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Notice is hereby given that a Meeting of the Services and Assets Committee will be held on:

 

Date:                      

Time:

Meeting Room:

Venue:

 

Wednesday, 5 April 2017

10.30am

Council Chambers
15 Forth Street
Invercargill

 

Services and Assets Committee Agenda

 

OPEN

 

 

MEMBERSHIP

 

Chairperson

Brian Dillon

 

 

Mayor Gary Tong

 

Councillors

Stuart Baird

 

 

John Douglas

 

 

Paul Duffy

 

 

Bruce Ford

 

 

Darren Frazer

 

 

George Harpur

 

 

Julie Keast

 

 

Ebel Kremer

 

 

Gavin Macpherson

 

 

Neil Paterson

 

 

Nick Perham

 

 

IN ATTENDANCE

 

Group Manager – Services and Assets

Ian Marshall

 

Committee Advisor

Fiona Dunlop

 

 

 

 

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

 

 

 


SERVICES AND ASSETS COMMITTEE - TERMS OF REFERENCE

 

SCOPE OF ACTIVITIES

 

The Services and Assets Committee is responsible for overseeing the following Council activities:

·                      Transport;

·                      Property management including community facilities, acquisitions and disposals (including land dealings);

·                      Forestry;

·                      Water supply, wastewater and stormwater;

·                      Solid waste management;

·                      Flood protection;

·                      Waste management;

·                      Rural fire management;

·                      Te Anau Airport;

·                      Stewart Island Jetties and Riverton Harbour Subcommittee;

·                      Water supply schemes.

 

DELEGATIONS

 

Power to Act

 

The Services and Assets Committee shall have the following delegated powers and be accountable to Council for the exercising of these powers[1]:

 

(a)           Monitoring the delivery of capital works projects and the implementation of the capital works programme.

(b)           Monitoring the delivery of operations and maintenance contracts.

(c)           To approve and/or assign all contracts for work, services or supplies where the value is in excess of $200,000 where those contracts relate to work within approved estimates.  Where the value of the work, services; supplies or business case or the value over the term of the contract is estimated to exceed $2M a prior review and recommendation of the business case by the Finance and Audit Committee is required.  The business case shall include as a minimum; risk assessment, a procurement plan and financial costings.

(d)           To monitor the return on all the Council’s investments including forestry;

(e)           To monitor and track Council contracts and compliance with contractual specifications.

 

Power to Recommend

 

The Services and Assets Committee is responsible for considering and making recommendations to Council regarding:

(a)           Policies relating to the scope of activities of the Services and Assets Committee;

(b)           Changes to Council’s adopted Levels of Service;

(c)           The dividend from the Forestry Business Unit.

 

Power to Delegate

 

The Services and Assets Committee may delegate the management and control of all Riverton harbour assets vested in the Southland District Council to the Riverton Harbour Subcommittee.

 

The Services and Assets Committee may delegate the responsibility to oversee the development and maintenance of jetties located at Fred’s Camp, Millars Beach, Ulva Island, Port William and Little Glory Cove to the Stewart Island Jetties Subcommittee.

 

 


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TABLE OF CONTENTS

ITEM                                                                                                                                   PAGE

Procedural

1          Apologies                                                                                                                        5

2          Leave of absence                                                                                                           5

3          Conflict of Interest                                                                                                         5

4          Public Forum                                                                                                                  5

5          Extraordinary/Urgent Items                                                                                          5

6          Confirmation of Minutes                                                                                               5

Reports

7.1       Forestry Operations - Financial Report to 31 December 2016                                 7

7.2       Forestry Operations Management Report                                                                15

7.3       Services and Assets Contracts Update                                                                    25

7.4       Roading Operations February 2017                                                                          27

7.5       Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for January 2017                                                                                                                39   

 


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

There are no minutes to confim as this is the first meeting of the Committee.

 


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Forestry Operations - Financial Report to 31 December 2016

Record No:        R/17/1/1091

Author:                 Ben du Mez, Graduate Accountant

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

 

Management Commentary

1        The forestry activity has had a steady first half of the year.  Although timber sales have been light, cash-flow is still positive and sufficient to cover any forestry program expenditure.  With the main harvest starting in February, the activity is expected to have a very strong year end result. The annual harvest target this year is 46,000 tonnes, with 14% cut so far.

2        Income to date comprises of $651K of timber sales from minor harvesting activity, including road-line harvest in the Waikaia Forest and vessel rebate from the Dipton harvest late last year.  Total timber sales are currently expected to be higher than forecast in October, log prices are approximately $20/tonne higher than budgeted, which is expected to result in $1.1M in additional income.  Expenditure at year end is forecast at $2.5M compared to the $848K budget.

3        Expenditure to date stands at $595K.  This has been predominantly associated with harvest and roading operations at Dipton and Waikaia ($430K), replanting in Dipton ($31K), pruning in Gowan Hills ($15K), forest management and general maintenance.

4        The year to date position stands at a surplus of $56K, it is now expected the net surplus at year end will be $1.9M, compared to a budget of $813K.  This $1.1M variation is reflective of stronger log prices.

 

 

Reece McKenzie

FOREST MANAGER

IFS GROWTH LIMITED

 


 

Financial Reports

 


 


 

 


 


 


 

 

 

Recommendation

That the Services and Assets Committee:

a)         Receives the report titled “Forestry Operations - Financial Report to 31 December 2016” dated 29 March 2017.

 

 

Attachments

There are no attachments for this report. 

 


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Forestry Operations Management Report

Record No:        R/17/3/6574

Author:                 Ian Marshall, Group Manager Services and Assets

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

Background

1        IFS Growth manage the Council’s commercial forest estate under a management contract.

2       The forests are managed in accordance with the Councils forest estate management plan.  This plan is the equivalent of an “Activity Management Plan” for other services.  The estate management plan will be updated later this year as part of the LTP updating process.

Purpose

3       The purpose of this report is to update the Committee on the management and operations of the Forestry business units.

4       A separate Health and Safety Report is attached to inform the Committee of performance and compliance in terms of the Health and Safety at Work Act.

IFS Growth Management Report

Operations and Maintenance

5       The major operations in the forest estate are the harvesting of the plots in the Dipton forest.

Financial

6        The major factor that is impacting financial performance at the moment is very good log prices.  These high prices and the projected harvest tonnage is forecast to create an additional $1.1 net return to the Council this year.

7        The value of carbon credits continues to stay around the $17-$18 range.

Customer Service

8        There were no customer service issues flagged this period.

Health and Safety

9        There were no incidents reported in the last period.

10      The lead indicators show a good consistent level of proactive safety actions such as Site Audits, Safety Tours/Meetings, and Tool Box meetings.  These actions are indicative of a good safety culture.


 

 

Recommendation

That the Services and Assets Committee:

a)         Receives the report titled “Forestry Operations Management Report” dated 29 March 2017.

b)         Notes the projected increase in net income for the 2016/17 period.

 

 

Attachments

a         Forestry Operations Health and Safety Report. IFS Growth - Mar 17

b         Forestry Report- to 28th February 2017.  Report by IFSGrowth.    

 


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FORESTRY REPORT

FOR PERIOD TO 28 FEBRUARY 2017

 

 

 

SOUTHLAND DISTRICT COUNCIL

 

 

 

 

 

Memorandum by:         ReeCE MCKENZIE | Forest Manager

 

IFS Growth - Living, Breathing Investments

 

 

 

Signature                               

            signiture

 

 

Author

 

 


 

MEMORANDUM

 

This report covers activity for the year to date, as at 28th February 2017.

 

 

 

·    Financial Summary

 

The projected full year performance for the forestry business remains very strong, with all budget targets to be exceeded. This result is primarily related to exceptionally strong log prices, on average up 17% per grade compared to budget. Current stumpage results are coming in at $52/t versus $36/t budgeted.

 

Although only a quarter of forestry income has been received to date, there will be a strong finish to the year with the main harvest now started in Dipton.

 

A forecast net position of $1.9M will be achieved by the end of the year. 

 

 

 

 

 

·    Main Issues

 

 

·    Harvesting

 

There has been 10,000 tonnes harvested to date of the 46,000 tonne program. This includes roadline harvesting in Waikaia Forest and one months production in Dipton. With Anderson logging now permanently back in the SDC estate, the remaining volume of 36,000 tonnes from Dipton and Ohai is acheivable by July.

 

 

 

 

·    Estate Planning

 

Future annual wood flows have been remodelled from the constraints in the 2015 – 25 Asset Management Plan. The estate model used for this “Tigermoth” will make updates and planning to a stand level going forward a lot easier. Wood flows generated show harvesting of between 40,000 – 11,000 tonnes per annum for the next ten years.

 

·    Historical Site Classification Waikaia

 

With the ongoing harvest program in Waikaia there are potentially issues regarding historical water races for mining. IFS Growth is in the process of scoping the responsibilities for this out and how to limit damage. Given the major blackberry issue in the forest it is most likely that the harvesting crews will be inducted on what to look out for - once this is determined.

 

·    Ohai Land-use decision

 

Section 185 at Ohai had been fallow since harvesting was undertaken in 2013. This 8 hectare area was potentially being looked at by a neighbour for purchase. It has been decided to replant this area in 2017 due to Pre-1990 ETS liabilities. Cost would be $80,000 in liability if not planted this year.

 

·    Carbon Units Available

 

The Councils currently have the following NZUs in their holding account:

 

Pre-1990 = 82,914 NZU. Current value = $1.4M.

            Being a one off allocation there is no future liabilities arising when sold.

 

Post-1989  =  33,891 NZU. Still to claim 2016 NZUs.

 

·                The NZ carbon market has remains in the $17 – 18 price range for a NZU.

·                 

·               

·                Source: Listed above in graph

·   Log Prices

 

Domestic Log Prices

Domestic log prices have remained firm for pruned logs. S & L grade sawlogs are up $12/t as competitive pressure from export prices exist for supply.

 

Export Prices

Export prices continue to peak. Last month February hit a new five year for A grade going through $130/t. There are no export logs available for under $107/t at present which is incredible.

 

Regional Log Price Summary

 

Source: IFS Growth Dataset

 

 

 

ReeCE MCKENZIE | Forest Manager

 

IFS Growth - Living, Breathing Investments

2016 Deloitte Fast 50 – National Winners – Fastest Growing Agriculture Business

 

 

 


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Services and Assets Contracts Update

Record No:        R/17/3/6376

Author:                 Trudy Saunders, Contracts Adminstrator

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

 

Background

1       The Services and Assets Contract Management tracks Roading, Water and Waste and Property Divisions operations and capex contracts.  This brief report just lists the status of the Community Services contracts.

2       The Water and Waste and Roading opex contracts are reported through their respective operations reports.

3       The status of Water and Waste and Roading capex contracts will be included in the next Services and Assets Committee meeting agenda.

Purpose

4       The purpose of this report is to update the Committee on the progress of status of all Contracts within Services and Assets.

Summary

5       Property:  As of 16 March the following Property related contracts are in progress:

Department

Current

Due soon

Work In Progress

Overdue

Total

Property

13

2

6

21

Community Engineers

26

7

1

5

39

 

39

9

7

5

60

Overview

6       Property Department contracts cover hall custodians and cleaning of buildings owned by SDC, such as offices and libraries.

7       Community Engineers contracts cover Township Maintenance, mowing, gardening and cleaning of public toilets.

8       Some cleaning of toilets are covered within the Roading Alliance Contracts.

Analysis

9       The five contracts that are overdue are currently with Community Engineers to discuss scope and price with the contractors.


 

10     Of the seven that are Work In Progress:

·              Two are with the Contract Administrator to find out further information.

·              One is with the Community Engineer to obtain the Contract signed off.

·              Five are with the Property Officer who is working with the contractors to finalise the specification and contract rates.

Risk and Strategy:

11     Three of our cleaning or beautification contractors are not currently on our Health and Safety Approved Contractors List.

Financial

12      It is difficult to get an accurate summary of costs of all Property related contracts due to the majority of these being maintenance contracts and paid out per clean or mow. 

 

 

Recommendation

That the Services and Assets Committee:

a)         Receives the report titled “Services and Assets Contracts Update” dated 29 March 2017.

 

 

Attachments

There are no attachments for this report. 

 


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Roading Operations February 2017

Record No:        R/17/3/6159

Author:                 Dylan Rabbidge, Commercial Lead Roading

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

 

Background

1       SouthRoads currently have the Waimea and Central Alliance maintenance contracts with Fulton Hogan having the Foveaux Alliance.  All three contracts are currently in the Tendering process and will be awarded prior to their expiry on 30th June 2017.

Purpose

2       The purpose of this report is to update the Committee on the progress of the major roading maintenance contracts.  A representative of Strategic Transport will be in attendance to speak to the report.

Summary

3       Customer Satisfaction; 102 Requests for Service (RFS), across the three Alliance contracts were received in February with one not completed on time.  2015/16 113 RFS’ were received in February.

4       Health and Safety; 10 near missis were reported for February with no Lost Time Injuries reported.  15 Site Safety Audits were completed in February.

5        Activity Performance:

·              Metalling, 34,885 m3 or 62% is completed Year to Date.

·              Grading, 9,523 km have been graded Year to Date.

·              2017/18 Pre-Reseal Repairs, 40 of 150 sites have been released for inspection.  The length completed is 19.19 km of 155.37 km or 12.35%.

·              Stabilisations, 7,192 m2 (73%) have been completed of a total programmed 9,872 m2.

·              Edge Break, 7,868 m (28%) of a programmed 28,513 m.

6        Risk and Strategy;

·              Slips, Devery Road and Ohai Clifden Highway levelling is programmed for March.  Waiarikiki Mimihau Road, Temporary repairs holding well with approval for permanent repairs being worked on.

·              Roads, Mandeville Kingston Crossing Road high crash site with Roy Clearwater (Safety Engineer) investigating.  Coastal Route, “High Crash Rate” signage and 50 kph signs helping to reduce the number and severity of crashes.  Road has been approved for seal extension.

Financial

7        There were no outstanding claims or variations to the contract.  All claims and invoices for completed work were certified and accepted.

 

 

 

Recommendation

That the Services and Assets Committee:

a)         Receives the report titled “Roading Operations February 2017” dated 29 March 2017.

 

 

Attachments

a         Summary Report - Combined A3 Reporting

b         06/26 - Foveaux Alliance A3 report February 2017

c         06-26 Foveaux Alliance Health and Safety Report

d         12-01 Waimea Alliance A3 Monthly Report February 2017

e         12-01 Waimea Alliance Health and Safety Report February 2017

f          13-01 Central Alliance February 2017 A3    

 


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Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for January 2017

Record No:        R/17/3/5577

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

Approved by:       Ian Marshall, Group Manager Services and Assets

 

  Decision                              Recommendation                         Information

 

  

 

Background

1       Downer was awarded Contract 10/01 for delivery of water and wastewater services to Council for the Southland District.  The contract was awarded in 2010 for a maximum period of 12 years.

Purpose

2       The purpose of this report is to update the Committee on the progress of this contract. 
A representative of Water and Waste Services will be in attendance to speak to the report.

Summary

3       KPI scoring of 93%.

Compliance (Drinking-water)

4        All drinking water compliance testing was completed and carried out as per
New Zealand Drinking-water Standards.  All samples were absent of Escherichia Coli, thus meeting the required standards.

Compliance (Environmental)

5        There were no non-compliant tests reported.

Operations and Maintenance

6        Service request calls for the month were 95; consistent for this time of year.

Financial

7        There were no outstanding claims or variations to the contract.  All claims and invoices for completed work were certified and accepted.

Customer Service

8        There were 95 service requests received with 94 inspected within response time, one odour complaint, 72 treated water related service requests, 13 wastewater related service requests and 10 rural water supply related requests.

Health and Safety

9        There were no incidents reported.

Quality Assurance

10      Zero Non Conformance/Opportunity for Improvement Reports were issued and no instances of rework or product failure during the month.

Water Consumption

 

 

Recommendation

That the Services and Assets Committee:

a)         Receives the report titled “Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for January 2017” dated 29 March 2017.

 

 

Attachments

a         Downer KPI Report - January 2017    

 


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[1] Local Government Act 2002, Schedule 7, Clause 32