Agenda of Nelson Tasman Regional Landfill Business Unit

Nelson Tasman Regional Landfill Business Unit

19 May 2023

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 17 March 2023 6 - 9

Document number M20056

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 17 March 2023, as a true and correct record.

6. Nelson Tasman Regional Landfill Business Unit Landfill Gas Reuse Options Update Report May 2023 10 - 61

Document number R27658

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit Landfill Gas Reuse Options Update Report May 2023 (R27658) and its attachment (1995708647-38); and

2. Confirms the General Manager proceed with detailed business case development for the short listed options.

7. Operations Contract Renewal Update Report 62 - 90

Document number R27659

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Operations Contract Renewal Update Report (R27659) and its attachments (1399367370-7916 and 1995708647-32); and

2. Confirms the procurement of a new Operations and Maintenance for the placement and compaction of waste contract be undertaken using a Target Outturn Cost contract model, noting that the contract will not include some specialist work packages.

8. Nelson Tasman Regional Landfill Business Unit General Manager Update Report 91 - 104

Document number R27690

Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit General Manager Update Report (R27690).

Confidential Business

9. Exclusion of the Public

Recommendation

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:

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	NTRLBU Compactor Procurement Report	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)(h) To enable the local authority to carry out, without prejudice or disadvantage, commercial activities

Item

General subject of each matter to be considered

Reason for passing this resolution in relation to each matter

Particular interests protected (where applicable)

NTRLBU Compactor Procurement Report

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)(h)

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

Nelson Tasman Regional Landfill Business Unit Minutes - 17 March 2023

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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 17 March 2023, commencing at 9.36a.m.

Present: Tasman District Councillors S Bryant (Deputy Mayor) and T Walker, Nelson City Councillors M Courtney and A Stallard

In Attendance: Group Manager Infrastructure (A Louverdis), Governance Adviser (T Kruger), Governance Adviser (K Libeau)

Apologies : Iwi Representative A Stephens

1. Nelson Tasman Regional Landfill Business Unit -Appointment of the Chair

Group Manager Infrastructure, A Louverdis, assumed the Chair to receive nominations to appoint the Chairperson.

Councillor M Courtney nominated TDC Deputy Mayor S Bryant, seconded by Councillor T Walker.

Document number R27566, agenda page 3 refer.

Resolved RLBU/2023/001

That the Nelson Tasman Regional Landfill Business Unit

1. Appoints Tasman District Councillor S Bryant as the Chairperson of the Nelson Tasman Regional Landfill Business Unit for the triennium 2022-2025.

Courtney/Walker Carried

Deputy Mayor S Bryant assumed the Chair.

2. Apologies

Apologies
Resolved RLBU/2023/002
	*That the Nelson Tasman Regional Landfill Business Unit* 1. Receives and accepts the apologies from Iwi Representative Andrew Stephens for attendance
Courtney/Walker Carried

3. Confirmation of Order of Business

Prior to the meeting the Chief Executive had removed the confidential item: Operations Contract Renewal Update Report from the agenda.

There were no further changes to the order of business.

4. Interests

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

5. Public Forum

There was no public forum.

6. Confirmation of Minutes

There were no minutes to confirm.

7. Nelson Tasman Regional Landfill Business Unit - Appointment of the Deputy Chairperson

The Chairperson called for nominations for the position of Deputy Chairperson.

Councillor T Walker nominated Councillor M Courtney, seconded by Councillor A Stallard.

Document number R27566, agenda pages 3 - 4 refer.

Resolved RLBU/2023/003

That the Nelson Tasman Regional Landfill Business Unit

1. Appoints Nelson City Councillor M Courtney as the Deputy Chairperson of the Nelson Tasman Regional Landfill Business Unit for the triennium 2022-2025.

Walker/Stallard Carried

8. Nelson Tasman Regional Landfill Business Unit General Manager Update Report March 2023

General Manager Regional Services, Nathan Clarke, presented his report. It had been noted that the delegation to approve the sale of the ETS units did not lie with NTRLBU and therefore the officer’s recommendation had been amended to recommend that Nelson City Council and Tasman District Council approve the sale.

Mr Clarke answered questions on the timeline for replacement of the compactor, noting a report would come to a future NTRLBU meeting with recommendations. He also provided further clarification on communications to promote open days and technology to assist in consumers disposing of their batteries, advising it currently cost $40,000 per year managing incorrect battery disposal.

Accountant, Andrew Bishop, answered questions on the proposed sale of the ETS units, advising members that the recommendation was to sell credits to remain within the limits of the Treasury Policy.

Document number R27534, agenda pages 7 - 24 refer.

Resolved RLBU/2023/004
	*That the Nelson Tasman Regional Landfill Business Unit* *1. Receives the report Nelson Tasman Regional Landfill Business Unit General Manager Update Report March 2023 (R27534)*
Courtney/Bryant Carried
Resolved RLBU/2023/005
	Recommendation to the Nelson City Council and Tasman District Council *That the Nelson Tasman Regional Landfill Business Unit* 1. Approves, subject to the approval of the alternate Council, the sale of 50,000 NZ ETS units and delegates the timing of the sale to the General Manager of the Nelson Tasman Regional Landfill Business unit.
Courtney/Bryant Carried

The meeting adjourned from 10.30a.m. until 10.52a.m.

9. Nelson Tasman Regional Landfill Business Unit - 2023/24 Business Plan

Operations Manager Regional Services, Brad Nixon, presented his report and it was taken as read.

Document number R27545, agenda pages 25 - 48 refer.

Resolved RLBU/2023/006
	*That the Nelson Tasman Regional Landfill Business Unit* 2. Receives the report (R27547) and its attachment (1399367390-7915); and 3. Approves the Nelson Tasman Regional Landfill Business Unit 2023/24 Business Plan (1399367390-7915) subject to minor changes approved by the Chairperson; and 4. Recommends the Nelson Tasman Regional Landfill Business Unit Business Plan 2023/24 (1399367390-7915) be presented to the Tasman District Council and Nelson City Council.
Stallard/Walker Carried
Recommendation to Councils
Resolved RLBU/2023/007
	*That the Nelson City Council and Tasman District Council* 1. Receive the Nelson Tasman Regional Landfill Business Unit Business Plan 2023/24 (1399367390-7915).
Stallard/Walker Carried

There being no further business the meeting ended 11.11a.m.

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

Resolved

Item 6: Nelson Tasman Regional Landfill Business Unit Landfill Gas Reuse Options Update Report May 2023

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Nelson Tasman Regional Landfill Business Unit
19 May 2023

Report Title: Nelson Tasman Regional Landfill Business Unit Landfill Gas Reuse Options Update Report May 2023

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

Report Number: R27658

1. Purpose of Report

1.1 To summarise options identified for the reuse of landfill gas from the York Valley and Eves Valley landfills and seek approval from the Nelson Tasman Regional Landfill Business Unit Board (NTRLBU) to proceed to development of a business case.

2. Summary

2.1 On 9 September 2022, the NTRLBU General Manager (GM) presented a Landfill Gas Reuse Options Report outlining the options for gas reuse from the NTRLBU York Valley and Eves Valley landfills.

2.2 The report recommended 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.

2.3 The NTRLBU considered the report and requested the GM undertake further work on the options.

2.4 The recommendation approved by the board during the 9 September 2022 meeting is shown below.

Resolved RLBU/2022/001

That the Nelson Tasman Regional Landfill Business Unit

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

2. Requests further information be brought back to a future Nelson Tasman Regional Landfill Business Unit meeting, detailing further analysis of all the options in line with good business case practices.

2.5 Deta Consulting Ltd (Deta) was engaged by NTRLBU to undertake the options review to confirm the short listed options as stage 1 of this work.

2.6 The Deta options review report has been received and outlined two recommended options for further consideration for the York Valley landfill, and two options for further consideration for the Eves Valley landfill.

2.7 The options are broadly in alignment with the options previously outlined by the NTRLBU GM.

2.8 If approved by the NTRLBU, these options will be further developed in a business case for presentation to NTRLBU board at a future board meeting.

3. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Nelson Tasman Regional Landfill Business Unit Landfill Gas Reuse Options Update Report May 2023 (R27658) and its attachment (1995708647-38); and

2. Confirms the General Manager proceed with detailed business case development for the short listed options.

4. Background and Discussion

4.1 The NTRLBU as part of its future thinking on reducing landfill gas emissions has commenced a programme of identifying ways to continue to reducing landfill gas emissions and using landfill gas in a productive way.

4.2 NTRLBU uses some of its gas but flares around 70 per cent of the gas captured in the landfill.

4.3 NTRLBU has recently completed the purchase of the hospital landfill gas supply installed by Pioneer Energy Ltd.

4.4 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.

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

4.6 Deta was engaged to undertake an options review to short list the best two gas reuse options for the York Valley and Eves Valley landfills.

5. Scope of Deta Options Review Study

5.1 A copy of the NTRLBU Biogas Options – Stage 1 (1995708647-38) report prepared by Deta is appended for information.

5.2 Initial suggestions for the use of the additional gas were:

5.2.1 Electricity generation at landfill sites.

5.2.2 Utilise the landfill gas for electricity and the waste heat from the generation system as a heat source.

5.2.3 Compressed biogas for use as a fuel, e.g., to displace diesel at the Wakapuaka Crematorium.

5.2.4 Develop a biodiesel conversion system (e.g. Fischer Tropsch) to convert biogas to biodiesel, potentially as part of a wider opportunity to utilise local biomass for conversion (in a similar process at a later stage).

5.3 A broader scan of potential options was to be used to refine the final options considered. The review criteria to be considered were:

5.3.1 High level project economics

5.3.2 Technology risk

5.3.3 Carbon abatement

5.3.4 Community benefit.

5.4 The process followed in the study was:

5.4.1 Modelling of biogas supply including an assessment of the expected volumes and composition of the biogas supply. This assessment was used for the modelling of process options and project scenarios.

5.4.2 Research of technology options to identify technology worth being considered by NTRLBU to process its biogas. This involved investigating:

· how others are utilising biogas

· the technologies being offered by vendors and technology providers

· the state of play in New Zealand and globally

· the potential local users of the biogas products.

5.5 Modelling of technology options. An assessment of the use of the available biogas in the different technologies.

5.6 Model project scenarios involved developing logical combinations of technologies (project scenarios) and assess the use of the available biogas in the different project scenarios.

5.7 From the outputs of the project scenarios, recommend two options for more detailed study.

6. Biogas Production

6.1 The report investigated gas production and the likely scenarios for gas production within the Nelson / Tasman region.

6.2 Some assumptions have been made about the use of waste streams within the region, these included assumptions about organic waste and sewerage sludge treatment.

6.3 The estimated gas production profile in the region is outlined in the graph labelled “Graph 6 – Forecast biogas production for Nelson / Tasman” below

6.4 The forecast gas production outlined by Deta Consulting is approximately 10.5 million m³/y or 230,000 GJ/y of biogas available in 2030.

6.5 The gas production does not include gas production from waste to energy systems using segregated organic wastes which could be separated from landfilled materials and used as a fuel feedstock.

7. Options Review

7.1 A range of options were reviewed including:

7.1.1 Flaring

7.1.2 Heat production in boiler (H)

7.1.3 Electricity generation (GE)

7.1.4 Combined heat and Power generation (CHP)

7.1.5 Renewable Compressed Natural Gas (RCNG)

7.1.6 Renewable Liquified Natural Gas (RLNG)

7.1.7 Compressed Biogas (CB)

7.1.8 Gas to Liquid Technology (GTL).

7.2 The options review considered a range of options and assigned each of the options a colour coded traffic light for the three principal considerations.

7.3 The options were reviewed and assessed using the colour coding system. The output from this is shown below.

7.4 Following the assessment of technologies, a range of scenarios was developed for the use of the gas. In addition to the above assessment, which was quantified in the scenarios, a qualitative assessment (outlined in the table below) was undertaken for each scenario on the community benefit that the scenario would create.

7.5 The various scenarios were each assessed and the outcomes for the assessment are outlined in the summary shown in the table below.

Base scenario is simply flaring the landfill gas.

· Current scenario is some gas to Hospital and flaring the rest.

· BVHP means Brook Valley Hot Pool.

7.6 From this table the best scenarios for the use of the York Valley landfill gas are scenario 4 and 5.

7.7 The above options show the potential benefits of the proposed reuse of gas options.

7.8 The option that has the best economic return and the best emission reduction profile is the use of the gas as a displacement for diesel or other high value fossil fuels. This option does not have as good a community benefit as this would only benefit a few individual large customers who use this fuel.

7.9 The option with the best community benefit is the use of the gas for electricity production with the waste heat being used for heating a pool complex. This option is however higher in capital cost.

7.10 Both the best options rely on additional further developments. One relies on the development of a hot pools complex, and the other on finding a gas user who is willing to pay for the gas to displace diesel or a similarly high cost fossil fuel.

7.11 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.

7.12 An allowance has been made in the 2023/24 Business Plan to progress further development of these options.

7.13 An allowance of $100,000 has been included for development of the York Valley landfill gas reuse options and an allowance of $3.5 million was included in the Business Plan for the implementation of gas reuse systems during the 2023/24 year following the selection of the preferred option.

8. Report Recommendations

8.1 The Deta report identifies option for the reuse of biogas from the York Valley and Eves Valley landfills

8.2 The York Valley Landfill gas reuse analysis identifies that:

8.2.1 The near-term supply to the hospital should be maximised.

8.2.2 NTRLBU need to engage with Te Whatu Ora on plans for energy in the Nelson hospital rebuild, including highlighting the benefits of continuing to use biogas at the Nelson Hospital.

8.2.3 Brook Valley Hot Pools CHP should be evaluated in more depth, including having input from a Hot Pools Resort subject matter expert.

8.2.4 RCNG should be evaluated in more depth, especially with prospective gas users.

8.3 Key outputs from the Eves Valley analysis:

8.3.1 The primary biogas utilisation will be electricity generation by a gas engine, and this should be evaluated in more depth. To maximise the opportunity, it should be implemented promptly after it is proven to be economic.

8.3.2 Compressed biogas should be considered in more detail. As Eves Valley is exempt from the ETS, compressed biogas can be sold to small users such as the Nelson Crematorium

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

9. Next Steps

9.1 NTRLBU propose to proceed to the detailed business case for the two short listed options for each landfill.

9.2 The business case development will include the discussion with potential stakeholders for the different options to confirm that the short listed solutions are actually viable on a practical as well as theoretical level.

9.3 The business case for each landfill will be presented to the NTRLBU Board at a future board meeting.

Important considerations for decision making

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.

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.

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:

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.

Attachments

Attachment 1: 1995708647-38 NTRLBU Biogas Options Report - Stage 1 ⇩

Item 7: Operations Contract Renewal Update Report

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Nelson Tasman Regional Landfill Business Unit
19 May 2023

Report Title: Operations Contract Renewal Update Report

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

Report Number: R27659

1. Purpose of Report

1.1 To update the Nelson Tasman Regional Landfill Business Unit Board on progress for the renewal of the Operations and Maintenance Contract for York Valley Landfill.

2. Recommendation

That the Nelson Tasman Regional Landfill Business Unit

1. Receives the report Operations Contract Renewal Update Report (R27659) and its attachments (1399367370-7916 and 1995708647-32); and

3. Background

3.1 The current landfill operations and maintenance contract is scheduled to end at the end of June 2024. The contract allows for a roll-over of the existing contract for a second five - year term, however a review under Section 17(a) of the Local Government Act 2002, undertaken during 2022 identified that the current contract is not considered appropriate for the future provision of landfill services due to the significant change that is affecting the landfill and solid waste sectors within New Zealand.

3.2 Over the last three years significant changes have occurred to the management of the landfill, including:

3.2.1 A heightened focus on safety in the workplace and staff wellbeing

3.2.2 Increased focus on fill placement and compaction, including airspace consumption

3.2.3 improvements to fire management

3.2.4 improvements to stormwater control

3.2.5 improvements to gas collection, destruction, and reuse

3.2.6 improvements to litter, noise and vector management

3.2.7 more specific odour control requirements

3.2.8 increased focus on waste diversion

3.2.9 changes to landfill capping and HAIL management

3.2.10 changes to asbestos management

3.2.11 commencing sales of gas to the hospital.

3.3 These changes mean that the current contract model and specification is no longer appropriate to meet the needs of the landfill operations.

3.4 The NTRLBU therefore needs to revise the contract to better meet the future requirements of the landfill operation. This will require a significant change to the current contract model and specification and to the skills held by the operations contractor(s).

4. Proposed Contract model

4.1 It is not expected that the pace of change, nor the scale of change will reduce significantly over the next contract period.

4.2 Over the next five years it is expected that additional services will be supplied by NTRLBU including additional commercial gas reuse, new resource consents for landfill(s), new operating methodologies and technologies for the existing landfill, improved sorting and diversion of wastes including diversion of food wastes and improved HAIL management.

4.3 It is also clear that the technical expertise required to operate different aspects of the landfill is becoming more specialised.

4.4 As an example, NTRLBU has now engages two separate suppliers to provide support for the gas management systems, onsite machinery including in-vehicle information management equipment, thermal cameras, automated sensors for the stormwater, groundwater and leachate monitoring and weighbridge software.

4.5 Due to NTRLBU expecting ongoing change, a review of contract frameworks was undertaken by NTRLBU. This review identified that a flexible model that allows the collaborative development of the landfill is the preferred model. The model proposed is a Target Outturn Cost (TOC) contract model.

4.6 The TOC model allows the selection of a contractor with the required capability for the project and allows for agreed margins for the work undertaken. The contractor works collaboratively with the NTRLBU to define the annual targets and to determine the level of resource needed to meet the changing needs of the landfill. This model allows the contract to adjust to the changing scope, scale, and technology without ongoing contractual changes being required.

4.7 The proposed option is similar to the current Nelson Regional Sewerage Business Unit operations and maintenance contract, which is working effectively, and is also similar to the Tasman District Council’s roading network and three waters maintenance contracts.

5. Scope of the operations contract

5.1 The technical requirements for landfill operation are rapidly changing, and it is now necessary for significantly improved information technologies to be implemented and used to deliver landfill operations.

5.2 It is not common for contractors who focus on bulk material handling to have technical expertise in relation to gas management as an example.

5.3 The review undertaken for the contract model identified that both cost and risk would be reduced by having several specialist contractors whose activities were focussed on their core skillset.

5.4 It is therefore proposed that the operations contract be separated into smaller specialist work packages. The principal package being considered in this report is the package related to placing and compacting waste received at the landfill.

5.5 This package includes management of material arriving at the disposal site, compacting waste to an agreed standard, managing stormwater, odour, litter, fire, traffic and leachate risks in relation to the waste disposal. It includes forward planning of waste placement actions including fill planning and front face construction. It is not expected that this contract will include gas management, leachate or stormwater treatment, weighbridge management or other specialist activities associated with the landfill operations and asset management.

5.6 The initial discussions have currently identified two separate contract packages. However depending on the future developments within the landfill and solid waste sector it is possible that additional contractors will also be required to support addition technological solutions in future.

5.7 A report prepared by DS Projects “NTRLBU Maintenance Contracts Procurement Decisions Summary Report (1399367370-7916)” which summarises the review of the contract options is appended to this report.

5.8 At present it is anticipated that this will involve one contract for gas and technology management, and a second contract for the supply of operational services for placing and compacting waste.

5.9 The proposed procurement methodology is outlined in the attached report prepared by DS Projects Titled “NTRLBU Procurement Option Report” (1995708647-32).

5.10 A number of workshops were held in preparation of the procurement report. These included an opportunity workshop and a risk workshop.

5.11 A procurement timeline has also been developed for the procurement.

6. Contractual framework options.

6.1 NTRLBU reviewed a number of contractual frameworks for the future operations and maintenance contract.

6.2 The options were short listed to two options.

6.3 These options are compared in table 2 below:

Table 2 – Short listed Options for Contract Type

Option 1:
Advantages	· Client pays and sets expectation, controls outcomes, costs related directly charged to client, no incentive for contractor to underdeliver or risk assigned to contractor. · Contract include annual assessment of the deliverables and can be adjusted to reflect the changing needs of the landfill. · Collaborative contract style allows NTRLBU and contractor to work together for “best for landfill” approach. · Learnings are visible and can be quickly adopted. · NTRLBU maintains high level of knowledge and skill. · Able to change operations as technology changes easily. · Contract allows for flexibility and innovation without penalty. · Allows for procurement of specialist skill sets for the right task.
Risks and Disadvantages	· Possibility of poor worker efficiency if poorly managed · Additional work in preparing the tender documentation
Option 2: Traditional 3917 Measure and Value contract
Advantages	· Client drives performance with KPIs and financial incentive's / penalties. · Easier to prepare the contract documentation
Risks and Disadvantages	· Contract scope is likely to be outdated rapidly resulting in variations being required. · Variations are not done in a competitive environment. · Current experience (current operational contract) is that this framework has not resulted in NTRLBUs preferred outcomes being prioritised. · Contractor sets level of Health and Safety in tender at cost to the project lump sum. Changes to standards become variations. · Contractual negotiations required to change any technology or methodology.

6.4 The procurement team considered a range of operation for the contract and shortlisted two for further consideration.

6.5 A range of contractual scopes of service was also considered and it was agreed that the contracts would be best separated into the specialist areas, and that at that this would include a waste placement contract and a specialist gas maintenance contract.

6.6 Additional contractual packages may need to be developed in future depending on the developments undertaken by NTRLBU.

6.7 Following further review, the TOC contractual option was selected as the preferred option and the procurement process was commenced based on this option.

7. Conclusion

7.1 The current operations and maintenance contract is coming to an end in June 2024. The NTRLBU has chosen not to consider a roll-over of the contract for a second term.

7.2 The current contract framework no longer best suits this operation due to the significant change to the landfill that has occurred over the last three years.

7.3 A new contract needs to be developed for the facility, and NTRLBU has identified that a more flexible contract model is the most appropriate. This will ensure that the contract can accommodate the expected ongoing significant change over the next contract period.

7.4 NTRLBU has considered whether to have only one contractor or to break the contract into more specialised parts and has chosen to break the contract due to the specialisation associated with different work packages.

7.5 It is proposed that a TOC collaborative contract model be prepared specifically for the waste placement and compaction works.

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 operations and maintenance of 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.

Financial impact

The financial impact of this would be limited due to this work reflecting operational options that allow for future change.

Degree of significance and level of engagement

It is therefore not considered significant to the Councils. It focuses on the procurement of a contractor for the operations and maintenance of a critical service in a way that allows for effective performance in a changing environment.

Climate Impact

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:

Attachments

Attachment 1: 1995708647-32 NTRLBU Procurement Option Report ⇩

Attachment 2: 1399367370-7916 NTRLBU Maintenance Contracts Procurement Decisions Summary Report ⇩

Item 8: Nelson Tasman Regional Landfill Business Unit General Manager Update Report

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Nelson Tasman Regional Landfill Business Unit
19 May 2023

Report Title: Nelson Tasman Regional Landfill Business Unit General Manager Update Report

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

Report Number: R27690

1. Purpose of Report

1.1 This report is an update by the General Manager (GM) on activities to 31 March 2023 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 Manager Update Report (R27690).

3. Background

3.1 Operations have improved since the last NTRLBU meeting in March 2023. A significant focus has been placed on safety management within the landfill with a number of safety actions implemented.

3.2 A leadership group has been meeting monthly (including the Group Managers of NCC and TDC) to ensure that focus is maintained on the safety requirements on the site.

3.3 Both compactors have now been repaired and are available for service.

3.4 Compaction performance at the landfill has been very poor and investigations are being undertaken into why the required compaction is not being achieved. Continued poor compaction performance would result in significant airspace losses for NTRLBU.

3.5 The upper buttress is completed and is awaiting hydroseeding and the final construction of the stormwater swale, however rain has delayed completion.

3.6 The new York Valley access road (up gully 2) is nearing completion, although rain has delayed the works. Completion is expected in the next four weeks.

3.7 The Eves Valley weighbridge has been installed and the upgrades to the access way have commenced. The new box culvert crossing for Eves Valley stream has been installed and the access road widening is now underway. Completion has been delayed by the recent wet periods but overall, the contractor has been achieving good progress.

3.8 The NTRLBU finances show a surplus of $651,000 for the 2022/23 financial year to 31 March 2022. This is due to the higher than budgeted waste volumes, and lower than expected Unique Emission Factor. This includes a significant amount of additional operational expenditure associated with airspace excavation works.

4. Health and Safety Environment

4.1 Several incidents occurred at the landfill during the period 28 Feb 2023 to 30 April 2023. These incidents are outlines in the tables below:

4.2 During February and March 2023, a significant effort has gone into improving and updating the safe safety documentation and procedures.

4.3 Safety training has been implemented to all staff on the correct use of gas safety monitoring equipment and NTRLBU has purchased gas safety monitors for the site.

4.4 A gas safety equipment trailer has been purchased. This trailer will house the gas safety equipment so that this can be quickly and easily bought to the site of a gas issue. The trailer will contain equipment including fans, work lighting, and personnel safety equipment for working around landfill gas services.

4.5 A new gas works permit has been implemented. A gas works permit is required to be completed and approved prior to all gas works being undertaken onsite.

4.6 The contractor has been working with NTRLBU to develop an additional layer of safety detection around vehicles to reduce the likelihood of vehicle accidents.

4.7 An independent safety inspector was engaged by NTRLBU to check that the safety performance onsite has been bought to the required standard. The person engaged is a safety professional who has been the president of national and international safety organisations. He has a background in safety management at landfills. He visited the York Valley site and has provided a preliminary report on safety at the site.

4.8 The safety inspector indicated at the completion of the site visit that there were no issues that he had spotted that needed immediate attention. The inspector will provide a detailed report at the end of May 2023.

4.9 NTRLBU has been considering options to eliminate vehicle on vehicle and vehicle on pedestrian risks at the landfill. This is one of NTRLBUs largest risks. The landfill has had four incidents over the last 18 months in relation to vehicle-on-vehicle incidents.

4.10 During May a visit was made to Kate Valley landfill. NTRLBU staff discussed operations with the Kate Valley management. A short tour of the Kate Valley site was undertaken.

4.11 This visit confirmed that this major vehicle risk can be eliminated by separating external drivers from the landfill surface.

4.12 At Kate Valley the waste is transferred at the entry to the landfill and is moved to the surface of the landfill by the Kate Valley staff on Kate Valley trucks. This reduces the risk associated with untrained staff at the landfill surface, reduces congestion, and allows waste placement at the correct point for the compaction equipment.

4.13 The waste transfer occurs at an engineered facility, in the same location, and doesn’t change daily. This reduces traffic management issues and speeds up customer visits and is on an engineered surface which reduces machinery risks.

5. NTRLBU Activities

5.1 Workload remains high for NTRLBU staff.

5.2 The period has been busy with Health and Safety incidents, investigations and actions, ongoing projects being implemented, and rain causing some operational and project issues onsite.

5.3 A range of projects are under construction. Progress on projects has been good over this construction season although rain over the last two months has delayed completion of the projects.

5.4 In addition to the 2022/23 projects in construction, NTRLBU is working with consultants and contractors to finalised designs and procurement is underway for the 2023/24 construction season. The principal projects for the 2023/24 construction season are the lower buttress and leachate system implementation at York Valley, and the HAIL management facilities and gas reuse system at Eves Valley Landfill.

6. Deed of Agreement and Terms of Reference Review

6.1 The review and alignment of the NTRLBU governance frameworks has been approved by Nelson City Council but has not yet been approved by Tasman District Council.

7. Airspace, Leachate, and Stability Upgrade

7.1 The airspace excavations along the southwestern wall of the landfill are complete. The works gained volume of over 100,000m³ which equates to around one year of airspace.

7.2 The works have moved a significant amount of material which has subsequently been used in the construction of the upper stability buttress.

7.3 The construction of the upper buttress is completed except for the stormwater swale construction and the hydroseeding.

7.4 The upper leachate wells that form part of the lower buttress and leachate improvements are being installed at present.

8. Odour Management

8.1 NTRLBU had no odour events during this period.

9. Stormwater Management

9.1 Stormwater retention Pond 3 - SRP3 is working well. No stormwater issues have occurred during this period.

9.2 The dredging of the sediment from the SRP3 is underway at present.

10. Litter Management

10.1 There was one litter complaint during this period from a neighbour on the southern side of the landfill.

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

10.3 NTRLBU have started installing the perimeter catch fence, the post holes are installed awaiting installation and concreting of the sockets for the catch fence arms. The catch fence netting has been ordered.

Photo 1 - Trial perimeter catch fence section.

11. Landfill Development Projects

11.1 The York Valley access road new alignment up gully 2 is nearing completion. This project has gone reasonably smoothly, with few issues during construction. There have been several variations to the contract scope due to unforeseen quantities of waste soil. The project is slightly over budget.

Photo 2 - Looking down the partly completed new access road alignment at York Valley landfill

11.2 The Eves Valley access and weighbridge upgrade is well underway, with the box culvert installed and the access road construction commenced. This project has been run well and has had few variations to date.

Photo 3 - View of the newly installed box culvert over Eves Valley Stream

12. Operations and Maintenance Contract Procurement

12.1 NTRLBU has chosen not to renew the operations and maintenance (O&M) contract and has instead chosen to issue a new tender for the service based on a revised contractual model. This outcome follows a Local Government Act 2002 section 17(a) review.

12.2 The revised contract procurement process is discussed in a separate report.

13. New Landfill Compactor Procurement

13.1 Landfill compaction has not been achieving the required compaction density. A range of actions have been investigated for resolving this issue.

13.2 A number of areas for improvement have been identified, with a key area being the size and weight of the current compactor.

13.3 With the tender for a new O&M contract being developed it is also necessary to procure a new compactor (the current compactor is leased by the O&M contractor). The lead time for a compactor is in the order of 12 months and as such getting this process underway soon is important.

13.4 The compactor purchase process has been developed and is discussed in a separate report.

14. Emission Management

14.1 The NTRLBU gas management system has continued to operate effectively during this period. We have had two short issues in the system over the period with one caused by a gas field pipe becoming dislodged and allowing air into the system. This was quickly identified and fixed.

14.2 An example of the gas monitoring status report is shown below.

Figure 1 –Gas monitoring status report

14.3 The installation of the new gas collection ring main is well underway, with the new condensate removal chambers arriving onsite in approximately two months.

14.4 The Stage 1 options review report was received regarding gas reuse options. This is discussed in a separate report on the agenda. This follows the NTRLBU boards request in September 2022 for additional detail on the options to be considered.

14.5 The options review was completed in April 2023. Scope preparation for a second stage report including a detailed business case for the two preferred options has commenced.

15. Emissions Trading Scheme Position

15.1 The Emission Trading Scheme (ETS) unit price has decreased to $56 at the end of March.

15.2 The auction of Government units on 15 March 2023 failed to reach the confidential reserve price meaning that no units were sold.

15.3 There is a lot of uncertainty in the ETS market at present due to a lack of clarity on what actions that Government will adopt from the Climate Commission recommendations.

15.4 The UEF filed for 2022 calendar year is 0.091 or 7,242 units which is significantly below what is currently budgeted.

15.5 Our current holding of 155,569 units have an average cost of $43.45 per unit.

15.6 Our current New Zealand Unit (NZU) holding and movements

Units on hand June 2022 140,166

Purchase December 2022 @ $85.25 10,000

Transfer from Pioneer @ $0.00 5,103

Units on Hand 31 January 2023 155,569

Calculated units to surrender for 2022 (7,242)

Balance after surrender 148,327

15.7 Treasury policy limit assuming UEF of 0.21 and budgeted waste volumes is 46,800 units.

15.8 Current holding is 101,527 units in excess of policy due to the reduction in the UEF achieved in 2022 and expected UEF in 2023 and the Pioneer units.

15.9 The NTRLBU and the Councils have approved the sale of 50,000 NZUs and delegated the timing of the sale to the General Manager of NTRLBU.

15.10 At present it is proposed that NTRLBU do not sell until there is more understanding of the NZ Governments position on climate change actions, and how this might affect future ETS prices.

16. Waste Minimisation

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

16.2 Battery diversion and recycling:

16.2.1 The number of small battery fire incidents at York Valley has remained low over the last two months although there is a continuing presence.

16.2.2 The cost of battery disposal is now expected to be in the order of $40,000 per annum. Nelson City Council has expended the allowance for battery collection and disposal and NTRLBU has extended the purchase order to cover the additional costs.

16.2.3 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.

16.3 NTRLBU waste minimisation activities:

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

16.3.2 A Solid Waste Analysis Protocol (SWAP) investigation was undertaken at York Valley landfill during February to assess the composition of waste for the region.

16.3.3 NTRLBU has continued to investigate additional separation works at the landfill. McDermott Contracting undertook a separation trial at the landfill during April 2023. This trial operated for approximately four weeks and focussed initially on skip and bin waste separation. During the time a number of transfer station bins were sorted, and a few front loader trucks were also sorted.

16.3.4 NCC and TDC arranged visits during the trial period including having building companies come to see the trial.

16.3.5 The trial identified that approximately 40 per cent of the waste sorted during the trial was organic material that would form part of the New Zealand Government plan to prohibit organic wastes from landfill. This material included timber, paper, cardboard, carpets and green wastes. The sorting trail also separated metal, glass and some plastic.

16.3.6 Further analysis is required to calculate the annual fraction of the waste that can be separated at the landfill annually based on these results, and how much airspace can be saved if this is sorted and removed from site.

16.3.7 At present there are no options for the reuse of this organic material if it were sorted from the waste, and NTRLBU are investigating options for turning this material into fuel in order to allow the diversion from landfill.

16.3.8 The knowledge gained from the trial has assisted TDC staff implementation of their sorting at the transfer station, with TDC also engaging McDermott Contracting to undertake their sorting trial.

16.3.9 A system is being developed to divert HAIL material from the landfill and reprocess the HAIL material so that it does not need to be disposed to a 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.

16.3.10 Funding for this system has been included in the 2023/24 Business Plan and preliminary design is currently being undertaken. This project will include the development of a class 3 landfill within the overarching Eves Valley Landfill area to ensure that treatment material can be stored and reused without requiring discharge to a class 1 landfill.

17. Landfill Waste Volumes

17.1 Landfill volumes remain high and have exceeded expected landfill volumes for the year to date (refer to Figure 2 Below)

Figure 2 – Waste volume and composition for 2022/2023 year to date and for the full 2021/2022 year.

17.2 Total waste tonnage for the 2021/22 financial year was 81,000 tonnes. Waste tonnage is slightly lower (at 58,600 tonnes) for the 2022/23 year to date than was received to the same point in 2021/22 (61,400 tonnes).

18. NTRLBU Finances

18.1 Income Account for the period to 31 March 2023.

Figure 3 – NTRLBU Financial Summary

18.2 The finances show an overall surplus for the year to 31 March 2023 is $651,000.

18.3 This increased income has come from the increased volume of wastes being received compared to the projected volumes used to generate the budget and the significantly lower UEF factor achieved for the 2022 calendar year than assumed in the Business Plan.

18.4 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, and due to significant expenditure on airspace excavations and waste diversion trials.

18.5 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.

18.6 Balance Sheet as of 31 March 2023

Figure 4 – NTRLBU Balance Sheet as at 31 March 2023

19. NTRLBU Resourcing

19.1 The new Operations Manager (Mark Sutton) for NTRLBU has started getting his feet dirty and is well on his way to understanding the landfill operations.

19.2 NTRLBU is still seeking one additional staff member.

20. Conclusion

20.1 NTRLBU operations and maintenance has started to recover from several performance issues that occurred in the early part of 2023, although there are ongoing issues with landfill compaction performance.

20.2 A significant amount of work has been undertaken on safety management at the landfill, and while improvements have been made, ongoing focus is required.

Attachments

Nil

Nelson Tasman Regional Landfill Business Unit

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