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, 17 October 2018 at 9.01am – 10.33am, 10.52 – 12.32pm, 1.03pm to 2.46pm).

 

present

 

Chairperson

Brian Dillon

 

Mayor Gary Tong (for item 8.1 via telephone from 9.54am – 10.33am, 10.52am to 12.32pm)

Councillors

Stuart Baird

 

John Douglas

 

Paul Duffy

 

Bruce Ford (9.06am - 10.33am, 10.52 – 12.32pm, 1.03pm to 2.46pm)

 

Darren Frazer

 

George Harpur

 

Julie Keast (9.08am - 10.33am, 10.52 – 12.32pm, 1.03pm to 2.46pm)

 

Ebel Kremer

 

Gavin Macpherson

 

Neil Paterson

 

Nick Perham

 

APOLOGIES

 

Mayor Gary Tong (but did join the meeting via telephone for item 8.1 - Business Case - Te Anau Wastewater Discharge Method - Kepler Block)

 

IN ATTENDANCE

 

Chief Executive

Steve Ruru

Group Manager, Services and Assets

Matt Russell

Communications Manager

Louise Pagan

Governance and Democracy Manager

Clare Sullivan

Committee Advisor

Fiona Dunlop

 


Services and Assets Committee

17 October 2018

 

1             Apologies

 

There were apologies from Mayor Tong.

 

Moved Cr Kremer, seconded Cr Paterson and resolved:

That the Services and Assets Committee accept the apology.

 

The meeting noted that Mayor Tong would be attempting to join the meeting via telephone for item 8.1 Business Case - Te Anau Wastewater Discharge Method - Kepler Block.

 

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 Duffy, seconded Cr Perham and resolved:

That the Services and Assets Committee confirms the minutes of the meeting, held on 5 September 2018 as a true and correct record of that meeting.

 

 

9.1

IFS Growth Forest Manager's Report of Forestry Activity for the period 1 July to 31 August 2018

Record No: R/18/9/22583

 

IFS Growth Forest Manager – Reece McKenzie and IFS Director of Strategy – Dan Minehan were in attendance for this item.

 

 

(Councillor Ford joined the meeting at 9.06am.)

 

(Councillor Keast joined the meeting at 9.08am.)

 

 

Resolution

Moved Chairperson Dillon, seconded Cr Douglas and resolved:

That the Services and Assets Committee:

a)            Receives the report titled “IFS Growth Forest Manager's Report of Forestry Activity for the period 1 July to 31 August 2018” dated 25 September 2018.

 

 

Reports for Resolution

 

 

7.1

Unbudgeted Expenditure Request, Invercargill Office Utilisation and Business Case Reporting

Record No: R/18/9/22166

 

Group Manager, Services and Assets – Matt Russell was in attendance for this item.

 

Mr Russell advised that the purpose of the report was to seek approval for $250,000 of unbudgeted expenditure to enable a Business Case and Utilisation Assessment to progress and that this will inform the decision-making process in regards to options for the Invercargill Office.

 

 

Resolution

Moved Cr Kremer, seconded Cr Harpur and resolved:

That the Services and Assets Committee:

a)            Receives the report titled “Unbudgeted Expenditure Request, Invercargill Office Utilisation and Business Case Reporting” dated 9 October 2018.

 

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)           Recommends to Council that it approve unbudgeted expenditure of up to $250,000 for the purposes of completing a Business Case and Utilisation Assessment associated with the Invercargill Office Development identified in years 2022-2024 of the 2018-2028 Long Term Plan to be funded from the District Property Development Reserve.

 

e)            Recommends to Council that it delegate authority to the Group Manager – Services and Assets to expend up to $250,000 on the Business Case and Utilisation Assessment works for the Invercargill Office Development and be funded from the District Property Development Reserve.

 

 

9.2

Roading Operations September 2018

Record No: R/18/9/21433

 

Commercial Lead Roading – Dylan Rabbidge was in attendance for this item.

 

 

Resolution

Moved Cr Baird, seconded Cr Macpherson and resolved:

That the Services and Assets Committee:

a)            Receives the report titled “Roading Operations September 2018” dated 9 October 2018.

 

 

9.3

Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for August 2018

Record No: R/18/9/21435

 

Operations Manager – Bill Witham was in attendance for this item.

 

 

Resolution

Moved Cr Perham, seconded Cr Frazer and resolved:

That the Services and Assets Committee:

a)            Receives the report titled “Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for August 2018” dated 10 October 2018.

 

 

(Mayor Tong joined the meeting via telephone at 9.54am.)

 

 

8.1

Business Case - Te Anau Wastewater Discharge Method - Kepler Block

Record No: R/18/10/23195

 

Group Manager, Services and Assets – Matt Russell, Management Accountant – Susan McNamara, Community Partnership Leader – Simon Moran and Stantec Consultant Roger Oakley were in attendance for this item.

 

The purpose of this report is to enable the Committee to recommend a wastewater discharge method at the Kepler Block based on an updated and peer reviewed business case.

The meeting adjourned for morning tea at 10.33am and reconvened at 10.52am.

 

Councillors Baird, Dillon, Douglas, Duffy, Ford, Frazer, Harpur, Keast, Kremer, Macpherson, Paterson and Perham were present when the meeting reconvened.

Mayor Tong also re-joined the meeting via telephone.

Moved Cr Duffy, seconded Councillor Baird the recommendations in the officers report.

The motion was put and declared LOST on a show of hands.

Moved Cr Douglas, seconded Cr Paterson the following:

That the Services and Assets Committee:

a)        Receives the report titled “Business Case - Te Anau Wastewater Discharge Method - Kepler Block” dated 9 October 2018.

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:

i)           The options outlined in the business case are the reasonably practicable options available.

ii)          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)       Determines that in making this decision it has had regard to:

i)           The purpose of local government as defined in section 10 of the Local Government Act 2002 and in particular the need to meet the needs of its communities in the most cost-effective manner now and into the future

ii)          The principles in section 14 of the Local Government Act 2002 including in particular the need to take account of the diversity of its communities and the range of views held by those communities and the need to take a sustainable development approach

iii)         The need to be conscious of the financial impact that this project will have on Councils current system of rating levels and Council’s overall financial position

iv)         The need to have an alternative discharge option consented and operational before the expiry of the current consented discharge to the Upukerora River in December 2020 and that the timeframes within which the design and construction of a new discharge scheme needs to be completed is now limited.

v)          The previous Council decision (Item 8.8 16 November 2016) that it is unacceptable for Council to not have a consented discharge for the Te Anau Wastewater Scheme.

e)        Notes the requirement for Council to manage its financial arrangements in a prudent manner and make effective provision for the funding of all of its activities in a way that is financially affordable and sustainable for its communities which suggests that it should adopt the most cost effective option.

f)         Notes that the capital costs of the four options outlined in the Te Anau Wastewater Scheme – Kepler Block business case have increased since the last business case was presented in December 2017 and that the cost of the different options now range between $17.6M (Option 1 – Centre Pivot Irrigation) and $22.2M (Option 3 – Slow Rate Drip Irrigation).

g)        Notes that Council has received notification that it will receive, subject to finalisation of appropriate contract conditions, a contribution of $5M from the Tourism Infrastructure Fund towards the cost of implementing the Te Anau Wastewater Scheme and that this allocation is not conditional on a particular discharge method.

h)        Notes that the financial analysis included at section 5.3 of the business case suggests that rates are at or nearing what is recognised as an affordability threshold for a number of communities in the Southland district and that as a result Council should be cautious about pursuing options which increase rates above other viable options

i)          Notes the importance of completing construction of the Te Anau Wastewater Discharge Project upgrade before 30 November 2020 and that the timeframes within which this work must be completed are now tight

 

New j Recommend to Council that it proceed with option 3 subject to agreement from the Te Anau  Community Board and Manapouri Community Development Area Subcommittee to fund the estimated difference between option 2a ($20.1million) to option 3 ($22.2million) the estimated difference being $2.1million and should agreement fail then proceed with option 2a.

 

k)        Notes that Council will need to record, in accordance with Section 80 of the Local Government Act 2002, that its decision to approve Option 2A is inconsistent with the 2018-2028 Long Term Plan on the basis of the significant cost escalations and the grant that has been approved from the Tourism Infrastructure Fund.

The meeting adjourned at 12.32pm for lunch and reconvened at 1.03pm.

Councillors Baird, Dillon, Douglas, Duffy, Ford, Frazer, Harpur, Keast, Kremer, Macpherson, Paterson and Perham were present when the meeting reconvened.

Mayor Tong was not present via telephone when the meeting reconvened.

 

 

Moved Cr Kremer, seconded Cr Ford, the following amendment to j above:

That the Services and Assets Committee:

j          Recommend to Council that it proceed with option 3 subject to agreement from the Te Anau  Community Board and Manapouri Community Development Area Subcommittee to fund the estimated difference between option 2b ($20.8million) to option 3 ($22.2million) the estimated difference being $1.4million and should agreement fail then proceed with option 2a.

The amendment was put and declared LOST on a show of hands.

The motion moved by Cr Douglas, seconded by Cr Paterson was put and declared CARRIED on a show of hands.

 

Final Resolution

That the Services and Assets Committee:

a)        Receives the report titled “Business Case - Te Anau Wastewater Discharge Method - Kepler Block” dated 9 October 2018.

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:

i)           The options outlined in the business case are the reasonably practicable options available.

ii)          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)       Determines that in making this decision it has had regard to:

i)           The purpose of local government as defined in section 10 of the Local Government Act 2002 and in particular the need to meet the needs of its communities in the most cost-effective manner now and into the future

ii)          The principles in section 14 of the Local Government Act 2002 including in particular the need to take account of the diversity of its communities and the range of views held by those communities and the need to take a sustainable development approach

iii)         The need to be conscious of the financial impact that this project will have on Councils current system of rating levels and Council’s overall financial position

iv)         The need to have an alternative discharge option consented and operational before the expiry of the current consented discharge to the Upukerora River in December 2020 and that the timeframes within which the design and construction of a new discharge scheme needs to be completed is now limited.

v)          The previous Council decision (Item 8.8 16 November 2016) that it is unacceptable for Council to not have a consented discharge for the Te Anau Wastewater Scheme.

e)        Notes the requirement for Council to manage its financial arrangements in a prudent manner and make effective provision for the funding of all of its activities in a way that is financially affordable and sustainable for its communities which suggests that it should adopt the most cost effective option.

f)         Notes that the capital costs of the four options outlined in the Te Anau Wastewater Scheme – Kepler Block business case have increased since the last business case was presented in December 2017 and that the cost of the different options now range between $17.6M (Option 1 – Centre Pivot Irrigation) and $22.2M (Option 3 – Slow Rate Drip Irrigation).

g)        Notes that Council has received notification that it will receive, subject to finalisation of appropriate contract conditions, a contribution of $5M from the Tourism Infrastructure Fund towards the cost of implementing the Te Anau Wastewater Scheme and that this allocation is not conditional on a particular discharge method.

h)        Notes that the financial analysis included at section 5.3 of the business case suggests that rates are at or nearing what is recognised as an affordability threshold for a number of communities in the Southland district and that as a result Council should be cautious about pursuing options which increase rates above other viable options

i)          Notes the importance of completing construction of the Te Anau Wastewater Discharge Project upgrade before 30 November 2020 and that the timeframes within which this work must be completed are now tight

 

j           Recommend to Council that it proceed with option 3 subject to agreement from the Te Anau  Community Board and Manapouri Community Development Area Subcommittee to fund the estimated difference between option 2a ($20.1million) to option 3 ($22.2million) the estimated difference being $2.1million and should agreement fail then proceed with option 2a.

 

k)        Notes that Council will need to record, in accordance with Section 80 of the Local Government Act 2002, that its decision to approve Option 2A is inconsistent with the 2018-2028 Long Term Plan on the basis of the significant cost escalations and the grant that has been approved from the Tourism Infrastructure Fund.

 

 


 

Public Excluded

 

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

Resolution

Moved Cr Perham, seconded Cr Baird and resolved:

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

C10.1 Unbudgeted Expenditure - Contract 18/09: Te Anau Watermain Renewals

C10.2 Bridge Replacement and Rationalisation Programme 2018-21

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:

 

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

 

Unbudgeted Expenditure - Contract 18/09: Te Anau Watermain Renewals

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

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.

 

Bridge Replacement and Rationalisation Programme 2018-21

s7(2)(b)(ii) - The withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information.

s7(2)(h) - The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities.

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 Chief Executive, Group Manager, Services and Assets, People and Capability Manager, Chief Financial Officer, Communications Manager, Communications Specialist, Governance and Democracy Manager and Committee Advisor be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the items C10.1 Unbudgeted Expenditure - Contract 18/09: Te Anau Watermain Renewals and C10.2 Bridge Replacement and Rationalisation Programme 2018-21. 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.

That Contract Administrator – Joe Findley and Management Accountant be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item C10.1 Unbudgeted Expenditure - Contract 18/09: Te Anau Watermain Renewals.  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.

That the Strategic Manager Transport Commercial Lead Roading and Roading Asset Engineer be permitted to remain at this meeting, after the public has been excluded, because of their knowledge of the item C10.2 Bridge Replacement and Rationalisation Programme 2018-21. 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 1.59pm.

 

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 2.46pm.                      CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Services and Assets Committee HELD ON WEDNESDAY 17 OCTOBER 2018.

 

 

 

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

 

 

 

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