Agenda of Lumsden/Balfour Water Supply Subcommittee

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Notice is hereby given that a Meeting of the Lumsden/Balfour Water Supply Subcommittee will be held on:

Date:

Time:

Meeting Room:

Venue:

Monday, 7 December 2015

6.30pm

SDC Office,

Lumsden

Lumsden/Balfour Water Supply Subcommittee Agenda

OPEN

MEMBERSHIP

Chairperson	David Henderson
Deputy Chairperson	Evan Hankey
Members	Karen Blakemore
	Peter Clarke
	David Henderson
	Robyn McGregor

Councillors	Brian Dillon John Douglas

IN ATTENDANCE

Area Officer

Programme Manager, Water & Waste Services

Rose Knowles

Bill Witham

Contact Telephone: 0800 732 732

Postal Address: PO Box 903, Invercargill 9840

Email: emailsdc@southlanddc.govt.nz

Website: www.southlanddc.govt.nz

Full agendas are available on Council’s Website

www.southlanddc.govt.nz

1 Apologies

At the close of the agenda no apologies had been received.

2 Leave of absence

At the close of the agenda no requests for leave of absence had been received.

3 Conflict of Interest

Committee Members are reminded of the need to be vigilant to stand aside from decision-making when a conflict arises between their role as a member and any private or other external interest they might have.

4 Public Forum

Notification to speak is required by 5pm at least two days before the meeting. Further information is available on www.southlanddc.govt.nz or phoning 0800 732 732.

5 Extraordinary/Urgent Items

To consider, and if thought fit, to pass a resolution to permit the committee to consider any further items which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded.

Such resolution is required to be made pursuant to Section 46A(7) of the Local Government Official Information and Meetings Act 1987, and the Chairperson must advise:

(i) The reason why the item was not on the Agenda, and

(ii) The reason why the discussion of this item cannot be delayed until a subsequent meeting.

Section 46A(7A) of the Local Government Official Information and Meetings Act 1987 (as amended) states:

“Where an item is not on the agenda for a meeting,-

(a) That item may be discussed at that meeting if-

(i) That item is a minor matter relating to the general business of the local authority; and

(ii) the presiding member explains at the beginning of the meeting, at a time when it is open to the public, that the item will be discussed at the meeting; but

(b) no resolution, decision or recommendation may be made in respect of that item except to refer that item to a subsequent meeting of the local authority for further discussion.”

6 Confirmation of Minutes

6.1 Meeting minutes of Lumsden/Balfour Water Supply Subcommittee, 24 August 2015

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Lumsden/Balfour Water Supply Subcommittee

OPEN MINUTES

Minutes of a meeting of Lumsden/Balfour Water Supply Subcommittee held in the SDC Office, Lumsden on Monday, 24 August 2015 at 6.30pm.

present

Chairperson	David Henderson
Deputy Chairperson	Evan Hankey
Members	Karen Blakemore
	Peter Clarke
	Paul Eaton
	Robyn McGregor

Councillor	John Douglas (arrived 7.15pm)

IN ATTENDANCE

Area Officer

Project & Programme Manager, Water & Waste Services

Rose Knowles

Bill Witham

1 Apologies

An apology for lateness was lodged by Councillor Douglas.

Moved Member Hankey, seconded Member Clarke and resolved:

That the Lumsden/Balfour Water Supply Subcommittee accept the apology.

2 Leave of absence

At the close of the agenda no requests for leave of absence had been received.

3 Conflict of Interest

There were no conflicts of interest declared.

4 Public Forum

There were no persons seeking speaking rights in Public Forum.

5 Extraordinary/Urgent Items

There were no Extraordinary/Urgent items.

6 Confirmation of Minutes

Resolution

Moved Member Eaton, seconded Member Clarke

That the minutes of Lumsden/Balfour Water Supply Subcommittee meeting held on 1 December 2014 be confirmed.

Reports

7.1

Action Sheet Lumsden Balfour Water Supply 24 August 2015

Record No: R/15/8/14853

The Action Sheet was circulated for Members information.

Balfour Township Water Connections

The subcommittee was advised that Council currently only has the necessary policies in place to provide targeted rates for connection costs associated with new schemes. Mr Witham stated establishing targeted rates for ratepayers in relation to connections to existing schemes is a discussion that needs to be had by Council and an approach agreed for the wider organisation. In order to implement such an approach, there is a significant process required to be undertaken to comply with legislation, including community consultation. It is anticipated that if Council agree to such an approach, it would be implemented as part of the 2018-28 Long Term Plan process.

The subcommittee advised that the project be put on hold until further notice from the Council.

Resolution

That the Lumsden/Balfour Water Supply Subcommittee:

a) Receives the report titled “Action Sheet Lumsden Balfour Water Supply 24 August 2015” dated 17 August 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

c) Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the Act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

7.2

Works and Finance Report to Lumsden/Balfour Rural Water Supply Subcommittee for the period ended 30 June 2015

Record No: R/15/3/4740

The Works and Finance Report prepared by Operations Manager – Water and Waste Services, Mr Bill Witham, for the period ending 30 June 2015, was tabled.

Member Eaton inquired if the line restrictor has been installed on the Duthie property.

Mr Witham advised that he would investigate and report back to the members.

Resolution

Moved Member McGregor, seconded Member Hankey

That the Lumsden/Balfour Water Supply Subcommittee:

a) Receives the report titled “Works and Finance Report to Lumsden/Balfour Rural Water Supply Subcommittee for the period ended 30 June 2015” dated 24 August 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

7.3

Unaudited Annual Accounts Report to Lumsden/ Balfour Water Supply Subcommittee for the year ended 30 June 2015

Record No: R/15/8/13807

The Unaudited Annual Accounts Report prepared by Operations Manager – Water and Waste Services, Mr Bill Witham, for the year ending 30 June 2015, was tabled.

Mr Witham advised the subcommittee of the following;

The total balance of Development and Financial contributions for the Lumsden/Balfour Water Supply scheme is $12,977.
The reticulation renewal project at Mr J McLean’s property was completed by Downer in 2014 with costs allocated to unplanned maintenance.

The Subcommittee advised that more information be provided on the locations of the projects be inserted into the project list, and enquired to why the project over the Oreti River Bridge was not included in the project list.

Resolution

Moved Member Hankey, seconded Member McGregor

That the Lumsden/Balfour Water Supply Subcommittee:

a) Receives the report titled “Unaudited Annual Accounts Report to Lumsden/ Balfour Water Supply Subcommittee for the year ended 30 June 2015” dated 14 August 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

d) Requests Water & Waste Services to provide more information on the location of projects and to include the project over the Oreti River Bridge in the project list.

7.45pm CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Lumsden/Balfour Water Supply Subcommittee HELD ON 24 AUGUST 2015.

DATE:...................................................................

CHAIRPERSON:...................................................

Lumsden/Balfour Water Supply Subcommittee

07 December 2015

Lumsden/Balfour Water Supply Subcommittee Action Sheet

Open Action Items

Author

Due Date

Subject

Notes

Bill Witham

07/09/2016

Balfour Township Water

Update 9 December 2015

The Subcommittee was advised that targeted rate options to fund the proposed work are currently in discussion with Council’s Chief Executive and Finance Manager. The Subcommittee will be advised of the outcome of this discussion and Council’s legal status with funding the six properties.

19 August 2015

Council currently only has the necessary policies in place to provide targeted rates for connection costs associated with new schemes. Establishing targeted rates for ratepayers in relation to connections to existing schemes is a discussion that needs to be had by Council and an approach agreed for the wider organisation. In order to implement such an approach, there is a significant process required to be undertaken to comply with legislation, including community consultation. It is anticipated that if Council agree to such an approach, it would be implemented as part of the 2018-28 Long Term Plan process.

24 August 2015

The subcommittee advised that the project be put on hold until further notice from the Council.

Bill Witham

07/12/2015

10/12/2015

Line Restrictor on the Duffy property

Project list - Replacement of the water main over the Oreti River Bridge.

The Subcommittee enquired as to whether the line restrictor has been installed on the Duffy property

30 November 2015

The water restrictor has been installed at the Duffy property.

30 November 2015

The project listing for this was given to the Lumsden CDA by mistake.

The tendered construction sum was $74,917.00. The actual cost for the project was $71,535.66.

Lumsden/Balfour Water Supply Subcommittee

7 December 2015

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Works and Finance Report to Lumsden/Balfour Water Supply Subcommittee for the period ended 31 October 2015

Record No: R/15/11/21159

Author: Bill Witham, Operations Manager - Water and Waste Services

Approved by: Ian Marshall, GM - Services and Assets

☐ Decision ☐ Recommendation ☒ Information

Water and Waste Engineer’s Report

1 The monthly operations reports from Downer are provided to the Board secretary as they are published. They include data on Downer’s district-wide operations activities which is presented on a town-by-town basis.

2 For the year to date, there has been no unplanned expenditure exceeding the $5,000 threshold.

Project List

Project Name	Year	Budget	Status	Officer’s Comment
Investigate new main to Balfour	2015/16	$8,000	Investigation	Investigations and design to be carried out by SDC

Financial Considerations

Development and Financial Contributions

3 The table below outlines the balance of Development and Financial contributions for your community to 30 June 2015 plus any amounts invoiced for this financial year to date. Spending of these funds is considered by Council staff when projects are in the planning stage. Once identified as a potential funding source for a project, confirmation from the Group Manager - Services and Assets is sought before undertaking the project to ensure that the relevant policy and legislative requirements are met.

Water

$13,067

Recommendation

That the Lumsden/Balfour Water Supply Subcommittee:

a) Receives the report titled “Works and Finance Report to Lumsden/Balfour Water Supply Subcommittee for the period ended 31 October 2015” dated 26 November 2015.

Attachments

a Lumsden/Balfour Water Supply Financial Report, 31 October 2015 View

Lumsden/Balfour Water Supply Subcommittee

7 December 2015

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Annual Plan 2016/2017 - Draft Estimates Report

Record No: R/15/10/19257

Author: Bill Witham, Operations Manager - Water and Waste Services

Approved by: Ian Marshall, GM - Services and Assets

☐ Decision ☒ Recommendation ☐ Information

Purpose

1 This report provides an overview of the forecasted services for the Lumsden/Balfour Water Supply Subcommittee in 2016/2017. It includes any variations from what was forecasted in year two of the Long Term Plan (LTP) 2015 - 2025.

2 Council has streamlined its 2016/2017 Annual Plan process and as a result the Subcommittee is only required to review your estimates for significant changes. In addition, consideration should be given to funding any significant changes from reserves where appropriate.

Executive Summary

3 The draft estimates will be incorporated into the Council’s Draft Annual Plan which will be released for consultation in February 2016. Once the plan is finalised (and subject to any changes resulting from submissions), the estimates shown for 2016/2017 will be used to set rates for the year beginning 1 July 2016.

Recommendation

That the Lumsden/Balfour Water Supply Subcommittee:

a) Receives the report titled “Annual Plan 2016/2017 - Draft Estimates Report” dated 19 November 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

d) Approves variations in the Lumsden/Balfour Water Supply Subcommittee estimates from year two of the Long Term Plan.

e) Estimates for the year commencing 1 July 2016 be adopted for inclusion in the Council’s Draft Annual Plan (subject to any amendments made at the meeting).

f) Identifies the key highlights for the local area (to be agreed at the meeting).

Content

Background

4 The draft estimates for the Lumsden/Balfour Water Supply Subcommittee for 2016/2017 have been based on forecasted information from year two of the LTP 2015 - 2025.

5 The objective of these estimates is to highlight variations from year two of the LTP and set rates for 2016/2017.

6 This report has the following appendices:

Appendix 1: This section is broken into rate types and includes a list of business units that make up the rate type and financial summary statement which shows the expenditure and income and rates calculation.

Issues

7 There are no key variances from what was originally included in year two of the LTP and what is planned now.

Revaluations

8 Section 9(1) of the Rating Valuations Act 1998 requires Council to revise its District Valuation Roll at least every three years. Quotable Value Limited, Council’s valuer, are currently
re-valuing all rateable properties in Southland. Ratepayers will be notified in December of their proposed valuation and have until late January 2016 to lodge an objection. The final valuations will be provided to Council in February/March 2016, and these values will be the basis for the 2016/2017 rates strike.

Factors to Consider

Legal and Statutory Requirements

9 The Annual Plan 2016/2017 is a requirement of the Local Government Act 2002 and is also closely aligned with the Local Government (2002) Rating Act.

Community Views

10 Significant or materially different variances from the LTP will be included in a consultation document and released for consultation from 30 January 2016 to 29 February 2016.
As a result of the submission process, amendments may be made prior to Council formally adopting the Annual Plan in June 2016.

Costs and Funding

11 All assumptions that were made when preparing the LTP have been applied in these estimates except the interest rate on borrowings. The interest rate on borrowings has been reduced from 6.25% per annum as per the 2015-2025 LTP, to 5.72% per annum to reflect the decline in market rates over the past year. This interest rate is based on the average BNZ three year fixed interest rate at the time of setting the LTP assumptions (August 2014) and now (October 2015). Please note, this interest rate is subject to confirmation by Council in December 2015, so could be subject to change. Interest on reserves has been calculated at 4.19% on the average of these balances at year end and is consistent with the 2015-2025 LTP. Inflation rates have also been kept consistent with BERL rates adopted in the
2015-2025 LTP.

Policy Implications

12 The LTP sets out the directions or outcomes the community desires and the activities of Council that will contribute to achieving these outcomes over 10 years. These estimates have been prepared using year two forecasted data in the LTP. Any differences between the LTP and Annual Plan budget have been identified and explained in the Issues Section of this report.

Analysis

Options Considered

13 The engineer has reviewed the original LTP numbers and revised as necessary; the options are to accept the report or amend it.

Analysis of Options

Option 1 - Accept the estimates as proposed in this report

Advantages	Disadvantages
· Enables an Annual Plan to be compiled in advance within the set timeframe	· None

Option 2 - Amend the estimates proposed in this report

Advantages

Disadvantages

· Further changes can be made to the LTP budgets

· Rates requirement may need to be recalculated

· May impact the delivery of the
Annual Plan within the set timeframe

Assessment of Significance

14 The contents of this report is not deemed significant under the Significance and Engagement Policy.

Recommended Option

15 Option 1 to accept the estimates as proposed in this report is recommended.

Next Steps

16 The estimates will be summarised in Council’s draft Annual Plan. Significant or materially different variances from the LTP will be included in a consultation document and released for consultation in February 2016. The final Annual Plan including changes made as a result of consultation will be adopted by Council in June 2016.

Attachments

There are no attachments for this report.

Lumsden/Balfour Water Supply Subcommittee

7 December 2015

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Feasibility Investigation for Upgrade of the Water Supply Main to Balfour Area

Record No: R/15/9/16447

Author: Mark Simpson, Project Engineer

Approved by: Ian Marshall, GM - Services and Assets

☐ Decision ☐ Recommendation ☒ Information

Purpose

1 This report discusses the various options for upgrading the water main supply to the Balfour area.

Executive Summary

2 The Water and Waste Department have been asked by the Lumsden/Balfour Water Supply Subcommittee to investigate upgrading the current water supply to the Balfour area as well as help cater for increasing demand from farming practices.

3 A number of different alignments and lengths have been investigated; the areas being serviced vary depending on the alignments. The lowest cost option for supplying water to Balfour area involves laying a main along SH 94 and Old Balfour Road while the higher cost options involve laying mains along Dryridge or Murphy Roads. We have also provided an option of remaining with the status quo.

4 The option that probably gives the most long term benefit is Option 3. This option would allow additional domestic and rural demand to the south east of Balfour and additional water to Balfour township.

5 The costs for the options range in scale up to an estimate of $3,100,000, excluding GST, and would require a loan to fund the works. For a 15 year loan this would increase the water rate district-wide by approximately $47, including GST, per water unit for the life of the loan. Any further investigation and/or consultation with the community will be dependent on the Subcommittee’s direction and if required, Council’s recommendation of any preferred option.

Recommendation

That the Lumsden/Balfour Water Supply Subcommittee:

a) Receives the report titled “Feasibility Investigation for Upgrade of the Water Supply Main to Balfour Area” dated 27 November 2015.

b) Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

d) Provides comments on the options provided and what its preference would be.

Content

Background

6 At the Lumsden/Balfour Water Supply Subcommittee meeting on 14 April 2014 an item was raised for upgrading the water supply to the Balfour area. The Subcommittee was interested in increasing the number of water units that can be allocated to properties south of Balfour while at the same time providing an upgrade of the water supply to the Balfour Township itself.

7 The current consent to take ground water for the Lumsden water treatment plant is valid until 2029; the consent allows a take of 4,200 m³/day until 2019 and then increases to 5,350 m³/day from 2019 to 2028. From 2028 until consent expiry the take increases again to 5,760 m³/day. Over the past 12 months the Council has taken an average of 2000 m³/day with a maximum take over this time of 2800 m³/day.

8 The investigation work has been included in the Council’s Long Term Plan to occur in the 2015/2016 financial year.

Issues

9 The purpose of the investigation is to consider the alignment and size of the supply main, future demand for both rural and town supply and cost estimates for the various options. The Subcommittee will be asked to provide comments on the viability of the options put forward.

Factors to Consider

Legal and Statutory Requirements

10 This project is being undertaken in accordance with the statutory processes and to fulfil Council’s statutory obligations set out in the Local Government Act 2002.

Community Views

11 No consultation with the community has been undertaken at present, if the upgrade to the Balfour area water supply does proceed it will be after extensive consultation with the public and other stakeholders.

12 Where a proposed alignment crosses private property, the individual property owners would need to agree with the alignment and a formal agreement would be made between the Council and owners.

Costs and Funding

13 Any upgrading of the water supply to Balfour and surrounds would be undertaken with district-funding, this would be after a budget for the work has been approved and included in the Long Term Plan. A business plan would have to be developed and approved by Council before the project could proceed. This would demonstrate the financial viability and sustainability of the upgrade project. The Council could also consider a provision for contributions from farmers who would benefit from an increase in available water units.

14 The works would be funded by raising a loan, based on an approximate project cost of $3,100,000, excluding GST, a loan period of 15 years would require an increase to the water rate of $41 excluding GST ($47 including GST) per water unit district-wide. This is a 12.1% increase to the 7760 water units, other projects costs or changes in inflation have not been taken into account.

Policy Implications

15 Any future works will need to be included into the Council’s Long Term Plan to allow for public consultation.

Analysis

Options Considered

16 Water and Waste staff have considered a number of different options with varying scope and costs, the options range from a new separate water supply pipe to staying with the status quo. The attached plan shows the alternative alignments that have been investigated. A number of the considered options could potentially be further extended to cater for future domestic and agricultural demand.

17 The costs for the options include any upgrade to the Balfour township supply, connections and reservoir. Included in the costs are design, Council and consultants fees as well as allowing for inflation and project risk. Not included is a future upgrade to the supply bores and treatment plant, the cost for this work is estimated to be $460,000 excluding GST.

18 From the initial investigation it is estimated that pipes will be around 200 mm diameter with any new reservoir requiring to hold a minimum of 180 m³. The alignments have been located within road reserves as much as possible to reduce the risk of the pipe being hit during farming activities. Where pipes are required to cross private property, agreements will need to be made between the Council and individual property owners.

Analysis of Options

Option 1 - Main laid along SH 94 and Old Balfour Road ($2,900,000 excluding GST)

Advantages

Disadvantages

· Shortest route of 13.8 km.

· Allows the use of the existing Balfour reservoir.

· Alignment remains within road reserves.

· Does not improve water supply south of Lintley Road.

Option 2 - Main laid along SH 94 and Murphy Road ($3,100,000 excluding GST)

Advantages

Disadvantages

· Improves water supply to properties south of Lintley Road and Balfour area and increases number of units available by at least 100 units.

· Upgrade to Balfour Township reticulation.

· Longest route at 16 km.

· No location for additional reservoir along route.

· Will cross some private property.

Option 3 - Main laid along Dryridge and Steffan Road ($3,100,000 excluding GST)

Advantages

Disadvantages

· Improves water supply to properties south of Lintley Road and Balfour area and increase number of units available by at least 100 units.

· Upgrade to Balfour Township reticulation.

· Pipeline will cross private property.

· Longest route at 16 km.

· No location for additional reservoir along route.

Option 4 - Do nothing

Advantages

Disadvantages

· No requirement for raising loans or increasing rates.

· No improvement to the Balfour area and rural supplies.

· Limited opportunities to offer to new customers.

Assessment of Significance

19 Upon assessing the options against the Council’s Significance and Engagement Policy, Water and Waste Services considers that a number of the options would meet the requirements to be classed a significant decision.

20 This is based on the options having a major effect on the Balfour township and surrounding area and also having a significant financial impact on Council’s rating levels. Depending on which option is chosen will determine the level of engagement that is required. Engagement would range from media releases and town meetings up to formal submissions and hearings. However this can be carried out as part of consultation for the next or any future 10 Year Plan (LTP)

Recommended Option

21 The officer’s recommendation is for the Subcommittee to review each of the options presented and provide a direction on how they wish to proceed with this investigation.

22 If the Subcommittee wish to proceed with this investigation further, the officer would recommend that Option 3 is the most suitable alignment as it improves the supply to areas south of Lintley Road, can link back into the Balfour township reticulation to improve supply in town and also allows the possibility of further extending a supply main to cater for future domestic and agricultural demand.

Next Steps

23 Depending on the Subcommittee’s direction it could be required that Council staff prepare a report to go to Council outlining the options and asking it to decide on what further action is to be taken. If Council wishes to proceed with one of the options then we will begin engaging the community and preparing the option to be included in the LTP. A more detailed design of the option including modelling and cost analysis of the alignments would also take place.

24 If there is currently not a desire from the Subcommittee to proceed with further investigation then any further work would be put on hold until such a time that a demand exists.

Attachments

a Balfour Area Supply Main Alternative Alignments View