceed. In my opinion, this is yet another move that front loads a disproportionate amount of risk on ratepayers should the dam not proceed, rather than those who benefit the most – irrigators. Remembering ratepayers are only getting 18% of the water supply and funding 34% of the total dam cost. Neither amount to 50%.

I could understand it, if we had entered into a joint venture (a 50:50 arrangement), but we have not. We are not expected to enter into that kind of arrangement until “Dam Co” (the irrigators investment holding company) have actually secured their part of the dam cost (roughly $49 million). Nor are we likely to in my opinion. I have received no assurances that Dam Co are able to raise anything. At best council has received letters of comfort (ie Dam Co think they can raise the money, but are unable to make any binding promise).

Further, Dam Co have barely secured any funds (cash or debt), than what they had proposed to raise when the dam’s total cost was only $42 million? In fact, I’m not aware of Dam Co raising any funds whatsoever. And until it capitalises (ie raises shareholder funds and\or debt), the company would appear to not be worth much at all. Information about the irrigators dam company can be found at the companies office (see www.business.govt.nz/companies/app/ui/pages/companies/3365573).

I have challenged the financing of this Dam for some time (see 2015 Dam disclosure/, 2015 Dam economics revisited 2014 Dam decision on funding, and 2014 Dam consultation begins).

I strongly suggest ratepayer take a read of the Morrison Report and Agenda item (see Full Council agenda on 31 March 2016) for themselves – and get informed.

Dam funding model

I also note the continued questioning of the councils funding position (ie funding 2/3rds of the environmental benefit portion). I agree with Mr Horn, who says in the Leader (25 August 2016) at page 6 that “on a proportionate basis (ie based on the water take from the plains) ratepayers contribution should be around $12 million, not the $28 million proposed”. In response, the mayor has said, “the council and Waimea Community Dam Co Ltd are still working on the funding model”.

I find the mayors statement very misleading. I have repeatedly asked that council adopt an extractor pays principle to the dam, and on every occasion, the mayor and other councillors (who support the mayor) have opposed it. In march 2016, I challenged the mayor to adopt an extractor pays approach for all of the environmental benefit portion, when he sought to lift the ratepayers contribution from $25 million to $28 million, and he declined. His argument was it was to late to change? In my opinion, the current leadership has shown no willingness to change course. And to suggest otherwise, is very misleading.

Leader (page 6). www.neighbourly.co.nz/e-edition/the-tasman-leader/6575?utm_medium=email&utm_source=transactional&utm_campaign=e-edition_the-tasman-leader_2016-08-25_6575.

Tradable water debate

Since I am on the topic of water, I thought it worth while pointing to a broader debate over tradable water rights. Although my impression is that the debate is fixated on “ownership” rights.

RNZ (3 May) Nick Smith (National). See http://www.stuff.co.nz/nelson-mail/news/73504764/new-115m-water-treatment-plant-opens-at-richmond

RNZ David Parker (Labour). See http://www.radionz.co.nz/news/te-manu-korihi/304199/maori-have-no-greater-interest-in-water-labour

At present, no one owns water (at least located in the public domain). However, if you hold it (for example, in a bottle or storage container, that you own), then its yours. Generally, people acquire water rights by either capturing water as it falls from the skies, or applying for a resource consent to extract it from the ground (or river). The cost of a resource consent is not a great expense and is not tied to the amount of water you want to extract. The amount of water provided under the resource consent is generally only constrained by the science (and impact on neighbouring water extractors).

Perhaps removing water rights from the Resource Management Act (RMA) to a separate legislative instrument, that is better able to tie the amount of water to a unit price, requires some further examination. I wonder if water should managed under a QMS (quota management system), to ensure sustainable utilisation of water resources through the direct control of water harvesting for a specified geographical area.

Basically, rather than just pay a flat charge for a resource consent to extract a specified amount of water, you tie the amount of extracted water to a charge (like you do with the fishing QMS) – that charge then goes to the administrators of the water – to manage it. The base unit price for water would reflect the cost of ensuring a specified water quality level by the administrators of the water. However, the unit price could also increase depending on demand and supply in the market price (enabling water to be tradable, like the fishing quota). Thus the charging and price of water is tied to the amount of water, rather than just the cost of the consent. Charging for a the amount of water, (rather than consent) would incentivise more efficient water use.

 

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Full council (31 March)

Queen Street Reinstatement and the Dam

The full council meeting was held on 31 March 2016. Apologies were received from Crs King, Bouillir and Sangster for lateness. All other councillors were present.

The agenda included: (1) Tasman speed management plan, (2) Development contributions policy review, (3) Richmond infrastructure – Queen Street reinstatement project, (4) Special grants funding, (5) Waimea Community Dam – project status report including council response to WCDL funding proposal, (6) Mayor’s report, (7) Chief executive’s activity report, (8) Machinery resolutions, and (9) Action items from previous council meetings. In-committee (confidential) items included: (1) Land and access in the Lee Valley for the purposes of the Waimea Community Dam Project, and (2) Procurement and tendering process. I will highlight the main issues for me.

Public forum

Presentations were received from Maxwell Clarke and Murray Dawson.

Mr Clark spoke about the Waimea Dam. He was concerned that decisions taken today were being made without informed public consultation. He believed it was not the ratepayers’ responsibility to fund the dam – it was the responsibility of the irrigators. He was concerned that the council was undertaking decisions that would have huge financial consequences on ratepayers beyond this term of council. Waimea East Irrigation company was a large extractor of water (extracting directly from the river), who sold that water to irrigators. He suggested that the environmental flow was not really councils problem – it was the irrigators problem.

Mr Dawson spoke about the environmental flow provided for with the proposed Waimea Dam. He also spoke about the provision for future demand with the dam model. Mr Dawson suggested that council cannot justify the current level of expenditure based on urban supply detracting from river. This was because the urban extractions were minor, in comparison to irrigators, and had very little environmental impact. He asked that council pause and reconsidered weirs as an option. He asked for a workshop on the issue.

Tasman speed management plan

The New Zealand Transport Agency (NZTA) made a submission to the Council on the draft Speed Limit Bylaw in October 2015. NZTA staff were concerned that the Council’s process for reviewing and setting speed limits may not be in harmony with NZTA’s new Draft Speed Management Guide (Guide) which was released on 1 September 2015.

The draft Guide provides a framework and a toolbox to help manage speed on road networks. It will help Road Controlling Authorities identify where the risks are, where effort should be prioritised, and exactly what interventions (if any), are needed on what roads.

On 18 February 2016, the Council agreed to develop a Tasman Speed Management Plan (Plan) together with NZTA. Council and NZTA staff consider that the Tasman Regional Transport Committee is an appropriate governance body to oversee and consult on the development of the Plan.

Development contributions policy review

Council received the report and instructed staff to commence a full review of the development contributions policy.

In 2015, the Development Contributions Policy was reviewed as part of the Long Term Plan (LTP) 2015-2025. Council also received a number of submissions on the issue. Unfortunately, it was not considered practical, due to time and resource constraints, to undertake a full review of the catchment approach used in the Policy. Consequently, the Council maintained the single catchment approach to calculating development contribution charges.

In 2015, Mapua Joint Ventures (MJV) lodged an objection to the development contributions notice issued by the Council for wastewater and stormwater. Most of their objection related to the Council’s Interim Development Contributions Policy. This was the first such Development Contributions objection heard by commissioners under the new legislation.

The commissioners’ decision upheld the Council’s assessment of development contributions, finding that none of the objection grounds were met. However, in their decision, the commissioners also made observations on the Council’s Interim Development Contributions Policy, as they are permitted to do so under clause 9 (5) of Schedule 13A of the LGA. Specifically, they were critical of the single catchment approach, noting that the LGA explicitly stated that “the district-wide approach for grouping assets should be avoided”; that it was odd that “vastly disconnected spatial communities should be somehow connected through a financial mechanism”; and that on this matter the Development Contributions Policy “fell short of expectations”.

Following the commissioners’ ruling, staff sought legal advice from Simpson Grierson concerning the Council’s approach to catchments. Simpson Grierson shared the commissioners’ concerns with the district-wide approach to catchments and they advised that the Council consider moving to a multi catchment approach in future.

Staff intend to seek legal and professional advice during the review and preparation of a new Policy. Staff estimate this cost to be in the order of $20,000. Staff propose to consult on the revised Policy concurrent with the Annual Plan 2017-2018.

Staff also intend to review the way growth expenditure and revenue are accounted for in our systems. This will ensure the Council can properly attribute development contribution revenue to growth costs, ensuring the Council knows when growth projects have been paid for, and when they should no longer be listed in the Development Contribution Policy.

Richmond infrastructure – Queen Street reinstatement project

20160331-fc-queenst-today

The upgrade of Queen Street is part of the 5-year Richmond Central Infrastructure programme to replace pipework and improve stormwater management around Richmond. This work on Queen Street will renew aging infrastructure and improve stormwater management. The above picture is what Queen Street looks like now. And the following picture illustrates what it would look like after reinstatement.

20160331-fc-queenst-reinstate

The concept design promotes a slow-speed environment where pedestrians have more space to sit, shop, linger and meet. A narrower road (3-metre wide traffic lanes) will assist in moving through traffic onto the ring road and change driver behavior to encourage lower vehicle speeds.

The wider footpath allows a 2-metre wide route of travel with no obstacles and improves accessibility for all. The continuous asphalt surface is a low cost material, easy to maintain, providing a very smooth surface for accessibility. Some colouring may be considered during detailed design to enhance the aesthetic of the street.

Overall the design provides for the needs identified by the community without extravagance and can be achieved within the existing budget. The budget for the Queen Street upgrade is $9.8 million which includes: replacement of stormwater, wastewater and water pipes, lowering and replacement of the road, and renewal of the footpath.

Key features of the designed street include:

  • Road profile: The road profile will be changed (from concave to convex), and the street layout from shop front-to-shop front will be a continuous surface, with no kerb and channel. Asphalt will be used to provide a smooth surface, with the exception of a 700mm wide buffer zone. The 700mm wide buffer zone will be exposed aggregate to clearly delineate the footpath and carriageway. Street lighting, traffic signs and other street furniture will be placed here, keeping the footpath clear of obstacles.
  • Footpaths: A 4-metre wide footpath will ensure a 2-metre wide continuous accessible route of travel along Queen Street can be provided. The additional space in the footpath area will enable people to have space to stop without obstructing the line of pedestrian travel, provide seating and other requirements for the community.
  • Parking: Parallel parking will be on both sides of the street. The car park width will be increased to 2.3 metres. This will provide more space to park and enter/exit the vehicle. This results in a loss of around 5 car parks from 112 spaces available today. By design, the car park spaces can easily and cost-effectively be converted to provide flexibility of their use (such as car or bike parking, outdoor seating or other business or community purpose).
  • Pedestrian crossings: The current raised crossings will be replaced with two zebra (legal) crossings located at the Mall entrance and Sundial Square. Crossings facilities will remain at the roundabouts. The change to the road geometry along the length (narrower road) will make it safer for crossing at any point along Queen Street as a result of the lower speed environment.
  • Bus routes: These will change. The current bus stop will be removed from Sundial Square to the mall entrance. There will be one or two stops, subject to the final agreed bus route which will be confirmed in detailed design.
  • Landscaping: More shade, trees and greenery has been requested from the community. Trees and seating will be used to provide areas with shade for pedestrians to stop and rest at intervals across the length of Queen Street.

I raised a question about the location of cyclists on the narrowed road. As vehicles would not be able to pass cyclists, and nor would cyclists have much room to allow cars to pass.

20160331-fc-queenst-roadwidth

Timeline

Action Timeline
Development of detailed design for reinstatement April – May 2016
Planning and discussions with businesses on construction methods and timing, prior to work April – July 2016
Report back to the Council with final detailed design June 2016
Procurement June 2016
Construction works commence on Queen Street August 2016
Construction works expected to be completed August 2017

See also TDC’s webpage on the Queen Street Reinstatement Project and the You Tube video.

Special grants funding

Council approved (with the mayor making a casting vote), the allocation of $50,000 towards a Special Grants Fund. The fund would be a one-off cost to council and would carry-over to the following year if not used. It would be used to fund large one-off community projects that the current community grants fund was unable to grant sufficient funds. Only applications for a minimum of $10,000 would be accepted. This was to clearly differentiate the fund from the community grants fund, and convey the message that it was primarily to support large events.

Criteria for the new special grants fund are:

  • align with Council’s community outcomes,
  • raise the national/international profile of Tasman District,
  • deliver an economic return to the Tasman District,
  • professionally develop the local event sector,
  • utilise facilities that Council has invested in, and/or build on the unique natural environment of Tasman District, and
  • address an identified community need.

My concern with the proposal was two fold. First, I held concerns that the community grants fund was not a sufficient check on the merits of allocating such a large sum of funds. In my opinion, full council should be deciding on the merits of such an application. Accordingly, I put forward an amendment (Cr Canton seconding) that read:

3b. that the Full Council make final decisions on recommendations from the Community Grants Subcommittee on applications made to the Fund.

Unfortunately, on a show of hands, the vote was 3/9 against my amendment.

Secondly, while I appreciated that attracting large events to the region was beneficial, I considered that council had more pressing need for $50,000 (ie stormwater). Surely it was more important to protect peoples homes first, before entertaining them. Further, TDC already funded the EDA, and that organisation already had capacity to fund large events. I voted against the fund.

Waimea Community Dam – project status report including council response to WCDL funding proposal

This was a significant report that updated council on progress and also invited the council to pass resolutions that: “confirms its commitment to fund up to $25M towards the project costs while noting that Council’s contribution (50%) to the sunk costs remains in addition to the $25M”. And also resolved “confirms that its position on funding the environmental capacity in the dam remains unchanged”

I took issue with both these resolutions (which I discuss in more detail below). First, I saw no reason to pass the resolutions, unless the purpose was to lift councils contribution from $25 million, to $28 million (ie $25 million plus $3 million of sunk costs). Secondly, I considered that an an extractor pays approach to the environmental benefit portion would result in council reducing its financial commitment (not increasing it) – and that given the opportunity, we should revise the environmental capacity funding model, rather than confirm it. In my opinion, the earlier council indicated a different approach, the fairer it was on those irrigators who were seeking funding for the dam.

Council also resolved to confirm its earlier advice to Waimea Community Dam Limited (WCDL) that the WCDL funding model was not acceptable to the council for the reasons set out previously.

Council’s preference was a model that:

  • allocates costs to beneficiaries in proportion to design capacity,
  • limits debt at p95 (95% price certainty) in the JV to around $10 million (this being consistent with the council’s funding commitment),
  • places the balance of the debt to fund the design capacity for the beneficiaries with the proposed joint venture partner(s), and
  • is based on p95 cost estimates and provides for equitable allocation of project cost over or under runs.

Update report

Following on from the Council’s December 2014 consultation, and decision that the project could not be fully funded from rates, WCDL undertook to try to raise the money to fund the irrigator capacity in the dam and to develop an initial investment proposal for consideration by Council.

That proposal looked something like this:

20160331-fc-damstruc-jan16

WCDL and Council representatives met on 2 December 2015. That meeting was to discuss WCDL’s proposed funding model and the assumptions they had made about the appropriate project cost estimate to use and about the additional debt that would need to be held in the JV vehicle. Some limited work had been done by WCDL to address the concerns raised by Council in September 2015 over their funding model as originally proposed.

The Council’s concerns with the WCDL proposal were about:

  • the robustness of the numbers proposed,
  • WCDL’s ability to meet its obligation to the proposed joint venture, and
  • the fairness and equity in how capital and operating costs are allocated and funded.

WCDL and Council representatives agreed that:

  • the overall CCO structure for the JV was acceptable,
  • irrigators and related extractive users (WCDL) would accept a structure where they do not hold 50% or more of the JV shares, and
  • council negotiators would prepare a modified proposal that identified issues for presentation to WCDL in January 2016.

On 20 January 2016, a modified funding model was presented to the Project Steering Group (PSG). As a result of discussions at the PSG and as requested, staff developed a revised proposal. The key changes from the original proposal were:

  • debt above $10 million being held in WCDL with interest costs met by irrigators,
  • industrial water users and high-use industries (“wet industries”) having Water Supply Agreements (WSAs) with Council, as this demand is included within the 1400 hectare equivalent of dam capacity assigned to urban water supplies, and
  • the balancing item for the higher project cost was NCC/Central Government funding. That has increased to $11 million.

In my opinion, leaving some debt in the Dam company (that is jointly owned) is sensible move as it allows any interest costs to be deducted against any potential revenue. Its a tax thing. As long as the debt is shared equally there is minimal risk for council (unless the other shareholders evaporate). Hence why I also did not want to see the Dam company completely debt loaded by the irrigators. Any irrigator debt should be held in an irrigator controlled investment holding vehicle.

On 18 February 2016, council held a workshop that considered a background paper on “Council’s Response to the Waimea Community Dam Ltd Funding Model”. A copy of the workshop paper was provided to WCDL and following that workshop, the Mayor communicated council’s concerns and position to the WCDL directors.

Subsequently, WCDL advised council that certain high level elements of the model were agreed, but it was also clear that there were affordability challenges, and a lot of detail to resolve before the model could be agreed.

The proposed model has the following characteristics:

  • retains the 50/50 JV structure (voting rights) but provides for an unequal capital contribution (TDC 34.4%, NCC 5.3% WCDL 60.3%),
  • is a CCO therefore has access to the Council’s Public Works Act (PWA) powers,
  • allocates costs to beneficiaries in proportion to design capacity,
  • assumes that NCC will be an “extractive user” and fund the design capacity and operating costs assigned to the regional supply,
  • limits debt at p95 in the JV to around $10M (this being consistent with the Council’s funding commitment),
  • places the balance of the debt to fund the design capacity for the beneficiaries with the JV partner, and
  • overcomes the unfairness in operating cost allocation.

The proposed structure and funding model for a $82.4 million Dam is illustrated below:

20160331-fc-damstruc-82m

The revised structure is preferred because it allocates dam project costs based on the design capacity assigned to each stakeholder group. The former model merely divided costs based on an environmental benefit portion and current and future water supply need. In the revised approach the funding required to be raised by irrigators is $41M. This is considerably higher than that proposed in the original WCDL model.

By way of comparison, the funding model for a $74.6 million Dam is illustrated below:

20160331-fc-damstruc-74m

Its quite evident in the above illustration, that the $3 million sunk cost was very much part of the $25 million contribution towards a $74.6 million dam. In my opinion, treating the sunk cost as additional to the $25 million in the revised funding model, subtly increased council’s funding to $28 million (and incidentally maintained the magic 1/3rd funding of the Dam by ratepayers).

The revised design capacity approach also allocates operating costs (including finance costs) in the Joint Venture to extractive users, based on the design capacity, not on the initial uptake. This is a positive of the model and reduces ratepayer exposure to ongoing operational costs – which in my opinion are likely to be around $600,000 per year based on similar sized Dam operations down south.

The proposed dam at 13.4 million m3 (or 7,765 ha of designed irrigation capacity) provides more capacity than is need to meet current and expected demand out 100 years. While Council can fund its 100-year requirement for industrial and urban water supplies (1400 ha), the irrigators, based on the WCDL proposal, only proposed funding 4,500 ha, out of the 5,850ha of designed irrigation capacity, allocated to irrigation.

If irrigators subscribed to 4,500 ha the funding gap is around $22 million ($18 million if NCC purchase 515 ha). However, at the time of the report, it appeared irrigators had only secured funding for around around 2,700 ha. On this basis there appearers to be a substantial funding gap for irrigators. Clearly the government would need to be contributing more than $8 million in loans.

The funding model approved under the Long Term Plan (LTP) provided $25 million in total funding for the $74.6 million project. That funding model allocated $3 million for a CCO (and its work streams), $14 million for two thirds of the environmental benefit/public good capacity, and $8 million for the urban water supply capacity.

No reference was made to sunk costs, and many councillors had rightly assumed that the $25 million contribution, included all (investigative) sunk costs. However, based on a revised project cost of $82.4 million and a revised funding model (based on design capacity) the allocation of total project costs (of $28 million) would change to $11.9 million for the urban water supply, and $16.5 million for the environmental benefit (less $3 million for the already funded sunk costs).

Interestingly, the report notes that in the LTP, the Dam project already caused council debt to peak, and servicing the funding costs would also put a lot of pressure on the 3% pa limit on rates increases. Therefore, in my opinion, its been no surprise that the mayor has been very motivated in the last 3 years to get debt down – so that he has the head room to spend it.

The Project Steering Group (PSG) meet on 16 March 2015. John Palmer attended (as Nick Patterson’s replacement) and WCDL’s project director. Murray Gribben who is the Chair of Crown Irrigation Investments Ltd also attended. John Palmer and Mike Drummond met again on 22 March to discuss some WCDL thoughts on the Council’s proposed model that they verbally commented on at the PSG meeting.

The PSG also agreed that the procurement process must be carried out jointly. The procurement process has three stages. The first stage is to invite expressions of interests (EOI) from the market; the second stage is to invite proposals from shortlisted contractors and the third stage is to select the preferred contractor. Stage one was scheduled to begin at the end of March or early April.

Because the JV can’t be constituted as a CCO until after a proposal to do that is consulted on (assuming that is the outcome of the consultation) some form of interim contractual arrangements between the council and WCDL were needed to jointly run the procurement process. What was contemplated (and approved by council) was a formal agreement to jointly carry out this work, to jointly fund it and to jointly share the risks and benefits. It is likely that the cost of the process including finalising the design will be around $1 million. It was considered imprudent for council to carry this funding obligation and the risks alone.

As at February 2016, council had $2.015 million in outstanding loans in relation to the project. Of these loans $684,000 is held by the Urban Water account and relates to expenditure from 2008 to 2011. The balance of $1.33 million relates to current work streams and is part of the $25 million budgeted in the LTP. In addition to these costs that have been loan funded, there are costs related to the project that have been charged to other operational budgets. These total an additional $431,000 including $161,000 charged in the current financial year.

As at the end of February 2016, the council write off should the project not proceed for outstanding loans used to fund the work streams since 2008 is $2.015 million. This write off will quickly escalate as the procurement and land acquisition work streams are ramped up.

Councillors queried whether Council would meet the control tests required under the Public Works Act if the Council was only funding around 34% of the project. The CEO said what was important was that council had the construction under its control – either through Council or through the CCO. Legal advice that he had received confirmed that the funding and structural model the Council proposed met the control tests.

A second test was the obligation to be ‘financially responsible’ for the project. He said that there was no legal precedent for ‘financially responsible’, but by having at least a 50% shareholding in the CCO the council would be financially in control, even if the council was not funding the majority of the cost of the project. It was also important that council not disclaim financial responsibility.

Councillors also discussed the irrigators commitment to the project (ie how much skin they had in the project). Councillors noted that the estimate hectarage paid for by irrigators had dropped back from the original estimate. This gap immediately created a funding gap. They also expressed concern that the irrigators’ uptake may not increase over time. Mr Drummond confirmed that this would result in an increased cost to the other irrigators.

I was generally supportive of the revised design capacity funding model as it showed a much clearer picture of the amount of water (1400 ha or 18% of total dam supply), council was asking for and the very clear disconnect between what council was getting (18% of water) and the amount it was paying (34% of dam cost).

However, I did not support treating the $3 million as a prior sunk cost. In my opinion (and given the reaction of councillors around the table to what was being proposed), the $3 million was always considered to be part of the $25 million (not that I supported that figure either).

Accordingly, I moved an amendment to resolution 2 to remove the words “while noting that Council’s contribution (50%) to the sunk costs remains in addition to the $25M”. Effectively excluding the sunk costs from the $25 million contribution. Unfortunately the amendment was defeated, with only Cr Canton, Bouillir and myself supporting the amendment.

I also raised the question about the heavy loading on ratepayers. Around 70% of the environmental benefit portion of Dam funding is being paid for by ratepayers. In my opinion, this is inequitable and unfair. At present, 30% of the dam cost is funded by the environmental benefit portion (around $24.75 million of an $82.4 million Dam). One-third (33%) of the environmental benefit portion is calculated on an extractor pays basis (TDC extracts 15% of allocated water, so the funding portion would be around 15% of 8.25 million = $1.24 million) and the remaining 2/3rds is fully (100%) funded by TDC (around $16.4 million). Thus ratepayers are being asked to fund a total of around $17.7 million ($16.4 million + $1.24 million) for the environmental benefit portion of the Dam cost.

In my opinion, if the whole (100%) of environmental benefit portion was funded on an extractor pays approach, TDC would only be paying 18% (roughly $15 million) of the Dam cost, not 34% (or $28 million). The loading of the environmental benefit portion on ratepayers, is what is inflating the ratepayers contribution. That’s not a fair deal in my book.

If TDC only paid for what it consumed (18%) we’d probably only pay $15 million (+ $3 million already spent). A total of $18 million (rather than $28 million). This is my preference. It is also a similar price for what we would pay for a Plan B option.

During the debate, I put it to councillors that this was an opportunity to revisit how the environmental benefit portion was allocated.That this was an opportunity not to increase the ratepayers level of contribution from $25 million to effectively $28 million (ie $25 million + the $3 million sunk cost). But instead take it down. After all many councillors had stated in the papers that they did not support any increase of the $25 million contribution to the Dam. In my opinion, it was also better to review funding now, rather than further down the track. Those irrigators seeking funding would want certainty over how much they needed to raise now. Leaving it till later was also not fair on them.

As an alternative, I also suggested that if councillors did not accept an extractor pays approach to the environmental benefit portion, then it could consider reversing the 2/3 (100%) loading on TDC, so that only 1/3 is fully funded. If this was done the net result would be that TDC would then only be funding $21.15 million (rather than $25 million). Thus, if council wanted to treat the sunk cost of $3 million as separate from the $25 million contribution, this revised calculation would result in a a total contribution to the Dam of $24.15 million (ie $21.5 million + $3 million).

Interestingly (at para 6.4 of the report, at page 51 of the agenda), it is noted that “the current council commitment to fund up to $25M may need to increase”.

I put all of these numbers to the council. Unfortunately, none were prepared to listen (although I could see some were looking rather uncomfortable with what they were hearing). In response to my argument, the mayor suggested it was to late to change now. And a few other councillors chipped in with similar comments, suggesting council had already decided how the environmental benefit portion would be carved up.

I disagree. In my opinion, council could change its mind. It was never to late to change direction. In my mind, council had to change now (if it wanted too), so that irrigators supporting the Dam knew what funds they needed to raise. Clearly the task would be bigger, if ratepayers would not providing as much of the funding. However, none of the other councillors were prepared to enter into debate on the issue. Nor was anyone prepared to second my intention to put a motion to change the environmental benefit portion.

Due to the ongoing uncertainty over whether the irrigators could raise the necessary funding, Cr Bouillir and myself put forward a motion that read: “That the Full Council requests staff to limit future Waimea Water Augmentation Project spending pending the funding gap issue being resolved.” This resolution was unanimously supported.

Finally, while I was supportive of the new funding methodology (design capacity), I could not support lifting the contribution to effectively $28 million. I called for a division (recorded vote) so that residents could see what councillors voted for in comparison to what they had said in the papers. Only Cr Bouillir, Cr Canton, and myself voted against the resolution. Everyone else supported what was an effective $28 million contribution to the overall Dam project.

I strongly advise readers of this blog to read the Morrison report (page 53 of the agenda).

Chief executive’s activity report

Highlights from the CEO’s report included:

  • Financials. Council had an accounting surplus of $8.5 million, an operating surplus of $1.6 million, and capital expenditure was $24 million below budget. External debt was $142 million (against a budget of $168 million) – with external debt forecast to reach $155 million by year end (June 2016).
  • Golden bay recreation centre. A large soft spot was found under the proposed site of the recreation centre. Work had stopped to assess the problem. Subsequently, a solution was found and work recommenced.

Mayor’s report

At the end of the mayor’s report councillors are asked if they have any issues. I raised the following questions. First, I asked if the mayor would be following up with residents at James Place in Richmond over their stormwater concerns. Apparently it had been several years since they had last heard from the mayor and they had been reassured at that time he would be keeping them informed. Given the planned improvements I felt it proper for the mayor to again make contact with those residents and reassure them something was being done. He agreed.

Secondly, I disagreed that council should get involved in the local government excellence programme. In my opinion, LGNZ would be looking to establish credibility about its objectivity and TDC was not yet in a good state of health. I also thought the $20,000 fee could be better spent on other issues.

Thirdly, I asked about what was happening with the Takaka Hill road issue (ie access to homes on a DoC road that was proposed to be closed). The mayor advised that residents did not appear interested in resolving the issue (ie part funding a solution) and it had not progressed any further. Finally, I noted that Barcelona had declared that it would no longer use Glyphosate spray in public parks, and perhaps it was time for TDC to consider a similar stance?

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2016/2016-03-31.

Media

www.stuff.co.nz/nelson-mail/news/76677093/proposed-waimea-dam-funds-plan-has-gap-to-plug

www.stuff.co.nz/nelson-mail/news/76451796/Waimea-Community-Dam-the-environmental-effects

www.stuff.co.nz/nelson-mail/news/83719555/urban-water-users-dont-need-dam-says-council-candidate-murray-dawson

www.stuff.co.nz/national/80048283/expert-warns-of-safety-risk-from-golden-bay-recreation-centre-sinkhole

www.stuff.co.nz/nelson-mail/news/78448275/Suspected-sinkhole-on-Golden-Bay-construction-site-just-a-hole

www.stuff.co.nz/nelson-mail/news/79599843/Soft-spot-at-Takakas-recreation-park-a-swamp

www.gmwatch.org/news/latest-news/16617-barcelona-bans-glyphosate-in-public-parks

My new books

I thought I would take this opportunity to promote my new book – Tax Administration Law Made Easy, together with two other books in the series that I have also been involved with – namely, Goods and Services Law Made Easy and Income Tax Law Made Easy.

All books can be purchased online from LexisNexis in hardcopy or eBook format.

Full council (18 February)

The full council meeting was held on 18 February 2016. It was followed by the community development committee meeting and a workshop on the dam. All councillors (except Cr Sangster) were present.

The agenda included: (1) Waimea community dam – project update, (2) Motueka security cameras, (3) speed limit bylaw, (4) council charges, (5) CEO’s activity report, (6) mayor’s report, and (7) home insulation funding request. A confidential session (in-committee) was also held in relation to the sale of (1) council land in Tadmor, and (2) LGFA shares.

There were two speakers in public forum.

Public forum

Maxwell Clarke asked that council amend the speed bylaw recommendations by extending the 50kmh speed limit from the CBD out to McShanes Road. He also referred to the recent heavy rainfall bomb (the highest flow since 1957) and the likelihood of more such events affecting the construction of the Dam. Max also highlighted the Dam funding shortfall of $31 million. He suggested that irrigators needed to find $55 million and it was not councilors job to sort out WWAC’s problems.

Murray Dawson spoke about the saltwater intrusion issue and asked that the salt issue was put into perspective. He brought 2 containers of water with different levels of salt for councillors to taste. Murray also asked that his information requests of 9 February 2016 (in relation to figures for urban water supply), is addressed in a more timely fashion, as he was still waiting for this information.

Waimea community dam update

Council received an update on the Waimea Community Dam project. The big news was a possible funding gap.

Based on a estimated cost of $82 million for the dam, a potential funding gap of between $31 million to $19 million was forecast (depending on the financing structure, funding model, and level of cost certainty sought). The reports states:

… If the uptake sought by WCDL pre-Christmas is fully subscribed, we estimate there is a $31M funding gap, after taking Council’s funding into account, assuming the project costs $82.5M. … Our alternative to the WCDL model (which we believe Council could adopt) produces a funding gap of $19.92M at P50 and $22.12M at P95. …

On 20 January 2016, the Dam project steering group (PSG) was advised that WCDL aimed to get initial commitments of 2700 hectare equivalents from its consent holder survey. However, as I understand it, the Dam model requires a substantially larger commitment from irrigators (around 4500 hectare equivalents of a total 7,700 hectare equivalents).

The council was also advised that spending since 1 July 2015 was $254k against a budget of $1.459 million. This reflected the ‘slow down’ across all project work streams. However, preparation work for procurement and land access continued.

Mr McKenzie confirmed total project costs to date were in the order of $6.4million. This had been funded by Council, irrigators and the Crown. Staff advised that the  portion of these costs that would be an unfunded write-down (which the Council would need to cover if the project was not completed) was in the order of $2-3 million (this included the cost of the resource consent). A similar write down occurred when the Motueka stop bank project was terminated.

Version 12 of the proposed work timeline is illustrated below.

FullC-20160218-DamTimeline-V12

This timeline has since been revised. See below

DamTimeline2016-v17

Dam funding model

I also note the continued questioning of the councils funding position (ie funding 2/3rds of the environmental benefit portion). I agree with Mr Horn, who says in the Leader (25 August 2016) at page 6 that “on a proportionate basis (ie based on the water take from the plains) ratepayers contribution should be around $12 million, not the $28 million proposed”. In response, the mayor has said, “the council and Waimea Community Dam Co Ltd are still working on the funding model”.

I find the mayors statement very misleading. I have repeatedly asked that council adopt an extractor pays principle to the dam, and on every occasion, the mayor and other councillors (who support the mayor) have opposed it. In march 2016, I challenged the mayor to adopt an extractor pays approach for all of the environmental benefit portion, when he sought to lift the ratepayers contribution from $25 million to $28 million, and he declined. His argument was it was to late to change? In my opinion, the current leadership has shown no willingness to change course. And to suggest otherwise, is very misleading.

Leader (page 6). www.neighbourly.co.nz/e-edition/the-tasman-leader/6575?utm_medium=email&utm_source=transactional&utm_campaign=e-edition_the-tasman-leader_2016-08-25_6575.

Speed limit bylaw

A draft Speed Limits Bylaw 2016 was approved by Full Council for public consultation on 10 September 2015. A hearing panel of councillors comprising Crs Norriss, Higgins, Sangster, and Dowler met on 24 November 2015 to hear submissions.

During the hearing, staff recommend to the panel that several roads (ie Carlyon Road, Dehra Doon Road, Old Coach Road, Tasman View Road, Ellis Street, and Redwood Valley Lane) were withdrawn from the bylaw review and instead be included in NZTA’s Speed Management assessment in 2016. The panel agreed and recommended to council that several roads were not part of the review and would have no speed limit changes. Council were then invited to approve the bylaw as recommended by the hearing panel, approve it as amended, or decline it in full.

My own assessment of the hearing process, is that all staff recommendations were accepted and that no public submissions were accepted, unless they were consistent with the staff recommendations. In my opinion, it appeared to be a rubber stamping exercise. Especially when you looked at the submissions on Ranzau Road.

Cr Canton and myself sought to amend the bylaw in respect of lower Queen Street (which had multiple speeds over a short distance) and Ranzau Road (which was proposed to be reduced from 80km to 60km, yet residents had sought a 50km limit).

The reason why I sought to make an amendment to Ranzau Road was I felt the panel had not listened to the submissions. The report presented to the hearing panel is included below.

Ranzau Road

Posted speed limit : 70km/hr & 100km/hr

Requested speed limit: 40km/hr & 50km/hr

Submission numbers: 88, 89, 90, 91, 92 and 93

Recommended speed limit: 60km/hr & School zone 80km/hr

Description of road environment: The total length of road was assessed during this review. There are entrances and exits to fields and orchards along the length of the road. Ranzau School and Hope Community Church are both located along this road. There are several other small businesses along the road, as well as a couple of larger business where trucks enter and leave from. Tasman’s Great Taste Trail runs along the edge of the first section of road, then crosses the road and runs along the other side for the length of the road.

Speed warrant recommended: The speed warrant recommends a speed limit of 100km/hr for this road.

Staff Assessment: As part of this Speed Limit Review it is intended to remove 70km/hr posted speed limits from the network. This is intended to be a recommendation from NZTA in the updated Speed Limit Management Guidelines. The speed limit along this section would then be either increased to 80km/hr or reduced to 60km/hr. It is recommended to reduce to 60km/hr for the first 1km section of road (this incorporates the school and church). It is then recommended to increase the rest of the road to 80km/hr. This would provide consistency if adjoining roads were also reduced to 80km/hr. There have also been several requests for adjoining roads to be reduced in speed.

Staff Recommendation: Reduce the first 1km section to 60km/hr. Increase the last section to 80km/hr.

Working Party’s recommendation: The working party supported reducing the posted speed limit to 60km/hr on the first 1km section. The working party supported increasing the posted speed limit to 80km/hr on the last section.

In my opinion, the submissions were compelling. All 166 people who had made a submission (and signed the attached petition), supported the speed limit being lowered to 50km (rather than 60km). Petition signatories to the submissions included virtually every resident and every businesses on this road, as well as people who attend the Hope Community church. While they supported lowering the speed limit to 60km, they wanted it lowered a further 10km to 50km. Their main argument was one of safety.

Many submitters were concerned that children riding to school would be hit by trucks that frequently used the road. This argument was also consistent with staff advice – that reducing speeds improves the chances of survival. Truck usage is very high on this road. I know this because a resident on this road constantly complains about the regular noise he hears from the volume of trucks going up and down this road.

In my opinion, the panel recommendation gave to much weight to the need to provide “consistency” with the Speed Limit Management Guidelines. Surely safety should trump consistency? I also felt that reducing the speed limit by a further 10km was not detrimental nor a significant difference in speed from their recommendation. In my mind, provided there was signage, what significant difference did it make if it was 50km or 60km.

Accordingly, I proposed an amendment to the resolution (with Cr Bouillir seconding) to reduce the speed limit to 50km.

Strangely, staff then suggested that my amendment might compromise the validity of the bylaw. It was suggested that making further changes to the bylaw, that were neither in the original bylaw, or the amended bylaw, and had not been through the consultation process, would compromise the bylaw.

I struggled to understand this argument, given (1) staff had already suggested in the report to council that council could decide to amend the bylaw (option 2), and (2) the community through the consultation process had asked for a 50km limit, so this proposal had already been through the consultation process. Albeit rejected by the hearing panel.

Staff also said they would not support my proposed amendment as the amount of development in this area was not urban enough to warrant a 50 km limit. Again, I would have thought safety trumped any other consideration. That said, there are also a number of lifestyle homes down this road. While the area might not be strictly urban, nor is it strictly rural.

In my opinion, we are constantly reminded that lowering speed increases the chance of survival. I think it would be remiss of council knowing all this information, not to heed the warning of potential catastrophe with a child vs truck incident – and make every effort to lower the speed on this road to improve the chances of survival.

I also did not believe a court would strike down this change should it be challenged under judicial review proceedings (which I very much doubted would happen). This is because it is reducing the speed, not increasing it. The change is not material (or significant). And it is based primarily on safety – which I think trumps consistency. Appropriate signage should be enough to accommodate any consistency issues. Finally, the consultation process had considered a 50km submission, but had discounted it.

Unfortunately, my proposed amendment was lost. With only Cr Bouillir, Cr Canton and myself supporting it. Where were the other councillors or mayor? Surely it is for the community to decide what type of community they want and for councillors to support that vision, within the parameters of the law? In my opinion, this was just another example of councillors rubber stamping what was in front of them, and not having the courage to stand up for residents.

Cr Canton (myself seconding his amendment) sought to reduce the number of different speed limits staggered down lower Queen Street to just two (rather than three), by reducing the 60km limit area to 50km (and thereby merging and extending the existing 50km speed limit area). Again this proposal was not new, and had been supported by a number of submitters, but discounted during the hearing process. Again, the amendment was lost, with only Cr Bouillir, Cr Canton, and myself supporting it.

Motueka security cameras

The Motueka Community Board had requested that council enter into a memorandum of understanding (MoU) with the Motueka Police to maintain and upgrade 20 street security cameras that have recently been installed in the Motueka business area.

Council (by majority with Cr Canton dissenting) declined to enter into a MoU or fund the street cameras. It was suggested that the Motueka business community (Our Town Motueka) should be approached to fund this maintenance.

In my opinion, this was a matter for the police (and central government) to fund, not council. The cameras were primarily for the protection of private property, not public reserves, which had their own cameras. In Richmond, cameras are funded by the business community (Richmond unlimited) or police.

Council charges

Generally, charges collected by council are either imposed by statute (eg liquor licensing or food safety) or by Council. These charges included fees for: water connections, trade waste permits, wastewater, building consents and permits.

In this instance, council was mostly proposing to adjust charges for inflation (2%). However, in some instances, charges were increased by 8-9%. Something I was quick to point out to staff. These larger increases were explained on the basis of closer alignment with Nelson council fees and the time demands placed on the consents team (as part of cost recovery). Staff advised that although these fees had increased more than inflation, they were still lower than Nelson council.

Overall, I was supportive of the increases. In my opinion it was also important that council benchmark their charges against other councils, in order to show we are not only competitive with other councils, but also ensure that we are able to fairly recover the cost of administering the RMA system that council is tasked with implementing, without asking ratepayers to subsidise that cost.

Home insulation funding

The Warmer Healthier Homes Steering Committee invited council to join the Warmer Healthier Homes Nelson Tasman Marlborough project by providing $50,000 towards the Healthy Homes insulation project.

Council chose to decline the invitation. The reason for declining was three fold. First, this was unbudgeted expenditure, and if there was to be any funding for this project, it should come from community grants fund or mayors discretionary fund. Secondly, while there were community health benefits from this project, health was a government responsibility, and priority for the current government. Council often complains about central government shifting costs to councils and this was just another example.

Finally, council already had a ‘Warm Tasman Rate’ available to ratepayers. This rate enables homeowners to apply to council for what is effectively a loan to allow them to insulate their homes and install an approved form of home heating. The loan is then repaid through their rates.

CEO’s activity report

The CEO’s report contained the following highlights:

  • Strategy and planning: A strategic planning workshop was held on 7 December 2015. This was an opportunity to provide direction on what kind of organisation we want to be, and how we want to do business. Four themes were discussed: (1) decision making (we need to be advisors), (2) customer service (we need to be customer centric), (3) engagement (we need to thinking like a customer), and (4) partnership (we need to be enabling).
  • Finance: External debt was $137 million. Capital expenditure was estimated at $50.166 million for year end ($8.748 million lower than budgeted). A surplus of $2.95 million for year-end was forecast.
  • People: Staff turnover for the December 2015 quarter was 3.75% or 8.8% for the calendar year. The number of full time equivalents (FTE) was 242.5, up by 0.4 from the previous quarter as a role in Engineering Services has gone from 0.6 FTE to 1 FTE. The headcount remained the same at 267.

Finally, the CEO entered into a Memorandum of Understanding (MoU) with the Pakawau Coastal Resident’s Association in in relation to beach protection works along the Pakawau coastline. The MoU clarifies the roles and responsibilities of the council and association.

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2016/2016-02-18.

Media

Nelson Mail. www.stuff.co.nz/nelson-mail/news/75082540/Tasman-District-Council-to-increase-building-consent-fees

Nelson Mail. www.stuff.co.nz/nelson-mail/news/76607897/Waimea-dam-Why-urban-residents-need-to-consider-the-proposal

Nelson Mail. www.stuff.co.nz/nelson-mail/news/76306364/Waimea-Dam-water-needed-for-council-and-crops

Nelson Mail. www.stuff.co.nz/nelson-mail/76973015/What-happens-if-the-Waimea-Community-Dam-isn-t-built

Nelson Mail. www.stuff.co.nz/nelson-mail/news/75830516/waimea-dam-too-big-cost-too-high-says-brian-halstead

Nelson Mail. www.stuff.co.nz/nelson-mail/news/10606141/Ratepayers-have-say-on-Waimea-dam

Nelson Mail. www.stuff.co.nz/nelson-mail/news/76677093/proposed-waimea-dam-funds-plan-has-gap-to-plug

Nelson Mail. www.stuff.co.nz/nelson-mail/news/75870804/Waimea-dam-Time-is-right-says-Kit-Maling

Nelson Mail. www.stuff.co.nz/nelson-mail/news/76312586/Smith-backs-dam-pushes-Southern-Link-and-disses-Hells-Angels

Nelson Mail. www.stuff.co.nz/nelson-mail/news/63859029/time-for-pause-in-dam-process

Nelson Mail. www.stuff.co.nz/nelson-mail/news/75434056/Waimea-Dam-The-growing-pains

Nelson Mail. www.stuff.co.nz/nelson-mail/news/76451796/Waimea-Community-Dam-the-environmental-effects

Nelson Mail. www.stuff.co.nz/nelson-mail/news/78685491/Waimea-dam-almost-out-of-reach

Nelson Mail. www.stuff.co.nz/nelson-mail/opinion/71297692/rolls-royce-waimea-dam-blatant-bid-for-subsidy

Nelson Mail. www.stuff.co.nz/nelson-mail/news/79218248/Nelson-City-Council-up-for-4-38m-in-dam-plan

Other documents

http://hydrologynz.co.nz/downloads/20071015-093149-JoHNZ_2001_v40_1_White.pdf

http://ageconsearch.umn.edu/bitstream/235246/2/Bermeo%20paper.pdf

My new books

I thought I would take this opportunity to promote my new book – Tax Administration Law Made Easy, together with two other books in the series that I have also been involved with – namely, Goods and Services Law Made Easy and Income Tax Law Made Easy.

All books can be purchased online from LexisNexis in hardcopy or eBook format.

Environment and planning (4 February)

The environment and planning committee meeting was held on 4 February 2016. Apologies were received from Cr Norris and Cr Mirfin, and for lateness from Cr Dowler. All other councillors were present.

The agenda included a number of information only reports and a confidential (in-committee) session on: (1) a private plan change request from Progressive Enterprises Ltd, (2) report and recommendations from commissioner on Plan changes 54, 55 and 56 relating to the Waimea Water Management (Security of Supply), and (3) a report on weather tight home resolution case.

The open agenda included: (1) reduction of fees categories for certain off-licences, (2) environmental policy manager’s report on environmental policy programme, (3) compliance monitoring 6-monthly report (1 July to 31 December 2015), (4) resource consent manager’s report (July to December 2015), (5) 2015 air quality report. (6) pesticide residues in groundwater 2014 survey, (7) environment and planning teams activity report (the manager’s report), and (8) chair’s report.

I will summarise the highlights for me from these reports.

Public forum

Mr Hellyer raised his concerns about freedom camping in the district. He considered it an appalling situation and asked that TDC enforce some of its bylaws. He suggested some freedom campers should use motor camps (which are very cheap!).

Mr Clark gave his condolences to the family of Nick Paterson who had recently passed away. A reminder to everyone how fleeting life can be. Maxwell asked that the Waimea Water Management (Security of Supply) Plan Changes 54, 55 and 56 be considered in open meeting, instead of in-committee. He also spoke about an article in a local paper (Tasman Leader 21 January 2016) pages 4-5), which contained Councillors opinions on the Waimea Community Dam. He asked councilors come clean on where they stood on the dam and considered some councillors were sitting on the fence with “hairy fairy” comments like “holistic”.

Interestingly, many councillors did not vote, how they said they would (see full council meeting agenda and minutes (recording the vote) of 31 March 2016 at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2016/2016-03-31)?

Mr Dawson also asked that council do not spend any more money on the proposed Waimea Community Dam. He suggested the current $25 million was more than enough. He warned that council should not be manipulated into dam. He asked that his questions to staff about the hydrology are given an adequate response. He also asked why there were no public forums at extraordinary (mini) full councils meetings?

Off-licence fee reduction

In my opinion, this was the most significant item on the agenda.

By way of background, the TDC has adopted the statutory regulations for fee setting (rather than introduce its own Bylaw), as set out by central government (see Sale and Supply of Alcohol (Fees) Regulations 2013 at www.legislation.govt.nz/regulation/public/2013/0452/latest/DLM5708133.html).

In this case, two local boutique businesses (Peckham Ciders and Schnapp Dragon Distillery) wrote to council asking that their off-licence fees be reduced. Peckham Ciders argued that they did not make cellar door sales and instead sold most of their products remotely via their website or directly to trade distributors. Schnapp Dragon made a similar argument, stating that while they sold products on-site (from the cellar door), they did not allow consumption of their products on-site.

Generally, the regulations use a classification and weighting system to determine fees and charges. This is achieved by adding a retailer classification risk weighting and enforcement risk weighting together to determine the overall risk weighting and corresponding fee for the application.

For example, a business that sells alcohol is classified into the following types of retailers:

Licence held or sought Type of premises Weighting
On-licence Class 1 restaurant, night club, tavern, adult premises 15
On-licence Class 2 restaurant, hotel, function centre 10
On-licence Class 3 restaurant, other premises not otherwise specified 5
On-licence BYO restaurants, theatres, cinemas, winery cellar doors 2
Off-licence Supermarket, grocery store, bottle store 15
Off-licence Hotel, tavern 10
Off-licence Class 1, 2, or 3 club, remote sale premises, premises not otherwise specified 5
Off-licence Winery cellar doors 2
Club licence Class 1 club 10
Club licence Class 2 club 5
Club licence Class 3 club 2

The relevant weighting is then combined with another enforcement weighting:

Number of enforcement holdings in last 18 months (applies to all types of premises) Weighting
None 0
1 10
2 or more 20

The total number is then used to create an overall risk rating that generates the license cost.

Cost/risk rating of premises Fees category Application fee Annual fee
0–2 Very low $320.00 $140.00
3–5 Low $530.00 $340.00
6–15 Medium $710.00 $550.00
16–25 High $890.00 $900.00
26 plus Very high $1,050.00 $1,250.00

Due to the manner in which the regulations were drafted, cellar door sales (of wine) are awarded a lower risk rating, than other businesses that sell spirit based alcohol from the door. This is good for the wine industry, who can obtain a lower risk rating by adding a cellar door operation to their business. Although it does create a strange outcome for vineyards that do not operate a cellar door?

I suspect the underlying reason for this distinction is an acknowledgement that the consumption of wine presents a lower risk, than the consumption of spirits. However, the regulations as they are currently drafted do not appear to recognise that online (remote) sales of alcohol (wine or spirits) provide an even lower risk of drink driving incidents. This is because online sales cannot be consumed at the point of purchase (ie at the vineyard or distillery), but are delivered to the home.

In my opinion, the regulations are poorly drafted and fail to make a clear distinction between the types of alcohol (ie wine vs spirits) and the point of sale (ie online (remote) vs site of manufacture). Ideally the regulations should separate out winery sales (remote or cellar door, and all other remote sales. This could be done by adding “remote sales” as a separate classification and awarding a risk rating of “2”. Unfortunately this is not the case, and TDC were left to apply another rule provided within the regulations (clause 6(4) of the regulations) – namely exercising a discretion to reduce the overall risk rating by one step (eg from “low” to “very low”). Exercising the discretion would save affected businesses $810 (over 3 years).

Staff recommended that council allow the applicants to be classified in the “very low” risk category as permitted in the Act. Council, after asking for information about the financial impact of a positive decision, unanimously agreed. Council also took the opportunity to reduce non-commercial community events and fundraising licensing categories by one step. Both changes took affect from the date of the resolutions (and were not retrospective).

TDC information on licensing can be found at www.tasman.govt.nz/services/licensing-and-environmental-health/alcohol-licensing/off-licence/.

Environmental policy programme

This report updated progress with live plan change projects in the environmental policy programme, and discussed priorities, deadlines, and staff resourcing for 2016.

Plan changes included: Richmond greenways (Plan Change 37), Wakefield review (Plan Change 57) Brightwater review (Plan Change 58) Residential zone coverage (Plan Change 59), Rural land use and subdivision policy review (Plan Change 60), PPCR Wainui Bay (Plan Change 61), PPCR Commercial Richmond north (Plan Change 62), Coastal occupation charges (Plan Change 63) Mooring review (Plan Change 64), NPSET – electricity transmission lines review (Plan Change 65), Golden Bay landscapes (Plan Change 66), Urban development review (Plan Change 67), Takaka catchments water management (Plan Change 68), Waimea Plains water quality (Plan Change 69), Richmond residential zone review (Plan Change 70), Takaka and Waimea plains FLAG projects.

Compliance reporting

The report provided a summary of the complaints, incidents, and general monitoring over a 6-month period (from 1 July 2015 to 31 December 2015). Between 1 July and 31 December a total of 428 complaints or requests for service were received by the compliance team. In comparison 479 complaints were received for the same period the previous year and 482 the year before that.

Enviro-20160204-p42

A total of 25 abatement notices were issued over the period. A total of 19 infringement fines were issued for breaches against the Resource Management Act or Litter Act. A total of 2278 individual monitoring actions were recorded against 1093 resource consents as part of the Council’s targeted compliance monitoring programme. Enforcement actions in relation to water takes in the district were: 1 abatement notice, 2 infringement fines, and 3 invoices for missing readings audits.

The 2015-16 dairy farm survey started in September 2015 as farms commenced milking. As at the end of December 2015, 40 farms had been inspected. There were 6 recorded instances of non-compliances within the first few weeks of the audits. Of these, 3 farms rated as non-compliant and 3 significantly non-compliant.

For the 3 rated non-compliant, one related to the discharge not meeting the setback requirement to a property boundary. The other two related to minor ponding o f effluent on the ground’s surface but did not pose any threat of run-off to water. For the 3 rated significant, the offences included the direct discharge of effluent to water, significant ponding of effluent on the ground’s surface that resulted in run-off into a waterway and a farm with no contingency in place to avoid a discharge to water. All 3 were dealt with through abatement notices and infringement fines.

Enviro-20160204-p49

Resource consents

The report presented a summary of the performance of the resource consent team regarding compliance with statutory timeframes for the first half of the 2015-2016 financial year.

Overall, 481 resource consent applications (including variations to existing consents) were processed, with 99.8% compliance with statutory timeframes during the 6-month period. Around 35% of all applications had time extensions applied (similar to last year).

The permit replacement processes for all water takes in the Wai-iti Zone, and the first batch of 40 water permits affected by the Waimea Augmentation proposals (Lee Valley Dam), had begun at the time of this report. Water users were able to continue to exercise their old permits in the interim period until new permits were completed.

In my opinion, the consent performance was very good, given resourcing issues (mainly due to staff changes) and increased workload.

Timeliness Results (July-December 2015) Non-notified Applications

Type of Application Number Complete Percentage Within Time Median Processing Days **
2012 * 2013 * 2014 * 2015 *
Non-notified Applications (No Hearing)
District Land 237 203 213 231 100.00% 13
Subdivision 67 68 71 58 98.00% 21
Coastal 14 21 25 10 100.00% 15
Discharge 81 53 101 78 100.00% 20
Regional Land 12 22 13 20 100.00% 22
Water 28 46 61 67 100.00% 19
Total: 446 425 484 464 99.80% 17
Others *** 7 12 18 17 n/a n/a
Non-Notified Applications (With Hearing)
All 0 0 4 0 n/a 0
* Numbers include applications to change conditions of existing consents.
** Processing days include time extensions. Time extensions are typically required for large and/or complex subdivisions including associated discharge permits for wastewater and stormwater disposal for new rural residential allotments. Time extensions are also applied for the bulk processing of replacement water permits for water management zones.
*** The “Others” category includes Rights of Way (ROWs), Designations, Outline Plans and Certificates of Compliance.

Timeliness Results (July-December 2015) Notified Applications

Type of Application Number Complete Percentage Within Time Average Processing Days *
2012 * 2013 * 2014 * 2015 *
Publicly Notified Applications (No Hearing)
All 1 0 2 5 100.00% 62
Publicly Notified Applications (With Hearing)
All 11 2 0 3 100.00% 168 ***
Limited Notified Applications (No Hearing)
All 7 5 2 4 100.00% 78
Limited Notified Applications (With Hearing)
All 1 2 42 ** 5 100.00% 333 ***
Totals 20 10 46 17 100.00% n/a
* Processing days include time extensions.
** The limited notified applications in 2014 included 27 discharge permits for rural subdivisions.
*** The applications with long processing times all involved requests from the applicants to give them time to attempt to resolve issues with submitters.

Summary of Decisions

Type of Decision Number
Declined by Committee 0
Granted by Committee 2
Declined by Independent Commissioners 0
Granted by Independent Commissioners 11
Granted by Mixed Panel 0
Declined under Delegated Authority 0
Granted under Delegated Authority 468
Requiring Authority Decision (Designations) 0

Air quality

The report updated the Environment & Planning Committee on results of air quality monitoring in Richmond undertaken during the winter of 2015. Based on current trends, during normal winter weather TDC is on track to achieve the current requirements of the National Environmental Standard Air Quality (NESAQ). The NESAQ is set by law and TDC is required to meet it.

Enviro-20160204-p62

Over the last winter the NESAQ was exceeded 3 times for 24 hour average particulate matter smaller than 10 microns (PM10). This is the second best result on record since air quality monitoring began in Richmond in 2001 and much lower than the total number of exceedences recorded during 2013 (nine), although one more exceedance than that recorded during 2014 (two).

Enviro-20160204-p64

The majority of smoke related complaints related to outdoor burning, with 15 complaints in the Richmond area, 12 in the Moutere Waimea area and 36 within the Motueka area.

Pesticides

The report discussed Council’s participation in the National Survey of Pesticides in New Zealand Groundwaters and presented the results of the latest round of sampling.

In Tasman, 15 groundwater sites are sampled at 4-yearly intervals and tested for the presence of pesticide residues. Tasman has participated in this programme since 1998 completing 5 surveys to date.

Overall, the 2014 sampling confirms the continued presence of trace level pesticide residues in groundwater at some locations (seven). Whilst showing some variability, no sites show any significant increases in pesticide residues compared to the previous sampling results.

The pesticide residues detected in Tasman groundwaters during the 2014 sampling round were:

  • Simazine pre-emergence herbicide (field half-life: 26 – 186 days),
  • Terbuthylazine herbicide for grass and broadleaf weed control (field half-life: 60 days),
  • Dinoseb herbicide for grass and broadleaf weed control (field half-life: 100 days).

Enviro-20160204-p76

Environment and planning activity report

Highlights from the managers report include:

  • Marine protection areas. There are two marine reservations in Tasman – Tonga Island and Whanganui Inlet. Both will transition into new reserve status under the proposed law changes.
  • RMA reform. The LGA and Productivity Commission have released think pieces on the future of the RMA (see www.lgnz.co.nz/home/our-work/publications/a-blue-skies-discussion/, and www.productivity.govt.nz/inquiry-content/2682?stage=2).
  • Woodburners. Nelson council (NCC) is proposing a limited number of Ultra Low Emission Burners (ULEBs) be allowed in Airshed B2 (including Stoke, Wakatu and Enner Glynn) and Airshed C (including Port Hills, City Centre, The Brook, The Wood and Atawhai). If there are further improvements to air quality over the next few years, the plan change proposes that burners could also become a permitted activity in Airshed A (including Bishopdale, Victory, Toi Toi, between the colleges, and Washington Valley) and Airshed B1 (Tahunanui and Tahunanui Hills south of The Cliffs). TDC is unlikely to have any spare capacity in the Richmond Airshed to allow a change in the current woodburner policy.

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/environment-and-planning-committee-meetings/?path=/EDMS/Public/Meetings/EnvironmentPlanningCommittee/2016/2016-02-04.

Engineering meeting (17 December)

The engineering services committee meeting was held on 17 December 2015. Apologies were received from Cr Edgar and King. All other councillors were present.

The agenda included: (1) water allocation guidelines, (2) road maintenance procurement co-operation, (3) school zones, (4) engineering department activity report, and (5) the chairs report. Overall, this was a pretty straightforward information update meeting.

Public forum

Presentations were received from Martyn Barlow and Jean Gorman.

Martyn speaking on behalf of the Mapua Boat Club updated council on a public meeting held in Mapua (120 people attended) about the Mapua wharf boat ramp. He expressed the communities feeling that they had been let down by the Waimea-Moutere councillors (Crs Norris, King and Ensor) and had not been well represented. He asked that council begin working constructively with the Mapua Boat club.

Jean from Spring Grove spoke about flooding and berm issues. She identified that a culvert pipe in Telenius Road was too small to take storm water flows And at least every 2 years the road flooded. A long term solution was needed. Jean also asked that council consider the installation of berms within the Pitfure Valley to help detain water (and reduce flooding).

Annual NZTA road trip

The annual New Zealand Transport Agency (NZTA) bus tour was held on 4 December 2015. The trip visited a number of road related sites between Richmond, Moutere, Tapawera, and Motueka. The usual suspects from the State Highway Liaison Group were present.

20151217-NZTARoadTrip

Tapawera Museum (and former Railway Station).

Water allocation guidelines

Council agreed to receive and endorse the water allocation guidelines. Status quo maintained.

Several council water supply schemes (in particular Mapua) are acknowledged to be close to their capacity (or are experiencing competition for water use). Engineering staff reviewed and reconfirmed the current practice guidelines (used to allocate, transfer, or share water) is sound.

The water allocation guidelines (a single page document on page 15 of the agenda) makes a clear distinction between rated water (water entitlements) for which a property is paying rates, commonly associated with a land use or building consent process, and allocated water generally associated with a subdivision process (or other mechanism) that is temporarily reserved for a property, but the council retains the right to reallocate.

Staff have pursued different approaches to water entitlements and water allocations in order to recognise different rights (associated with the water), while managing entitlements and allocations within a scheme to optimise water use. The amount of control that council exercises over water allocations is partly influenced by regulatory provisions and from the physical realities of water movement.

Under s 130 of the Local Government Act 2002, the council is required to continue to supply water to properties connected to the scheme. This underpins the existing user entitlement principle. The council’s Water Bylaw (at rule 9.17) restricts transfer of entitlements by customers, and provides authority for the council to have discretion regarding how to reuse any existing water entitlement or allocation surrendered by property owners.

Road maintenance procurement co-operation

Council agreed to receive the report and for staff to prepare a business case for joint urban road maintenance services (primarily in Richmond which immediately borders the Nelson urban area) with Nelson City Council (NCC).

I supported this resolution as part of my desire to see more shared service arrangements (where financially beneficial for all ratepayers) between TDC and NCC.

By way of background, a number of informal discussions have already occurred between NCC and TDC staff to consider opportunities to work together to gain efficiencies with road maintenance service delivery. These discussions have concluded that both networks are of a sufficient size that mutually beneficial economies of scale may be realised for the urban network including road marking, street sweeping, and general maintenance.

School zones

The council resolved to receive this update report. The report updated the committee on the work program and costs to install school zone signs (eg, static school zone signs, and 40km/hr variable school speed limit signs).

The report highlighted a priority list of all schools within the Tasman District that were likely to receive signs. The priority lists reflected those schools most at risk. Funds to cover the purchase and installation of signs would be taken from the Minor Safety Improvements budget.

Costs for the installation of static signs are outlined below. The cost for the installation of static signs includes signs placed on both sides of the roads and on both approaches to the school.

Signs – “school zone 40”

4

$2,409.60

Signs – “school zone ends”

4

$1,732.80

Poles, bases, brackets and installation

4

$3,915.20

Total

$8,057.60

Costs for the installation of the 40km/hr variable school speed limit signs are outlined below. These costs are for installing one sign on both approaches to the school.

Signs – “40 school zone”

2

$7,475.02

Signs – “school zone ends”

2

$866.40

Solar panels

2

$1,751.80

Technology to run signs

2

$1,569.75

Poles, bases, and brackets

$3,699.56

Total

$15,362.53

Budget constraints resulted in identifying the top 10 at risk schools for the project. Schools were ranked using several factors, including: speed environment, parking facilities, and average daily traffic count. Data on numbers of children walking/cycling to school, entering or leaving a vehicle on the roadside, and crossing the road still needed to be collected for some of the schools, before a final decision could be made in early 2016. The data would also be used to determine whether a school fits the NZTA warrant for a 40km/hr variable speed limit.

The schools (in ranked order) are: Ranzau, Motupipi, Hope, Central Takaka, Dovedale, Brooklyn, Motueka Rudolf Steiner, Mapua, Ngatimoti, Mahana, Lower Moutere, Takaka primary, Brightwater, Parklands, Appleby, Riwaka, Richmond primary, Henley, Golden Bay, Lake Rotoiti, St Peter Chanel, Motueka High, Upper Moutere, Tasman, Motueka South, St Pauls Catholic, Wakefield, Garin College, Tasman Bay Christian, Murchison Area, Tapawera Area, Te Kura Kaupapa, Salisbury, Waimea Intermediate, Waimea College, and Collingwood Area. Motueka Rudolf Steiner school was ranked seventh, but was removed from the top 10 list, as it fronts onto a state highway under the control of the New Zealand Transport Agency.

Cr Mirfin asked why Richmond schools were not ranked higher. It was explained that road speeds in Richmond were already low, and there were limited opportunities to place additional signage, without compromising visibility.

The engineering committee could expect a decision report in early 2016. Councillors asked that staff gave this issue urgent attention for an early decision.

Engineering department activity report

Highlights from the manager’s report include:

  • Richmond catchment management plan (CMP) for management of quality and quantity of runoff in the Richmond catchments to support flood management and compliance with a discharge consent is behind schedule.
  • Regional water supply and demand model is a a joint investigation with NCC as to the water future needs and supply options is on track.
  • Joint Land Development Manual providing a common engineering standards/land development manual for NCC and TDC is on track. Good progress has been made on all chapters. Recent changes to the timing of the Nelson resource management plan review means this work will now take about 2 months longer. Staff expect to hold a stakeholder workshop in April or May 2016, before seeking approval to issue the draft manual for public-wide consultation. The manual requires changes to the two regional plans to give the new manual “effect” under the RMA.
  • Asset management. Changes have been made to Explore Tasman to assist with visual identification of assets. A pipe break viewer will be expanded to allow live reporting of breaks, rather than a static snapshot. Improvements to the Confirm system setup and processes are continuing. Since the last report, 810 utilities’ asset features have been added, edited or deleted based on new subdivision works, repairs and council contracts as-built data received. Tracking and reporting of developments, infrastructure and subdivisions (TARDIS) system development is on track.
  • Land developments.
    • The council’s legal advisors are preparing a development agreement for an area in Richmond West which has a deferred residential zoning and has the potential for an additional 500 new dwellings. This area will be serviced by a new wastewater pressure sewerage system draining to Headingly Lane.
    • Pre-discussions on future developments in Richmond South are continuing.
    • Residential developments (60 lots) off Pitfure road in Wakefield are extending into residential zoned land. Discussion with the developer’s agent is continuing.
    • A residential application (28 lots) to extend Talisman Heights at Kaiteriteri is about to be issued.
    • Council has now secured land in Seaton Valley next to the Mapua Joint Venture (MJV) site in Mapua to act as a detention basin for the MJV development as well as all other deferred land in the vicinity. The lack of water supply to Mapua is still raised by developers and limits growth in this area. Investigations will continue to find ways to assist developers in overcoming this hurdle.
    • Engineering plans for the Hart subdivision have been lodged and are currently in the final sign off process. The subdivision involves the construction of 31 new residential lots with a new connecting road from Pine Crest Drive (Trek Developments) to Hart Road. The existing creek within the property will be realigned and upgraded to cope with a Q100 flood event with 500mm of freeboard.
    • Stage three of a subdivision in Grey Street Motueka is currently under construction comprising 36 residential sections.
    • The last stage of the Trek Development (22 residential allotments) extending off Fairose Drive is nearing completion and all construction works except the final sealing of the road will also be completed prior to Christmas.
  • Projects. Waimea Community Dam (P1025) $25m funding in LTP. Additional funding required. Irrigator business case and CCO/JV structure is under review. Richmond Church Street Water Pipeline (P1039) installs a new water line and remove the existing while maintaining water to properties. Project on hold. Bateup Road Widening (P1047) The widening and upgrade of Bateup Road from 3 brothers corner to Paton Road to accommodate residential and commercial development in Richmond South. Lower Queen Street Widening (P1043) Reconstruction of Lower Queen Street to provide for future growth in Richmond West. Consent submitted. Design complete. Land purchase close to completion. Richmond Central Infrastructure (P967) Richmond central storm water improvements, upgrade utilities, reshaping road, amenity improvements in Queen Street. Subject to public engagement on Queen Street reinstatement design.
  • Water network. Renewal of the Tapawera water treatment plant is nearing completion. A split in the liner of the Kaiteriteri main reservoir liner has been identified near the top of the tank and will require repair.
  • Wastewater. Blockages at pump stations continue to be an issue. The aeration basin at Motueka WWTP has been repaired, scour pads laid and the pond refilled.
  • Solid waste. Recycling ollection tonnages are around 20% higher than last year.
  • Jackett Island. The last inspection was carried out on 7 September 2015 and everything was found to be in good order.

Chairs report

Cr Norris chaired the Hearings Panel for the Speed Limit Bylaw Review together with Crs Dowler, Higgins, and Sangster. According to Cr Norris there were 19 submitters. Although, as I later discovered one submission (in relation to Ranzau Road) included over 160 signatories. Despite his acknowledgement of the submitters “passion”, the panel did not deviate from the staff’s recommendations, and in Cr Norris’s own words “I am pleased to report that all proposed speed limits were agreed”. So much for listening to the passionate plea’s of a few residents? Just another example of the captured, rubber stamping attendance culture, that has existed on this council for far too long.

Of course, its no secret that Cr Norris (a self confessed “dinosaur” – his words, not mine) and myself, do not always see eye to eye, in my efforts to push back against a long history and culture of increasing debt and poor spending decisions (I won’t rub salt into the Mapua development wound). However, I take comfort, in the knowledge that there are already some outstanding candidates putting up their hands to stand in the Waimea-Moutere Ward. I look forward to a few more good people standing up for their communities and putting up their hands in Waimea and Motueka Wards.

I should note, that all councillors swear an oath (clause 14, schedule 7 of the Local Government Act 2002) to act faithfully and impartially in the best interests of the district, not just the ward (or other communities) they wish to represent. A point made very clear by Mr Foster, during the public forum presentation at the recent Golden Bay Community Board meeting (of 10 May 2016), that I attended. And again, I extend my offer to talk about my experiences on council with any prospective candidates.

Interestingly, given the storm brewing in Nelson (see http://www.stuff.co.nz/nelson-mail/news/73755660/councillor-under-fire-for-interference-into-southern-link-investigation), Cr Norris stated that “I have been involved with New Zealand Transport Agency, Nelson City Council and other affected parties looking at the business case for the southern link” (my emphasis).

In contrast, Cr Davy had suggested that he was invited to take part because of his knowledge of Nelson’s transport network, and not as a representative of Nelson City Council (see http://www.stuff.co.nz/nelson-mail/news/74796878/Councillors-clash-over-Southern-Link-investigation, http://www.stuff.co.nz/nelson-mail/75210791/councillor-eric-davy-ousted-from-regional-transport-committee).

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/2015/2015-12-17.

 

 

 

 

 

 

Full council meeting (3 December)

The full council meeting was held on 3 December 2015. Apologies were received from Cr Mirfin and Cr Inglis (with Cr Bouillir arriving late from her drive over the Takaka hill). All other councillors were present.

The agenda included: (1) September quarterly financial update, (2) Waimea community dam project update, (3) velodrome easement, (5) chief executive’s activity report, (6) mayor’s report, (6) action items, (7) machinery resolutions. Council also considered a confidential item (in-committee) in relation to the public release of the 10 September 2015 in-committee report.

Public forum had two speakers. My general observation for this meeting was that council moved rapidly through the agenda with very little debate. Perhaps a reflection that this was another meeting of information updates and simple machinery decisions.

Public forum

Maxwell Clarke complimented council on its quarterly financial report which he said was clear and precise. He also noted an improvement in communication from the engineering department over storm water work. However, Maxwell raised concerns over the limited time to speak (currently 3 minutes). He asked council to be more flexible. There was no reason why it could not be extended to 5 minutes. After all, Christchurch council provided 5 minutes. He also asked that council begin considering Plan B initiatives for water augmentation, given it was becoming very apparent that there was insufficient support for the Dam. He noted that 2700 ha (which was WCDL’s target) was 70% of all irrigators. He would be surprised if this was met at an $83 million funding level.

Martyn Barlow spoke about the concerns of the Mapua Boat Club and the restricted access to the boat ramp. He noted that TDC had now banned vehicles accessing the boat ramp between the hours of 10am and 7pm, due to “health and safety concerns”. This severely limits use for boat users who are dependent on the tide. Martyn noted that the commercialisation of the wharf precinct was done for businesses, tourists and visitors to Mapua – but not for the local community.

Martyn also stressed that boat use was on the increase and a boat ramp in the Mapua area was a necessity. One only had to see what was happening in Nelson. He noted that building the new Shed 4 had also compounded the parking and traffic management issues. In a circulated copy of his speech he stated that “… TDC has failed to meet their own objectives in the case of the local Mapua community’s use of coastal assets and we want to know why – and we expect our elected councillor’s to put it right! In the words of the late Alan Martin it’s the putting right that counts!”. I agree.

Unfortunately, council’s commercial aspirations in attempting to cover the entire site with the Shed 4 building (to maximise revenues), has meant access to the boat ramp is severely limited. In my opinion, a container development would have been less intrusive and met the aspirations of the council, businesses, and the community. The lack of vision and foresight by those councillors who supported this development has been exposed.

In my opinion, council may have to explore placing boat ramp access along the southern boundary of the reserve and allow boat users to share the carpark (which might have to be extended). If that can come in at around $80,000 then it would seem the most logical solution.

Waimea community dam project update

This was the fourth update report on the Waimea Community Dam Project. The report covers the period following the Council’s decision to transfer a joint interest in the resource consents for the dam to Waimea Community Dam Limited (WCDL) company.

Key points included:

  • Resource consents. The resource consents are now jointly held by council and WCDL. The Deed terms were satisfied by agreement.
  • Project Steering Group (PSG). The CEO has since withdrawn from direct involvement with the PSG in order to maintain independence and safeguard objectivity when providing advice to council. This leaves the PSG membership with: the Mayor, Cr King, Cr Edgar, and Cr Higgins.
  • Structure. WCDL undertook to begin seeking preliminary expressions of interest based on its proposed corporate structure and P50 pricing model. WCDL were advised that Council did not agree with WCDL’s proposed structure or pricing model. WCDL were advised that any consultation using the WCDL proposal was a risky assumption.
  • Procurement. An approach to procurement had been agreed. It was intended to issue a request for interest (ROI) in December. That time line has since slipped given the uncertainty on funding.
  • Land. Draft agreements were sent to the private land owners at the end of October 2015. All parties had confirmed receipt by 6 November 2015. Department of Conservation (DOC)/Crown acquisitions are to track alongside the private landowner agreements. The LINZ land comprises part of the dam footprint. The proposal is to resume the paper road under the dam and preferentially allocate it to Council under the Land Act. A meeting was held with Frank Hippolite (Ngati Koata) to discuss the purchase (or other treatment) of Ngati Koata land.
  • Plan change. A Plan change (two tier water allocation system) was notified on 19 September 2015, receiving 32 submissions.
  • Project costs. Total direct project costs (capital and operational costs) for 2014-15 year (up to 30 June 2015) was $1.582 million ($1.483 million plus $99,000). An additional $250,000 was spent up to October 2015, bringing the total direct project cost (as at October 2015) to $1.832 million (see page 31 of the agenda for detailed costings).

Much of the discussion focused on procurement advice which was expected in 2016. This advice was preliminary in nature and low cost. The CEO stressed the need to ensure funding streams have been secured before any tenders started. He also stressed that any consultation would need to respond to issues raised by communities. I agree. I also asked that “write down” costs (which is the cost to council if it walked away from the project) are highlighted in any future update reports.

Project Expenditure

2014-15

YTD October 2015

Direct operational costs

$99,000

$1,000

Project capital costs

$1,483,000

$249,000

Indirect operational costs

$218,000

$16,000

Total

$1,800,000

$266,000

$2,066,000

Project Funding sources
Existing operational

$218,000

$16,000

Waimea levy

$71,000

Targeted rates

$20,000

WWAC opening balance

$470,000

Loan funded balance

$1,021,000

$250,000

Total

$1,800,000

$266,000

$2,066,000

September quarterly financial update

Council agreed to quarterly reporting to full council as part of a workshop held on 3 September 2015. The September 2015 quarterly financial report provides a snapshot of the financial highlights of the first quarter.

Year end Forecast

Annual budget

Variance

Accounting Surplus

-$10,187,000

-$6,811,000

$3,376,000,000

Favourable
Operating Surplus

$2,352,000

$5,303,000

$2,950,000,000

Favourable
Total Net Debt

$158,982,000

$173,267,000

$14,286,000

Favourable
Expenditure

$99,422,000

$101,634,000

-$2,212,000

Favourable
Income

$108,467,000

$107,303,000

$1,164,000

Favourable
Capital Expenditure

$50,107,000

$50,400,000

-$292,000

Favourable

Overall the financial position of Council remains extremely strong and in line with year end budget expectations. The notable exception being the debtors balance.

Total net debt

The forecast year end net debt position for 2015-16 is now $159 million ($14 million lower than forecast in the LTP).

Opening Net Debt 2015 July $140,318 million
Net Debt 2015 September $142,513 million
Forecast Net Debt 2016 June $158,982 million
Net Debt 2016 June (per LTP) $173,267 million

20151203-FC-p15

Income

Income is above budget by $734,000 with a forecast excess of $1.164 million at the end of the 2015-16 financial year.

Expenditure

Expenditure is below budget by $2.089 million with a forecast underspend of $2.126m at the end of the 2015-16 financial year.

Debtors balance

The total debt ledger is up $1,843,076, and 3-month overdue ledger up $1,221,463, from September 2014.

20151203-FC-p19

Chief executive’s activity report

Highlights from the CEO’s report include:

  • Finances. For the period ended October 2015 the Council had a surplus of $3.83 million above the budget. External debt is $144 million compared to a budget of $168 million. Capital expenditure is $18.47 million lower then budget on a year-to-date basis (subject to capital carryovers of $15.59 million).
  • Health and Safety. Council have been invited to participate in a Safety Star Rating Scheme (SSRS), a new WorkSafe pilot scheme which is expected to replace the current ACC Workplace Safety Management Practices scheme (WSMP).
  • Economic Development. The Economic Development Services Review Group met on 9 November 2015. The areas of focus for the new entity were agreed. And are aligned with council’s outcomes as prescribed in the funding agreement with Nelson council.
  • Landfill. The basis for asset valuations of a joint landfill proposal with Nelson council has been agreed. In my opinion, this is an important step towards more shared services between both councils, and will be a win-win for ratepayers.
  • Pre-election report. This is required to be produced prior to 1 July in the year that local elections are held. The purpose of a pre-election report is to provide information to promote public discussion about the issues facing the local authority. The financial information and the text will be prepared in April and May with the final version ready for sign off in mid- June.

Velodrome easement

Council resolved to grant an easement to Network Tasman to convey electricity to the new velodrome on Saxton field. The new power supply is expected to be substantially less intrusive than the old supply. The new power supply requires only one power pole and associated stays in a location where there is already an existing power pole. The rest of the supply is by way of underground cabling.

Mayors report

During the mayor’s report I asked mayor about what progress had been made over a request by residents for TDC to do a road swap with DoC on the Takaka Hill. According to reports, Doc had threatened to stop the public and property owners from using a reserve road on the top of Takaka Hill which was used to access private properties. The mayor advised that he would be facilitating a solution between residents, DoC, and TDC. I will be watching this space with interest.

I also advised councillors that I spoke on behalf of the council at the Inaugral Trans-Tasman Golf-Croquet Test series, which New Zealand had won. I have reported my speech in an earlier post.

Machinery resolutions

These resolutions confirms documents signed under delegated authority and council seal. They included: a partial surrender of easement and alteration of easement in gross; and a forest management agreement with PF Olsen to manage the council’s forest estates for a term of 12 months (from 1 July 2015 to 30 June 2016).

In-committee report

This item arose from my request to release a confidential report to council on the Waimea Community Dam (dated September 2015). The mayor anticipating my request put a motion to council (recorded below) outlining his reasons why the report should not be released. While I am unable to summarise the discussion, I am able to report the voting. Although I am unable to report who supported making the voting public (and who did not).

Unfortunately, I did not secure support from the majority of council to make this report publicly available. Nor am I able to explain the arguments I made or the argument’s the mayor (and others) made. All I can say is that in my opinion the mayor’s argument made no sense and was quite ridiculous given some material would have been redacted. Clearly old habits are hard to break. The official minutes record the following resolution and outcome:

1. Receives the Request to Release 10 September In Committee Report report RCN15-12-08; and

2. Declines to publicly release RCN15-09-13 (Supplementary Report – Waimea Water Augmentation Project).

Cr Greening called for a division.

Bouillir Against

Bryant For

Canton Against

Dowler For

Edgar For

Ensor For

Greening Against

Higgins Against

Kempthorne For

King For

Norriss For

Sangster For

CARRIED

Agenda and minutes

The agenda and minutes are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-12-03.

Dam disclosure: full council meeting (22 October)

The full council meeting was held on 22 October 2015. Apologies were received from Cr Mirfin. All other councillors were present.

The agenda included: (1) Reserve classification of Rabbit Island, Rough Island, and Best Island, (2) Queen street reinstatement project, (3) Tasman historic wharves, (4) Krammer occupancy update, (5) Surplus treatment, (6) Tourist sign application, (7) Mayor’s report, (8) CEO’s report, and (9) Waimea community dam project status update report.

This was an eventful day. With one member of the public being asked to leave the council chamber under police escort, and council deciding at the last minute not to exclude the public from the Waimea community dam update deliberations. I will start with the public forum.

Public forum

Maxwell Clarke questioned the purpose of reserve park classification and suggested that the process was part of a wider arrangement (agreed 8 earlier) to swap Rabbit Island for land needed in the construction of the Waimea community dam. He asked the mayor to confirm if this was the case (or not). He also suggested that weirs could have been constructed for the amount of money already spent investigating the viability of the dam. Mr Clarke stated that a report written by Fred diCanzo for the TDC had observed that the decline of the Waimea aquifer was because: (1) tree’s along the river prevented the naturally wide flood plain being fully used to replenish the aquifer, and (2) the lowering water table had caused deep channels in the river, which further reduced the river’s ability to recharge the aquifer.

Reg Turner (“an award winning accommodation provider of 41 years”) responded to the report at page 67 of the agenda. He disputed the contents and accuracy of the report (addressing a number of paragraphs in the report). Mr Turner also tabled an application letter from him to TDC (dated 23 July 2015), on paper displaying the logo of his accommodation business. I will discuss the report and Mr Turner’s presentation below.

Unfortunately, Mr Turner was not allowed to complete all of his presentation. This is because the speaking time for the public forum is only 5 minutes, and the mayor did not permit Mr Turner to speak any longer. On being asked to sit down, Mr Turner refused (stating he only needed an extra 2 minutes to complete his speech), the mayor then asked the CEO to remove him from the chamber.

In my opinion this was an unfortunate situation and was handled poorly by the mayor. There was no reason why Mr Turner could not have been provided more time, as there were no other presentations in the public forum. Further, he had come considerable distance (and at some cost) to present his case before the elected representatives of the community. As other councillors left the chamber, Cr Bouillir, Cr Higgins, and myself remained to hear the remaining 2 minutes of his presentation (along with two members of the public). A typed copy of his presentation was also tabled.

The media has since published a story on the event. I agree with Cr Bouillir’s comments in the media article. Mr Turner should have been allowed to finish. It’s why I stayed to hear him out (see http://nelsonlive.co.nz/news/2015/10/manthrowntdc-meeting/).

Waimea community dam update

The council resolution for the Waimea community dam project status update report originally proposed to exclude the public from deliberations. However, the resolution did not receive the support of council and therefore the report was considered in public.

The report focused on two items: (1) the recently acquired resource consent (for the Dam), and (2) WCDL’s proposed financing and governance structure for a proposed Dam company. A highlight of this report for me was council doing a u-turn on gifting $300,000 to Waimea Community Dam Ltd (WCDL) under a loan arrangement that was unlikely to be recovered if the dam did not proceed. See some of my earlier posts on the dam (www.greeningtasman.wordpress.com/2015/06/02/long-term-plan-meeting-full-council-28-may/www.greeningtasman.wordpress.com/2015/09/08/full-council-meeting-30-july/www.greeningtasman.wordpress.com/2015/09/20/full-council-meeting-10-september/)

Resource consent

On 10 September 2015, the council considered a late confidential item concerning Waimea Community Dam Ltd’s (WCDL’s) refusal to handover a resource consent it had obtained under a prior funding and support agreement (dated 3 October 2014) with council.

Under that agreement, the council undertook to provide funding to WCDL to secure a resource consent (for the proposed Dam) for the council. This was because the council could not apply for a resource consent itself, and WCDL was a vehicle that was already formed, that could be used to test if a resource consent could be obtained for a dam. If a resource consent could not be obtained, then the dam project would be parked, and other water augmentation solutions explored. Using WCDL, avoided the need for council to form a company itself. To protect ratepayer funds, council entered into a funding and support agreement with WCDL, whereby WCDL agreed to handover the resource consent to council by a specified date, or on formation of a CCO, whichever occurred earlier.

Unfortunately, WCDL considered that this was not what was agreed, and refused to handover the resource consent to council on the specified date (in the absence of a CCO being formed). WCDL argued that a CCO had not been formed, and that they would only hand the resource consent to the entity choose to form the dam (not council).

In my opinion, this was an extraordinary position for WCDL to adopt. They had obtained a resource consent, funded totally from ratepayer money, and had signed a written agreement that set out the conditions for the handing over the consent to the people funding the exercise (council).

Council was faced with two options. It could proceed to court (more legal costs to enforce the agreement), or it could negotiate a solution that avoided such an outcome. Council’s preference was for a negotiated solution to be explored first. A suggested solution, was to both hold the resource consent – but without compromising councils legal rights to the consent (and the money spent to secure it). In my mind, if the dam did not proceed, the resource consent would be worth very little to council. Hence council were, in reality, giving up very little.

Accordingly, council resolved to instruct the CEO to “take necessary measures to have WCDL meet its obligations” under the funding and support agreement. At the project steering group (PSG) meeting (of 24 September 2015), the proposal for “joint holder status” was put to WCDL to avoid escalating the issue (on a without prejudice basis) to the courts.

Under this new proposed arrangement (to register WCDL as a joint holder of the resource consent), WCDL would hold the councils interest in the resource consent (as a trustee) under trust (with the council being the beneficiary). This meant WCDL could not use, transfer, or encumber the resource consent in any way. For example, it could not use the resource consent as security to raise funds for irrigators or sell it to another party. This also meant that WCDL could not ignore that fact that the value of the consent remained councils (as it was not theirs). Council also undertook not encumber or transfer the consent.

As part of this new arrangement, council would continue to advance $70,000 of water levy funds (that council could levy water users under its legislative powers) to WCDL, but would not advance $300,000 (as originally proposed in the LTP). The removal of the $300,000 grant was a good outcome. As some readers will be aware (from earlier posts on the LTP), I was opposed to council giving ratepayer funds to a private company – as was Cr Canton and Cr Bouillir.

However, at this meeting it was clear that WCDL continued to advance the argument that they did not want costs council had incurred up to now, to be considered to be part of councils final contribution to the dam. Accordingly, I was at pains to emphasise to WCDL (and councillors), that joint holder status should not be confused with joint ownership. By registering WCDL as a joint holder it could be perceived that we are giving WCDL half the value of the consent (like registering someone on the ownership papers of a car).

I was at pains to emphasise that if council thought it was doing this, then it should not support joint registration. If WCDL thought council was doing this, then they needed to think again. Rather this was an arrangement formed under trust law – whereby the beneficial interest was not given up. And council would continue to treat the cost of the resource consent as part of its financial contribution to any dam construction.

WCDL’s proposed structure

The report advised that the PSG had met with WCDL in late August to hear about WCDL’s proposed business model for dam construction. At that meeting WCDL proposed a preferred joint venture businesses model that would enable the formation of a CCO that would then enable the CCO to utilise the Public Works Act. The PSG undertook at this meeting to brief council of WCDL’s suggested business model at this meeting.

The report outlined the key structural elements of the proposed joint venture structure. Which is illustrated below.

DamCo-Sturcture-OptionB

The key structural elements were:

  • 50:50 ownership of co-operative company called Dam Co – thus holding the status of a CCO.
  • Dam Co construct, owns, and operates the dam.
  • Dam Co enters into water supply agreements with TDC and WCDL.
  • WCDL enters into water supply agreements with irrigators.

The key financial elements of the proposal were:

  • Dam costings use P50 pricing model (estimated to be $65 million).
  • WCDL and TDC invest $20 million each.
  • WCDL’s $20 million would include a $8.7 million loan from CIL.
  • Dam Co raises $17 million debt. This would appear to be paid off (funded) by subsequent irrigator uptake. However, liability for the debt (and servicing interest) would appear to be the responsibility of the current shareholders (and apportioned according to the shareholding at that time).
  • Dam Co received $8 million of grants.

Understandably, council had concerns with a number of the financial elements of the proposed joint venture structure. These were:

  • Pricing methodology (use of P50 over P95 pricing estimates).
  • $20 million equity from WCDL (for a $65 or $75 million dam).
  • $25 million from alternate sources (possibly $35 million if the dam is $75 million). In particular, debt funding of $17 million (and top up grants of $8 million).

Pricing methodology

A P95 estimate provides 95% certainty of pricing. A P50 provides 50% certainty over price. Commencing a project with a P50 rather than P95 pricing estimate increases risk of cost over-runs, without clarity over who will fund the over-run. Under a normal joint venture (50:50 ownership) both parties would be equally responsible. Any investment of council funds would have to have P95 security level.

WCDL’s initial investment

While this fits with the appearance of a 50:50 ownership model, 66% of dam water is intended for irrigators, and the total cost of the dam is $75 million (or $65 million under a P50). At the start, council is expected to take up irrigation for 1400 ha of land (this figure includes current and future users) and irrigators 2600 ha (expected to increase to 4500 ha). At a very simple level the numbers do not add up to legitimately justify equal ownership.

In my opinion, the drive for equal ownership appears to be an attempt to fit the proposal into the legal requirements for a CCO under the Local Government Act and the Public Works Act. To be a CCO, council must have control over the objectives of the organisation (either through 50% ownership of the entity, or control of the board). Such control must be “real” and effective. The Public Works Act requires the council has control over the construction of the works. This requires that the council has financial responsibility for the works. A CCO model might do this if the control is real and the financial contribution is real.

In my mind, a potential problem is the works will cost $65 or $75 million, yet councils commitment is only $25 million at best. How can council have “real” control or real financial responsibility for works (or even half the works), when the financial contribution of council will never add up to even half the cost of the works? The same could be said of a model that contemplates shifting subsequent ownership to irrigators as more irrigators come on board – which the ownership model already contemplates.

Debt funding of $17 million

At a simple level, joint ownership of the company holding the debt would mean council would be liable for half the debt (and the interest payments). At present, council have only committed to a $25 million contribution. So any additional liability (half the $17 million debt) would be outside any authorised investment by council. Arguably, this could be mitigated by wrap-around-agreements, whereby WCDL underwrite the council’s debt liability (and interest liability).

However, questions then arise about WCDL’s ability to undertake and honour that liability. Not to mention WCDL’s history of not honouring agreements. For example, the recent resource consent funding and support agreement. There is also a question about the debt being used to enable the “appearance” of 50:50 ownership model, when the “real” ownership arrangement is more likely to be less than 50:50 for council. Especially if any debt is underwritten by WCDL (or associated parties).

Moving forward

In my opinion, council is rapidly running out of time to put in place a solution that protects urban water consumers from the new water allocation (and restriction) rules. If a dam cannot be financed under a satisfactory model, then council needs to quickly undertake development of Plan B water augmentation solutions.

WCDL acknowledged in its presentation that there were effectively two options. The first was their proposed joint venture proposal, and the second was a private ownership model, whereby council was treated as just another water consumer (or irrigator investor). The later approach might be where this plane lands if a joint venture is not feasible. If it does, there will still be a number of conditions attached to council investment in a private company model, including security of investment.

A number of problems (discussed above) also draw me to the conclusion that a CCO model probably won’t work, unless government directly tops up councils investment, so that it equals the irrigators contribution (which it is also supporting, through the CIL loan). Anything else will be seen as artificial, and constructed to get around the requirements of a CCO under the Local Government Act, or an improper use of the Public Works Act. The alternative, is the dam company, as a private company (not a CCO), would have to seek government appointed “requiring authority” status to utilise the Public Works Act.

Council resolved to further explore (and test) WCDL’s joint venture proposal and to report back to council.

As I had stated in earlier posts, in my opinion, council should only be committing $14 t0 $15 million, not $25 million. A $15 million investment would reflect: $9 million for current and future urban water needs, $3 million for urban water users portion of the environmental benefit (under an extractor pays principle), and $3 million for investigation and resource consents). Reducing councils investment to $15 million will also reduce any risks for council and the public. As well as place pressure on the government to properly fund this project if it is to be implemented.

In my opinion, much has been made of the economic benefits the dam will provide (see earlier posts). However, it is only the government who is likely to immediately benefit from the dam (through the tax system, that can clip the ticket on an expanding economy from construction and future growth). In contrast, councils main mechanism for revenue raising is limited to land charges (rates). Any improvement from irrigation is unlikely to change councils revenue in a significant way.

I also find it strange that with all the economic benefits being banded about, government has remained silent on any significant investment in the dam. It would appear from government’s silence that they are not convinced the project has merit. For if it did, they would have made a statement already. I did note with interest the comments of Nelson MP (Nick Smith) at the opening of the water treatment plant, that water was considered to an economic advantage over competitors (ie Australia) (see www.stuff.co.nz/nelson-mail/news/73504764/new-115m-water-treatment-plant-opens-at-richmond). If the government believe that, where is the financial investment?

In my opinion, it is not the duty of ratepayers to sustain broader economic growth objectives of business. That is the role of government. Its time for government to step up, if this dam project is going to get across the line!

Surplus treatment

The purpose of this report was to re-allocate the financial surplus that council had achieved for the 2014-15 financial year (ended June 2015). This surplus was the result of actual expenditure for the year being lower than forecast expenditure. Generally, the surplus has been redeployed to debt retirement or other activities. In a number of other instances, the surplus has been left in the original activity, pending further examination.

Overall the surplus was allocated as follows:

  • external debt repayment ($9.243 million),
  • emergency fund ($0.87 million),
  • activity deficit retirement ($0.715 million),
  • carry over projects ($0.539 million),
  • remain with the original activity ($8.253 million, although $2 million requires further analysis).

From a departmental (or functional) perspective, the surplus funds were allocated as follows:

  • Community development: (1) carryover of $100,000 for Saxton field, (2) community housing internal debt retirement of $74,000, (3) parks and reserves internal debt retirement of $13,000, (4) carryover of $150,000 for LED lights in parks, (5) special purpose committee internal debt retirement of $9,000, (6) transfer of $8,000 from community grants to reduce deficit in the community recreation activity account, (7) transfer $358,000 from library activity account to library radio frequency information data project account.
  • Corporate services: (1) apply $117,000 to deficits in governance accounts, and (2) apply $142,000 to deferred maintenance of operational property activities.
  • Environment and planning: (1) transfer $250,000 from compliance monitoring, $100,000 from environmental information, and $56,000 from environmental policy to building control to reduce deficit, (2) carryover $72,000 for environmental information operational projects, (3) debt retirement of $18,000 within environmental information account, (4) Mapua decontamination debt retirement of $500,00 (balance $1.18 million remains), and (5) carryover of $67,000 for the operational projects within the sustainable management acount.
  • Engineering: (1) internal debt retirement of $139,000 in the coastal works account, (2) transfer $600,000 from subsidised roading activity account to general disaster fund, (3) debt retirement of $422,000 in subsidised roading account, (4) debt retirement of $378,000 in non-subsidised roading account, (5) transfer $270,000 from general river account to classified river protection fund, (6) carryover $150,000 from stormwater account to Seaton Valley detention pond, (7) debt retirement of $364,000 in stormwater account, (8) debt retirement of $3.896 million in wastewater account, (9) debt retirement of $2.212 million in urban water account, (10) debt retirement of $456,000 in Motueka water account, and (11) debt retirement of $105,000 in Takaka water account.

Interim remedial storm water measures

As part of this agenda item, I sought to have some of the surplus (roughly $400,000) applied to addressing 5 flooding hotspots in the wider Richmond area, identified during the 2011 flood event. These are spots that are prone to flooding in heavy rain events. The type of work I had contemplated would have been remedial in nature, aimed at mitigating flooding risk, before more substantial investment could be made. For example, joining storm water sink hole sumps (so a stand alone sump overflows into another sump rather than directly onto properties), or clearing and widening creeks (again to avoid overflows or blockages, that result in secondary flood paths).

Unfortunately, I received no support from any other Richmond ward councillors (or any other councillors, apart from Cr Bouillir). In my opinion, this is disappointing, given the communities very strong concerns over flooding risk in the wider Richmond area (as evidence by the community survey). Instead the majority of councillors preferred to wait until storm water modeling was completed in 6-9 months time.

Tourist signs application

Council were asked to consider an original 2014 application (and revised 2015 application) by Mr Reg Turner (owner and operator of a lodge called “Songs of the Tui”) for two MOSAT signs to be erected on the Collingwood Bainham Main Road. MOSAT stands for “Manual of traffic signs and markings” which is published by NZTA (see www.nzta.govt.nz/resources/motsam/). MOSAT signs are a legislatively prescribed sign and can only be used with the approval of an authorising body.

The signs sought to direct traffic along Mackay Pass Road in Golden Bay as an alternate scenic route to the Heaphy Track, and the Salisbury Falls (the Hobbit film site). That application sought to use the words “Song of the Tui – Alternative to the Heaphy Track”.

TDC staff initially declined this application on the basis they did not want to promote Mackay Pass Road as an alternate road to the Collingwood Bainham Main Road. This was because the Collingwood Bainham Main Road was sealed (and Mackay Pass Road was not), the additional risk of directing foreign travelers through a narrow unsealed road that had limited sight distance and some challenging road geometry, when a sealed road was available.

However, Mr Turner was still able to erect his own sign on private property if he did not agree with the decision of council. Such a sign would need to comply with resource consents (if any were required). In Golden Bay, there are many examples of private signs (located on private property) advertising local businesses. This was the advice council staff provided. He could also appeal to the council governance body, which is the reason for this report.

Mr Turner decided to take TDC staff advice, and subsequently approached the council’s roading contractor (Fulton Hogan) to construct a MOSAT sign – presumably with the intention of locating it on private property. Unfortunately, Mr Turner’s actions appear to show that he had not fully understood the staff advice. As that advice also made it clear that a private sign could not replicate the look of an official MOTSAT sign.

The contractor on receiving Mr Turners request, contacted the council (as the authorising body) to confirm approval had been provided – which was standard practice. Understandably, staff did not confirm this approval and the contractor advised Mr Turner that it could not construct a MOSAT sign for him. Mr Turner, considered that staff had interfered with private business activities and told his story to the papers. This was reported in the Nelson Mail on 17 April 2015 (see www.stuff.co.nz/nelson-mail/news/67669478/Golden-Bay-tourism-operator-accuses-TDC-of-blackmail-over-road-sign).

Mr Turner then submitted a revised application on 23 July 2015. In that application, he changed the words of the sign from “Song of the Tui – Alternative to the Heaphy Track” to “Scenic Route via Mackay Pass Road – Heaphy Track & Hobbit Film Site 300 meters”. The application notes that this is the first time a route refers to the Hobbit film site at Salisbury Falls. A copy of this application was sent to councillors on 15 October 2015, for consideration at the 22 October 2015 full council meeting.

Application to facts

Council unanimously declined this application. However, the decision does not prevent the applicant from pursuing a private sign (which is not a MOSAT sign), being located on private property near the locations he sought.

In my opinion, council could not endorse the use of Mackay Pass Road to reach several tourist destinations (the Heaphy Track or Salisbury Falls), when a better (safer) road was already available. This decision was not about promoting (or not promoting) business, this was about council endorsing the use of roads for getting to tourist destinations. As observed above, the applicant’s business was already promoted at the intersections sought under these applications.

MackayPassRd

While I agree that the roads after the Collingwood Bainham Main Road are unsealed, this does not mean that council should promote the use of unsealed roads over sealed roads. Quite the opposite. Council has invested substantial ratepayer funds in providing (and maintaining) a safe corridor to the Heaphy Track and Salisbury Falls via the Collingwood Bainham Main Road. That is the corridor that council has chosen to invest and support. To promote an alternative corridor (Mackay Pass Road), would only invite additional costs for council in the future, without any discernible advantage for council, ratepayers, or tourists.

Mr Turner raised a number of questions in his presentation that I would like to respond too. These observations and opinions are my own.

First, it would appear from the applicants submissions that the underlying reason for wanting the signs was to increase drive by traffic. In the applicants opinion, the tourist should have the right to choose the best path. I would note at this point that the tourist is still able to choose their best path – with (or without) a MOSAT sign. Generally, most tourists (if they are like me) use maps and draw on the presence of signage to confirm they are correctly reading their map. Although, clearly the applicant consider’s the presence of a MOSAT sign, would influence that decision. Which it might.

However, the applicant’s underlying reason for a MOTSAT sign, is not the only consideration council has to consider in approving or declining an application. Council also has to weigh up a number of other considerations (including road safety and cost).

In my opinion directing additional traffic down Mackay Pass Road (other than to find Mr Turner’s lodge) would also put additional pressure on council to make further improvements to this road – to meet any increased usage, especially if there was an accident. I cannot see why council would want to increase the usage of MacKay Pass Road, when it has already invested substantial amounts in sealing (and maintaining) the Collingwood Bainham Main Road. That is the preferred route for council to the Heaphy Track and Salisbury Falls.

While I appreciate, a sign might increase drive by traffic for the applicant, that has to be weighed against road safety concerns and future potential costs for council (and ratepayers). While I also appreciate, the applicant could achieve this end privately, council cannot endorse an outcome that is not in its (and ratepayers) best interests. In this regard, the interests of the applicant have to be weighed up against the interests of the ratepayers (and tourists).

Further, while I am not a marketing expert, I also wonder if increasing drive by traffic past the applicant’s lodge is a good marketing ploy. In my opinion, the applicant might be better off to market his lodge as a return destination (for refreshments or accommodation) at the tourist destinations he sought to promote, rather than promote alternative corridors to those destinations. I think its highly unlikely anyone motivated to get to the Heaphy Track or Salisbury Falls via an alternative route will be stopping on the way (unless they have an accident). I think its more likely that they might consider a stop over on their way back. Perhaps a sign located at the destination recommending the applicants business, is a far better marketing strategy?

Second, the applicant considers the report (at para 4.2) is incorrect in referring to the lodge as the applicant. In his words the “lodge name is not mentioned in [the] application”. I disagree, although I do not see it as material to the decision. In my opinion, it is reasonable to conclude that the lodge was the applicant. This is because: (1) Mr Turner is the owner operator of the lodge, (2) his name appears as the author of the 23 July 2015 application letter (“REJ Turner – Tourism operator”), (3) the 23 July 2015 application letter appears on lodge letter headed paper which contains the email and web address of the lodge.

Third, the applicant considers the report (at para 4.4) is incorrect in referring to “Lord of the Rings” as the film site, when the application refers to the “Hobbit”. I agree. However, councilors received a copy of the 23 July application letter (which correctly referred to “Hobbit Film Site”) on 15 October, several days before considering the report. Accordingly, the original error in the report is not material in the resulting decision.

Fourth, the applicant considers the report (at para 4.8) is incorrect. Mr Turner contends that there is no evidence of incorrect statements to the media. I disagree. Mr Turner is reported in the media article (dated 17 April 2015) as accusing “staff of acting illegally, blackmail and preventing a council contractor of doing business with him”. As discussed above, council have not prevented a contractor from doing business with him. Nor have they blackmailed the contractor as contended. However, they have stopped a contractor from supplying a MOTSAT sign to a person (or business) who was not authorised to use one.

Fifth, the applicant has also stated (page 3 of his submissions) that statements that try to compare sealed roads with gravel roads are not acceptable. He points out that there are a number of gravel roads that lead to tourist destinations and Mackay’s Pass Road is no different to those. I agree. However, unlike those other roads, there is a sealed alternative to Mackays Pass Road that provides a better (and safer) route to the aforementioned tourist destinations.

Sixth, the applicant considers the report (at para 5.3) is not sustained by the facts. The report at para 5.3 contends that a sign endorsing the use of Mackays Pass Road “has the potential to encourage motorists to use a road that has lower standard of maintenance, delineation and safety. Some of these motorists are likely to be international drivers and encouraging these road users to use Mackay Pass Road may lead to crashes involving themselves or with other vehicles. There could also be an increase in maintenance, complaints and requests for more work to be done to improve the low volume road.” The applicant points out that there have been no road incidents on McKays Pass Road, but there have been a total of 7 serious crashes (including one fatal) on the Collingwood Bainham Main Road (4 incidents), Collingwood Puponga Road (2 incidents) and Cowin Road (1 incident), between 2005 and 2014.

First, while I might agree the report does not appear to present all the evidence (that it probably could have), I cannot agree with the applicant’s statement that the report’s conclusion (and recommendation) is not sustained by the facts. A quick survey across the internet will generate a number of articles of road accidents involving tourists on gravel roads. For example www.stuff.co.nz/motoring/66769245/road-kill–must-something-be-done-about-foreign-drivers, and www.scoop.co.nz/stories/PO1504/S00093/most-tourist-accidents-are-preventable-says-report.htm.

In analysis of foreign drivers published last year, it was revealed that loss of control and unfamiliarity with local conditions were the leading causes of accidents (see www.transport.govt.nz/assets/Uploads/Research/Documents/Overseas-drivers-2014-web.pdf). Otago Regional Council has also specifically identified gravel roads and tourists as a cause of serious road trauma in the region and has suggested that “teaching tourist drivers how to drive on gravel roads: targeting drivers aged 25 to 34 years, in particular, and/or sealing roads commonly used by tourists” are means to mitigate this concern (see www.orc.govt.nz/PageFiles/1404/April%202015/Report%203a3%20-%20road%20safety-%20tourist%20drivers%20-%20with%20cover-%20%20%20LATEST%20PDF.pdf).

These reports alone, support the conclusion that the reports observations (at para 5.3) are sustained by facts. Albeit, not presented in the report.

Second, the applicant fails to appreciate that the current statistics for Mackay Pass Road are based on existing usage. In my opinion the applicant’s comparisons are misleading, as it suggests that a low crash rate would continue on Mackay Pass Road after road usage increased – which is the underlying purpose of the application. In fact, it might be suggested that the crash rates on the other three roads are in part due to higher road usage, and could well be worse, if road improvements (like sealing and geometrical changes to the road) had not been made. Unlike the applicant, I find it difficult to take any meaningful conclusions from the crash rate data, in terms of justifying increased usage of Mackay Pass Road.

Seventh, the applicant considers the report (at para 6.2) which stated “there are, however, risks in installing a tourist sign directing motorists along a route that has some geometric deficiencies. The local community is aware of these issues and drive accordingly whereas unfamiliar drivers may not” – is silly. I disagree. In my opinion there are risks (see preceding observations).

Eighth, the applicant considers the report (at para 7.1) ignores other operators who have placed signs up. In my opinion, the actions of other operators is not material to the decision, which must weigh a number of considerations. The actions of other operators is not one of them (especially if they are illegal). Nor is the failure of council to ensure compliance. However, if other operators are acting illegally, then council should be making proper investigations to correct this situation, now that it has been brought to its attention.

Ninth, the applicant considers the report (at paras 8.1 and 8.2) to be untrue and disputes the estimated costs of making and installing a sign ($1,700) or the cost of road improvements (above $40,000) over the 19km road. Unfortunately, these are the costs that council often face and why it is important to ensure council costs are contained if we want to keep rates costs down. To put the estimates into perspective, the average cost of road sealing is roughly $5,000 per km. Although this is figure is itself dependent on a number of other considerations.

As an aside, an interesting report on the cost of roading infrastructure in NZ is located at www.transport.govt.nz/assets/Uploads/Research/Documents/NZIER-report-2013-construction-industry-performance.pdf.

Tenth, the applicant considered the statement in the report (at para 9.1), that the issue had low significance “because it is a local issue being promoted by one landowner”, was not true, because tourism benefits the whole community. While the applicant’s statement has some general truth behind it (and the reason why council has decided to promote destination tourism on behalf of the region), I cannot agree that there is any evidence of measurable financial benefit from the applicant’s efforts in promoting the road as a scenic route in the manner contended. The burden of proof is on the applicant, and no evidence is provided in his submissions (or application) to support his conclusion.

Finally, the applicant considered the report’s conclusion (at paras 10.1 and 10.2) is speculative and not sustained by facts. In my opinion, these are concluding remarks from points made out in earlier parts of the report, and have been addressed above in this opinion.

In conclusion, while I have every sympathy for the applicant’s position, having considered the evidence and surrounding facts, I could not support the application. However, as stated above, this does not prevent the applicant from undertaking construction of different signage on private property, or exploring the promotion of his business from the destinations themselves.

Reserve classification

Rabbit Island (Motorua), Rough Island, and Birds Island are Crown owned reserves. Under the Reserves Act 1977, all reserves must be classified. Classification of reserves needs to completed before doing a reserve management plan. Before 2013, the minister of conservation was responsible for classification. In 2013, the minister delegated this task to local authorities. Local authorities are also tasked with preparation of management plans for reserves as the administering body.

It appears that formal classification of Rabbit Island (Motorua), Rough Island, and Birds Island under the Reserves Act 1977 has never been undertaken or completed. Although the existing management plan (first drafted by council in 1989 and updated in 1997 and 2001) has repeatedly stated (at para 2.3) that “classification is being undertaken as required by the Reserves Act 1977 … part of the land is to be classified as “recreation” and the reminder is to be classified “local purpose (plantation)”. A full history of the management of the islands is contained in the agenda report.

The administering body (council) can prepare an advance draft of a plan covering unclassified reserves for which it is the administering body, provided this does not pre-empt the classification process. However, the administering body cannot, invite public submissions on the draft plan until all the reserves which it covers are classified and the draft plan is consistent with those classifications (see www.doc.govt.nz/about-us/our-role/legislation/guides-and-bylaws/a-guide-for-reserve-administering-bodies/chapter-11-management-planning-for-reserves/questions-about-management-plans/).

For any unclassified reserves, the management plan will only have the status of an advance draft. This means that any policies or rules for managing unclassified land cannot be enforced, as they will only have a draft status. In addition, the Reserves Act (s 16(6) and(7)) appears to suggest that unclassified reserves are to be treated as recreation reserves until classified. This suggests that the forest plantation on the island should be administered as a recreation reserve, not a “local purpose (plantation)” reserve.

The net effect is that the current management plan cannot impose “local purpose” rules on the island’s forestry plantation. At best it appears it can only impose recreation reserve rules on land used for forestry. To correct this administrative oversight, formal classification of the forestry plantation was required.

Given this oversight, council resolved to complete the classification process, so that a valid (enforceable) management plan could be implemented. To avoid unnecessary consultation costs, a non-notified process would be undertaken (subject to consultation with iwi, given its crown land).

As discussed above, Max Clarke questioned the purpose of classifying the reserve at this time. I imagine part of the reason for his position is because a similar reclassification process occurred in the Queenstown region with the stated purpose of enabling land swaps (see www.qldc.govt.nz/assets/Uploads/Your-Views/LLS/Lakeview-Land-Swap-Summary-of-Proposal.pdf). In that situation, the Queenstown regional council (QRC), undertook to reclassify reserve land so that it could be swapped with other land of a similar classification. A similar land swap arrangement was also proposed for the Ruataniwha-dam (see www.stuff.co.nz/dominion-post/news/72700495/doc-approves-land-swap-paves-way-for-ruataniwha-dam.html).

[Update! The Ruataniwha-dam land swap arrangement is now subject to an appeal (www.stuff.co.nz/business/farming/74863647/land-swap-for-ruataniwha-dam-illegal-forest-and-bird).]

According to the QRC report:

The Department of Conservation guidelines for administering bodies suggests it is mandatory to classify a reserve under the Reserves Act before public notification of a draft management plan, but desirable before exchange of land or granting a major lease.

The requirements of the Reserves Act state that land becoming reserve land must be held for the same “purposes” as the land being exchanged. The purposes of a recreation reserve are:

“providing areas for the recreation and sporting activities and the physical welfare and enjoyment of the public, and for the protection of the natural environment and beauty of the countryside, with emphasis on the retention of open spaces and on outdoor recreational activities, including recreational tracks in the countryside”.

There is no requirement that on exchange the particular use must remain the same, as long as any change in use remains within the general purpose of the reserve classification.

To address Mr Clarke’s concerns the mayor declared that he had not been involved in any discussions concerning the swapping Rabbit Island forestry land for land in the Lee Valley.

While I took comfort from the mayor’s statement, and the underlying administrative purpose of reclassification (discussed above and with council staff before the meeting), I thought the timing for completion of the reclassification (September 2016) was an interesting coincidence. In my opinion, it would also be political suicide for a mayor or MP (given its crown land), to contemplate a land swap with Rabbit Island. There would be a public revolt.

Queen street reinstatement

As part of council’s strategy to address central business district (CBD) flooding risk, council propose to make improvements to Queen Street. This involves extensive excavation of the road and footpaths (from shop front to shop front) between Salisbury Road and Gladstone Road. The aim is to enable Queen Street to be a secondary flow path for storm water by reducing the level of the road. The project also provides an opportunity to evaluate whether changes should be made to this stretch of road. For example, wider footpaths, cycleways, bus lanes, etc.

Council resolved to receive the report and approve staff to engage with the community on amenity aspects of the project and report back following consultation.

I took the opportunity to reinforce to staff that the cost of the reinstatement should not be more than what it would cost to replace what is already there. If new things could be done within this financial cap, then council were open to the opportunity, subject to community feedback on such ideas. What I did not want to see is some councilors seeing this as a legacy opportunity and go on another spending spree (which is what has happened in the past).

Mayor’s report

I do not normally discuss the mayors report as there is not usually much in it. However, I do want to mention two items.

Climate change declaration

The first is in relation to the local government leaders climate change declaration. The declaration letter acknowledged the importance and urgent need to address climate change for the benefit of current and future generations. The letter also set out a number of commitments councils would support, as well as councils expectations of government (see www.lgnz.co.nz/assets/Mayors-Climate-Change-Declaration.pdf).

The mayor had written to councillors before the full council meeting advising them that he had decided to not affix his signature to this letter because of the potential cost to council in supporting some of commitments councils were signing up to. For example, supporting the use of electric cars.

I responded to the mayors email suggesting that it should be for council to decide, rather than the mayor. This was because the letter referred to the mayor’s signature as “signatories from councils”. As a signatory for council (which is what the letter suggested), council should consider the opportunity of supporting the declaration (or not).

I also noted that the tenure of the letter was to “support”, not undertake. The letter says “support” not “commit to buy”. “Support” can be passive or active. I’d be surprised if council could not “support the use of renewable energy and uptake of electric cars”. In fact, we already support renewable energy (through purchase of solar panels on the aquatic centre). And I’m sure if there was an application to install a recharge station (for electric cars) in Tasman, council would support such a venture. Its only a matter of time before petrol stations begin rolling them out.

I invited the mayor to reconsider his position and at least invite council to vote on councils representative (being the mayor) signing the declaration on councils behalf. To his credit, he did this. A show of hands was called and the majority of councillors supported the mayor’s position. Cr Ensor, Bouillir, and myself, did not. The essence of our argument (articulated very well by Cr Ensor) was council needed to show some leadership on the challenges of climate change for local government. My argument (as stated above), was that support did not have to translate to any cost for council (unless it chose to do so). In my mind, any financial support had to make commercial sense and be fiscally prudent.

Aniseed toilets

The second is an issue raised by a Richmond resident. The mayor’s report offers the opportunity for councillors to raise any issues not on the agenda. It was mentioned by a resident that the aniseed toilets were in a poor state. There was often no toilet papers or running water to wash hands. And the toilet was not pleasant to use. The resident had stated that they had raised the issue with the mayor and Cr Edgar sometime ago, but had not heard back.

I asked the mayor (and Cr Edgar) if they were aware of any progress. Neither recalled this issue. I have since followed up the issue with staff who have undertaken to contact the Department of Conservation (DoC) who are responsible for this toilet. Staff have also undertaken to audit other council toilets in the Aniseed valley. I hope to report back to the residents soon.

CEO report

Economic development

Nelson council has considered the funding agreement adopted by TDC on 10 September and have proposed some minor wording changes. The agreement has been referred to the transition group (who are reviewing the proposed merger of the EDA and NTT).

At the recent Joint Council meeting (held on 3 November 2015), I spoke to a few Nelson councilors and reiterated that this was the funding level Tasman council currently supported. However, the real issue was not the level of funding, but agreeing on measurable performance targets for this organisation. Council needed to be able to see that their investment was returning something financially tangible that was sufficiently connected (and traceable) to the funding. If council could see that the investment did directly result in improved financial outcomes, then it might be more willing to invest more.

For example, current indicators, like increased spend in town centres, does not necessarily mean it is coming from tourists or marketing initiatives. It could be coming from residents visiting those centres. The same criticism could be made of the EDA. Better measures and analysis is required.

Elections for 2016

Planning for local body elections has begun.

I would like to offer the opportunity for people considering standing for council in 2016 to contact me to talk confidentially about what council involves and what can be expected. I am hopeful that a number of people will put their hand up in 2016. In my opinion, a healthy council is one that continues to bring in new ideas and thinking, rather than returning the same people, with the same ideas. This can only happen with significant change around the council table. Change also avoids organisational capture.

Finance

For the quarter ended September 2015 (for the 2015-16 financial year), an accounting surplus of $2.394 million (compared to a budgeted surplus of $1.378 million) has been achieved. A positive accounting variance of $1.016 million.

On a year to date basis, expenditure is $2.866 million below forecast budget (mainly due to less than expected expenditure for emergency works, general maintenance, and finance costs). In addition, income is $705 million above forecast budget (mainly due to library insurance proceeds being received (and used for the Mapua development), timing of dog registration fees, external lotteries funds for Motueka recreation centre, and civil defence funds for Rameka creek claim). The net result is a $3.57 million operational surplus.

Year to date capital expenditure is $3.838 million. Overall, capital expenditure is budgeted at $34.315 million (plus carry overs from last year) for year end.

Debt is currently $146 million (lower than the forecast $173 million disclosed in the LTP).

People

Since the last report 5 appointments (internal transfer or replacement) have been made. Three resignations and 2 retirements have been received. TDC is currently recruiting for a strategi policy manager. For the quarter ending 30 September 2015, staff turnover was 1.12%, staff numbers were 242 FTEs (made up from 267 full-time and part-time people).

TDC has also been selected (after applying) to be part of the high performance work initiative programme offered by Callaghan Innovation (see www.callaghaninnovation.govt.nz). In my opinion, this is an exciting opportunity for the organisation.

Health and safety

Cosman Parkes have been engaged to complete a health and safety review of the council’s activities. A workshop (on 12 November) will be developed to report back to council on their findings and recommendations.

Best Island update

Two land valuations have been received – one based on the subdivision value (Ashford’s). Negotiations will begin soon.

Tasman wharves

Council resolved to receive the reports on historic wharves and small wharves in the Tasman region (mainly in Golden Bay) and agreed to consider at no cost to council (for historic wharves), or from reserve financial contribution (RFC) funds (which compete with other reserve projects) for small wharves, the establishment of local trusts to acquire and manage such wharves.

Agenda and minutes

The agenda and minutes are located at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-10-22.

 

Dam economics revisited

The Ministry of Primary Industries (MPI) has released a new case study report (called “Waimea Plains: A freshwater quantity management case study”) on the Waimea Community Dam. This report (and all other reports from MPI) are located at http://www.mpi.govt.nz/news-and-resources/publications/.

The reports key finding are:

  • Transferable water permits (if the dam does not proceed). MPI’s economic analysis suggests an increase average annual profit of $1.2 million (or 8.6%) for the catchment, after over-allocation is phased out. These benefits relate primarily to short-term transfers in dry years, with profit being 46% higher than profit without transfers in one particularly dry year. If the dam goes ahead, there would no longer be a shortage of water and, consequently, water permit transfers would have minimal impact until the additional water is fully allocated.
  • The Waimea Community Dam. MPI’s economic analysis suggests an increase average annual profit of $2.9 million (or 20%) for the catchment. Increasing to around $15 million for the catchment (using average product prices from 2010-14), after an expansion of available irrigated land, and the conversion of unirrigated low value pasture to irrigated higher value apple crops.

The Minister of Primary Industries, Nathan Guy, has stated that the report “shows the proposed Waimea Community Dam near Nelson would deliver major economic and environmental benefits” (see https://www.national.org.nz/news/news/media-releases/detail/2015/10/08/Report-shows-major-potential-for-Waimea-dam). Adding that:

the dam would enable unirrigated pasture to be converted to higher value crops like apples and improve water quality at the same time. The report shows that building the dam would more than double the average annual catchment profit from $14.5 million to $29.5 million. This value includes an average annual benefit of $2.9 million, and up to $9.5 million in an individual year for existing irrigators from the reliable water supply the dam would provide.

The report identified the current land use mix on the Waimea plains as:

WaimeaPlainsLandUse2015

This economic analysis provides an interesting contrast to MPI’s earlier analysis of the Nelson-Tasman pip fruit industry’s financial performance between 2008 and 2012. At present, there is no 2015 analysis. The horticultural monitoring report (called “Farm Monitoring Report 2012 – Horticulture Monitoring: Pipfruit), see above link for location, stated (at page 10) that:

The Nelson pipfruit model experienced a loss before tax of $79 600 in 2011, despite increases in both gross and export yields and efforts to constrain expenditure. Low market returns for the main apple and pear varieties constrained most growers’ revenue. This negative financial result is the third consecutive year of financial losses for the Nelson pipfruit model.”

Adding (at page 12) that:

The Nelson pipfruit model is budgeted to achieve a small orchard profit before tax of $13 300 in 2012, driven by an anticipated improvement in export prices for all apple and pear varieties. Should this financial outcome be realised, it would be the first profit the model has achieved since 2008.

Pip fruit orchard model profitability for the 2008 to 2012 period (at page 14) is illustrated below:

PipFruitModelTrends2008-12

Added to the above observations on profitability, is the dependency of apple crops on exchange rate performance.

In my opinion, MPI’s economic analysis is probably more realistic than other economic assessments done on the dam (see http://www.eda.co.nz/edanew/wp-content/uploads/2014/10/NZIER-Waimea-Dam-Economic-Assessment-Report-21-October-2014.pdf). Although the significant economic benefits appear to be dependent on converting  unirrigated pastures (21% of the plains) to apples, and an expansion of available irrigated land. Hardly a significantly compelling argument for ratepayers to invest $25 million. However, an investment of $8 million to protect urban water supply, should still be given some consideration.

What I do find interesting is the analysis of transferable water rights. Something that has been lacking. The picture provided by MPI is a positive one, albeit not as positive as the gains derived from the expansion of  irrigable land. It makes me wonder if providing a mechanism to charge for water consumption on the plains as well (as has been done for urban water consumers) would ensure more efficient use of water, if the dam irrigators are unable to finance the project.

Media

(Nelson Mail) http://www.stuff.co.nz/business/farming/cropping/72832507/waimea-dam-will-benefit-apple-growers-says-primary-industries-minister

Full council meeting (10 September)

The full council meeting was held on 10 September 2015. All councillors were in attendance.

The agenda included: (1) treasury policy change, (2) capital carry-overs, navigation safety by-law, (3) public transport regional plan, (4) speed limits review, (5) unmanned aircraft policy, (6) Nelson regional sewerage business unit, (7) economic development funding agreement, (8) mayor’s report, (9) Waimea community dam, and (10) CEOs report.

Two additional late items were also considered in confidence: (1) audit subcommittee independent member appointment, and (2) Waimea water augmentation project. I’m unable to talk to these items at present, as they were discussed in committee and have yet to have their confidential status lifted.

Finally, two items were raised in public forum – with one raising a very interesting legal issue.

Public forum

Michael Croxford raised (and tabled) an interesting question regarding the treatment of development contribution levies by the council. By way of background, a developer (being the “consent holder” at the time the development is approved) will normally pay the council a development contribution. This financial contribution helps fund downstream infrastructural impacts from the development or proposed infrastructure that the development would benefit from.

In some instances council might decide not to proceed with implementing proposed infrastructural improvements. In those instances, council refunds the financial contribution to the consent holder (the original payor). In this instance, the Motueka coastal pipeline was removed from the long term plan requiring council to refund the development contribution. In some instances the original developer (the “consent holder” at the time) is no longer operating or has been liquidated. If it is a company it is normally removed from the companies register. However, removal from the companies office does not prevent a company re-registering.

Michael argued that the refund of development contributions, should go to the holder of the consent at the time it is deemed no longer required. Accordingly, where the developer no longer exists, the refund should go to the land owner as the subsequent holder of the consent. Essentially, his argument turned on whether the term “consent holder”, could import a wider meaning from examining other provisions of the Local Government Act (LGA) or Resource Management Act (RMA).

This matter was subsequently discussed during the Mayor’s report. The outcome of that discussion was that the council felt it had discharged its duty to determine (to the best of its ability) the legal position. That advice suggested that the “consent holder” was the payor (the original developer) and did not include the subsequent owner of the developed land. As Michael had not received a copy of the council’s legal opinion, it was felt that he should be provided a copy, so that he (and other residents) could decide whether they wanted to challenge the council’s legal advice.

Kit Maling spoke to the Waimea community dam update report (discussed below) and tabled a document outlining a resolution from the Waimea East Irrigation Company.

Waimea community dam

This item was a second (regular) project update for councillors. At this stage the project has been in slow mode (to avoid unnecessary expenditure) as discussions with WCDL progressed. The confidential briefing to councillors, updated much of what was stated in this part of the report. Once discussions with WCDL have been completed, planned work streams should move forward a little faster. The proposed work streams were outlined in my earlier post (see www.greeningtasman.wordpress.com/2015/09/08/full-council-meeting-30-july/).

Work that can be expected to re-gather momentum once discussions with WCDL have concluded are:

  • formation of a biodiversity technical advisory group (BTAG) to prepare a biodiversity management plan (a resource consent condition).
  • construction procurement process planning. It is being suggested that a two stage process (that comprises construction and design planning, followed by price negotiation and construction).
  • business structure planning. WCDL has been considering a variety of options (prepared by Northington partners). Staff will present a report to full council in October that considers the various issues.
  • preparation and review of pre-purchase agreements with landowners. These are agreements that hold open the ability to purchase the relevant land (at agreed prices), without actually entering into land sales. Effectively, the council avoids having to purchase land until there is agreement to proceed with a dam.

By way of background, WCDL acknowledged council’s recent offer to share the resource consent as joint resource consent holders (a 50:50 ownership arrangement). This is a change from councils original arrangement, where WCDL were contracted to secure the resource consent on behalf of the council and handing over the resource consent by a specified date or the formation of a CCO (which ever was earlier). WCDL has attached several conditions to this offer which council representatives have since brought back to council. Hence the confidential session.

I would hope that once all discussions with WCDL are completed, that relevant reports withheld under confidentiality are made public. I will certainly be advocating for this to happen.

So where to from here?

In my opinion, the process is at a critical fulcrum (or tipping point). I believe council needs to re-evaluate its relationship with WCDL. It has become very confusing and the lines between council and WCDL are very blurred. This has resulted in a great deal of uncertainty (and confusion) about who should be doing what, and who should be funding what.

At present council is both (sole) funder and service provider. Council is carrying all the risk (hence the growing concerns of council about the escalating write-off cost). Those roles need to be formally separated. Council should no longer be the sole funder and certainly not the main funder of a water solution that is being developed for the primary benefit of irrigators (who will receive over 2/3rds of the augmented water supply).

In my opinion, (as I have said repeatedly on this blog), WCDL needs to capitalise (as an investment holding entity for interested irrigators), so that it can take over this project as majority shareholder and funder of the dam. Like all investment vehicles, it needs start up capital to come from those investors who truly believe in this venture.

Once initially capitalised, WCDL can invest in developing a prospectus to secure more funding from potential investors to eventually invest into a Dam holding entity. The dam holding entity can then fund the services (and work streams) it needs to bring about the construction of a dam. Council can then evaluate whether it wants to invest in the venture or not. And can also compete against others, to provide project management services and technical expertise.

The parallel issue of water allocation and restrictions

Unfortunately, one of the most frustrating elements of the dam debate for me, is the confusion surrounding the water management (allocation and restriction) rules – which are set to change. Hardly anyone I speak to understands how these rules operate or how they impact on the way water is currently managed.

In my opinion council has done a very poor job in communicating the changing landscape of water management. This should have been communicated by council well before it began its conversation about water augmentation. Because this is “the” reason why council is having a debate about water augmentation solutions. Ironically, council were the ones who brought about these change in the rules, by way of a plan change a number of years ago.

However, the good news is that council has got its act together and is beginning to have this conversation. As part of the consultation process for proposed changes to the district plan rules, council will be hosting 2 open days for residents to meet and discuss the proposed plan changes. These are:

  • Wednesday, 7 October 2015 at Richmond Council Chambers (focusing on urban water supply), and
  • Thursday, 8 October 2015 at Seifried’s Estate, Redwood Rd (focusing on rural water permit holders).

Changes to water management rules

There are three changes to the water management rules.

First, water allocation is about to change. Basically, the amount of water people receive is likely to reduce. For example, people might have received a water allocation right of 10 litres, but only actually consumed 5 litres. This resulted in an over allocation of water. To correct this over-allocation, council will be reviewing peoples actual water usage. The review will re-calibrate water allocations so that they equal actual usage.

This re-calibration will also have an immediate affect on the impact of water restrictions on some water right holders. This is because water restrictions step down from the allocation right volume. If the allocation right volume was higher than real water consumption volume, the restrictions had no impact on water right holders. However, if the allocation right volume is the same as consumption, then restrictions will immediately affect the amount of water available for the water right holder.

For urban water users the allocation right volume is virtually identical to consumption. Effectively council has not purchased more water than it needs. Whereas, some rural water consumers have. This means any re-calibration of urban water will not result in any change.

The second change is the threshold for imposing water restrictions. The thresholds have changed (by way of an earlier plan change) so that they bite earlier (ie, at lower thresholds). These changes are even more severe for water users who will have their water allocation levels reduced to historical consumption levels (or use).

The third change (currently being consulted on) is the introduction of a dual water restriction system – one for those who are allocated water and are funding an increase in water supply (a dam funder), and one for those who are not. Those who choose not to fund an increase in water supply, will operate under the above rules (ie, the revised allocations that are equivalent to historical use, and lowered thresholds for water restrictions).

Those that fund a water supply increase, will effectively have a system that imposes water restrictions that take into consideration the additional water being added to the natural water supply. Effectively, using a different water restriction threshold, so that they can extract the water they have added to the river, before restrictions apply.

If council purchases water from the dam for urban users (estimated investment of $9 million) then they are less likely to see water restrictions. It should be noted that council has voted to provide $25 million towards the dam. With $13 million (of that $25 million) considered to be the environmental benefit contribution that will be rated across the whole district, against water club members (those people connected to a council provided water supply).

As I have said in earlier posts, I consider that the $13 million should be apportioned between the extractors (urban consumers and irrigators), rather than imposed across the district. Adopting an extractor pays approach would have resulted in council only contributing roughly $14 million towards water augmentation, rather than the $25 million that council has undertaken to provide in the LTP (see www.greeningtasman.wordpress.com/2015/06/02/long-term-plan-meeting-full-council-28-may/). In my opinion, the community should continue to put pressure on the councils (majority) decision to fund $25 million of the dam cost.

Speed limits

The council unanimously agreed to release for public consultation the draft consolidated bylaws on road speed limits for the district (see the “attachments” document at www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-09-10).

A number of changes to road speed limits across the district are proposed. For example, Ranzau Road will have its speed limits reduced. Consultation is expected to begin from 14 September 2015 to 16 October 2015.

My advice for people wanting to a submission is to read the attachments document. This is because the attachment document highlights the proposed changes (via track changes), so that you can quickly identify any proposed changes. While the public consultation document will highlight if a speed has gone up or down, it won’t indicate the speed it has changed from.

The attachment document also includes very detailed assessments and reasons for why speed limits were proposed for changed (or not). Those assessments include a recommended speed (based on model), additional staff assessments (that consider aspects not included in the speed modeling), and the working party recommendations (being Crs Norris, Dowler, Higgins, Bryant, and Sangster).

In relation to school zones, the draft bylaw proposes a managed roll out of advisory signs. The only exception is for Brightwater, where the Brightwater school zone will have the benefit of a reduced speed limit. This was achieved by the mayor proposing a separate resolution that proposed a speed limit reduction for the main road in Brightwater. A number of councillors were upset with this move, as it appeared to give special treatment to one particular street (and school).

While, I could agree with those councillors, that this treatment was not fair, I nonetheless supported the separate resolution, as at least one school would benefit from the proposed speed reduction. However, I agree with those councillors who opposed the mayor’s maneuvering, that all other schools zones should have had similar treatment. No doubt those schools will be making a submission to council highlighting the difference in treatment and inviting council to lower speed limits on their roads.

Treasury policy

Council’s current treasury policy requires any interest rate swap arrangements that are longer than 10 years to be approved by full council (which meets every 6 weeks). The proposed change sought to extend the delegated authority from 10 years to 12 years, to enable staff to take advantage of the swap market (which is very fluid at present), without having to wait 6 weeks for approval. Both the full council and corporate services meeting unanimously supported the proposed change.

This item was brought to full council from the corporate services meeting (held on 3 September) as the corporate services committee did not have authority to amend the treasury policy. This item was explained in detail at para 9.4 of the corporate services agenda (see www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/corporate-services-committee-meetings/?path=/EDMS/Public/Meetings/CorporateServicesCommittee/2015/2015-09-03) and discussed in an earlier post (see www.greeningtasman.wordpress.com/2015/09/08/corporate-services-committee-3-september/).

Capital carry-overs

Due to the nature of capital works, some projects planned to be undertaken in earlier financial years are either not started, or are not completed in the financial year they were planned. Often delays are due to weather or the cascading effect of other projects being delayed. This means funds that were allocated in an earlier financial year have to be brought forward into this financial year to enable the work to be completed or started.

Council unanimously supported the carry forward of $14.853 million from the 2014-15 year into the 2015-16 year. This does not have a financial impact in the 2015-16 year, as the funds for these projects has already been raised in the earlier years that these projects were planned to be completed. In the previous financial year, council carried forward around $20 million of capital projects. The reduction in carry forwards this year would suggest that council has made some progress in catching up on the delivery of these delayed projects.

A list of the projects being carried forward is listed in the agenda at page 15 to 23.

Navigation safety

Council unanimously adopted the proposed “Navigation Safety Bylaw 2015” which comes into effect on 14 September 2015. The new 2015 bylaw replaces the old 2006 bylaw. All bylaws are located on the council website at www.tasman.govt.nz/policy/policies/bylaws/.

The new 2015 bylaw is the result of a review of the old 2006 bylaw that began in December 2013 and involved public consultation during early 2014. During that consultation period council received over 212 submissions.

Since the consultation period the government has further simplified the law. This has meant that the new 2015 bylaw does not have to reproduce all the rules contained in the parent Act. Therefore, anyone referring to the Navigation Safety Bylaw 2015 should also consult the parent Act (the Maritime Transport Act 1994, see www.legislation.govt.nz/act/public/1994/0104/latest/whole.html), associated regulations, and rules.

Public transport

The regional public transport plan for 2015-18 was received and adopted by council.

I took the opportunity to reinforce the communities concerns that the regional plan is not used to drive (forgive the pun) further road widening projects (Wensley Road comes to mind). In my opinion, any expansion of the public transport network needs to utilise existing infrastructure not place additional financial costs on the community.

For example, a loop around Richmond that uses Hill Street, Hart’s Road, and Bateup Road (which is already earmarked for widening due to the proposed supermarket development) would be more appropriate roads to use as they have the capacity to take buses.

Unmanned aircraft

This topic was discussed in an earlier meeting (see www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/corporate-services-committee-meetings/?path=/EDMS/Public/Meetings/CorporateServicesCommittee/2015/2015-09-03).

Full council received and approved the interim policy on unmanned aircraft (also referred to as drones, model aircraft, remotely piloted aircraft systems, or UAVs). The policy should be read in conjunction with the civil aviation authority (CAA) rules (which came into force on 1 August 2015) and are located at www.caa.govt.nz/rpas/.

The council policy document is is located at www.tasman.govt.nz/policy/policies/flying-drones-and-other-unmanned-aircraft-over-council-land/. Essentially, the policy prohibits use of unmanned aircraft within 4 km of identified aerodromes (controlled airspace), unless permission is granted by the council.

In contrast, council has provided general consent to use unmanned aircraft on all other council land, unless prohibited. Prohibited land areas include: council offices, libraries, forestry plantations, Mapua commercial precinct and wharf area, various public and memorial gardens (such as, Washbourn, Pethybridge, etc), cemeteries, Motueka sandspit, leased land to other parties (such as, bowling greens, tennis courts, etc). If on doubt contact the council.

This policy does not cover privately owned land. However, the CAA requires unmanned aircraft operators to obtain permission from a private landowner or occupier before flying over private land.

Nelson regional sewerage business unit

Council agreed to renew the Nelson regional sewerage business unit (NSRBU) memorandum of understanding and reappoint the joint committee that administers the NSRBU.

This item came before full council because both councils failed to enter into a renewed memorandum of understanding before August 2015, resulting in the deemed discharging of NRSBU joint committee. The council’s resolutions effectively corrected this administrative oversight.

Economic development funding

Council received and approved the EDA funding agreement with Nelson council. The agreement looks to fund destination tourism and economic development initiatives for the Tasman region at a total cost of $400,000 per annum. These funds come from general rates. Nelson council will use the EDA and NTT (or other appropriate vehicle) to provide these services (and outcomes).

I note that the Nelson council has begun a review of both organisations and is not proposing to merge both entities (see www.stuff.co.nz/nelson-mail/news/71888656/Nelson-economic-development-and-tourism-merger-could-save-100-000-a-year). I certainly support a merger as I have stated in earlier posts (see my discussion about tourism at www.greeningtasman.wordpress.com/2013/12/18/full-council-meeting-5-december/).

The council also established a liason group (comprising the mayor, Cr King, Bryant and Edgar) to improve accountability arrangements for service delivery for the Tasman district. In my opinion, this is an important element of the new process. Unfortunately the council in the past has not provided clear targets or outcomes for the Tasman district and therefore has struggled to receive anything meaningful in terms of measuring its return on investment.

While attempts had been made to target the cost of destination tourism to the commercial community (being those who directly benefit), rather than general ratepayers, the tools available to council were rather blunt (ie rating commercial land), and in the end the council opted in the interim to continue to use the general rating system.

CEO’s report

Highlights of the CEO’s report include:

  • strategy and planning. Council’s LTP consultative document was judged to one of the top 8 documents in the country. Council staff are reviewing the winning entry (and the other 6 documents) to make improvements for future consultation documents. Planning for the next financial year (including how we will consult with the public) has begun. A workshop was held on 3 September that discussed several issues including enabling the finance team to focus on forecasting (for the future), rather than just reporting on the past.
  • annual report. The annual audit process went more smoothly this year, with the annual report expected to be adopted at the next full council meeting on 24 September 2015. Appointment of an independent member to the audit subcommittee was addressed in a confidential session with the appointment being made by majority vote. The person appointed was Graham Naylor.
  • rules reduction taskforce. The government task force concluded that there were few loopy laws with many grievances stemming from service delivery and process problems. My experience has been that the interpretation of legislative rules by central government agencies is also an area of concern, especially in relation to health and safety standards (and there over zealous application).
  • people. Council are currently seeking 3 staff replacements. Collective employment agreement bargaining concluded with the union in August. This resulted in a wage increase of 1.2% for most staff – which was “just” within budget. A high level review of councils existing health and safety systems and processes has begun, with a view to implementing an improvement plan. Under the new Health and Safety Act councillors and officers have a duty of due diligence (ie taking reasonable steps to ensure compliance), but cannot be prosecuted for non-compliance.

Agenda and minutes

The agenda, attachments, and minutes are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-09-10.

 

Full council meeting (30 July)

The full council meeting was held on 30 July 2015. Apologies were received from Cr Canton (and Cr King and Bouillir for lateness). Cr Norris announced he had to leave for another meeting at 11am. All other councillors were present.

The agenda included the following items: (1) activity management plan approval, (2) special projects funding criteria for the Motueka community board, (3) economic development funding outputs, (4) parking at Mapua wharf, (5) joint development standards project for Nelson and Tasman, (6) reserve land re-classification for Takaka service centre, (7) Waimea community dam project updates, (8) the CEO’s activity report, (9) mayor’s report, and (10) machinery resolutions and action items update.

I will focus on the important topics.

Public forum

There were three presentations at the public forum. My thanks to all three ratepayers (Ray, David, and Penny) who raised some good points.

The first raised concerns over the cost of water compliance reports that were posted to a ratepayer. They felt that if some unnecessary costs could be reduced (eg double sided paper, so two pages not 4 pages, and\or emailed instead of posted), water monitoring fees could be reduced. They felt council were not working very smartly to keep costs down.

I certainly welcomed this reminder that all aspects of council’s business needed to be operating smarter. Every time council do something, staff (and councilors) need to be asking, how can we do this smarter and more cost effectively. We have made some progress in some areas, but we still have room for improvement in others. Its a process of continual improvement.

The second item related to the Motueka community board and concerns that the criteria would unduly prohibit community driven projects. It was felt many community projects already undertaken would not have met the criteria. Accordingly, some wording changes were suggested. I will talk more about this issue below.

The third item related to council minutes. Concerns were raised that the minutes did not accurately record the opinions of councillors and that a degree of accountability of councillors decisions was lost.

I agree. Its why I write this blog, so that people know where I stand on particular issues, and why I often ask for divisions on controversial issues.

Waimea community dam

There were several items (including confidential items) on the the Waimea community dam (the Dam). The first item related to Dam costs to date, and importantly the write off cost for the council, should the Dam not proceed with any council funding (see item 8.5 at page 69). The second item provide an update on work streams (see item 8.6 at page 73).

Background

By way of background, the Dam project is governed by a project steering group that includes the mayor, Cr King, Cr Higgins, and directors from Waimea Community Dam Ltd (WCDL), which is a private company representing irrigator interests. Any decisions requiring council involvement or funding have to come back to council for approval.

Information about WCDL and its constitution can be found on the companies office website (see https://www.business.govt.nz/companies/app/ui/pages/companies/3365573).

WCDL is responsible for raising capital from irrigators, crown irrigation (a government agency), and financial institutions (like banks). The Dam project is being co-ordinated within council, with council staff delivering many of the necessary work stream outputs.

The relationship of the parties is illustrated in the following updated diagram (page 79 of the agenda).

GovDam20150730

Workstreams

Work streams include:

  • Financial reporting and funding. This work stream is ongoing (see financial discussion below). WCDL is seeking funds from the MPI’s irrigation acceleration fund.
  • Project management. Work streams that are not critical have been put on hold pending a satisfactory response from WCDL on their business model and funding.
  • Communication. A part-time resource is being recruited to provide communication support (including preparing funding proposals) for WCDL.
  • Governance. The funding and support agreement with WCDL has expired. New agreements will need to be entered into for any more funding. The transfer of the resource consents from WCDL to council (as required under the funding and support agreement) is pending. This was discussed in-committee (in a confidential session). More work on the ultimate form of co-investment needs to be finalised. At present, WCDL has no proposition to take to potential investors.
  • Land. Negotiations regarding an acceptable price for the sale of land are ongoing. An agreement on the negotiation process is ready to go to potential land owners.
  • Procurement. Beca has completed preparing a fee proposal for the procurement strategy.
  • Resource consents. The consent (with conditions) has been granted. A condition of the consent is the re-location of the “shovel mint” plant and preparation of a biodiversity management plan.
  • Plan changes. Draft amendments to the TRMP to better reflect Dam funding arrangements is currently under consideration. Submissions closed 31 July 2015.
  • Statutory processes. It is contemplated that there will be another special consultative process before council embarks on any joint investment in the Dam project.

Financials

The council has sought greater clarity over the council’s financial write down exposure, should the Dam not proceed. Basically, how much will TDC have spent by the time a decision is made on whether to start construction (or not). At this stage, it is estimated that the estimated write-off cost for council would be $2.449 million.

Mapua wharf parking

The expected parking shortfall from wharf redevelopment work (that includes the new $1.35 million Mapua development (shed 4), and the planned removal of parking within the wharf area) has provoked council to rethink its planned roll out of parking improvements for the Mapua wharf area.

The council had planned to spend $180,000 this financial year (2015-16), and another $350,000 in 2018-19 to complete construction of 100 parking spaces (at a total cost of $530,000).

The transportation manager (Gary Clarke) advised council that the project could be brought forward into the 2015-16 financial year at a total cost of $300,000, due to a revised parking design concept – providing an overall saving of $280,000.

The $300,000 would be funded from bringing forward $70,000 of the $350,000 intended to be spent in 2018-19, plus the $180,000 intended to be spent in 2015-16, plus a $50,000 contribution from the Mapua development. While the proposed costs are only estimates (and a degree of contingency needs to be built into the $300,000) there is an expectation tender pricing will be sharper.

This arrangement would also increase the total cost of the Mapua development to $1.4 million (ie $1.35 million + $50,000). As I have stated in earlier posts, I believe that if council felt compelled to become a landlord to ensure there was an ice cream vendor in the precinct (rather than regulator), it should have pursued a low cost container development (eg, $200,000), that would have allowed a good return on investment, while allowing lower (affordable) rents to be charged for tenants.

Special projects funding criteria

The Motueka community currently pay a $5 per annum charge in their rates that (contributes about $24,000) to the Motueka Community Board’s special projects fund. This amount is planned to increase to $10 in the 2015-16 year, resulting in a contribution of about $48,500.

Spending of the special projects fund is governed by a policy document that is administered by the Motueka Community Board. Before funding can be allocated to a special project by the Board, it must fulfill the policy criteria. Generally, the fund is for projects that are low priority for the district, but high priority for the ward.

To ensure funds are properly allocated the policy was revised. However, concerns were raised by board member Ogilvie that the revised policy was to restrictive. In his public forum presentation, he suggested that the general waivor (consideration number 15) from the 14 preceding criteria was overly restrictive as the circumstances had to an “extraordinary situation”. He suggested the word “extraordinary” should be deleted. To support his argument he suggested many projects undertaken by the board would probably not be considered “ extraordinary”. Applying the new criteria, he felt many of the projects already delivered by the board could not be considered “extraordinary”. For example, a road crossing was hardly extraordinary.

I raised board member Ogilvie’s argument as part of my questions – to put the matter on the table. I also raised questions over the priority given to health and safety issues within the criteria. My concern was the health and safety plan requirement (consideration number 10) appeared to overridden by the “extraordinary situation” waivor provided to the board.

Staff reassured council that this was not the intention. That the board would always have to keep in mind health and safety considerations when approving any project application – including the ability for the board “to consider and approve” application that did “not fully meet the criteria described in the policy”. Staff also reassured council that many of the examples provided by board member Olgilvie would meet the “extraordinary situation” threshold or would have met the other criteria without the need for the board to seek a waivor from the preceding criteria.

Cr Edgar also raised concerns over the wording of consideration number 8. Staff emphasised that projects had to be “bricks and mortar” type projects (eg maintenance of existing infrastructure). For clarification, staff reordered the wording.

Council resolved to approve the revised policy criteria with amendments that emphasised the underlying health and safety constraints on the boards exercise of any of the criteria.

CEO’s activity report

The chief executives activity report covered a number of items. These included: (1) the shared services memorandum with nelson council, (2) human resource (staff) update, and (3) financial update.

Financials

Provisions financial results for the 2014-15 year (June end) have been completed.

The accounting position provides a positive variance (surplus) against budget of $4.611 million ($13.916 million surplus compared with a budgeted surplus of $9.305 million). Council also achieved an operational surplus of $5.435 million (a $7.025 million reduction on budgeted expenditure against a reduced income of $1.59 million), and an adjusted operational surplus (including revaluations and dividends) of $7.318 million.

The reduction in budgeted expenditure ($7.05 million) was due to a number of factors including interest cost savings ($2.665 million), and maintenance cost savings ($4.4 million). It is noted that capital growth was higher than budgeted, with an additional $200,000 collected from rates, and an additional $260,000 from water meters.

Capital expenditure was $33.872 million. However, the overall capital expenditure budget was $48.682 million, which included $17.34 million of 2013-14 carry-overs, approved by council in October.

Closing debt is expected to be around $147 million for the 2014-15 year.

Overall a good result and certainly heading in the right direction.

Human resources

Collective employment agreement bargaining with the New Zealand Public Service Association (PSA) has concluded and is expected to be within budget.

Council are currently at various stages of recruiting for a: (1) communications officer – new (0.6 FTE), (2) administration officer – resource consents – replacement (0.4 FTE); (3) administration officer – commercial – new (1 FTE); and (4) policy planner – urban and rural development – replacement (1 FTE).

All positions are within approved budgets for staffing and are either replacement positions, or new budgeted positions, or new positions funded from within available budgeted funds (what the report misguidedly terms “unbudgeted”, but probably better described as unplanned). For example, staff might not be replaced immediately due to an extended recruitment process and the delay in replacement provides funding room for a new unplanned position.

Current staffing levels are:

Full-time Part-time Casual Fixed-term
Office of the CEO

5

1 1
Community development

47

31 2

0

Corporate services

38

1 0

3

Engineering

40

2 0

1

Environment and planning

81

11 0

5

Total 211 46 2

10

Some good analysis on staff numbers and turn-over (over a number of years) are provided in the supplementary late agenda (pages 19 to 21). Generally, council has an average annual staff turn-over of around 8-9% with 15.3% of staff, 60 years or older.

For me, both statistics are quite informative. First, a large portion of staff will be entering retirement soon. This is an operational risk for the organisation and succession planning needs to be put in place for key roles.  Secondly, staff turn-over is quite low. The national average is around 16.3% for 2014, and 13.5% for public sector entities with more than 100 staff (see http://www.lawsonwilliams.co.nz/userfiles/file/2014%20NZ%20Staff%20Turnover%20Survey%20-%20Summary%20Report.pdf). The low turn-over might indicate good organisational moral, or an unstable economy where people are unsure of changing jobs. Low turn-over also means that new thinking is not entering the organisation.

Shared services

A memorandum of understanding (MoU) on shared services was signed entered into by Tasman, Nelson, and Marlborough councils in July 2012. The excutive teams of all three councils had agreed to recommend the agreement lapse and this was proposed in the original resolution before council.

However, the recent statements by the Minister of Local Government suggested that it might be appropriate to keep the agreement in place. The minister had stated  at a recent local government conference (in Rotorua on 19-21 July 2015) that (my emphasis):

It is time for sustained, locked in change. So I reiterate, I will not legislate for large amalgamation. I am as tired as our communities are of having an argument over how many mayors there should be and over whom is bigger than whom and which area will dominate. Size doesn’t always matter, but long term sustainable growth in the best interests of all New Zealanders should. … This might mean a CCO on water or transport across a region. It could mean a different business structure or increased responsibilities and accountabilities for Regional Councils. It could even mean in areas that might put a number of CCOs in place for key growth and infrastructure that there is no longer a need for a Regional Council. Some councils may even choose to amalgamate. I fully understand and accept that one solution will not work across all of New Zealand. That is why the Local Government Commission will be working up various structure options for each region to look at and decide what works best for them, and then where necessary I will legislate to either set a new CCO up across a region – or even to take something away. I have zero interest in imposing unwanted change on you. But you know that our regions are not as cohesive as they need to be to support our challenges and our future growth. So I implore you to do something about it. Be brave – own the change and both the Commission and I will do everything we can to assist and support you. But let me be clear – there will be change.

I certainly welcomed this message. It’s what the Tasman community have being saying for sometime. We do not want to amalgamate, but we do want to work smarter so we reduce the costs of local government (and our rates).

In my opinion, the thrust of the message for neighbouring councils is become “cohesive” to support the challenges of growth. That means working together through shared service arrangements where it makes sense to share services. Whether through shared service agreements, or other delivery vehicles (eg, council controlled organisations (CCOs) , limited liability partnerships (LLPs), or other entities).

York valley landfill is the first major shared service arrangement between Nelson and Tasman for sometime. But it should not be the last. Both councils should be pro-active in identifying more opportunities to reduce costs and share services.

Agenda and minutes

The agenda (including supplementary late reports) and minutes are located at http://www.tasman.govt.nz/council/council-meetings/standing-committees-meetings/full-council-meetings/?path=/EDMS/Public/Meetings/FullCouncil/2015/2015-07-30.