Agenda of Activities Performance Audit Committee

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Activities Performance Audit Committee

OPEN MINUTES

Minutes of a meeting of Activities Performance Audit Committee held in the Council Chambers, 15 Forth Street, Invercargill on Wednesday, 29 June 2016 at 10.30am.

present

Chairperson	Lyall Bailey
Mayor	Gary Tong
Councillors	Stuart Baird
	Brian Dillon
	Rodney Dobson
	John Douglas
	Paul Duffy
	Bruce Ford
	George Harpur
	Julie Keast
	Ebel Kremer
	Gavin Macpherson
	Neil Paterson

IN ATTENDANCE

Chief Executive - Steve Ruru, Group Manager Community & Futures - Rex Capil, Group Manager Environment and Community - Bruce Halligan, Group Manager Services and Assets - Ian Marshall, Chief Financial Officer - Anne Robson, Manager Communications Louise Pagan, People and Capability Manager – Janet Ellis and Committee Advisor - Alyson Hamilton.

1 Apologies

There were no apologies received.

2 Leave of absence

There were no requests for leave of absence received.

3 Conflict of Interest

There were no conflicts of interest declared.

4 Public Forum

There were no members of the public seeking speaking rights.

5 Extraordinary/Urgent Items

There were no Extraordinary/Urgent items.

6 Confirmation of Minutes

Resolution

Moved Cr Macpherson, seconded Cr Paterson and resolved:

That the minutes of Activities Performance Audit Committee meeting held on 8 June 2016 be confirmed as a true and correct record.

Reports

7.1

Financial Report for the period ended 30 April 2016

Record No: R/16/6/9075

Susan McNamara, Management Accountant, was in attendance for this item.

The Committee noted that 83% of the financial year is compete and that no significant issues have been identified that raise any concerns for Council.

Ms McNamara then spoke on matters relating to the income, operating expenditure, capital expenditure, forestry revenue, roading and transport, chief executive’s account and the balance sheet.

Ms McNamara commented that the Information Management capital expenditure is under forecast by $160K. Included in the budget are costs associated with the core systems review and digitisation project.

Members noted there has been $97K spent to date on both projects with a forecasted year end budget of $310K. The balance of these projects will be carried forward into the 2016/2017 year.

Ms McNamara informed Council has 8M invested in five term deposits ranging from one to two months maturities. These have now all matured with recent re-investments achieving 2.64% to 3.31%.

Resolution

Moved Cr Kremer, seconded Cr Baird and resolved:

That the Activities Performance Audit Committee:

a) Receives the report titled “Financial Report for the period ended 30 April 2016” dated 21 June 2016.

7.2

Interim Management Report from Audit New Zealand for the year ended 30 June 2016

Record No: R/16/4/5600

Mrs Sheree Marrah, Finance Manager, was in attendance for this item.

1 Mrs Marrah advised as part of the audit process, Audit New Zealand provides Council with a report at the conclusion of the interim stage of its Annual Report audit, outlining the work that was performed and any recommended areas for improvement.

2 Mrs Marrah informed Audit New Zealand did not identify any significant or material issues during Council’s interim audit for the year ended 30 June 2016.

3 The Committee was advised that this meant that Audit New Zealand did not find any significant issues in the systems and process that support the activities of Council. However, Mrs Marrah added that during the process Audit NZ did identify a number of areas for improvement.

4 Mrs Marrah explained the table presented to the Committee highlights the recommendations made by Audit NZ in these reports, in the form of an action list.

5 Members noted Council staff will work to implement/resolve the recommendations identified by Audit NZ, in accordance with the self-imposed timelines and with April being the anticipated date Audit NZ will visit to undertake their interim procedures for the 2017 audit.

Cr Douglas queried the issue raised in the Audit NZ report concerning fraud and whether this action should be undertaken by Audit NZ and not undertaken by staff.

Mr Ruru responded advising staff are to have appropriate fraud polices in place and internal control systems to prevent and detect fraud.

Resolution

Moved Cr Dillon, seconded Cr Duffy and resolved:

That the Activities Performance Audit Committee:

a) Receives the report titled “Interim Management Report from Audit New Zealand for the year ended 30 June 2016” dated 15 June 2016.

7.3

Work Schemes Survey Results Report 2015/2016

Record No: R/16/5/8139

Mr Ian Marshall, Group Manager Services & Assets, was in attendance for this item.

Mr Marshall advised the purpose of the Work Schemes targeted survey is to provide staff with useful feedback on whether jobs were completed to specifications and to gauge satisfaction with costs of doing the work.

Mr Marshall added the survey identified areas for improvement in the Work Schemes activity, and to monitor whether levels of service as outlined in the Council’s 10 Year Plan (LTP) 2015-2025 are being achieved.

The Committee noted the survey was conducted online in May 2016 via a link that was sent to all clients on the client list provided by the Work Schemes Supervisor for the finanical year 2015/2016. Mr Marshall added that all thirteen clients filled in the survey giving a response rate of 100%. Due to the small number of clients this survey is not statistically significant.

Resolution

Moved Cr Dobson, seconded Cr Macpherson and resolved:

That the Activities Performance Audit Committee:

a) Receives the report titled “Work Schemes Survey Results Report 2015/2016” dated 7 June 2016.

7.4

Results of the Council Buildings Survey Report 2015 2016

Record No: R/16/5/8143

Mr Ian Marshall, Group Manager Services & Assets, was in attendance for this item.

6 Mr Marshall reported that during the preparation of the 10 Year Plan 2012-2022, the Southland District Council revised the levels of service it wished to provide to the community in each activity area.

8 The Committee noted that as a result, a number of targeted surveys were created. One of these surveys in the Community Facilities activity is the Council Buildings Survey.

10 Mr Marshall explained this survey was conducted to find out the percentage of users satisfied with the standard of their building.

12 Cr Duffy queried comments made by staff in regards to earthquake prone issues.

Mr Halligan responded that tests have confirmed the section of the building affected is significantly above the standard level required.

Cr Paterson queried staff comments made in relation to Health and Safety issues.

Mr Marshall responded that any health & safety issues raised by staff are dealt with through the Health & Safety Committee.

Resolution

Moved Cr Ford, seconded Cr Keast and resolved:

That the Activities Performance Audit Committee:

a) Receives the report titled “Results of the Council Buildings Survey Report 2015 2016” dated 21 June 2016.

7.5

General Information - Southland Museum and Art Gallery Quarterly Report Against Statement of Intent

Record No: R/16/6/8279

Mr Halligan, Group Manager, Environmental Services, was in attendance for this item.

14 Mr Halligan advised the report outlines recent levels of use and activities at the museum and tracks progress against target service levels.

15 Members noted a review of the catalogue information of the collection is the most important project needing to be carried out in the near future. Mr Halligan added this is the reason that SMAG has proposed an increase of the Regional Heritage Rate from $34.10 including GST to $50.00 next year (2017/2018) to provide a further $600,000 of operational budget.

16 Mr Halligan commented this would constitute a very significant increase to the level of this rate for SDC ratepayers, and would need to be flagged clearly in consultation processes for feedback.

Cr Keast commented in regards to the proposed cataloguing work of the possibility of utilizing volunteers to undertake this work therefore less costings involved.

Mr Halligan responded to ensure the cataloguing is carried out efficiently required professional protocols.

Resolution

Moved Cr Paterson, seconded Cr Kremer and resolved:

That the Activities Performance Audit Committee:

a) Receives the report titled “General Information - Southland Museum and Art Gallery Quarterly Report Against Statement of Intent Third Quarter 2015/2016” dated 8 June 2016.

7.6

Health and Safety

Record No: R/16/6/8895

Mrs Janet Ellis, People and Capability Manager, was in attendance for this item.

Mrs Ellis advised that as part of due diligence requirements, Councillors are required to keep up to date with health and safety matters, understand the nature of the business, audit its hazards and risks, ensure there are appropriate reporting and investigation processes in place and monitor and verify that appropriate actions are being taken.

Members noted training on health and safety responsibilities for elected members will be included in the 2016 Council Induction Programme.

Mrs Ellis advised the Southland District Councils Health and Safety Management Group has prepared a Health and Safety Toolkit which is in the finalisation stages and is circulated with this report.

Mrs Ellis explained the report outlined activities relating to Contractor Health and Safety Management, Vehicles and Driving, Personal Protective Equipment and Accidents/Incidents/Near Misses.

Resolution

Moved Cr Douglas, seconded Cr Keast and resolved:

That the Activities Performance Audit Committee:

a) Receives the report titled “Health and Safety” dated 22 June 2016.

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.

f) Notes the new Health and Safety Toolkit developed.

7.7	MWH Global Transfer of Ownership to Stantec Inc Record No: R/16/6/8955
	Mr Joe Bourque Strategic Manager, Transport and Mr John Laskewitz (MWH), was in attendance for this item. Mr Bourque advised MWH Global has entered into a merger with Stantec Inc. Mr Bourque added under the terms of Southland District Council Contract 12/03 for Professional Services, the merger constitutes an assignment of the contract, due to the change of control. Mr Bourque explained from a Council point of view there are no real negative issues with granting this approval as the people involved in the contract, terms and conditions all remain the same. In response to a query from Cr Duffy regarding possible changes to the contract Mr Laskewitz confirmed there are no changes that affect Councils current contract.

	Resolution Moved Cr Kremer, seconded Cr Ford and resolved: That the Activities Performance Audit Committee: a) Receives the report titled “MWH Global Transfer of Ownership to Stantec Inc” dated 17 June 2016. 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. d) Agrees to the transfer of ownership of MWH to Stantec Inc. e) Agrees that the Chief Executive should write officially granting Council’s approval to MWH assigning and novating all of its rights under the Southland District Council Contract 12/03 for Professional Services to Stantec Inc.

7.8	Southland District Council 2016/2017 Resurfacing Contracts Record No: R/16/6/8976
	Mr Joe Bourque Strategic Manager, Transport and Mr John Laskewitz (MWH), was in attendance for this item. Mr Bourque advised this report covers the tendering for the resurfacing of approximately 1,120,000 m² of urban and rural roads in the Southland District Council’s 2016/2017 Resurfacing Programme. Mr Bourque added the tendering is to be let as two contracts. 17 Mr Bourque explained splitting the district into two areas was done to encourage competition for these large parcels of work in the current market place. It also produced contract areas that have a mix of coastal and drier inland areas to reduce the risk of weather affecting progress. Members noted the report covers the tenders received, the evaluation carried out and recommendations for letting the contracts. Mr Laskewitz responded to Members queries regarding whether Contractors are held to account for poor workmanship he confirmed that there is a timeframe for renewal work to be undertaken. Members expressed concern in some instances at the delay of renewal work. Staff to note accordingly.

	Resolution Moved Cr Dobson, seconded Cr Dillon and resolved: That the Activities Performance Audit Committee: a) Receives the report titled “Southland District Council 2016/2017 Resurfacing Contracts” dated 17 June 2016. 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. d) Accept Fulton Hogan’s tender price of $2,327,551.36 plus GST for Contract 16/10 - 2016/2017 Eastern Area Resurfacing. e) Accept Downer’s tender price of $2,458,250.00 plus GST for Contract 2016/2017 Western Area Resurfacing. f) Approves the 2016/17 Sealed Roads Resurfacing budget being adjusted to $4.8M subject to the variation being managed within the overall roading budget for 2016/17.

The meeting concluded at 11.50am CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Activities Performance Audit Committee HELD ON WEDNESDAY, 29 JUNE 2016.

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

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

Activities Performance Audit Committee

20 July 2016

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Financial Report for the period ended 31 May 2016

Record No: R/16/7/10662

Author: Susan McNamara, Management Accountant

Approved by: Anne Robson, Chief Financial Officer

☐ Decision ☐ Recommendation ☒ Information

Background

1. This report outlines the financial results to 31 May 2016. At 31 May 2016, 92% of the financial year is complete.

2. The monthly and year to date actual result is being compared to a budget based on the forecasted year end result provided by budget managers at the end of February. Any variances between the actual result and the forecast will be different to the variances shown in the Annual Report as the Annual Report will compare the actual result to the Budget included in the Long Term Plan. The Budget from the LTP is shown in these reports as the Full Year Budget.

Overview

3. The financial commentary centres on the attached summary sheet which draws the totals from each of the key groups together. Commentary provided focuses on the year to date (YTD) results.

4. More detailed variance explanations for each group can be found in the attached detailed commentary report.

5. As part of the monthly review, Finance staff review the phasing/timing of the budgets with the budget manager and revise where appropriate. Where specific phasing of the budgets has not occurred, one twelfth of budgeted cost is the default to establish the monthly budget.

6. The financial tables include the forecasting data discussed at the Council’s April meeting. In summary:

· The monthly and annual budget columns are the phased full year projection.

· The FY Budget is the LTP budget for the year.

· The FY Projection is the forecasted year end result.

7. Staff will continue to refine the format of this report, with additional features being added to enhance the financial information given. Any feedback or suggestions on further amendments that could be made to this report are welcome.

8. Results at a glance, compared to forecast year to date. Budget year to date is the phased forecast budget.

INCOME YTD			OPERATING EXPENDITURE YTD
Actual	Forecast		Actual	Forecast
$60.7M	$61.2M		$46.0M	$48.6M
Variance	$0.5M	1%	Variance	$2.6M	5%
NET SURPLUS YTD			CAPITAL EXPENDITURE YTD
Actual	Forecast		Actual	Forecast
$14.7M	$12.6M		$11.3M	$12.7M
Variance	$2.1M	17%	Variance	$1.4M	11%

Income

9. Overall for the YTD, income is 1% ($0.5M) under forecast ($60.7M actual v $61.2M forecast).

10. The forecasted income at the end of June is expected to be $3.9M lower than was budgeted in the LTP for these District activities. The reduced forecasted income is the result of $1.7M less income expected from NZTA with the deferral of the sealing of the Scenic Route along with a $2.9M reduction in grants and subsidies and $0.4M from other revenue. The reduction in grants and subsidises relate to the Around the Mountains Cycle Trail. The reduction in other revenue is predominately due to reduced income for building regulation and resource consent processing due to lower consents being received throughout the year. The reduction in income has been offset from increasing the income for forestry by $1.2M to reflect the invoices showing total revenue less expenses.

11. Services and Assets income is over forecast by $32K due to a number of items.

12. The largest being forestry revenue which is currently $254K over forecast with harvesting activities commencing in February. Initial harvesting has resulted in higher yields and log prices than was anticipated. All harvesting in the Dipton forest is expected to be completed in late June. There is also some roadline harvesting to occur in Waikaia as preparation for the next season harvest. The projected numbers for income and expenditure for forestry have been adjusted by $1.2M for the year from previous months reports. This now reflects the change in accounting treatment reflecting total sales and expenditure rather than the net amount received.

13. As a result of less expenditure being incurred to date in the Area Engineers and Engineering Consultants business units internal revenue required to balance these business units are also less than forecasted ($119K). This is the result of vacancies throughout the year and is expected to remain below budget at year end.

14. Work scheme revenue is $127K under budget as a result of less work being completed overall due to having one less supervisor. This is partially offset by a reduction in staff costs and material purchases. At the end of May this activity has a net deficit of $20K and is expected to remain in a deficit position at year end.

Operating Expenditure

15. Overall for the YTD, operating expenditure is 5% ($2.7M) under budget ($46.0M actual vs $48.6M budget).

16. The forecasted expenditure at the end of June is expected to be $2.4M higher than was budgeted in the LTP for these District activities. The significant items contributing to this higher forecast are the increased consultants costs and costs relating to the Appeal process for Around the Mountains Cycle Trail, district sewerage and water projects carried forward from previous years and additional forestry expenditure of $1.2M to reflect the invoices showing total revenue less expenses. These have been offset by reduced employee costs and the deferral of further significant work on the district plan in the current year. There is also a number of smaller savings across most groups.

17. Environment and Community expenditure is $427K under budget. This is mainly in the regulatory areas of Building Regulation ($126K), Resource Consent Processing ($48K) and Resource Planning ($80K). Current market conditions has resulted in less building and resource consent activity, resulting in lower than budgeted income and expenditure in these areas. The District Plan mediation processes have been delayed at the direction of the Environment Court due to the status of Environment Southland’s Regional Policy Statement. Until the Regional Policy Statement is progressed the amount of expenditure on the District Plan during this year is uncertain. Overall it is expected that the business units will be in deficit at year end. The anticipated deficit at year end $296K will be funded from the district operating reserve. The District Library ($33K), Customer Services ($28K) and Environment Health ($72K) business units are also under budget for the year due to reduced staff and communication costs.

18. The Chief Executive group is currently under budget by $97K. Around the Mountains Cycle Trail is over budget at the end of May by $59K as a result of the appeal costs being $43K higher than was forecast at the end of March along with maintenance occurring on the track. The consent appeal costs at the end of the year will be higher than was forecast as the process is requiring extra detail than was anticipated in March. The Chief Executive’s business unit is currently under budget $183K mainly related to professional services/consultants costs. Costs incurred in relation to the Around the Mountains Cycle Trail review will be paid from this budget.

19. Financial Services is under budget by $122K YTD due to vacancies within the department. It is projected that the business units will remain under budget at year end and this saving will be used to fund the cost of any overspend at year end in the Chief Executive business unit.

Capital Expenditure

20. Overall for the YTD, capital expenditure is 11% ($1.4M) under budget ($11.3M actual vs $12.7M budget).

21. Information Management capital expenditure is under forecast by $183K. Included in the budget are costs associated with the core systems review and digitisation project. There has been $101K spent to date on both projects with a forecasted year end budget of $310K. The balance of these projects will be carried forward into the 2016/2017 year with Council’s approval.

22. Services and Assets capital expenditure is under budget year to date, $443K due to less capital work being undertaken to date beyond the purchase of Hansen software.
The Curio Bay sewerage project is still in progress, latest estimations suggest a cost of $155K will be incurred in this year instead of the original $970K, the difference of $815K has been included 2016/2017 Annual Plan. The actual capital cost will be less than the budgeted cost overall. Public convenience upgrades in Winton (Ivy Russell Reserve) and Dipton are currently being undertaken with units to be delivered onsite in late May. Colac Bay toilets at Surfies Corner and Athol have been completed, with Waikaia upgrades being built as part of the museum rebuild.

Roading and Transport

23. The seasonality of the capital works programme directly affects the level of income received from NZTA along with any changes to the programmed works. Overall roading costs were less than what was budgeted resulting in NZTA also paying actual cost less than budgeted.

24. Operational expenditure is in line with the long term plan budget and the NZTA approved budget for 2015/16 even though weather events over winter put a strain on the budgets over early days of the year. Any further adverse weather events could affect the final outcome of the current financial year.

25. The Roading and Transport team have forecasted that capital expenditure will be under budget at the end of the year. This variance is principally due to the Southern Scenic Route extension and the Mararoa Bridge projects being deferred to the 2016/2017 financial year ($2.48M). This is offset by additional rehabilitation projects, changes in scope and market prices $321K.

Balance Sheet

26. Council’s financial position as at 31 May 2016 is detailed below and is only for the activities of Council. The balance sheet as at 30 June 2015 represents the audited balance sheet for activities of Council and includes SIESA and Venture Southland.

27. At 31 May 2016, Council had $8M invested in three term deposits ranging from one to six month maturities. These have now all matured with recent re-investments achieving 2.64% to 3.08%.

The details at 31 May 2016 are:

Amount	Where Invested	Interest Rate	Term of Investment	Date of Expiry
$5,000,000	ANZ	3.04%	92 days	10 Jun 2016
$5,000,000	ASB	3.31%	183 days	30 Nov 2016
$2,000,000	Westpac	3.39%	119 days	10 Jun 2016

28. Funds on call are the result of Council rates received at the end of May and held to ensure there is enough cash available to meet commitments as they fall due.

Balance at 31 May	Where Invested	Interest Rate
$2,000,000	Westpac	1.75%
$2,718,368	BNZ	0.75 %

29. External borrowings have still not been required, with internal funds being used to meet obligations for the year to date. The borrowings shown in current liabilities is the outstanding amount of assets funded by finance leases for computer equipment.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Financial Report for the period ended 31 May 2016” dated 12 July 2016.

Attachments

a Summary Financial Report View

b Detailed Commentary View

Activities Performance Audit Committee

20 July 2016

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Contract 15/33 - Winton Rising Watermain Renewal

Record No: R/16/5/7430

Author: Matthew Keil, Operations/Project Engineer-Water and Waste Services

Approved by: Ian Marshall, Group Manager Services and Assets

☒ Decision ☐ Recommendation ☐ Information

Purpose

1 The purpose of this report is to recommend the commencement of a programmed
‘Rising Watermain Renewal’ Project in Winton’ as presented under staff submission during 2015 to occur in 2016-2017 as per Council’s current 2016-2017 Annual Plan.

Executive Summary

2 This report outlines the proposal to complete a water pipeline renewal of an existing
200 mm diameter fibrolite asbestos watermain between the Winton water intake and the Winton Water Treatment Plant totalling 2.9 kilometres, including all associated fixtures.

Recommendation

That the Activities Performance Audit Committee:

a) Receives the report titled “Contract 15/33 - Winton Rising Watermain Renewal” dated 12 July 2016.

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 the Winton Rising Watermain Renewal Project to proceed for a total cost of $1,280,591.80 ex GST to be funded by the District Water Activity.

e) Awards the Contract 15/33 to Fulton Hogan for the sum of $907,591.80 ex GST including a total contingency of $130,000.00.

f) Approves the expenditure from the district fund for replacement of 218 lineal/metres of a critical pipeline between the Winton Water Treatment Plant and 274 Great North Road - brought forward from 2018-2019, subject to there being sufficient funds within the overall project following the completion of Contract 15/33 and be funded by the District Water Activity.

g) Delegate’s authority to Council’s ‘Group Manager, Services and Assets” to award the expenditure for ‘Railway Street Watermain Installation’ subject to recommendation (f).

Content

Background

3 The current Winton rising watermain is located between 81 Substation Road, where the water intake is located and pumps raw water to the Winton Water Treatment Plant located at 190 Florence Road. The current alignment primarily follows Great North Road (SHW 6) and enters the water treatment plant from the western boundary via Springford Street totalling
2.6 kilometres.

4 The current rising main is 200 mm diameter Class B asbestos cement-fibrolite pipe. The pipeline was installed in 1975 giving the pipeline a current asset life to date of 41 years.

5 Due to the critical nature of this pipeline, supplying water to the Winton Township and the potential imminent risk of failure, it is proposed to replace the AC pipeline with DN 225 High Density Polyethelene PE 100.

6 Contract 15/33 also allows for a pipeline re-alignment change to position the new HDPE rising main down Welsh Road East and south into Florence Road. This proposal with eliminate expensive pipeline installation costs, including associated seal reinstatements and imposed legislative requirements that can occur within a State Highway. The pipeline re-alignment also has the new main positioned in Council’s corridor instead of New Zealand Transport Agency’s (NZTA’s) highway. Total chainage under the proposed re-alignment route is 2.9 kilometres.

7 The proposed pipeline re-alignment down Florence Road also eliminates the requirement for contractors to handle the existing asbestos pipeline which significantly mitigates potential health and safety concerns to the contractor, and also reduces cost to the project.

8 Contract 15/33 works also includes two provisional items of renewing an existing 100 mm asbestos watermain on Florence Road with 180 mm HDPE totalling 830 lineal/metres and installing a 50 mm HDPE rider main from Great North Road down towards consumers at the lower end of Welsh Road East totalling 535 Lineal Metres where consumers currently receive a low pressure supply.

9 The proposed Florence Road pipeline renewal will replace a watermain which was installed in 1956 giving an asset age of 60 years. This pipeline has been installed shallow without sufficient bedding material and has in numerous failures along its length.

10 Council’s Water and Waste staff would also like to highlight Florence Road has been programmed for a full road re-seal during the 2018 sealing season, so it is preferable to undertake this work prior to then.

11 Council’s Water and Waste staff advertised Contract 15/33 online for a period of four weeks with a tender closure date of 10 July 2016.

12 Council’s Water and Waste Engineers would also like to outline an additional 300 mm HDPE pipeline installation between the Winton Water Treatment Plant situated at 190 Florence Road and 274 Great North Road totalling 218 lineal/metres - where Council has an existing 150 PVC watermain - Named ‘Railway Street Watermain Installation’.

13 Please refer to Attachment (A) - within the appendix of this report, outlining the proposed pipeline and the alignment map for ‘Contract 15/33’.

14 ‘Railway Street Watermain Installation’ forms part of a larger project to complete the last of the asbestos watermain renewals in Winton, and has been programed to occur within Councils current 2015-2025 Long Term Plan in 2018-2019, with a budgeted amount of $1,102,400 (WAT 815).

15 It is also proposed Fulton Hogan also complete ‘Railway Street Watermain Installation’ as the lowest price conforming tenderer- Subject to the approval from Council’s ‘Group Manager of Works and Services’.

16 The installation of this pipeline would provide the Winton Township with assurance should and when the existing 200 mm asbestos cement carry watermain fails, between the Winton Water Treatment Plant and the intersection of Great North Road and Meldrum Street.
Where the asbestos main delivers water to both consumers and the Winton water tower.

17 The existing 200 mm asbestos carry water main has an asset age of 41 years, and was installed when Deegans bore was established. The pipeline has been assessed and is known to be in poor condition and at risk of failure.

Issues

18 This pipeline serves all of the Winton Township and is a critical asset to the town’s water supply, and the high risk of failure to the current asbestos pipeline, due to the current pipeline condition.

19 Findings from a pipeline condition assessment completed by Opus International Consultants in September 2006 outlined the pipeline has been graded as 5, ie very poor condition.
This grading has the description “imminent failure predicted, deterioration failures may have already occurred”.

20 This grading has been calculated using the AC pipe lifetime prediction model. Other findings reported from Opus confirm that the pipe wall, both internally and externally, indicate aggressive drinking water and soil conditions relating to low pH

21 When the last repair was undertaken by Downer, it was reported that the pipe wall was soft and easily cut using a handsaw.

Factors to Consider

Legal and Statutory Requirements

22 The current AC pipeline runs under an existing full 3.05 metre wide legal easement from
81 Substation Road up to 65 Welsh Road this chainage totals 980 lineal metres. The new pipeline will also be positioned within the easement. This area of works effects six private property owners, Water and Waste staff have notified and liaised with all parties relating to this area of works.

23 The proposed pipeline will also cross Great North Road (SHW 6) and the Winton Hedgehope Highway (SHW 96) both crossings total approximately 60 lineal metres. Water and Waste staff have also liaised with the local NZTA Highway Manager to confirm approval for the proposed alignment to cross NZTA’s corridor at the two locations.

24 All other remaining works will occur with Council’s accessways and roading corridor.

Community Views

25 The project (Contract 15/33) is programmed to occur in Council’s current 2016-2017 Annual Plan and was approved by Council on the 29 June.

26 Railway Street Watermain Installation- Has been programmed to occur in Council’s current 2015-2025 Long Term Plan, as part of an ‘early watermain renewals project in 2018-2019.

27 Water and Waste Staff attended a previous Winton Community Board meeting dated
23 November 2015, to outline the proposal and associated design of Contract 15/33.
This consultation was also held between the Winton Community Board Chairman and Water and Waste staff by means of telephone and email correspondence. This resulted in the board agreeing the project needs to be prioritised.

Costs and Funding

28 The project is to be funded via loan within the District water rate for the total amount of $1.6M.

29 Contract 15/33 was publicly advertised for Tender for a period of four weeks. Tender prices received are as outlined below within in Table 1.

Conforming Tender Prices
Tenderer	Fulton Hogan	Wilson Contractors	Downer	Bond Contracts
Section A - Winton Rising Raw Water Main	$648,768.80	$730,308.30	$864,988.50	$688,243.32
Section B (Provisional Item) Florence Road	$159,788.50	$273,922.40	$262,454.60	$203,835.08
Section C (Provisional Item) Welsh Road	$91,009.50	$83,848.85	$40,087.90	$60,157.85
Section D - Schedule of Day Works Rates	$8,025.00	$13,015.00	$11,791.00	$11,714.33
Total Tender Price - ex GST (Including Contingencies)	$907,591.80	$1,101,094.55	$1,179,322.00	$963,950.58

30 Alternative Tenders for the project are as outlined below in Table 2.

Tenderer	Fulton Hogan	Wilson Contractors	Downer	Bond Contracts
Section A - Winton Rising Raw Water Main	N/A	$541,130.00	$721,916.80	N/A
Section B (Provisional Item) Florence Road		$262,315.10	$236,853.00
Section C (Provisional Item) Welsh Road		$83,848.85	$40,138.70
Section D - Schedule of Day Works Rates		$13,015.00	$11,791.00
Total Tender Price-ex GST (Including Contingencies)	N/A	$900,308.95	$ 1,010,699.50	N/A
Alternative Tender Prices

Note: Wilson Contractors alternative tender was withdrawn at the request of Wilson Contractors due to a financial error found in the contractors pricing. Please refer to the e-mail within this report.

31 Total project costs for Contract 15/33 are as outlined below in Table 3.

Contract 15/33 Total Project Costs
Table 3
Fulton Hogan-Conforming Tender Total	$907,591.80
SDC Water and Waste Project Fees	$140,000.00
Railway Street Watermain Installation- Total Provisional Costs. Subject to the sufficient funding available following the completion of Contract 15/33	$233,000.00
Total Project Price - ex GST (Including Contingencies)	$1,280.591.80

32 Council’s Water and Waste Engineers have estimated a project renewal cost of $1,029.000.00 excluding GST for the existing pipeline through Great North Road an increase of $380,231.20 from the preferred Florence Road alignment option.

33 Railway Street Watermain Installation - and shall only occur if Contract 15/33 is completed under budget and with the delegated authority of Council’s Group Manager of Works and Services to approve. This work has been programed to occur in 2018-2019 year as outlined within Council’s current 2015-2025 Long Term Plan, under ‘early watermain renewals’ with a budget of $1,102.400.

Policy Implications

34 Contract 15/33 has been programmed to occur within the 2016-2017 financial year and through consultation to the public with the adoption of Council’s 2016-2017 Annual Plan.

35 Railway Street Watermain Installation forms part of an ‘early watermains renewals’ project (project WAT 815) in Winton. Programed to occur within the 2018-2019 financial year, as outlined within the 2015-2025 Long Term Plan.

36 Given the criticality of this pipeline it is proposed to bring its replacement forward subject to sufficient funding being available under the current project budget.

Analysis

Options Considered

37 The following options have been identified and considered as outlined below in Options 1-4.

Analysis of Options

Option 1 - A full pipeline renewal on a new alignment (down Florence Road-preferred option)

Advantages

Disadvantages

· A significant reduction in future pipeline failure and potential risk to Council.

· Lower maintenance costs maintaining the renewed pipeline.

· A more cost effective alignment due to the revised alignment being installed within Council’s corridor, instead of NZTA’s corridor.

· Reduced reinstatement costs due to the alignment being installed primarily in a grassed and gravel shoulder on Florence Road - not installed under 150 mm of asphalt like the existing pipeline on Great North Road.

· The proposed alignment will significantly reduce disruption to the public as the pipeline will be located on a low volume road instead of a NZTA state highway.

· Tender costs will be significantly lower under the Florence Road alignment option, as contractor productivities will be higher than undertaking a pipeline renewal under the current alignment on Great North Road. This is due to costly seal reinstatement associated with renewing a pipeline in Great North Road instead a grassed/gravel berm in Florence Road and Welsh Road East.

· The cost to the District water rate associated with undertaking the project, although the rate is set.

· The intermitted traffic disruptions to the public, during road crossings.

· The long construction period required to undertake the project.

Option 2 - Complete a full pipeline renewal on the existing alignment (down Great North Road)

Advantages

Disadvantages

· The current pipeline alignment is 300 lineal/metres shorter than the preferred alignment under Option 1.

· An increased construction cost by the Contractor to undertake a renewal under this alignment route, due to increased risk on-site to the contractor, reduced productivities and costly seal reinstatements required to be undertaken.

· The huge expense around alignment verification to confirm the alignment route - pre tender design costs.

· Conflicting existing services/utilities adjacent to the existing pipeline.

· Significant disruptions to the public during construction, due to the location of works.

· A slower project completion time than Option 1.

· Increased costs to the District water rate to undertake the project.

· The revised and costly consultation process with NZTA.

Option 3 - Complete a partial pipeline renewal on the existing alignment

Advantages

Disadvantages

· A short term reduction in costs to undertake the project.

· Due to the current condition rating of the entire existing pipeline, future failure and risk will be imminent to Council and the Winton public.

· Expensive repair costs to rectify the failure/s.

· Intermitted traffic disruptions to the public.

· Potential disruptions to the Winton water consumer.

· Potential non-compliance from the Ministry of Health (MoH) to meet the New Zealand Drinking-water Standards (NZDWS) should a failure occur on this particular pipeline.

· Increased maintenance costs to maintain the pipeline.

Option 4 - Do nothing

Advantages

Disadvantages

· A short term reduction in costs.

· Due to the current condition rating of the entire existing pipeline, future failure and risk will be imminent to Council and the Winton public.

· Expensive repairs costs to rectify the failure/s.

· Intermitted traffic disruptions to the public.

· Potential disruptions to the Winton water consumer.

· Potential non-compliance from Ministry of Health (MoH) should a failure occur on this particular pipeline.

· Increased maintenance costs to maintain the pipeline.

Assessment of Significance

38 Contract 15/33 is not of significance as per Council’s Significance Policy.

Recommended Option

39 Council’s Water and Waste Department recommend a full pipeline renewal (down Florence Road) as outlined within Option 1 of paragraph 37.

40 Also to complete the ‘Railway Street Watermain Installation’ as outlined within paragraphs 12-15, subject to being sufficient remaining funding in the project budget and approval by Council’s Group Manager of Works and Services under delegated authority.

Next Steps

41 Activities Performance Audit Committee award Contract 15/33 to Fulton Hogan for a tendered cost of $907,591.80 excluding GST and a total project cost of $1,280,591.80 excluding GST.

42 Delegate’s authority to Council’s Group Manager of Works and Services to award the undertaking of ‘Railway Street Watermain Installation’, subject to sufficient funding being available following the completion of Contract 15/33.

Attachments

a Railway Street Watermain Overview Map View

b Wilson Contractors Alternative Tender Withdrawal - E-mail View

c Contract 15-33 Map View

Activities Performance Audit Committee

20 July 2016

FEEDBACK FROM CAMPERS ON DESIGNATED SITES

FROM THE RANKERS WEBSITE

Lumsden

Very good car park stop over. Nice clean toilets, water tap near sinks on platform and space for 30 plus vehicles. Stayed 2 non consecutive nights and highly recommend. There is free WIFI at the library steps, good shops including 4 Square Grocery and cafes, and petrol/diesel just up the road toward Te Anau. Power points have no power. Thanks to the local Council. The shops do well from this site!!

What an amazing little town! Full marks to the council who decided to use this spot for travellers. We stopped in en-route to Te Anau. The free camping site at the old railway station becomes a hive of activity at the end of the day, as campers pull in. We chose a spot closer to the toilets but noticed that there was quite a friendly community over under the station roof. The site has a grocery store, pub, and small cafe within 50meters.

Good location, sinks for washing up, bins, undercover picnic benches. Clean toilets, across the road from the library wifi, 4 Square there in town too.

Just a parking lot. Tourists come to take a photo of the historic train station. Shop and library in front. Clean toilet. Rubbish bin. Not so noisy with the road. Protect and respect nature!

Campsite is right in the middle of the town, with shops and the library right next so it. Drinking water is provided and public toilets are just 20 meters away. There are some sockets although they had no power. All in all a good way to spend the night and a beautiful spot if you want to go to Bluff, Milford Sound, Queenstown etc.

Large area around the old railway station. Fresh drinking water, clean toilets, waste bins. Free Wifi from nearby library. Very convenient to/from Milford Sound.

This spot was one of my favourite. Very large area. Drinking water, dump station, clean facilities, rubbish bins, electric plug too...... We spent a night before and after Milford Sound drive. Talked to locals and found out some interesting info.

Clifden Historic Bridge

Awesome campsite for free with toilet and tap water. We put our tent in the grass just next to an old bridge and a river.

Basic site gravel car park. Little grass area to pitch tent possible. The site can now hold about 10plus camper vans gravel site. It is next to a very pretty bridge but also the main road. Perfect if you just need to stop and sleep good location for this.

Small camping ground beside river, overlooking historic bridge. Very quiet with nice views. Water tap and toilet on site, great place for a night stop.

Just a stop for the night on the road between the Fiordland and the Catlins. Free, basic toilets, tap water, Small grassy area for tent and next to the bridge.

Nice campsite next to an historic bridge and a beautiful river !! Very small, can accommodate 4-5 vans (less or more). But it's free so we can complain at all. Toilets and water.

Winton

A basic carpark in a small town near pubs and public bathrooms. Water and a dump site are provided as well. Would absolutely stay again.

A carpark in the centre of Winton. Dump site and water, shining new toilets playing classical music across the road. We had a few beers in the pub across the road with very friendly locals. In summer, sheep shearers depart from this place early (5am-ish) but we've hardly heard them. Self-contained only. Free wifi at the local library.

Moray Terrace, Fortrose

Big grass area. Front of the sea. Wonderful ! Toilets not so clean. Be careful in rainy day as much mud. Perfect to enter or finish the Catlins. Protect and respect nature!

Wonderful, peaceful place. Admire the sun setting over the ocean. Wouaaaaaawwww

Really nice view but super windy! Clean toilets with toilet paper and hand sanitizer. Couldn't find a tap so bring your own water. Nice place to stay in a van or motorhome!

Open space and exposed hence windy, many oystercatchers to watch, fishing possible at river mouth, nice spot.

Good freedom campsite, lovely location by the bay, can be pretty windy as exposed location, pretty popular. Cafe nearby at the corner.

Beside the road but overlooking the bay. Dry toilets, space for his tent. Just departing from the route of the Catlins, nice!

Perfect area on the grass between small road and beach. Great view to the birds.

Really nice freedom camp site on a level large grassy area alongside the estuary with wonderful bird life including flocks of Royal Spoonbills. Didn't need to use toilet facilities so can't comment on these. Very peaceful, relaxing place to stay. Thoroughly recommended.

Nice spot next to a beach in Fortrose. Get up early and you can see the shipwreck nearby as well.

Really nice free campground with good toilets and a nice view.

Lovely large area by the harbour with great views. Another good stop over point to save some dosh!

This was one of my favorite free spots we stayed at. It's just a big patch of grass off the road by a small beach, with a toilet nearby, but it's lovely. We made a little fire on the beach at night after asking some locals if it was permitted (they said it was, so long as the wind wasn't too bad).

Very quiet when we were there, with one of the most spectacular sunsets you can imagine.

self contained motorhomes allowed basic toilets. right on tidal beach by boat ramp. peaceful...cold in May lol

Waikawa

Beautiful location right on the grass at the water's edge. Toilets and water nearby.

Nice big freedom camping area with the small hamlet of Waikawa on one side and native woodland on the other, as well as partly overlooking the harbour. The toilets were good (flush, water and a light) and there was a drinking water tap. We enjoyed the short walk through the woodland behind the site. The chip van is currently only open Friday-Sunday (mid November) so we didn't get to try any but it looked good! Nice site, would return.

Weirs Beach

Campsite is a little bit retired from the main road but nice. Big large grassy area with trees and inlet behind. Super cool for a walkway. Protect and respect nature!

Landed quite late on a rainy day. Wind picked up during the night but the surrounding trees offered shelter from the worst gusts. The toilet gave a rough impression from the outside but turned out to be really nice and tidy! The grass area was hard and firm and we had no problems going back out to the road with the 3500 kg motorhome on the soaking wet grass

Camping in large field area surrounded by large trees. Beautiful tidy estuary unspoilt which can be crossed at low tide to get to large sandy beach do not miss the crossing back otherwise long walk or swim back. You will need to wade a little to get across to the beach. If you go pass the entrance to the campsite there is space for two or three pitches or vans with amazing views as main camp site has limited or no views sneaky area around the corner makes this site wow if you can get this pitch, it feels like you have your own little island all to yourself lovely spot. Toilet X1 and fresh water available at this site however take rubbish with you. This site is also free. Good gravel road to site. 10/10 as we got a spot with amazing views here. Very few bugs here to nibble on you nothing really to worry about but worth carrying repellent just in case.

Clean toilets, nice view to a lake but we did not swim, free (donations apply), drinking water, but it is on a rough road, big place - much room.

Colac Bay

Quite a windy spot and a few sandflies in the morning. It was quite muddy but there's plenty of places to park on grass/gravel. Flush toilets, surprisingly with toilet paper and bins. Right on the water, great spot. A 30 minute walk to the tavern, nice owners there and decent enough food.

Great place to camp. It's free! Not windy on this occasion but other reviews say otherwise. Self contained so didn't have a need to use public toilets. Great views. Nice little village and we were all alone. This is the motorhome life!

Nice spot, bit windy but plenty of space. Lovely cafe nearby in the village for breakfast/morning tea.

Great freedom stop on the bay. Plenty of room. Cockles galore at low tide. Unprotected so windy.

Monkey Island

Free spot, quite exposed. Not too busy when we visited in May. Clean toilet and rubbish bins provided. Difficult to find a level spot though, but it is free. Bit boggy near dunes in rain. Walk over to and climb to Monkey Island at low tide. Views to Rakiura Island (Stewart) on clear day

We loved our stay here, however, it was crowded. People with tents partly blocked us in. The grass was very wet, with underlying mud. Be very careful where you park: we were stuck briefly, spinning on the wet grass and mud, when trying to leave in the morning.

Great place but very difficult to get a spot. Very crowded.

Great place to stay just next to the beach. Two toilets close by. Short walk to Monkey Island. We would come again.

What a lovely campsite. Water (sign says needs boiling) and two toilets, lots of flat semi-protected spaces and tents are allowed (up to 28 days!!) Only drawback was the wind, but superb views and access to a beautiful beach :)

This is a justifiably popular freedom camping area. We had a nice spot looking into the beach with the snow capped mountains in the distance. There were two clean long drop toilets and a tap fed by spring water. It was pretty busy when we were there but when we were on the beach it felt like we had the place to ourselves.

Super AWESOME place to stay! Lots of room for camping (tent or campervan) not super sheltered from the wind but it's a little protected. There's a tap for water (but it doesn't look nice to drink in our opinion) so make sure to have some on hand. There is also a well maintained long drop toilet. LOTS of large rocks to make a fire pit with, a plethora of wood to use in your fire and BEAUTIFUL sunsets over Monkey Island!!! GO HERE!!! Stay a while, ENJOY!!!!!

Indicator	Target*	Actual	Variance	Compliance
External Funding: Non rateable income/Total income	> 39%	32%	-7%	x
Working Capital: Current Assets/Current Liabilities	>1.09	2.01	0.92	a
Debt Ratio:** Total Liabilities/Total Assets	<0.73%	0.71%	-0.02%	a
Debt To Equity Ratio: Total Debt/Total Equity	<0.01%	0.00%	-0.01%	a

*Key*
	Largely on Track
	Monitoring
	Action Required
Financial Tracking Vs Plans
YTD		Forecast	Annual Plan	NZTA Approved
*92%*		*90.99%*	*90.66%*	*88.57%*

Financial Tracking Vs Plans
YTD	Forecast	Annual Plan	NZTA Approved
*92%*	*102%*	*91%*	*80%*

Chief Executive	Steve Ruru
Committee Advisor	Alyson Hamilton