Agenda of Nelson Regional Sewerage Business Unit

Item 7: Nelson Regional Sewerage Business Unit - Draft Business Plan 2021/22 and Draft Activity Management Plan 2021 - 2031

Nelson Regional Sewerage Business Unit

11 September 2020

REPORT R20296

Nelson Regional Sewerage Business Unit - Draft Business Plan 2021/22 and Draft Activity Management Plan 2021 - 2031

1. Purpose of Report

1.1 This report provides a summary of the Nelson Regional Sewerage Business Unit (NRSBU) Draft Business Plan 2021/22 and the Draft NTRLBU Activity Management Plan 2021 – 2031, and seeks approval of these documents for circulation to Nelson City Council and Tasman District Council for review and feedback.

2. Summary

2.1 The Draft NRSBU Activity Management Plan 2021-2031 (AMP) (A2458264) is attached for approval at this meeting. The AMP has developed based on the workshop held in March 2020, and on feedback from questionnaires e-mailed to the board members and based on feedback from a discussion document submitted to board members.

2.2 The AMP uses the work undertaken to date on the 50 year Master Plan. This work has allowed the two plans to link together, however it would have been significantly better to have had the strategic plan completed in advance of the AMP.

2.3 The preparation of the AMP has been a significant piece of work to bring together.

2.4 The AMP has been bought together to the best of NRSBU staff knowledge. It focusses on reducing operating risks, resolving capacity constraints and improving systems to allow improved performance.

2.5 The program has been developed to try to reflect the priorities and timing while spreading out the expenditure. At present the programme of works is still ambitious and will be very difficult for NRSBU staff to deliver.

2.6 The Draft NRSBU Business Plan 2021/2022 (A2458266) is attached for discussion and approval.

2.7 The Draft NRSBU Business Plan generally follows the works as outlined for 2021/22 in the 2020/2021 plan.

2.8 The capital expenditure requested is significant. The programme of works is ambitious and will be difficult for the Regional Services staff to deliver without additional resources.

3. Recommendation

That the Nelson Regional Sewerage Business Unit

1. Receives the report Nelson Regional Sewerage Business Unit - Draft Business Plan 2021/22 and Draft Activity Management Plan 2021 - 2031 (R20296) and its attachments (A2458264 and A2458266); and

2. Approves the Draft Nelson Regional Sewerage Business Unit Draft Business Plan 2021/22 (A2458266) for presentation to the Nelson City Council and Tasman District Council, with delegation of all minor amendments to the Nelson Regional Sewerage Business Unit Chairperson; and

3. Approves the Draft Nelson Regional Sewerage Business Unit Activity Management Plan 2021-2031 (A2458264) for presentation to the Nelson City Council and Tasman District Council, with delegation of all minor amendments to the Nelson Regional Sewerage Business Unit Chairperson.

Recommendation to Nelson City Council and Tasman District Council

That the Nelson City Council and Tasman District Councils

1. Receive the 2021/2022 Draft Nelson Regional Sewerage Business Unit Business Plan (A2458266) for review, and provide feedback to the Nelson Regional Sewerage Business Unit if required; and

2. Receive the Draft Nelson Regional Sewerage Business Unit Activity Management Plan 2021-2031 (A2458264) for review, and provide feedback to the Nelson Regional Sewerage Business Unit if required.

4. Background

4.1 The NRSBU Memorandum of Understanding outlines a number of activities required by the NTRLBU along with specified timing for these activities.

4.2 The NRSBU is required to prepare a Strategic Plan (referred to by Regional Services staff as the Master Plan) in relations to its operation in advance of the development of the drafting of the Asset Management Plan. Due to time constraints, staff changes, and COVID 19 this has not been formally undertaken and the Master Plan still needs to be completed.

4.3 NRSBU has focussed on developing the Draft Activity Management Plan (AMP) for the next 10 years, and has held a number of workshops to discuss the future goals and targets for NTRLBU.

4.4 It is noted therefore that despite the Master Plan not having been updated, the AMP incorporates the long term objective and goals for the NTRLBU as they are understood at present.

4.5 The MOU requires that the AMP is updated every three years, and NRSBU has focussed on the AMP because this plan has an influence on both the Nelson City Council, and Tasman District Council AMPs, that are currently being updated.

4.6 The MOU also requires that the NRSBU prepare a Draft Business Plan and that this be presented to the councils by 31 December each year.

4.7 A Draft Business Plan has been drafted to reflect the activities proposed in the first year of the Draft NRSBU AMP.

5. Discussion

5.1 The AMP includes a significant amount of capital expenditure throughout the 10 year period, and the work undertaken on the Master Plan shows that further spending will be required in the decades following this 10 year plan also.

5.2 This capital expenditure is required implement a number of improvements to the capacity of the regional pumping and pipework network. The plan includes additional feature to allow improved maintenance, and resilience to avoid overflows from the network.

5.3 Additional capital costs are required to

· implement the land application systems,

· for acquiring land to allow adaption and managed retreat resulting from sea level rise,

· for treatment plant changes to increase capacity,

· to reduce adverse effects on the community and,

· to improve the resilience of our systems and facilities.

5.4 This additional expenditure will increase the debt held by NRSBU and will result in an increased debt funding cost.

5.5 The AMP includes an allowance for the changes to levels of service related to redundancy and resilience.

5.6 NRSBU propose to move to an N+1 redundancy policy. This means that we will have sufficient capacity to allow our facilities and systems to operate while one unit is maintained or replaced.

5.7 At present a number of our assets have no redundant capacity which prevents effective maintenance, and also means that when they fail NRSBU immediate has a loss of service.

5.8 There are some significant changes likely to occur during the term of the AMP, including the likelihood that the national water reforms will result in significant change to the way the NRSBU operates. At this time no allowance for this has been made, and it has been assumed that NRSBU will continue its business as usual.

5.9 No allowance has been made for the implementation of national standards should this occur which would result in significant additional capital expenditure being required.

6. Operational Costs

6.1 The costs to run the NRSBU will increase significantly over the next 10 year. These cost increases are largely related to;

· Increase reticulation capacity resulting in increased storm reaching Bell Island and needing treatment.

· Diverting waste discharges away from the estuarine environment and applying it to land, or reusing it for beneficial purposes.

· Increased debt servicing costs.

· Increased capacity associated with increase growth.

· Increase monitoring and operational costs associated with New Resource Consents.

6.2 The rate of cost increase will depend on the speed at which we implement the programme of capital expenditure activities.

6.3 The AMP is based on assumptions, which are based on the best judgement of the NTRLBU staff. We have not received detailed assessment of growth profiles from either NCC OR TDC which has created confusion regarding what Allowance need to be made for future growth, and what levers NRSBU have in order to influence the level of capital expenditure expected by the contributors.

6.4 It is particularly difficult when a contributor has a number of different point where they discharge into the NRSBU system, but they have a single aggregated capacity in their tradewaste contract. NRSBU is unable to effectively manage the specific assets as the customers have not provided their demand requirements for each of their discharge points. NRSBU is having to make assumptions on what growth will occur and where it will occur. Therefore there is a risk that our projections are not as accurate as desired.

6.5 NRSBU have used the AMP as the basis to developing the Draft NRSBU Business Plan 2021/22.

6.6 The Draft NRSBU Business Plan 2021/22 includes a significant capital expenditure programme.

6.7 Regional Services staff may not have capacity to carry out the amount of work required in the capital budgets for NRSBU, and additional resources may be required.

7. Conclusion

7.1 The AMP has been prepared to the best of the ability of the NRSBU staff based on feedback from the NRSBU board, and incorporating the foreseeable changes to the inputs to the NRSBU business.

7.2 It has been based on the revised Master Plan as far as possible, however it is noted that the Master Plan has not been finalised.

7.3 There continues to be significant uncertainty in a number of areas which may affect the accuracy of the AMP, particularly in areas related to central government water reforms.

7.4 The Draft NRSBU Business Plan 2021/22 has been prepared based on the AMP.

7.5 The Draft NRSBU Business Plan 2021/22 therefore includes significant capital expenditure.

7.6 NRSBU may need to obtain additional resources to deliver the Programme of works required by the AMP and Business Plan.

8. Next Steps

8.1 The Draft NRSBU Activity Management plan 2021-2031 and the Draft NTRLBU Business Plan 2021/22 need to be circulated to Nelson City Council and Tasman District Council for their review and feedback.

8.2 Following receipt of any comments NRSBU will update the document as required for approval at the 11 December 2020 NRSBU Board meeting

Author: Nathan Clarke, General Manager Regional Sewerage and Landfill

Attachments

Attachment 1: A2458264 - NRSBU AMP 2021 -2031 ⇩

Attachment 2: A2458266 - NRSBU Business Plan 2021 - 2022 Draft V1 ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

The NRSBU is a joint committee constituted pursuant to the provisions of Schedule 7 to the Local Government Act 2002 and contributes to the four Local Government well-beings of social, economic, environmental and cultural.

2. Consistency with Community Outcomes and Council Policy

The NRSBU Business Plan and Activity Management Plan feeds into Council’s 2021/22 Annual Plan and Councils Wastewater Activity Management Plans 2021 - 2031.

3. Risk

This report includes a draft NRSBU Business Plan and a Draft Activity management Plan for review by the NRSBU Board and following consideration by the Joint Committee submission to NCC and TDC for review and feedback. The risk of not approving the Business Plan and AMP is that this could delay the NCC and TDC preparing their Activity Management Plans.

4. Financial impact

The NRSBU 2021/22 Business Plan and AMP 2021 – 2031 reflects an increase in essential renewals expenditure and the commencement of the regional pipeline upgrade, and an outline of the development of the NRSBU assets over the next 10 years. These report form the basis for review of the financial impact on the Councils.

5. Degree of significance and level of engagement

The NRSBU is a Joint Committee of the two Councils and its activities are included in the Long-term Plans and Annual Plans of each Council. Consultation is undertaken by both Councils in the preparation and adoption of these plans.

6. Climate Impact

A key feature of the Business Plan and the Activity Management Plan is the inclusion of a long–term objective of greenhouse gas emissions with the commitment to measure and reduce greenhouse gas emissions from the facility and consideration about site location and retreat for vulnerable sites.

7. Inclusion of Māori in the decision making process

No engagement with Māori has been undertaken in preparing this report but iwi have representation on the Board.

8. Delegations

The Infrastructure Committee has the following delegations to consider the Nelson Regional Sewerage Business Plan:

Relevant Areas of responsibility:

• Wastewater, including Bell Island Wastewater Treatment Plant

5.6.2 Delegations:

The exercise of Council’s responsibilities, powers, functions and duties in relation to governance matters includes

· Developing, approving, monitoring and reviewing policies and plans, including activity management plans and the Infrastructure Strategy

Item 7: Nelson Regional Sewerage Business Unit - Draft Business Plan 2021/22 and Draft Activity Management Plan 2021 - 2031: Attachment 1 – A2458264

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Item 8: Nelson Regional Sewerage Business Unit Quarterly Update Report and 2019/20 Annual Report

Nelson Regional Sewerage Business Unit

11 September 2020

REPORT R20278

Nelson Regional Sewerage Business Unit Quarterly Update Report and 2019/20 Annual Report

1. Purpose of Report

1.1 This report updates the activities associated with the Nelson Regional Sewerage Business Unit (NRSBU) over the last three months, and seeks approval of the Draft NRSBU Annual Report 2019/2020.

2. Summary

2.1 Operations are generally running well, albeit a very busy period for the NRSBU and Nelmac staff.

2.2 Operations have been proceeding well, however minor additional costs are still being incurred for PPE and a Portacom shower block to provide improved showering and hygiene facilities as a result of COVID 19

2.3 The new NRSBU Activity Engineer started on 26 June 2020 and he has immediately been immersed in the NRSBU Activity Management Plan, and 50 year Master Plan.

2.4 A number of renewals and capital works project have commenced, including:

· Containment area for proposed pond desludging commence but was put on hold due to wet weather. This work will recommence over the next few weeks.

· Reuse water and high pressure pumping system construction is well underway and the water reuse facility is expected to be operational by the end of September.

· Overflow screening chamber at the airport pumpstation has been installed.

· Odour control upgrades at the inlet area are underway, with the biofilter being constructed at present.

· Facilities upgrade investigation works have commenced.

· Rising main duplication investigation works have commenced.

· Lifting gantry for chamber C3

2.5 No odour issues were experienced during this period despite significant issues with very high load entering the facility.

2.6 High loads were experience as a result of COVID 19, with the highest load experience being twice the capacity of the plant. This has been a common finding around NZ, and other facilities have experienced similar events.

2.7 The ponds experienced high loads which caused significant reductions in algal populations. Additional chemical dosing was frequently added to the ponds during this period to mitigate odour production.

2.8 Significant additional operational measures were implemented during this period including hiring an additional generator to allow temporary aeration to be added to the Bell Island aeration basin.

2.9 NRSBU is currently constructing the containment beds for the Pond desludging programme. Pond desludging is planned for November/December 2020, and early 2021, it is anticipated that desludging will improve the stability of the ponds.

2.10 The Rabbit Island Biosolids Reuse Consent Assessment of Environmental Effects (AEE) has been submitted.

2.11 Consultation was undertaken, and a hui over zoom has been undertaken with Te Tau Ihu Iwi. NRSBU was unable to complete the cultural impact assessments prior to submission of the Assessment of Effects document and are still working with Iwi to try to get these completed.

2.12 The purchase of the land at Best Island settled on 30 June 2020. Since possession NRSBU staff have locked the gates, and the chain has been cut by people entering the site. Further security measures are being implemented.

2.13 Planning is underway to remove the old batch on the site to reduce the likelihood of unwanted squatters, and to prepare for the future use of the land for wastewater application.

2.14 A number of groups have asked for permission to hold activities on our land, including:

2.14.1 NZ Army – Exercise in Bell Island forest

2.14.2 Land Search and Rescue – Use old batch for exercise

2.14.3 Police AOS – Use old batch for mock forced entry exercises.

2.14.4 NZ Fire Service – Use old batch for firefighting exercise

2.14.5 Nelson Grass Cart Club – Requested lease for an area of land at the north eastern corner of Bell Island (as far from public as possible) and a potential area for them to lease is being discussed with them. Discussion with the Grass Cart Representative has identified that they are willing to pay a “commercial” rate for the land. NRSBU staff have identified 3 Ha of land as far from residents as possible.

2.14.6 Nelson 4WD club – use of rough paddock at south of plant.

2.14.7 Radio Yacht Squadron – lease for access to the use of the southern pond as their primary yachting course in Nelson. At this time NRSBU have approved the use for most of these activities, and are developing rules and leases where appropriate. The exception are the 4WD club as these activities have implications on site access to the Bell Island facility.

2.15 A key reason for considering the grass cart clubs request is that this can be used to also improve a longstanding Health and Safety issue relating to the ornithological society access to the bird roosting site on the east of Bell Island. Currently the ornithological society have access through the operational area, which is something that NRSBU management wish to stop. The lease to the grass club includes the formation of an access route outside the NRSBU operational area which could also be used by the ornithological society.

3. Recommendation

That the Nelson Regional Sewerage Business Unit

1. Receives the Nelson Regional Sewerage Business Unit Quarterly Update Report and 2019/20 Annual Report (R20278) and its attachments (A2458265 and A2458077); and

2. Approves the Nelson Regional Sewerage Business Unit 2019/20 Annual Report (A2458265) and Draft Nelson Regional Sewerage Business Unit – Annual Financial Statements 2019-20 (A2458267) for presentation to the Nelson City Council and Tasman District Council, with delegation of all minor amendments to the Nelson Regional Sewerage Business Unit Chair; and

Recommendation to Nelson City Council and Tasman District Council

That the Nelson City Council and Tasman District Councils

1. Receive the Nelson Regional Sewerage Business Unit 2019/20 Annual report (A2458265) and Nelson Regional Sewerage Business Unit – Annual Financial Statements 2019-20 (Draft) (A2458267).

4. Background

4.1 Significant effort is being undertaken at present by a range of parties acting for NRSBU. Activities include the development of the Activity Management Plan, physical construction of odour control systems, the lodgement of the Rabbit Island resource consent, water recycling facility, sludge bunds and overflow screens, as well as investigations for the rising main duplication and generator replacement projects. The period has been exceedingly busy and has stretched the regional services staff.

4.2 For the new Operations Manager and Activity Engineer it has been an initiation by fire, and it is a testament to them that effective operations have been able to be maintained while delivering the required outputs.

5. Health and Safety

5.1 Health and Safety at the site is being managed well.

5.2 Over this period there a number of minor incidents and 2 lost time injuries. The following table is a summary of the Health and Safety issues associated with the operations and maintenance of Bell Island wastewater treatment plant.

5.3 Summary of Bell Island Health and Safety issues.

Objective	Performance 2019/20
Zero lost time injuries	Not Achieved. Two lost time injuries reported – these were from becoming sick following working in pump station wet well
Zero Incident Frequency Rate towards health and safety.	Not Achieved. 69 incidents/ near misses reported
100% compliance with statutory acts and regulations.	Achieved. There were no breaches of statutory acts or regulations recorded during the year.
Identification, assessment and control of all workplace hazards and risks.	Achieved. The hazard register and job hazard analysis procedures are in place at the NRSS Treatment Plant. Along with developing a comprehensive H&S improvement list for the site.
Continually improve safety and health performance standards of managers, supervision and workplace employees.	Achieved. Health and Safety is the first topic at all site tool box and management meetings. A hazard board is maintained at the site office entrance.
Provision of information & training for personnel at all levels to effectively meet responsibilities.	Achieved.
Continuous improvement of company goals, objectives and methods for safety and health.	Achieved. Nelmac and its subcontractors continue to strive for improvement in all areas of health and safety. New initiatives such as the use of UHF radios and the implementation of a call minder service for lone work have been put in place.

5.4 The NRSBU Health and Safety actions this period included:

5.4.1 Completion of the chamber C3 lifting gantry.

5.4.2 Installation of gas monitoring system on Bell Island inlet.

5.4.3 Refurbishment of the Bell Island inlet building to include wet area shower.

5.4.4 Installation of eye wash and emergency showers at key locations around the site.

5.4.5 Installation of stairs and handrails down wavebands of the ponds

5.4.6 Safe access ways to primary clarifier scum well.

5.4.7 Improve access ways to secondary clarifier scum well.

5.4.8 Safe access to biosolids pigging system.

5.4.9 Mechanical guarding to DAF scraper.

5.4.10 Mechanical guarding design for inlet screens.

5.5 As a consequence of the locking chains being cut at the entry to our Best Island land, and due to damage to the gates at Bell Island entry, NRSBU has commissioned a mobile camera which can be installed at various locations around the site. This will allow us to identify inappropriate actions and those undertaking them. NRSBU can choose to follow up at its discretion.

5.6 As previously mentioned there is work being done to identify improvement to access for the ornithological society

5.7 An ongoing traffic management issue has been identified and is being worked on. The air valves on the NRSBU rising main from Beach Road to Saxton Road are currently located under the cycleway alongside Whakatu Drive. Nelmac are unable to access the air valves with machinery to maintain them effectively without significant disruption to cyclists. Options are being considered that will allow effective and safe access for this activity.

6. Operations and Maintenance

6.1 Operations are generally running well, however high loads have again been experienced on Bell Island, with poor settling sludge creating operational challenges. This is an annual issue that is believed to be related to the type of waste discharged by ENZAfoods NZ Ltd.

6.2 NRSBU has been trying to get more certainty from ENZAfoods NZ Ltd (via Cedenco) to understand the future loads and flows from the facility. NRSBU staff have made contact with Turners and Growers Ltd (the holder of the contract), and they have indicated that they will maintain the contract until another lessee on the site leaves in the new year. No clear long term information has been received at the time of this report being prepared.

6.3 NRSBU have requested Nelmac continue to operate the facility until next year to avoid issues with international tenderers for the new contract. NRSBU has accepted an offer from Nelmac to undertake this extension to the contract. There is an increase in cost associated with this extension.

6.4 A building contractor has been engaged to develop the design for the facilities upgrade at Bell Island. The geotechnical investigation has shown that the ground conditions are suitable. It is expected that these facilities will be constructed and available for use by the end of June 2021.

7. Odour management

7.1 NRSBU has been struggling to find an independent odour monitor. Discussion has been entered into with 5 different parties, but all of these have chosen not to proceed, (or have not been able to provide the level of service required).

7.2 NRSBU staff are now looking to source a company rather than a person to undertaken this, and will prepare a request for proposals.

8. Resource Consents

8.1 Aberrational Overflow Consent - NRSBU is technically non-compliant with the aberrational overflows consent. No overflow events have occurred and therefore there is little consequence of the non-compliance, however NRSBU is at risk in the event that an overflow does occur.

8.2 NRSBU has struggled to make progress on this consent for two reasons.

8.2.1 The first is there is no clear way to engage Iwi to undertake the Cultural Health Indexing required by the consent. Aneika Young has been engaged to facilitate this for us. At this time there is no clear timeframe for resolving this.

8.2.2 The second issue is that the screening design has proven difficult due to no hydraulic head being available to drive water through a screen. The design has been reviewed and developed to include overflow pumps into the designs to allow them to function effectively.

8.3 Physical progress has been made with the overflow screening systems, and Nelmac are presently installing the overflow screening facility at the Airport pumpstation. This has been delayed due to COVID 19 related shipping delays of the screens. It is expected that this screen will be operational by the end of September 2020.

8.4 The detailed design of Songer St pump station overflow screening system is underway. NRSBU staff anticipate starting the construction for this screen installation in the next 2 months. This screen has been a difficult screen to design due to the low lying nature of the site, and the need to bund the site to prevent inundation from high tides.

8.5 The Whakatu screening concept has been developed and NRSBU staff will move onto the design of this screen once the Songer Street screen has started construction.

8.6 Desludging Consent -The Bell Island sludge bund for the pond dewatering is partly constructed but wet weather has delayed progress at present. This containment area will be complete prior to starting desludging, which is planned for late October.

8.7 Bell Island Discharge Consent - Monitoring of Bell Island discharge performance against the new Bell Island resource consent has shown compliance with all parameters at this time.

8.8 Rabbit Island Biosolids Reuse Consent - The application for the Rabbit Island biosolids discharge consent has been submitted. NRSBU is able to continue to operate under the existing consent until the consent application is completed.

8.9 The discharge of biosolids this year is the highest seen in many years. This is thought to be due to high loads being received into the plant, and due to the operation of the facility during summer to reduce the risk of odour issues.

8.10 The biosolids application operation on Moturoa / Rabbit Island continues to perform well and there have been no odour issues during this period.

8.11 During the last 3 months NRSBU has renewed one of the tanks at Rabbit Island and have extended the capacity of the other three tanks. This gives significantly more storage capacity on Rabbit Island, and will allow more flexibility to store biosolids during adverse weather events.

8.12 The biosolids application contract 3619 has been extended until 30 June 2021.

8.13 The biosolids discharge odour management app is being developed at present. The company developing the app (Accredited Technology Ltd) have indicated that this will be available as a trial version before the end of September. NRSBU is looking forward to our contractor using the app as it will streamline record keeping and make decision making more consistent and auditable.

8.14 Considerable effort has gone into trying to renew the existing Licence to Occupy which runs out in November 2020. This licence is required to allow NRSBU on the Rabbit Island site. This has been quite a saga, and TDC have recently responded that they are unable renew the licence, and want to have an MOU for the land instead.

8.15 Following a number of discussions the GM has decided that a pragmatic solution is to accept an MOU rather than continue to try to get a lease or licence.

8.16 As part of this negotiation for Rabbit Island, Tasman District Council are requiring NRSBU to pay $85,000 for the use of Rabbit Island.

8.17 NRSBU does not believe this is a fair reflection of the costs. In order to proceed NRSBU requested the assistance of Duncan Cotterill to continue the work on NRSBU behalf.

8.18 Review of the costs shows that Tasman District as claiming that NRSBU cause $30,000 maintenance to road each year, increases management costs to PFOlsen by $30,000 and pruning costs of 2500 per Ha. NRSBU believe the road maintenance costs to be exaggerated. At present in order to get the MOU in place it is proposed to accept the costs without prejudice, and get an independent review of the cost and additional value that accrues from the activity. This information would then be used as a basis for negotiations with TDC in future.

9. Land Irrigation

9.1 NRSBU has notified Raine Farms Ltd that NRSBU is terminating the lease on Bell Island.

9.2 NRSBU has decided to terminate for a number of reasons. including;

· The lease has come to an end and the lease value is no longer a commercial rate.

· A number of issues have been ongoing with the management of the irrigation system, with a lack of data for resource consent reporting.

· Irrigation system be operated insufficiently for waste reuse purposes.

· With the purchase of the Best Island land there is the ability to offer a larger lease as a single package.

9.3 NRSBU may need to invest to purchase the existing irrigator (or purchase a replacement) following the termination of the lease.

9.4 A number of actions have been undertaken in regard to the Best Island land. These include increased security for the site, arranging the removal of the existing batch, and initiating actions for improving fencing and tiding up the house on the site.

9.5 The contract with Fulton Hogan for sand extraction has been completed and NRSBU are now receiving royalties of $7 per ton.

9.6 Fulton Hogan have started landscaping their site, with the road having been upgraded, and new earthworks bunds and fencing being constructed.

9.7 The Radio Yacht Squadron has started clearing and setting up the facilities at the second pond at Best Island. This includes hand railing, and locating a container and mobile toilet on the site. A peppercorn lease is being put together to cover this activity. The Radio Yacht Squadron are holding a national tournament in October and plan to use the new facility for this tournament

10. Regional Pipeline

10.1 As discussed above work is ongoing to comply with some of the conditions of the aberrational discharge consent at pump stations (e.g. installation of screens).

10.2 Initial investigations have been undertaken on the old rising main between Saxtons Rd and Monaco. These initial investigation have shown that the existing pipe is in good condition and identified that a section of the pipe has been replaced with HDPE historically, and it is therefore not necessary to install a new pipe under the western carriageway of Whakatu drive.

10.3 Further investigations are required at the Monaco end of the pipe, and our consultants (BECA) are finishing the pipe relining options review and the planning review at present.

10.4 NRSBU staff expect additional investigation works to be undertaken over the next 2 months, and design procurement toward the end of this year. Physical installation works for the pipe liner are expected at the start of 2021.

10.5 NRSBU will face issues with this installation of the liner as the specialists will need to come to NZ from overseas, and it will therefore be necessary to apply for exemptions for them, and have them go through quarantine.

10.6 An investigation plan for the old Monaco to Bell Island pipe (sectional concrete pipe) is being developed, with this work expected to be undertaken following the Monaco investigation works during the 2020/21 summer.

10.7 Higher power output back-up generators are being procured for the pump stations. The procurement package for this is being developed at present.

11. Trade Waste Agreements

11.1 In investigating some invoicing issues it has been identified that there is an ambiguity in the way that NRSBU is charging our customers.

11.2 The current approach has been used for many years.

11.3 NRSBU proposes to discuss the charging calculation with the contributors over the next few months to consider whether any change should be made to the charging calculation.

12. Trade Waste Management

12.1 Ongoing improvements are being worked on for the trade waste monitoring.

12.2 It became clear as a result of very high loads received to the facility that there has been no focus by the O & M contractor on determining where the high loads came from. While investigating these issues NRSBU identified that sampling procedures have not always been followed accurately by the O&M contractor.

12.3 This means that NRSBU billing has not always followed the prescribe method outlined in the contributor contracts, and that the sampling may not accurately represent that actual loads and flows from the facility. This finding is a serious disappointment. It has highlighted a critical lack of understanding by our O & M contractor, and has bought NRSBU credibility into question.

12.4 As a result NRSBU reiterated the requirement that Nelmac undertake flow proportional sampling of all contributors everyday (as should have been undertaken), and requested Nelmac store the samples for later analysis if adverse events are identified. This will enable NRSBU to examine the issues and identify the contributor and catchment causing the issues.

12.5 Flow monitoring has been an ongoing area of investigation for some time. Changes are being implemented to the flowmeters to make sure that the reading on the meter matches the reading on the SCADA system.

13. Bell Island Resource Consent Application

13.1 The decision was received 21 February 2020.

13.2 Monitoring against these conditions has been undertaken and Bell Island is currently compliant with all the consent conditions following the new consent.

13.3 It is a bit difficult to analyse some parameters as they require an average of 26 samples and NRSBU has not yet analysed sufficient samples for this 26 point average to be generated.

14. Treated Wastewater Re-use Trial

14.1 Construction and assembly of this facility was delayed by COVID 19 but is now nearly complete. Minor additional delays have occurred and it is expected that commissioning of this system will occur toward the end of September.

15. Carbon Emissions

15.1 The development of the emissions dashboard has commenced and NRSBU is expecting this to be up and running by year end 2020.

15.2 Enabling works have been undertaken to change all NRSBU electrical meters to smart meters so that the data can be automatically updated to the dashboard. Due to workload the dashboards have not yet been developed.

15.3 The electrical recycle pump at the discharge channel is being installed as part of the water recycling facility installation, and this will reduce diesel consumption when pond performance issues require large recirculation events to occur.

16. Annual Report

16.1 The Annual report (2019/2020) (A2458265) is submitted for approval at this meeting.

16.2 Following approval the annual report will be presented to NCC and TDC.

17. Finance

17.1 Income Account for NRSBU to 30 June 2020:

Balance Sheet as at 30 June 2020.

Nelson Regional Sewerage Business Unit
NRSBU Balance Sheet
As at 30th June 2020

	Current	Last Month	June 2019
Equity
Opening Equity (July)	49,562,837	49,562,837	48,867,719
Plus Net Income YTD	0	1,079,726	0
Plus Revaluation	2,602,714	0	695,117
Closing Equity	52,165,551	50,642,562	49,562,837
Contingency Reserve	100,000	100,000	100,000
	52,265,551	50,742,562	49,662,837

Which was Invested as follows -
Current Assets
Bank	4,382	4,382	244,462
Debtors	568,279	37,073	552,781
NCC Current account	0	192,231	0
Total Current Assets	572,661	233,686	797,243
Fixed Assets	70,812,223	65,155,398	64,261,580
Current Liabilities
Creditors	(21,081)	(486,521)	(60,919)
NCC Loan	(960,000)	(160,000)	0
TDC Current Account	(423,626)	0	(514,939)
NCC Current account	(1,714,625)	0	(820,128)
Total Current Liabilities	(3,119,333)	(646,521)	(1,395,986)
Term Liabilities	(16,000,000)	(14,000,000)	(14,000,000)
Derivative Financial Instruments	0	0	0
	52,265,551	50,742,562	49,662,837

17.2 Total income was 3% over budget.

17.3 Total expenses were 2% under budget.

17.4 Owners Distribution was $1,563,151 for the year

17.5 A wash up will be required from the contributors of $412,000.

17.6 Significant renewals works were undertaken this year with $1.516 Million being spent. This is above the budget of $870,000. The discrepancy in the accounts relates to CAPEX expenditure works for the Rabbit Island and inlet works odour upgrade having been recorded as renewals rather than CAPEX.

17.7 A number of projects have been delayed by COVID 19 the investigation of the Bell Island rising main, and the Bell Island sludge management works.

17.8 Capital expenditure was $4.5 million vs annual budget of $7.7 million. Capital expenditure was delayed by COVID 19 but has commenced following level 2 lockdown. Significant work is currently being undertaken.

17.9 Approximately $2.5 Million CAPEX was carried over from 2019/20 to 2020/21

17.10 The carryover of capital from 2019/20 to 20/21 has identified that NRSBU has had ongoing issues with delivery of its capital program for some time.

17.11 While NRSBU has staff on board it is clear that this issue has not been addressed.

17.12 The GM has considered the forward program outlined in the NRSBU (and NTRLBU) Activity Management Plans (AMP) and believes it will not be possible to achieve the capital expenditure with the current level of Regional Services resourcing.

17.13 The GM proposes to review the AMP works program (potentially reduce the activities NRSBU implement), and to engage additional staff to deliver the projects required by the final AMP.

18. Strategic Plan (referred to as the Master Plan)

18.1 The Strategic Plan (called the Master Plan) is being rewritten.

18.2 A brief workshop to discuss the plan was held in March 2020 to discuss this plan.

18.3 The workshop discussion has helped to refine the focus for the draft Activity Management Plan. The Strategic Plan (called the NRSBU Master Plan) will continue to be developed during 2020.

18.4 It is proposed that a workshop be held to discuss this in advance of the 11 December NRSBU board meeting.

18.5 It is proposed that this will be presented to NRSBU in a draft form for discussion at the workshop.

18.6 The Master Plan is the key basis for the Asset Management Plan, but in this AMP cycle the timing of the AMP and the Master Plan will be out of cycle.

18.7 Despite this issue a significant amount of the long term planning has been undertaken for the Master Plan, so that NRSBU staff can – as far as possible- align the AMP with the Master Plan

18.8 It is proposed that the AMP will be updated to reflect any changes that result from the adoption of the Master Plan in 2021.

19. NRSBU Resourcing

19.1 The new Regional Services Activity Engineer commenced work on 29 June 2020.

19.2 While the current Regional Services staffing (GM/OM/AE) will allow a significant improvement in capacity, responsiveness from Regional Services staff, there is concern regarding their ability to deliver the capital programme outlines in the AMP.

19.3 Review of Regional Services capital programme and development works has identified that current staffing level are unlikely to allow effective delivery of all capital development activities.

19.4 The GM proposes to seek additional resources, and will be reviewing the capital programme to allow effective delivery to be achieved.

19.5 The GM has purchased a utility vehicle for Regional Services to allow staff to be on-call, and respond to emergencies.

19.6 Discussion with the NCC programme manager has indicated that NCC capital projects is able to assist with overflow projects, but would prefer not to be needed for the NRSBU (and NTRLBU) base load of projects.

Author: Nathan Clarke, General Manager Regional Sewerage and Landfill

Attachments

Attachment 1: A2458265 - NRSBU Annual Report 2019-2020 ⇩

Attachment 2: A2458267 - NRSBU Financial Report 2019-20 ⇩

Important considerations for decision making

1. Fit with Purpose of Local Government

2. Consistency with Community Outcomes and Council Policy

The NRSBU Business Plan guides the Activity Management Plan and the Nelson and Tasman Long-term Plans.

3. Risk

This report presents the NRSBU Annual report for approval following consideration by the Board. The Annual report will be circulated to TDC and NCC following approval.

The risk of not approving the Annual report is that mean the information may not be available to the councils in a timely fashion.

4. Financial impact

The NRSBU Annual Report reflects the previous year and therefore has little impact on the current activities.

5. Degree of significance and level of engagement

6. Climate Impact

A key feature of the work being undertaken by NRSBU is the inclusion of a long–term objective of greenhouse gas emissions with the commitment to measure and reduce greenhouse gas emissions from the facility.

7. Inclusion of Māori in the decision making process

No engagement with Māori has been undertaken in preparing this report but iwi have representation on the Board.

8. Delegations

The Councils are agreed that the responsibility for all management and administrative matters associated with the NRSBU operation shall be with the Board, and in particular the Board shall without the need to seek any further authority from the Councils:

1 operate a bank Account for the business unit,

2 Comply with the Procurement Policy of the Administering Council,

3 Enter into all contract necessary for the operations and management of the Business Unit in accordance with approved Budgets and the intent of the Business Plan.

4 Authorise all payments necessary for the operations and management of the business unit within the approve budgets and the intent of the Business Plan

5 Do all other things, other than those things explicitly prohibited by this MOU or relevant statutes, that are necessary to achieve the objectives as stated in the strategic Plan, Asset Management Plan or Business Plan approved by the councils.

6 Comply with the Health and Safety Policy and requirements of the Administering Council.