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

 

Date:                            

Time:

Meeting Room:

Venue:

 

Wednesday, 15 November 2017

9am

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

 

 

 


Terms of Reference – Services and Assets Committee

 

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 Committee;

·                 Water supply schemes.

 

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

 

(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.

 

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.

 

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 Committee.

 

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.


Services and Assets Committee

15 November 2017

 

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 for Resolution

7.1         Contract 17/11 Deans Road Bridge Replacement                                                                         17

7.2         Otapiri Gorge Road Pavement Rehabilitation - Contract 17/38                                          23

7.3         Transport Programme 2017/2018                                                                                                          27

Reports for Recommendation

8.1         Roading Operations October 2017                                                                                                       39

8.2         Development of the Business Case in Support of Kepler Options                                     53

Reports

9.1         Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for September 2017                                                                                                                                             215

9.2         Update on Contract Status                                                                                                                     217

9.3         Forestry Operations - Financial Report to 30 September 2017                                         219

9.4         IFS Growth Forest Manager's Report of Forestry Activity for the period to 30 September 2017                                                                                                                                                                       223   


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 Services and Assets Committee, 27 September 2017


sdclogo

 

 

Services and Assets Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Services and Assets Committee held in the Council Chambers, 15 Forth Street, Invercargill on Wednesday, 27 September 2017 at 8.30am.

 

present

 

Chairperson

Brian Dillon

 

Mayor Gary Tong (8.55am – 9.52am)

Councillors

Stuart Baird (9.20am – 9.52am)

 

John Douglas

 

Paul Duffy (8.34am – 9.52am)

 

Bruce Ford

 

Darren Frazer

 

George Harpur

 

Julie Keast

 

Ebel Kremer (8.30am – 9.21am, 9.25am – 9.52am)

 

Gavin Macpherson

 

Neil Paterson

 

IN ATTENDANCE

 

Chief Executive Officer

Steve Ruru

Group Manager Services and Assets

Ian Marshall

Communications Manager

Louise Pagan

Governance and Democracy Manager

Clare Sullivan

Committee Advisor

Fiona Dunlop

 


1          Apologies

 

Apologies for absence were been received from Councillor Perham and for lateness from Councillor Baird and Mayor Tong.

 

Resolution

Moved Cr Keast, seconded Cr Macpherson and resolved:

That the Services and Assets Committee accept the apologies.

 

 

2          Leave of absence

 

There were no requests for leave of absence.

 

 

3          Conflict of Interest

 

There were no conflicts of interest declared.

 

 

4          Public Forum

 

There was no public forum.

 

 

5          Extraordinary/Urgent Items

 

There were no Extraordinary/Urgent items.

 

 

6          Confirmation of Minutes

 

Resolution

Moved Cr Harpur, seconded Cr Douglas and resolved:

THAT the Services and Assets Committee confirms the minutes of the meeting, held on 9 August 2017 as a true and correct record of that meeting.

 

Reports for Resolution

 

 

7.1

Southland District Council Pavement Marking Tender Award

Record No:         R/17/9/21650

 

Group Manager, Services and Assets – Ian Marshall, Strategic Manager Transport – Hartley Hare and Commercial Lead Roading – Dylan Rabbidge were in attendance for this item.

 

 

 

 

 

Mr Hare advised that the purpose of the report was to outline the tenders received for the 2017-2020 Southland District Council Pavement Marking Services and seeks approval from the Services and Assets Committee to award Contract 17/30 (Eastern Area) and Contract 17/31 (Western Area) to the recommended tenderers.

The Meeting noted that the report covers the tendering outcome for the pavement marking of urban and rural roads across the Southland District Council network.   

Mr Hare further advised that each contract is for a period of 3 years with a possible further 2 years (1+1) extension.  This is subject to satisfactory completion and performance of the first 3 years of work.

The Meeting further noted that the extent of marking to be done each year will be confirmed by Southland District Council by 30 September each year but it is anticipated that all markings will be re-marked in years 1 and 3 and approximately 50% will be remarked in year 2.

(Councillor Duffy joined the meeting at 8.34am.)

 

Resolution

Moved Cr Douglas, seconded Cr Paterson and resolved:

That the Services and Assets Committee:

a)      Receives the report titled “Southland District Council Pavement Marking Tender Award” dated 20 September 2017.

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 the Downer tender price of $972,427.84 plus GST for Contract 17/30   Eastern Area Pavement Marking.

e)      Accept the Downer tender price $1,108,314.14 plus GST for Contract 17/31 Western Area Pavement Marking.

 

 

7.2

District Wide LED Replacement - Unbudgeted Expenditure and Tender Award

Record No:         R/17/9/21792

 

Group Manager, Services and Assets – Ian Marshall, Strategic Manager Transport – Hartley Hare and Commercial Lead Roading – Dylan Rabbidge were in attendance for this item.

 

 

 

 

 

Mr Rabbidge advised that the purpose of the report was to seek approval from the Committee to proceed with the accelerated LED streetlighting replacement programme across the Southland District Council network, along with the award of Contract 17/45 – Southland Streetlight LED Upgrade 2017/18 for the physical installation works.

The Meeting noted that a report was presented to Services and Assets on 9 August 2017 seeking approval to proceed with the procurement of physical works and accelerated purchase of LED streetlights.  This report covers the tenders received, the evaluation carried out and recommendations for awarding the contract.

 

Resolution

Moved Cr Kremer, seconded Cr Macpherson recommendations a to c, d with an addition (as indicated) and e.

That the Services and Assets Committee:

a)         Receives the report titled “District Wide LED Replacement - Unbudgeted Expenditure and Tender Award” dated 20 September 2017.

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)         Approve the unbudgeted expenditure of $1.2M (SDC Portion $180k) for the accelerated upgrade programme for LED streetlights to maximise NZTA funding assistance for this activity (85% vs 52%) subject to NZTA approval of the 85% financial assistance rate funding.

e)         Accept the tender from Network Electrical Servicing for the installation of the LED lights to the value of $576,233.05 plus GST.

 

 

7.3

Clifden Blackmount Road Seal Widening

Record No:         R/17/9/21845

 

Group Manager, Services and Assets – Ian Marshall, Strategic Manager Transport – Hartley Hare and Commercial Lead Roading – Dylan Rabbidge were in attendance for this item.

 

 

Mr Hare advised that the report outlined the tenders received for Contract 17/35 – Clifden Blackmount Road Seal Widening and seeks approval from the Committee to award Contract 17/35 to the recommended tenderer.

The Meeting noted that the report covered the tendering outcome for the seal widening of 2,300 metres of Clifden Blackmount Road from RP 3684 to RP 5985.

(Mayor Tong joined the meeting at 8.55am.)

 

Resolution

Moved Cr Harpur, seconded Cr Kremer and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Clifden Blackmount Road Seal Widening” dated 20 September 2017.

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 The Roading Company’s tender price of $253,900.00 plus GST.

 

 

7.4

Structural Engineering Services for Transport

Record No:         R/17/9/21859

 

Group Manager, Services and Assets – Ian Marshall, Strategic Manager Transport – Hartley Hare and Commercial Lead Roading – Dylan Rabbidge were in attendance for this item.

 

 

Mr Hare advised that the purpose of the report was to advise the Committee of the outcome of the tender evaluation process for the Structural Engineering Services for Transport Tenders, Contract No. 17/29.

The Meeting noted that the current contract for the provision of Professional Services for Roading, Contract 12/03 expires on 30 September 2017.  The incumbent is Stantec (formerly MWH Global).

Mr Hare further advised that enders were called in July 2017 and closed on 2 August 2017 for a three-year initial term with two possible extensions of one year each subject to performance and Council’s discretion.  Three bona fide tenders were received, from Calibre Consultants, Opus and from Stantec.

The Meeting further noted that then tender proposals have been evaluated in accordance with Council’s Procurement Policy and the provisions of the Request for Tenders.  This report presents the outcome of the evaluations and seeks Council approval to award the contract to the preferred tenderer.

 

 

 

 

Mr Hare also advised that Stantec submitted a conforming tender and an alternative tender.  In consideration of all conforming tenders Stantec was the highest ranked tenderer when it’s extremely competitive price was taken in to account.  Stantec’s alternative tender offered a lower price for the Primary Services but was considered by the Evaluation Team as deficient in meeting the requirements of the contract and is not recommended.

 

Resolution

Moved Cr Ford, seconded Cr Keast and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Structural Engineering Services for Transport” dated 19 September 2017.

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)         Notes the outcome of the tender evaluation process

e)         Awards Contract 17/29 for Structural Engineering Services for Transport Services to Stantec for the sum of $765,000.

f)          Authorise the Group Manger Services and Assets to formally notify Tenderers of the outcome and to execute the Contract documents.

 

 

7.5

Milford Crescent Minor Improvement

Record No:         R/17/9/22406

 

Group Manager, Services and Assets – Ian Marshall, Strategic Manager Transport – Hartley Hare and Commercial Lead Roading – Dylan Rabbidge were in attendance for this item.

 

 

Mr Hare advised that the report outlined the outcome of the proposed improvement works at Milford Crescent in Te Anau including the outcome from the Te Anau Community Board consultation.

The Meeting noted that the Council are proposing to carry out some minor improvements on Milford Crescent in Te Anau to improve the safety and performance of this road.  These improvements also tie-in with the Wong Way development.

Mr Hare also advised that the report outlined the issues along with the proposed interventions along with a recommendation from the Te Anau Community Board

(Councillor Baird joined the meeting at 9.20am.)

 

Resolution

Moved Cr Kremer, seconded Cr Duffy and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Milford Crescent Minor Improvement” dated 21 September 2017.

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)         Notes that the original staff recommendation was to relocate the pedestrian crossing on Milford Crescent at The Lane so that it was in the area of the existing entry/exit from the supermarket.

e)         Endorse the recommendation from the Te Anau Community Board meeting to carry out the minor safety works but not to relocate the pedestrian crossing on Milford Crescent at The Lane.

f)          Endorse that a review of the Pedestrian crossing on Milford Crescent at The Lane be carried out within the next 12 months and the outcome of that assessment be reported back the Committee including usage.   

 

 

(Councillor Kremer left the meeting at 9.21am.)

 

 

7.6

Contract 17/25 Waterford Drive Watermain Renewal

Record No:         R/17/9/21135

 

Group Manager, Services and Assets – Ian Marshall and Operations/Project Engineer, Water and Waste Services – Matt Keil were in attendance for this item.

 

 

Mr Keil advised that the purpose of the report was to recommend the award of a contract and commence the programmed watermain renewal within Waterford Drive and the surrounding area in Winton, as programmed to occur within the current 2017/2018 Annual Plan. 

The Meeting noted that the report outlined the proposal to undertake a watermain renewal within the Waterford Drive Winton reticulation catchment, Winton, including the renewal of all associated service laterals, rider mains and fixtures, and the installation of a new distribution main between the Winton Water Treatment Plant and 274 Great North Road.

(Councillor Kremer returned to the meeting at 9.25am.)

 

Resolution

Moved Cr Paterson, seconded Cr Frazer and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Contract 17/25 Waterford Drive Watermain Renewal” dated 20 September 2017.

b)         Determines that this matter or decision be recognised 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)         Approves the Waterford Drive and Railway Street Watermain Renewal projects to proceed for a total amount of $1,323,226.60 ex GST.

e)         Approves the award of Contract 17/25 ‘Waterford Drive Watermain Renewal’ to Fulton Hogan for the tendered sum of $818,746.60, including a total contingency of $80,000.00.

f)          Approves the expenditure for the proposed ‘Railway Street Watermain Installation’ consisting of 358 lineal/metres of a renewed new potable distribution main/s between the Winton Water Treatment Plant, 274 Great North Road and 252 Great North Road to 20 Wemyss Street.

g)         Delegates authority to Council’s ‘Group Manager-Services and Assets’ to award a variation to Contract 17/25 for ‘Railway Street Watermain Installation’ subject to recommendations d) and f). 

 

Reports

 

 

8.1

Forestry Operations - Financial Report to 30 June 2017

Record No:         R/17/9/21955

 

Group Manager, Services and Assets – Ian Marshall was in attendance for this item.

 

Mr Marshall advised that the purpose of the report was to update the Committee on the Forestry Operations Financial Report to 30 June 2017. 

The Meeting noted that the forestry business has had another high performing year, with a consolidated net surplus, before forest revaluation, of $3.1M. This result is $2.3M favourable to budget.  Additional to this is a gain in forest estate valuation of $0.8M and a loss on ETUs of $0.08M, which brings the net surplus after revaluation to $3.8M.

 

 

 

Resolution

Moved Cr Keast, seconded Cr Douglas and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Forestry Operations - Financial Report to 30 June 2017” dated 20 September 2017.

 

 

8.2

Services and Assets Contracts Update

Record No:         R/17/9/21747

 

Group Manager, Services and Assets – Ian Marshall was in attendance for this item.

 

Mr Marshall advised that the purpose of the report was to update the Committee on the Services and Assets Contract Management tracking of Roading, Water and Waste and Property Divisions operations and capex contracts. 

The Meeting noted that this report is reporting on the status of the Community Services contracts and that the Water and Waste and Roading opex and capex contracts are reported through their respective operations reports.

 

Resolution

Moved Cr Ford, seconded Cr Paterson and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Services and Assets Contracts Update” dated 15 September 2017.

 

 

8.3

Roading Operations August 2017

Record No:         R/17/9/21794

 

Group Manager, Services and Assets – Ian Marshall, Strategic Manager Transport – Hartley Hare and Commercial Lead Roading – Dylan Rabbidge were in attendance for this item.

 

Mr Rabbidge advised that the purpose of the report was to update the Committee on the progress of the major roading maintenance contracts.

The Meeting noted that SouthRoads currently have the Waimea and Central Alliance maintenance contracts with Fulton Hogan having the Foveaux Alliance.  These contracts began in July 2017 with all three currently on an Interim Project Alliance Agreement and it is expected that they will move to a Project Alliance Agreement in early October 2017.

 

Resolution

Moved Cr Kremer, seconded Cr Harpur and resolved:

That the Services and Assets Committee:

a)         Receives the report titled “Roading Operations August 2017” dated 20 September 2017.

 

 

 

The meeting concluded at 9.52am.               CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Services and Assets Committee HELD ON WEDNESDAY 27 SEPTEMBER 2017.

 

 

 

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

 

 

 

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

 


Services and Assets Committee

15 November 2017

 

Contract 17/11 Deans Road Bridge Replacement

Record No:             R/17/10/25759

Author:                      Hartley Hare, Strategic Manager Transport

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        To re-establish the appropriate level of services along Deans Road, north of Winton by replacing the existing bridge which is restricted to 70% of Class 1.

Executive Summary

2        This report outlines the proposed replacement of restricted bridge on Deans Road. The single lane 11 m long timber bridge is proposed to be replaced with a new single span, single lane bridge precast concrete structure designed to support class 1 loading.

3        It is proposed that this work will be procured through open tender and awarded on lowest price conforming basis. With the preliminary estimate for the physical works currently estimated at $180,000.

4        Delegation is requested from the Services and Assets Committee to the Group Manger Services and Assets as it could potentially exceed the $200,000 delegation once final design and tendering is completed.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Contract 17/11 Deans Road Bridge Replacement” dated 10 November 2017.

 

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)           Approves the procurement methodologies for the Dean Road bridge replacement.

 

e)            Approves delegation to the Group Manager Services and Assets to award a contract up to the value of $250,000.

 

 

Background

5        This project involves the replacement of the existing bridge on Deans Road over the Winton stream, which is North of Winton and directly off the end of SH 96 at its intersection with SH 6.

6        This single lane two span 11 m long timber bridge is proposed to be replaced with a new single span single lane precast concrete structure designed to support Class 1 (0.85 HN 72) loading.

7        The existing bridge, which is restricted to 70% of Class 1, has reached the end of its useful life.

8        The following points have been considered as part of the decision making process:

 

·              The overall economic importance of the road and where it fits in the hierarchy.

·              The degree of inconvenience and economic hardship caused by the restrictions which will consider the number of people using the bridge, the size of the restriction, the length of alternatives and if there are alternatives available.

·              The degree of danger posed if someone does ignore the restrictions and collapse the bridge, along with the likelihood that this may happen.

·              Consideration of good asset management principals in terms of obtaining as much life out of each bridge or parts of the bridge, such as decks. 

 

9        The road is classed as an Access Road with a traffic volume of approximately 80 vehicles per day. By making the bridge Class 1 only, it provides a suitable level of service to local users.

Issues

10      The main issue is the levels of services as a result of posted bride along with the risks associated with road users not observing those restriction.

11      Issues relating to the bridge and the restrictions have been discussed above.

Factors to Consider

Legal and Statutory Requirements

12      NZTA procurement procedures apply.

13      No unusual legal considerations are involved with the project.

Community Views

14      No specific community views have been sought as part of this project however consideration has been given to the impact the posted bridge has on the communities and users as described in the background.

Costs and Funding

15      The programme of works form part of the overall roading programme for the 2017/18 seasons and fits within the annual plan programme. NZTA share (52%) will be apportioned appropriately to the project.

16      The preliminary estimate for the physical works is currently $180,000 but this may alter once the detailed design is finalised. This along with the level of competition during tendering process will impact on the final cost.

Policy Implications

17      The proposed works form part of Councils Roading Activity Management Plan.

18      Council’s Procurement Policy and Council’s NZTA Procurement Strategy.

19      As outlined above in the report, NZTA tender evaluation process will be followed along with Council’s procurement Policy.

20      On this basis it is proposed that this work will be procured through open tendering and awarded on a lowest price conforming basis.

21      The proposed procurement mythology has been chosen to balance minimising Professional Services inputs with obtaining competitive prices and managing risks and price certainty.
The overall aim is to obtain value for money.

Analysis

Options Considered

22      The option for this site is to do nothing and accept the reduce level of service of the posted bridges and ultimately closer and removal of the bridge.

Analysis of Options

Option 1 - Do Nothing

Advantages

Disadvantages

·        Reduce financial input required particularly in the short to medium term.

·        Continued reduction in levels of service and subsequent inconvenience to road user.

·        Increased risk of structure failure.

 

Option 2 – Remove the bridge

Advantages

Disadvantages

·        Removes the long term financial commitment to the asset

·        Eliminates the risk of the structure failing

·        Reduction in levels of service and subsequent inconvenience to road user.

 


 

Option 3 – Install a Ford

Advantages

Disadvantages

·        Reduce financial input required particularly in the short to medium term.

·        The capacity of the stream would likely result in continues water flow over the ford resulting in more frequent maintenance.

·        May not get resource consent.

·        Continued reduction in levels of service and subsequent inconvenience to road user.

·        Due to the depth of the stream may require reasonable amount of earthworks to create and ramp in and out increasing costs.

 

Option 4 – Replace Bridge

Advantages

Disadvantages

·        Reinstating level of service.

·        Remove inconvenience to road users.

·        Reduces risk of structure failure.

·        Greater financial input required short term compared to options 1 and 2.

 

23      The chosen treatment attempts to balance all factors such as levels of services and cost to come up with the most economical long term solution to produce the best value for money long term.

24      It has been determined that it is worthwhile to replace this bridge rather than to close it.

Proposal

25      The proposed new bridge will be made up of precast concrete double T units spanning 14 m. These will be supported by cast insitu concrete abutments founded on driven steel piles with spill through rock abutments.

26      The clear deck width between wheel guards will be 4.2 m. There are alternative routes available for any vehicles exceeding Class 1 or this width. Due to the size of the stream and the flow, a box culvert was not considered appropriate as a replacement. It was also not considered suitable for an upgrade due to the poor condition of most of the bridge elements, including the foundations.

27      As a full span bridge there should not be the issues experienced in gaining a resource consent with box culverts, due to fish passage. Southland District Council’s generic resource consent for bridging work may be sufficient, without the need to get a specific consent for this project.
This is yet to be confirmed.

Assessment of Significance

28      A decision on the bridge replacement is not considered significant. This represents a routine business decision for Council.

Recommended Option

29      The report has provided an outline of the proposed bridge replacement and how it is planned to be procured.

30      Approval is therefore requested from the Services and Assets Committee for this bridge tender to be let under staff delegation, as it could potentially exceed the current $200,000 delegation and if this was the case valuable construction time could be lost if awarded of the tender had to wait until the next Services and Assets meeting in February 2018.

Next Steps

31      Bridge design and released for procurement.

 

Attachments

There are no attachments for this report. 

 


Services and Assets Committee

15 November 2017

 

Otapiri Gorge Road Pavement Rehabilitation - Contract 17/38

Record No:             R/17/10/25760

Author:                      Hartley Hare, Strategic Manager Transport

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        The report outlines the tenders received for Contract 17/38 - Otapiri Gorge Road (320 - 1670) Pavement Rehabilitation and seeks approval from the Services and Assets Committee to award Contract 17/38 to the recommended tenderer.

Executive Summary

2        The report covers the tendering outcome for the Rehabilitation of 1,350 metres of Otapiri Gorge Road from route position (RP) 320 to RP 1670.    

3        The report covers the background to the project, the tenders received, the evaluation carried out and recommendations for letting the contract.

 

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Otapiri Gorge Road Pavement Rehabilitation - Contract 17/38” dated 10 November 2017.

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 The Roading Company’s tender price of $582,300 plus GST.

 

 

Background

4        This section of Otapiri Gorge Road was identified by the Central Alliance Management Team as needing to be rehabilitated, due to the rapid pavement deterioration occurring and associated increased maintenance costs. The greatly increased volume of logging traffic using the road, and associated increased pavement loading, has been the primary cause of this.

5        The costs have reached the point where rehabilitation is the lowest cost option to address this ongoing deterioration.

6        This section of road has an Access Road classification, carrying 120 vehicles per day of which 27% are heavy. At 5.5 m wide it is generally 1.0 m under width.  It is proposed as part of this rehabilitation to widen the road to the recommended width for an Access Road.

7        The tender was advertised on Local Government Online and in the Tenders Gazette.  Conforming tenders were received from two tenderers by the closing date of 17 October 2017.

8        The submitted tenders are as follows (excluding GST):

Tenderer

Tender Price

The Roading Company

$582,300.00

SouthRoads

$591,714.48

Stantec Estimate

$511,540.00

9        The lowest conforming price received was 14% greater than the Engineer’s detailed tender estimate. As there were only two tenderers and one of these has a strong forward workload, there may not be the price tension that there has been in the past to keep prices low.

10      Following pavement design and a review of pavement failures, a Present Value (PV) of $25,357 was calculated based on the estimated costs of $511,540. This was reviewed after tenders closed based on the lowest conforming tender price, which has reduced this PV to a very marginal $1,791.

11      The review of pavement failures indicated that stabilisation patching is generally only useful as a temporary repair. In the light of this, full digout repair of all the failures recorded may be a more appropriate comparison in the PV calculations.

12      Using this as a maintenance philosophy would achieve a significantly higher PV. Also given how rapidly the pavement is failing, it is expected that a review of the pavement would increase the recorded failures increasing the PV further.

13      Based on the above, The Roading Company is the recommended Tenderer for Contract 17/38 – Otapiri Gorge Road (320 – 1670) Pavement Rehabilitation.

 

Issues

14      As part of this contract the easing of the curve at the intersection of Otapiri Gorge and Shand Roads has been proposed. The landowner has been approached and has signified his agreement to the land area required being purchased by Council.

Factors to Consider

Legal and Statutory Requirements

15      No unusual legal considerations are involved with this project.  As with all projects, but larger value projects in particular, there is the risk of a legal challenge regarding the tender results from unsuccessful Tenderers.  To reduce this risk the Tender Evaluation Team carefully follow the NZTA procurement procedures.

Community Views

16      Although no specific community views have been sought, feedback has been sought and received from Council’s Community Engineers and the Alliance Contractors in identifying priority rehabilitation candidate sites.

Costs and Funding

17      The activity forms part of the overall roading budget with the NZTA share (52%) being apportioned appropriately.

Policy Implications

18      This project has been tendered and evaluated under the NZTA Lowest Price Conforming Tender process and in compliance with Council’s Procurement Policy.

19      The activity forms part of the overall roading budget with the NZTA share (52%) being apportioned appropriately.

Analysis

Options Considered

20      Generally three main options have been considered and outlined below.

21      The Do Minimum option of continued reactive maintenance has an increasing risk as existing patching is already beginning to fail and new areas of pavement failure are becoming apparent.

22      Pavement Stabilisation with lime or cement was rejected due to variable pavement depths which increase the risk of further pavement failures. Also existing stabilisation patches on this section of road are already starting to fail under traffic loading.

23      Granular overlay was considered the lowest risk option when used in conjunction with scarification of the pavement, in areas where rutting has been excessive.

Analysis of Options

Option 1 - Do Minimum (Status Quo)

Advantages

Disadvantages

·        Reduced financial input required in the short term.

·        Greater number of small defects can be treated in isolation over the whole of the Southland District Council roading network.

·        Continued reduction in levels of service and likely increase in road user safety risk and cost over time.

·        Increased risk of road deterioration requiring an increased maintenance expenditure and in turn imposing a significant financial requirement of the longer term.

Option 2 – Stabilisation

Advantages

Disadvantages

·      Maintain levels of service on the network.

·      Removing inconvenience to road users and providing improved road user experience.

·      Long term cost savings.

·      Possible reduced maintenance cost which can be redistributed elsewhere on the network.

·      Greater shorter term financial input required compared to patch and reseal option.

·      Potential risk of isolated pavement deterioration requiring an increase maintenance cost.

·      High risk of early failure given variable pavement depths and poor success rate with stabilisation patches.

Option 3 – Granular Overlay

Advantages

Disadvantages

·      Maintain levels of service on the network.

·      Removing inconvenience to road users and providing improved road user experience.

·      Long term cost savings.

·        Reduced maintenance cost which can be redistributed elsewhere on the network.

·        Greater shorter term financial input required compared to patch and reseal option.

·        Reduced risk of isolated pavement deterioration requiring an increase maintenance cost.

24      The recommended pavement design is to:

•        Scarify the sealed surface in areas of rutting prior to the placing the overlay to prevent moisture being trapped by the old seal coat and weakening the new pavement.

•        Place a 125 mm granular overlay over high spots. The basecourse shall meet the SDC grading requirements and NZTA M/4 properties.

•        Realign intersection of Otapiri Gorge Road and Shand Road to a design speed of 45 km/hr as a minor improvement at an estimated cost of $35,100.

 

Assessment of Significance

25      Based on the Council’s Policy on Significance and given that any decision made is in line with the Annual Plan and budget expectations, it is believed that the decision made based on this recommendation is not significant.

26      The procurement method proposed, along with this activity forming part of the Annual Plan and Long Term Plan, means that the letting of this contract is not significant in terms of Section 76 of the Local Government Act 2002.

Recommended Option

27      The recommended Tenderer has successfully completed similar work for the Southland District Council in the past and has submitted a reasonable price.  We therefore recommend the acceptance of the tender from The Roading Company of $582,300.00 (excluding GST).

Next Steps

28      The Services and Assets Committee formally award the contract to the recommended tenderer and Council's Group Manager Services and Assets, formally notifies the successful and unsuccessful tenderers of the outcome from the tendering process.

 

Attachments

There are no attachments for this report.   


Services and Assets Committee

15 November 2017

 

Transport Programme 2017/2018

Record No:             R/17/10/26001

Author:                      Hartley Hare, Strategic Manager Transport

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        To outline to the Services and Assets Committee, the programme of works for the 2017/2018 construction season, while seeking feedback and endorsement of the proposed actions.

Executive Summary

2        The report outlines sections of road included in the pavement rehabilitation programme currently being worked on, sites identified for drainage renewal and two guardrail packages.

3        As these projects are currently being worked on or close to completed and with the Christmas / New Year holiday period approaching, Services and Assets Committee endorsement of the programme and planned procurement process is sought including delegation to the Group Manager Services and Assets to award the successful tenders.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Transport Programme 2017/2018” dated 10 November 2017.

 

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)           Endorse the programme of works as part of the 2017/2018 Transport Programme.

 

e)            Delegate’s authority to the Group Manager Services and Assets to let contracts for the projects identified in the report subject to satisfactory tenders being received that provide value to the Southland District Council.

 

Background

4        This report discusses the proposed and potential sites identified for works.  It is proposed to progressively release the approved projects to the market prior to Christmas.

5        The programme of works for 2017/2018 is to be completed by to 30 June 2018, if all projects are approved and proceed. This programme can be completed within the approved Annual Plan budgets.

Pavement Rehabilitation Programme

6        The candidate rehabilitation sites have been selected for rehabilitation based on the remaining expected pavement life recorded in RAMM, visual assessment of the sites by Stantec along with, the results of FWD, condition rating and high speed data testing.

7        The sites identified are:

8        Project 1: Ferry Road, RP350 to 1040 and Edendale Wyndham Road, RP 0 – 1400.

9        Project 2: Mabel Woodstock Road, RP 60 – 1345.

10      Kennington Waimatua Rd – this is a boundary road with Invercargill City Council (ICC responsibility) $165375-00 and is covered by the boundary road agreement that is in place.

11      Attachment A provides more detail in terms of location, the scope of the rehabilitation work anticipated and the specific details of each site which have influenced its selection as a candidate for rehabilitation. 

Minor Improvement Programme

12      Two contract packages of work are in the process of being finalised. This programme is part of the ongoing safety improvement programme.

13      The sites identified are prioritised as highest risk using the safety embankment risk assessment tool which takes into account aspects such a consequence of a crash, traffic volume, previous crash history etc.

14      The package of work are;

15      Project 1: Wreys Bush Mossburn Road - Etal Stream Bridge (16 km) and Home Creek bridge (16.8km).

16      Project 2: Balfour Area - Keowns Bridge Road Bridge and Glenure Road Bridge.

Drainage Programme

17      The first of three drainage improvement packages planned over the next two years was approved and award in July 2017 under contract 17/22. The second of these packages is being prepared to be released to market.

18      The sites were identified and prioritised as part of a complete review of the drainage on sealed roads throughout the district and the planned programme that has been prepared will address the highest priority deficient drainage sites throughout the rural sealed road network.

19      Drainage activities include clearing and reshaping existing drainage channels as well as complete formation of new water paths where existing is insufficient or non-existent.  These high priority sites are then tied into medium priority sites if immediately adjacent to each other to save on establishment costs and ensure positive drainage throughout the entire area.  Access culverts will be extended or replaced where necessary to meet required specification as applicable

Issues

20      The various treatment options proposed for each site are based on re-establishing pavement capacity and levels of service appropriate to the hierarchy of the road for each location and by improving road safety.

21      The chosen treatments attempt to balance all factors to come up with the most appropriate long term solution to produce the most appropriate outcome.

Factors to Consider

Legal and Statutory Requirements

22      No unusual legal considerations are involved with this project.  As with all projects, but larger value projects in particular, there is the risk of a legal challenge regarding the tender results from unsuccessful Tenderers.  To reduce this risk the Tender Evaluation Team carefully follow the NZTA procurement procedures.

Community Views

23      Although no specific community views have been sought, feedback has been sought and received from Council’s Community Engineers and the Alliance Contractors in identifying priority rehabilitation candidate sites.

Costs and Funding

24      The activity forms part of the overall roading budget with the NZTA share (52%) being apportioned appropriately.

25      Cost estimates for each package of works are:

·    Pavement rehabilitation:

o Ferry Road / Edendale Wyndham: $781,000

o Mabel Woodstock Road: $387,000

·    Guardrail Package:

o Project 1 (Wreys Bush): $210,100

o Project 2 (Balfour Area):$222,100

·    Drainage Package 2: $516,870

26      It should be noted that some of these estimates are based on a general view of potential costs, prior to detailed design being carried out to confirm full requirements.

Policy Implications

27      The project are to be tenderer and evaluated under the NZTA Lowest Price Conforming Tender process and in compliance with Council’s Procurement Policy.

28      The activity forms part of the overall annual roading programme.

Analysis

Options Considered

29      Three main options for each pavement rehabilitation site have been considered and outlined below.

Analysis of Options

Option 1 - Do Minimum (Status Quo)

Advantages

Disadvantages

·        Reduced financial input required in the short term.

·        Greater number of small defects can be treated in isolation over the whole of the Southland District Council roading network.

·        Continued reduction in levels of service and likely increase in road user safety risk and cost over time.

·        Increased risk of road deterioration requiring an increased maintenance expenditure and in turn imposing a significant financial requirement of the longer term.

Option 2 - Patch and reseal candidate rehabilitation sites within the existing maintenance programme

Advantages

Disadvantages

·        Reduced financial input required particularly in the short to medium term.

·        Greater number of small defects can be treated in isolation over the whole SDC roading network.

 

·        Continued reduction in levels of service and subsequent inconvenience and economic hardship to users.

·        Increased risk of road deterioration requiring sections to be fully reconstructed, imposing a significant financial requirement in the longer term.

 

Option 3 - Full rehabilitation of candidate sites

Advantages

Disadvantages

·        Reinstating levels of service on routes justified by traffic volumes and strategic value to the network.

·        Removing inconvenience to road users and providing improved economic output.

·        Maximises the current NZTA funding assistance rate.

·        Long term cost savings.

·        Greater shorter term financial input required compared to patch and reseal option.

 

30      The recommended option is carry out a full rehabilitation of candidate sites.

31      The options for the guardrail sites are to carry out the work or maintain the status quo. It is recommended to carry out the work to improve network and road user safety.

32      The options for the drainage site are to carry out the work to ensure positive outfall of surface water to achieve associated safety benefits along with maximising the longevity of pavement life or not to do the work and therefore not achieve these benefits.

Assessment of Significance

33      Based on the Council’s Policy on Significance and given that any decision made is in line with the Annual Plan and budget expectations, it is believed that the decision made based on this recommendation is not significant.

34      The procurement method proposed, along with this activity forming part of the Annual Plan and Long Term Plan, means that the letting of this contract is not significant in terms of Section 76 of the Local Government Act 2002.

Recommended Option

35      This report and its attachment provide an outline of the proposed programme of 2016/2017 Pavement Rehabilitations and an indication on how these may be procured.

36      The proposed procurement methodologies have been chosen to balance minimising professional services inputs with obtaining competitive prices and managing risks and price certainty.

37      The overall aim is to obtain value for money. For these projects it is proposed that all be tendered on a Lowest Price Conforming basis.

38      It is recommended that the Committee endorse both the proposed programme of works and procurement methodologies, including that all projects be let under staff delegated authority.

Next Steps

39      For projects to be designed and released for procurement.

 

Attachments

a             Roading Pavement Rehabilitation Programme 20172018 projects    

 


Services and Assets Committee

15 November 2017

 


 


 


 


 


 


 

 


Services and Assets Committee

15 November 2017

 

Roading Operations October 2017

Record No:             R/17/10/25726

Author:                      Dylan Rabbidge, Commercial Lead Roading

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

1       SouthRoads currently have the Waimea and Central Alliance maintenance contracts with Fulton Hogan having the Foveaux Alliance.

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; 75 Requests for Service (RFS), across the three Alliance contracts were received in October with two not completed on time.  2016/17 78 RFS’s were received in October.  The two RFS’s not completed on time were due to an administration error on the contractors behalf (not closed off in time), however the work was completed on time. 

4       Health and Safety; one near miss was reported for October with no Lost Time Injuries reported. 
13 Site Safety Audits were completed in October.

5        Activity Performance:

·              Metalling, 10,562 m3 or 19.4% is completed Year to Date.

·              Grading, 4,407 km have been graded Year to Date.

·              2017/18 Pre-Reseal Repairs, 154 of 157 sites have been released for inspection. 
The length completed is 153.72 km of 157.32 km or 97.71%.

·              Stabilisations, 10,365 m2 (100%) have been completed.

·              Edge Break, 28,513 m2 (100%) has been completed.

·              2018/19 reseal sites have been released to the contractors with the repairs expected to be marked up in October and November with repairs beginning in earnest.

6        Risk and Strategy;

·              Slips, Brydone Glencoe has had a Willow wall installed with this site to be monitored and remaining pavement works to be completed later in the season dependent on results.  The roading team have received the draft Geotechnical and Risk Assessment report on the Chaslands Highway slip options.  It is expected that this can now be moved along with a design due to be commenced in November. 

·              Roads, Mataura Island-Titiroa Bridge underwent a “push test” on Friday, 3 November.    This involved using a 20 tonne digger to push on the piles.  This test is designed to test the connections between the piles and the bridge superstructure.  It is expected that a report from Stantec will be received in early November.  The bridge will remain closed until this report and subsequent recommendations are received.

Financial

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

8        Alternative Coastal Route Seal Extension

·              The Project Status Report is attached.

 

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Roading Operations October 2017” dated 7 November 2017.

 

 

Attachments

a             October - Project Status Report - Alternative Coastal Route

b             Combined A3 Report - October

c             Central Alliance Summary Report October 2017

d            Waimea Alliance Summary Report October 2017

e             Alliances Health and Safety Report October

f             Foveaux Alliance Summary Report 2017

g            Foveaux Alliance Safety Report - October 2017    

 


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Services and Assets Committee

15 November 2017

 

Development of the Business Case in Support of Kepler Options

Record No:             R/17/11/27034

Author:                      Ian Evans, Strategic Manager Water and Waste

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        To provide an update to the Services and Assets Committee on the development of the Te Anau Wastewater Business Case.

Executive Summary

2       At its meeting on 17 May 2017, Council asked officers to proceed with development of a business case for the upgrading of the Te Anau Wastewater Scheme. It also asked that officers develop selection criteria and a process via which possible alternative disposal sites might be identified.

3       This report provides an update on the progress being made with development of the business case. The Business Case currently considers scoring of options that can be undertaken under the current consent, or with a variation to that consent on the Kepler site. It may be appropriate to review these depending on the any Council decision around alternative site selection which will be considered in December

4       It is anticipated that a draft of the finalised business case can be brought to elected members by November 2017 with a decision to be made on whether to grant formal approval by December 2017. The Business Case has incorporated comments from Alan Bickers who sits on the Te Anau Wastewater Discharge Project Committee. The attached draft version now includes a procurement plan and timeline as well as financial analysis and detailed risk register.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Development of the Business Case in Support of Kepler Options” dated 10 November 2017.

b)           Determines that this matter or decision be recognised as 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)         Notes the process that has been followed to develop a Business Case for the
Te Anau
Wastewater Project.

e)         Recommends to Council the adoption of the Business Case Development of the Business Case in Support of Kepler Options.

Background

5       At its meeting on 17 May 2017 Council asked officers to proceed with development of a business case for upgrading of the Te Anau Wastewater Scheme using the consented Kepler option.

6       It also asked that officers develop selection criteria and a process via which possible alternative disposal sites might be identified. This report provides an upgrade on the progress being made with development of the Kepler business case and seeks comment on the work undertaken to date. The Business Case currently considers scoring of options that can be undertaken under the current consent, or with by a variation to that consent.  Overall, four options have been evaluated with the highest ranking option being the consented proposal.

7       The Wastewater Project Committee have previously been advised of the following high level timetable for the development of the business case. The dates in this table represent targeted dates and there is likely to be movement in them as work is progressed and particularly as drafts of the business case are reviewed:

Task

Due By

Completed by

Provide TAWC a copy of the business case project problem definition, investment objectives, and constraints.

31/8/17

Complete

Advertise alternative site criteria.

1/9/17

Complete

Report to Council on business case project problem definition, investment objectives, and constraints.

27/9/17

Complete

Provide to Council the initial business case draft on the Kepler options - as these are the ones that are currently known.

30/9/17

Complete

TAWC meeting to discuss the initial business case draft and get comments.

17/10/17

Complete

Close off date for expressing interest in providing an alternative site.

11/10/17

Complete

Consideration of the alternative sites identified.

25/10/17

Ongoing

Meeting with TAWC to discuss alternative sites and process from here.

9/11/17

Complete

Report to Council on the outcome of the alternative site process.

15/11/17

Services and Assets Committee 15/11/2017

Finance and Audit Committee 16/11/2017

Business case report to Council  

13/12/17

 

8       The detailed business case is being developed following the models used by both Treasury and NZTA in support of development of significant infrastructure investment decisions, albeit somewhat modified to reflect the scale of investment and the relatively advanced nature of the project.

9       Typically the business case is a multi-stage process based on the following assessments:

·                      Strategic assessment - what is the need?

·                      Economic assessment - generally to demonstrate value for money against any viable alternatives.

·                      Commercial assessment - can it be delivered and what are the options in terms of procurement/delivery models?

·                      Financial assessment - is it affordable and what are the funding sources (loans, contributions etc) referenced through the LTP?

·                      Management assessment - can it be successfully delivered including any further consenting requirements?

10     For the purposes of the current document the above five elements are being combined into one single document with some amendments to headings and terminology. The Economic Assessment, for example, is called an Options Assessment.

11     The Commercial, Financial and Management assessments will be replaced with the Procurement Approach, Financing and Funding Arrangements and Timeframe sections in the final version of the business case. The document is a live draft and has been updated incorporating comments from a representative of the Te Anau Wastewater Discharge Project Committee. 

12     Any business case should clearly identify the problem or issue that is being addressed, the reasons why investment is necessary and the assumptions around what realistic options are available to address the issue/problem. 

13     The current business case has used the Treasury model which has been amended to a more ‘user friendly’ wording following advice/guidance from Committee Member Bickers who has reviewed the case on behalf of Committee Members.

Issues

14      At its meeting on 27 September, Council confirmed the Problem Statement (Need), Investment Objectives and Constraints being used to guide development of the Te Anau Wastewater Business Case. Based on comments received from Council, individual Committee Members and member Bickers the Business Case has been further developed and is presented as Attachment A.

15      It is important to reiterate that the only options considered  are based around further treatment and disposal to the Kepler Block given that this is the site that Council currently has consent for, but noting that this may change subject to identification of a more suitable alternative site through the registration of interest process.

16      The four options considered at Kepler are outlined within the Business Case document and can be broadly summarised as:

·                        Option 1 Consented Option – pipeline to Kepler with irrigation via centre pivot with provision of land treatment via nutrient uptake through pasture and bacteria die off from both UV radiation from natural sunlight and also as treated wastewater passes through the soil. Additionally odour risk would be controlled by a trickling filter.

·                        Option 2A - this is essentially similar to option 1 with addition of a membrane filter at the oxidation ponds to treat flows up to 2000m3. This would provide additional treatment for the majority of occasions.

·                        Option 2B - This is essentially the same as option 1 but with a membrane filter sized to treat flows to the consented peak of 4500m3.

·                        Option 3 - This is similar to option 2B with membrane treatment up to peak flow of 4500 m3 but with further land based treatment through sub surface drip irrigation rather than centre pivot irrigation.

17      The Business Case further outlines the criteria by which the alternatives were scored relative to each other, with a favoured option being identified. Options were scored independently by each member of an evaluation panel with final agreement of scores agreed through a final ‘arbitration’ process. All information on the scoring evaluation and scoring process is included in the Business Case.

18      Following scoring of all options the consented proposal (Option 1) scored as the highest ranked option, with Option 2A scoring only slightly less albeit incurring additional capex of $2.9 million. Option 1 will remain Council’s preferred option subject to identification of suitable alternative available land. Should such land become available Council must decide whether any option for further treatment and disposal should be developed to the point where it can be scored using the same constraints and criteria outlined in the Business Case and noting key constraints.

19      Following on from the Committee meeting on 17 October officers have continued to develop the business case, which is now largely complete albeit still in draft form pending feedback and endorsement from both the Services and Assets and Finance and Audit Committees. 

Factors to Consider

Legal and Statutory Requirements

20      It is noted that all decisions of the Council are subject to the decision-making provisions detailed in Part 6 of the Local Government Act 2002. In broad terms, these provisions require that the Council assess the advantages and disadvantages of each reasonably practicable option.

21      The extent of consideration given should have regard to the level of significance of the proposed decision.

22      Under section 14 of the Local Government Act 2002 Council is required to undertake commercial transactions in accordance with sound business practice. A decision on a significant capital investment, such as that involved with the upgrading of the Te Anau Wastewater scheme would fall within this definition.

Community Views

23      There are a number of different groups or sections of the community whose views need to be considered as Council proceeds through the process of making a decision on which option to pursue. These include:

·              The residents and communities of Te Anau and Manapouri. FSO is an organisation that purports to represent the views of a number within these communities.

·              The district wastewater user community who will be collectively required to fund the final solution through a targeted rate.

·              All district ratepayers who ultimately carry a level of responsibility and risk for all Council activities.

·              Tangata whenua. Note that under section 77(1)(c) of the Local Government Act 2002 there is a requirement for the Council to take into account the relationship of Maori with their ancestral land and waters if the decision being made is considered to be significant. It is clear that a decision about how to dispose of wastewater for Te Anau would be such a decision given that the Lake is a natural state waterbody and statutory acknowledgement area.

·              Stakeholder groups and organisations with an interest in the Te Anau Catchment.
These include Fish and Game NZ, Guardians of the Lakes and Department of Conservation.

24      In making the decision to proceed with the development of a business case for the Kepler option Council has taken the views of these stakeholders into account. These include recognition of the fact that there are a number of people within the Te Anau and Manapouri communities who are concerned about the current Kepler consented option.

25      It is relevant that Council continue to consider the full range of views that exist as it considers the appropriateness of the criteria proposed through this report.


 

Risk Analysis

The Business Case considers the Key risks to Council through the endorsement of the business case and also includes a full detailed risk register with proposed mitigation measures.

Overall the most significant risk is associated with the impact of further delays to the project to continue further investigation of alternative sites. The current consent to discharge to the Upukerora expires by December 2020 and Council must have any new consent arrangements in place and scheme constructed by that date to be able to continue operating. Currently the procurement plan section of the Business Case indicates that the preferred option can be delivered at Kepler ahead of this date. Delaying the project further to allow further investigation work increases the risk that this date would not be met.

Under the terms of Reference for the Finance and Audit Committee there is a responsibility to review, refine and comment on the overall risk register included within the Business Case.

Costs and Funding

26      At this stage the draft 2018-28 Long Term Plan (LTP) includes a budget of approximately $14.7 million. This is the cost estimate included in the business case for the preferred option, with inflation added for year two. The updated business case identifies additional capital expenditure required from the amount included in the 2015-25 LTP to complete the work. This has arisen largely as a result of review of contract rates and additional scope around pipeline design.

27      Also included in draft 2018-28 LTP are changes to the operational expenditure included based on the business case.  These costs have changed from the 2015-25 LTP.  The most significant operational cost change is that the cut and carry operational will break even rather than produce a surplus that can be used to offset any other costs.

28      All operational expenditure is funded directly from rates in the year that it is incurred.  Capital expenditure is to be funded from available development contributions and depreciation reserves, with the remainder funded by loans over 30 years.  The loans are serviced directly from the district wastewater rate.

29      The impact of the preferred option on the district wastewater rate (along with all other work programmed) in the draft 2018-28 LTP is:

Year

2018 /19

2019
/20

2020
/21

2021
/22

2022
/23

2023
/24

2024
/25

2025
/26

2026
/27

2027
/28

Percentage increase

2.15%

2.56%

9.51%

0.86%

5.50%

5.59%

6.50%

2.44%

2.01%

2.32%

Rate (excl GST)

$397

$408

$446

$450

$475

$502

$534

$547

$558

$571

30     The GST exclusive rate for district wastewater in 2017/18 is $389 and increases to $571 in 2027/28.  Residential ratepayers are impacted by GST inclusive rate of $448 in 2017/18 increasing to $657 in 2027/28.

31      The appropriateness of this cost estimate, and the current LTP budget assumptions, will need to be considered further once the financial costs and risks associated with development of the Kepler option, and any others that Council may want to consider further, have been reviewed as part of the current business case process and decisions are made about whether Council has a desire to investigate an alternative disposal site.

32      It is likely that investigation of any alternative would need to be undertaken concurrently with the development of the Kepler option if the December 2020 deadline is not able to be moved.  Currently the draft 2018-28 LTP has $500 thousand allowed for investigation into alternative sites, funded from reserves.  Any funds not required for investigation of the alternative sites will be used to reduce the loan required to fund the capital expenditure.  This will reduce the loan repayments required to be funded from rates in future years.

Policy Implication

33      It is noted that procurement of the preferred option will be undertaken in line with Councils current Procurement Policy.

34      The funding mechanisms proposed are in line with the current Revenue and Financing Policy.

35      Council’s external debt levels as a result of this project will be line with Council’s Investment and Liability Management Policy.  The policy requires that net external debt not to exceed 100% of total revenue.

Project Committee Feedback

36      Member Bickers has undertaken a critical review of the Business Case on behalf of the Te Anau Discharge Project Committee and has offered a number of comments that have been incorporated into the attached document.

37      Services and Assets Committee Members now have the opportunity to provide comment and recommend any potential amendments to the Business Case. 

Alternative Site Options

38     Following 17 May, Council decision a set of criteria and process for identification of possible alternative disposal sites were developed and subsequently approved by the Project Committee.

39     Council has advertised for expressions of interest for alternative sites that people may wish to sell to Council. A number of criteria have been developed based on the type and area of land Council would require if it was to look at land availability for any new wastewater discharge. The criteria were initially advertised on 1 September 2017 with any expressions of interest required to be with Council by 11 October. A separate report outlines the process and provides information on how any such alternatives will be evaluated.


 

40     If potentially suitable site(s) are identified there will be a need for Council to make a decision on whether to proceed with a detailed investigation programme for that site knowing the timescales involved with the investigation and consenting phases of the process. This work would likely need to proceed in parallel with work on the consented Kepler option.

41     The Services and Assets Committee are reminded of a resolution of Council from it meeting of 16 November 2016 where it ‘Agrees that it is unacceptable for the Council to not have a consented discharge for the Te Anau Wastewater Scheme’.

Analysis

Options Considered

42     The options considered are to endorse the Business Case as presented, endorse the Business Case with amendments or not endorse the Business Case. 

Analysis of Options

Option 1 – Endorse the Business Case as presented

Advantages

Disadvantages

·        Will allow progress to be made with development detailed design

·        Provides greater degree of certainty that critical timelines can be met

·        Enables the Committee to bring to Council’s attention any relevant matters that Council should consider in making a decision on the business case.

·        None identified.

Option 2 - Endorse the Business Case with amendments

Advantages

Disadvantages

·        None identified.

·       Business case as drafted may not fully reflect all relevant matters.

·       May add degree of risk that critical timelines will not be met if any amendments result in delays to the current timeline outlined through the Business case.

Option 3 - Do not Endorse the Business Case

Advantages

Disadvantages

·        None identified.

·       Business case as presented may not fully reflect all relevant matters.

·       Adds risk that critical timelines around expiry of the current consent will not be met.

Assessment of Significance

43      The decisions that Council is making on how to proceed with the development of a new long term solution for the disposal of Te Anau Wastewater is significant. It involves a significant level of capital investment on an important piece of Council infrastructure.

Recommended Option

44       It is recommended that the Services and Assets Committee endorse the Business Case either as presented or subject to amendment with approval to present the final version to Council for approval at its meeting on 13 December 2017.

Next Steps

45      Work will continue to finalise the Business Case with a view to presenting to Council for approval on 13 December 2017.

 

 

Attachments

a             Te Anau Business Case - Kepler Option     

 


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Services and Assets Committee

15 November 2017

 

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

Record No:             R/17/10/25728

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 86% for September.

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 bacteriological standards.

Compliance (Environmental)

There was one non-compliant test reported.  E-Coli concentration exceeded at Ohai.  This result has been investigated and operational procedures reviewed.

Operations and Maintenance

5        Service request calls for the month were 59; which is consistent with historical trends.

Financial

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

Customer Service

7        There were 59 service requests received with 57 inspected within response time, no odour complaints.

Health and Safety

8        There were no incidents reported.

Quality Assurance

9        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 September 2017” dated 8 November 2017.

Attachments

There are no attachments for this report. 

 


Services and Assets Committee

15 November 2017

 

Update on Contract Status

Record No:             R/17/10/25793

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 register tracks Roading, Water and Waste and Property Divisions operations and capex contracts.  This report only updates the status of the Community Services contracts.

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

Purpose

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

Summary

4       Community Service Contracts as at 26 October 2017

Department

Current

Due Soon

Work in Progress

Overdue

Total

Community Engineers

26

1

5

8

40

Property

18

 

2

 

20

Property – land related

2

 

3

 

5

 

46

1

10

8

65

 

Overview

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

Type of Service (CE’s)

Number

Type of Service (Property’s)

Number

Beautification

22

Land related

5

Beautification / cleaning (townships)

3

Major projects

2

Cleaning (public toilets)

13

Hall Custodians

6

Project

1

Compliance

1

Lease

1

Cleaning (offices and libraries)

11

SUB TOTAL

40

 

30

 

6        Community Engineers contracts cover township Maintenance, mowing, gardening and cleaning of public toilets.

7        Some cleaning of toilets and mowing areas are covered within the Roading Alliance Contracts.

Analysis

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

9        Of the ten that are Work In Progress:

·        Three are land related regarding land tenders or grazing and with the Property Officer.

·        Four are in the tender phase for Wyndham Hall Custodian, Regional Tree maintenance, Wyndham Footpaths and Head Office Needs Assessment

10      Three are for Beautification contracts either new or being extended.

Risk and Strategy

11      None.

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 “Update on Contract Status” dated 10 November 2017.

 

 

Attachments

There are no attachments for this report. 

 


Services and Assets Committee

15 November 2017

 

Forestry Operations - Financial Report to 30 September 2017

Record No:             R/17/10/25719

Author:                      Ben du Mez, Graduate Accountant

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Summary Financial Statements

Overview

1        Financial reporting on Council’s forestry operations have been reviewed by management and finance staff to improve the way the financial information is presented. The key areas identified for improvement include providing more graphical information and reducing the level of detail to focus on the key areas of interest. Staff also hope to incorporate an analysis of actual and budgeted log sales volume and prices in future reports. Staff welcome any feedback from the committee on the revised reports, or suggestions for further improvements in future reporting.

Income

2        Income for the year to date totals $1.02 million, with 9,500 tonnes of log sales from Ohai. Harvesting of the remaining planned programme (39,000 tonnes) in Waikaia and Ohai is anticipated to commence early 2018. Harvesting in the current year will differ from the annual plan budget, with harvesting planned for Dipton in the current year, actually occurring in prior to 30 June 2017. The income and expenditure associated with the Dipton harvesting are still included in the budgets for this report, however they will be removed as part of the October forecasting.

Expenditure

3        Total expenditure for the year to date is $671K. Expenditure for the year to date predominantly relates to harvesting costs in Ohai. Expenditure in Dipton primarily relates to seedling purchases and tree planting subsequent to the recent harvesting.

 

Net Surplus

4        At 30 September 2017, the forestry activity has a $441K surplus for the year to date. Of this surplus $353K relates to harvesting activities and $88K relates to a gain in value on emissions trading units held. The forestry activity is currently anticipated to have a surplus of $1.18 million for the financial year ended 30 June 2018.

Emissions Trading Units

5        The following data shows the change in value of SDC’s Emissions Trading Units (ETU’s) for the current year (based on units held at 30 June 2017). Changes to the number of ETU’s held as a result of current year forestry operations will be reflected at 30 June 2018.

Capital Expenditure

6        No capital expenditure is budgeted in the current year.

 

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Forestry Operations - Financial Report to 30 September 2017” dated 10 November 2017.

 

 

Attachments

There are no attachments for this report. 

 


Services and Assets Committee

15 November 2017

 

IFS Growth Forest Manager's Report of Forestry Activity for the period to 30 September 2017

Record No:             R/17/10/26006

Author:                      Ian Marshall, Group Manager Services and Assets

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Report Summary

1        The IFS Growth Forest Manager’s Reports advise of forestry activity for the period to 30 September 2017.

Southland District Council Forestry Activity

2        The IFS Growth Forest Manager’s reports received are attached.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “IFS Growth Forest Manager's Report of Forestry Activity for the period to 30 September 2017” dated 10 November 2017.

 

 

Attachments

a             IFS Report to Services and Assets Committee to be held 15 November 2017

b             IFS Long Term Plan Harvest Areas    

 


Services and Assets Committee

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