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

 

Date:

Time:

Meeting Room:

Venue:

 

Tuesday, 24 March 2020

9am

Council Chamber
15 Forth Street
Invercargill

 

Services and Assets Committee Agenda

OPEN

 

 

MEMBERSHIP

 

Chairperson

Ebel Kremer

 

 

Mayor Gary Tong

 

Councillors

Don Byars

 

 

John Douglas

 

 

Paul Duffy

 

 

Bruce Ford

 

 

Darren Frazer

 

 

George Harpur

 

 

Julie Keast

 

 

Christine Menzies

 

 

Karyn Owen

 

 

Margie Ruddenklau

 

 

Rob Scott

 

 

IN ATTENDANCE

 

Group Manager, Services and Assets

Matt Russell

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

 

TYPE OF COMMITTEE

Council standing committee

RESPONSIBLE TO

Council

SUBCOMMITTEES

None

LEGISLATIVE BASIS

Committee constituted by Council as per schedule 7, clause 30 (1)(a), LGA 2002.

Committee delegated powers by Council as per schedule 7, clause 32, LGA 2002.

MEMBERSHIP

The Services and Assets Committee is a committee of the whole Council.  The mayor and all the councillors will be members of the Services and Assets Committee. 

FREQUENCY OF MEETINGS

Six weekly or as required

QUORUM

Not less than seven members

SCOPE OF ACTIVITIES

The Services and Assets Committee is responsible for ensuring that Council delivers its infrastructural asset based services in an effective and efficient manner that meets the needs of its communities and protects the investment that Council has in these assets.

The 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

•      Te Anau airport

•      Stewart Island Electrical Supply Authority

•      Stewart Island Jetties and Riverton Harbour

•      water supply schemes.

DELEGATIONS

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

Power to Act

The committee has the delegated authority to:

a)     assess and provide advice to Council on the strategic issues relating to the delivery of infrastructural asset services

b)    reviewing and recommending to Council strategies on how it should go about managing the delivery of the infrastructural asset services that it provides

c)     monitor the condition and performance capability of the infrastructural assets owned by Council so as to ensure that it protects its investment in these assets in accordance with accepted professional standards

d)     monitor the delivery of capital works projects and the implementation of the capital works programme

e)     monitor the delivery of operations and maintenance contracts

f)     approve and/or assign all contracts for work, services or supplies 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 $2 million a prior review and recommendation of the business case by the Finance and Assurance Committee is required.  The business case shall include as a minimum; risk assessment, a procurement plan and financial costings.  If there is a different recommendation from the Finance and Assurance Committee the matter will be referred to Council for a decision

g)     monitor the return on all Council’s investments including forestry

h)     monitor and track Council contracts and compliance with contractual specifications.

Power to Recommend

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

a)     policies relating to the scope of activities of the Services and Assets Committee

b)     changes to Council’s adopted levels of service

c)     the dividend from the forestry business unit

FINANCIAL DELEGATIONS

Council authorises the following delegated authority of financial powers to Council committees in regard to matters within each committee’s jurisdiction.

Contract Acceptance:

            accept or decline any contract for the purchase of goods, services, capital works or other assets where the total value of the lump sum contract does not exceed the sum allocated in the Long Term Plan/Annual Plan and the contract relates to an activity that is within the scope of activities relating to the work of the Services and Assets committee

            accept or decline any contract for the disposal of goods, plant or other assets other than property or land.

Budget Reallocation

Committee is authorised to reallocate funds from one existing budget item to another.  Reallocation of this kind must not impact on current or future levels of service and must be:

            funded by way of savings on existing budget items

            within the jurisdiction of the committee

            consistent with the Revenue and Financing Policy.

LIMITS TO DELEGATIONS

Matters that must be processed by way of recommendation to Council include:

•      amendment to fees and charges relating to all activities

•      powers that cannot be delegated to committees as per the Local Government Act 2002 and sections 2.4 and 2.5 of this manual.

Delegated authority is within the financial limits in section 9 of this manual.

STAKEHOLDER RELATIONSHIPS

This committee shall maintain relationships including, but not limited to the following organisations:

             Community Boards

             Regional Land Transport Committee

             WasteNet

             FENZ (Fire and Emergency New Zealand)

The committee will also hear and receive updates to Council from these organisations, as required. 

CONTACT WITH MEDIA

The committee chairperson is the authorised spokesperson for the committee in all matters where the committee has authority or a particular interest.

Committee members do not have delegated authority to speak to the media and/or outside agencies on behalf of Council on matters outside of the board’s delegations.

The group manager services and assets will manage the formal communications between the committee and the people of the Southland District and for the committee in the exercise of its business. 

Correspondence with central government, other local government agencies or official agencies will only take place through Council staff and will be undertaken under the name of Southland District Council.

 


Services and Assets Committee

24 March 2020

 

TABLE OF CONTENTS

ITEM                                                                                                                                                                                  PAGE

Procedural

1             Apologies                                                                                                                                                                7

2             Leave of absence                                                                                                                                                7

3             Conflict of Interest                                                                                                                                             7

4             Public Forum                                                                                                                                                         7

5             Extraordinary/Urgent Items                                                                                                                        7

6             Confirmation of Minutes                                                                                                                               7

Reports

7.1         Services and Assets Programme Report                                                                                           11

7.2         17A Community Facilities tender process update                                                                       19

7.3         Alternative Procurement of Stewart Island Wind Power Predevelopment Consultant                                                                                                                                                                                    31

7.4         Roading Operations - January and February 2020                                                                      37

Public Excluded

Procedural motion to exclude the public                                                                                                         51

C8.1      Lake Monowai Road Canal Bridge Tender Award                                                                         55

C8.2      Alternative Procurement for Supplier of Services to Stewart Island Electricity Supply Authority (SIESA)                                                                                                                                             85

C8.3      Structural Engineering Services Contract for Transport                                                         91

  


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, 11 February 2020


 

Services and Assets Committee

 

OPEN MINUTES

 

 

 

Minutes of a meeting of Services and Assets Committee held in the Council Chamber, 15 Forth Street, Invercargill on Tuesday, 11 February 2020 at 9am. (9.01am – 9.14am)

 

present

 

Chairperson

Ebel Kremer

 

 

Mayor Gary Tong

 

Councillors

Don Byars

 

 

John Douglas

 

 

Paul Duffy (9.01am – 9.14am)

 

 

Bruce Ford

 

 

Darren Frazer

 

 

George Harpur

 

 

Julie Keast

 

 

Christine Menzies

 

 

Karyn Owen

 

 

Rob Scott

 

 

 

APOLOGIES

Councillor Ruddenklau

 

 

IN ATTENDANCE

Chief Executive – Steve Ruru

Group Manager, Services and Assets – Matt Russell

Group Manager, Community and Futures – Rex Capil

Group Manager – Service Delivery – Trudy Hurst

Committee Advisor – Fiona Dunlop

 


1             Apologies

 

There were apologies from Councillor Ruddenklau.

 

Moved Mayor Tong, seconded Chairperson Kremer and resolved:

That the Services and Assets Committee accept the apology.

 

(Councillor Duffy joined the meeting at 9.01am.)

 

 

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 Chairperson Kremer, seconded Cr Douglas and resolved:

That the Services and Assets Committee confirms the minutes of the meeting held on 3 December 2019 as a true and correct record of that meeting.

 

Reports

 

 

7.1

Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for November 2019

Record No: R/19/12/30826

 

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

 

Mr Witham advised that the purpose of the report was to update the Committee on the water and wastewater maintenance contact 10/01 up to the end of November 2019.

 

 

Resolution

Moved Cr Frazer, seconded Cr Scott and resolved:

That the Services and Assets Committee:

a)            Receives the report titled “Downer Water and Wastewater Maintenance Contract 10/01 - Monthly Report for November 2019” dated 17 January 2020.

 

 

7.2

Services and Assets Programme Report

Record No: R/20/1/1170

 

Project Delivery Manager – Nick Hamlin was in attendance for this item.

 

Mr Hamlin advised that the purpose of the report was to update the Committee on the Services and Assets department projects.

 

 

Resolution

Moved Chairperson Kremer, seconded Cr Ford and resolved:

That the Services and Assets Committee:

a)            Receives the report titled “Services and Assets Programme Report” dated 17 January 2020.

 

 

The meeting concluded at 9.14am.                      CONFIRMED AS A TRUE AND CORRECT RECORD AT A MEETING OF THE Services and Assets Committee HELD ON TUEDSAY 11 FEBRUARY 2020.

 

 

 

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

 

 

 

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

 


Services and Assets Committee

24 March 2020

 

Services and Assets Programme Report

Record No:             R/20/3/5424

Author:                      Trudy Saunders, Contracts and Projects Adminstrator

Approved by:         Matt Russell, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

 

Summary

1        CAMMS Project tracks all Services and Assets projects. This report seeks to update the status of these projects to this Committee.

2        Please see attached report for your information.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Services and Assets Programme Report” dated 13 March 2020.

 

Attachments

a             Services and Assets Programme Report as at 3 March 2020    

 


Confidential Services and Assets Committee

24 March 2020

 

Services and Assets Programme Report

Date: 03/03/2020

Author: Trudy Saunders, Nick Hamlin


Projects Count and Expenditure Totals for 2019 – 2020 – open projects

Total Project Count:   81 Total Project Expenditure:  $26,726,083.47

Total Budgets for Projects by Financial Year

Approximately $8 million of works have been completed so far this financial year.

Executive Overview

1.   Below is a summary of the overall asset programme of works

Currently $26m of works is underway in the 19/20 works programme

          $1.6m is in Initiation phase

$5m in business case phase

$3.7m is in pre delivery phase (design / tender and consents)

$16.3m is in construction delivery         

2.   Total current project counts is as follows

·    Community Facilities 40

·    Waste and water 51

·    Roading 23

·    Commercial Infrastructure 2

3.   Completed projects in the last month include

a.   Cemetery beams throughout district

b.   Flying fox at Manapouri playground

c.   Five Rivers hall repaint

d.   Thornbury toilet refurbishment and landscaping.

4.   Key Projects due to start in construction over next 2 months

a.   Te Anau Waste water processing plant

b.   Stage 1 of the Bridge replacement

c.   Te Anau watermain replacements

d.   Athol railway project

e.   SDC Head office tower block roof replacement

2019-20 by Activity and Phase

Major Projects

Water and Waste

Roading

Activity by Status

Community Facilities

2019-20

 

The Community Facilities works programme for 2019-20 will be completed by the end of the financial year apart from two main projects which are Monkey Island currently waiting on approval to continue construction works and the Golden Bay wharf replacement works which is on hold.

Water and Waste

2019-20

 

 

The Te Anau Waste Water project is continuing to be re-designed from CPI to SDI.   The Te Anau Membrane filtration tender is currently going through a value engineering process with the preferred tenderer.  A report updating programme and cost will be presented to Council on 22 April 2020.

The Te Anau Watermain contract has now been awarded to Te Anau Earthworks and construction will begin in early April.

Otautau watermain renewals is progressing well.

Roading

2019-20

 

The bridges design and build replacement programme contracts have been awarded and initial pre-start meetings have been held.  The Bridge replacement programmes (with culverts) contracts have been awarded – Northern package to SouthRoads and Southern package to Downers.

There has been good progress for the pavement rehab programme the 2019-20 reseal programme is behind schedule due to weather conditions but it is expected that the contractors will catch up now the weather has improved.

Lake Monowai Road canal bridge replacement is due to be awarded within the next few weeks.

Otapiri Gorge Road Rehabilitation is due to be completed in the near future.

Some projects have been delayed due to contractors prioritising flood damage works.  It is anticipated that this will not affect the completion dates.

Commercial Infrastructure

2019-20

 

The majority of projects for SIESA are to be cancelled and report is due in front of Council to approve this decision. 

Projects by Location 2019-20

 

Projects by Activity Group – 2019-20

 

 

Projects by Activity Name and Expenditure – 2019-20

 


Services and Assets Committee

24 March 2020

 

17A Community Facilities tender process update

Record No:             R/20/3/5507

Author:                      Trudy Saunders, Contracts and Projects Adminstrator

Approved by:         Matt Russell, Group Manager Services and Assets

 

  Decision                                       Recommendation                                  Information

 

 

 

Purpose

1        To update the Services and Assets Committee on progress for the Community Facilities Service Delivery Review with work completed to date and next steps. Further, to propose a two phase procurement approach and seek endorsement from Council for the intended procurement approach.

Executive Summary

2        The Community Facilities 17A Review outcomes were identified and endorsed by Council in February 2017. Since this time, there have been multiple discussions with elected members and Council regarding the appropriate process for achieving the recommended outcomes.

3        Initially, it was anticipated that a more aggressive process would be employed to consolidate and amend the Contracting landscape for Community Facilities maintenance and operations. However, it became evident over time that this process needed to carefully consider the implications for each individual community and contract to ensure the best collective outcome was achieved balancing efficiency, affordability, health and safety improvements and social outcomes.

4        At a Council meeting held on 27 September 2019, Council endorsed the following:

d)         Endorses the proposed approach ‘Enhanced Status Quo’ by staff in relation to the funding, rollout and implementation of the revisions to contract arrangements and service provision for mowing, gardening and cleaning across the district based on:

·                     calling for tenders for separable portions of a contract by mowing, gardening and cleaning based on the nine community board boundaries

·                     the principle that the District rate would be used to supplement differences in cost, if any, between the budgeted costs and the tendered prices received for mowing and gardening contracts.

e)         Determines that it will make a final decision on the funding of these activities once the tender prices are received.

5        After further analysis and discussions internally, the enhanced status quo approach has been modified further and detailed within this report.  The proposed approach recommends a mixture of both direct negotiation with existing contractors and competitive tendering where it is envisioned that better social outcomes are able to be achieved whilst still improving efficiency and health and safety and maintaining affordability. This approach will improve the resilience and quality of the service provision and introduce a degree of consistency and a standardised contract management framework.

 

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “17A Community Facilities tender process update” dated 16 March 2020.

 

b)           Determines that this matter or decision be recognised as not significant in terms of Section 76 of the Local Government Act 2002.

 

c)            Determines that it has complied with the decision-making provisions of the Local Government Act 2002 to the extent necessary in relation to this decision; and in accordance with Section 79 of the act determines that it does not require further information, further assessment of options or further analysis of costs and benefits or advantages and disadvantages prior to making a decision on this matter.

 

d)           Agrees with the proposal for an enhanced status quo procurement approach to enable Community Board consultation and direct negotiations with existing contractors.

 

e)            Endorses the procurement plan for Community Facilities Service Delivery as follows:

 

1.         Cleaning contracts – Office / hall cleaning and Fiordland cleaning to go to tender in April 2020.

2.         Toilet cleaning contracts – spilt into two separable portions via direct negotiation.

3.         Mowing contracts – split into 6 separable portions with some direct negotiation with existing contractors and some being publically tendered.

4.         Gardening contracts – after consultation with Community Boards to confirm service levels and scope either directly negotiate with existing contractors or consider further options after the consultation. 

 

f)             Approves under Section 7.3 of the Procurement Policy (2010) Alternative Procurement method of direct negotiation with selected existing contractors in principle.

 

g)           Understands that there may be changes made to the procurement plan between direct negotiation and open tender for certain separable portions based on market service availability, and as such, the identified proposal may not necessarily reflect the final procurement packages.

 

Background

6        Southland District Council (SDC) currently has 38 contracts for the provision of community facilities activity services across the District. Further to this, a number of services are provided within the three roading alliance contracts. Some other services are not delivered through a contract but via a purchase order, donation funding or provided by volunteers.

7        Morrison Low were commissioned in 2017 to complete a Section 17A Service Delivery Review for community facilities. Key findings from this review identified a number of issues with our current contract approach, most notably:

·        health and safety competence of contractors

·        high contract administration costs carried by Council and funded from general overheads

·        lack of formal performance management, monitoring and consistency

·        lack of alignment with, or visibility of levels of service

·        wide variability of level of service provision.

8        The review went on to identify a number of improvement recommendations including:

·        a reduction in the number of contracts

·        development of standardised contracts

·        improved and consistent approach to time management and contract administration

·        further development of contractor performance management actions

·        a review of governance arrangements of the services within the activity.

9        Council resolved to support the review outcomes and recommendations.

10      Since this report was presented and endorsed in February 2017 staff have been working internally on addressing these shortcomings and reviewing options and timing for implementation. In view of the Representation Review, it was determined that it was prudent to await the outcome of this process, as the representative structure would determine contract areas which in turn has the potential to impact funding streams and rating boundaries over the longer term. As such, any contracts that have expired since this time have been extended until 30 June 2020 only to enable a revised structure to be implemented from this date.

11      Initially, it was anticipated that a more aggressive process would be employed to consolidate and amend the Contracting landscape for Community Facilities maintenance and operations. However, it became evident over time that this process needed to carefully consider the implications for each individual community and contract to ensure the best collective outcome was achieved balancing efficiency, affordability, health and safety improvements and social outcomes.

12      In February 2020, the Project team met with six of the existing major contractors to discuss options around future delivery of these services.  These discussions included best ways to split the areas to ensure viable packages of work and to gauge the level of support for the proposal.


 

13      There are a number of risks associated with the proposed consolidation of services and contracts in conjunction with the revised nine community board boundaries including (but not limited to):

·        proposed service levels may differ from existing service levels and result in additional cost

·        scope may be missed as a result of staff being unaware of local arrangements

·        market pricing may differ from existing service provision costs

·        community boards may wish to review scope and service levels (beyond minimum service levels)

·        market interest may be minimal without economy of scale and longevity of service provision.

14      In order to mitigate the risks identified above, staff are proposing a procurement approach of direct negotiation with existing contractors, utilising Roading Alliance contracts and consolidating services by areas to reduce the number of existing contracts where appropriate.  Where it is considered that the current service provision and contract mechanism is appropriate, staff do not propose amendments beyound an updated contract capturing consistent service levels.

15      It is anticipated that this approach would provide confidence in the procurement process, whilst providing the new community boards an opportunity to better understand the service levels provision, scope and budgets for their board areas in the lead up to the 2024 LTP. At that point any revisions and the cost implications would be better understood within their rating boundaries. Through this proposed service provision transition, staff are working to strike the right balance between a robust procurement process that maximises value to the ratepayer, while ensuring appropriate information and transparency is available to the different levels of governance to inform decision-making.

16      Based on existing service provision arrangements, staff subjectively estimate an increase in the overall price. It is evident that some areas of the District are more susceptible to this risk than others based on scope, scale and geographical isolation. It is noted that there may be opportunities to reduce this cost impact through the utilisation of our internal work scheme resource.

17      Further improvements in service delivery which have occurred since the completion of the Morrison Low review include:

·        a community facilities restructure incorporating three contract managers

·        implementation of a consistent service level agreement framework

·        development of minimum  service levels

·        establishment of a commercial infrastructure team to further strengthen procurement and contract administration practices

·        Increased focus on contract health and safety performance monitoring.

·        Merging service provision into existing contracts when contractors have retired or decided to exit their contracts. 

18      After discussions with Senior Management an enhanced status quo approach has been decided on which will include direct negotiation with existing contractors, utilising the SDC workforce team and incorporating some works within the Roading Alliances. Where it is deemed better for the community or financially advantageous a public tender process will occur to enable a reduction in the number of contracts.

19      It is proposed that this process occur in phases which will enable a more manageable procurement process:

 

1.       Cleaning contracts – split into 4 separable portions to go to tender in April 2020.

2.       Mowing contracts– split into 6 separable portions with some direct negotiation with existing contractors and some being publically tendered.

3.       Gardening contracts – after consultation with Community Boards to confirm service levels and scope to directly negotiate with existing contractors.

20      The proposal aligns with the recommendations made within the Morrison Low Review and include:

·        Enhanced status quo

·        enable accurate forecasting for 2021-31 LTP for these services

·        allows for smaller and local contractors to bid for separable portions

·        use of standardised contracts

·        better time management for Council staff

·        lower contract management costs

·        Improved contractor performance management and monitoring.

 

PROPOSED PROCUREMENT METHODOLODY

CLEANING

21      It is proposed to go to public tender for separable portions in April with a contract start date of 1 July 2020.  Alternative proposals will be accepted to enable cost savings if a tenderer submits for more than one portion.

 

Separable portions, for example:

 

Via Public Tender

1.       Office cleaning for six offices and two halls

o   Scope: Invercargill, Wyndham, Winton, Lumsden, Riverton, and Otautau. RSA and Winton Memorial Hall.

Exceptions - Stewart Island office and library which is currently being undertaken under an employment contract with a staff member.

o   Te Anau office and library will be included in the Fiordland Cleaning tender

2.       Fiordland cleaning

·        Scope:  Te Anau Library, Te Anau office, Lions Park Toilets (30 pans), 8 public toilets (22 pans)

Toilet cleaning areas are proposed to align with the existing Roading Alliances with the exception of Fiordland.

Via Direct Negotiation

22      It is proposed that direct negotiation occur with the Roading Contractors which will enable utilisation of their cyclic programme and include toilet maintenance which they already undertake.

1.       Cleaning of toilets – Waimea and Central (Ardlussa, Northern, Oreti, Wallace Takitimu, Oraka Aparima, Tuatapere Te Waewae, Cycle Trail). With the exception of Dunsdale Reserve which will be included with mowing.

2.       Cleaning of toilets – Foveaux Alliance area (Waihopai Toetoe, Stewart Island/Rakiura)

MOWING

23      It is proposed to workshop the scope of works and levels of service with Community Boards in March / April 2020.

 

Six Separable portions, for example:

1.       Fiordland (Te Anau / Manapouri)

It is proposed that toilet cleaning be removed from the current township maintenance contract and merge the two townships into one contract.  This will include mowing, gardening, litter removal and street cleaning. This will be done via direct negotiation with the existing contractor.

2.       Waihopai Toetoe – via direct negotiation with existing contractors.

3.       Stewart Island / Rakiura– keep within Foveaux Roading alliance.

4.       & 5    Split rest of district into two portions via open tender.

a.       Option 1: East(Northern, Tuatapere Te Waewae, Oraka Aparima, Wallace Takitimu) and West (Oreti, Ardlussa)

b.       Option 2: North (Northern, Ardlussa) and South (Tuatapere Te Waewae, Oraka Aparima, Wallace Takitimu, Oreti)

6.       Monowai- keep status quo with volunteer.

GARDENING

24      It is proposed to workshop the scope of works and levels of service with Community Boards in March / April 2020.

25      To enable this to happen, it is proposed that the Community Facilities team will contact all current contractors requesting a three month extension at current costs.

 

Procurement options

1.       Direct negotiation with existing local contractors.

2.       Further options to be considered after consultation with Community Boards.

Issues

26      Contractors may not agree with a three month rollover as SDC have already rolled some of the contracts over twice for one year each.

27      After discussions with current toilet cleaning contractors, it has been suggested that unless maintenance is included they may decline to tender. These included the Roading Alliance and major cleaning contractor.

28      If it is agreed to rollover the existing Te Anau and Manapouri township maintenance contracts (taking out toilet cleaning), it could be seen to be unfair as SDC will not go to market.

29      These contracts are funded through existing rating boundaries that are not aligned with new Community Board areas.  This will complicate pricing, procurement and contract claims, but is able to be dealt with by staff.

30      After consultation with Community Boards, there is a risk that an increase in additional local funding may not be approved.

31      Separable portions that are proposed to be directly negotiated with existing contractors are:

Separable portion

Current 2019/20 budget.

a)   Cleaning of toilets – Waimea and Central (Ardlussa, Northern, Oreti, Wallace Takitimu, Oraka Aparima, Tuatapere Te Waewae, Cycle Trail). With the exception of Dunsdale Reserve which will be included with mowing.

 

$267,531

b)  Cleaning of toilets – Foveaux Alliance area (Waihopai Toetoe, Stewart Island / Rakiura)

$ 84,677

c)   Mowing Fiordland (Te Anau / Manapouri) - It is proposed that toilet cleaning be removed from the current township maintenance contract and merge the two townships into one contract.  This will include mowing, gardening, litter removal and street cleaning. This will be done via direct negotiation with the existing contractor.

$ 84,825

d)  Mowing Waihopai Toetoe – via direct negotiation with existing contractors.

$ 68,826

e)   Mowing Stewart Island / Rakiura – keep within Foveaux Roading alliance.

$ 29,860

f)   Mowing Monowai- keep status quo with volunteer.

$     550

g)  Gardening negotiation potentially with existing local contractors – TBC after consultation with Community Boards

$217,783

 

32      This approach to directly negotiate for toilet cleaning with the Roading Contractors will enable utilisation of their cyclic programme and include toilet maintenance which they already undertake. Currently overheads for toilet cleaning and maintenance done by the Roading Alliances is funded through NZTA therefore providing cost savings for Community Facilities.

33      With regards to existing mowing contracts, the incumbent contractors have proved over the lengths of their existing contracts to provide excellent service and coverage of the district as well and having high levels of health and safety compliance and appropriate plant.

34      As per SDC’s Procurement Policy, dated 29 September 2010, Section 7.3 Alternative procurement methods allow and have provision for procurement aside from the competitive tender process. This report outlines reasons for preferring a non-competitive process in fulfilment of Section 7.3 and shall be submitted to whomever responsible, as per Section 9 of the Policy.

35      As per Section 9, 3. (b) Decision to use direct negotiation shall be documented clearly and will require the following authorisation: (i) Any goods, services or works expected to have a value over $200,000 is to be approved by Activities Performance and Audit Committee (APAC).  The APAC Committee is no longer in operation.  This authorisation would now be sought by the Services and Assets Committee.

 

36      On the basis of the above issues, there may be changes made to the procurement plan between direct negotiation and open tender for certain separable portions, if for example negotiations are not successful or tendering is not successful.  The identified examples above may not necessarily reflect the final procurement packages. The recommendation is for a mixture of open tender and direct negotiation and utilisation of internal SDC Workforce scheme.

Factors to Consider

Legal and Statutory Requirements

37      Section 17A of the Local Government Act (LGA) requires Council review service delivery arrangements for their activities and implement improvements where appropriate. The review outcomes identified by Morrison Low have been forefront as part of developing the proposed way forward.

38      In relation to section 101 of the LGA it is considered that the proposed approach accords with and balances appropriately Councils responsibilities in relation to financial prudence with Council’s health and safety obligations.

39      The Employment Relations Act is considered to be relevant is terms of how the proposal deals with staff who are technically employed by Council to undertake cleaning contracts. Any restructuring will need to be undertaken in accordance with the requirements of this act.  As cleaners are classified as vulnerable workers any new contractors will have to offer the existing cleaners positions within the new contract. 

40      Previously Council agreed in principle to the concept of a district contribution if significant short fall resulted in a requirement for unbudgeted expenditure.

41      Section 80 of the LGA requires that significantly inconsistent decisions clearly identify the inconsistency, the reasons for the inconsistency and any plan to amend relevant policies to address the inconsistency.

42      If a significant shortfall arose and Council were of a mind to fund this shortfall utilising district funding this would be contrary to Council’s current Revenue and Financing Policy and as such would constitute an inconsistent decision. It is not proposed to amend the Revenue and Financing Policy to address the inconsistency if it were to arise as it is considered an anomaly that is able to be resolved through the 2024 LTP process.

Community Views

43      The community would expect Council to utilise procurement approaches that will ensure the required services are delivered to the agreed level of service at an efficient cost. The procurement approach should also be in keeping with good commercial practices.

44      Community views will be integrated into this process to review service levels and funding approaches when they are reviewed through the 2021 and 2024 LTP processes.

45      Further, ongoing discussions with community boards regarding contractor performance will be required as the review outcomes are rolled out.

Costs and Funding

46      An overview of current 2019/20 budgets by revised community board areas is provided in the table below:

 

47      The budgets identified above were established through the 2018 LTP process. It is important to note that there is an expectation that these costs will increase in some areas based on the aggregation of contract scope. This is anticipated primarily as a result of the introduction of minimum service levels, greater distances to cover, increased overhead costs for contractors and more stringent health and safety standards (eg increasing traffic management obligations).

48      Some areas of the District are more susceptible to these cost increases as a result of isolation and minimal scope, or due to the nature of the existing service provision. Monowai grass mowing is a good example of this given that the service is currently provided by a local resident at a very low cost. However, there are areas of the District, such as Te Anau which has had new contract arrangements put in place in recent years where this risk is lowered as a result of the existing service provision.

49      Provided Council endorse the proposed implementation and funding principles, it is intended to undertake the procurement process in the next 3 months leading into 1 July 2020.

Policy Implications

50      As is indicated above, SDC’s Procurement Policy, dated 29 September 2010, Section 7.3 Alternative procurement methods allows for procurement aside from the competitive tender process. This report outlines reasons for preferring a non-competitive process in fulfilment of Section 7.3 and shall be submitted to whomever responsible, as per Section 9 of the Policy.

51      As per Section 9, 3. (b) Decision to use direct negotiation shall be documented clearly and will require the following authorisation: (i) Any goods, services or works expected to have a value over $200,000 is to be approved by the Activities Performance and Audit Committee (APAC).  The APAC Committee is no longer in operation.  This authorisation is sought from the Services and Assets Committee.

 

Four Well-beings

52      Under the Local Government Act 2002, local authorities have a responsibility to promote the social, economic, cultural and environmental well-being of the communities they serve.

53      Council is also required under section 14 of the Act to undertake any commercial transactions in accordance with sound business practices. Procurement of goods and services is clearly a commercial transaction, which raises a question about how Council might best find the right balance between a ‘pure’ commercial approach and the promotion of the four well-beings.

54      The Ministry for Business, Innovation and Employment (MBIE) have recently released updated Government Procurement Rules, which provide further guidance for central government entities, on how through procurement processes can also support the delivery of “public value” and “broader outcomes”. The rules note that the Government is committed to:

·    The delivery of public value (including broader outcomes)

·    Does not discriminate against suppliers (whether domestic or international)

·    Meets agreed international standards.

55      Rule 16 of the Government Procurement Rules then talks about broader outcomes being the secondary benefits that are generated from the procurement activity. These include benefits such as reducing carbon emissions, increasing access for NZ businesses to government contracts, improving skill levels within the NZ workforce and improving conditions for NZ workers.

56      Implicit in the Government Procurement Rules is a discussion about the ‘fine line’ to be walked between maintaining a competitive and commercially neutral approach to procurement whilst also recognising that there is a broader set of outcomes that can be delivered through the procurement decisions that public entities make. Hence, while there is merit, for example, in structuring contracts in such a way that a wider range of contractors (from small to large) can participate, Council shouldn’t do that at the expense of not being able to obtain a competitive price nor at the expense of employing contractors who do not meet agreed minimum standards such as those which are set for health and safety purposes. There is a balance to be found in planning each procurement decision. Council needs to be conscious of the need to find that balance in relation to the procurement of its community facilities maintenance services.


 

Analysis

Options Considered

57      Staff have identified two different options for implementation:

58      Option One - involves the retention of the status quo and reduce and merge services into existing contracts as and when renewal timeframes arise.

59      Option Two - involves a staged implementation of the three contract types – mowing, gardening and cleaning across multiple years (aligning with LTP and/or annual planning processes)

Analysis of Options

Option 1 – Status Quo

Advantages

Disadvantages

·     no disruption for current contractors.

·     will need to extend 38 contracts for the third time

·     will not provide opportunities to implement improvements as per Morrison Low recommendations.

 

Option 2 – Enhanced Status Quo

Advantages

Disadvantages

·     reduce the number of contracts from 38 to between 10 to 21 dependant on outcomes from consultation with Community Boards.

·     ability to directly negotiate with existing contractors to enable cost savings by incorporating further services within the Roading Alliances.

·     enable a two phase process where cleaning and mowing new contracts will be in place on 1 July 2020 and provide an opportunity to consult with Community Boards regarding gardening.

·     provide a degree of consistency and standardised contract management framework.

·     some contracts will need to be extended again for mowing and gardening

 

 

Recommended Option

60      Staff recommend Option 2 – enhanced status quo.

Next Steps

61      Provided the Committee agree with the proposed approach, the next steps are as follows:

Proposed timeline:

WHAT

WHEN

Services and Assets committee to approve alternative procurement approach.

24 March

Communications plan approved

By end of March

Consultation with Community Boards re gardening and mowing to confirm scope and levels of service.

March / April

Letters to existing contractors communicating upcoming process

By end of March

Finalising scope and levels of service for each Community Board area.

End of April

Finalising tender documentation

End of April

Letters to existing contractors confirming process.

April

Direct negotiation with existing contractors

April / May

Public tender process

April to May

Tender evaluation, negotiation and recommendations to award contracts.

 

Relevant contracts to be extended where necessary

By end of May

Approval to award contracts

-     Finance and Assurance Committee (where total contract value over life of contract exceeds $2 million)

June

Finalising new contracts

Early June

Contracts fully signed by contractors and SDC

Mid-June

New Contract commencement date

1 July 2020

 

 

Attachments

There are no attachments for this report. 

 


Services and Assets Committee

24 March 2020

 

Alternative Procurement of Stewart Island Wind Power Predevelopment Consultant

Record No:             R/20/3/5494

Author:                      Ashby Brown, Commercial Infrastructure Manager

Approved by:         Matt Russell, Group Manager Services and Assets

 

  Decision                                       Recommendation                                  Information

 

 

 

Purpose

1        To outline the background and issues around engaging a consultant to undertake the predevelopment phase of the Stewart Island wind power project and determine the most suitable approach within the Council’s current procurement policy.

Executive Summary

2        Southland District Council (SDC) has entered in to a funding agreement with the Ministry of Business, Innovation and Employment (MBIE) for the development of wind power generation on Stewart Island.

3        A portion of this funding is associated with engaging a consultant for the predevelopment phase of the project.

4        For a several reasons, including market conditions, project history, and previous documentation, direct negotiation with a consultant, Roaring 40s Wind Power is recommended as the most efficient and lowest risk procurement approach for this service.

5        A decision to proceed with alternative procurement, for provision of predevelopment consulting services in relation to the above, and to an estimated value of $495,000 is sought.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Alternative Procurement of Stewart Island Wind Power Predevelopment Consultant” dated 13 March 2020.

 

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 alternative procurement method to directly negotiate with a consultant, Roaring 40s Wind Power, for the predevelopment phase of the Stewart Island wind power project to be funded from the Ministry of Business, Innovation and Employment Provincial Growth Fund funding received for this project.

 

Background

6        The Ministry of Business, Innovation and Employment (MBIE) has been a key party to investigate wind power as an alternative generation option on Stewart Island and has provided assistance to Southland District Council (SDC) with recent investigation and a report carried out by a consultant, Roaring 40s Wind Power. Subsequent to the Roaring 40s Wind Power Report (report) and in communication with MBIE, SDC made an application to MBIE for funding from the Provincial Growth Fund (PGF) to progress this project.

7        The project and application for funding is structured in two phases – a pre-development phase undertaken primarily by a single consultant, potentially followed by a development phase based on the pre-development conclusions. The $530K of funding sought for pre-development and $2.7M sought for development phase was based on estimates within the report.

8        On 17 January 2020, a funding agreement between MBIE and SDC to develop wind generation capacity on Stewart Island was executed.

Issues

9        There are several considerations in making a recommendation to pursue an alternative procurement process, as follows:

10      In developing their report, Roaring 40s Wind Power already has substantial history on this project and are considered to have significant knowledge and intellectual property specific to this project. An alternative consultant would require time (cost) to reach an equivalent background and the cost for duplicitous work would necessarily be borne by the project.

11      Due to the specialised nature of the project, and the intention to engage a single supplier, the market for consultants has a limited number of viable suppliers. The benefits of a competitive tender process are not obvious in this case and furthermore, a competitive tender process is not without significant investment of time and money – which is not covered under the PGF agreement. Investment in a tender process would risk poor outcomes such as lack of interest or unaffordable prices and require funding of additional cost, without any clear benefit.

12      Due to advice received by SDC, the application for PGF funding explicitly proposed Roaring 40s Wind Power as the consultant. Furthermore, the cost breakdown identified in the application was prepared by Roaring 40s Windpower. Thus, there is a degree of expectation for both SDC to honour the delivery approach (within the constraints of SDC Procurement Policy) and for Roaring 40s Windpower to honour the pre-development costs advised.

13      A number of due diligence actions have been completed to establish a reasonable level of confidence in Roaring 40s suitability for the task. Resumes of key staff and a capability statement have been obtained which outline a successful track record completing other similar wind projects. Background documents, research and cost assumptions were provided. Additionally, SDC staff have had the opportunity to speak with Roaring 40s Wind Power staff on several occasions, and this demonstrates a credible level of knowledge, value and interest from Roaring 40s Wind Power beyond the report itself.

Factors to Consider

Legal and Statutory Requirements

14      No legal or statutory issues have been identified.

Community Views

15      No community views have been sought specifically on this procurement issue.

Costs and Funding

16      The pre-development phase of this project is to be funded entirely from the PGF as per the aforementioned funding agreement. This provides an initial $300K upon the agreement being executed and a further $200K once the pre-development consultant has been contracted. A final $30K is available once the pre-development report has been completed and submitted to MBIE.

Policy Implications

17      Although under review, SDC’s current procurement policy, dated 29 September 2010, is in effect regarding engagement of a supplier(s) for the pre-development phase of the project.

18      The value of the pre-development contract with Roaring 40s Wind Power is estimated at $495K as per the report and the PGF application.

19      As per SDC’s procurement policy, dated 29 September 2010, Section 7.3 Alternative procurement methods allow and have provision for procurement aside from the competitive tender process. This memo outlines above, reasons for preferring a non-competitive process in fulfilment of Section 7.3 and shall be submitted to whomever responsible, as per Section 9 of the policy.

20      As per Section 9, 3. (b) Decision to use direct negotiation shall be documented clearly and will require the following authorisation: (i) Any goods, services or works expected to have a value over $200,000 is to be approved by Activities Performance and Audit Committee (APAC) – now replaced by the Services and Assets Committee.

Analysis

Options Considered

21      Option 1:  Proceed to directly negotiate a contract with Roaring 40s Wind Power for the predevelopment phase of the Stewart Island Wind Power Project.

22      Option 2:  Proceed with a competitive procurement process to establish a consultant for the predevelopment phase of the Stewart Island Wind Power Project.

23      Option 3:  Do nothing, SDC does not engage a predevelopment consultant and does not exercise the Provincial Growth Fund agreement.

Analysis of Options

Option 1 – Direct Negotiation

Advantages

Disadvantages

·        procurement costs are minimised

·        timeframe to execute a contract with a predevelopment consultant is minimised. A competitive tender process would require SDC to cover significant expenditure of time and expense before PGF funding is unlocked.

·        there is a small possibility that other viable consultants have not been considered.

Option 2 – Competitive Tender

Advantages

Disadvantages

·        achieve greater confidence of achieving a competitive price.

·        increased time and expense for a tender process is not covered by the PGF funding agreement and would instead have to be covered by SDC

·        improved value may not be realised because either tender costs outweigh the benefits or the market is not competitive enough to support this approach.

Option 3 –Do Nothing

Advantages

Disadvantages

·        risks and costs associated with embarking on this project are not realised by SDC, noting that only internal costs are borne by SDC during the predevelopment phase as external costs are fully funded.

·        wind power generation on Stewart Island, and the potential benefits associated with such, is not contemplated any further.

 

Assessment of Significance

24      This alternative procurement decision is not deemed significant.

Recommended Option

25      Option 1 – Direct Negotiation.

Next Steps

26      Council will proceed to develop a contract for the predevelopment phase via direct negotiation with Roaring 40s Wind Power. It is expected the final contract will be executed under delegated authority of Council staff.

 

Attachments

There are no attachments for this report. 

 


Services and Assets Committee

24 March 2020

 

Roading Operations - January and February 2020

Record No:             R/20/3/5576

Author:                      Rob Hayes, Roading Engineer

Approved by:         Matt Russell, Group Manager Services and Assets

 

  Decision                                        Recommendation                                  Information

 

 

Purpose

1        The purpose of this report is to update the committee on the progress of the major roading maintenance contracts and provide some context to the 2019/20 budget.

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

Executive Summary

3       Due to the flooding during February we have agreed not to report on January due to workloads at this time.

4       Customer satisfaction; 165 Requests for Service (RFS), across the three Alliance contracts were received in February 2020 compared to 99 in 2018/19, an increase of 67 or 67%. This is a significant increase compared to the same time last year and well above historic averages (81).

5       These figures are distorted because of the flooding event. This number could have been higher but Southland District Council customer service staff were filtering many calls during the flooding which was a great team effort.

6       The flood response dominated work activities through February. 

7       In relation to health and safety; 5 safety audits were completed in February with no lost time injuries and 3 near misses reported.

8        Activity performance:

·        metalling, 31369m3 (61%) has been placed of a total 2019/20 budget of 50,755m3.

·        grading, 8,780km (65%) have been graded by October of a total 2019/20 budget of 13,400 km for the year.

·        the general focus has been getting reseal sites ready and drainage works completed including culvert clearing.

·        focus will start shifting towards pavement repairs as weather conditions improve including commencing work on the 20/21 preseal programme.

Pavement Rehabilitation / Resurfacing

9        The Roading Company have completed works on Edendale Wyndham Road/Brydone Glencoe Road and have also started at Niagara Tokanui Road.  SouthRoads have completed 75% of the work on Otapiri Gorge Road and sealed the first 1km.

Brydone Glencoe Road

10      The 2019/20 resurfacing had a slow start due to the unsettled weather. Downer were 76% complete at the end of February after a big effort post Christmas. The work is programmed to be completed by the end of March as scheduled.   

Bridges

11      The tender evaluation processes for two bridge design/build packages were completed and awarded in December with SouthRoads the successful tenderer for the Northern package and Downer the successful tenderer for the Southern. We have completed our site meetings with affected parties at each bridge. Our contractors are currently finalising design and the project delivery team working through site specific planning including alternative access.

12      The Lake Monowai Road Bridge over Pioneer Energy’s hydro canal has been designed and tendered. This is the site we installed a Bailey bridge late last year to provide alternative access during construction. The outcome of the tender process is reported separately.

13      Mararoa Bridge has had some setbacks due to river levels and during the floods. SouthRoads are back on track and will be completed in April.

14      McDonald Road Bridge was completed and opened in December.

15      A bespoke design for Waghorn Road Bridge at Waituna Lagoon is underway.

Flood event

Strategic Transport staff and our Alliance contractors have had a challenging February dealing with flooding with 64 roads closed or under restriction at its peak. Although there has been a huge effort to date there is still a number of roads that still need our attention. The worst affected area was the Mataura river catchments. Below are a few photos from around Mataura Island and Fortrose.

Financial

16      We are still counting the cost of flood damage, which is currently sitting at $600K however, we are estimating this cost to reach approximately $3 million. For our Alliance contracts the “business as usual” turnover is down by $200K for February. This was expected and there are no outstanding claims or variations to the maintenance contracts.  All claims and invoices for completed work were certified and accepted.

 

Recommendation

That the Services and Assets Committee:

a)            Receives the report titled “Roading Operations - January and February 2020” dated 13 March 2020.

 

 

 

Attachments

a             Waimea A3 Report - Feb 2020

b             Central A3 - February 2020

c             Foveaux A3 - Feb 2020    

 


Services and Assets Committee

24 March 2020

 

PDF Creator

PDF Creator


Services and Assets Committee

24 March 2020

 

PDF Creator

PDF Creator


Services and Assets Committee

24 March 2020

 

PDF Creator

PDF Creator


Services and Assets Committee

24 March 2020

 

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.

C8.1 Lake Monowai Road Canal Bridge Tender Award

C8.2 Alternative Procurement for Supplier of Services to Stewart Island Electricity Supply Authority (SIESA)

C8.3 Structural Engineering Services Contract for Transport

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

Lake Monowai Road Canal Bridge Tender Award

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.

Alternative Procurement for Supplier of Services to Stewart Island Electricity Supply Authority (SIESA)

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.

Structural Engineering Services Contract for Transport

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.