Agenda of Nelson Regional Sewerage Business Unit

Minutes of a meeting of the Nelson Regional Sewerage Business Unit

Held in Ruma Mārama, Floor 2A, Civic House, 110 Trafalgar Street, Nelson

On Friday 24 June 2016, commencing at 1.01pm

Present: Councillors M Higgins (Chairperson) and B Dowler (Tasman District Council), Councillor R Copeland (Nelson City Council), and Mr D Shaw (Nelson City Council Representative).

In Attendance: Nelson Regional Sewerage Business Unit Manager (R Kirby), Senior Asset Engineer – Solid Waste (J Thiart), Industry Customers’ Representative (P Wilson), Iwi Representative (M Hippolite), Management Accountant (A Bishop), and Administration Adviser (J McDougall)

Apologies

It was noted that Councillor Copeland would be a few minutes late.

1. Confirmation of Order of Business

There was no change to the order of business.

2. Interests

The Chairperson declared an interest with item 5.8 Contract 3619 – Biosolids Operation.

For future reference (as the item was not on today’s agenda), the Chairperson declared an interest in the Rabbit Island hearing decision.

There were no updates to the Interests Register, and no further interests with items on the agenda were declared.

3. Public Forum

There was no public forum.

4. Confirmation of Minutes

4.1 11 March 2016

Document number M1761, agenda pages 5 - 8 refer.

Resolved NRSBU/2016/003

THAT the minutes of the meeting of the Nelson Regional Sewerage Business Unit, held on 11 March 2016, be confirmed as a true and correct record.

Shaw/Dowler Carried

5. General Manager's report

Document number R5962, agenda pages 9 - 26 refer.

Attendance: Nelson City Councillor Ruth Copeland joined the meeting at 1.06pm.

The General Manager’s report was discussed as follows:

5.1 Bokashi Logic project proposal

In response to a query, Nelson Regional Sewerage Business Unit Manager, Richard Kirby, advised that it was hoped to have enough details of the Bokashi Logic proposal for the September meeting so that a decision could be made on the next step.

It was suggested that any decision on the Bokashi Logic proposal might need to go to the owners (Tasman District Council and Nelson City Council) because of its significance, as the Nelson Regional Sewerage Business Unit committee only had four voting members.

5.2 Pond Sludge Management

It was noted that the ponds were desludged last in 1994-1996. It was advised that Pond 2 was not completely desludged at that time due to the lack of a location to receive the sludge.

In response to a question, Senior Asset Engineer – Solid Waste, Johan Thiart, advised that the proposal from Gurney Environmental stated that the sludge levels in the ponds would be reduced by 2.5 feet to 12 inches.

In response to a further question, Mr Thiart advised that action needed to be taken on pond 2 within 3 years, and within 7-10 years on ponds 1 and 3.

Mr Thiart advised that he would report back at the September meeting on the possibility of the Cawthron Institute undertaking a study of the capacity of Bell Island to receive the sludge.

In response to a request, Mr Thiart said he would circulate information about the Accel-o-Fac mixers/aerators included in the Gurney Environmental proposal.

Nelson Regional Sewerage Business Unit Manager, Richard Kirby, advised that he would provide information to the September meeting on the proposal received from Gurney Environmental.

5.3 Bell Island Spit Restoration

Nelson Regional Sewerage Business Unit Manager, Richard Kirby agreed to invite the Spit Restoration Group to make a presentation to the Board on their continued activities at the spit area at the December Board meeting.

5.4 Sampling and Laboratory Auditing

Nelson Regional Sewerage Business Unit Manager, Richard Kirby said that the accuracy of sampling and laboratory auditing had been discussed at the last contributor meeting, with a need identified for some processes to be sharpened. It was discussed whether testing was being undertaken in a consistent way and queried if the tests were reliable enough to reveal any systemic problems.

5.5 Trade Waste Agreement Amendments

Senior Asset Engineer – Solid Waste, Johan Thiart, noted that at the previous meeting it had been agreed to decide on the process as a group.

It was also noted that some industries occasionally needed to put an elevated load on the system and this could skew results. An example of this was discharging from log vats. These elevated loads would need to be scheduled around other contributors and it was confirmed that these matters were being discussed with other contributors.

5.6 Annual Customer Satisfaction Survey

Nelson Regional Sewerage Business Unit Manager, Richard Kirby noted the comments received from survey respondents, with some disappointment considering that costs had been more fairly allocated and a transparent agreed process used.

5.7 Contract 3458 – Operation and Maintenance

Nelson Regional Sewerage Business Unit Manager, Richard Kirby, advised that he recommended that the current contract (with Nelmac) be rolled over for a further two year period.

In response to a query, Mr Kirby advised that the contractor’s performance had been evaluated and any deficiencies were either being addressed or had been addressed.

5.8 Contract 3619 – Biosolids Operation

Attendance: The Chairperson declared an interest with item 5.9 Contract 3619 – Biosolids Operation and left the meeting at 2.16pm.

It was noted that in 10.2, the date should be changed from December 2016 to December 2015.

The group asked for paragraph 10.4 to be amended to read:

With the sludge processing system, ATAD’s, back to full capacity following remedial work it is projected that land available at Rabbit Island and Bell Island will be adequate for the application of all biosolids produced at Bell island for the next three to five years.

Attendance: The Chairperson returned to the meeting at 2.20pm.

Attendance: Councillor Higgins declared an interest in the Rabbit Island hearing decision.

5.9 Key Performance Indicators

In answer to a query, Nelson Regional Sewerage Business Unit Manager, Richard Kirby, advised that there had been three accidental discharges in the last three months. It was highlighted that it was impractical for all accidental discharges to be prohibited.

5.10 Compliance outcomes

Group members had no comment on this part of the report.

5.11 Health and Safety

The large number of visitors to the Bell Island Wastewater Treatment Plan was noted.

5.12 Financial

Management Accountant, Andrew Bishop, presented the financial report for the period ending 31 May 2016 (A1565151).

Mr Bishop noted that expenditure was below budget and that interest received was also below budget, reflecting the current economic environment. Mr Bishop noted that refunds would be being made this year.

Resolved NRSBU/2016/004

THAT the report General Manager's report (R5962) and its attachments (A1516705 and A1565151) be received;

AND THAT Contract 3458 Operations and Maintenance with Nelmac be extended on the same terms and conditions for another 2 years to 30^th September 2018 at an annual cost of approximately $1,600,000 excl GST.

Copeland/Dowler Carried

6. NRSBU Demand Management

Document number R6063, agenda pages 27 - 31 refer.

Senior Asset Engineer – Solid Waste, Johan Thiart, presented the report.

Resolved NRSBU/2016/005

THAT the report NRSBU Demand Management (R6063) be received.

Shaw/Dowler Carried

Attachments

A1516705 – Bell Island Spit Restoration
A1565151 – Nelson Regional Sewerage Business Unit Financial Report for the period ending 31 May 2016
R6063 - NRSBU Demand Management

There being no further business the meeting ended at 2.56pm.

Confirmed as a correct record of proceedings:

Chairperson Date

Nelson Regional Sewerage Business Unit

16 September 2016

REPORT R6501

General Manager's report

1. Purpose of Report

1.1 To report on the NRSBU operational activities over the last few months and outline what is proposed over the next few months.

Recommendation

It is recommended that the Committee

Receives the report General Manager's report (R6501) and its attachments (A1517758, A1617464 and A1618644);

Approves a 50% contribution towards the cost of installing a second power cable to the Bell Island Wastewater Treatment Plant, up to a maximum of $223,500, excluding GST;

Approves funding the upgrade cost of improvements to the biosolids transfer pipeline from within the capital budget approved in the 2016/2017 Business Plan;

Approves progressing with engaging the appropriate expertise to prepare and submit a resource consent application that will allow for the renewal of the discharge of treated wastewater to the Waimea Inlet, discharge of treated wastewater to land at Bell Island, and the discharges to air related to the wastewater treatment plant at Bell Island.

2. Bell Island Wastewater Treatment Plant - Electricity Supply

2.1 Currently there is only one electrical cable supplying power to Bell Island Wastewater Treatment Plant. This cable is owned by Network Tasman and crosses the estuary south of the plant. Only having one cable is a risk to the ongoing supply of power to the plant. If the cable was to fail, Network Tasman has indicated that it could take at least a week to reinstate the supply.

2.2 This risk to supply was initially identified during Engineering Lifelines studies in the region.

2.3 The NRSBU has had ongoing discussions with Network Tasman over some time. Network Tasman has investigated and concluded that a second cable is the most cost-effective way of providing greater security of supply (see Network Tasman Letter 23 August 2016 attached)

2.4 After considering several options, Network Tasman has confirmed that the most cost-effective solution is running an underground cable from the overhead supply on Best Island, along the golf course fairway adjacent to the treatment plant access road, under the estuary and along to the treatment plant. Network Tasman has secured easements along the proposed route.

2.5 The total cost of the project is estimated at $447,000. This is greater than what Network Tasman had budgeted for the work. It has consequently requested that NRSBU consider sharing the cost 50:50. This would require NRSBU funding $223,500 (plus GST).

2.6 Although Network Tasman are contracted to supply electricity, it has not guaranteed to provide a continuous supply 100% of the time. This is not unusual as events do occur that can interrupt supply which are beyond Network Tasman’s control. This includes the current cable failing.

2.7 The key issue for the NRSBU is the impact of no electrical supply for what could potentially be up to a week and in some more extreme events more than a week. The impacts would not only be compromised wastewater treatment but potentially the associated adverse environmental impacts.

2.8 The NRSBU has considered the option of installing standby generation, however the power demands to keep the plant fully operational render this option not cost-effective. Installing sufficient standby generation to only operate parts of the plant could be viable, however this would require capital investment plus ongoing maintenance to keep generation functional.

2.9 This could be verified by undertaking a more detailed cost-benefit analysis of the various options. However given the complexity of reducing the operability of the plant with its associated risks, it is considered that an investment of $223,500 by the NRSBU in this backup supply is warranted.

2.10 Network Tasman has confirmed that the proposed cable will have around 20% greater capacity than the current supply cable. Although this is not of benefit to the NRSBU now, it could be of benefit if any future upgrade at the plant is required.

2.11 Network Tasman will still own the cable, and have indicated that it will be connected so that in the event of any power disruption caused by the current cable failing, the proposed cable can be operating without delay. This means that the NRSBU funding cannot be capitalised by attributing it to a specific asset, however it may be considered as capital given that it provides an improved management of risk. This will require further assessment and probably consultation with the contributors to determine the most appropriate funding mechanism.

2.12 In the meantime it is recommended that the NRSBU approve funding of 50% of the cost of installing the second cable up to a maximum of $223,500 (plus GST).

3. Bokashi Logic Proposal

3.1 At its meeting 24 June, the NRSBU was given an update on progress with this proposal.

3.2 Although the Bokashi Logic proposal outlined a trial process, it did not include any details on a testing regime to demonstrate how the biosolids are affected by the introduction of the additive. Specific sampling and laboratory testing would be required to validate the results and it was unclear from the proposal who would be responsible for this cost.

3.3 In proposing the trial, Bokashi Logic requested a financial contribution of $9,000 to run the trial over a period of approximately 100 days.

3.4 The NRSBU requested this additional detail and has received a response from Bokashi which has outlined a revised trail involving 8 x 1,000 litre water tanks. The NRSBU has met Bokashi on site and been briefed on the revised proposal. These trials and the liability of the proposed costs are still being finalised.

4. Pond Sludge Management

4.1 At its meeting 24^th June, the NRSBU were briefed on a proposal from Gurney Environmental regarding the installation of Accel-o-Fac aerators in the ponds to reduce sludge production and volumes. The intention was to undertake more research to achieve more certainty around the cost-effectiveness of this proposal and associated investment.

4.2 The NRSBU has progressed the investigations and this included meeting with a wastewater specialist at Massey University who has seen the equipment in the UK. The NRSBU obtained some feedback and suggested a course of action for further investigations.

4.3 We had hoped to complete the investigations and the due diligence on this proposal and present these findings to this meeting. However we have not completed this and we hope to report at the next meeting of the NRSBU in December 2016.

5. Coastal Effects - Bell Island Wastewater Treatment Plant Discharge.

5.1 The NRSBU has commissioned the Cawthron Institute to undertake twice-yearly (summer and winter) shellfish monitoring surveys. These are to identify any potential bacteriological water quality issues at inner Tasman Bay sites in the vicinity of the Bell Island Wastewater Treatment Plant outfall.

5.2 The surveys, first implemented in April 2008 are carried out in accordance with conditions of consent for Coastal Permit NN925584 (Annex 2, Part B; revised July 2007).

5.3 The latest Cawthon Institute Report No. 2814, March 2016 (as attached A1517758) describes the results of the February (summer) 2015-16 survey. This report confirms that there is no evidence that the treatment plant discharge has a significant effect on bacteriological water quality at the inner Tasman Bay sites.

5.4 It should be noted that Cawthron Institute is currently working on the five yearly sea bed and seawater characteristics monitoring, and is expected to report back to the NRSBU on those results by the end of October 2016. The reports will include the assessment of the summer and winter monitoring work carried out since the last report in 2011.

5.5 Cawthron Institute are of the view that an update to the 2001 study of nutrient and bacterial input from streams around the Waimea Estuary would be very useful in interpreting the Bell Island monitoring data, given likely changes in land-use and land-management practices in the interim.

5.6 All this information will be collated and incorporated into the NRSBU application to renew the discharge consent in the next couple of years.

6. Discharge Consent Renewal

6.1 The discharge consent for the Bell Island Wastewater Treatment Plant expires on 7 February 2018. The consent comprises the discharge of treated wastewater to the Waimea Inlet, the discharge of treated wastewater to land at Bell Island and the discharges to air related to the wastewater treatment plant at Bell Island.

6.2 Significant data sets are now available on the performance of the treatment plant in terms of the effects of discharges from Bell Island. Analyses of the performance of the treatment plant suggest that the improvements have facilitated compliance with the objectives of the consent.

6.3 The NRSBU needs to engage appropriate expertise to develop the application based primarily around the renewal of the consent. Although the expertise needs to keep an open mind, there has been significant investment in considering and assessing alternative options. Therefore the engaged expertise needs to comprise appropriate legal and technical skills to review the collated information and prepare the most appropriate application to renew the consent.

6.4 The project will need to be managed actively to consolidate the consent application for lodgement with the consent authority in early August 2017.

6.5 The estimated cost of preparing and submitting an application is around $200,000. This funding is included as part of the renewals funding in the Business Plan 2016/17 and the balance will be included in the Business Plan 2017/18.

6.6 An assessment of the expertise required has been undertaken and it is intended that the NRSBU progress with engaging the relevant expertise and initiate the preparation of the consent.

6.7 It is therefore recommended that the Joint Committee approve the preparation and submission of a resource consent application for the discharges from the Bell Island Wastewater Treatment Plant.

7. Trade Waste Agreement Amendments

7.1 Following consultation with contributor representatives the Agreement for Disposal of Trade Waste has been amended.

7.2 The amended Draft Agreement for Disposal of Trade Waste (Draft Agreement) was circulated to the contributor representatives, consulted on and then discussed at the contributor meeting held on 16 March 2016.

7.3 Changes to The Agreement were reported to the Board at the meeting on 24 June 2016 and discussed at the contributor meeting on 29 June 2016.

7.4 Following this meeting the Draft Agreement was circulated to contributor representatives on 30 July 2016 for consideration.

7.5 Although a meeting was scheduled for 15 July 2016 to discuss the proposed changes, all five contributor representatives indicated that there was no need to have the meeting. It is now proposed to present the revised agreements to the contributor representatives for final approval.

7.6 All the contributors other than the Nelson City Council have indicated that they are in agreement with the amendments. Should Nelson City Council not agree with the amendments, then retaining the current agreement with Nelson City Council will not have an impact on the activities of the NRSBU.

8. Valuations

8.1 The NRSBU had intended to complete a primary based valuation by the 30^th June 2016. For various reasons this has not occurred. There are still some complexities with the NRSBU data which has delayed the progress of the primary based valuation.

8.2 Whilst the 30 June 2016 primary valuation was being undertaken it became apparent that its accuracy and reliability required further breakdown of specific items in the valuation register.

8.3 The process of reconciling the redeveloped fixed asset register with the valuation register demonstrated that there continue to be gaps in both registers. Some significant items in the valuation register were not sufficiently detailed to allow for an accurate valuation. (Significant electrical and control equipment was found to be lumped together without a description of individual components.)

8.4 The process of reconciling the registers is resource intensive, reliant on experience and familiarity with the physical assets. The NRSBU is assessing how best to progress with this work cost-effectively.

8.5 Consequently the original deadline of 30 June 2016 was not met and therefore cannot be included in the financial statements of the owners, Nelson City Council and Tasman District Council.

8.6 It is likely to take at least 6 to 8 weeks to componentise and value the assets that have traditionally been grouped together. Then a further 4 to 8 weeks to validate and integrate these into the valuation and fixed asset registers.

8.7 The NRSBU will focus on completing the alignment of the fixed asset register and valuation register before completing the primary valuation. The intention is to complete the primary valuation prior to 30 June 2017 for reporting to both Councils.

9. Contract 3458 – Operation and Maintenance

9.1 The reticulation and treatment operations have continued as normal over the last few months. Discharge continues to meet consent conditions and sludge produced at the treatment plant complies with Class A biosolids quality.

9.2 Ponds have performed well. It is likely that load will be diverted away from the activated sludge area and into the ponds. This is to utilise the capacity of the ponds earlier than normal and will result in energy savings in the aeration basin.

Biosolids Pipeline Blowout

9.3 In August 2016 there was a blowout in the biosolids pipeline. The blowout was located on Bell Island near the road causeway.

9.4 It took some time and effort to repair the blowout and determine the cause. An investigation has indicated that potentially 90-100m3 of biosolids were discharged. Some of the discharge was contained and an unknown volume discharged into the estuary.

9.5 The cause was a blockage. Four cut-outs along the concrete line steel pipeline were required to clear the blockages. A condition assessment that included sampling at four points along the concrete lined steel pipe showed that the blow out occurred at a weak point along the line. The four cut outs were reinstated to allow access to the rising main to clear future blockages.

9.6 The investigation into the event revealed that improved monitoring controls would better manage future blockages as and when they occurred.

9.7 An automated process review is underway including the option of implementing an automated mass balance between the Bell Island sludge transfer flow meter and the Rabbit Island sludge discharge flow meter. A number of possible improvements are being considered however these are reliant on remote data monitoring. Previous studies have shown that the Rabbit Island activities cannot be easily integrated with the Bell Island SCADA systems due to the significant cost associated with the construction of a suitable aerial to establish radio linkages.

9.8 The costs of the improvement works on biosolids pipeline have not been budgeted. It is therefore recommended that these be funded from the savings in the capital budget in the 2016/2017 Business Plan allocated to installing curtains ion the oxidation ponds.

Songer Street Pumpstation Blockages

9.9 Investigations into recent pump blockages at the Songer street pump station have demonstrated that the problems experienced at this pump station is associated with the recent express sewer bypass installed by Nelson City Council (NCC).

9.10 NCC is now working with its contractors, trade waste officers and asset engineers to develop strategies to improve the management of the bypass. This work includes investigating the source of the material causing the blockages. Public education aimed at awareness of the effects of disposing material such as sanitary wipes and rubber gloves on the sewerage network.

9.11 NCC is also designing and installing screening equipment on the bypass.

9.12 Nelmac is now aware of potential blockages associated with increased flow along the pipeline following heavy rain events and intend to be more proactive when issues develop at the pump station.

Biosolids Volume Increase

9.13 Work is underway to investigate if there is a link between the 2010 upgrade and the increase in biosolids volumes at the treatment plant.

9.14 Trends suggest that biosolids volumes have doubled following the upgrade. A theory that organic matter is more effectively reduced in the activated sludge area compared to the removal of primary sludge before the loads enters the activated sludge area is being investigated.

10. Contract 3619 – Biosolids Operation

10.1 The monthly average volume of biosolids sprayed over the last few months have stayed at higher levels and is expected to start tapering down once load is diverted to the ponds.

11. Key Performance Indicators

11.1 The outcomes of key performance indicators for the 3 month period to 31 July 2016.

Note 1: An overflow occurred at the Songer Street pump station when pumps became partially blocked during a rain event on 22 June 2016. Following an investigation, NCC has formed the view that the problem is associated with the management of the express sewer bypass constructed by NCC. NCC has now put processes in place to improve the management of the bypass that includes an investigation into the construction of a screening facility on the express bypass.

Note 2: An overflow of treated biosolids (Estimated 98m³) occurred following a blow out on the concrete lined steel biosolids transfer pipeline on 19 June 2016. Some of the overflow was contained and an unknown quantity flowed into the Waimea Estuary. (Less than 98m³). The issue was investigated and mitigation measure are being put in place.

12. Compliance Outcomes

12.1 The compliance outcomes for the 12 months to 31 July 2016 are outlined in the following table:

i)	Resource Consent Compliance (rolling 12 month record)
	Ø Discharge to Estuary Permit			Achieved.
	Ø Accidental discharges (Consent for accidental discharges within Nelson City Council area is being sought at present)			Overflows occurred at the Beach Road, Saxton Road and Songer Street pump station during the heavy rain event on 24 March 2016. The rainfall event is the second highest rainfall recorded over a 24 hour period recorded for Nelson since January 2000. An overflow occurred at the Songer Street during wet weather conditions when both storm pumps blocked on 22 June 2016. Biosolids overflow to land and the Waimea estuary following a blow out on biosolids transfer pipeline on 19 and 20 July 2016.
	Ø Discharge to Air Permit			100% Compliance
	Ø Biosolids Disposal			100% Compliance
	Ø Discharge treated waste water to land			100% Compliance
ii)	Odour Notifications
	Ø Past three months	Nil.
	Ø Last 12 months	Nil.
iii)	Overflows
	Ø Past three months		Two.
	Ø Last 12 months		Five.
iv)	Speed of response for maintenance works
	In past three months: Ø Seven call outs were associated with treatment plant issues. · DAF Poly auger – 2 events · Gravity belt thickener – 3 events · Primary Clarifier sludge transfer over pressure. · ATAD: Foam cutter fault. Ø Four call outs recorded for pump station. · Airport – power failure. · Songer Street – 3 events – related to pump blockages. (Including response for overflow during the 22 June 2016 heavy rain event)
	Ø Response within 30 minutes. Achieved.

13. Review of Action Plan Implementation –
2014 Asset Management Plan and 2015/16 Business Plan

The following table indicates the draft time lines for the individual action items:

IP	Business Plan Action	Target Date	Completion Date	Comments
1	Review manuals annually.	Oct 2016		Delayed. Work now programmed for completion by Nelmac in September/October 2016.
2	Consolidate all natural disaster information and review 3 yearly.	Mar 2018		Work will be carried out as part of next asset management review.
3	Internal benchmarking carried out annually.	Jun 2016	Aug 2016	Carried out as part of annual report.
4	Review risk of contributors leaving NRSBU.	Jun 2016	Dec 2015	Completed.
5	Review capacity of treatment components.	Mar 2017		Expect treatment plant model to be in place in March 2017. Following assessment of S::can results.
6	Programme for pipe inspections.	Oct 2016		Included in annual review of Operation and Maintenance Plan.
7	Annual review of contractor performance.	Dec 2016	Jun 2016	Completed.
8	Screen upgrade.	Dec 2016		Variation issued to Nelmac to manage the duplication of the screen.
9	Review secondary sludge separation.	Dec 2016		Depends on completion of treatment plant model.
10	Construction second sludge storage tank.	Jun 2017		Delayed from June 2016.
11	Develop sludge removal programme.	Jun 2017		Business case developed. Options identified. Report on option 2 included in this report.
12	Review effluent discharge management.	Mar 2016	Jan 2016	Competed.
13	Renewal of effluent discharge permit	Dec 2018

AP	AMP Action	Target Date	Completion Date	Comments
1	Annual customer survey.	Mar 2016	Apr 2016	Completed.
2	Business Continuity Plan review.	Jun 2016	Jun 2016	Completed.
3	Consider benefits of succession planning and how it might be implemented once governance issues (TDC and NCC) have been resolved.	Jun 2016	June 2016	Completed.
4	Review of security required at all facilities.	Mar 2016	May 2016	Formed part of 6 monthly Safety Audit.
5	Monitor sludge levels in ponds and ascertain long term removal and disposal requirements.	Mar 2016	Feb 2006	Completed.
6	Improve reporting requirements for asset condition, performance and maintenance from maintenance contractor.	Mar 2016	Apr 2016	Completed.
7	Implementation of internal bench marking (using historical data) of NRSBU network, pump stations, treatment and disposal facilities.	Jun 2016		Delayed until 2017.
8	Develop Demand Management Policy.	Jun 2016	Jun 2016	Completed.

14. Health and Safety

14.1 There have been 3 inductions and 146 visitors to the Bell Island Wastewater Treatment Plant over the past three months.

14.2 Two near miss observations and one injury were reported during the last three months.

14.2.1 Unsafe work observation at Gravity belt Thickener – Operators instructed to use specialised tool when cleaning debris from moving belt or to stop belt before attending to the belt.

14.2.2 Operators instructed to use portable barriers at Songer street pump station when attending to the wet well to ensure that people and pets do not affect operations.

14.2.3 Operator pinched finger when lifting a chamber lid.

14.3 Variation approved for work to address slippery work surface conditions along the oxidation ponds wavebands when servicing automated dissolved oxygen monitoring equipment.

15. Financial

15.1 The expenditure for the first two months is generally tracking below budget.

15.2 The draft Annual Report 2015/16 is appended as a separate report.

15.3 The costs incurred repairing the blow out on the biosolids transfer pipeline are still to be assessed. They are likely to be reasonably significant.

Richard Kirby

Consulting Engineer

Attachments

Attachment 1: Coastal Effect of the Bell Island Regional Sewerage Discharge: February 2016 Mussel Monitoring Survey A1517758

Attachment 2: NRSBU Status Report 16 September 2016 A1617464

Attachment 3: Bell Island Sewerage Facility Electricity Supply A1618644

Nelson Regional Sewerage Business Unit

16 September 2016

REPORT R6520

Draft Nelson Regional Sewerage Business Unit Annual Report 2015/2016

1. Purpose of Report

1.1 To consider the performance of the Nelson Regional Sewerage Business Unit (NRSBU) for the 2015/16 financial year.

1. Recommendation

It is recommended that the Committee

Receives the report Draft Nelson Regional Sewerage Business Unit Annual Report 2015/2016 (R6520) and its attachments (A1619083, A1619080 and A1623133;

Approves that the Annual Report (R6520) subject to audit.

2. Background

2.1 This Annual Report is a review of what has been achieved by the Nelson Regional Sewerage Business Unit (NRSBU) in the 2015/16 financial year and its level of performance against Key Performance Indicators.

3. Discussion

3.1 The NRSBU met its budget targets with a surplus of $1,923,385. Operation and maintenance costs are 1% less than the budget.

3.2 One of the highlights of the past year is the continued savings in electricity usage at the treatment plant resulting from improved utilisation of the capacity of the Bell Island ponds by Nelmac. Microbiological analysis of the pond organisms and physico-chemical parameters monitored demonstrate that pond health has been maintained or improved during the last few years.

3.3 The upgrade of the treatment plant load monitoring, airport pump station and the odour control at the Saxton pump station were completed within budget.

3.4 Capital projects to the value of $549,000 were delayed to allow for the completion of an investigation into a proposal received from Gurney Environmental relating to the optimisation of the Bell Island pond systems to improve sludge digestion. Gurney Environmental claims that installing Accel-o-Fac mixers in the ponds will increase the hydraulic capacity of the ponds over time by decreasing the sludge level in the ponds by up to 3 feet creating significant future savings for the NRSBU resulting from the deferral of the desludging of the ponds.

3.5 The upgrade of the inlet screening at Bell Island is programmed for completion during 2016/17.

3.6 All consent conditions were met during the year.

3.6.1 The effluent discharge quality has met the consent conditions for the year.

3.6.2 The sludge treated at Bell Island consistently met the requirements for A Grade biosolids.

3.6.3 The operation and maintenance contractor maintained a high level of Health and Safety vigilance and there were no lost time related to injuries during the past year.

3.6.4 Ten health and safety incidents were recorded during the year, one of which resulted in a minor abrasion to a finger.

3.7 The online spectrolyser (S::Scan) installed during the year at the wastewater treatment plant inlet provides valuable real-time information about influent characteristics and will over time generate a reliable dataset that will allow the NRSBU to optimise the treatment plant performance

Level of Service Performance

3.8 The levels of service recorded over the past three years have stayed reasonably consistent. The following table summarises compliance of the levels of service

3.9 Four overflows occurred at pump stations over the past year. The following graph outlines the overflows and associated causes that have occurred since 1996/97.

Figure 5: Pump Station Overflow Causes

3.9.1 Three overflows occurred during a rain event (highest 24 hour rain event recorded since 2000) on 24 March 2016 at three different pump stations.

3.9.2 One overflow occurred on 22 June at the Songer Street pump station following an event where all three pumps at the pump station blocked. Investigations into this event and other events where pumps were blocked at this pump station have shown that the blockages are related to the express sewer bypass constructed by Nelson City Council. Nelson City Council has programmed work to improve the management of this pipeline.

Figure 6: Odours

Customer Group

3.10 Four Customer group meetings were held during the year. Customers continue to see cost effective and efficient operation of the regional scheme as the most important task of the NRSBU and this is a high priority for the Joint Committee.

3.11 The survey also showed that most customers feel that the NRSBU is responsive to their needs. (The survey is marked out of 7). The following table summarises the results of the customer surveys.

Figure 4.2: Customer Survey Results 2015/2016

Performance Measured Against Strategic Business Objectives

3.12 The strategic goals of the NRSBU set the basis for performance measurement and longer term strategies. Seven Key Result Areas are identified and a set of Key Performance Indicators developed to measure the performance of the NRSBU. The following section reports the performance of the NRSBU towards achieving the 2015-16 performance objectives. The following table outlines the performance objectives, key performance measures and what was achieved:

3.13 “5.1 Wastewater reticulation, treatment and disposal services meet customers’ long term needs.”

Objective	Key Performance Measures	Performance
Sufficient reticulation, treatment and disposal capacity is available for loads received	Loads do not exceed the capacity of system components.	Achieved.
Intergenerational equity is maintained.	Loans are repaid over 30 years (the average life of the assets).	Achieved. The distribution to shareholders, as measured over a three year period, does not breach this requirement.
Customers are encouraged to engage with the organisation and are satisfied with the service.	All customer representatives attend at least 75% of customer meetings.	Achieved.
	Customer surveys show an average score of at least 5 out of 7 on satisfaction with services.	An average of 5.7 was achieved.
Levels of service are defined in all contracts and are met.	100% compliance with service level agreements by all major contractors.	Achieved.

3.14 “5.2 The cost of wastewater reticulation, treatment and disposal services are minimised”

Objective	Key Performance Measures	Performance
The costs of reticulation, treatment and disposal processes are minimised.	The operational costs of reticulation, treatment and disposal processes are maintained under the cost for these services at 30 June 2013 when adjusted by the Producer Price Index.	Achieved. The cost of operations is 10% lower than operational cost for the year ending 30 June 2013.
	All capital projects are delivered within budget.	Not achieved. Programmed capital projects delayed to allow for review of pond optimisation.
The economic lives of all assets are optimised.	Three yearly independent audit of asset management practices confirms this.	Achieved. No comment received from Audit New Zealand.
Customers understand the benefits of demand management and the costs, risks and environmental implications of increasing demand.	Demand management policy is developed by July/August 2014.	Completed.
	Customer contracts are reviewed by June 2015 to ensure that charging mechanisms support the demand management policy.	Achieved. Customer contracts were reviewed in June 2015.
	Nelson City Council and Tasman District Council implement their own load management policies, priorities and plans.	Both Councils have developed inflow and infiltration strategies in their asset management plans and these strategies are part of their Long Term Plans.
	Combined Loads do not exceed the capacity of the components of the system.	Achieved.
	Peak storm water inflows are reduced by 10% per year and that this target will be reviewed annually.	It is not possible to measure the storm water component.
Technology choices are well understood and are proven to be stable and cost effective.	Technology choices are supported by cost benefit analysis, independent peer review, energy efficiency analysis, risk analysis and, where appropriate, by other users of those technologies.	Optimisation of pond operation is being reviewed following a proposal received from a third party.

3.15 “5.3 Risks associated with the services provided are identified and mitigated to a level agreed with customers and owners”

Objective	Key Performance Measures	Performance
Risk management plans include all significant health and safety, environmental, cultural, social economic and contractual risks.	No event, which impacts on agreed levels of service, occurs that has not been identified in the Nelson Regional Sewerage Business Unit risk management plans.	Achieved. Risk management plans were reviewed as part of the 2015-18 asset management planning process.
Contingency plans adequately address emergency events.	Customer representatives review and approve the plans annually.	Asset management plan considered at customer meeting.
Contingency plans adequately address emergency events.	Effectiveness of plans is reviewed and confirmed following incidents which require activation of the plan.	Incidents reported in quarterly reports and considered at customer meetings.
Customers engage with the risk assessment process, understand and accept the important risks and the level of mitigation provided.	Customer representatives review and approve the risk management plan annually and following any incidents which require activation of the plan.	Asset management plan considered at customer meeting.

3.16 “5.4 We engage the right people, with the right skills and experience”

Objective	Key Performance Measures	Performance
Those engaged with the Nelson Regional Sewerage Business Unit have the right skills, experience, and support to perform well.	Annual staff performance reviews include assessment of the skills and experience required in their role in Nelson Regional Sewerage Business Unit and their development needs are identified and met.	Continued.
	Development and succession plans are in place.	Continued.
	The Board reviews its performance at least every two years.	No review carried out during 2015/16.
	A workshop is conducted at least annually to develop the skills and industry knowledge of the Board members and staff.	Achieved. The workshop held in March 2016 on the performance of the oxidation ponds were attended by all Board members and two contributor representatives.
	An independent audit every three years confirms this.	Not achieved. The review of the manuals were delayed until 2016/17.

3.17 “5.5 Nelson Regional Sewerage Business Unit operates sustainably and endeavours to remedy or mitigate any identified adverse environmental, social or cultural impact”

Objective	Key Performance Measures	Performance
Nelson Regional Sewerage Business Unit minimises adverse environmental, social and cultural impacts where this is economically viable.	Targets are set for energy efficiency improvements by June 2015 and are reported on and reviewed annually from that date.	Achieved. Reported in quarterly reports.
	Current capacity to utilise beneficial application of biosolids to land is sustained.	100% of biosolids treated at Bell Island are beneficially applied to Radiata pine plantations belonging to Tasman District Council and Nelson City Council.
	Beneficial economic and environmental reuse of treated waste water is maintained or increased.	The lessee continued to use the irrigation system on Bell Island.
	Environmental, social and cultural impacts are considered in all decision making.	Not measured.

3.18 “5.6 Good relationships are maintained with all stakeholders.

Objective	Key performance Measures	Performance
Shareholders are satisfied with the strategic direction and the economic performance of the business unit.	All strategic and business plans are approved by shareholders.	Achieved. The Business and Strategic Plans were approved by both owners
	All budget projections are met.	Achieved.
Good relationships are maintained with all stakeholders including owners, iwi, customers, contractors, neighbours, and the wider community.	All complaints or objections are addressed within 7 days.	Achieved.
	All applications for resource consents are approved.	Achieved. The Accidental discharges consent application is continuing.
	Up to date information on activities and achievements are publicly available.	The NRSBU website is reviewed annually and updated as required.
	Stakeholders are identified and communication targets are set and met by June 2014.	Not achieved. Annual meeting with Best Island residents was delayed and is programmed for November 2016.
		Continued good communication with Best Island residents and early response to issues raised have allowed the NRSBU to pre-empt odour complaints.

3.19 “5.7 All statutory obligations are met.”

Objective	Key Performance Measures	Performance
All statutory obligations are identified and met and are included in contracts with suppliers.	100% compliance with all statutory obligations.	Achieved.
All resource consents requirements are met.	Compliance with resource consent conditions.	Not achieved. The Bell Island irrigation consent report was delayed as a result of delay in receiving soil test results. Report will be submitted in August 2016.

Capital Expenditure 2015/16

3.20 The following table lists the extent of renewals that were undertaken in 2015/16;

3.21 Renewals are programmed based on expected life and condition assessments carried out as part of the annual valuation review. During the year that the renewal is programmed the asset condition is reviewed before the renewal is confirmed and completed.

3.22 Upgrades

C/O = carry over from previous budgets. Project cost to date for the Accidental Discharge Consent application = $47,870.

3.23 Upgrade projects identified to improve the efficiency of the ponds and sludge processing were put on hold while the proposal received from Gurney Environmental is reviewed.

Scheme Capacity Trends

3.24 The average inflow to Bell Island is trending well below the projections used for the 2006 capacity review.

Figure 8: Shows the increased inflows into Bell Island

3.25 The total suspended solids design parameters (2 day peak and 90 percentile values) have shown a significant decrease since the disposal of trade waste agreements were put in place. It is considered that this decrease results from the improved on site wastewater treatment by the three industrial contributors leading up to and following the implementation of the customer contracts that were signed in 2007.

Figure 9: Decrease in peak suspended solids following the signing of the Disposal of Trade Waste Agreement

3.26 The biological oxygen demand in the inflow has decreased over the period since the trade waste agreements were effected.

Figure 10: Biological oxygen demand

3.27 The chemical oxygen demand (figure 11) is trending lower. Future demand projections should be adjusted to these base levels as it is considered that the decrease in loads is related to the implementation of the disposal of trade waste agreements in 2007. These agreements continue to provide an incentive for industrial customers to improve on site treatment of waste water.

Figure 11: Shows the decrease of peak chemical oxygen demand since the implementation of the Disposal of Trade Waste Agreements in 2007.

3.28 The Total Kjeldahl Nitrogen (TKN) and Total Phosphorous (TP) in the effluent discharged to Bell Island has decreased has over time and little change in the nutrient levels in discharges from Bell Island has been observed.

Figure 12: Shows a decrease in the nutrients received at
Bell Island

Figure 14: Shows a decrease in the phosphorous received at Bell Island

3.29 The average total nitrogen and total phosphorous loads discharging from Bell Island at around 50% of the resource consent limits.

3.30 The graph below shows that the application of nitrogen at Rabbit and Bell Island through biosolid application is within the capacity of these areas to receive nitrogen.

Figure 15: Average daily biosolids application

3.31 The diversion of solids away from the ponds since the completion of the primary clarifier upgrade is significant. This allows flexibility in the management of sludge treatment at Bell Island without compromising the ponds.

Figure 16: Dry solids diverted to pine plantations

Conclusion

3.32 Analysis of the scheme capacity trends confirms that peak loads have been shaved significantly since 2007 and that there is adequate capacity within the system to treat wastewater discharged to Bell Island.

Financial Performance

3.33 Explanations for major variations from the Nelson Regional Sewerage Business Unit's 2015/16 Business Plan are as follows:

Statement of Comprehensive Income

3.34 Total Income is $587,796 less than budget due to lower interest rates reducing the rate of return on capital.

3.35 Total Expenses are $236,981 less than budget largely due to interest being $247,611 less than the budget due to a reduction in interest rate paid. Electricity is $106,348 less than budget as a result of optimising load into the ponds and lower pump costs. The cost of Bio Disposal was $107,442 more than budget due to increased volumes and additional cost of transporting to alternative disposal sites.

Richard Kirby

Consulting Engineer

Attachments

Attachment 1: Discharge consent compliance 2015/2016 A1619083

Attachment 2: Contributor Heavy Metal Results A1619080

Attachment 3: Draft Financial Statement 30 June 2016 A1623258

Important considerations for decision making

1. Fit with Purpose of Local Government

Annual performance report to show that All statutory obligations have been met.

2. Consistency with Community Outcomes and Council Policy

Wastewater reticulation, treatment and disposal services meet customers’ long term needs

3. Risk

Risks associated with the services provided are identified and mitigated to a level agreed with customers and owners

4. Financial impact

The costs of wastewater reticulation, treatment and disposal services are minimised

5. Degree of significance and level of engagement

This matter is of high significance for the NRSBU because the report informs the owners how the NRSBU met key performance indicators. The report will be released to the owners once the audit report is received.

6. Inclusion of Māori in the decision making process

N/A

7. Delegations

The Joint Committee has the responsibility for considering the annual report on behalf of the owners, Nelson City Council and Tasman District, in terms of the memorandum of understanding.