Agenda of Nelson Tasman Regional Landfill Business Unit

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Page No.

1. Apologies

Nil

2. Confirmation of Order of Business

3. Interests

3.1 Updates to the Interests Register

3.2 Identify any conflicts of interest in the agenda

4. Public Forum

5. Confirmation of Minutes

5.1 15 July 2022 8 - 11

Document number M19640

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Confirms the minutes of the meeting of the Nelson Tasman Regional Landfill Business Unit, held on 15 July 2022, as a true and correct record.

6. Chairperson's Report 12 - 16

Document number R27198

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Chairperson's Report (R27198); and

2. Approves/Allocates $250,000 from operating surpluses to be allocated to establish an emergency fund.

7. Nelson Tasman Regional Landfill Business Unit General Managers Update Report September 2022 17 - 27

Document number R27147

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit General Managers Update Report September 2022 (R27147).

8. York Valley Landfill Flood Waste Fee Waiver 28 - 30

Document number R27192

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report York Valley Landfill Flood Waste Fee Waiver (R27192); and

2. Approves (retrospectively) the provision of a landfill fee waiver for flood damaged goods, received under the initial 2 week free dumping offer, of up to 200 tons of waste; and

3. Approves the Operations Manager – Regional Services to provide a landfill fee waiver for a further 200 tons of flood damaged goods, at his discretion.

9. Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22 31 - 61

Document number R27132

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22 (R27132) and its attachment (1399367370-7648); and

2. Approves the Nelson Tasman Regional Landfill Business Unit 2021/22 Annual Report (R27132) and Nelson Tasman Regional Landfill Business Unit – Annual Financial Statements 2021/22 for presentation to Nelson City Council and Tasman District Council with delegation of all minor amendments to the Nelson Tasman Regional Landfill Business Unit Chairperson and General Manager.

Recommendation to Nelson City Council and Tasman District Council

That the Nelson City Council and Tasman District Council

1. Receives the Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22 (1399367370-7648), the Nelson Tasman Regional Landfill Business Unit – Annual Financial Statements 2021/22.

10. 2021/22 Capital/Renewals Expenditure and Carryover Report 62 - 67

Document number R27145

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report 2021/22 Capital/Renewals Expenditure and Carryover Report (R27145); and

2. Approves the carryover of capital ($0.682M) and renewals ($1.381M) budgets from 2021/22 financial year to the 2022/23 financial year for inclusion in the Nelson Tasman Regional Landfill Business Unit Business Plan 2022/23, to ensure continuation of urgent and planned works.

11. Overview of Landfill Gas Reuse Options Report 68 - 77

Document number R26802

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Overview of Landfill Gas Reuse Options Report (R26802); and

2. Approves the report Gas Reuse Feasibility Assessment and Business Case Development is undertaken for option 6 of this Report (R26802).

12. Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/2024 78 - 105

Document number R27146

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/2024 (R27146) and its attachment (1399367370-7649); and

2. Approves the Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/24 (1399367370-7649) for presentation to the Nelson City Council and Tasman District Council with delegation of all minor amendments to the Nelson Tasman Regional Landfill Business Unit Chairperson and General Manager.

Recommendation to Nelson City Council and Tasman District Council

That the Nelson City Council and Tasman District Council

1. Receives the Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/24 (1399367370-7649) for review and provide feedback to the Nelson Tasman Regional Landfill Business Unit, if required.

13. Nelson Tasman Regional Landfill Business Unit Governance Agreement Review Report 106 - 219

Document number R27043

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the Nelson Tasman Regional Landfill Business Unit Governance Agreement Review Report (R27043) and its Attachments (A2921581, A2921574, A2921572, A2921594, A2921577 and A2921595); and

2. Approves the Nelson Tasman Regional Landfill Business Unit Governance Agreement Review Report (R27043), and its attachments (A2921581, A2921574, A2921572, A2921594, A2921577 and A2921595) for submission to Nelson City Council and Tasman District Council.

Recommendation to Nelson City Council and Tasman District Council

That the Council

1. Receives the Draft Amended and Restated Deed of Agreement for the Nelson-Tasman Regional Landfill Business Unit (A2921574), and the Draft Updated Terms of Reference for the Nelson Tasman Regional Landfill Business Unit (A2921572); and

2. Approves the Draft Amended and Restated Deed of Agreement for the Nelson-Tasman Regional Landfill Business Unit (A2921574), and the Draft Updated Terms of Reference for the Nelson Tasman Regional Landfill Business Unit (A2921572).

Nelson Tasman Regional Landfill Business Unit Minutes - 15 July 2022

Minutes of a meeting of the

Nelson Tasman Regional Landfill Business Unit

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

Held in the Council Chamber, Floor 2A, Civic House, 110 Trafalgar Street, Nelson on Friday 15 July 2022, commencing at 9.35a.m.

Present: Nelson City Councillor J Edgar (Chairperson), Nelson City Councillor M Courtney, S Bryant, Tasman District Councillor T Walker (Deputy Chairperson) and Iwi Representative A Stephens

In Attendance: Group Manager Infrastructure (A Louverdis), Governance Adviser (T Kruger) and Assistant Governance Adviser (A Bryce-Neumann)

Apologies: Nil

Karakia

The Committee confirmed the re-appointment of Andrew Stephens and welcomed him.

1. Apologies

There were no apologies.

2. Confirmation of Order of Business

There was no change to the 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 27 May 2022

Document number M19488, agenda pages 5 - 8 refer.

Resolved RLBU/2022/013

That the Nelson Tasman Regional Landfill Business Unit

1. Confirms the minutes of the meeting of the Nelson Tasman Regional Landfill Business Unit, held on 27 May 2022, as a true and correct record.

Courtney/Bryant Carried

6. Nelson Tasman Regional Landfill Business Unit General Manager Update report

Document number R27017, agenda pages 9 - 22 refer.

Group Manager Regional Services, Nathan Clarke answered questions on the landfill activities, confirmed these are ongoing. Airspace and buttress works have slowed down due to bad weather, no significant safety incidents since the last report and changes to the tailbacks have improved. New storm water system tested and achieved what was required to be compliant.

Nathan Clarke advised that the current primary compactor is having issues and the refurbished compactor is being used. Gas Management activities are underway. The odour that was detected on site has been investigated by contractors, sewer systems have been checked and will be monitored.

Resolved RLBU/2022/014

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit General Manager Update report. (R27017).

Walker/Courtney Carried

7. Exclusion of the Public

Resolved RLBU/2022/015

That the Nelson Tasman Regional Landfill 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:

Bryant/Courtney 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 Tasman Regional Landfill Business Unit Meeting - Confidential Minutes - 27 May 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

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 Tasman Regional Landfill Business Unit Meeting - Confidential Minutes - 27 May 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

The meeting went into confidential session at 10.25a.m. and resumed in public session at 10.26a.m.

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

Resolved RLBU/2022/016

That the Nelson Tasman Regional Landfill Business Unit

1. Confirms the minutes of part of the meeting of the Nelson Tasman Regional Landfill Business Unit, held with the public excluded on 27 May 2022, as a true and correct record.

Bryant/Courtney Carried

There being no further business the meeting ended at 10.27a.m.

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

Item 6: Chairperson's Report

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: Chairperson's Report

Report Author: Judene Edgar - Chairperson

Report Number: R27198

1. Purpose of Report

1.1 To provide a summary of key achievements of the Nelson Tasman Regional Landfill Business Unit (NTRLBU) over the past three years.

1.2 To propose an Emergency Fund.

2. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Chairperson's Report (R27198); and

2. Approves/Allocates $250,000 from operating surpluses to be allocated to establish an emergency fund.

3. Emergency Fund

3.1 The NTRLBU sustained relatively minor damaged during the August rainfall events, as well as some impacts from the closure of Market Road due to slips. A verbal update will be provided by staff at the meeting on the impacts on the landfill.

3.2 In addition to damage sustained on-site, there were significant impacts across Nelson with large volumes of mud, silt and damaged household materials (carpets, appliances, furniture) needing to be disposed of. A fee waiver (refer separate report on this agenda) was implemented to be able to support the removal of mud and silt in particular, as disposal of other items are covered through insurance.

3.3 To support the landfill and the Nelson Tasman communities to respond to on-site damage or to provide a fee waiver to the community, it is proposed that an emergency fund of $250,000 be established; it is noted that this expenditure level is within the existing delegations of the General Manager (GM), and would enable the GM to be able to respond quickly in the event of an emergency.

4. Capital Works

4.1 The NTRLBU has progressed its most significant capital works programme since it was established. The leachate, airspace and landfill stability and buttress works are critically important to ensure the life of the landfill is maximised to align with its resource consent, as well as providing environmental and financial stability.

4.2 The stormwater system upgrades have also been a major project to improve the quality of the stormwater being discharged to the York stream. Despite rain delays in February, this critically important project was implemented, and now ensures we are meeting our responsibility as stewards of the land and waterways.

4.3 Several smaller capital projects have also taken place at Eves Valley to allow for all-weather access and enable Eves Valley to be able to accept waste rapidly; this includes the new weighbridge and controls and work on the leachate line to improve leachate system resilience. The enhancements to Eves Valley also provide the region with a lower cost disposal mechanism for HAIL material that reduces the overall disposal costs.

5. Operations

5.1 Enhancements to onsite Health and Safety including an independent audit have been a key operational focus. A number of improvements have been implemented to reduce risks such as those relating to vehicle doors, vehicle movements, battery fires and manual handling.

5.2 A collaborative programme was implemented to reduce the risks of fires caused by lithium-ion batteries. Thermal imaging cameras were installed to identify hot spots and a pressurised water supply was installed to fight fires. Due to increasing risks, a diversion programme was initiated with the cooperation of Nelson City and Tasman District council, providing drop-off points for lithium-ion batteries to divert these from the landfill. This programme has been successful and is continuing.

5.3 A trial for the diversion of HAIL material from York Valley landfill to Eves Valley landfill is also underway. Other waste minimisation and diversion opportunities continue to be investigated.

5.4 Landfill compactor issues presented as a problem in 2022, so the NTRLBU purchased and refurbished a second-hand compactor as a backup, to ensure that a compactor is available at all times.

5.5 In addition to consents for stormwater discharge and earthworks consents, a global earthworks consent for the site was submitted and approved this year which allowed NTRLBU to implement the airspace and stability buttress construction, along with other earthworks required on the landfill site and in Gully 3 of the landfill designation. The global consent also reduces the requirement for individual consents for each new activity.

5.6 Work is also underway for consents for the next stage of the landfill and consideration of the future of waste management in the Nelson Tasman region including the role of new technologies as well as existing practices. This is a significant piece of work and will be a key focus for the Board going forward.

5.7 The O&M Contractor staffing structure at the landfill changed in 2021 including an additional management staff member. This has helped the contractor to be more responsive to health and safety enhancements and improved their overall performance.

5.8 Swift operational changes were also made in 2020 during lockdowns to reduce the risk of covid 19 to contractors and staff and to reduce impacts on operations. Facility work streams were separated, regular rapid antigen testing was undertaken, and critical staff worked in separate bubbles. With these measures in place, the landfill was able to remain open and there were no service disruptions to the community.

5.9 As more young people engage with waste and waste minimisation, the landfill has also had an increasing number of requests for student visits. My appreciation to the staff and contractors for facilitating these enquiring young minds and for fostering their consciousness for waste issues.

6. Gas capture and reuse

6.1 After a robust due diligence process, we have successfully purchased the gas management contract from Pioneer Energy. Ownership of the contract removes both a significant constraint and provides important gains by enabling NTRLBU to capture and destruct gas, and, ideally, to reuse the gas. As only a portion of the gas captured was on-sold to Te Whatu Ora Nelson Marlborough (formerly the NMDHB), there was no control over the emissions and lost opportunities for reuse. As a consequence, this reduces both the ETS liability, but more importantly, and a key focus for the Board, reduces the actual emissions.

6.2 A new enclosed flare was installed at York Valley landfill which also enabled the old flare to be installed at Eves Valley landfill this year which helped with gas capture and on-site safety. Based on the data available, the Eves Valley flare is removing around 13,750 tonnes of CO2 equivalent from being discharged to the atmosphere - which is the equivalent to reducing car travel by 81 million Km.

6.3 The new enclosed flare has improved the emission destruction efficiency which further reduces ETS liabilities. Historically our gas capture has been very low, and in order to meet our emissions targets and the Climate Change Commission’s 2021 advice to the government regarding landfill gas capture, more work is in the 2022/23 and draft 2023/24 Business Plans to address this.

7. Good neighbour responsibilities

7.1 Wind reduction bunds and litter catch fences were installed significantly reducing the amount of litter blown around in the landfill and potentially going off-site. Additionally, the process of covering refuse on site was also changed to reduce the litter at source. Work on reducing litter continues, now that the palisade wall to improve the geotechnical stability has been installed, NTRLBU will begin the design of the site exterior catchfence.

7.2 Noise and odour assessments are also being undertaken regularly to monitor any incidents of off-site noise or odours to ensure that we’re continuing to be good neighbours.

8. Finances

8.1 The NTRLBU finances have been well-managed. While we have to prepare annual budgets, due to the scale of our capital projects, most of these are multi-year requiring careful management and monitoring and carryovers. Like most other capital works projects, we have also been impacted by bad weather, covid 19, staff shortages and inflationary pressures. Nonetheless, due to the emissions work being undertaken we have been successful at reducing our Unique Emissions Factor leading to significantly lower costs.

8.2 We remain in a solid financial position to be able to undertake critical capital works, as well as having operational funds to investigate options and opportunities to further reduce emissions, reuse gas and enhance our health and safety processes. We were also able to provide a fee waiver to support those impacted by the August rain events which was a positive contribution.

8.3 My personal thanks to Andrew Bishop for his exemplary work for the NTRLBU, managing and monitoring our finances, budgeting, forecasting and reporting. Thanks to his expertise and commitment to excellence, we have a high level of confidence in our finances and are in a good financial position.

9. Staff Resources

9.1 Unfortunately, we have been short-staffed for much of the past three years, with only a short period with a full staffing complement. While consultants have been able to backfill some of the work, it has put increasing and undue pressure on General Manager Nathan Clarke and Operations Manager Brad Nixon.

9.2 Despite this, we have achieved more in the last three years than any other period of the landfill, and for that I am extremely appreciative for the dedication, experience, skill and innovation that Nathan and Brad bring to the NTRLBU operations. You have continued to push to deliver more and deliver better, keeping emissions and health and safety foremost in your considerations. For this, we are all extremely grateful.

9.3 Thank you also to the ongoing support and collaboration of the waste management teams at Nelson City and Tasman District councils, in particular David Stephenson, Karen Lee and Mike Schruer. Thank you also to the Councils’ Infrastructure Managers Alec Louverdis and Richard Kirby for your ongoing support and guidance.

10. Board Membership

10.1 We were delighted that Iwi representative Andrew Stephens accepted a further three-year term on the Board, which has been approved by Nelson City and Tasman District councils. Andrew, I have really appreciated your contributions and insights, and for supporting our Kaupapa and mahi.

10.2 I’d also like to acknowledge Deputy Chair Trindi Walker and Councillor Stuart Bryant from Tasman District Council who have been on the Board for three years with me. It has been a pleasure to work with focused and dedicated Board members with such an aligned direction. Thank you also to Councillor Courtney who joined the Board to replace Councillor McGurk, who in turn, had joined the Board to replace Councillor Fulton. Despite coming in midway through the triennium with many key pieces of work already being in train, you got up to speed very quickly, and I’ve appreciated your input immensely.

Attachments

Nil

Item 7: Nelson Tasman Regional Landfill Business Unit General Managers Update Report September 2022

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: Nelson Tasman Regional Landfill Business Unit General Managers Update Report September 2022

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

Report Number: R27147

1. Purpose of Report

1.1 This report is an update by the General Manager (GM) on activities and finances to 31 June 2022, by the Nelson Tasman Regional Landfill Business Unit (NTRLBU).

2. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit General Managers Update Report September 2022 (R27147).

3. Background

3.1 There have been no significant safety incidents since the last NTRLBU Board meeting.

3.2 Operations are generally running well, the NTRLBU compactor is now onsite and available for use when the Contractor’s compactor suffers breakdown.

3.3 The stormwater pond 3 (SRP 3) permanent flocculation system has been installed and is in operation. Stormwater pond one (SRP 1) is now usable. Some completion works are still required when the weather dries enough to allow access.

3.4 Ongoing wet weather has reduced productivity on the earthworks for the buttress and airspace excavation. Some slipping has occurred at the boundary of the site, but this has largely been contained by the palisade stabilisation wall installed as part of the airspace works.

3.5 Procurement is underway for the Eves Valley weighbridge construction and the all weather access upgrade. The works are scheduled to commence prior to the end of 2022.

3.6 The NTRLBU finances show a surplus of $2.12 Million for the 2021/22 financial year. This is due to the higher than budgeted waste volumes, and lower than expected Unique Emission Factor.

3.7 This report is for the April to June 2022 period, and was prepared prior to the extreme weather events of August 2022. A verbal update will be provided at the meeting on the impacts on the landfill

4. Health and Safety

4.1 No significant incidents have occurred at the York Valley Landfill (YVL) during the period.

4.2 There were three fire incidents at the landfill, one from a vehicle exhaust and two from lithium ion batteries. All fires were managed in accordance with the response procedure.

4.3 The fire risk management plan is being prepared but has not been received yet.

4.4 There were several incidents logged in the incident register for June and July. The incidents are listed below.

· Truck tail door caught the stationary compactor blade after tipping and pulling forward from the tip face. This was investigated by our HSE team and found that the spotter did not issue clear and precise instructions to truck driver. Truck/door is to be clear of any obstructions before swinging.

· A member of staff arrived at the tip face on a Saturday morning and drove within the swing zone of a 20-tonne excavator. Although there was no near miss this was investigated by our HSE team and issues remediated and closed out, with operators contact details available to ensure contact can be made prior to approaching the tip face.

· Lithium battery fire. This was removed from the tip face and smothered with clay fill.

· Broken window in Cat compactor due to a faulty latch. Latch adjusted and side window replaced

· Lithium battery fire. This was smothered and removed from tip face.

· FH truck exhaust started a small fire on some dry sawdust. Fire removed and capped with clay.

· Missing manhole cover on western face. New scruffy dome purchased and fitted.

5. Landfill Compactor Issues

5.1 There have been no issues with the primary compactor during June and July following its repair from a broken axle.

6. NTRLBU Activities

6.1 It has continued to be busy for NTRLBU staff. A range of projects have needed to be managed in construction, and procurement is underway for the 2022/23 construction season, and design development is underway for the proposed 2023/2024 capital works, in addition to the normal operations.

7. Landfill Gas management

7.1 Due diligence on the hospital boiler and gas management system has been ongoing, the contract with Pioneer Energy has been signed and asset inspections are being undertaken. NTRLBU has engaged WSP to complete the asset evaluations. This project is proceeding well, and it is expected that the transaction will finalise on 31 August 2022.

8. Deed of Agreement and Terms of Reference Review

8.1 The review and alignment of the NTRLBU and NRSBU governance frameworks has been undertaken by Duncan Cotterill. A draft report has been prepared along with an amended NTRLBU Deed of Agreement and a Revised NTRLBU Terms of Reference. The review identified that it was not worth changing the NRSBU Memorandum of Understanding due to the upcoming three waters changes. Amendments were made to the NTRLBU Deed of Agreement and the NTRLBU Terms of Reference to remove conflicts between the two documents and to add clarity to the processes and timing of actions required to meet the Councils planning and approvals processes.

9. Airspace, Leachate, and Stability Upgrade

9.1 The airspace works are underway with earthworks machinery onsite. The works have moved a significant amount of material and some airspace gains have been made. This work has now been slowed down to avoid wet weather claims during winter.

A high angle view of a dam

Description automatically generated with medium confidence

Figure 1 – Airspace excavation works in construction 4 July 2022.

9.2 The design of the upper leachate improvements has been undertaken and cost estimates are being sought from contractors for the works based on the draft design.

9.3 The earthworks contractor will begin the top level of the buttress construction in areas above the upper leachate drains once the weather dries out after winter.

10. Odour Management

10.1 One neighbour contacted the NTRLBU regarding an odour observation during this period.

10.2 This observation came directly to the General Manager and was not intended as a complaint, rather as information that the weather conditions at the time can result in some odour reaching neighbours.

10.3 Ongoing odour and noise assessment are being undertaken at the landfill.

11. Stormwater Management

11.1 SRP3 is working well with the coagulant significantly improving water quality leaving the site.

11.2 The stormwater pond has been dredged during July to remove the accumulated sediment. A more permanent sediment removal system will be installed during 2022 to reduce the costs and manpower requirements for sediment removal.

11.3 The design of the western side dirty water drain has been reviewed and an alternative design has been developed that allows the stormwater to pass back to the eastern side of the landfill. NTRLBU has installed temporary flexible pipes on the western side of the landfill to prevent scouring during rainfall until the western side dirty water drains can be implemented. Observations during the last rainfall event have shown these to be working effectively. Additional funding has been included in the 2023/24 Business Plan to allow improvements to the western dirty water drain following the construction of the toe buttress and leachate system upgrade.

12. Litter Management

12.1 There were no litter complaints during this period.

12.2 The new litter catch fences are in use and are significantly reducing the amount of litter being blown around in the landfill

12.3 Now that the palisade wall to improve the geotechnical stability has been installed, NTRLBU will begin the implementation of the site exterior catchfence.

13. Emission Management

13.1 The Eves Valley flare is running, and the flow meter and gas analyser are now installed and operational.

13.2 Records are now available showing that the flare is burning around 2500 m3 per day of landfill gas. This equates to around 1500m3 of methane. We can now confirm that this system is reducing carbon dioxide emission by around 7500 tonnes per annum.

13.3 The design of the additional gas wells at the York Valley Landfill and the new gas collection ring main have been received. The drilling rig for the wells is due onsite in mid-September.

13.4 NTRLBU has ordered all the new gas pipe for the ring main, and this has now been supplied to site. Pipe welding of the pipe strings has commenced.

14. Emissions Trading Scheme Position

14.1 The ETS unit price has been increasing and is now above $80 per tonne CO2.

14.2 This ETS price is significantly higher than projected (NTRLBU AMP assumed a CO2 unit price of $42.50 per NZU for 2022/2023, $47.50 per NZU for 2023/2024 and $50 per NZU from 2024/2025 onwards)

14.3 It is expected that ETS credits will continue to rise in price over the next three years.

14.4 Due to the NTRLBU hedging arrangements, this change in price will not result in budget issues for the 2022/23 or for the 2023/24 year.

14.5 The average price for ETS units based on the NTRLBU hedging is $47 per unit for 2022/23 and $37 for 2023/24.

14.6 NTRLBU purchased ETS credits to the maximum allowance under the Treasury Policy based on an assumed UEF value.

14.7 Following a review of the UEF for 2021 the UEF for York Valley Landfill is 0.518.

14.8 Current NZU holding and movements

Units on hand on 30 June 2021 140,909

Purchased October 21 @ $65.40 20,000

Purchased January 2022 @ $69.25 10,000

Purchased February 2022 @ $76.50 10,000

Units on hand February 2022 180,900

Units to surrender for 2021 @ UEF 0.518 40,483

Units on hand 30 June 2022 140,166

14.9 Policy limit - 106,902

14.10 The current holding is 33,564 more units than our policy provides for due to the UEF of 0.518 achieved for 2021 being significantly less than anticipated when purchasing units. This is based on actuals to 30 March 2022 and budget volumes for 2022 and beyond. There is a small risk that volumes of waste received will continue to exceed budget. This risk is likely to be covered by the units held in excess of the policy.

14.11 There is significant demand for units from the market and little supply resulting in the market price continuing to rise.

14.12 The second government auction for 2022 was on the 15 June 2022. There were more bids than the base allocation resulting in all the units available for Cost Containment Reserve being sold. The settlement price was $76 per unit.

14.13 The NTRLBU propose to continue maintaining the units beyond the current policy as a hedge against the risks of volumes of waste received, a change in the UEF and the predicted price escalation.

15. Waste Minimisation

15.1 There are three primary activities going on with waste minimisation for NTRLBU at present.

15.2 Battery diversion and recycling.

15.2.1 The number of small battery fire incidents at York Valley has remained lower over the last two months.

15.2.2 The cost of battery disposal is now expected to be in the order of $40,000. This funding will allow the region to maintain a focus on this, and hopefully this will further reduce battery fires and the risk of major fires occurring at the landfill.

15.3 NTRLBU waste minimisation activities.

15.3.1 NTRLBU is working with NCC and TDC on the review of the Joint Waste Minimisation and Management Plan (JWMMP).

15.3.2 NTRLBU has continued to investigate additional separation works at the landfill. This unfortunately has still not identified a method that is successful and economic. This is considered work in progress and will continue.

15.3.3 NTRLBU has begun looking at options for waste treatment and energy production from wastes, that will result in reduced airspace consumption and energy production. This is aimed at identifying whether a small system is available to treat Chrome Copper Arsenate contaminated saw dust, as well as timber, paper and rubber. This is a work in progress, and funding for feasibility and piloting has been included in the 2023/24 Business Plan.

15.3.4 A system is being developed to divert HAIL material from the landfill and reprocessing the HAIL so that it does not need to be disposed to the class 1 landfill. This will save airspace, reduce Ministry for the Environment landfill levies, and reduce ETS liability due to a reduced mass of waste for disposal. Funding for this system has been included in the 2023/24 Business Plan.

15.4 2022 York Valley SWAP study

15.4.1 The NTRLBU has commissioned the 2022 Solid Waste Analysis Protocol (SWAP) study for wastes being received at the York Valley landfill. This has been received and is being used to inform the development of the JWMMP.

16. Landfill Waste Volumes

16.1 Landfill volumes remain high and have exceeded expected landfill volumes for the year to date. ( refer to Figure 4 Below) Chart, bar chart

Description automatically generated

Figure 4 – Waste volume and composition for 2021/2022

16.2 Total waste tonnage for the 2021/22 financial year was 81,292 tonnes. This compares to 78,069 tonnes for the 2020/21 FY.

17. NTRLBU Finances

17.1 Income Account for the period to 30^th June 2022.

17.2 The finances show an overall surplus for the year to 30 June 2022 is $2,122,224

17.3 This increased income has come from the increased volume of wastes being received compared to the projected volumes used to generate the budget and from the significantly lower UEF factor achieved for the 2021 calendar year than assumed in the Business Plan.

17.4 Expenses are up compared to budget for a range of items, which is expected due to higher volume of wastes, and consequently the higher Waste Disposal Levy and operational costs.

17.5 One item that is particularly high for the year to date is consultancy costs. These relate to work on operational consent applications, secondments for activity management support, and support for other items such as the Eves Valley leachate system investigations. While these costs are higher than budget, they are more than compensated by the additional revenue and lower ETS costs.

17.6 Balance Sheet as of 30 June 2022

18. Carryover

18.1 NTRLBU has prepared a separate carryover report for this agenda.

19. NTRLBU Resourcing

19.1 A business case has been prepared to review the structure of NTRLBU to alter the makeup of the Regional Service staff. No further progress has been made since the last meeting.

20. Conclusion

20.1 NTRLBU operations have been running reasonably smoothly and the issues with the availability of the compaction machinery onsite have now been overcome with the compactor owned by NTRLBU now being available for use.

20.2 Battery diversion works appear to continue reducing the frequency of fires at the landfill.

20.3 The stormwater system is now achieving effective treatment prior to discharge to York Stream.

20.4 Work has started on the airspace and landfill stability work, and this has resulted in one additional year of airspace being realised.

20.5 There have been no significant safety incidents since the last NTRLBU Board meeting, and improvement to vehicle management has been implemented.

Attachments

Nil

Item 9: Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22

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

Report Number: R27132

1. Purpose of Report

1.1 This report is to provide a summary of the annual performance of the Nelson Tasman Regional Landfill Business Unit (NTRLBU).

2. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22 (R27132) and its attachment/s (1399367370-7648); and

Recommendation to Nelson City Council and Tasman District Council

That the Nelson City Council and Tasman District Council

1. Receives the Nelson Tasman Regional Landfill Business Unit Annual Report 2021/22 (27132) and its attachment (1399367370-7648), the Nelson Tasman Regional Landfill Business Unit – Annual Financial Statements 2021/22.

3. Background

3.1 This annual review outlines what has been achieved by the NTRLBU in the 2021/22 financial year and its level of performance against Key Performance Indicators.

3.2 There were no significant safety issues or incidents during the year.

3.3 A gas hazard identified during 2020/21 at the Eves Valley Landfill was remediated and a gas destruction flare was installed to combust gas emissions from the Eves Valley landfill. The flare installation removed the gas hazard.

3.4 NTRLBU implemented stormwater upgrades which resulted in the removal of the abatement notice issued by the Nelson City Council during 2020/21. One infringement notice was received during 2021/22 for an overflow from the York Valley Landfill Stormwater system while it was being constructed. The stormwater system has significantly improved the quality of the stormwater being discharged to the York stream

3.5 Several new resource consents were granted during the year including an earthworks consent for the landfill operations, a variation to the stormwater discharge consent, A consent for the use of polymer to assist in soil stabilisation and a earthworks consent for the realignment of the access Road for the York Valley landfill. The Eves Valley Stage 2 consent remains in progress.

3.6 NTRLBU had a net surplus of $2,122,224.00 for the 2021/22 financial year, excluding gains on revaluation.

3.7 This surplus results from a waste volume being more than estimated, Emission Trading Scheme Unique Emission Factor (UEF) being lower than estimated and interest rate changes influencing aftercare provisions.

4. Discussion

4.1 The York Valley landfill ran effectively during the year, with 81,000 tonnes of waste being received.

4.2 Safety on the site was a focus during the year. Several safety audits were undertaken by NTRLBU using an external party, and significant focus was paid to ensuring that the contractors’ operations were to a high standard, and in compliance with the documented plans. The audits showed a significant improvement in compliance following the various review stages. A change was made during the year to traffic management at the landfill, with a traffic controller being employed to manage traffic at the landfill face. A second change was the implementation of tipping bays with physical separation. These changes reduce the risk of vehicle to vehicle contact, and significantly reduce risks to vehicle operators when they need to exit their vehicle at the landfill face.

4.6 NTRLBU remains very constrained in terms of resource capacity and has engaged support from contractors and consultants to allow appropriate progress to be maintained.

4.7 A landfill disposal location setback was implemented in the landfill during the year to avoid issues with landfill breaching its stability criteria (identified in 2020/21). This set back is still in place and will be removed once the upper buttress is completed in the 2022/23 financial year.

4.9 The landfill stability upgrade has been designed. The initial stages of this work included the excavation of material from the back of the landfill for use in the buttress. This excavation work is covered by the new resource consent, and the work allowed the development of additional airspace.

4.10 Landfill airspace calculation has been updated, excavation works have been undertaken on the landfill and one additional year has been gained following this work. There is now just under 900,000 m³ of airspace available. Airspace is consumed at a rate of around 100,000m³ per year, giving a remaining life of around nine years. Waste mass entering the landfill has remained above the projected rate with 81,000 Tonnes of waste during the 2021/22 year. A pie chart showing the distribution of the type of waste is shown below.

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5. Performance Measured Against Business Objectives and Performance Measures

5.1 The objectives outlined below describe the long term aims of the business unit. Performance measure targets and dates (where they are not specified below) are set annually in the Business Plan, along with performance measures for projects identified in the Activity Management Plan. Performance is reported to the Joint Committee and to the shareholding councils annually.

5.2 Table 3.1 below outlines the 2021/22 Business Objectives and the performance assessed against these objectives.

Long Term Objectives	Key Performance Measures	Performance Achieved
Landfill capacity is available to receive solid waste generated within the Nelson Tasman region.
At least five years’ capacity of consented landfill is available. Adequate planning has been completed and agreed to before the five-year wind down period begins at York Valley.	Report the available landfill airspace annually (in terms of years remaining).	Achieved – nine years capacity remaining. A team is working on the new resource consent options. Work is being undertaken to extend the capacity of York Valley Gully 1, with significant airspace excavations being undertaken during 2021/22 financial year
	Review the Landfill Development Plan by 30 June 2021.	Achieved – Development plan included in AMP and 10-year budgets, review of development options included in 2022/2023 Business plan, and 2023/24 Business plan
	Complete actions required by Landfill Development Plan for 2021/2022 period.	Airspace construction being undertaken Stormwater system upgrade undertaken New flare installed at York, and old flare installed at Eves.
The available airspace at the landfill is used efficiently.	Airspace consumption of 1.23m³ per tonne of residual waste received is maintained or improved.	Airspace use measured between July 2021 and July 2022 is 1.21 m³ per tonne. Work has been undertaken to identify airspace saving options including the use of Eves Valley Stage 2 remaining capacity for HAIL material.
Disposal to landfill is efficient and cost effective
Disposal to landfill is cost effective for users.	Regularly monitor and review financial performance. Levels of Service (as per Appendix B) are met, and budgets (as per current Business Plan) are met.	Achieved - The landfill ran at a higher surplus than forecast during the 2021/22 year, due to increased waste volumes against budget, and a reduced UEF
The economic lives of all assets are optimised.	Three yearly internal audit of asset management practices confirms this.	Achieved - A review of the assets and their valuation was undertaken during 2020/21 as part of the AMP development, and additional valuations have been undertaken during 2021/22.
Consider and use new technology where it will provide benefit.	Report on technology considerations annually and identify and recommend new technology choices that are reliable and increase efficiency (and/or reduce cost).	Achieved - Ongoing assessment of the use of technology is continuously being undertaken. Improvements are being made regarding litter control, waste destruction, hail management, gas reuse and stormwater management. Further work is required in 2022/23 to advance the options for waste diversion, waste destruction technologies, landfill gas reuse, and alternative uses of waste material as part of the option review for future landfill options.
Risks associated with the services provided are identified and mitigated.
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 NTRLBU risk management plans.	Ongoing - A review of the risk matrix was undertaken during the AMP development. Additional risk management is being implemented regarding fire management in combination with Fire and Emergency NZ and a Fire Management Plan has been commissioned. Seismic stability risks for York Valley Landfill are in the process of being resolved through the construction of a Toe Buttress. An investigation into Eves Valley leachate pipeline risks was commissioned during 2021/2022 NTRLBU has supported the development of battery diversion within the Nelson Tasman region to reduce fire risk
Contingency plans adequately address emergency events.	Review Risk and Contingency plan for NTRLBU by 30 June 2021.	Achieved - risk review updated within NCC system
Contingency plans adequately address emergency events.	Review the effectiveness of the Landfill Management Plan following incidents, which require activation of the contingency plan, from 1 July 2020 and provide an incident report in the next Quarterly General Manager’s report.	Achieved - Review of the Landfill Management Plan has been undertaken, and updates are in progress. Issues with landfill management are reported to the NTRLBU board quarterly meetings. No significant issues with landfill management occurred.
Performance Monitoring
The Board and key stakeholders are kept well-informed about performance of the NTRLBU.	All agreed reports (as per Appendix A) are issued on time.	Achieved - notification is given to the Board Chair when unexpected events occur, and this is followed up in the General Manager’s quarterly reports.
Those engaged with the NTRLBU have the right skills, experience, and support to perform well.	The Joint Committee reviews its performance as part of its annual report.	Not undertaken – measure being reviewed as part of the next Business Plan Staffing numbers within NTRBLU remain below required levels. Additional staff capacity is required to achieve the outcomes included in the development plans, particularly now that actions are being implemented to mitigate carbon emissions and sell gas. External support has been engaged to augment capacity, but contractors have constraints to efficient productivity.
All activities are planned and agreed.	The AMP is reviewed every three years.	Achieved - the AMP was revised in 2020/21, and the development plan and funding incorporated into the AMP; additional Waste minimisation, airspace management and cost management actions have been identified for consideration in annual Business Plans.
NTRLBU operates sustainably and endeavours to remedy or mitigate any adverse environmental, social, or cultural impact
NTRLBU minimises adverse environmental, social, and cultural impacts.	Environmental, social, and cultural impacts are considered in decision making.	Achieved NTRLBU resolved the abatement notice for stormwater discharge and new stormwater facilities have been installed to improve discharge quality. Resource consents were granted for activities associated with the landfill operations. NTRLBU has made additional improvement to litter management, fire management, carbon emission management, and sediment issues on waste vehicles. Carbon emissions are being significantly reduced both at York Valley and Eves Valley – this is evidenced through the reduced UEF at York Valley, and the new extraction and flare system at Eves is destructing approximately 140m3 per hour of landfill gas.
NTRLBU identifies waste minimisation opportunities.	Report quarterly regarding waste minimisation opportunities. Report annually on NTRLBU waste minimisation and emission opportunities and mitigation. Annual Business Plan shall include an outline of the actions NTRLBU is proposing in regard to waste minimisation, and the costs associated with these.	Achieved – Quarterly report include a summary of waste minimisation opportunities. NTRLBU has supported the development of battery diversion within the Nelson Tasman Region. NTRLBU has identified additional waste diversion and management activities for inclusion in annual business plans funding processes.
NTRLBU identifies waste minimisation opportunities.		NTRLBU is also undertaking a trial on waste sorting and diversion from York Valley and is also implementing a weighbridge and access improvements to support diversion of HAIL material from York Valley landfill to Eves Valley landfill.
Climate change effects are managed responsibly
NTRLBU measures the greenhouse gas emissions of landfill activities.	The composition of incoming waste is assessed annually, commencing December 2020. The emissions from the York Valley Landfill are assessed and reported annually, commencing June 2021. The annual emissions from the Eves Valley closed landfill are estimated commencing June 2021.	Achieved – A swap analysis was undertaken during the 21/22 year. Achieved – the 2021 calendar year UEF was calculated at 0.518 tons of carbon dioxide per ton of refuse. This equated to 40,443 tons CO₂ emitted. Achieved – a flare, flow meter and gas analyser have been installed at Eves Valley and show that around 2500m³ of landfill gas at 60% methane is combusted daily.
NTRLBU reduces the greenhouse gas emissions rate for landfill activities.	A target for emissions per tonne of waste is established by June 2021 and reviewed annually. The NTRLBU will annually report on and consider applying for a Unique Emissions Factor for landfill operations.	A UEF of 0.518 was achieved for the 2021 calendar year. The target UEF for 2022 is 0.5. The NTRLBU will annually assess the business case for reducing emissions from landfill operations, including the reduction of high emissions waste and the improved capture of landfill gas. A flare has been installed at Eves valley and an Enclosed flare has been installed at York Valley significantly reducing greenhouse gas emissions. Additional reuse opportunities are being developed for landfill gas at both York Valley and Eves Valley.
NTRLBU mitigates its greenhouse gas emissions.	NTRLBU emission mitigation plan drafted by end of FY 2020/21. Activities associated with the emissions mitigation plan for 2021/2022 FY are implemented. Mitigation methods outlined in the annual Business Plan for NTRLBU board consideration.	NTRLBU emission mitigation reviewed each year in advance of annual business plan preparation. Achieved Additional gas reuse options have been considered and are included in the annual Business Plan for consideration.
Good relationships are maintained with all stakeholders
Shareholders are satisfied with the strategic direction and the economic performance of the business unit.	All business plans are approved by shareholders.	Achieved - NTRLBU operated at a surplus for the 2021/22 year. Capital works budgets were underspent, but capital implementation was improved compared to 2020/21. While some capex funding will need to be carried over to 2021/22 financial year for unfinished activities, a significant number of improvements were made, and important works commenced
Good relationships are maintained with all stakeholders including owners, iwi, customers, contractors, neighbours, and the wider community.	All complaints or objections are addressed promptly. Up to date information on activities and achievements are publicly available. Regularly engages with: Customers Owners Iwi RMA practitioners and other stakeholders.	Achieved. One complaint was received regarding litter from a neighbour, actions have been implemented to improve litter management. Some feedback received from customers that Landfill “turnaround” time have increased due to new traffic management processes. Two odour notifications were received from landfill neighbours. A new odour assessment protocol was implemented Odour will also be further addressed with the improved gas management systems being implemented during 2022/23
NTRLBU will encourage education about waste management and minimisation.	Information will be published at least annually, and up to date information will be available regarding NTRLBU activities.	Achieved. Up-to-date information is available regarding NTRLBU performance and activities, however the proposed website has not been commenced.
All statutory obligations are met
All statutory obligations are identified and met and are included in contracts with suppliers.	100% compliance with all statutory obligations.	An abatement noticed was received in regard to a single event stormwater discharge – this was self notified Monitoring reporting at Eves Valley landfill was found to have been overlooked in the transition between TDC/NCC and NTRLBU. This is being resolved. All other requirements have been met.
All resource consent requirements are met.	100% compliance with all resource consents. All applications for resource consents are approved.	Issues have been found where consents were in the name of TDC and therefore were not being focused on by NTRLBU. Transference of these consents was initiated during the year. NTRLBU have begun monitoring and reporting on the consents.

6. Financial Performance

6.1 The NTRLBU Annual Financial Statements for the year ended 30 June 2022 are appended to this report. A summary of NTRLBU financials for the 2021/22 financial year is shown in the comprehensive revenue and expense table below.

6.2 Total revenue was greater than budget with a revenue of $14,423,275 compared to budget of $12,778,000.

6.3 Total expenditure was lower than budget with total expenses of $12,301,051 compared to a budget of $12,578,000.

6.4 NTRLBU had a surplus, excluding revaluation gains of $2,122,224.

6.5 Expenses were less than budget, with the following factors contributing:

6.5.1 Increased management costs associated with external consultants supporting the development of the AMP, asset valuations and project development of the landfill development plan and airspace plans.

6.5.2 Post closure provisions - The assessed current cost of closure has decreased by $150,140 due an increase in the interest rate used to calculate the Net Present Value of the liability and the revised landfill capacity. These were offset by the costs of the Eves valley gas hazard remediation, increased provision for the Eves Valley leachate pipe maintenance and a higher inflation factor.

6.5.3 Management costs were $18,485 below budget and incorporated the use of management consultants for most of the financial year.

6.5.4 Operations and Maintenance costs were $1,581,875 above budget. A significant portion of the additional costs accrue from works done to manage airspace development works, manage traffic at the landfill face, and actions to apply for resource consents.

6.5.5 Emission Trading Scheme (ETS) costs were $1,628,071 below budget, due to a significant reduction in the UEF achieved for the 2021 calendar year, and due to NTRLBU hedging resulting in a lower ETS average price that the projected price. The ETS costs were lower than projected despite an increased waste mass being disposed compared to budget. The UEF achieved during 2020/2021 was 0.518 compared to a budgeted UEF for 2020/21 of 0.75

6.5.6 Consultancy costs were $634,826 above budget due to assistance with consent preparation, airspace development works, investigations into stability, investigations into leachate issues at Eves Valley, safety auditing, and operational and asset management support.

6.6 Expenses above budget were offset by the increased revenue arising from greater than budgeted landfill volumes and the significant ETS savings.

6.7 The reduction in post closure cost provision of $1,870,000 due to the reduced net present value as a result of the increased interest rates is regarded as an extra-ordinary item for the purposes of the Deed of Agreement (DOA).

6.8 Cumulative net deficit to June 2021 was $1,050,419. It is proposed to retain $1,050,419 from the 2021/22 surplus to repay the 2021 net deficit. The balance of the surplus ($1,071,805) is to be retained within the NTRLBU due to the extra-ordinary post closure costs outlined in 6.7 above. As allowed for in the DOA this surplus is proposed to be utilised to reduce the landfill fees over the next 10 years.

Note: This satisfies NTRLBUs reporting requirements to the Commerce Commission.

7. Conclusion

7.1 The 2021/22 year has been a successful year for the NTRLBU.

7.2 Despite high landfill mass being received, NTRLBU developed additional airspace resulting in one additional year’s airspace being available.

7.3 The year that has included a significant amount of change and development for the York Valley landfill.

7.4 Safety audits and safety improvements for traffic management at the landfill face resulted in a significant improvement for the facility. While the work added to the operational costs the facility is now reaching a high standard for safety management.

7.5 Improvements were completed for several issues discovered during 2020/2021, including gas collection and destruction at Eves Valley landfill, ongoing improvement to litter management at York Valley landfill, gas destruction improvements at York Valley Landfill, and improved fire management at York Valley landfill.

7.6 Several projects were started, and good progress was made during 2021/22 but are yet to be completed. These projects include the York Valley Access Road realignment, the York Valley Buttress and leachate upgrade, and the Pioneer Contract Procurement. The funding for these projects will need to be carried over into 2022/23.

Attachments

Attachment 1: Nelson Tasman Regional Landfill Business Unit - Annual Financial Statements 2021/22 (1399367370-7648)

Item 10: 2021/22 Capital/Renewals Expenditure and Carryover Report

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: 2021/22 Capital/Renewals Expenditure and Carryover Report

Report Author: Brad Nixon - Operations Manager Regional Services

Report Number: R27145

1. Purpose of Report

1.1 To consider and approve the 2021/22 capital and renewals expenditure and carryover requirements to 2022/23.

2. Summary

2.1 A significant amount of capital upgrading work has commenced but has not been completed during the 2021/22 financial year. This work is necessary, and it is therefore important to carry over unspent capital from 2021/22 to 2022/23 to allow this work to be undertaken

3. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report 2021/22 Capital/Renewals Expenditure and Carryover Report (R27145); and

4. Background and Discussion

4.1 NTRLBU has been continuing with a challenging renewals and expenditure programme during the 2021/22 financial year.

4.2 Officers generally approach capex projects with a three-year process, allowing a year for concept development, a year for detailed design and consenting (if required), and a year for construction.

4.3 Business unit resource levels are lower than needed to meet the workloads, and whilst assistance has been provided from NCC Capital Projects and external support has been engaged from consultants, delivery timeframes have had to be extended.

4.4 A significant volume of capital and renewal physical work has been completed during 2021/22. Of the proposed carry over almost half relates to the funding for the gas assets purchase.

4.5 The following tables detail overall renewals and capital expenditure, along with notable items, as at 30 June 2021, with the 2021/22 proposed carry over

4.6 Specifics of notable proposed renewal carryover is as follows:

4.6.1 Collection network/flare/gas: During 2021/22 a significant package of upgrade works was completed. A new flare for York Valley was procured and has been running continuously to maximise the gas extraction and destruction at York. This has resulted in the notable improvement in the Unique Emissions Factor for this year. The old York flare was relocated to Eves Valley Landfill, where it has been extracting and destructing the residual gas from closed stage 2. Design work on the upgraded well field & resilient landfill gas conveyance system at York is complete, with work on gas well installation due to commence in the first quarter of 2022/23.

4.6.2 Road extension: commencement of physical works to alter the York tip face access road was deferred whilst stormwater upgrade works progressed, and discussions around airspace use have been ongoing. Resource consent has been gained for this work, with work due to progress in 2022/23 once earthworks around the borrow pit are completed.

4.7 Specifics of notable proposed capital carryover is as follows:

4.7.1 Stormwater control: Stormwater upgrades at York made great progress during 2021/22, with completion of stormwater retention pond (SRP) 3 beside the weigh bridge, and construction and armouring of SRP 1. Both SRPs are now operating, with the flocculation system in SRP 3 fully online and working well. Initial performance of the completed parts of the stormwater system has been promising, with several significant storm events being managed within the consent limits. The budget estimates incorporated in the Activity Management Plan (AMP) were not sufficient for the scope of works required to ensure compliance with consent conditions – including the recent variations to allow use of flocculent dosing. Work on the remainder of the stormwater system will continue in the second half of 2022 (once weather conditions settle).

4.7.2 Investigation and Consents for Stage 2 & 3 as regional site (Eves): Progress has slowed on the new consents for Eves, and this is currently sitting with TDC for their next action. Works for the Consent for the next landfill after York Valley Gully 1 continues.

4.7.3 York Valley Leachate Upgrade: Design work is progressing on the leachate upgrade to improve landfill stability. Physical works are scheduled to commence in 2022/23.

4.7.4 Plant and Equipment: With the current landfill operations and maintenance contractor deciding not to repair their back up compactor following motor failure the Business Unit elected to purchase the compactor and complete the repairs – ensuring that the landfill has sufficient resilience to continue normal operations in the event of plant malfunction. This decision was to prove beneficial, with the primary compactor out of service in June, and the rental compactor hired by the contractor also failing.

4.7.5 Pioneer Contract and Asset Purchase: The sale & purchase agreement is due to be finalised in late August 2022 – these funds are required to be carried over to complete this transaction

4.7.6 York Valley Front Face Alteration: The Business Unit elected to take advantage of the upcoming landfill stability improvements to gain significant refuse airspace within the landfill footprint by commencing excavations ahead of schedule. This activity utilised the funding allocated for leachate stability upgrade (which is still in the design phase) ahead of funding allocated in 2022/23.

5. Options

5.1 Two options have been considered for the carryover – approving the carryover and not approving the carryover. These are outlined in the table below.

5.2 Officers support Option 1 – Approving the carryover.

Option 1: Approve the carryover
Advantages	· The capital projects will be able to continue. · Upgrades will be possible to reduce environmental concerns related to the current landfill operations. · Planning and actions will be able to be completed to develop the future landfill operations and reduce current and future risks. · Greenhouse gas emission reductions, landfill leachate and stability issues will be able to be addressed. · Landfill airspace will be enhanced, resulting in reduced landfill waste disposal costs. · Future workload for staff will be reduced
Risks and Disadvantages	· Regional services staff will have a higher workload delivering the capital projects.
Option 2: Do not approve the carryover
Advantages	· Less immediate stress of Regional Service staff
Risks and Disadvantages	· The capital upgrade works will not be undertaken or works underway will not be completed resulting in environmental and performance issues. · Landfill costs will increase as the landfill life will not be extended and NTRLBU will need to impair the life of the landfill resulting in increased costs to landfill users.

6. Conclusion

6.1 It is recommended that $1.381M of renewals and $0.672M of capital funds will be carried forward into 2022/23.

6.2 Expenditure of these funds is generally programmed for completion in 2022/23.

Attachments

Nil

Important considerations for decision making

7.1 Fit with Purpose of Local Government

The NTRLBU 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.

7.2 Consistency with Community Outcomes and Council Policy

Our infrastructure is efficient, cost effective and meets current and future needs.

7.3 Risk

The risk of not approving the carry-overs is that urgent and planned works will not be able to be undertaken and works already underway will not be able to be completed. This would likely result in consent non-compliance

7.4 Financial impact

This report has considered funding approved by the Councils and transfers capital funding to allow the delivery of the required capital upgrades as outlined in the annual and long-term plans.

7.5 Degree of significance and level of engagement

The NTRLBU 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

7.6 Climate Impact

A key feature of the capital programme is the ability to implement systems to reduce greenhouse gas emissions and environmental issues. Carryover of funds allows these programmes to continue.

7.7 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.

7.8 Delegations

Relevant Areas of responsibility:

• Landfill, including York Valley landfill and Eves Valley landfill.

Delegations:

The NTRLBU may without the need to seek any further authority from the councils:

Set fees and charges for waste disposal at the regional landfill facilities by 30 June each year; including the power to apply discounted fees and charges for the disposal of waste in bulk; and may determine other circumstances where discounted fees and charges may be applied. For clarity, the fees and charges shall be included in the draft annual Business Plan that is submitted for Council approval each year.

Item 11: Overview of Landfill Gas Reuse Options Report

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: Overview of Landfill Gas Reuse Options Report

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

Report Number: R26802

1. Purpose of Report

To summarise options available for the reuse of landfill gas from the York Valley and Eves Valley landfills focussing on creating community, economic or environmental benefits.

2. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Overview of Landfill Gas Reuse Options Report (R26802); and

2. Approves the report Gas Reuse Feasibility Assessment and Business Case Development is undertaken for option 6 of this Report (R26802).

3. Background and Discussion

3.1 The Nelson Tasman Regional Landfill Business Unit (NTRLBU) has commenced a programme of reducing landfill gas emissions, and has recently completed the purchase of the hospital landfill gas supply installed by Pioneer Energy Ltd. The purchase contracts have been signed and the purchase is expected to be completed in early September.

3.2 Following the work on the hospital landfill gas system NTRLBU has removed the constraints that prevented NTRLBU from reusing the York Valley landfill gas for economic or community benefits.

3.3 There is approximately 2 million m³/year gas being flared at York Valley and around 900,000m³/year being flared at Eves Valley.

3.4 This gas has a significant energy content that could be used for economic activities, or for the community benefit, and this energy could also reduce the greenhouse gas emissions if it was used to displace fossil fuels.

3.5 A high-level review of options for beneficial reuse of landfill gas has been undertaken. The three principal options available are described and discussed.

4. Principles for the selection of Landfill Gas reuse options

4.1 It is important to have clear guidelines that we use to assess whether the options for reuse are worth consideration.

4.2 Overarching guidelines:

4.2.1 Operational Requirements

The options need to consider whether the option can be readily operated, what costs or technical capability is required for the operation, and what the resilience and risk are associated with the operations. Consideration of any impact on operation of the landfill(s) is also required.

4.2.2 Economic return

The work would need to consider whether the reuse option would have a reasonable return on invested capital for the shareholders. For the purposes of the assessment options that have a clearly negative return on investment will not be considered unless they have significant alternative value to the Councils.

4.2.3 Reasonable Capital Commitments for the Councils.

The options will need to consider the capital requirements and the effect of these capital requirements on the Councils. Possible partnering should be considered to reduce capital commitments from Councils.

4.2.4 Supports Community Wellbeing

Options that have clear community wellbeing benefits, recreational benefit or improves regional amenities should be prioritised.

4.2.5 Regional Economic and Resilience Benefits

Options that have clear regional economic or resilience benefits should be prioritised.

4.2.6 Reducing climate emissions

Where reasonable, options that further reduce emissions (in addition to the reduced landfill ETS emissions) should be targeted. This would most likely relate to the displacement of fossil fuels.

4.2.7 Least adverse effects

Options that result in other adverse effects such as odour, noise, aesthetic issues, or other similar issues should be avoided if possible.

4.2.8 Collaborative

If reasonable, the options should consider partners, both from an operational perspective or for co-funding.

4.2.9 Sustainable

The options should consider sustainability – covering environmental, economic, and cultural sustainability. The installation of a system that is not likely to be sustainable in the long term should be avoided.

4.2.10 Expandable

The options should consider future development and whether the option is able to adapt to change or be expanded or scaled back to accommodate growth or changes in gas flows or to accommodate additional gas inputs from alternative locations if/as additional gas streams are developed over time.

5. Options

5.1 There are a range of generic technical options for the reuse, with often several sub options for each category, and these options need to also consider that NTRLBU has two different sources of landfill gas - York Valley landfill and Eves Valley landfill, and the option selected for each source may be different because there are different constraints at the location. It is therefore likely that one option will need to be developed for each source of landfill gas.

6. Do Nothing

6.1 The Do-Nothing option focusses on maintaining the current general philosophy for use of the gas. It seeks to minimise the capital costs and does not look to maximise the value of the energy, community amenities or environmental benefits that could be gained using the gas. Do nothing does include some sub options.

6.1.1 Do nothing (keep flaring all gas extracted not used in the NMDHB boiler)

6.1.2 Do minimal – keep using gas at the hospital and work with the hospital to use more gas but flare the gas not able to be used by the hospital.

7. Create Electricity

7.1 Create electricity is the traditional answer used by other landfill owners for the use of the gas generated in the landfill. The gas is treated to remove harmful (to co-generation engines) contaminants and then burned in the engines to produce electricity.

7.2 This electricity can be sent to the national grid or can be consumed onsite.

7.3 The connection to the national electrical grid only requires the approval of the electrical grid network operator, and an agreement to sell the electricity to the grid. The grid would need to be checked to ensure it had capacity to accept this additional power.

7.4 There are specific safety requirements that need to be met to allow the interconnection with the electrical grid and these would need to be incorporated into the design of the system.

7.5 An additional sub option is that the gas could be piped to a third-party site such as the Nelson Hospital, or a sawmill. The engine could be located at that site and the energy generated could be sold to the end-users directly and not need to be transmitted over the national grid electrical network. This would simplify the sale of gas and would reduce the costs for the gas (related to the network access approvals and cost for transmission on the national electricity grid).

7.6 Installing generators to produce electricity results in a significant amount of waste heat from the engines. This heat can be captured and used for heating purposes, or it can be discharged as waste heat to air. This option means that there is value in locating a generator system in a location where the waste heat can be reused. The raises the possibility of sub options for the electricity production:

· Locating the generators at the landfills and exporting power to the grid, and discharge waste heat to air which give no value to the waste heat.

· Locating the generators at neighbouring sites and selling the power to the site owner directly (such as the Hospital), this would involve piping the gas to the site. This would also allow the waste heat to be used for heating water or similar on that site.

· A similar option could be undertaken at an alternative site such as a hot pool complex.

8. Create Community Wellbeing Benefits

8.1 This option can either consider targeting additional existing users for heat or creating a community facility that can use the waste heat. This option could include piping the gas to customers to produce heat, such as Nelson College, Nelson Intermediate, or Hampden Street for pool heating or similar.

8.2 This allows beneficial use of the gas but would not be expected to result in much economic return to the NTRLBU.

8.3 This option is essentially an extension of what has been undertaken with the NMDHB. The gas is piped to an end user that has a significant heat need and used in a boiler to create steam or hot water.

8.4 The costs associated with piping the gas can be significant and piping to several small users is often not economically feasible. Therefore, using the gas in a larger single facility is typically the most beneficial option.

8.5 An alternative and more beneficial option is to create a community recreational asset such as a hot pool facility close to the landfill and use the waste gas to provide the heat for the facility. This would use the gas all year, and would have benefits both economically for the region, but also for recreational purposes for the residents of the region. An example of this would be to use the Brook camp and Eureka Park as the site for a hot pool complex and pipe the gas to the facility. The gas could be used for electricity production with waste heat used for hot pool heating.

8.6 The further this facility is from the landfill then the less likely it is to be economically beneficial.

9. Transportable Fuel Production

9.1 This option would include the installation of gas compression and clean up equipment. The intent would be to produce fuel that can displace diesel for vehicles or LPG or other fossil fuel use (such as in the crematorium) and reduce the carbon footprint within the Nelson Tasman Region by using the gas beneficially.

9.2 This option requires end users of the fuel whose gas destruction efficiency can be verified. The ETS reporting requirement for gas destruction efficiency is a constraint for the use of gas from the York Valley site but is not a constraint for the Eves Valley site, whilst it remains inactive.

9.3 The production of transportable fuel is a reasonably complex mechanical system that requires skill to operate and maintain, and it may need partner organisations for implementation and to facilitate the sale of the fuel produced.

9.4 The value of transportable fuel is often significantly higher than the value gained from electricity production or heat production, and therefore it is possible that a better return on investment may be possible with transportable fuel production.

9.5 The production of transportable fuel may allow the fuel to be used to replace fossil fuels and therefore reduce carbon emissions within the region, while also having an economic return.

10. Comparison of Options

10.1 The following table outlines the advantages and the disadvantages of the various options.

Table 2 Table outlining advantages and disadvantages of options.

Option 1: Do Nothing
Advantages	· No or limited capital cost · No or limited additional management costs
Risks and Disadvantages	· No return on investment · Wastes a significant amount of useable energy · Has risk of bad publicity · No benefit to the region from improved jobs, economic benefits, or reduced carbon emissions.
Option 2:
Advantages	· Very little capital investment required · Little management required
Risks and Disadvantages	· No additional return on investment · Wastes a significant amount of useable energy. · Doesn’t contribute toward improving climate issues. · Has risk of bad publicity. · No benefit to the region from improved jobs, economic benefits, or reduced carbon emissions.
Option 3:
Advantages	· Moderate capital expenditure, · Few parties to negotiate with. · Well tested and understood technology · Would be easily managed by NTRLBU
Risks and Disadvantages	· More management and technical expertise required. · Would need additional staff and additional skill sets to maintain the facility. · Uncertain future regarding electricity price and uses in NZ

Option 4:
Advantages	· Significant community recreational benefit · Likely good economic return · Likely economic productivity benefit to region · Potentially reuses poorly utilised assets. · Good ability to incorporate partners or co-funders. · Can also produce electricity for additional revenue
Risks and Disadvantages	· Moderate to significant capital investment required, depending on partnering arrangements. · Requires consenting and easements. · Doesn’t contribute toward improving climate issues.
Option 5:
Advantages	· High visibility project demonstrating regional commitment to reducing greenhouse gas emissions. · Significant additional greenhouse gas abatement possible. · Likely good economic return. · Limited community benefit · Likely economic productivity benefit to region · Good ability to incorporate business partners or co-funders. · Relatively high-risk project but would likely have the highest economic return.
Risks and Disadvantages	· Significant capital investment required · Needs partners with energy demands to use the fuel produced from York, due to ETS requirements. · Eves Valley Fuel can be used more broadly. · Complex mechanical systems, with high pressure. · Requires significant management time and operational skills. · Marketing and sales would require partnering.
Option 6:
Advantages	· High visibility projects demonstrating regional commitment to reducing greenhouse gas emissions and creating benefits for the community from what would otherwise be wastes. · Moderate additional greenhouse gas abatement possible. · Likely good economic return. · Good community benefit · Likely economic productivity benefit to region · Good ability to incorporate business partners or co-funders. · Doesn’t require verification of gas for the gas use for the fuel produced from Eves Valley so it could be used as barbeque gas, or other LPG or diesel displacement fuel. · Would need a marketing and sales partner for gas sales and distribution, and a separate operations partner for a hot pool complex.
Risks and Disadvantages	· Significant capital investment required · More complex than one type of system alone. · Complex mechanical systems, with high pressure. · Moderate risks associated with the investment. · Requires significant management time and operational skills. · Marketing and maximisation of revenue would require partnering.

10.2 The above options show the different advantages and disadvantages of the proposed reuse of gas options.

10.3 A significant amount of additional work is required prior to it being clear that these options are achievable, economically feasible, and whether there are any partner organisations that would be interested in assisting to develop and implement the options.

10.4 The options are presented to allow the NTRLBU to consider what (if any) direction options it would like Officers to investigate further and develop.

10.5 An allowance has been made in the 2023/24 Business Plan to progress further development of an option. The funding currently assumes option 6 is progressed.

11. Recommendation

11.1 It is recommended that the NTRLBU consider options for the reuse of landfill gas for beneficial purposes.

11.2 The General Manager (GM) believes that it is important to consider beneficial reuse of the gas.

11.3 The reuse of gas could significantly reduce carbon emissions, it could result in economic and social benefits to the community.

11.4 As an example, the potential benefits of the use of landfill gas to displace fossil fuels could result in significantly more greenhouse gas emission reduction per annum than changing all the Councils vehicles to electric vehicles. It may also be possible to achieve a return on investment while undertaking this work.

11.5 The GM recommends the NTRLBU undertake further investigation into the feasibility of gas reuse options.

11.6 The GM recommends further investigation be undertaken into the feasibility of a community benefit solution for York Valley gas and a transportable fuel option for the Eves Valley gas (option 6).

11.7 It is recognised that while this option is more complex and requires more capital expenditure, it also provides more benefits to the region from a climate and economic perspective, and also provide benefits to the region’s residents in the form of additional recreational activities compared to doing nothing or using the gas for electricity production.

Attachments

Nil

Important considerations for decision making

Fit with Purpose of Local Government

Consistency with Community Outcomes and Council Policy

This report has been prepared to allow decision making on options for the reuse of waste gas from the landfill. This work links to climate mitigation, environmental, and social benefits, which are in line with Council policy.

Risk

This report includes allowance or mitigation of environmental issues. The report considers the feasibility and business case development, which are processes that reduce risk.

Risk

There is very little risk associated with this decision. The work resulting focuses on feasibility of options. Should none of the options prove feasible the only consequence would be the costs associated with the feasibility assessment.

Financial impact

The financial impact of this would be limited due to this work only focussing on the feasibility of options. If a system were implemented, it would be expected to have a positive return on investment and would therefore result in a lower landfill fee and therefore has benefit financially to the region.

Degree of significance and level of engagement

Any capital expenditure from activities associated with the implementation of gas reuse systems (if adopted) will be spread over a few years. This report does only focus on whether or not to undertake feasibility and business case assessments which would feed into a separate approvals process for the project(s)

It is therefore not considered significant to the Councils.

Climate Impact

A key feature of the NTRLBU Business Plans and this report are projects that work toward mitigation of greenhouse gas emissions. This includes physical works for gas reuse, and opportunities to develop projects to divert a significant fraction of organic waste from landfill for energy production.

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.

Delegations

The Joint Committee has the following delegations to consider the Nelson Tasman Regional Landfill Business Unit:

5.6.1 Relevant Areas of responsibility:

• Landfill, including York Valley landfill and Eves Valley landfill.

5.6.2 Delegations:

· The NTRLBU may without the need to seek any further authority from the councils:

Item 12: Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/2024

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/2024

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

Report Number: R27146

1. Purpose of Report

1.1 This report provides a summary of the Nelson Tasman Regional Landfill Unit (NTRLBU) Draft Business Plan 2023/24 and seeks approval of the Draft Business Plan for circulation to Nelson City Council and Tasman District Council for feedback.

2. Summary

2.1 The Draft Business Plan generally follows the works programme as outlined for 2023/24 in the NTRLBU Activity Management Plan 2021 – 2031 (AMP).

2.1.1 There are some changes to the works outlined in the AMP. These changes are summarised below.

2.1.2 This Draft Business Plan has been prepared on the assumption that the structure of the NTRLBU will be changed during the 2022/2023 financial year. It also assumed that the staffing roles will be able to be filled during the 2022/23 financial year.

2.1.3 A business case has been prepared to increase the staff of Regional Services which includes changes to the structure to ensure continuity of staffing and capacity post the proposed three waters changes in July 2024.

2.1.4 Capital expenditure has been included to allow mitigation of risks associated with landfill stability, leachate management and airspace optimisation, and to focus on waste minimisation that will result in airspace savings and will be cost neutral or beneficial to the business unit.

2.1.5 The Draft Business Plan assumes that capital funding will be available for projects with appropriate return on investment, sufficient benefits to waste minimisation, or significant reduction in risk.

2.1.6 The Business Objectives and Performance measures of the Business Plan requires the NTRLBU consider reuse of landfill gas including mitigation measures for board consideration in the business plan.

2.1.7 The Business Objectives and performance measures of the business plan requires that NTRLBU includes an outline of the waste minimisation actions NTRLBU is proposing, and the costs associated with these.

2.1.8 ETS costs have reduced compared to the AMP due to reduced UEF, and reduced unit price due to effective hedging. Despite the current ETS unit price being significantly above the NTRLBU assumed price (the AMP assumed $47.5/NZU, compared to current price market unit price of ~$80/NZU) the Business Plan is based on the price for carbon credits held by NTRLBU under the hedging policy. This results in the budgeted price being $37 per unit.

2.1.9 Allowance needs to be made in funding to purchase sufficient credits during the 2023/24 financial year to cover the 2025/2026 financial year.

2.1.10 There is a risk that NTRLBU may not be able to achieve the reduced Unique Emission Factor assumed in the AMP (0.5) due to limited Regional Services resources. Achieving the reduced UEF relies on capital works being implemented to schedule.

2.1.11 In accordance with the process set out in the NTRLBU Terms of References, the Local Disposal Levy (LDL) costs in this budget are based on the information supplied by Tasman District Council. The Tasman District Council has requested $3.0 million in LDL. Nelson City Council requested an LDL of $3.1M. The AMP assumed an LDL of $3.3 million to each council.

3. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/2024 (R27146) and its attachment/s (1399367370-7649); and

Recommendation to Nelson City Council and Tasman District Council

That the Nelson City Council and Tasman District Councils

1. Receive the Nelson Tasman Regional Landfill Business Unit Draft Business Plan 2023/24 (1399367370-7649) for review and provide feedback to the Nelson Tasman Regional Landfill Business Unit, if required.

4. Background and Discussion

4.1 The NTRLBU Terms of Reference (TOR) outlines several activities required by the NTRLBU along with specified timing for these activities.

4.2 The TOR requires that the NTRLBU prepares a Business Plan and that this be presented to the councils by 31 October each year.

5. Background and Discussion

5.1 The NTRLBU Terms of Reference (TOR) outlines several activities required by the NTRLBU along with specified timing for these activities.

5.2 The TOR requires that the NTRLBU prepares a Business Plan and that this be presented to the Councils by 31 October each year.

5.3 The NTRLBU will consider any feedback provided by the Councils on the draft Business Plan, plus any updates or new information, and then the final Business Plan is approved to be presented to the Councils by 31 May 2023.

6. Operational Costs

6.1 The costs to run the NTRLBU will continue to increase during the 2022/23 financial year as outlined in the AMP, but an additional operating cost will be included associated with staffing the traffic management role at the landfill tip face.

6.1.1 Cost increases also increase due to the increases to the Waste Minimisation Levy increase from to $30/tonne in 2022/23 to $50/tonne in 2023/24

6.1.2 The increasing cost of carbon emissions under the NZ Emissions Trading Scheme was also expected to rise, however the rise has been higher than that assumed in the AMP. The AMP assumed a carbon price of $42.50/unit in 2022/23, however the current ETS carbon price is around $80/unit. The NTRLBU hedging policy continues to reduce the impact of these increased ETS costs on the landfill gate fee.

6.2 Regional Services staff capacity is less than required. Consultants and contractors have been engaged to assist the NTRLBU officers with the delivery of the works programme and to support activity management activities. These changes resulted in increased expenditure compared to the AMP budget.

6.3 Additional allowance for consulting services has been included in the management budget to cover the cost of feasibility studies and business cases for the proposed waste minimisation works, and new technology options for the diversion or reuse of wastes.

7. Capital Works Programme

7.1 The Draft Business Plan includes a significant amount of capital expenditure, as included in the AMP, and includes additional capital expenditure not anticipated at the time the AMP was prepared, however these works have been discussed by the Board in separate reports subsequent to the AMP being adopted.

7.2 The capital expenditure for greenhouse gas mitigation is required to allow the implementation of improvements to the gas management system, including additional gas wells. This work will allow NTRLBU to continue to reduce its carbon emissions and reduce the cost to the community of those carbon emissions. Additional funding has been included to assess the feasibility of different landfill gas reuse options.

7.3 The Draft Business Plan includes allowance for some additional stormwater improvements to the western side dirty water drains which have not been upgraded yet.

7.4 The Draft Business Plan includes allowance for improvements to the Eves Valley landfill access and for the installation of a weighbridge to allow the diversion of HAIL and other special wastes from York Valley Gully 1. This work includes a capital allowance for a HAIL reprocessing facility to allow diversion away from disposal to the landfill.

7.5 The Draft Business Plan includes an allowance approved by the NTRLBU and the Councils in 2020/2021 of $2M for the construction of a buttress at the toe of York Valley gully 1 to increase airspace.

7.6 The Draft Business Plan includes allowance for funding for technical work and a feasibility study during 2023/2024, and for a pilot trial in 2024/2025 to test a Pyrolysis or Hydrothermal waste destruction facility. This facility will demonstrate the effectiveness of the technology in the Nelson Tasman Regional context.

7.7 A separate team has been engaged and have begun developing options in preparation for a consent application for a new landfill.

Overall effect of the changes to the Draft Business plan

7.8 The draft Business Plan proposes an increase in landfill fees from $204 per tonne to $221 per tonne excluding GST for general wastes. This equated to an increase of 8.3%. This increase is lower than the increase outlined in the AMP which assumed a landfill fee of $230 per tonne excluding GST – the reduced UEF is a significant contributor to the smaller fee increase.

7.9 This revised draft Business Plan includes the additional capital expenditure for the landfill gas reuse and for waste minimisation activities. The lower ETS has assisted with NTRLBU being able to maintain a lower gate fee than was outlined in the AMP.

8. Option review for NTRLBU Draft Business plan

8.1 The following table outlines three options for the NTRLBU Draft Business Plan. Officers support option 3.

Option 1: Do not adopt the Draft Business Plan

Advantages

· There are no advantages

Disadvantages

· NTRLBU will not be meeting the requirements of the Terms of Reference adopted by Nelson City and Tasman District councils.

· NTRLBU will not have approval to continue its works programme.

· NTRLBU will not meet its legal requirements, capital works programme, health and safety obligations or emissions reductions.

· NTRLBU does not implement waste minimisation and diversion options.

· Ongoing issues will remain with HAIL and Hazardous waste due to the high cost for responsible disposal of these materials.

· No additional revenue will be gained from the gas, and this energy will be wasted.

Option 2: Request amendments to the Draft Business Plan prior to submission to NCC and TDC for feedback.
Advantages	· Allows the NTRLBU board to consider and modify the scope of proposed capital works or the timing of the proposed capital works associated with waste minimisation activities and gas reuse.
Risks and Disadvantages	· If significant changes are made, may not meet the 31 October due date by both Councils. · May require rework of the plan and approval of the revised plan if significant changes are made to the scope or timing of the capital works. · Regional services staff capacity will continue to be constrained.
Option 3: Adopt the Draft Business Plan and submit to NCC and TDC for feedback – recommended option.
Advantages	· Allows the implementation of plans for Waste minimisation, gas reuse and diversion of HAIL and Hazardous wastes. · Allows the adoption of a business plan that reduces the landfill charges per tonne compared to the AMP. · Improves operational certainty for the landfill and further safeguards airspace for general waste use. · Reduces barriers to responsible disposal of HAIL and hazardous wastes · Begins the development of a plan to divert and reuse organic wastes from the landfill. · Allows ongoing implementation of greenhouse gas mitigation works.
Risks and Disadvantages	· Requires additional capital expenditure. · Regional services staff capacity will continue to be constrained.

9. Recommendation

9.1 It is recommended that Option 3, adoption of the Draft Business Plan is accepted and that this Draft Business Plan be adopted by the NTRLBU for submission to the Councils for feedback.

10. Conclusion and Next Steps

10.1 The Draft Business Plan 2023/24 has been prepared based on the AMP plus additional information not available at the time the AMP was developed, and it includes projects to address waste minimisation, gas reuse and emission reduction opportunities, and to support responsible disposal of HAIL and hazardous materials from the community.

10.2 This plan includes capital funding not included in the AMP.

10.3 The landfill fee increase included in this business plan is lower than that anticipated in the AMP. The increase in landfill general waste fee is 8.3%. The fee increases result in a fee of $221 per tonne of general waste excluding GST, which is 4% less than the fee adopted in the AMP for 2023/24 financial year.

Attachments

Attachment 1: Nelson Tasman Regional Landfill Business Unit - Draft Business Plan 2023/24 ⇩

Important considerations for decision making

Fit with Purpose of Local Government

Consistency with Community Outcomes and Council Policy

The NTRLBU Business Plan feed into the NCC and TDC Annual Plans and the business plan has been prepared based on the NTRLBU 2021 -2031 Activity Management Plan and incorporating additional information not available at the time the AMP was prepared.

Risk

This report includes allowance or mitigation of environmental and business continuity risks. The business plan will be submitted to TDC and NCC for feedback, this feedback will be considered by the Board. The risk of not approving the business plan is that this could delay the NRSBU implementing the works outlined and could result in significant adverse effect environmentally, financially and to the sustainability of waste management in the Nelson Tasman Region.

Financial impact

The NTRLBU 2023/24 fee reflects an increase in essential renewals expenditure and implementation of the landfill airspace and stability works. IT also includes works to further reduce climate emissions, and beneficially reuse landfill gas, and options for diverting waste from the landfill to reduce airspace. These activities allow ongoing safe operation of the landfill and allow it to provide ongoing disposal services to the community. The financial impact of this business plan results in a lower landfill fee than was outlined in the approved AMP and therefore has benefit financially to the region.

Degree of significance and level of engagement

The NTRLBU plans result in a reduce landfill fee but require an increase in capital expenditure. The additional capital expenditure has been spread over three years to reduce the impact on NTRLBUs owners. While this business plan is significant to NTRLBU, and results in lower charges to the community ( than previously planned) it is not considered significant to the Councils.

Climate Impact

A key feature of the NTRLBU Business Plan are projects that work toward mitigation of greenhouse gas emissions. This includes physical works for gas reuse, and opportunities to develop projects to divert a significant fraction of organic waste from landfill for energy production.

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.

Delegations

The Joint Committee has the following delegations to consider the Nelson Tasman Regional Landfill Business Unit:

5.6.1 Relevant Areas of responsibility:

• Landfill, including York Valley landfill and Eves Valley landfill.

5.6.2 Delegations:

· The NTRLBU may without the need to seek any further authority from the councils:

Item 13: Nelson Tasman Regional Landfill Business Unit Governance Agreement Review Report

Nelson Tasman Regional Landfill Business Unit

9 September 2022

Report Title: Nelson Tasman Regional Landfill Business Unit Governance Agreement Review Report

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

Report Number: R27043

1. Purpose of Report

1.1 To receive the Nelson Tasman Regional Landfill Business Unit (NTRLBU) draft Governance Agreement Review Report, and approve the draft report on NTRLBU Governance Documents, the Amended NTRLBU Deed of Agreement and the Revised Terms of Reference.

2. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the Nelson Tasman Regional Landfill Business Unit Governance Agreement Review Report (R27043) and its attachments (A2921581, A2921574, A2921572, A2921594, A2921577 and A2921595); and

Recommendation to Nelson City Council and Tasman District Council

That the Council

3. Background

3.1 The NTRLBU was established by the Nelson City Council (NCC) and Tasman District Council (TDC) in July 2017. Its purpose is to manage and operate the jointly owned landfill assets on behalf of the Nelson/Tasman region.

3.2 The Nelson Tasman Regional Landfill Business Unit and the Nelson Regional Sewerage Business Unit (NRSBU) are set up as joint committees of the Nelson City and Tasman District Councils for the purposes of managing the jointly owned landfill and sewerage assets.

3.3 The two joint committees have governance documents that set out the delegated responsibilities and the rules and the reporting requirements under which the joint committees operate.

3.4 Since operation of the joint committee commenced, some inconsistencies and ambiguities have been identified between the documents associated with the NRSBU and the NTRLBU, and some issues have also been identified within the two governance documents relating to the NTRLBU.

3.5 The Chairs of the two joint committees requested a review of the governance documents be undertaken to ascertain if the inconsistencies and ambiguities could be removed and the documents streamlined.

3.6 A scope was prepared for the review with the review being undertaken by Duncan Cotterill

3.7 The review involved consultation with senior managers of both Nelson City Council (NCC) and Tasman District Council (TDC), the Chairs of the two Joint Committees, with some consultation with the Business Units General Manager.

3.8 Duncan Cotterill commenced its review and discussed the inconsistencies between NRSBU and NTRLBU with the senior managers of NCC and TDC and the Chairs of the two joint committees. It was agreed with the two Chairs that it was not appropriate to spend significant time and effort reviewing the NRSBU documents with the pending Three Waters Review changes being implemented over the next two years.

3.9 The review by Duncan Cotterill therefore concentrated on the inconsistencies and ambiguities within the governance documents for the NTRLBU.

3.10 The NTRLBU has had oversight from the Commerce Commission and the terms of reference for the review included making no material changes that could put the Commerce Commission authority at risk.

3.11 The Draft Report on NTRLBU Governance Documents (A2921581) from Duncan Cotterill outlining the proposed changes and the reasons for not changing some items has been prepared and is appended to this report as Attachment 1. This report includes comparison tables for the proposed changes to the NTRLBU Deed of Agreement (A2921594 – Attachment 2) and the NTRLBU Terms of Reference (A2921577 – Attachment 3) and a flow chart outlining the proposed NTRLBU business plan reporting (A2921595)

3.12 The Draft Amended and Restated Deed of Agreement for the NTRLBU (A2921574 – Attachment 4), and the Draft Updated Terms of Reference for the NTRLBU (A2921572 – Attachment 5) have also been prepared and are attached.

4. Discussion

4.1 The Draft Amended and Restated Deed of Agreement for the NTRLBU (A2921574), and the Draft Updated Terms of Reference for the NTRLBU (A2921572) have been prepared to streamline a number of the issues identified as a result of the review.

4.2 The issues and the changes to the governance documents are intended to have no implications to the NTRLBU budgets, and do not change the intent of the NTRLBU or the responsibilities delegated to the NTRLBU by NCC and TDC.

4.3 The changes are intended to provide clarity, and to reduce conflicts between the Deed of Agreement and the Terms of Reference.

5. Options

5.1 The NTRLBU Joint committee has two options.

5.2 Option 1 involves receiving the report, but not recommending to NCC and TDC that they adopt the report. This option may involve the NTRLBU requesting further work on points within the governance documents. This option will mean that the current issues and inconsistencies will remain and will continue to affect the efficiency of the NTRLBU.

5.3 Option 2 involves receiving the report and recommending to NCC and TDC that they approve the changes to the governance documents. This option will allow NCC and TDC to consider and approve the changes proposed to the governance documents. Adopting the revised governance documents will remove many of the inconsistencies in the governance documents and will improve clarity of the operational processes with the management of the NTRLBU.

6. Recommendation

6.1 It is recommended that the NTRLBU approve option 2 and recommend to the Councils that they approve the Draft Amended and Restated Deed of Agreement for the Nelson-Tasman Regional Landfill Business Unit (A2921574), and the Draft Updated Terms of Reference for the Nelson Tasman Regional Landfill Business Unit (A2921572)

Attachments

Attachment 1: Draft Report on NTRLBU Governance Documents (A2921581) ⇩

Attachment 2: NTRLBU Draft Amended and Restated Deed of Agreement (A2921574) ⇩

Attachment 3: NTRLBU Draft Updated Terms of Reference (A2921572) ⇩

Attachment 4: Comparison Table Deed of Agreement (A2921594) ⇩

Attachment 5: Comparison Table for ToR (A2921577) ⇩

Attachment 6: Flowchart 2 May 2022 (A2921595) ⇩

Important considerations for decision making

· Fit with Purpose of Local Government

· Consistency with Community Outcomes and Council Policy

This report outlines changes that support the responsible management of waste within the region. The changes include review of the NTRLBU Deed of Agreement to remove inconsistencies and improve the clarity of the Deed of Agreement and the Terms of Reference.

· Risk

This report has been developed to cover works to remove interpretation risks associated with the governance documents and the recommended changes seek to remove these conflicts while not undermining the commerce commission authority.

· Financial impact

There are no financial impacts associated with the proposed changes.

· Degree of significance and level of engagement

The work outlined in this review clarifies inconsistencies and makes no substantive changes to the NTRLBU documents but does require approval of the two Councils.

· Climate Impact

This report has no impact on the planned Climate mitigation measured proposed by NTRLBU

· 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.

· Delegations

The Joint Committee has the following delegations to consider the Nelson Tasman Regional Landfill Business Unit :

5.6.1 Relevant Areas of responsibility:

• Landfill, including York Valley landfill and Eves Valley landfill.

5.6.2 Delegations: Under the terms of reference the NTRLBU has the Responsibility to:

The NTRLBU may without the need to seek any further authority from the councils:

However under the deed of Agreement the NTRLBU has the responsibilities outlined below.