Notice is hereby given that a Meeting of the Te Anau Wastewater Discharge Project Committee will be held on:

 

Date:                            

Time:

Meeting Room:

Venue:

 

Thursday, 9 November 2017

10.00am

Community Room
Fiordland Events Centre
Te Anau

 

Te Anau Wastewater Discharge Project Committee Agenda

OPEN

 

 

MEMBERSHIP

 

Chairperson

Mayor Gary Tong

 

Members

Alan Bickers

 

 

Rachel Cockburn

 

 

Shirley Mouat

 

 

Don Mowat

 

 

Allan Youldon

 

Councillor

Ebel Kremer

 

 

IN ATTENDANCE

 

Chief Executive

Steve Ruru

 

Group Manager Services and Assets

Ian Marshall

 

Manager Water and Waste Services

Ian Evans

 

Committee Advisor

Jenny Labruyere

 

 

 

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 for Te Anau Wastewater Discharge Project Committee

 

The Te Anau Wastewater Discharge Project Committee shall assist the Southland District Council to progress implementation of the Te Anau Wastewater Discharge Project in accordance with the project scope approved by Council and the Deed of Agreement that it has entered into with Fiordland Sewerage Options.

 

The Committee is required to provide guidance and assistance to the Council as it proceeds with meeting its obligations under the Deed and subsequent implementation of its preferred option.

The specific responsibilities of the Project Committee are to:

a)                   Provide advice on how the Council might progress implementation of the Deed of Agreement it has with FSO

b)                   Provide advice on how it might undertake the investigation of the Smith Block in accordance with the programme and budget approved by Council

c)                   Provide advice on how Council might consult with and communicate with the community, affected parties and other stakeholders in an appropriate manner about the project and the disposal of wastewater generated in Te Anau

d)                   Monitor the progress that is being made in progressing the evaluation of the Smith Block given the regulatory and timeframe constraints within which Council needs to operate. These include the need to ensure that Council has a consented wastewater discharge option available at all times

e)                   Assist with the development of a robust business case for Council consideration in relation to the treatment and disposal systems which should be developed to meet the needs of the Te Anau community into the future

f)                    Monitor the progress that is made in delivering on the overall project, and any sub-projects, relative to the approved milestones, budgets and project scope and business cases

g)                   Provide guidance and where appropriate recommendations to Council, on how any variations between actual and planned delivery might be best addressed

h)                   Ensure that appropriate reporting systems are maintained to provide accurate and timely information to the Committee and Council

i)                     Provide advice to Council on the assessment of project risks and appropriate mitigation strategies given the overall scope of the project

j)                     Assist with providing information to the Te Anau Community Board and the Manapouri Community Development Area Subcommittee on the project

k)                   Recommend to Council any changes to the project objectives, timelines, budget and deliverables that the Committee consider might be required

l)                     Ensure that Committee decisions and processes are well documented in accordance with Council policies and its statutory requirements.

 

The Te Anau Wastewater Discharge Project Committee has delegated authority to provide advice and monitor the progress being made with the project in accordance with the responsibilities outlined above.

 

The Project Committee does not have delegated authority in relation to the following matters:

a)                   The expenditure or committal of Council funds

b)                   Approval of project timetable(s) and budget(s) within which the different stages of the project need to be progressed

c)                   Negotiation and approval of any Land Access, Acquisition or Disposal Agreements

d)                   Approval of the final business case and/or decisions in relation to the type of treatment and disposal systems to be developed

e)                   Approval of the procurement strategy and/or methods to be used for services and other works which need to be progressed as part of the project

f)                    The approval of any tenders or other expenditure associated with the project

g)                   Negotiation, approval or limitation of any other contractual arrangements that Council might have and/or put in place including with its staff.


Te Anau Wastewater Discharge Project Committee

09 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

7.1         Management Report - Te Anau Wastewater Discharge Project                                          13

7.2         Development of the Business Case in Support of Kepler Option                                       17   

Public Excluded

Procedural motion to exclude the public                                                                                                       165

C8.1      Evaluation of Alternative Sites                                                                                                             165  

 


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 Te Anau Wastewater Discharge Project Committee, held on 17 October 2017 .


 

Te Anau Wastewater Discharge Project Committee

 

OPEN MINUTES

 

UNCONFIRMED

 

 

Minutes of a meeting of Te Anau Wastewater Discharge Project Committee held in the Council Chambers, First Floor, 15 Forth Street, Invercargill, on Tuesday, 17 October 2017 at 2.00pm.

 

present

 

Chairperson

Mayor Gary Tong

 

Members

Alan Bickers

 

 

Rachel Cockburn

 

 

Shirley Mouat

 

 

Don Mowat

 

 

Allan Youldon

 

Councillors

Ebel Kremer

 

 

Brian Dillon

 

 

IN ATTENDANCE

 

Chief Executive

Steve Ruru

 

Group Manager Services and Assets

Ian Marshall

 

Manager Water and Waste Services

Ian Evans

 

Committee Advisor

Jenny Labruyere

 

Community Partnership Leader

Simon Moran

 

 

 

 

 

 

 

PUBLIC FORUM

 

 

 

 

 

A Paton McDonald

 

 

R Smith

 

 

 

 

 

 

 

 

1             Apologies

 

There were no 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 Kremer, seconded Member Mouat 

Confirms the minutes of Te Anau Wastewater Discharge Project Committee, held on 11 August 2017.

 

Reports

 

 

7.1

Update on National and Regional directions on Water Quality

Record No: R/17/10/24422

 

Courtney Ellison, Senior Resource Management Planner, presented the report.

 

Ms Ellison outlined the purpose of this report is to provide an update to the Committee on the changing regulations in relation to managing water quality and how this could relate to the provision of Council infrastructure such as wastewater.

 

Ms Ellison advised the management of water quality nationally has become an increasingly important issue. There are a number of layers of regulation to be considered when managing water that is relevant in relation to the Te Anau Wastewater Discharge  consent, such as the following;

  • National Policy Statement for Freshwater Management 2014 review
  • Catchment Limit Setting Process
  • Regional Policy Statement
  • Water and Land Plan
  • Te Anau Wastewater Consents: it is important to note that with both the changes the NPS for Freshwater Management and the introduction of the Proposed Water and Land Plan there are now much greater requirements that would need to be met in order for consent to be granted. Improvements may need to be made to the quality of the water before it is discharged into the Upukerora in order to meet these more stringent requirements.

Members questioned how to manage the scheme in the event of an emergency and what steps would be taken to identify and deal with such in the future, and whether provision for risk management would be considered prior to undertaking the project.

Staff responded to the issues raised.

 

 

Resolution

Moved Member Mowat, seconded Member Cockburn 

That the Te Anau Wastewater Discharge Project Committee:

a)            Receives the report titled “Update on National and Regional directions on Water Quality” dated 10 October 2017.

 

 

 

7.2

Development of the Business Case in Support of Kepler Options

Record No: R/17/10/24190

 

1          Simon Moran, Community Partnership Leader, and Ian Evans, Strategic Manager Water and Waste, presented the report.

Mr Moran outlined the purpose is to provide an update to the Te Anau Wastewater Discharge Project Committee on the development of the Te Anau Wastewater Business Case.

2          Mr Moran advised that 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          Mr Moran added that the 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.  He stated it may be appropriate to review these depending on the outcome of the alternative site selection process but this is a decision that will need to be made by Council at a later date.

4          Mr Moran informed that Council has also called for expressions of interest for possible alternative disposal sites based on a set of criteria that were approved by the Project Committee.

5         

Mr Moran advised that it is anticipated that a draft of the finalised business case can be brought to Council by November 2017 with a decision to be made on whether to grant formal approval by December 2017.

Mr Evans advised that the four options outlined for consideration at the Kepler block within the Business Case document are in summary;

  • 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 4500m3 but with further land based treatment through sub surface drip irrigation rather than centre pivot irrigation.

In summarising Mr Evans advised Option 1 is the preferred solution, being the considered discharge of oxidation pond treated wastewater to the Kepler Block by central pivot irrigation.

Mr Evans advised the next steps are to identify the Procurement Approach, the Financing and Funding Arrangements and the Timeframe for the preferred option.

Furthermore, Mr Evans added that if other options become available, particularly in response to the request for land that is currently open, they will be reviewed against criteria and then against the Key Constraints as outlined in the Business Case.

Mr Alan Bickers outlined his review work in relation to a draft Business Case for land treatment and disposal options for the Kepler Block; this included a new Option 2A analysis of the four options the key values, weightings, and risk analysis along with the methodology explaining the Business Case and scoring guidelines.

Mr Bickers stated that he considers that the business case has been well prepared and provides sufficient information to assist with confident decision making by the Te Anau Wastewater Discharge Project Committee and the Council.

During lengthy discussions on the report members raised a number of questions for clarification including the following;

  • Concern at the opex costings provided in regard to farming practice and baleage budgets.  Members requested assistance from a farming consultant in conjunction with MWH and staff to validate the figures provided to date.
  • Clarification as to the long term effect of irrigation on the soils
  • Why Manapouri future disposal has been included in the consent
  • Concern expressed at current consent to discharge at the Upukerora River expiry date; what are the conditions, costs and impacts of the requirements and time lines for the various steps of the consent to be met
  • Acknowledgement of the impact of the project on the restrictions and development of i.e accommodation and hanger development at the Te Anau Airport Manapouri .

 

 

 

Resolution

Moved Cr Kremer, seconded Member Cockburn 

That the Te Anau Wastewater Discharge Project Committee:

a)            Receives the report titled “Development of the Business Case in Support of Kepler Options” dated 12 October 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 process that is being followed to develop a Business Case for the
Te Anau
Wastewater Project.

e)         Considers the Business Case that will be presented in the public excluded section of the meeting.

 

 

7.3

Management Report October 2017

Record No: R/17/10/24196

 

1               Mr Evans, Strategic Manager Water and Waste, presented the report.

2                

3               Mr Evans advised that the purpose of this report is to keep Committee members updated on the progress of works being undertaken within the Te Anau and Manapouri areas that are not necessarily related to the larger discharge consent project. 

2          It was noted the report will be updated and presented at all upcoming Committee meetings. 

Mr Evans advised this information is up to date as of the week commencing 9 October 2017. Issues or projects reported as complete in previous reports have now been removed if there is nothing further to update the Committee on.

In discussing the report members sought an update is to progress on the Upukerora River defence works.  The Chief Executive advised he would pursue this matter for update.

 

 

 

 

Resolution

Moved Mayor Tong, seconded Cr Kremer 

That the Te Anau Wastewater Discharge Project Committee:

a)            Receives the report titled “Management Report October 2017” dated 12 October 2017.

 

 

Public Excluded

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

Resolution

Moved Member Cockburn, seconded Member Youldon 

That the public be excluded from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

C8.1      Procedure for Evaluation of Alternative Land

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Ground(s) under section 48(1) for the passing of this resolution

Procedure for Evaluation of Alternative Land

s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

 

s7(2)(i) - The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

 

That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists.

 

That the relevant staff be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items Procedure for Evaluation of Alternative Land. This knowledge, which will be of assistance in relation to the matters to be discussed, is relevant to those matters because of their knowledge on the issues discussed and meeting procedure.

 

The public were excluded at 2.05pm.

 

Resolutions in relation to the confidential items are recorded in the confidential section of these minutes and are not publicly available unless released here.

 

 

The meeting concluded at 2.30pm                       CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Te Anau Wastewater Discharge Project Committee HELD ON 17 OCTOBER 2017.

 

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

 

 

 

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

 


Te Anau Wastewater Discharge Project Committee

9 November 2017

 

Management Report - Te Anau Wastewater Discharge Project

Record No:             R/17/10/26150

Author:                      Ian Evans, Strategic Manager Water and Waste

Approved by:         Ian Marshall, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Purpose

1        The purpose of this report is to keep Committee members updated on the progress of works being undertaken within the Te Anau and Manapouri areas that are not necessarily related to the larger discharge consent project. 

2        The report will be updated and presented at all upcoming Committee meetings. 

3        This information is up to date as of the week commencing 30 October 2017. Issues or projects reported as complete in previous reports have now been removed if there is nothing further to update the Committee on.

Status Report on Ongoing Work

4       Discharge Consent Application

·                      Consent was granted 15 January 2015.

·                      Three appeals were subsequently lodged with the Environment Court (EC).

·                      Both Council and appellants agreed to participate in court appointed mediation.

·                      Response to EC was lodged by Environment Southland (ES) on 29 May 2015 indicating the position of all parties to the appeal.

·                      Further hold until 18 December, with the expectation this will be extended pending the outcome of the peer review.

·                      Council’s legal advisors reviewed the Pattle Delamore Partners (PDP) report and provided legal advice on implications of the peer review outcomes.  They also prepared a response to the EC.

·                      Court appointed mediation occurred on 20 and 21 June 2016.  An update of the outcome of the mediation process is included in an additional report on the agenda for 6 July meeting.

·                      Appeal settled December 2016 with execution of Deed of Agreement.

·                      Business case in support of consented proposal is being progressed in parallel with the development of criteria to be considered if alternative discharge locations are identified.


 

5       Upukerora Flood Defence Work

·                      ES is proposing flood defence work both upstream and downstream of the Upukerora Bridge.

·                      ES claims that work is necessary to protect both the bridge and Council’s oxidation ponds should the river deviate from its current course.

·                      ES indicates that any significant deviation could cause oxidation ponds to be inundated in the event of a significant flood.

·                      Any flood event will also increase the risk of the Upukerora Road downstream of the ponds being washed out.

·                      Risk of inundation also arises from not managing gravel levels in the river bed.

·                      Currently there is little demand for gravel and as a consequence, levels have increased over those previously measured.

·                      Meeting on 26 May 2015 discussed proposed works.

·                      As an outcome of the meeting, ES will investigate feasibility and costs of a proposed alternative. 

·                      The alternative proposal has been assessed and a draft with costs provided to Council on 24 July 2015. 

·                      Meeting with senior Council and ES staff agreed to delay the decision until the outcome of the peer review is known and understood as this may have implications for the degree of protection work required.

·                      Stakeholder meeting held at ES in December 2016 where expert parties for ES and the River Committee agreed to review proposed options and confirm viability.

·                      A further meeting of stakeholders was held on 19 May 2017. The main outcome of the meeting were that engineering consultants engaged by Environment Southland and the River Liaison Committee were in agreement on the range of issues and effectiveness of potential solutions, both for further work upstream and downstream of the state highway bridge. It was also agreed that an active gravel management programme was also needed downstream of the bridge to ensure the long term success of the flood defence work.

·                      No further update to date.

6       Contact Tanks at Te Anau and Manapouri Water Treatment Plants

·                      Full assessment of the condition and serviceability of the contact tanks at both
Te Anau and Manapouri water treatment plants will be undertaken in the upcoming financial year.

·                      Design work to be undertaken in 2017/18 financial year.

7       Finance and Risk

·                      Financial estimates and risk registers have been developed and will be presented to the Committee at future meetings once they have been aligned to Council’s Risk Management Policy.

·                      These issues will form part of the business case approach that Council are using to progress the project.

Development of Business Case

8          Regardless of which option Council decides to pursue a Detailed Business Case will need to be developed.  The business case would:

·              outline the strategic goals and overall intent of the proposal

·              outline the preferred option and provide an analysis of the costs, benefits and risks of the short-listed options

·              detail a suggested approach to procurement and seek approval to proceed to the next stage of development

·              detail the proposed funding arrangements

·              outline the proposed management arrangements for delivery of the project

·              identify the range of stakeholders who need to be kept informed during the implementation of the project.

 

9          The Te Anau Wastewater Discharge Project Committee has a role to assist with the development of the business case.  The business case, the project budgets and decisions on how the project are to proceed are, however, ultimately decisions for the Council to make.

10        Elements of the business case are currently being drafted and will be presented to the Committee for approval in due course.

11        The approach to using a business case has originated from Treasury and been adopted by a number of organisations to enable justification of large scale infrastructure projects. 
The business case has been reviewed on behalf of the Committee by member Bickers.

 

Recommendation

That the Te Anau Wastewater Discharge Project Committee:

a)            Receives the report titled “Management Report - Te Anau Wastewater Discharge Project” dated 6 November 2017.

 

Attachments

There are no attachments for this report. 

 


Te Anau Wastewater Discharge Project Committee

9 November 2017

 

Development of the Business Case in Support of Kepler Option

Record No:             R/17/10/26182

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 Te Anau Wastewater Discharge Project Committee on the development of the Te Anau Wastewater Business Case.

Executive Summary

2       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.  It may be appropriate to review these depending on the outcome of the alternative site selection process but this is a decision that will need to be made by Council at a later date.

3       It is also noted that Council has also called for expressions of interest for possible alternative disposal sites based on a set of criteria that were approved by the Project Committee. This period closed on 11 October with expressions currently being evaluated.

4       It is anticipated that a draft of the finalised business case will be brought to Council in November 2017 with a decision to be made on whether to grant formal approval by December 2017. The Business Case was updated following comments from Member Bickers and now also includes a procurement plan and timeline which will be further developed to include an evaluation of the risk profile associated with the recommended approach.

5       A further review of operating costs and assumptions around baleage and dry matter production was undertaken following discussions between Dr Tony Daveron and a local agricultural business consultant with detailed knowledge of the Southland market.

 

Recommendation

That the Te Anau Wastewater Discharge Project Committee:

a)            Receives the report titled “Development of the Business Case in Support of Kepler Option” dated 6 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)         Notes the process that is being followed to develop a business case for the
Te Anau
Wastewater Project.

e)         Provides comment on the draft business case attached.

Background

6       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.

7       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.

8       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, constraints.

31/8/17

Complete

Advertise alternative site criteria.

1/9/17

Complete

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

To be presented at meeting

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

9/11/17

 

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

15/11/17

 

Business case report to Council  

13/12/17

 

9       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.

10     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?

11     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.

12     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 has been updated following comments from Member Bickers and now also includes a proposed procurement plan with timeline.  

13     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. 

14     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

15      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. The draft business case now also contains a draft procurement plan and a timeline for delivery. Financial analysis of the preferred option on a final risk register will substantially complete the business case.

16      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.

17      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 2,000 m3. 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 4,500 m3.

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

18      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.

19      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.

20      Following on from the Committee meeting on 17 October officers have continued to development Councils preferred procurement approach which is now included in the draft document. It is anticipated that this will be developed further based on comments from the Committee.

Factors to Consider

Legal and Statutory Requirements

21      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 and that 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.

Costs and Funding

26      At this stage the assumption is being made that the project will need to be progressed in accordance with the existing Long Term Plan budget of approximately $12 million. This is the rough order cost estimate that was included in the 2015 LTP for the Kepler option. The updated business case identifies additional capital expenditure required to complete the work. This has arisen largely as a result of review of contract rates and additional scope around pipeline design.

27      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.

28      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.

29      A decision to investigate an alternative site will have a number of significant budget implications that will need to be considered as part of the 2018 LTP.

30      Following comments made around operating costs, assumptions on dry matter production and marketability of baleage a review was undertaken between Dr Tony Daveron and Deane Carson a Farm Management Consultant with the AgriBusiness Group based in Invercargill. The local agricultural business consultant. As a starting point discussions of dry matter assessment were based around a set of agreed protocols developed by Farm Management Consultants based on annual Gypsy Day movements. An updated memo from Dr Daveron post meeting and the agreed protocols are included as attachments B and C. Opex costs and NPV of each option have been revised following the conferencing process.

Policy Implication

31      There is no existing policy relating to the development of business cases.

Project Committee Feedback

32      Member Bickers has undertaken a critical review of the business case and has offered a number of suggestions as to how it can be improved. These changes have been incorporated into the latest draft.

33      Committee Members will have further opportunity to provide comment for consideration in the final report. 

Alternative Site Options

34     Council has also 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. A separate report outlines the process and provides information on how any such alternatives will be evaluated.

35     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. This work would likely need to proceed in parallel with work on the consented Kepler option.

Analysis

Options Considered

36     The options considered are to provide comment on the draft business case (Option 1) or Do Nothing (Option 2).

Analysis of Options

Option 1 – Provide Comment

Advantages

Disadvantages

·        Will allow progress to be made with development of the business case.

·        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 - Do Nothing

Advantages

Disadvantages

·        None identified.

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

·       Council will not have the benefit of receiving comment from the Committee.

Assessment of Significance

37      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.

38      Council has previously confirmed the Problem Definition (Need), Investment Objectives and Constraints that have been used to inform the selection of suitable options to be short listed for assessment in the business case that is currently under development. The criterion used largely reflect the steps that Council has taken to date in investigating the options available. There will, however, also be the opportunity for Council to review these when they receive the draft business case and when it becomes clear about whether there are any alternative sites that would warrant further investigation. 

39      Through this report the Committee is being kept informed of the process to date and planned next steps through to the completion of the business case stage of the project. As such the report is largely an administrative information gathering exercise rather than one in which the Committee is being asked to make an explicit recommendation to Council. That will come at a later date. As such it is reasonable to conclude that the decisions that the Committee is being asked to make through this report are not significant.

Recommended Option

40      It is recommended that the Committee provide feedback on the updated draft business case and that continues to be developed following the proposed timeline set down in paragraph 8 of this report. 

Next Steps

41      Work will continue with drafting of business case with a view to presenting the finalised version to Council in December 2017.

 

 

Attachments

a             Te Anau Business Case - Kepler Option 

b             Agreed Protocols for End of Contract Feed Assessments in the Lower South Island

c             Baleage Value Nov 2017    

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 


 


 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


 


 


 



Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 


 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 


 


 

  

 


Te Anau Wastewater Discharge Project Committee

09 November 2017

 

Exclusion of the Public: Local Government Official Information and Meetings Act 1987

 

Recommendation

 

That the public be excluded from the following part(s) of the proceedings of this meeting.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

C8.1      Evaluation of Alternative Sites

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Ground(s) under section 48(1) for the passing of this resolution

Evaluation of Alternative Sites

s7(2)(a) - The withholding of the information is necessary to protect the privacy of natural persons, including that of a deceased person.

 

s7(2)(i) - The withholding of the information is necessary to enable the local authority to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations).

 

That the public conduct of the whole or the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exists.