Agenda of Nelson Regional Sewerage Business Unit

Nelson Regional Sewerage Business Unit Minutes - 13 May 2022

Minutes of a meeting of the

Nelson Regional Sewerage Business Unit

Te Rōpū ā-Rohe Para, Whakatū / Te Tai o Aorere

Held in the Council Chamber, Floor 2A, Civic House, 110 Trafalgar Street, Nelson on Friday 13 May 2022, commencing at 9.30a.m.

Present: Tasman District Councillor K Maling (Chairperson), Nelson City Councillor B McGurk, T Skinner (Deputy Chairperson), Tasman District Councillor T Tuffnell, Independent Member T Mehmood and Industry Representative (non-voting) P Wilson

In Attendance: Group Manager Infrastructure (A Louverdis), Tasman District Group Manager Community Infrastructure (R Kirby), General Manager Regional Services (N Clarke), Senior Governance Advisor (M Macfarlane) and Governance Adviser (T Kruger)

Apologies : Nil

1. Apologies

2. Confirmation of Order of Business

There were no changes to Order of Business.

3. Interests

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

4. Public Forum

There was no public forum.

5. Confirmation of Minutes

5.1 11 March 2022

Document number M19303, agenda pages 7 - 11 refer.

Resolved RSBU/2022/008

That the Nelson Regional Sewerage Business Unit

1. Confirms the minutes of the meeting of the Nelson Regional Sewerage Business Unit, held on 11 March 2022, as a true and correct record.

McGurk/Skinner Carried

Attendance: Industry Representative P Wilson joined the meeting at 9.35a.m.

6. Nelson Regional Sewerage Business Unit General Managers Quarterly Report

Document number R26871, agenda pages 12 - 26 refer.

General Manager Regional Service, Nathan Clarke, presented the report and answered questions in relation to addressing odour notifications, a small overflow from the network, the regional pipeline rehabilitation project, the biosolids consent, capacity to deliver capital works, the Green Acres Golf Course resource consent, financial performance and recruitment.

Resolved RSBU/2022/009

That the Nelson Regional Sewerage Business Unit

1. Receives the report Nelson Regional Sewerage Business Unit General Managers Quarterly Report (R26871); and

2. Notes that a report to approve projected carryovers from 2021/22 to 2022/23 will be presented to the first Nelson Regional Sewerage Business Unit Board Meeting in 2022/23.

McGurk/Skinner Carried

7. Exclusion of the Public

Resolved RSBU/2022/010

That the Nelson Regional Sewerage Business Unit

1. Excludes the public from the following parts of the proceedings of this meeting.

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

McGurk/Tuffnell Carried

Item	General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Particular interests protected (where applicable)
1	Nelson Regional Sewerage Business Unit Meeting - Confidential Minutes - 11 March 2022	Section 48(1)(a) The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.	The withholding of the information is necessary: · Section 7(2)(b)(ii) To protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information · Section 7(2)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities

Item

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Particular interests protected (where applicable)

Nelson Regional Sewerage Business Unit Meeting - Confidential Minutes - 11 March 2022

Section 48(1)(a)

The public conduct of this matter would be likely to result in disclosure of information for which good reason exists under section 7.

The withholding of the information is necessary:

· Section 7(2)(b)(ii)

To protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information

· Section 7(2)(h)

To enable the local authority to carry out, without prejudice or disadvantage, commercial activities

The meeting went into confidential session at 10.22a.m. and resumed in public session at 10.23a.m.

The only business transacted in confidential session was to confirm the minutes. In accordance with the Local Government Official Information and Meetings Act, no reason for withholding this information from the public exists, therefore this business has been recorded in the open minutes.

1. Confirmation of Minutes

1.1 11 March 2022

Document number M19310, agenda pages 3 - 5 refer.

Resolved RSBU/2022/011

That the Nelson Regional Sewerage Business Unit

1. Confirms the minutes of part of the meeting of the Nelson Regional Sewerage Business Unit, held with the public excluded on 11 March 2022, as a true and correct record.

McGurk/Tuffnell Carried

There being no further business the meeting ended at 10.24a.m.

Confirmed as a correct record of proceedings by resolution on (date)

Resolved

Item 6: Nelson Regional Sewerage Business Unit Quarterly Update Report.

Nelson Regional Sewerage Business Unit

1 July 2022

Report Title: Nelson Regional Sewerage Business Unit Quarterly Update Report.

Report Author: Nathan Clarke - General Manager Regional Sewerage and Landfill

Report Number: R26985

1. Purpose of Report

1.1 This report is an update by the General Manager (GM) on activities undertaken to the end of May 2022 by the Nelson Regional Sewerage Business Unit (NRSBU).

2. Summary

2.1 Operations are generally running well. The site continues to work under COVID-19 Orange Light rules. This includes reducing unnecessary visits to Bell Island.

2.2 The Operations and Maintenance contract is running smoothly. The contract governance team has met to discuss progress and is continuing to enhance the collaborative aspects of the contract.

2.3 The preliminary Target Outturn Cost for the 2022/2023 year has been developed and this is generally in alignment with the Nelson Regional Sewerage Business Unit 2022/2023 business plan budget.

2.4 Capital and renewals work implementation has increased with both the biosolids and sludge tanks replacement and facilities project contracts now prepared. The delivery of the capital/ renewals works remains behind schedule.

2.5 A review of Regional Services staffing is being prepared but has not progressed significantly since the last update.

2.6 There were 6 odour notifications for the period. The first four related to the transition within the Facultative ponds which resolved in early May, and two were considered to be silage odours and not related to NRSBU. All were investigated. Work is ongoing on odour control for the ATAD system which should reduce odours from the ATAD.

2.7 Refinement of the offer to supply NRSBU base load solar power to Bell Island has been undertaken and NRSBU have received a response from the preferred supplier on the agreement term. NRSBU is preparing a counteroffer.

2.8 The regional pipeline rehabilitation project is proceeding well. The relining of Section 11 has been completed. Early contractor meetings have commenced for Section 8, and it is still expected that Section 8 will commence construction in September 2022.

2.9 The overall regional pipeline rehabilitation project programme looks to be on target for completion in the latter half of the 2023 calendar year.

2.10 A burglary occurred on the Saxton Rd pumpstation site and diesel, and cabling was stolen from the generation upgrade project underway onsite. The theft was reported to police, and investigations are underway. Additional security measure will be implemented.

2.11 Financial performance to 30 April 2022 remains behind budget. Income remains below budget for fixed income (-$395,000). Consultancy costs remain high with external Activity Management support, support for Bell Island site designation application, and consent applications for the reuse of wastewater at Greenacres contributing to the high consultancy costs. The new contract costs remain above budget due to start up transfer costs. The trend is that costs remain high with income not covering the increased costs. Projections to the end of 2021/22 financial year suggest a loss for the year in the order of $500,000.

2.12 Due to the timing of this meeting (the first day of the new financial year) it has not been possible to consolidate the financial information for either May or June 2022 and the carry over report will therefore be delayed to the NRSBU September board meeting.

3. Recommendation

That the Nelson Regional Sewerage Business Unit

1. Receives the report Nelson Regional Sewerage Business Unit Quarterly Update Report. (R26985); and

2. Notes that a report to approve projected carryovers from 2021/22 to 2022/23 will be presented to the Nelson Regional Sewerage Business Unit Board Meeting to be held on 2 September 2022.

4. Background

4.1 This report is the GM update to 31 May 2022 with finance updates to 30 April 2022. It outlines the activities, issues and opportunities that have occurred during this period.

5. Health Safety and Environment (HS&E)

5.1 H&S for the operations contract is being managed well, and no significant safety issues are currently outstanding.

5.2 An emphasis has been on changing reporting to include “opportunities for improvement’’ and this has been embraced by operational staff.

5.3 The programme of safety improvements is currently ongoing. Progress on these activities is being updated by the contractor in each monthly report.

5.4 Table 1 below shows a list of H&S notifications for the period 31 March 2022 to 31 May 2022

6. NRSBU Activities

6.1 NRSBU staff continue to be very busy during the period with numerous activities and projects in progress.

6.2 Projects/ Actions completed since last meeting

· Relining of the pipe between Turners and Growers site and Martin Point.

· Saxton Island air valve structure repairs (caused by Cyclone Gita) have now been completed.

· Consent for the duplicate pipeline beneath Orphanage Stream has been granted.

· Consent for the rising main installation along Elm St has been granted under the National Environmental Standard - Contaminated Soils (NESCS)

6.3 Projects underway at present include:

· Moturoa Rabbit Island Biosolids discharge consent. The hearing was postponed to 2^nd August 2022 due to the one commissioner being ill with COVID -19

· Rising main pipework upgrades.

· Emergency generators installation.

· Overflow screening at Songer St Pumpstation is in progress, with the Wakatu overflow screen still to be installed.

· Consideration of sites for overflow storage at Saxton Rd.

· Consideration regarding future options to adapt to sea level raise for both pumpstations and the Bell Island facility.

· Condition assessment of the concrete rising main between Monaco and Bell Island

6.3.1 Site improvement works at Bell Island including:

· Generator procurement and installation.

· Covers to chambers

· Pond desludging and sea defence bund.

· Vehicle underbody wash to reduce corrosion from salt water.

· Solar power supply draft agreement development.

6.3.2 Other Bell Island Projects

· Sludge tanks replacement has been released to selected contractors for pricing.

· Workshop and staff ablution facilities upgrade design, design is complete, NRSBU is awaiting the resource consent for the works.

· Repair of the inlet works corroded concrete, design review underway.

· Odour upgrade work at ATAD system, this work has commenced construction onsite.

6.3.3 Renewals and maintenance on buildings and equipment.

6.3.4 Best Island Foreshore Rehabilitation planting enabling work has been completed and planting will be completed over the next few months.

6.3.5 Greenacres Golf Course (Greenacres) water reuse and NRSBU water reuse pipeline consents have been submitted to TDC for consideration. An information request has been received from Tasman District Council, and a response is being prepared by Greenacres.

7. Update on Significant projects

7.1 Rabbit Island Biosolids Application Consent –The Resource Consent Hearing was scheduled for 26 May 2022 however this was postponed till 2 August 2022.

7.2 Rabbit Island O&M contract - The Biosolids Application Operations and Maintenance Contract is running smoothly. The change in ownership of the business has not altered the contract delivery.

7.3 NRSS pipeline – A significant amount of work is being undertaken on this project with multiple activities along the length of the pipeline.

· Section 8 from Bunnings to Saxton Pumpstation has been designed. The construction work is scheduled to start in September 2022. Physical installation will be undertaken by Ching Contracting Ltd and will take around 6 months to complete.

· Detailed design is underway for Sections 6 – 7 (from Kotua Place to Saxton Road). Geotech investigation have been undertaken, and resource consent has been granted for the Orphanage Creek stream crossing.

· Section 5– Discussion has started with Barnicoat Developments Ltd to secure the easement through the Heslops Site. The construction work will coincide with or be after the completion of Saxton Creek Stage 4 project being undertaken by NCC. Barnicoat Developments have indicated that no construction able to be undertaken prior to April 2023.

· Investigations for the section 1-4 (Beach Rd to Heslops) have been progressing. It has now been confirmed that the existing pipes beneath Whakatu Drive is intact and can be relined, and it has been confirmed that the existing pipe beneath the estuary is intact and can be rehabilitated. The procurement planning for this section is underway at present.

· Overall, the progress has been good on the pipeline project. The engineers estimate for the works is estimated to be $13.3 million including engineering fees and contingency. Budget Allowance for the works over the 4-year period is $13 Million.

· There is an additional $2.6 million allowance for the Saxton Rd and Beach Rd Pumpstation pipework and pump upgrade which is not yet fully designed.

· Completion for the project is estimated to be the second quarter of the 2023/2024 financial year. This may mean that the $2.25 million allowance for work in the 2024/2025 financial year may need to be bought forward into 2023/2024 financial year.

7.4 Generator installation – The generators have arrived and have been placed onsite at Bell Island along with Saxton & Whakatu pump stations and electrical installation is underway at Saxton Road & Bell Island. Electrical installation and commissioning will happen over the next three months. The Airport and Beach Rd generators were placed in mid-May, however due to regulation changes the electrical connection system has required redesign, and there is expected to be a cost increase for the project. The redesign of the electrical connection systems is presently underway, and therefore the quantum of the cost increase is not presently available. The construction container and the diesel storage tank at the Saxton Road pumpstation were burgled and around 1000 litres of diesel was stolen along with cables and pumps. The theft is being investigated by Police.

7.5 Desludging of the Bell Island ponds is still in progress with Pond F2 desludging nearing completion.

7.6 Asset inspections –NRSBU is now developing the next stage of the old concrete pipe investigations from Monaco to Bell Island. The next stage of works will include the core sampling of the pipe and inspection of the fittings and cathodic protection systems.

7.7 Greenacre Golf Course Ultrafiltered Water Irrigation – NRSBU has submitted the resource consent application to TDC for the Water reuse pipeline to transport reuse water to Greenacres, and NRSBU has provided information to Greenacres on the water quality from the Ultrafiltration system.

7.8 Bell Island Site Designation – NRSBU has begun preparing an application for the Designation of the NRSBU sites under the Tasman District Plan.

8. Finance

8.1 The NRSBU is behind budget for the year to 30 April 2022.

8.1.1 The deficit for the year has now increased from $319,000 for the year to 31 March 2022 to $468,000 for the year to 31 April 2022.

8.1.2 The deficit was exacerbated over the last month by dryer than average weather leading to lower than budget variable income ($100,000 below budget for the April month)

8.1.3 Additional costs were incurred from the net effect of interest and depreciation changes. The impact of these is a deficit of $100,000 for the year to 31 April 2022, up from $52,000 deficit for the year to 31 March 2022.

8.2 Income

· Fixed recoveries under budget by $396,000 due to a lower interest rate in the WACC in the recovery calculation compared with budget.

· Variable recoveries $155,000 over budget (for the year) but under budget by $103,000 for April. It is anticipated that the May 2022 recoveries will also be significantly under budget due to low rainfall.

· Other recoveries were $157,000 over budget for the year to date.

8.3 Expenditure

· Management costs under budget by $129,00, however these were more than offset by increased consultancy costs for Activity Management.

· Additional consultancy costs have been incurred associated with the work being undertaken to designate the Bell Island and NRSBU sites in Tasman District Plan.

· Additional consultancy costs were incurred for the preparation and submission of the consent application for the reuse of water at Greenacres Golf Course, along with a site wide soil disturbance consent under the NESCS (National Environmental Standard – Contaminated Soils).

· Contract maintenance costs remain over budget by $253,000 up from $251,000 for the year to 31^St March.

· Consultancy costs remain over budget by $283,000 up from $282,000 for the year to 31 March 2022. These costs have been incurred due to staff secondment, O&M procurement, Asset Register & Valuation works, works on NRSBU site designations, and Greenacres Golf Course Consent and Soil Disturbance Consent applications.

8.4 Officers would like to bring to the Boards attention the inflationary pressures being experienced across the construction industry at present. Significant increases to raw materials, fuel, plant, and labour costs will put pressure on budgets for maintenance and renewal/capital works activities. Officers will present further information on the likely impacts of these pressures as this comes available.

8.5 Table 3 below shows the NRSBU Financial Report to 30 June 2021.

8.6 The NRSBU financial Position as of 30 April 2022 is shown in Table 4 Below

9. Carryover

9.1 NRSBU has continued a challenging renewals and expenditure programme during the 2021/22 financial year.

9.2 Due to the timing of this meeting (annual financial results are not yet available) a full expenditure and carryover report will be presented to the board in the NRSBU September 2022 meeting. It was not possible to have these available for this meeting.

10. Discharge performance

10.1 The wastewater discharge performance from Bell Island WWTP has met all the consent criteria for the period to 31 May 2022.

11. NRSBU Resourcing

11.1 The resourcing constraints are leading to some capital and operational works being delayed, and further delays are expected because of reduced staffing levels in the regional services team, however support has been sought from consultants and the O&M contractor and additional resource has been supplied for Activity Management and Capital Project works.

11.2 The additional support from the contractor is now increasing the timeliness of capital projects and will help to ensure a good start to the 2022/23 financial year.

11.3 A review of Regional Services staffing capacity is being undertaken that includes consideration of the staffing structure in anticipation of the wastewater staff transferring to the new water entity. No progress has been made on this since the last meeting.

Attachments

Nil

Nelson Regional Sewerage Business Unit

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