wastewater asset management plan · use of private wastewater systems. the public wastewater...

2015-2025

Hauraki District CouncilDRAFT 2015 AMPFRED 1189881 _v6

WASTEWATERASSET MANAGEMENT PLAN

Wastewater Asset Management Plan

July 2015 2

Asset Management Plan Control Sheet

1.PROJECT MANAGER: Nathan Shaw

2. PLAN PREPARED / REVIEWED / UPDATED BY:

DATE NAME DESIGNATION

Oct 2014 N Shaw Asset Management

Oct 2014 K Thompson District Engineer

Oct 2014 M Charteris Utilities Manager

3. COUNCIL CONSIDERATION / ADOPTION: WASTEWATER ASSET MANAGEMENT PLAN

DATE MINUTE NO./ ACTION REASON / ACTION / DECISION

Nov 2014 Updated AMP & Exec Summaryadopted

Completion of review – Wastewater AssetManagement Plan Nov 2014

4. PUBLIC CONSULTATION (RELATING TO THE WHOLE PLAN ITSELF):

DATE FORM OF

Ongoing Water & Waste Consultative Committee

In process LTP Consultation & Submission Process

5. PLAN UPDATE AND REVIEW BY MANAGEMENT:

DATE RECORD OF


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TABLE OF CONTENTS1 INTRODUCTION ............................................................................................................ 61.1 WASTEWATER ACTIVITY GOALS & OBJECTIVES ...................................................... 71.2 OBJECTIVES OF THE WASTEWATER ASSET MANAGEMENT PLAN ......................... 82 COMMUNITY OUTCOMES ............................................................................................ 93 STRATEGIC AND LEGISLATIVE FRAMEWORK ........................................................ 114 ASSET MANAGEMENT PLANNING POLICY .............................................................. 124.1 LEVEL OF ASSET MANAGEMENT PRACTICE ........................................................... 155 LEVELS OF SERVICE ................................................................................................. 175.1 INTRODUCTION .......................................................................................................... 175.2 WHAT IS IMPORTANT TO THE COMMUNITY ............................................................. 175.3 CUSTOMER LEVELS OF SERVICE AND TECHNICAL LEVELS OF SERVICE ............ 185.4 CUSTOMER LEVELS OF SERVICE ............................................................................. 185.5 TECHNICAL PERFORMANCE TARGETS .................................................................... 205.6 SERVICE REQUEST PRIORITISATION ....................................................................... 245.7 ANNUAL RESIDENT SURVEY ..................................................................................... 255.8 LEVELS OF SERVICE CONSULTATION ..................................................................... 26

5.8.1 COMMUNITY CONSULTATION ................................................................ 265.8.2 WATER AND WASTE CONSULTATIVE COMMITTEE .............................. 27

5.9 REVISION OF LEVELS OF SERVICE FOR 2015-2025 ................................................ 276 DESCRIPTION OF ASSETS ........................................................................................ 286.1 OVERVIEW .................................................................................................................. 286.2 INDIVIDUAL SCHEMES WITHIN THE DISTRICT ......................................................... 286.3 WASTEWATER NETWORK ASSET DESCRIPTION .................................................... 296.4 WASTEWATER TREATMENT ASSET DESCRIPTION ................................................. 316.5 ASSET REGISTERS .................................................................................................... 326.6 FINANCIAL DESCRIPTION .......................................................................................... 337 DEMAND AND GROWTH ............................................................................................ 347.1 FUTURE DEMAND ....................................................................................................... 347.2 DEMAND MANAGEMENT ............................................................................................ 387.3 POPULATION PROJECTIONS ..................................................................................... 41

7.3.1 HISTORIC POPULATION NUMBERS ........................................................ 417.3.2 FUTURE POPULATION FORECASTS ...................................................... 41

8 RISK MANAGEMENT .................................................................................................. 428.1 FOCUS ON CRITICAL ASSETS ................................................................................... 448.2 RESIDUAL RISK .......................................................................................................... 458.3 RISK MANAGEMENT STRATEGIES ............................................................................ 45

8.3.1 EMERGENCY FAILURES .......................................................................... 458.4 CATASTROPHIC EVENTS ........................................................................................... 468.5 RISK MANAGEMENT AT CORPORATE & SERVICE LEVEL ....................................... 468.6 LEGISLATIVE REQUIREMENTS FOR RISK MANAGEMENT ...................................... 478.7 INTEGRATION WITH MAINTENANCE & REPLACEMENT STRATEGIES .................... 47

8.7.1 Risk Register ............................................................................................. 489 LIFECYCLE MANAGEMENT ....................................................................................... 529.1 INTRODUCTION: THE OBJECTIVES OF LIFECYCLE MANAGEMENT ....................... 529.2 LIFECYCLE MANAGEMENT STRATEGY .................................................................... 54

9.2.1 RISK MITIGATION VS ASSET CRITICALITY............................................. 549.3 MANAGING RISK ......................................................................................................... 56


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9.4 EXPECTED LIVES ....................................................................................................... 579.5 THE RENEWALS MODEL ............................................................................................ 609.6 OPERATIONS AND MAINTENANCE ........................................................................... 639.7 ASSET CONDITION AND PERFORMANCE MONITORING ......................................... 649.8 RENEWAL.................................................................................................................... 669.9 CREATION AND ACQUISITION ................................................................................... 6810 STRATEGIC PRIORITIES ............................................................................................ 6910.1 STRATEGIC PRIORITIES PAST 3-YEARS ............................................................ 6910.2 STRATEGIC PRIORITIES NEXT 3-YEARS ............................................................ 6911 KEY PROJECTS .......................................................................................................... 7011.1 KEY PROJECTS PAST 3-YEARS .......................................................................... 7011.2 KEY PROJECTS NEXT 3-YEARS .......................................................................... 7012 FINANCIAL FORECASTS & MANAGEMENT .............................................................. 7212.1 LINKAGE BETWEEN THE FINANCIAL PLAN AND COMMUNITY OUTCOMES..... 7412.2 FEES AND CHARGES ........................................................................................... 7512.3 DETAILED 10 YEAR FINANCIAL PLAN ................................................................. 76

12.3.1 OPERATIONS & MAINTENANCE EXPENDITURE .................................... 7612.3.2 NEW CAPITAL EXPENDITURE ................................................................. 7912.3.3 RENEWAL CAPITAL EXPENDITURE ........................................................ 80

12.4 DEPRECIATION .................................................................................................... 8212.4.1 ANNUAL DEPRECIATION FOR NEXT 10 YEARS ..................................... 82

12.5 DEPRECIATION POLICY ....................................................................................... 8412.6 ASSET USEFUL LIVES & UNIT RATES ................................................................. 8413 LEGISLATION AND BYLAWS ..................................................................................... 8514 RELEVANT STRATEGIES AND PLANS ...................................................................... 8615 PLANNING ASSUMPTIONS AND CONFIDENCE LEVELS ......................................... 8715.1 SIGNIFICANT ASSUMPTIONS AND POSSIBLE EFFECTS ................................... 8715.2 DATA CONFIDENCE ............................................................................................. 91

15.2.1 CONFIDENCE LEVELS ON ASSET CONDITION & PERFORMANCE ....... 9115.2.2 Accuracy of Asset Inventory ....................................................................... 9215.2.3 Confidence Level on Demand/Growth & Financial Forecasts ...................... 92

16 EFFECTS OF THE WASTEWATER SERVICE ............................................................. 9316.1 ENVIRONMENTAL EFFECTS ................................................................................ 9316.2 SUSTAINABILITY .................................................................................................. 9416.3 RESOURCE CONSENTS....................................................................................... 9517 IMPROVEMENT PROGRAMME................................................................................... 9617.1 2015-18 IMPROVEMENT PROGRAM .................................................................... 9617.2 PROGRESS WITH 2012-15 IMPROVEMENT PLAN .............................................. 9818 COUNCIL Commitment ............................................................................................... 99

SCHEDULE OF APPENDICESA: Rural Wastewater Service Zone


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Paeroa Treatment Plant – Aerator


July 2015 6

1 INTRODUCTIONThe public waste water network collects waste water within the urban boundaries of seven townshipsin the Hauraki District. Approximately 8,000 people within the District have their house connected tothe wastewater service.

The key reasons for providing a service for the treatment and disposal of wastewater are to protectpublic health; to mitigate the risks of pollution and disease associated with wastewater; and to protectthe receiving environments from the effects of wastewater products and by-products.

Seven schemes in the District are operated by the Council. Each scheme has its own wastewatertreatment plant (Table 1.1) and wastewater from approximately 6,050 properties is received at theplants via a total of160 km of pipes. Fifty wastewater pump stations within the network lift thewastewater to a higher elevation to enable it to continue its journey towards the treatment plant.

The public waste water treatment service is provided in towns of: Ngatea, Kerepehi, Turua, Paeroa,Waihi, and Whiritoa.

Rural townships that must provide their own private wastewater treatment facilities within the districtare: Mackaytown, Karangahake, and Waikino. The small population and remoteness of these smalltownships renders a public wastewater service to these communities uneconomic. However, the lackof population pressure on the density of housing in these communities also means that private lotsizes are large in these townships, with sufficient area for the disposal of the effluent to soil. Theseareas also have well-draining soils.

The small rural township of Waitakaruru is the exception within the district. A public wastewaterservice is provided to this community because the high groundwater table in the area prevents normaldisposal to the ground of septic tank effluent.

Rural households within the district dispose of their wastewater by private means – usually septictanks.

In November 2010 the Kaiaua area was incorporated into the Hauraki district. No public wastewatersystems were transferred to HDC. All current waste water systems in the area are privately owned andoperated.

Apart from the public waste water systems approximately 9,700 people on 4,500 properties operatetheir own private wastewater treatment facilities.

Table 1.1: Wastewater Treatment Plants and the associated receiving body for treated wastewater(Listed West to East)

WASTEWATER TREATMENT PLANT RECEIVING BODY

Waitakaruru · Maukoro Canal

Ngatea · Piako River.

Kerepehi · Awaiti Canal.

Turua · Waihou River.

Paeroa · Waihou River.

Waihi · Ohinemuri River

Whiritoa · Irrigation onto an 8 ha eucalyptus plantation


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1.1 WASTEWATER ACTIVITY GOALS & OBJECTIVES

Legislation requires Council to identify the need for public wastewater treatment services. Council mayprovide the wastewater treatment service itself, as is currently being done, or maintain an overview ofsupply provided by others.

In respect of meeting the wastewater disposal needs of the community, the Council’s wastewaterservice strategic goals are:

· To provide a reticulated wastewater network connection and treatment facility to residential,commercial, and industrial properties within town urban limits;

· To provide a rural wastewater treatment service to properties within the rural wastewaterservice area in Waitakaruru (Appendix A);

· To operate the wastewater network and treatment plants in a manner that is sensitive to thenatural environment;

· To encourage efficient use of potable water and thereby minimise the volume of wastewaterthat must be treated.

The map in Figure 1.1 shows the location of the wastewater systems in the Hauraki district.

Figure 1.1: Hauraki Wastewater Systems

WAITAKARURU

NGATEA

KEREPEHI

TURUA

WHIRITOA

WAIHI

PAEROA


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1.2 OBJECTIVES OF THE WASTEWATER ASSET MANAGEMENTPLAN

The objectives of this Asset Management Plan are:

· To demonstrate that our asset management strategies are carried out at an appropriate levelfor the Hauraki community;

· To outline how Council will meet its legal and regulatory obligations both as a local DistrictCouncil and as operator of the public wastewater network;

· To ensure that the volume of wastewater is managed in a cost-effective and sustainablemanner;

· To ensure and demonstrate that the Council has applied a long-term view in respect ofenvironmental and financial sustainability;

· To provide substantiated financial forecasts and projections demonstrating financialstewardship of the wastewater assets that Hauraki District Council manages on behalf of thecommunity;

· To promote and carry out a continuous improvement process that identifies both needs andopportunities for improvements in the management and operation of the wastewater activity.


July 2015 9

2 COMMUNITY OUTCOMESAs required by the Local Government Act 2002, Council has carried out a process to identifycommunity outcomes by giving the community the opportunity to discuss what they think is importantin terms of the present and future social, economic, environmental and cultural wellbeing of theircommunity.

The community identified the following six community outcomes:

PREPARED HAURAKI:· We provide a range of services and facilities to meet our District's needs and expectations for

a safe environment;

INTERACTIVE HAURAKI:· We are a proactive Council that provides leadership and communicates effectively with all

sectors of our District;

KOTAHITANGA HAURAKI:· We take a collaborative approach with both Mana Whenua and Tangata Whenua in our

District;

LIFESTYLE HAURAKI:· We provide an environment that encourages vibrant communities and an enhanced quality of

life;

PROGRESS HAURAKI:· We have a positive climate that encourages balanced and sustained economic growth

throughout our District;

SUSTAINABLE HAURAKI:· We plan for the wise use and management of all land and resources for the continued benefit

of our District.

The Community Outcomes are the high level statement of what Council wants to achieve for thecommunity in the future. Therefore the Community Outcomes can also be interpreted as the Council’sVision for the District.

The Council Community Outcomes and the how Wastewater activity contributes are provided in thetable page-over:


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Table 2.1: Council Community Outcomes and how the Wastewater Service Contributes

COUNCIL COMMUNITYOUTCOMES STRATEGIC OUTCOME HOW THE WASTEWATER ACTIVITY

CONTRIBUTES

PREPARED HAURAKIWe provide a range ofservices and facilities tomeet our District's needsand expectations for asafe environment.

Safe disposal of wastewatergenerated in the urban environment.

Wastewater is collected from propertieswithin town urban limits and treated beforebeing discharged back into the environmentas clean, safe, water.

KOTAHITANGAHAURAKI

We take a collaborativeapproach with both ManaWhenua and TangataWhenua in our District.

The wastewater network is operatedin a manner that is sensitive to thenatural environment.

By ensuring that cultural values are takeninto account in the management of thewastewater network, and disposal oftreated waste water back to theenvironment.

LIFESTYLE HAURAKIWe provide anenvironment thatencourages vibrantcommunities and anenhanced quality of life.

A significant reduction in the risk ofwaterborne diseases spreadingthroughout the community.

Higher densities are possible withinthe urban environment than couldotherwise be achieved through theuse of private wastewater systems.

The public wastewater network takesresponsibility of the safe treatment ofwastewater out of the hands of lay people,and places it in the hands of professionals.

The centralised nature of the public servicemakes monitoring significantly easier forregulatory authorities.

The removal of wastewater from privateproperties means that space no longerneeds to be allocated within privateproperty for the purposes of effluentdisposal.

PROGRESS HAURAKIWe have a positiveclimate that encouragesbalanced and sustainedeconomic growththroughout our District.

To free residents and businessesfrom the higher costs and timerequired to maintain privatewastewater treatment systems.

A public wastewater service requiresessentially no maintenance on behalf ofprivate residents and businesses. The costof a public wastewater network service issignificantly lower than the lifetime costsassociated with private wastewatertreatment and disposal systems.

SUSTAINABLEHAURAKIWe plan for the wise useand management of allland and resources forthe continued benefit ofour District.

The environment is protected. By ensuring that wastewater treatmentplants are operated in line with theirconsent conditions, Council also ensuresthat the wastewater is returned to theenvironment of a high standard that issensitive to the natural environment;

A centralised public wastewater service iseasier to monitor than individual privatesystems. Better monitoring reduces therisks of potential adverse environmentaleffects.


July 2015 11

3 STRATEGIC AND LEGISLATIVE FRAMEWORKFigure 3.1 below illustrates the primary linkages between some of the major council plans, strategiesand legislative requirements. It shows how the concept of community wellbeing links to the communityoutcomes, the Long Term Plan (LTP), legislation and other key strategies and documents. This figurerepresents an overview of the strategic landscape in which the wastewater service is being operatedand developed.

The diagram also shows that consultation with and the participation of the community underpin thestrategic direction as well as business, tactical and operational planning for council activities. Thecommunity participation in general is represented by Council. Hauraki district has created an additionalinitiative in this regard through the establishment of a Water and Wastes Consultative Committee toliaise and consult with relevant community and stakeholder groups on important issues regarding thewater and waste services.

The diagram shows where the Wastewater Asset Management Plan (and AMP’s in general) fits intothe strategic and legislative framework for HDC.

Figure 3.1: Linkages between strategic concepts, documents, plans and legislative requirements

Community Wellbeing

Council CommunityOutcomes

Long Term Plan

Legislation

Bylaws

AMP’s

Political Direction Professional AdviceCommunityConsultation

Key

Stra

tegi

es(lo

cal,

regi

onal

,nat

iona

lpl

ans)

CouncilPolicies

Economic

Social

Environmental

Cultural

Community Plans

Internal Resources

EnablersLegislativeDrivers Planning Drivers

Water &WastewaterConsultativeCommittee

KEY:


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4 ASSET MANAGEMENT PLANNING POLICYThe small population of the Hauraki District calls for a fit-for-purpose asset management approach.For comparison, the total population provided with a wastewater service within the district (8,000people) is fewer than the population of most suburbs in Auckland City.

To achieve a fit-for-purpose approach Council had to select an appropriate asset management levelfor the organisation. The figure below provides a broad framework of the environments considered andanalysed to develop the AM policy for the Wastewater Activity in the Hauraki district.

Figure 4.1.: Drivers of Asset Management Policy

Waugh Infrastructure Management Ltd, assessed Hauraki’s asset management planning requirementson behalf of Council. The following table provides the criteria assessed, the results of the assessmentand comments on the rationale for the assessment findings.

ExternalEnvironment

CustomerEnvironment

InternalEnvironment


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Table 4.1: Wastewater - Level of Asset Management, Factor Assessment Results

CRITERIA ASSESSMENT COMMENTARY

Population Core The initial population risk screen for urban areas, all townshippopulations, and total district population showed that assetmanagement practice should be ‘Core’.

District WideRisks

Core Plus Based on the identified district wide risk factors, the suggested levelof appropriate asset management practice for Hauraki District Councilis ‘Core’ with some extension of practice around the risk managementissues identified.

Costs andBenefits

Large portion of therates -More risk

The Water and Wastewater budgets are large and represent higherrisks if AM practice is not at an appropriate level. These budgets alsoallow more scope to develop asset management practice asappropriate.

LegislativeRequirements

Meet minimum Hauraki District Council policy is to meet minimum legislativerequirements, or exceed requirements where deemed appropriateand cost effective through levels of Service Consultation. The assetmanagement response to legislative requirements is a compliancebased approach.

Size, Condition,Complexity ofAssets

Normal The size and complexity of assets is normal for a rural authority withsmall towns. The assets are generally in good condition with theexception of high inflow and infiltration into wastewater reticulation inWaihi and Paeroa due to the poor condition of pipes. Assets are fitfor purpose and generally not of unusual size or complexity.Flooding affects portions of the network from time to time andcontingency planning is required.

Risks Associatedwith Failures

Average + Failure of water systems (particularly the plains area) would lead to arange of issues including economic risk, and wastewater systemfailure has public health and environmental consequences. Thissuggests a higher level of risk management practice for water andwastewater. Public Health risk management is already legislativelymandated.All activities are affected by funding risks, and any uncertainty aroundthe district economy and funding from third parties should beconsidered.

OrganisationalSkills andResources

Normal Hauraki District Council is a small sized local authority. On apopulation basis, approximately 30% of local council’s in NewZealand are smaller than Hauraki District Council. Internal andexternal resources have been maintained as required to deliverservices. Operational knowledge has been retained by theorganization. Staff resourcing levels are stable, although there arelonger term issues around recruitment and retention of suitableresources. Elected representatives knowledgeable and engaged incommunity decisions. Identified resource gaps in technical expertise(Water and Wastewater) need to be managed. There is a lack ofdocumented Standard Operating Procedures and Quality Plans.

Council considers its approach and ability to deliver assetmanagement in terms of its wider business approach. A regular self-assessment of Council’s asset management processes assists toascertain focus and areas for improvement. The organisational skillsand resources applied to achieve the asset management objectivesare outlined through Councils LTP, AMPs, Human Resources andBusiness Plans.

CustomerExpectations

Average Council has developed and maintained assets to a good standard.Maintenance of current service levels is important to the community.Overall customer expectations are judged to be typical of a rural andsmall communities – that are stable but with high expectations of


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CRITERIA ASSESSMENT COMMENTARY

maintaining and / or restoring service that have economic impacts onrural production and the district economy.

Sustainability Corporatesustainability policy

Hauraki District Council has a sustainability policy as outlined in theLTP that will be applied to all assets and management.Potential impacts of climate change and sea level rise require a long-term risk management approachLegislative changes currently being considered, and changes toregional and national standards may impact the activity.

Final AM Level Core (riskmanagement ‘CorePlus’)

Analysis of factors suggests that asset management practice shouldbe Core with a more comprehensive ‘Core Plus’ approach to riskmanagement.

This policy introduces the concept of ‘Core Plus’ asset management practice. The IIMM 2006 (Section2.2.4) identifies two levels of asset management practice; core and comprehensive (also referred to asadvanced). For many asset owning authorities their desired practice levels, based on theirinfrastructure drivers will be above core practice (as defined in the IIMM 2006) but may well be belowComprehensive asset management practice.

‘Core Plus’ asset management practice is above core and below fully compliant with Comprehensivepractice. Therefore, each asset owner has had to consider the appropriate asset management level onan activity basis, taking into account national, regional and local drivers of asset management practicefor that asset.

The ‘Core Plus’ Asset Management Policy was implemented in 2012.


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4.1 LEVEL OF ASSET MANAGEMENT PRACTICEFurther analysis of wastewater asset management practices and processes performed by WaughInfrastructure Management Ltd and council staff provided a more detailed framework for theidentification and future management of appropriate asset management levels1. The practices andprocesses required for the wastewater activity to achieve the identified asset management level aredetailed in the table below:

Table 4.2: Wastewater Summary - Level of Asset Management Practises RequiredAM ATTRIBUTE PRACTICES AND PROCESSES

REQUIRED

Core Core Plus

1. Levels of Service · Reliable Physical inventory:· Define LOS or performance· Linkage to strategic/community

outcomes· Links to other planning documents· Levels of consultation identified and

agreed· Service life of network stated

2. Description of assets · Process of Development:· Adequate Physical Description of Asset· Adequate Financial Description of Asset· Remaining useful life· Ability to Aggregate & Disaggregate

Information

· Physical attributes captured(location, material, age etc)

3. Managing growth · Demand Forecasts (30 year)· Demand Management drivers

documented· Demand Management strategies

documented· Sustainability Strategies

4. Risk Management · Identify critical assets· Identify associated risks and risk

management strategies for criticalassets

· Identify significant negative effects

· Recognition & application ofprinciples of integrated riskmanagement to assetsdemonstrated

· Apply standards & industry goodpractice (e.g. NZS4360 andLocal Government Handbook)

· Risk Management integratedwith other Corporate processes(Lifelines, Disasters Recovery,Continuity Plans)

· Integrate with maintenance andreplacement strategies

5. Lifecycle (Optimised)Decision-making

· Lifecycle and Asset ManagementPractices:

· Service capacity gap analysis· Evaluation and ranking based on

criteria of options for significant capitalinvest decisions

· Maintenance Outcomes, Strategies,Standards and Plans documented

1 The result areas are aligned with the document - Criteria for assessing conformity to “Core” and “Advanced” levels of AssetManagement by the Office of the Auditor General (New Zealand).


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AM ATTRIBUTE PRACTICES AND PROCESSESREQUIRED

Core Core Plus

6. Financial Forecasts · AM reflected in 30 year Financial Plan –Maintenance, Renewals, New Capital(LOS and demand).

· Validate the Depreciation/Decline inService Potential

7. PlanningAssumptions andConfidence Levels

· List all assumptions and possible effects· Confidence level on asset condition· Accuracy of asset inventory· Confidence level demand/growth

forecasts· Confidence level on financial forecasts

· List all assumptions includingorganisations strategic plan thatsupport AM – linkages with otherplanning doc

8. Sustainability · Compliance with LGA 2002 andamendments.

· Corporate policy in place· Sustainability liabilities

· Incorporation of national andregional sustainability policiesand plans

9. Outline ImprovementProgrammes

· Identify improvements to AM processes& techniques

· Identify weak areas & how they will beaddressed

· Timeframes for improvements· Identify resources required (human &

financial)· Improvement programmes are

monitored against KPI’s

10. Planning byQualified Persons

· AM Planning should be undertaken by asuitably qualified person

· Process should be PeerReviewed

11. Commitment · Plan adopted by Council includingimprovement programme

· Plan key tool to support LTP· AM Plan regularly updated and should

reflect progress on improvement plan

· AM Plan requirements are beingimplemented and discrepanciesformally reported

· AM Plans evolving as AMsystems provide betterinformation

· AM Plans updated every 3 yearsalong with organisationsstrategic planning cycles

12. AMP Format · Purpose of the plan· Indicates significant changes with

previous AMP· Strategic asset management functions

are detailed· Clearly identifies issues associated with

the service· Indicates AM Programme for the service· Indicates AM practices


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Figure 5.1: Levels of Service Guide the Direction ofthe Wastewater Asset Management Activity

5 LEVELS OF SERVICE

5.1 INTRODUCTIONLevels of service (LoS) define the standard of service delivered to the community, over and above thelegislative requirements. LoS represent an agreement between the Council and the Communitydefining what will and will not be provided by the service.

Level of service targets guide the planning,work programmes, infrastructure designand maintenance decisions that Council’sengineers and management make(Figure 5.1). The work programmes andmaintenance that arise out of the Council’scommitment to deliver on the LoS costmoney to carry out; and therefore the LoStargets ultimately affect the cost of thewastewater service to customers.

The LoS therefore represent an agreementbetween the Council and Community onwhat aspects of the wastewater serviceare important to the community, and whatthe community is prepared to pay for.

5.2 WHAT IS IMPORTANT TO THE COMMUNITY

The following seven aspects of the wastewater service were identified as those of greatest importanceto the community:

1. The cost of the wastewater service;2. That the treated waste water is safe to discharge back into the environment;3. That the wastewater is unobtrusively carried away from people’s houses to the treatment

plant;4. That the community and environment is protected from the risks surrounding the spread of

disease and human waste;5. That the wastewater service is reliable;6. That the Council is quick to respond to interruptions to the wastewater service if and when

they occur;7. That customer service requests are dealt with promptly and appropriately.


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5.3 CUSTOMER LEVELS OF SERVICE AND TECHNICAL LEVELSOF SERVICE

Two types of Level of Service have been prepared:i. Customer Levels of Service; andii. Technical Levels of Service.

The customer levels of service are intended for the public; and encapsulate the seven aspects ofimportance to the community.

The Technical Levels of Service are the means by which Council meets its agreement with thecommunity to provide a wastewater service at a stated standard at an agreed cost. They are intendedfor use by Council management and engineers to help assess at a technical level whether or not thewastewater network is being managed in the manner that will deliver the Customer Levels of Service.

The Customer Levels of Service are those that are described in the Hauraki Long Term Planningdocuments and this executive summary. The Technical Levels of Service are described in the mainbody of this AMP.

5.4 CUSTOMER LEVELS OF SERVICEThe customer levels of service are those that follow through to the Hauraki Long term plan. The levelsof service have been revised for the 2015 Asset Management Plan to address the seven aspects ofgreatest importance to the community listed above.

The Customer Performance Measures are developed to enable the customers of the service and thewider community, to understand the targets and measurement of the Levels of Service with ease.Four Levels of Service are used to monitor whether the aspects important to the community (Section5.2) are being met, refer Table 5.1, page over:


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Table 5.1: Customer Levels of Service, Performance Indicator & Targets

LEVEL OF SERVICEOBJECTIVE

COMMUNITYVALUE BEINGADDRESSED

PERFORMANCEINDICATOR TARGET

ACTUALPERFORMANCE

2014Council provideswastewater services atagreed levels of service.

All seven communityvalues, including:

3. That the wastewaternetwork operatesunobtrusively.

Percentage of userssatisfied with the qualityof wastewater servicesprovided.

2015-18: Equal to orgreater than 95%

96%

Wastewater servicesmeet regulatoryrequirements.

2. That the treatedwaste water is safe todischarge back into theenvironment;

4. That the communityand environment isprotected from therisks surrounding thespread of disease andhuman waste.

The wastewater serviceis operated incompliance withregulatory requirements.

No abatementnotices received.

No enforcementnotices received.

No abatementnotices andenforcementnotices received(2013/14)

Protection is provided tothe community and theenvironment.

4. That the communityand environment isprotected from therisks surrounding thespread of disease andhuman waste.

5. That the wastewaterservice is reliable;

Number of dry weatheroverflows from pumpstations and / or thewastewater network.

<1 pump-stationoverflow per 20pump stations peryear.

<15 overflows fromthe pipe network per100km of wastewaterpipe length perannum.

0.85 overflows per20 pump stations

3 overflows per100km of network.

Timely response tocustomer requests.

6. That the Council isquick to respond tointerruptions to thesupply if and whenthey occur;

7. That customerservice requests aredealt with promptly andappropriately.

Customer requests areresponded to withintarget timeframes:

Emergency call outs:resolved Less than 1 hour

Urgent customerrequests: Response within 1 hour

Priority customerrequests:

Assessed within 4 hours

Routine customerrequests: Call back within 3 working days

Emergency call-outs: 100%

Urgent customerrequests: 80% or better

Priority customerrequests: 80% or better

Routine customerrequests: 85% or better.

Emergency 100%

Urgent 77%

Priority 96%

Routine 70%


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5.5 TECHNICAL PERFORMANCE TARGETSThe underpinning Technical Performance Measures are those used by the Council’s engineers and managers to measure the technical details of the serviceprovided, to enable them to deliver upon the Customer Levels of Service.

Table 5.2: Technical Levels of Service, performance measures, targets, measurement procedures and monitoring frequencies.

LOS

No.Level of Service

Statement Performance indicatorTarget

2015-18

ActualPerformance

2014Future Targets

Measured(where and

how)Exclusions

Community Level of Service:Desired Community Outcomes:

Council provides wastewater services at agreed levels of serviceHauraki DC will provide a wastewater service that the community can afford.

Hauraki District Council will provide a wastewater service that delivers a level of service customers’ desire and are prepared to pay for.

WW 1 The wastewater servicemeets customers’expectations.

Annual Customer satisfaction survey:

“How satisfied, or dissatisfied, are you withthe wastewater service provided by Council”“

More than95% ofrespondentsare satisfiedwith thewastewaterservice

2014satisfactionsurvey result96%

As per currenttarget

AnnualCustomerSurvey

Customersnot currentlyconnected tothewastewaternetwork.

WW 2 The wastewater networkwill operateunobtrusively.

Number of customer complaints about the wastewaterservice for obtrusive issues, such as odour.

< 5 per1000

customers

0.3complaintsper 1000

connections.

< 5 per 1000customers

By review ofrecordedcustomerservicerequests.

Non-financialperformancetarget quarterlyreporting

Multiplecomplaintsinvolving thesameincident froman individualcustomercount as asinglecomplaint


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LOS

No.Level of Service

Statement Performance indicatorTarget

2015-18

ActualPerformance

2014Future Targets

Measured(where and

how)Exclusions


Wastewater services meet regulatory requirementsHauraki District Council will meet the legal requirements for a public wastewater service. In doing so, the Council can assure the communitythat:

1. The treated wastewater is clean and fit for return back into the natural environment;

2. The health of the community and environment is protected.

WW 3 The wastewater serviceis operated incompliance withregulatory requirements.

The number of abatement notices and enforcementnotices received.

Councilreceives noabatementnotices orenforcementproceedings.

Noabatementnotices orenforcementproceedingswerereceived.


Annual reportfrom UtilitiesManager

Nil.


July 2015 22

LOS Level of ServiceStatement Performance indicator Target 2015-18

ActualPerformance

2014Future Targets Measured (where

and how) Exclusions


Protection is provided to the Community and the EnvironmentThe wastewater network will be operated in a manner that protects the public from the risk of disease.

Council's wastewater treatment plant discharges will comply with their resource consents.

WW 4.1

The number of dryweather overflows frompump stations and/orthe wastewaternetwork.

The frequency of dry weather overflows frompump stations will be minimized.

A dry day is defined as less than 1mm of rainfalling in the catchment during the preceding24 hour period.

Less than 1overflow per 20pump stations

per annum.

0.85 overflows per20 pump stations


Annual Report fromUtilities Manager

Nil

WW 4.2 The frequency of dry weather overflows fromthe wastewater network will be minimized.

Less than 15 per100 km of

wastewater pipelength perannum.

3 overflows per100km of network.


Annual Report fromUtilities Manager

Nil

WW 5 Dry weather overflowswill be contained within4 hours of notification.

The percentage of dry weather overflowrequests contained within 4 hours ofnotification.

80% or more 82% As per currenttarget

By review of recordedcustomer servicerequests and loggedtime of restoration.

Non-financialperformance targetquarterly reporting

Private SewerFaults

WW 6 The risk of publicexposure to untreatedsewerage will beminimized

Percentage of overflows caused by the publicsewer cleaned up within 24 hours of theoverflow ceasing.

90% or more 94% As per currenttarget

By review of recordedcustomer servicerequests and loggedtime of restoration.


Extremeweather.Dangerousworkingconditions.

Overflows goneunnoticed by thepublic, councilstaff andcontractors.

WW 7 The discharge from thewaste water treatmentplants will comply withresource consentconditions.

The operation of the Wastewater TreatmentPlant will comply with the conditions of theresource consents.

Council receivesno abatementnotices orenforcementproceedings.

No abatementnotices orenforcementproceedings werereceived.


Annual report fromUtilities Manager

Nil.


July 2015 23

LOS Level of ServiceStatement Performance indicator Target 2015-18

ActualPerformance

2014

FutureTargets

Measured (whereand how) Exclusions


Timely response to customer requestsCustomer service requests are dealt with promptly and appropriately.

WW 8 Emergency situationscreated by a fault inthe wastewaternetwork areresponded to rapidly.

Incidents that fall intothe category of“Emergency” asdefined in Table 5.3.

Appropriate action to safeguard the public and /or property is taken within 1-hour of notification.

100% 1 incident.

Responsetime = 20minutes.

100% By review ofrecorded customerservice requests.


Nil

WW 9 Urgent requests areresponded to withminimum delay

Requests falling intothe “Urgent” categoryare defined inTable 5.3

Council staff or contractors will arrive on site toassess the appropriate response within 1 hour ofnotification.

80% 77% As percurrenttarget

By review ofrecorded customerservice requests.


Extremeweather, ordangerousworkenvironment

WW 10 Priority requests areresponded to within anacceptable time.

Requests falling intothe “Priority” categoryare defined inTable 5.3

Council staff or contractors will arrive on site toassess the incident within 4 hours of notification.




Extremeweather, ordangerousworkenvironment

WW 11 Routine requests areresponded to within areasonable time

Requests falling intothe “Routine” categoryare defined inTable 5.3.

Within 3 working days Council will contact thecustomer and advise of Council’s intendedactions and time frame.

If Council’s management decides not to action therequest, the customer will be advised of thereason and of other options available.




Nuisance orprank calls.


June 2015 24

5.6 SERVICE REQUEST PRIORITISATIONTarget response times are set based upon the risk and consequence of the event that triggered thecustomer service request. As much as possible the priority levels have been aligned with themandatory reporting requirements issued by the Department of Internal Affairs.

Table 5.3 Target Response Timeframes

PriorityLevel

Description Target Response Time

Emergency An Emergency situation is defined as an event that:· Is a threat to life;· Is causing damage to a habitable dwelling or· Is obstructing a State Highway.· A complete loss-of-supply of a service (water or

wastewater connection) to greater than 1,000 people.

Appropriate action to safeguard thepublic and/or property is taken within1 hour following notification.

Urgent An Urgent request is defined as:· A complete loss-of-supply of a service (water or

wastewater connection); or· An imminent threat to a habitable dwelling;

Council staff or contractors will havearrived on site to assess theappropriate response within 1 hour ofnotification.

Priority A Priority request is defined as:· A partial loss-of-supply of a service (water or wastewater

connection); or· Flooding that is not threatening habitable dwellings; or· A threat to non-moveable private property.

Council staff or contractors will havearrived on site to assess the incidentwithin 4 hours of notification.

Routine A Routine request is one not falling into the above threecategories.

Routine requests will typically entail preventative maintenanceactivities, modifications, renewals, and replacements that havebeen requested by Hauraki District Council’s customers.

Within 3 working days Council willcontact the customer and advise ofCouncil’s intended actions and timeframe.

If Council’s management decides not toaction the request, the customer will beadvised of the reason and of otheroptions available.

Routine service requests are submitted to the wastewater asset manager. This enables the assetmanager to assess and prioritise the appropriate response to the request. Some requests may bescheduled to align with existing work programs, thereby achieving efficiencies in the delivery of therequest.

The customer call-back target has been introduced for the 2015-18 planning cycle. The desiredoutcome is improved communication with the customer. By calling the customer back to communicatethe intended resolution action and timeframe it gives the customer a chance to correct the Council ifthe customer believes that the Council has not understood the nature or urgency of his or her request.

Other benefits foreseen include a chance to explain to customers why their request may not bedelivered for several weeks or months (or at all). For example, if the Council considers that the mostefficient way to action the customer’s request is to schedule it at a time when maintenance crews willbe in the area, the maintenance may not occur for several months. This explanation will hopefully helpthe customer to understand that their request is not being ignored or forgotten, rather it will beaddressed in due course. Council will assess the benefit of this introduced call-back procedure whilepreparing for the 2018 asset management plans. If the benefits are insufficient, the call-backprocedure may be dropped.


June 2015 25

Figure 5.2 – Percentage of Customers Satisfiedwith the Quality of Wastewater Services Provided

0%10%20%30%40%50%60%70%80%90%

100%

2011-12 2012-13 2013-14

Perc

entS

atisf

ied

(%)

Survey Result Target

5.7 ANNUAL RESIDENT SURVEY

Hauraki District Council carries out an annualsurvey to assess the customer satisfactionwith the quality of the wastewater serviceprovided by Council.

Customers are selected at random for theannual survey. The survey indicates a veryhigh level of satisfaction with the wastewaterservice that is being provided, with thesatisfaction levels regularly reaching theambitious 95% or greater satisfaction levelset by the Council.

This high level of satisfaction indicates thatthe general public is unconcerned about thequality of the wastewater service beingprovided. The lack of concern suggests that the Council’s stated goals of operating the wastewaternetwork unobtrusively, in a manner that protects the public health, and the environment have beenmet in the eyes of the public.

Waihi Wastewater Treatment Plant


June 2015 26

5.8 LEVELS OF SERVICE CONSULTATION

The Council endeavours to provide the required level of service that customers and stakeholders’desire throughout the district. In order to provide an efficient level of service, consultation is carried outto identify the potential customers and stakeholders and relevant issues.

5.8.1 COMMUNITY CONSULTATION

The mechanisms of consultation used for the wastewater service are the following:

· Annual Resident Satisfaction Surveys· Levels of Service Review 2008 (thorough)· Service request response levels· Water & Waste Consultative Committee

LEVELS OF SERVICE REVIEW RESULTS

The findings of the 2008 Levels of Service Review for the wastewater services are:

· Customer ValuesSeven core values were identified for wastewater activity. They are discussed in Section 5.2WHAT IS IMPORTANT TO THE COMMUNITY.

· CommentsIt is generally believed that the Districts wastewater system is working satisfactorily. Ensuringthe environment is protected, rivers are not polluted and the network does not overflow are themain concerns.

· Agreed level of service98% agreed to maintain the current rate and level of service.

· Overall rating97% were satisfied to very satisfied.

· ObservationComments across the District on environmental issues show a genuine concern forenvironmental protection and prevention. Through Council reports Council have aresponsibility to better inform the community on its prevention and mitigation measures.

The high degree of satisfaction rating was further enhanced when 50% of participants (bustours) were shown the Paeroa wastewater site in operation.


June 2015 27

5.8.2 WATER AND WASTE CONSULTATIVE COMMITTEE

The Water and Waste Consultative Committee has representatives from Hauraki District Council,Waikato Regional Council, Federated Farmers, Environmental Groups and Iwi This committee is anadvisory committee to Council and provides feedback and recommendations to Hauraki DC on thewastewater activity.

5.9 REVISION OF LEVELS OF SERVICE FOR 2015-2025The inference from the community consultation, as described in the section above is that thecommunity is happy with the level of service currently provided and does not see a need for change.

In 2014, central government introduced a requirement for local councils to report on key non-financialperformance measures. These mandatory measures were prepared by the Department of InternalAffairs. In preparation for the 2015-25 planning cycle, Hauraki’s level of service measures and targetswere assessed and where necessary revised to better align with the newly introduced mandatoryperformance measures. Outside of this alignment, the level of service performance measures andtargets were largely kept from the 2012-2022 planning cycle.

The LoS for the 2015-25 planning cycle will be consulted on during March / April 2015. The draft AMPand any changes to the LoS resulting from the community consultation will be finalized and adopted byCouncil in June 2015.


June 2015 28

Figure 6.1: Size of the Schemes operated within theHauraki District

(reported value is the population served by each scheme).

Waihi 3290

Paeroa 3070

Ngatea 1010

Kerepehi 270

Turua 210

Whiritoa 130Waitakaruru

50

6 DESCRIPTION OF ASSETS

6.1 OVERVIEWHauraki District Council owns and operates the infrastructure to take wastewater from customer’sproperties, carry it to the treatment plant, treat the water, and return clean and safe water back to theenvironment.

Infrastructure required to deliver the service includes:· customer lateral service connections between the public sewer mains and the private property

boundary (customers generally own the wastewater infrastructure within their propertyboundary);

· the pipes and manholes that convey the sewerage to the treatment plant;· the pump-stations that lift the wastewater to a higher elevation within the network to enable it

to continue its journey towards the treatment plant; and,· the wastewater treatment plants;

The 2014 valuation puts the total value of the wastewater asset within the Hauraki District at$70 million.

By far the largest asset, by dollar value, is the wastewater reticulation network. The wastewaterreticulation network comprises the gravity sewer mains; manholes; customer lateral connections;pump-stations and associated rising mains; and inspection points. Together, they comprise 85% of thetotal value of the wastewater assets. The wastewater treatment plants are the second-largest valueasset, representing 14% of the total value of the wastewater asset. The remaining 1% of the assetvalue is the resource consents.

The flat terrain in many parts of the District means that there is considerable reliance on pumpingwithin the pipe network. These pump stations need regular maintenance and are vulnerable to powersupply interruption.

6.2 INDIVIDUAL SCHEMESWITHIN THE DISTRICT

The Council operates seven treatment plants -located at Waitakaruru, Ngatea, Kerepehi,Turua, Paeroa, Waihi, and Whiritoa (describedWest to East) - to which approximately 6,050properties are connected. The sewer networkincludes 50 pump stations which are used to liftthe wastewater to a higher elevation to enable itto continue its journey towards the treatmentplant. Together the seven schemes compriseapproximately 160 km of gravity sewer mains.

Figure 6.1 illustrates the size of each of theseven schemes by presenting the populationserved by each wastewater treatment plant.


June 2015 29

6.3 WASTEWATER NETWORK ASSET DESCRIPTION

The two main reticulation networks which account for approx 70% of the District’s reticulation arePaeroa and Waihi. Each of these has pipe lengths of nearly 50 kilometres (excluding laterals).Approximately 25% of the wastewater carried from these two systems is commercial or industrial.Other systems within the District cater for predominantly domestic wastewater (between 85 –100%)with a few industrial and commercial properties being provided for.

The type of pipe material used in each system is dependent on the period it was installed. Pipematerial type ranges from Earthenware (GEW), Asbestos Cement (AC) through to Polyethylene (PE).An overview of the development of the District’s reticulation schemes is as follows:

Table 6.1: Brief history of the establishment and development of each scheme

Reticulated wastewater systems were established in the Hauraki District Townships as detailed below:

Kerepehi Hauraki Plains County Council commenced construction of a reticulated system in 1976.

NgateaHauraki Plains County Council commenced construction of a reticulated system and anoxidation pond in 1980/81.Wastewater Treatment Plant upgrade was completed 2003.

Paeroa

Paeroa Borough Council commenced construction of 40 per cent of the existing reticulatedsystem between 1925 and 1940 and the balance was laid between 1965 and 1998.The original treatment plant was built in 1982/83. There were extensions to the system in 1991covering areas outside the original approved boundaries.Construction of a new treatment plant at Irwin Road was completed in 2002.

Turua Hauraki Plains County Council established the reticulated system and an oxidation pond in1982/83. A new Maturation pond was installed in May 2006.

Waihi

Waihi Borough Council established about one-third of the current reticulated system and a smalloxidation pond in 1976.From 1984 to 1989 the remaining two-thirds of the system was established, the oxidation pondwas enlarged and a second pond was installed.A new tertiary treatment plant was installed in June 2005

Waitakaruru

A small system was established in 1963 by the New Zealand Co-operative Dairy Company toservice staff housing.A new wastewater plant and reticulation system was installed in June 2005. This included apressure sewer service to address issues associated with the disposal of wastewater effluent bysoakage using private treatment facilities. The high groundwater tables in the area precludedand/or made soil based effluent disposal systems ineffective.

Whiritoa Hauraki District Council established a reticulated system and treatment plant in 1989/90.

In addition to the areas served by the public systems, the balance of the population disposes of itssewage by private means.


June 2015 30

Figure 6.2: Sewer Main Installation Profile The majority of the reticulated network withinthe district has been installed post-1970 (Figure6.2). Therefore, relative to many other districtswithin NZ, the Hauraki District has relativelyyoung wastewater network infrastructure.

The young age of the network would supportthe view that Hauraki District Council’swastewater infrastructure is largely in goodcondition.

The younger age means that the asset has ahigh proportion of more modern pipe materialsthat can be expected to be more watertightthan those commonly used in wastewaternetworks elsewhere in New Zealand. Thewatertight pipe materials mean that ingress ofrainfall and groundwater should not be a majorissue for the District. This is discussed in somedetail in Section 7 – Demand Management.

The pipe material distribution is presented inFigure 6.3. This shows that by far the longestlength of pipe material used within the district isPVC. PVC is modern sewer pipe material that isrelatively inert and all indications within the industryto date are that its life expectancy is 100 years plus.Because of the long life and relatively young age ofthe PVC pipes in the district no PVC is forecast torequire renewal within the next 30 years.

However, the second longest material is asbestoscement. This represents a risk to the district,because asbestos cement is expected to have arelatively short lifespan of between 60 and 90 years.Hauraki DC addresses this issue, by proactivelymonitoring its asbestos cement pipes. The renewalforecasts and financial implications of renewing theasbestos cement pipes show that increasingamounts of asbestos cement pipe will needreplacing within the 30-year forecasts of this AMP.The renewals section of this AMP shows that thecost and volume of this work is not prohibitive forthe District.

Figure 6.3: Water Main Material Profile

-

10,000

20,000

30,000

40,000

50,000

60,00019

00-1

910

1910

-192

0

1920

-193

0

1930

-194

0

1940

-195

0

1950

-196

0

1960

-197

0

1970

-198

0

1980

-199

0

1990

-200

0

2000

-201

0

2010

-201

4

Leng

thCo

nstr

ucte

d/R

enew

ed(k

m)

0

10

20

30

40

50

60

70

80

Unkn

own

PVC

Asbe

stos

Cem

ent

Gla

zed

Eart

henw

are

Poly

ethy

lene

Alka

then

e

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Line

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Rein

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Iron

Stee

l(al

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Leng

th(k

m)


June 2015 31

6.4 WASTEWATER TREATMENT ASSET DESCRIPTIONThe size, type of treatment, and take-up of consented discharge are described in the table below.

Table 6.2: Treatment Type and Size of the District’s Water Treatment Plants

AREA

AVERAGESYSTEMVOLUME(PER DAY)

RESOURCECONSENTPERMITTEDDISCHARGE(PER DAY)

CO

NN

EC

TED

PR

OP

ER

TIE

S

TREATMENT PROCESSDESCRIPTION

Kerepehi 190 m³ 834 m³ 210 Wastewater is treated in twooxidation ponds and thendischarged to Awaiti Canal.

Ngatea 300 m³ 6050 m³ 640 Wastewater is treated in a singlecell aerated oxidation pond, anddrip fed onto two gravel beds priorto being discharged to landadjacent to the Piako River.

Paeroa 2,650 m³ 4000 m³ duringnormaloperatingconditions, or5800 m³ whenpond levels highdue to wetweather

2,230 Wastewater is treated in threeaerated lagoons, drip fed ontoeight gravel beds, disinfected byUV, and then discharged to landadjacent to the Waihou River.

Turua 100 m³ 250 m³ 170 Wastewater is treated in a singlecell aerated oxidation pond,through a series of maturationcells with gravel filters, and thendischarged to land adjacent to theWaihou River.

Waihi 1,480 m³ 4000 m³ 2,240 Wastewater is treated in a two-stage oxidation pond, prior tonutrient removal in an IAF tertiaryplant, UV treated, and thendischarged to the land adjacent tothe Ohinemuri River.

Waitakaruru 20 m³ 75 m³ 55 Wastewater is treated inadvanced septic systems at eachproperty, pumped to the treatmentplant where it is further treated byre-circulating textile reactors, UVtreated, and then discharged toland adjacent to the MaukoroCanal.

Whiritoa 60 m³ 392 m³ 490 Wastewater is treated in afacultative aerated pond, followedby a storage pond from which it isirrigated onto an 8 ha eucalyptusplantation.

TOTAL 4,800 11,350 6,050


June 2015 32

Over the past 10 years, the Council has completed a major programme of consent renewals andupgrading of wastewater treatment plants at Paeroa, Waihi, Ngatea, Kerepehi and Turua. A newwastewater collection and treatment system has been installed at Waitakaruru. The recent upgradesmean that the District’s wastewater treatment plants are treating water to modern standards. As such,when the wastewater treatment Plant discharge consents come up for renewal over the next six years(Table 9.4), Hauraki District Council anticipates that the District’s wastewater treatment plants will beable to meet the conditions imposed by the new consents without significant upgrade. On this basis,Council has not forecast large expenditure to lift the treatment standard of the District’s wastewatertreatment plants within the next 30 years.

DISPOSAL OF SEPTIC TANK EFFLUENTThe Council maintains a facility for tanker trucks to dispose of septic tank effluent, and monitors thevolume of this waste which is delivered to the network. The current system appears to be suitablysized at least for the period of this Plan.

6.5 ASSET REGISTERS

Council’s asset management system, AssetFinda TM, stores all primary asset information into onesystem.

All asset information is stored in an asset hierarchy where it can easily be accessed by query basedon asset activity type, asset sub type, location and down to individual asset level. More detailedinformation regarding each asset is captured in attribute sets linked to each asset e.g. size, material,location, length etc. Additional asset data such as asset criticality, condition ratings, valuationinformation, spatial and metadata and are also stored against each asset where applicable.

Inspection data, failure data, performance and maintenance records and history will in due course alsobe captured. These records are currently managed through manual processes and captured by othersystems and processes. The asset management improvement programme describes a project tocreate an Asset Criticality Management database documenting asset condition, and inspection data.This is described in greater detail within the Risk and Lifecycle sections of the AMP.


June 2015 33

6.6 FINANCIAL DESCRIPTIONThe wastewater assets were valued by Opus International Consultants as at 1 July 2014. Bothunderground infrastructure assets e.g. pipes, manholes etc. and above ground assets e.g. treatmentplant assets, pump stations, structures etc. have been valued.

The following tables provide the Optimised Replacement Cost (ORC) and assessed Fair Value(ODRC) for the wastewater systems and assets, as determined by Opus consultants.

Table 6.3: Wastewater Asset Valuation as 30 June 2014

ASSET QUANTITYOPTIMISED REPLACEMENT

COST 1

($ million)

FAIR VALUE 2

($ million)

TreatmentPlant 7 10 4.6

GravitySewers 128 km 33.7 19.7

Manholes 2,176 9.3 5.5

Laterals 6,152 8.1 5.1AerialCrossings 10 < 0.00 < 0.00

InspectionPoints 178 0.5 0.2

Rising Main 30 km 7.8 5.9

Consents 7 0.4 0.1

Total 70 41

1. Optimised replacement cost assesses the replacement cost of equivalent performance assets at the date ofvaluation.

2. Fair value is based upon the optimised depreciated replacement cost (ODRC). It defines the fair value ofassets as the gross current replacement cost less allowances for physical deterioration, optimisation forobsolescence and relevant surplus capacity.


June 2015 34

7 DEMAND AND GROWTH

7.1 FUTURE DEMAND

The population in the Hauraki District is projected to remain virtually static over the next 10 yearsfollowed by a slight decline to 2045. However the lack of population growth in the district populationdisguises changes that are expected to occur in the profile and spatial distribution of the population.

Most significant is the change in the age profile within the district, characterised by a markedly ageingpopulation and matched by a decline in the population below 64 years of age. The changing ageprofile of the district’s population is expected to affect the average household size which is projected tocontinue to reduce over the long term.

From a wastewater perspective, the decrease in average household size is likely to increase wateruse and hence waste water generation per capita. Studies indicate that households with a highernumber of people use their water more efficiently per person, as daily tasks such as dishwashing andclothes washing require a similar daily volume of water irrespective of the number of people living inthe household.

Projections also indicate that the majority of dwelling growth is likely to occur in the form of lifestyleproperties outside of existing settlements. As the rural community is not serviced by a publicwastewater service, this growth is not forecast to have any significant increase demand on any of thedistrict’s public wastewater schemes.

The cost of providing the rural community with a public wastewater service with today’s materials andtechnology would be uneconomic. Therefore unless a new, ground breaking technology is developedin the future, it is safe to assume that the rural community will not be serviced in the future.

It is considered that future technological improvements are more likely to improve private wastewatersystems than lower the cost of piped public systems. Improvements in private wastewater treatmentsystems would further preclude a public wastewater service from being viable for rural customers.

RAINWATER AND GROUND WATER INFILTRATIONAs wastewater networks age they become less watertight. This is a natural progression for a gravitysewer and reasonable levels of rainwater and ground water infiltration are accepted within agedwastewater sewers.

Hauraki DC, along with numerous other councils, have concluded that it is cheaper to treat reasonableamounts of rainwater and groundwater ingress than the alternative, which is to repair or renew thenetwork to stop the water getting in. It also follows that the cheapest life-cycle option is to designsufficient capacity into the network so that when rates of rainwater and groundwater infiltrationincrease as a result of the deterioration of the asset, the network still has sufficient capacity to copewith the infiltration. Hauraki District Council factors future deterioration into its new and renewedwastewater infrastructure.

North Shore City Council (NSCC) had an advanced wastewater infiltration program that formed a sub-project within their larger wastewater network upgrade project that called ‘Project CARE’. ProjectCARE ran between 1998 and 2008. Hauraki District Council is applying the lessons learned fromNSCC’s wastewater infiltration program in the management of infiltration within the District2.

2 Several other leading wastewater service providers are also using or have used findings from North Shore City Council’sinfiltration program. These organisations include: the Water Services Association of Australia, Sydney Water, Watercare, and inthe USA, The East Bay Municipal Utility District.


June 2015 35

NSCC’s program then ensured efficient use of the renewals spend by assessing the network’s abilityto cope with the measured infiltration. Because of the high cost of repair / renewal to prevent andreduce rainwater and groundwater infiltration; renewal work was only carried out when no othercheaper alternatives exist. Under the assessment criteria, infiltration was not regarded as excessive,unless it consumed all of the required capacity for the normal operation of the wastewater network.

Hauraki’s flow gauging program has identified the wastewater catchments with the highest rates ofrainwater and groundwater infiltration. Hydraulic models will be used during the next three-yearplanning cycle to assess the capacity of the network to cope with current and future rates of infiltration.

Sections of the network that have reached or will soon reach full capacity due to high rates ofinfiltration will be scheduled for renewal and/or upgrade.

Hauraki will flow gauge the wastewater networks on a 10-year rolling cycle. This rolling programmeensures that future demand from rainwater and groundwater infiltration is managed in a manner thatprevents overflows from the wastewater network.

INDUSTRIAL WATER USECouncil is actively promoting the Hauraki District to industry. Industrial users, depending on the natureof the industry, can be very large users of water. It would not be uncommon for a ’wet’ industry toconsume 1,000 m3 of water per day. To give some idea of scale, this volume of water, if entirelyreturned to the sewer, would represent roughly 40% of the daily inflow into the Paeroa wastewatertreatment plant on a dry day; and 120% of the Waihi wastewater treatment plant inflow.

Because a single wet industry customer can increase demand by such a large percentage, wetindustry represents an unknown area of risk in respect of the growth in demand within the district.

However, the cost of increasing capacity to meet future industrial demands can be passed on to theincoming industry. Industrial applications to connect to the public wastewater network are dealt withon their commercial merits and the unquantifiable risk surrounding unknown future industrial demandcan be transferred away from the community and onto the prospective industrial customer. This riskthen no longer needs to be managed as a part of current asset management planning processes.

LEVEL OF SERVICE INCREASEAs discussed in section 5.8, the most recent detailed survey of community satisfaction with the levelsof service being provided indicated that 98% of the community wish to maintain the current rate andlevel of service provided by Council. This strong support for the levels of service to be maintained atcurrent levels indicates that future demand from the community for higher levels of service is unlikely.

It is considered more likely that increased levels of service will be mandated by central or regionalgovernment. The increased treatment requirements of the New Zealand drinking water standards(DWSNZ v2008) are a recent example of this. Changes of this nature are, however, usually wellsignalled several years in advance by central government. Hauraki is currently unaware of anyintentions by central government or the regional government to mandate any changes to thewastewater treatment standards required within the District.

Containment StandardsAs described in greater detail in Section 7.2, the Waikato Regional Council currently has a highwastewater containment standard that is more stringent than standards recently developed in otherregions after sound analysis of environmental impacts versus costs. While the wastewater networks inthe Hauraki District due to their young age currently meet the containment standards with littleexception3, , as the networks degrade with time, it is unlikely that they will continue to do soindefinitely.

3 A small area serving a total of 185 houses does not currently meet this requirement. This is discussed in detail in Section 7.2.


June 2015 36

Intrinsic within the renewals forecasting carried out by Hauraki District Council, is the assumption thatthe current extremely high containment standards required by the Waikato Regional Council will berelaxed to similar containment standards required within the Auckland Region at some stage within thenext 30 years.

If the wastewater network containment standards are not relaxed sometime within the next 30 years,then the pipe and manhole lives assumed within current forecasts will need to be shortened. This willfollow through to higher annual depreciation rates, and higher operating costs of the wastewaternetwork for the community.

THE EFFECT OF CLIMATE CHANGE ON THE WASTEWATER NETWORK DEMANDResearch undertaken by the University of Waikato (2011) indicates that, in the context of the WaikatoRegion, Hauraki District’s exposure to climate change events is largely in terms of future extremerainfall and drought conditions. This means that the District is expected to experience both anincreased risk of heavy or prolonged rainfall and also extended periods of reduced rainfall. Suchevents have implications for the volume of wastewater that will be conveyed and treated.

Prolonged RainfallProlonged rainfall impacts the wastewater network within the district by increasing groundwater levels.Raised groundwater levels increase the chance that groundwater will find its way into minor defectswithin the pipe network. If this occurs, the base flow of the wastewater network will increase duringwinter months.

Increased base flow has the effect of consuming the latent capacity within the network and treatmentfacilities. To address this, Hauraki District Council has implemented a program where wastewatercatchments within the district are monitored on a 10 year rolling cycle. This enables the Council totrack any increase in groundwater infiltration over time.

The groundwater flows are then assessed on a calibrated hydraulic model, and any implications interms of the latent capacity being consumed by the groundwater ingress can be identified. Plans toaddress any problems caused by the consumption of latent capacity by groundwater can then bedeveloped.

The flow gauging program carried out by Council has already identified one small area within theWaihi township and a second small area within the Paeroa Township which have excessivegroundwater flows. The affected areas are small in size, within the extents of circa 200 houses (thecombined total of both areas).

Regardless of the small size of the area, Council has programmed a project with the target completiondate within the next three years to investigate the source of these flows as a part of the ongoingmaintenance of the network. As further information comes to hand, Council will assess options toaddress these flows. Outside of these two small areas, flow monitoring carried out by the Council hasnot shown excessive groundwater infiltration.

Heavy RainfallHeavy rainfall poses a greater threat to achieving level of service targets than groundwater. If heavyrainfall is able to get into the wastewater network, it can quickly overwhelm the sewer system, causingthe network to overflow.

The same flow monitoring and hydraulic modelling studies used to monitor groundwater infiltration willalso be used to monitor for any problems caused by heavy rainfall entering the wastewater network.The 10 year rolling monitoring program that has been implemented will help enable Council to identifyany deterioration in the water tightness of the network, and areas where heavy rainfall ingress couldbecome problematic in the future.


June 2015 37

Currently, Council is aware of a small area of the Paeroa township (circa 185 houses) that has aproblem with heavy rainfall entering the sewer. Council has programmed a project to furtherinvestigate and correct this situation. The project is scheduled for completion within the next six years.

Longer, more Severe and Frequent DroughtPeriods without rain during summer months are expected to become more prolonged as a result ofclimate change. There are no foreseen implications of increased drought on the wastewater activity.

The Kerepehi Floating Wetlands

The plants in the floating wetland adsorb nutrients from the wastewater prior to discharge back into the environment.


June 2015 38

Figure 7.1: Urban Water Use per Capita vs.Demand Management Targets

The values presented are averaged over theFinancial Year 1 July to 30 June. They include allurban water use by residential, commercial, and

industrial water users.

100

200

300

400

2011-12 2012-13 2013-14

PerP

erso

nW

ater

Cons

umpt

ion

(L/p

erso

n/da

y)

Urban Water Consumption

Urban Water Use Target

7.2 DEMAND MANAGEMENTDemand on the wastewater network is comprisedof two sources of flow:

1. The return to sewer from potable waterused within residential, commercial, andindustrial premises; and,

2. Rainwater and groundwater entering thewastewater network.

DEMAND MANAGEMENT TARGETS

Council has set demand management targets forboth sources of flow. We describe these below.

Demand from Return to Sewer of Potable WaterThe volume of sewerage entering the network fromresidential and commercial premises is largelydictated by the volume of potable water consumedon the property. In this regard, the best way toreduce and manage demand for this source ofwastewater is to manage the volume of potablewater consumed.

In this regard, Hauraki District Council has set a demand management target for the volume of potablewater used per capita within the district. Described in detail within the Water Supply AMP, the target is:

· Urban water use:o Average annual water consumption within urban communities is less than 300 L per

person per day.

Commercial use is encapsulated within this target. Benchmarking the urban water use across otherdistricts in NZ, shows that urban water use within the Hauraki District is low to normal when measuredon a per capita basis. Because of this, Hauraki’s demand management targets are static, i.e. we donot see the need for a ‘sinking lid’ reduction target.

Water usage data over the past three years shows that both the urban water use targets are beingmet. Over the past three years the water use per person has increased slightly. Council is aware ofthis issue and is monitoring it to see whether it is part of a longer term trend, or simply a short-term blipin usage patterns.

The volume of sewerage returned to the sewer from commercial and industrial use does not have adirect correlation with the volume of potable water consumed. The return to sewer from industry isentirely dependent on the industrial activity been carried out on the premise. As described earlier,commercial connections to the wastewater network of this nature are assessed on their commercialmerits. Commercial discharge into the wastewater network is managed through the Council’s tradewaste and wastewater bylaws.

Rainwater and Groundwater infiltration Targets

The Waikato Region is different to several other regions in that overflows from the wastewater networkare a prohibited activity under the Regional Plan. This means that they must never occur, which is avery high standard. In contrast, in Auckland, Watercare’s wastewater network has consents permittingoverflow. Those consents require Watercare to work towards lifting the performance of the wastewatersystem so that it overflows no more than 2-times per year, on average. Where the cost of achievingtwo overflows per year is considered uneconomic, Watercare can propose a ‘best practicable option’for consideration. The ‘best practicable option’ has been introduced to ensure that the central


June 2015 39

Hauraki’s demand management strategy for rainfalland groundwater ingress is entirely performance

based. The Council will accept ingress of rainwaterand groundwater, provided it does not cause seweroverflows nor exceed consented discharge volumes

for the treatment plants.

government’s directive that the cost of environmental management is balanced against rationaleconomic decisions has, and can be met.

HDC has encapsulated the Waikato Regional Plan within its LoS design targets, in that the LoStargets stipulate that the wastewater network will comply with all relevant legislation. Relevantlegislation includes the Regional Plan. Therefore, the design target for rainwater and groundwater thatis imposed upon the Hauraki District Council by the Waikato Regional Council is that the network willnever overflow. The cost implications for the community of the more stringent standards imposed bythe Waikato Regional Council (as opposed to the standards required in Auckland, for example) havenot yet been calculated by Hauraki DC.

Studies carried out by Hauraki District Council and other councils within New Zealand have repeatedlyconcluded that it is cheaper to treat rainwater and groundwater that enters the sewer network than it isto stop it entering. Other studies have shown that it is impossible to stop all of the rainwater and/orgroundwater entering the sewer through network renewal using trenchless sewer techniques. Thesestudies concluded that after a completely renewing a catchment using trenchless technologies, 30-60% of the original ingress still remained.

Ingress of rainwater and groundwater is therefore accepted as an inevitable part of a publicwastewater system by Hauraki District Council. The demand management target for rainwater andgroundwater infiltration is to manage the amount of infiltration such that the wastewater network doesnot overflow, and that the wastewater treatment plants do not exceed their consented dischargevolumes.

DEMAND MANAGEMENT

Demand from Return to Sewer of Potable WaterAs described in section 7.1 Future Demands,above, demand management of the return ofpotable water to the sewer is not seen as a majorissue within the district.

Flow gauging studies have shown that the District’swastewater networks have capacity well in excessof that required to convey the current and futurevolumes of sewerage originating from potablewater use.

The demand for sewer capacity from the potablewater return to sewer is controlled through the water supply demand management practices, which aredescribed within the Water Supply AMP.

Demand from Rainwater and Groundwater IngressIt is a well-known fact that over time increasing amounts of rainwater and groundwater will enter sewersystems. There are two primary mechanisms for this:

i. The first is that the number of illegal connections of stormwater into the wastewater networkincreases with time. These usually occur when homeowners (usually unknowingly) connecttheir stormwater systems into the wastewater sewer. These illegal connections occur as aresult of the kiwi do-it-yourself attitude; with residents seeking to address stormwater issueson their private property.

ii. The second mechanism is that cracks and gaps in pipe joints form over time in the publicwastewater network. These cracks form primarily as a result of ground movement andinstallation defects that manifest themselves with the passage of time. Roots of some treesare capable of breaking apart older (non-plastic based) pipe materials. Where there is a weakpoint in the system rainwater or groundwater will enter the network.


June 2015 40

Hauraki DC has implemented a rolling 10 year program to flow gauge and model the wastewaternetworks. Through this program, Hauraki:

· Is able to assess the hydraulic capacity of the network, throughout the entire network;· Is able to assess how much of the network capacity is being used by demand from:

o the return to sewer of potable water;o groundwater infiltration; and,o ingress of rainfall during heavy rainfall.

· The rolling nature of this program enables any increase in the volume of groundwater andrainwater entering the sewer network to be tracked over time.

· The calibrated hydraulic models enable potential future problems surrounding lack of capacityto be identified before they occur, and solutions implemented to address them.

The flow monitoring has shown that with little exception, the wastewater network within the district is ofgood condition, and performing well. Rainwater and groundwater ingress is not currently a large issuefor the district. There are exceptions to this statement, however. These are the three problem areasalready mentioned (two small areas where volume of groundwater her house is high, circa 200houses, total; and one area where heavy rainfall is causing problems, circa 185 houses). Council hasprojects programmed to further investigate and correct the excess groundwater and rainfall in thesethree areas.

The flow monitoring of the wastewater networksthroughout the district has shown that with little

exception, the wastewater network within thedistrict is of good condition, and performing well.

Rainwater and groundwater ingress is not currentlya large issue for the district.


June 2015 41

7.3 POPULATION PROJECTIONS

7.3.1 HISTORIC POPULATION NUMBERSOver the past 20 years, the Hauraki District has had a small, but steady, increase in population.However, the 2001 census showed a decrease in population which goes against the trend in earlieryears. During November 2010 the Kaiaua area was incorporated into Hauraki district when theAuckland City was amalgamated. The population in 2001 was 16,764. In 2006 it was 17,751 (Kaiauaincluded) – an increase of 5.9% in Hauraki District population.

The table below provides the population projections by Statistics NZ (Kaiaua included).

Table 7.1 Population measured over the past three Census

Review of this table shows that the usually resident population of the district is estimated to be around18,280 people. The population within the district has grown by only 300 people over the past 12 years(0.1% per year). All of the growth occurred in the period between 2001 and 2006, before a minordecline over the past seven years.

Over the same period, more than 1,100 new dwellings have been built an increase of around 1.1% or92 dwellings per year. This is reflective of the shift towards lower occupancy per dwelling within thedistrict discussed in Section 7.1.

7.3.2 FUTURE POPULATION FORECASTSTable 7.2 below presents the population forecast for the Hauraki District. The usually residentpopulation is forecast to decrease by 230 people over the next 30 years. The total number of dwellingsis forecast to increase by approx 1,100. In summary, the population is forecast to essentially stay thesame, however, due to a move towards lower occupancy per household, a there is a forecast 13%increase in the number of dwellings within the district.

Table 7.2: Population Projections


June 2015 42

8 RISK MANAGEMENTRisk is managed in a manner that enables the key business objectives and community outcomes to beconsistently achieved. Potential risks to the wastewater services and assets are identified, analysed,and mitigation strategies developed.

The diagram below outlines the process Council follows to ensure risk management procedures aresuccessfully applied to wastewater service’s significant and critical assets.

Figure 8.1: Risk Management Framework & Process

Establishing thecontext

Risk Assessment

RiskIdentification

Risk Analysis

Risk Evaluation

Risk Treatment

Com

mun

icat

ion

&Co

nsul

tatio

nM

onitoring&

Review

Analyse & TreatResidual Risks

This risk management section of the Asset Management Plan:

· Discusses the context within which the risks must be evaluated.· Identifies and prioritises potential risks to the wastewater services and assets.· Analyses the consequences and likelihood of those risks occurring.· Describes the treatments and controls used to mitigate those risks.

Residual risks remaining after the implementation of risk control strategies are also analysed and theeffectiveness of treatment options and control processes evaluated. Risks are categorised into:

· Very high;· High;· Medium; or· Low.


June 2015 43

In early 2005 Council drafted and promulgated an Assessment of Water and Sanitary Services underSection 125 of the Local Government Act 2002. The assessment analyses the risks that may threatenthe successful provision of the service and includes mitigation plans. This was reviewed in 2014 aspart of the LTP process.

In 2008 a structured risk analysis and prioritisation exercise following Risk Standard AS/NZS4360:2006 was performed for wastewater assets and services to guide the preparation of plans andstrategies to minimise the likelihood and mitigate the impacts associated with identified risks. TheWastewater Risk Analysis exercise can be accessed in Council’s document management system,Fred – DM no. 695336. This work has been reviewed as a part of the 2015-25 planning cycle andfound still relevant for the 2015-planning cycle.

In terms of the HDC AM Policy4, parts of the Risk Management activity for the wastewater activity areto be carried out at the Core Plus level, as detailed in Table 8.1 below. All other asset managementactivities require only the Core level of asset management. Council’s AM Policy requirements for RiskManagement are detailed below:

Table 8.1: HDC Policy – Risk Management Levels of Asset Management

RISK MANAGEMENT ELEMENT LEVELS OF ASSETMANAGEMENT REQUIRED NOTES

Identify critical assets Core

Identify significant negative effects Core

Legislation Requirement for risk met Core

Identify associated risks and risk managementstrategies for critical assets Core

Recognition & application of principles ofintegrated risk management to assetsdemonstrated

Core - Plus

Corporate approach

Apply standards & industry good practice(e.g. NZS4360 and Local GovernmentHandbook)

Core - Plus

Risk Management integrated with otherCorporate processes(Lifelines, Disasters Recovery, ContinuityPlans)

Core - Plus

Integrate with maintenance and replacementstrategies Core – Plus Extension of criticality

practice

4 Based on the study performed by Waugh Infrastructure Management – Selecting the AppropriateAsset Management Level (DM 526153).


June 2015 44

8.1 FOCUS ON CRITICAL ASSETSThe identified criticality of assets is recorded in the AssetFinda Asset Management (AM) system. Thecriticality methodology is based on work by Waugh Infrastructure Management; the grading criteriahave been developed by Hauraki District Council.

The criticality criteria are based upon the potential unmitigated consequence, if the asset were to fail.Assigning the criticality based upon the unmitigated consequence serves to ensure that assetmanagement practices provide appropriate warning to manage and mitigate these risks.

The criticality grading criteria are related to the number of people directly and indirectly affected; andthe potential duration of supply interruption if repair work were to experience difficulty. The criticalitygrading criteria are presented below in Table 8.2.

Table 8.2 Asset Criticality Grading Criteria

AssignedCriticality

Potential Unmitigated Consequence of Failure(Assuming that repair work experiences difficulty)

Very high criticality Failure of the asset is unacceptable.

High criticality Significant and widespread consequences of failure, such as:· Servicing 500 or more people with potential for a repair to take 8-hours or more;· Potential disruption to the activities of 1000 or more people for more than 8-hours;· Significant potential for damage to multiple buildings.

Medium criticality More than minor consequences of failure, such as:· Servicing 100 or more people with potential for a repair to take 8-hours or more;· Servicing 500 or more people with potential for a repair to take 4-hours or more;· Potential disruption to the activities of:

o 100 or more people for 8-hours or more;o 500 or more people for over 4 hours;

· Significant potential for damage to one or more habitable buildings.

Low criticality Isolated impacts from failure, such as:· Loss of supply to less than 10 people for 8-hours or more;· Potential disruption to the activities of less than 100 people or more for 8-hours or

more;· Low potential to damage buildings.

Very low criticality Minimal impacts from failure, such as:· Loss of supply likely to be restored in less than 4-hours;· Minor or no disruption to the community;

Asset managers and operational staff review the criticality of the district’s wastewater infrastructureassets against these criteria on a 3-yearly basis, as a part of the asset management planning cycle.

Development of a database to manage the mitigation of risks associated with critical assets isprovided for on the asset management improvement programme. It is envisaged that the databasewill:

· Store the mitigation strategies for each of the very high, high, or medium criticality assets.Mitigation strategies are not developed for low and very low criticality assets.

· Be used to track and schedule proactive condition assessments for the very high and highcriticality assets.

· Document the assessed time to repair for very high, high, and medium criticality assets; and,· Document proactive and opportunistic condition based sampling results.

The implementation of an Asset Criticality Management database, and the populating of mitigationstrategies for very high, high, and medium criticality assets are both scheduled for completion beforeJune 2018 in the AMP improvement plan.


June 2015 45

8.2 RESIDUAL RISK

The residual risk is that which remains after mitigation measures have been implemented. Theresidual risk strategy is to maintain senior management and relevant staff awareness of the residualrisk.

Once the planned Asset Criticality Management database has been populated with the mitigationstrategies for Very High and High criticality assets, the Asset Management Manager will prepare aresidual risk report.

The residual risk report will be updated three yearly, in line with the three year planning cycle. Thisreport will be provided to the executive management team and the utilities manager, assetmanagement staff; senior engineering staff both in the office, and in the field.Key points will be summarised in subsequent asset management plans.

8.3 RISK MANAGEMENT STRATEGIES

A risk analysis has considered events related to business risk, environmental risk (weather); and assetrisk. Table 8.3 shows the highest priority risk events, the analysis, risk priority, vulnerability or flow-oneffects and their mitigation strategies.

The risk mitigation strategies and procedures still require development and documentation.

Strategies likely to be used for mitigating specific risks are the following:

· Reduce probability of failure by capital works (renew, provide redundancy, upgrade),maintenance expenditure, operational documentation, training, etc.

· Reconfigure the network to minimise disruption.· Reduce the impact of a failure by emergency response plans.· Insure against the consequential costs. Various insurance products are available to insure

against perils like fire, theft, vandalism and even environmental disasters like earthquakes(e.g. Standard Material Damage (SMD)). Other products will provide cover against risks suchas public and professional liability, consequential loss (e.g. a crash due to traffic lightsmalfunctioning) etc. Council is also part of the LAPP5 fund that may assist when acatastrophic event damage infrastructure not covered by MD policies.

· A combination of the above.

8.3.1 EMERGENCY FAILURES

Asset failures are either logged by internal staff with the wastewater utilities manager, or if identified bythe public are recorded in the Customer Service Request System and allocated to the appropriateservice person. Response to the failure is determined by the priority grading of the incident. Thepriority grading assigned to customer requests is detailed in Section 5.6. Council’s customer servicestaff are trained to assess the priority of an incident, and the required actions to take according to thepriority of the request.

True emergency failure will receive a priority grading of ‘Emergency’; Urgent; or ‘Priority’, according tothe Council’s prioritisation grading system. Such incidents are forwarded directly to the field staffmanager to ensure the fastest possible response. The required response times to the level of serviceinterruptions are provided in the levels of service section, Section 5.6.

5 Local Authority Protection Programme which is a mutual fund that will contribute to council’s responsibility of paying 40% ofdamages in case of a catastrophic event destroying significant sections of reticulation and infrastructure not covered bystandard material damage insurance policies.


June 2015 46

8.4 CATASTROPHIC EVENTSIn the event of a larger scale service interruption e.g. due to a catastrophic event like an earthquake,council has an Operative Civil Defence and Emergency Management Plan which, will see theestablishment of an emergency management headquarters within the Hauraki District or the ThamesValley Combined District.

In recent years emergency conditions have resulted from the effects of weather (e.g. flooding, wind).However, the Operative Plan caters for operational systems in response to all possible civil defenceemergencies including earthquake, fire, hazardous substances, volcanic eruption and subsidence.

The Council is an active member of the Waikato Civil Defence Emergency Management Group andthe Thames Valley Combined Civil Defence Committee, which includes all local authorities within theWaikato Region including the Waikato Regional Council.

This group was established under the Civil Defence Emergency Management Act 2002 (CDEM Act).The CDEM Group's members’ work together to manage responses to Waikato’s hazards so that thecommunities face acceptable levels of risk. Arrangements for managing emergencies in acoordinated, multi-agency manner are specified in the Waikato CDEM Group Plan. As an integratedpart of the Group Plan, this local arrangement specifies the unique local operational arrangements ofthe Hauraki District Council.

HDC also has a Pandemic Response Plan in operation. The details of this plan mostly directed at theconsequences and impact of swine flu pandemic.

8.5 RISK MANAGEMENT AT CORPORATE & SERVICE LEVEL

The risk framework used to analyse and to prioritise risks is implemented at a corporate and servicelevel. Risks across the total spectrum from catastrophic events e.g. earthquakes, tsunami’s etc. tomore regular occurring risks with smaller impacts e.g. pipe burst, flooding etc. are analysed using thesame framework. The risk framework is also used to analyse risks across most asset activity arease.g. water supply, wastewater, solid waste etc.

Risks are identified and analysed for the business risks at all organisational levels (strategic, tacticaland operational). The Risk Register, Table 8.3, identifies the very high and high priority risk eventslinked to business risks, each asset group and high critical assets.

The table distinguishes between business risks, which are corporate level risks that impact on councilbusiness as a whole; and asset risks which focus on specific risks affecting designated groups ofassets e.g. treatment plants or reticulation.


June 2015 47

8.6 LEGISLATIVE REQUIREMENTS FOR RISK MANAGEMENT

Risk management processes, analysis and strategies have been developed in line with risk standardsnamely AS/NZS 4360:2004 Risk Management Standard and AS/NZS 31000:2009 Risk Management –Principles and Guidelines. AS/NZS 5050:2010 Business Continuity Management is the neweststandard and is yet to be incorporated in the business processes of the organization.

8.7 INTEGRATION WITH MAINTENANCE & REPLACEMENTSTRATEGIES

The management and mitigation of risks forms a key part of the Lifecycle Management Strategy. Thisis discussed in detail within the life-cycle Management section of this asset management plan.


June 2015 48

8.7.1 Risk Register

The table below shows a summary of the Wastewater Risk Register and Control Schedule for with unmitigated risks assessed to be Very High or High prior toMitigation.

Table 8.3: Risks for the Wastewater Activity deemed Very High or High prior to Mitigation6

RISK TYPE RISK EVENT WEAKNESS ORVULNERABILITY

MITIGATIONSTRATEGY

STRATEGY TODEVELOP

RESIDUALRISKPRIORITY

LEVELS OF SERVICE IMPACT

Regulatory Changingenvironmentalstandards

Increased capitaland operatingexpenditure tocomply as newconsents requiremore rigorousconditions

Maintain watch onpolicydevelopment

HIGH Potential for increased costs for community ifenvironmental standards are tightened (the wastewaterservice is affordable).

Business /Management

Sub-standardoperation ofassets

Assets deliverbelow capacity

Follow assetmanagement planstrategies inoperations andmaintenanceactivities.

LOW

The network may fail to meet overflow targets.

Gradual decline in the monetary efficiency in thewastewater activity (decreased value for money).


Ad-hoc/reactivedecisionmaking

Focus on long termobjectives lost

Follow assetmanagement planstrategies indecision makingprocesses.

LOW

Slow deterioration of level of service delivered tocustomers.



Long-termfinancialplanningdeficient

Insufficient fundingprovision andpossible ratesincrease or deferredexpenditure

Assetmanagement andLTCCPdevelopment

Furtherrefinement ofasset lifeforecasting; andasset values

MEDIUM The wastewater services are affordable

6 Complete Wastewater Risk Analysis in DM 695337


June 2015 49


MITIGATIONSTRATEGY

STRATEGY TODEVELOP



Financial Issues Errors infinancialforecasting

Pressure on Capexand Opex and LOSdecline or ratesincrease

Certified valuersused. Workaudited.

Furtherrefinement ofasset lifeforecasting; andasset values



Flaws indesign /construction ofassets

Capacity to deliverlevel of service and/ or additional costincurred or LOSdecline

Goodinfrastructuredesign standards.

Good constructionsupervision.

LOW

Slow deterioration of level of service delivered tocustomers.



ResourceConsents notgranted orconditions notmet

Environmentaldamage andpossible legal action

Monitor and reporton compliancewith consents.

Programmedreporting/renewal MEDIUM Legislative compliance.

Operation andMaintenance

Power supplyfailure

Inability to pumpwater within thereticulation networkresulting in overflow

Backupgeneration LOW The wastewater network will be operated in a manner

that protects the public from the risk of disease.

WastewaterActivityManagement

Requiredrenewal ormaintenancedeferred andnot recorded

High unplannedmaintenance costsand increasedservice delivery cost

Development of astructuredRenewals andMaintenanceProgramme.

Renewals andMaintenanceProgramme


WastewaterActivityManagement

Deficient orinadequateincidentresponseplanning

Slow response toemergency event,reduced LOS andpossible healthissues

Staff trained andproperlyequipped.

Emergencyresponse plansto be developedand practiceevents to be heldwith contractor.

MEDIUM The wastewater network will be operated in a mannerthat protects the public from the risk of disease.


June 2015 50


MITIGATIONSTRATEGY

STRATEGY TODEVELOP



AssetManagement

Asset RiskRegister andRisk Plan notimplemented

Asset failure due tounmanagedidentifiable risk.Regulatory actionpossible; additionalcosts incurred

Completeregister andimplement riskplan


The wastewater service is operated in compliance withregulatory requirements.

Reticulation Subsidencedue to mining

Pipe breaks,increasedgroundwaterinfiltration;overflows, andpossible publichealth risks.


WastewaterTreatmentPlants

Flood Plant inoperablewith untreatedwastewaterdischarged andpossible publichealth risk

Emergencyresponse plansto be developedand practiseevents to be heldwith contractor.

MEDIUM Protection is provided to the Community and theEnvironment

Pump Stations Flood Pump switchgeardamaged andsewer overflowswith possible publichealth risk

Emergencyresponse plansto be developedand practiseevents to be heldwith contractor.


Pump Stations Pump controlcomponentfailure

Pump inoperable,sewer overflowsleading to publichealth andenvironmental risk

Assess criticalsparesrequirement


WastewaterTreatmentPlants

Toxicsubstancedisposed of

Disposal of engineoil, chemicals, orother contaminants,

Public educationon substancesthat must not be

MEDIUM Protection is provided to the Community and theEnvironment


June 2015 51


MITIGATIONSTRATEGY

STRATEGY TODEVELOP



intowastewatersewer.

into the wastewaternetwork that kill thebeneficial bacterialthat are used in thewastewatertreatment plants totreat the water

disposed of in thesewer.

The wastewater service is operated in compliance withregulatory requirements.


June 2015 52

9 LIFECYCLE MANAGEMENT

9.1 INTRODUCTION: THE OBJECTIVES OF LIFECYCLEMANAGEMENT

The objective of lifecycle management is the management of assets from conception to disposal whilstmeeting levels of service, maximising benefits and minimising whole of life costs.

The figure below illustrates the lifecycle stages and the asset management functions relevant to eachstage.

Figure 9.1: Lifecycle Asset Management Processes Key elements of infrastructure assetmanagement (AM) are:

· Delivering a defined level ofservice and monitoringperformance;

· Managing the impact of growthand the decline in service potentialby application of demandmanagement and infrastructureinvestment;

· Long term management strategiesthat meet the defined level ofservice cost effectively;

· Identifying, assessing andappropriately controlling risks;

· A long-term financial planidentifying required expenditureand funding sources.

The basic premise of lifecycle management is thatas an asset ages the cost of operating and/ormaintaining that asset increases and the risk of theasset failing increases. The performance of the assetmay also decline with age. Therefore, at some pointin that asset’s life, the cost of continuing to use andmaintain that asset will exceed the cost ofreplacement and/or performance will no longer meetthe required level of service. At this point themaximum value has been extracted, and is thetheoretical optimal time to replace the asset(Figure 9.2).

Figure 9.2: Theoretical example of the optimal timeto replace an Asset

Source: International Infrastructure Management Manual (2011)P67.

The figure illustrates the theory that the cost of operatingand maintaining an asset increases as the asset ages.The optimal time to replace the asset occurs when the

cost of maintaining the asset (blue line) exceeds the costof replacing the asset (red line).


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In the real-world the benefit-cost decisions around the optimal time to replace the asset arecomplicated by intangible costs, such as the health and environmental risks in the event of an overflowcaused by a service outage. The analysis of the optimal replacement time is therefore not a simplecost-based decision.

To manage assets to best meet levels of service at a minimal whole life cost, it is necessary tobalance three main programmes of work:

· The Operations and Maintenance Programme· The Asset Renewals Programme· The Development Works Programme

The following figure further explains these programmes and their relative impact on levels of service.In the right combination these programmes can be combined to provide an optimal level of assetmaintenance and renewal.

Figure 9.3: Lifecycle Management Work Programmes

Operations &MaintenanceProgrammes

Asset RenewalsProgrammes

DevelopmentWorks

Programmes

ProactiveProgrammes

ReactiveProgrammes

Reactive and proactive maintenance andday-to-day operations ensure efficient

operation and serviceability of the assetswhilst maintaining levels of service over

their useful lives.

ReplacementProgrammes

RehabilitationProgrammes

Asset Creation

Asset Disposal

Renewals programmes allow for theprogressive replacement of the assetbase to restore assets to their original

levels of service e.g. to restore capacityor performance . Replacement costs

include from inception to asset disposal .

Development works involve theaugmentation of assets to improve

system capacity and performance wherecurrent levels of service are not beingmet or levels of service are to change .

Source: Babbage Consultants Lifecycle Management Report for Hauraki District Council (2012).


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9.2 LIFECYCLE MANAGEMENT STRATEGYHauraki DC’s lifecycle management strategy is to maximise the useful and economic lives of itsassets. By maximising the lives of the District’s assets, the Council is able to reduce the cost of thewastewater service to the community.

The primary mechanism that Council uses to maximise the lives of the District’s assets is through themanagement of:

· The consequential risks of an asset failing; and,· The duration, frequency and extent of disruption to the wastewater service due to repair or

replacement of an asset.

Assets with high failure consequences are rated high criticality, and assets where failureconsequences have minimal impact on the community are rated low criticality. The criticality ratingprocess is a part of the Council’s Risk Management activity, see Section 8.

The asset criticality determines the extent of the risk mitigation undertaken to limit the extent andfrequency of any interruption caused by the unexpected failure and/or repair/maintenance of the asset.The risk mitigation measures utilized by the Council are summarised below:

9.2.1 RISK MITIGATION VS ASSET CRITICALITY

VERY HIGH CRITICALITY AND HIGH CRITICALITY ASSETS:· Very-high and high criticality assets are proactively managed to prevent interruption to the

wastewater service that would exceed the level-of-service reliability targets;· The management process consists of:

o Critical assets are monitored throughout their life for performance indicators of a potentialpremature deterioration in the asset’s condition. A database of critical assets is beingestablished that will be used to track repairs and other indicators that might signal that thecondition of the asset has deteriorated;

o Opportunistic sampling of the condition is carried out if and when such opportunities arise;o Proactive condition assessment is carried out when the asset reaches 80% of its expected life,

or if performance indicators suggest premature deterioration of the asset;o Data from asset condition inspections (opportunistic or proactive), will be used to re-project

the asset’s life, and schedule the next condition inspection. If the inspection finds thatreplacement is required, the asset will be scheduled for replacement;

o Industry information about the various types of wastewater infrastructure installed in HaurakiDC will be referenced where available. Problems with specific types of infrastructure typicallymanifest themselves with other wastewater operators several years before they becomeproblematic for the Hauraki District because of the young-age of the infrastructure within theDistrict.

o Council will document an Interruption Management Strategy within the critical assets databasefor unexpected failure of each Very-High and High criticality asset. Examples may includeasset duplication; carrying spare / replacement parts; or the temporary idling of pump stationswithin network in order to store the wastewater within the reticulation system while repairs arebeing carried out. The programming of inspections for Very-High and High criticality assets willbe maintained within the critical-asset database that is being created.


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The 4-hour repair time arises from the Council’sLevel-of-Service commitment to contain 80% ormore of dry weather overflows in less than 4-hours (refer the Level of Service section of the

main body of the report).

MEDIUM CRITICALITY ASSETS:· The condition of Medium criticality assets is not proactively monitored throughout the assets’ life

since the consequence of an unexpected failure of a Medium criticality asset is not expected towarrant the cost of proactive monitoring;

· Instead, the time to repair will be assessed for each Medium criticality asset and stored within thecriticality database;

· Where in the event of a failure of the asset, the wastewater service can continue to convey / treatsewerage, or have capacity reinstated within 4-hours; Medium Criticality assets will be kept inservice until:

§ Economics indicate that it is cheaper to replace than repair / maintain the asset; or§ They can no longer meet the reliability targets specified in the levels-of-service; or§ The asset’s performance has degraded to the point where the Council’s performance

based level-of-service targets are no longer being met.· If the wastewater service will be interrupted in the

event of a failure and/or repair; and the asset cannotbe repaired or replaced within 4-hours, then:

§ A formal assessment of the asset’scondition will be carried out when the assetreaches 80% of its expected life, or ifperformance indicators suggests prematuredeterioration of the asset;

§ The condition data will be used to re-projectthe asset’s life, and schedule the nextcondition inspection or the replacement ofthe asset;

§ Duplication or replacement will beconsidered at the first failure of the asset.

LOW AND VERY-LOW CRITICALITY ASSETS:· Low and Very Low criticality assets will be kept in service, repaired and maintained until:

§ Economics indicate that it is cheaper to replace than repair / maintain the asset; or§ They can no longer meet the reliability targets specified in the levels-of-service; or§ The asset’s performance has degraded to the point where the Council’s performance

based level-of-service targets are no longer being met.

SUMMARYThe criticality vs. useful-lifespan process described above enables the Council to maximise the usefullives of its assets, while balancing the risks, costs, and consequences of each asset failing to both theCouncil and the wider community.


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9.3 MANAGING RISKRisk Management is an inherent part of the Council’s Lifecycle Management Strategy (describedabove). However, in order for the Council’s Lifecycle Management Strategy to work, other risks alsoneed to be managed. We provide an overview below:

REACTIVE MAINTENANCE: MAINTAINING PREPAREDNESSCouncil’s Lifecycle Management Strategy for Medium, Low and Very-Low criticality pipes relies on itsability to carry out repairs and replacement in a timely manner without compromising level-of-servicetargets relating to reliability and overflows. The Council’s levels of service targets stipulate requiredrepair times, and the maximum frequency with which wastewater overflows can occur.

In order for the Council be able to repair assets within the stipulated time frames requires a state ofpreparedness to be maintained. This requires an adequate supply of spare parts and pipes to bestocked; and suitably qualified staff and appropriate machinery to be available.

The wastewater asset manager reviews the wastewater treatment plant assets and reticulation assetsthree-yearly, and ensures:· That appropriate suite of pumps, manholes, and pipes of varying sizes, and associated valves and

fittings are either warehoused by the Council within the District, or are available under contractwithin a sufficiently short period of time that the repair / replacement can be completed within 4-hours of notification of failure;

· Assets with long lead-in times for replacement (eg: months) are identified and reviewed 3-yearly.Spares are either stocked at the Council’s depot, or alternatively, the assets are scheduled forproactive condition inspection.


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9.4 EXPECTED LIVES

As described above, Hauraki District Council’s Lifespan Management and Risk Managementstrategies are reliant on an understanding of the expected lives of the Council’s assets.

One of the challenges for Hauraki District Council, with its relatively small asset base, is obtainingsufficient data on asset lives.

For some assets, such as pipes of a common diameter, and manholes, Hauraki District Council has asufficient number of assets in use that valid statistical conclusions can be drawn from assessments ofthe existing assets’ performance. For other assets, Hauraki District Council draws upon the experienceof specialists in infrastructure Management who maintain their own databases; or industry standardlives.

Figure 9.4: Range of expected useful Asset Lives for Wastewater Pipes.

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MODELLING EXPECTED LIVESHauraki District Council has developed a statistical model to forecast the expected life of its assetswhere age is the most likely reason for the asset’s future retirement. The model has been used wherethe Council has a sufficient number of assets to use as a basis for analysis.

For the 2015-25 Wastewater AMP and 2015 renewals forecasts, the model has only been used onpipes and manholes. Other assets may be included within the modelling if and when there is sufficientdata to calibrate the forecasts.

Inputs required for the modelling process include:· An industry standard life for the asset (used as a starting point for forecasts);· Age of each individual asset;· The type, material and size of the asset;· The number/length of the assets in use; and,· All of the above details for assets that have already been retired within the district.

The records on retired assets must include the reason for the asset being retired, to ensurethat only age related issues are included in the model for calibration purposes;

The model is based on the premise that in a population of assets, each asset does not fail at an exactpoint in time. Rather, failures are spread over time; with some assets failing early and someperforming satisfactorily well past the average lives of the other assets. Hauraki’s model assumes anormal statistical distribution of actual service lives over the entire asset population, and that the actualservice life of each individual asset will be normally distributed about the average life of the assetpopulation.

As a set of assets approaches the end of their expected service life, an increasing percentage of themshould have failed early. The statistics behind the normal distribution indicate small percentages of theassets that are expected to have failed early. Eg: 1, 2 or even 3 standard deviations prior to the mean.Council’s records of these early failures are used to calibrate the model to re-define the expectedservice lives of the set of assets. This concept is illustrated in Figure 9.5 and is described in greaterdetail below.


June 2015 59

Calibration of the ModelWithin the model the expected life of a set (or population) of a particular type of asset is determined byadjusting the average life in the model until the number of asset failures predicted by the modelmatches the number of assets that have actually already failed. Figure 9.5 illustrates this principle.

Within the modelling carried out to-date, assets have been grouped by type (pipe / manhole / pump,etc); material; and diameter, although any desired grouping system is possible. This enables the livesof pipes of different diameters, but the same material, for example, to be individually modelled andadjusted.

Limitations of the model:The model can only be used where:

· There are enough assets with which to form valid statistical conclusions;· The asset set already has a small percentage retired due to age-related issues (eg: 2% or

more should have been retired).

When neither of these two requirements can be met, Hauraki District Council has continued to use anindustry standard life, or draw upon work carried out by other Councils in New Zealand that havecarried out sufficiently rigorous analysis.

The main asset classes, by dollar value, that could not be assessed using Hauraki’s Expected-lifemodel were the newer pipe materials, PVC and PE. Pipes made of these two materials are too new tohave any age related failures and therefore the model cannot be calibrated. Default industry lives wereused in both instances. However, the effect of using industry standard lives is minor, as due to theiryoung age, no PVC or PE pipes are forecast to need replacement within the next 30-years.

Principal and Basic Premise behind the model.

Figure 9.5: Principal behind forecasts to asset livesTop Figure:

In the top figure we illustrate a theoretical pipe asset which hasthe following parameters:

· The industry standard life is 80 years;· The average age of the asset within the district is 60

years;· The standard deviation of the asset life is 15-years;

Analysis of this asset using the standard-normal curve showsthat 15.8% of the asset should have already failed, or is past itsuseful life.

This does not align with Council knowledge of the asset. TheCouncil has only replaced 4% of the asset to-date. A further 1 %is known to be in poor condition, and has been scheduled forreplacement within the next 3-years.

Bottom Figure:

In the bottom figure we illustrate how the expected life of ourtheoretical asset is calibrated based on the condition of theasset:

· As described above, 4% of the asset has already been replaced, and 1% of the asset has used the end of its life andhas been scheduled for replacement. This gives a total of 5% of the asset that has reached the end of its useful life.

· The average life of the asset is increased until the percentage under the normal-distribution frequency curve below60-years old equals 5%.

Adjusting the average life of our theoretical pipe to match the condition of the asset shows yields an increase in the average lifeof the asset population from 80 to 90 years.


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9.5 THE RENEWALS MODELOnce the asset lives have been calibrated the Expected Life model can be and was used to develop a financialforecast of the renewals budget. Forecasts are undertaken using a Monte-Carlo style simulation.

The Monte Carlo simulation assigns a random value to each asset. This is then converted into a forecastremaining life by fitting the random value within a standard normal distribution curve defined by the expected lifeand the standard deviation determined through the model calibration process described in the previous section.

Renewals ForecastingIn order to forecast funding for renewals, the asset valuation register is coupled to the Expected Life model,enabling the cost of replacing the asset to be budgeted for in the year of forecast replacement. The model carriesout these calculations ‘line-by-line’ for each asset included in the model asset register. The resulting budgetforecast is then stored away for later analysis.

The Monte Carlo style simulation then runs the model again,assigning a new random value to each asset in the model, resultingin a second forecast of the assets’ life. Again, the cost of replacingeach individual asset is budgeted for in its newly forecastreplacement year. These same calculations are carried out on everysingle asset included in the set being modelled, and when totalledthey form a renewals budget for all assets included in the model. Thisbudget is then stored away for later analysis.

After the model has been re-run a large number of times, a picturestarts to form of the most likely spread in the lives of the assetsincluded in the model. Combined with information about the cost-of-replacement, the model outputs are turned into a financial renewalsbudget.

Hauraki’s Expected Life model was run using 100 iterations of theMonte Carlo style simulation. This produced 100 different renewalsforecast budgets. Subsequent analysis of these 100 renewalsforecasts reveals the most likely required renewals spend. The 100renewals forecasts were also used to develop an understanding ofthe potential spread in the required renewals spending. Forexample, if a particularly expensive asset were to fail several yearsearlier than expected, this would cause a spike in the renewalsspend for that year. The Monte Carlo style simulation has the benefitthat the scenario of that large-expensive asset failing earlier thanexpected is built into the spread of the forecasts. This is perhaps bestexplained by review of Figure 9.6, on the page over.

Accounting for Assets not included in the Renewals ModelAs described above the Expected Life model has only been utilisedto forecast the end lives of wastewater pipes and manholes in theforecasting carried out for in preparation for the 2015-25 planningcycle. However, the Council’s renewals budget also needs to includenumerous other assets, such as the subcomponents forming thewater treatment plants.

For these assets, the wastewater utilities manager has manuallyprepared a renewals forecast of the anticipated year of replacement.These forecasts were added to the forecasts of the pipe and valverenewals to derive the total renewals budget. The resulting renewalsbudget, and forecast potential spread in the annual renewalsexpenditure are presented in Figure 12.5 in the Finance Section ofthe AMP.

What is ‘Monte CarloSimulation’?Monte Carlo simulation, is a techniqueused to understand the impact of riskand uncertainty in forecasting models.

The technique was developed byscientists working on the atomic bombin the 1940s, who named it for the cityof Monaco, famed for its casinos andgames of chance.

Monte Carlo simulations are particularlypowerful when a forecast or estimateneeds to be carried out where there issignificant uncertainty. The key featureof a Monte Carlo simulation is that it cantell you how likely the resultingoutcomes are.

This is different from a normalforecasting model, in which you plugsome numbers into a formula oralgorithm, and you get a single value asthe result. For example, a pipesupposed to last 80 years, installed in1940 would be forecast to needreplacement in the year 2020. However,chances are that it actually won't fail inthe year 2020. Instead, it will failsometime shortly before after this date.This example illustrates how forecastsof the remaining lives of assets arehighly uncertain.

The Monte Carlo simulation enables thespread of years during which an asset,or group of assets is most-likely to fail.


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Figure 9.6: A 30 year forecast of required Pipe and Manhole Renewals expenditure derived from a Monte Carlosimulation of the Expected Lives Model

(reported values are the forecast renewal spend in 2014 dollars, with no allowance for inflation).

The plot presents:· The forecast average annual renewals spend for pipes;· The 5 and 95 percentile forecasts; and the 25 and 75 percentile forecasts (upper and lower quart) ;· When reading the percentile forecasts it is important to understand that the reported figures represent the

chance of the renewals spend being that value in any particular year. It would be extremely unlikely for two95 percentile renewals forecasts to occur back-to-back, for example.

· The percentile forecasts represent the statistical chance of failure in a single year of a large asset, or thecoincidental failure of several smaller assets all occurring within a single year.

· The percentile forecasts are useful when planning the amount of money the Council should have thecontingency to draw upon in any single financial year to cover the risk of a large asset failing; or thecoincidental failure of several smaller assets within a 12 month period.

10-year forecast:The renewals forecasts shows the renewals spending for pipe asset increasing to an average of $70,000 p.a. by2025. The forecast shows that there is a 25% chance in the year 2025 that the renewals figure could spike ashigh as $90,000; and a 5% chance that the renewals figure could spike as high as $140,000.

30-year forecast:The renewals forecasts shows the renewals spending increasing to an average of $480,000 p.a. by 2045. Theforecast shows that there is a 25% chance in the year 2045 that the renewals figure could spike as high as$580,000, and a 5% chance that the renewals figure could spike as high as $785,000.

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Improvement of the renewals model forecastsAsset data held by Hauraki on its active assets currently fulfils the requirements of the renewalsmodel. However, the renewals model is reliant on good data being held on decommissioned assets.

Back in the 1990s and early 2000’s, information about decommissioned assets was as not reliablykept. The wastewater industry had not yet foreseen the extent to which data about retired assets isutilised today for the purposes of good asset management. To address this going forward, guidelinesfor staff will be formalised to ensure that sufficient and appropriate data is captured and kept whenassets are decommissioned.

Over coming years, use of the renewals model forecast may extend beyond pipes valves and fittings.Other assets that the Council is considering to include in the life-cycle model are pumps and motors,for example. Records on these shorter lived assets were not as complete as the records held onreticulation assets, particularly in respect of information about decommissioned assets. Council willwork to improve the records held with a view towards enabling life-cycle forecasting to be carried outacross other asset areas.

The larger the number of assets included in the model, the better the forecasts. Council intends toapproach other wastewater operators with a view to sharing each other’s asset condition data.

Keeping the Expected Life - Renewals Model up to DateThe key inputs for the renewals model are:

1. The valuation asset register. which must include:a. A description of the each asset (asset type (eg: pipe/manhole/pump); diameter;

material; year of install); and,b. The cost of renewing each asset.

2. For calibration purposes, details on assets that have already been retired need to be added asan input to the model. The required details for calibration purposes are essentially the sameas those used to value the asset, e.g.: asset type (pipe/manhole/pump); diameter; material;year of install; year of retirement; reason for retirement.

a. Note that the reason for retirement does not to need to be added to the expected lifemodel. Instead, this data is used to filter out assets that were replaced for reasonsother than old age. For example, a pipe that was replaced early because it was toosmall. Assets replaced for reasons other than old age or poor condition should not beincluded in the model for calibration purposes, as they would bias the calibration.

The process to update the model is summarised below:1. Update the model with the latest valuation data, as described above.2. Update the model with the latest data held on assets retired due to old age/poor condition.3. Adjust the expected life, and spread within the expected life parameters for each asset class.

(Asset class being: pipes grouped by material and diameter, for example). The goal of theadjustment is to align the number/length of assets forecast to have needed replacement withthe actual occurrence of replacement.

a. Note, as described above, where insufficient data exists on the number/length ofassets that have already been replaced, use of standard industry lives isrecommended.

4. Update the range of years for which forecasts are required. E.g.: between 2018 to 2048.5. Run the Monte Carlo simulation, by pressing the macro button in the spreadsheet model.


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9.6 OPERATIONS AND MAINTENANCE

The objective of the operation and maintenance activities is to maintain and operate the system suchthat the performance and reliability targets of the wastewater levels-of-service are met. The presentlevel of maintenance and operation is sufficient to meet these targets.

OPERATION AND MAINTENANCE STRATEGYHauraki District Council’s operation and maintenance strategy is to make informed decisions basedupon data. The strategy relates not just to the operation and maintenance activity, but data capturedthrough the operation and maintenance activity being used to support larger and longer-term decisionsaround capital investment and asset renewal.

MONITORING COMPLIANCE WITH LEVEL-OF-SERVICE TARGETS AND LEGISLATIVEREQUIREMENTSThe wastewater asset manager is required to report to the Council’s senior management teamquarterly on performance and reliability level of service targets and legislative compliance. Annualreporting is required for measures that only change slowly over time. The details of what is reported,how frequently it is reported, and how it is measured are described in full within the Level-of-Serviceand Performance Measurements section of the main body of the AMP.

PROACTIVE OPERATION AND MAINTENANCEIn a top level down approach: the quarterly reporting process outlined above enables the wastewaterasset manager, and Council management to identify any issues that are arising with the wastewateractivity and address them in a timely manner.

In a bottom level up approach: maintenance issues identified by operators and field staff are loggedwith the wastewater asset manager. This enables the asset manager to assess and prioritise theresponse to such issues. Centralising maintenance in this manner, helps to keep track of larger issuesthat may be developing, and prevent excessive reliance on reactive maintenance.

REACTIVE MAINTENANCEReactive maintenance is primarily handled through the Customer Service Request system. Thecustomer services team are trained to assess the relative priority of the customer’s request. Urgentrequests are sent to the Council’s field staff for immediate action. Non-urgent requests are filed withthe wastewater asset manager in a similar manner that field staff lodge identified non-urgentmaintenance. Again, this enables the asset manager to assess and prioritise the response.

FORWARD IMPROVEMENTSOver the next three years Hauraki DC will be placing an emphasis on streamlining and improving thecollection of data about the operation and maintenance activities carried out on the wastewaternetwork and treatment plants. Areas for particular attention will be:

· improving the ability to efficiently measure level of service compliance;· track operating costs (eg: electricity, cleaning);· track repair and maintenance costs;· track asset reliability;· spatially present and analyse the data.

Emphasis on capturing sufficient data that enables informed decisions to be made.


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9.7 ASSET CONDITION AND PERFORMANCE MONITORING

“Performance” relates to the ability of an asset to provide a required level of service the customer.

“Condition” relates to the structural integrity of an asset.

STRATEGY

Hauraki has adopted a primarily performance based asset monitoring approach. Apart from the assetcondition monitoring described within the Lifecycle Management Strategy, asset condition monitoringand assessment is included in the regulatory and overflow targets in the level of service performancecriteria:

· Dry weather overflow targets require proactive maintenance of the pumps and network.Without proactive maintenance, the network overflow frequency would quickly be exceeded bythe build-up of fat, roots, and ragging of pump impellors, etc;

· Regulatory targets require the wastewater to be treated to the standards outlined within theresource consents. They also regulate that wastewater overflows are not a permitted activity,and therefore cannot be a part of the normal or designed operation of the wastewater sewer;

· A wastewater asset that is in poor condition or poorly maintained will fail to meet theregulatory and reliability performance targets specified in the levels of service.

MONITORING PERFORMANCE

Flow gauging and calibrated hydraulic models of the wastewater network are used to monitor thecondition, demand and capacity of the network. The structural condition of a wastewater network canbe inferred from its water-tightness. A wastewater network that is poor condition will respond to rainfallin a manner similar to a stormwater network. Groundwater ingress may occur up to the entire capacityof the pipes.

Where demand caused by rainfall or groundwater has increased to excessive levels, then thecondition of the pipe network may have deteriorated to a point where renewal or repair is required. Thethreshold where intervention is required is determined on a catchment-by-catchment basis. Theassessment takes into account both the hydraulic capacity of the network within the catchment, andthe impact that the flow from the catchment has on downstream catchments.

Because of low population growth in the district, the hydraulic models do not need frequent updates inorder to remain current. Hauraki’s rolling programme sees the catchments flow gauged andremodelled every 10 years. This rolling program allows trends to be identified, and potential issuesnoted before they become problematic.

Hydraulic models are cost-effective in measuring many of the performance measures, because theycan also be used to identify and design cost-effective solutions where performance is found to belacking. The models are also used to design replacements when assets are due for renewal.

The customer service requests database is also used to monitor the performance of the network. Thecustomer service requests are reported on quarterly to Council senior management. Any sharpupward trend in complaints is investigated, as it may signal a sudden problem with the network. Long-term trends are tracked and monitored by both the wastewater asset manager and Councilmanagement. Deterioration in long-term trends is investigated, as it may indicate deterioration in theperformance of the network that needs to be addressed.

The Council’s SCADA systems are used to identify problems with pump stations and treatment plants,such that maintenance crews are alerted to the problems before sewerage overflows occur. TheCouncil’s SCADA system is working well in this regard.


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Proactive maintenance work carried out by Council’s field staff is also monitored. Systems are beingestablished to digitally map the location and frequency of maintenance works within the pipereticulation. Over time this data should start to form a useful tool to monitor the performance and costof maintaining problem-spots within the network.

The Council’s resource consent conditions specify specific measurements required to demonstratecompliance. These measurements are carried out, and reported to the Waikato Regional Council asstipulated within the resource consent conditions.

OPPORTUNISTIC CONDITION BASED SAMPLING

Hauraki DC’s Lifecycle Management Strategy does not require proactive asset condition monitoring forMedium criticality, Low and Very Low criticality assets. The reasons for this are largely twofold:

i. The cost exceeds the benefit for assets with these lower levels of criticality;ii. Because of Hauraki District Council’s small size, a sub-sample of our already small asset base

will have too few assets with which to draw valid conclusions from.

However, over recent years Hauraki District Council has carried out opportunistic condition basedsampling. The results of this initial work were considered beneficial, and obtained at relatively low cost.

Opportunistic condition sampling opportunities present themselves when assets are already exposedfor extensions, maintenance, or repair.

Over the next 3 years, Hauraki District Council will investigate the merits of implementing anopportunistic condition based sampling program. Results would be stored in a spatial database. Theintended use of this condition data is to help refine the accuracy of forecasts of the expected lives ofthe District’s assets.


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9.8 RENEWAL

Council will continue to renew assets to sustain agreed levels of service targets and meet regulatoryrequirements.

Prior to commissioning a renewal, Council will assess whether the need for the asset remains. If noongoing need is identified, the asset will be decommissioned and not renewed.

Assets are renewed on the following basis:

· Performance:o The existing asset is not and cannot (with modification) meet the required performance

level of service targets and/or regulatory requirements;

· Reliability:o A Very High or High criticality asset has reached the end of its useful life, and is being

replaced to ensure the continued reliability of the service;o A Medium criticality asset that is time consuming to repair or replace has failed and has

therefore been scheduled for replacement;o A Very Low, Low, or Medium criticality asset has reached an age where it has started to

fail at a frequency that exceeds the reliability targets specified within the levels of service.· Economic:

o The asset has become uneconomic to maintain and operate; and net present valueanalysis (NPV) has shown that it is cheaper to replace the asset with a modernequivalent.

o NPV analysis shows that a more modern asset has an operating cost is sufficiently lowerthan the existing asset to justify the replacement of the aged asset;

· Obsolescence:o The asset has become obsolete and needs to be replaced in order to integrate with wider

Council systems;· Opportunistic:

o Where other activities or maintenance has been carried out in the vicinity of an asset thatis nearing the end of its economic were useful life, assets may be replaced prematurely totie in with those other activities or maintenance been carried out. An example would be apipe buried underneath the road that is about to be dug up for repair. In this circumstanceit may be cheaper to renew the pipe while the road is being repaired.

o Opportunistic renewals will only be carried out when it is determined that prematurerenewal of the asset to coincide with the other activities or maintenance is likely to be thecheapest long-term option. Opportunistic renewals are assessed on a case-by-case basis.

IDENTIFICATION OF RENEWALS

With the exception of opportunistic renewals, the data capture and analysis process described withinthe operations and maintenance section (Section 9.6); and the 10 year rolling flow gauging andmodelling programme described within the Demand Management section (Section 7) are used byCouncil to identify assets that require renewal for one of the reasons listed above.

Opportunistic renewals are currently identified through an ad hoc process, predominately facilitated bydepartmental and interdepartmental team meetings, or offers from external agencies.


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LONGER TERM RENEWAL FORECASTSLonger term renewal forecasts are based upon the expected lives of the assets. The asset criticality isassigned to each asset within the Council’s asset register. The safety margin applied to very high andhigh criticality assets reduces the forecast useful life of these assets.

Where sufficient data exists, the Council’s annual forecasting model will be used to simulate the periodwhen each asset is forecast to fail. The use of a Monte Carlo simulation enables an average renewalsforecast to be derived, and the confidence intervals around the forecast to be understood.

SELECTION OF AN APPROPRIATE REPLACEMENTBecause reticulation assets are long-lived, hydraulic models of the wastewater network are used toensure that the replacement pipe is sized correctly to meet the needs of current and future generationsover the life of the asset.

As treatment assets usually are part of a larger plant, they are usually replaced like-for-like, unless anew technology has been developed that supersedes the existing asset. In this circumstance, andwhere the economics justify the investment, the plant may be modified to accommodate the newertechnology.

RECENT ASSET RENEWALSCouncil has recently commenced the renewal of the pumpstation controllers, sensors, and ancillaries.This renewal replaced assets which were near reaching the end of their economic life, with newertechnology that will facilitate better monitoring of the performance of the pump stations in the district.

A section of the Victoria Street rising Main was augmented due to hydraulic limitations.

Obsolete SCADA systems are being renewed due to technological obsolescence. The new SCADAsystems enable remote control and monitoring, and improve data collection on the treatment plantsand pump stations. The improved monitoring will help the Council meet and exceed its overflowfrequency targets, and improve the Council’s ability to continue to meet the resource consentsspecifying the discharge parameters of the wastewater treatment plants.

PLANNED ASSET RENEWALSSignificant planned renewals within the next six years include:

· Treatment Plant renewals:o Waveband renewals;o Pond desludging;o Completion of the SCADA upgrade;

· Reticulation renewals(Note: this work is subject to further investigation confirming the scope and necessity:

o Manhole repair / renewal in the ‘Bank Street’ catchment within Waihi.§ The driver for this work is to remove excess groundwater identified through flow

gauging studies;o Pipe and manhole repair / renewal in the Waimarei South catchment in Paeroa.§ The driver for this work is to remove excess groundwater identified through flow

gauging studies;o Public and private lateral, manhole, and pipe repair / renewal in the Taylors Avenue

catchment in Paeroa.§ The driver for this work is to remove excess rainwater ingress during heavy rainfall

that has been identified through flow gauging studies;


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9.9 CREATION AND ACQUISITION

Because there is near zero population growth within the Hauraki District, the wastewater activity islargely being maintained in a “maintenance of existing service” mode of operation.

ASSET CREATION AND ACQUISITION POLICY

Council policy requires a business case to be prepared for the creation or acquisition of any newsignificant assets. The business case must:

· show that the proposed asset represents good value for money for both households andbusinesses over the anticipated life of the service; and,

· Consider the risks that surround the creation or acquisition of the asset.

When calculating the value over the life the asset, the operating costs of the asset are consideredusing NPV analysis. This means that an asset with a lower initial outlay, may not necessarily be thechosen option, if the subsequent on-going operating costs are high.

IDENTIFICATION OF THE NEED FOR ASSET CREATION

The primary drivers for the creation of new assets are foreseen to be:i. new residential housing and commercial developments; andii. new assets required to continue to meet or lift substandard performance to a level that meets

level of service targets.

In respect of new housing and commercial developments, most of the required new infrastructure isbuilt and paid for by the land developer. This infrastructure is then subsequently vested with Council.

The District Plan details where new residential and commercial development is allowed to take place.In doing so, the District plan prevents ad-hoc growth within the district. This ensures that appropriateinfrastructure can be provided to areas designated for new development.

In some cases, the connection of new properties to the wastewater network will require upgrades tothe existing infrastructure such that it may support the new development. The additional capacityprovided by such upgrades is funded from a financial contribution from the developer to the extent thatit is needed to serve the development itself. Beyond this development contributions can be utilised tocreate additional capacity. Upgrades of this nature also provide an opportunity (where necessary) toimprove the level of service delivered to existing customers. Any increase to the level of service ofexisting customers facilitated by such upgrades would be funded by Council subject to the necessarypublic consultation.

In respect of new assets required to continue to meet, or lift substandard performance to a level thatmeets level of service targets; these assets will be identified through the data capture and analysisprocesses described within the operations and maintenance section (Section 9.6).

Newly created assets are sized to meet the needs of both current and future generations over the lifeof the asset.


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10 STRATEGIC PRIORITIESHauraki DC’s strategic priorities over the past 3-years remain largely the same as the next 3-years.That the strategic priorities remain the same for the following 3-years is positive because it helps toshow that:

· The Council is following its long-term strategy;· The Council is working in a pro-active style of operation;

Council expects to deliver on several of the strategic priorities set out in the 2012 AMP over the next 3-years. The 2015 AMP also introduces new strategic priorities as described below:

10.1 STRATEGIC PRIORITIES PAST 3-YEARS

· Understand the long-term wet weather leakage and demand characteristics throughout thewastewater networks of Paeroa and Waihi, by undertaking long-term (12-months plus)detailed catchment flow gauging.

· Plug missing data on manhole and pipe assets through a field data capture and verificationexercise. Field work to be carried out in the townships of: Ngatea, Kerepehi Turua, Paeroaand Waihi (field survey complete, data post-processing is underway).

· Renew the pumpstation controllers and sensors, cabinets and ancillaries that have reachedthe end or near end of the economic life. Replacements will be with modern equivalents thatwill improve data collection, and thereby present opportunities for improved operationalefficiency within the network (underway).

· Upgrade the aged telemetry systems to a modern equivalent (underway);· Digitise (where sensible) field-data capture where manual methods are currently used

(underway).

10.2 STRATEGIC PRIORITIES NEXT 3-YEARS

· Completion of the five priorities listed above within the next 3-years;· Understand the long-term wet weather leakage and demand characteristics throughout the

wastewater networks of Kerepehi and Ngatea, by undertaking long-term (12-months plus)detailed catchment flow gauging.

· Develop an understanding of the built-capacity throughout the wastewater networks, throughhydraulic modelling;

· Develop an understanding of utilisation of capacity throughout the wastewater networks,through hydraulic modelling;

Plus, the following strategic objectives which have a 6-year target timeframe:· Work towards reducing the excess groundwater infiltration where it is occurring;· Work towards reducing excess infiltration of heavy rainfall, where it is occurring;· Improve the resilience and overall capacity of the network through the strategic removal of

capacity bottlenecks within the system;· Standardise, as far as possible, the submersible pumps used throughout the district in

reticulation pump stations. This will ease and speed maintenance, and reduce therequirements to hold numerous spare parts.

· Improve the efficiency of in-office information management:o The flow of data from the field to office, and office to field;o Asset data capture;o Tracking of costs against an asset, or group of assets;

· Improve the measurement of Council’s delivery of level-of-service to customers;· Improve data held on asset condition.


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11 KEY PROJECTSThe Council’s key projects over the past and coming 3-years are focused on delivering on theCouncil’s Strategic Priorities described in the Section above.

11.1 KEY PROJECTS PAST 3-YEARS

The key projects and their linkage to the strategic priorities of Council are listed below:

· Investigate treatment plant pond sludge depths and determine when desludging will be required(complete);

· Upgrade Kerepehi WWTP instrumentation (complete);· Upgrade of ageing SCADA systems (underway);· Renew the pumpstation controllers and sensors, cabinets and ancillaries that have reached the

end or near end of the economic life (underway)’· Field data capture and verification of manhole and pipe data in the townships of: Ngatea, Kerepehi

Turua, Paeroa and Waihi (complete). Data post-processing of field-data is currently underway.· Upgrading telemetry systems (underway);· Provide field-staff with mobile electronic devices that enable them to enter and receive field-data

directly into the devices. This eliminates the inefficient double-handling of information which usedto be typed into computer systems from hand-written notes (underway).

11.2 KEY PROJECTS NEXT 3-YEARS

· Completion of all active projects listed above within the next 3-years,· Carry out long-term detailed catchment flow gauging in Kerepehi and Ngatea;· Replace damaged sections of the Kerepehi and Paeroa wastewater treatment plant pond wave

protection;· Hydraulic model build and calibration of the Paeroa and Waihi wastewater networks.· System performance analysis and options assessment of the Paeroa and Waihi wastewater

network, using the hydraulic model.

Plus, the following key projects which have a 6-year target timeframe for completion:· Carry out performance based renewals as described below:

o Waihi, Banks Street catchment: renewal / repair of manholes to eliminate excessivegroundwater infiltration.

o Paeroa, Waimarei South catchment: renewal / repair of manholes and pipes to eliminateexcessive groundwater infiltration;

o Paeroa, Taylors Avenue catchment: renewal / repair of public and private laterals, manholesand pipes to eliminate excessive heavy rainfall infiltration;

o Note: it is intended that these three projects will be further refined and scoped by the hydraulicmodels that will be developed.

· Removal of priority bottlenecks in the network capacity identified through the hydraulic modellingprocess;

· Supporting works, as required, to facilitate the standardisation of submersible pumps used inreticulation pump-stations.


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· Improve the efficiency of in-office information management. (Details are yet to be scoped,however, current objectives are):o Improved cost allocation against assets;o Improved office to field, and field to office data integration;o Improved systems around asset data capture;o Improved customer service request job-management.

· Improving the reliability and resilience of the network:o Review of preparedness to repair interruptions to the wastewater service within the target

timeframes outlined in the Levels of Service.· Improving the measurement of Council’s delivery of level-of-service to customers:

o Improved customer service request job-management (as listed above).· Improved data held on asset condition:

o Work with other Councils with a view towards data sharing;o Development of internal procedures in respect of data capture on asset condition;o Training of staff on asset condition data capture.


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12 FINANCIAL FORECASTS & MANAGEMENTFinancial management in asset-intensive organisations is characterised by high asset values relativeto the total value. The financial management principles important to these types of organisations are:

· Consumption of asset service potential· Categorising expenditure appropriately· Allocating costs to appropriate assets· Preparing long-term forecasts· Cost-effective financing· Effective reporting of financial performance

The figure below provides a representation of the accumulation of costs over the total lifecycle of anasset.

Figure 12.1: Long-Term Lifecycle Asset Expenditure

The figure shows how initial up-front capital costs often dominate the decision-making process whenacquiring new assets. Recurring and ongoing expenditure usually represent a high proportion of thetotal lifecycle costs of many assets (e.g. depreciation, loan, interest, overheads etc.).


June 2015 73

Financial and asset management should complement each other in a symbiotic relationship ratherthan there being a demarcation between the activities7. Asset and financial management systemsinterface at the following areas:

· Asset classification and asset hierarchiesAsset management may require greater detail but the Asset Management System (AMS)hierarchy will be the same or align with the fixed asset register Finance System (FS).

· Categories of asset expenditure and capitalisation rulesThere should be agreement about the capitalisation and categories of expenditure in both theAMS and FS systems.

· Asset revaluations and depreciation chargesReplacement and carrying value (book value) of assets forms a significant proportion of theassets on the balance sheet. Depreciation expenditure also forms a large part of theoperational costs in financial budgets. Similar unit rates, asset lives and depreciation methodsare followed.

· Costing levels of serviceService levels costs are robustly calculated and expenditure projections by asset managersare used by financial staff to perform the calculations.

· Lifecycle costing and feasibility analysisLifecycle costs are considered as part of the benefit-cost analysis when a new project oracquisition is evaluated.

7 IIMM 2011, Section 3.5.2


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12.1 LINKAGE BETWEEN THE FINANCIAL PLAN ANDCOMMUNITY OUTCOMES

The model below illustrates the links between community outcomes, levels of service, funding,lifecycle expenditure and future or required levels of service and key performance indicators.

Figure 12.2: Levels of Service/Lifecycle/Expenditure Relationship

Community Outcomes & Well Being

Optimising Life -Cycle Service Level

Resource Assessment Capital &Operational Expenditure

CurrentFunding

Level

CurrentService

level

CurrentCustomer

KPI’s

CurrentTechnical

KPI’s

FutureFunding

Level

FutureServiceLevel

TargetTechnical

KPI’s

TargetCustomer

KPI’s

Life-Cycle Analysis Minimum 10 YearPlanning Period

Optimising Life -Cycle Cost

Life-Cycle Planning Period

If a higher service level is provided to the consumer it should translate into improved customersatisfaction and therefore will impact on community outcomes and well-being. However, higher levelsof service will usually require additional capital or operational expenditure. Increased expenditure willlikely flow through to a need recoup the additional cost through higher charges to the consumer. Forthis reason, there is a balance to be struck between the level of service provided, and the cost of thewastewater service.

Lifecycle Planning Period


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12.2 FEES AND CHARGES

The fees and charges are updated as part of the LTP process the reader is directed to the currentCouncil Annual Plan to review the current fees and chargers relevant to the wastewater. The currentAnnual Plan document is available on the Council’s public website.

The Council’s current funding approach for wastewater is:-

· Operating costs are funded almost entirely by a scale of pan charges..

· Every separate household that is connected to a public system pays a standard uniform charge,irrespective of the number of pans.

· Commercial and industrial properties pay a charge per pan connected, but the charge per panreduces progressively the more pans that there are. The current charging structure is:

· Properties that are capable of being connected, but which are not connected, and which arelocated within 300 metres of a wastewater main, pay a half charge

Table 12.1: Commercial and Industrial Wastewater Charges

COMMERCIAL SERVICE LEVEL CHARGE

Up to and including 2 pans See current annual plan.







Over 20 pans See current annual plan.


June 2015 76

12.3 DETAILED 10 YEAR FINANCIAL PLAN

The 10 year plan for all renewal and capital renewals are outlined in detail in Table 12.2 and Table12.3. The total new-capital expenditure between 2015 and 2025 is $1.6m. The total renewalexpenditure over the same period is $6.6m.

12.3.1 OPERATIONS & MAINTENANCE EXPENDITURE

The operational and maintenance cost for the past 3 years, and next 10 years is presented graphicallyin Graph 7.1. The chart represents forecast expenditure of approximately $33m between 2015 and2025 (2014 dollars).

Figure 12.3: Forecast Maintenance and Operating Costs – 2015/25 ($million)

(reported values are the operation and maintenance spend in 2014 dollars, with no allowance for inflation).


June 2015 77

Table 12.2: Summary of Operational & Capital Expenditure and Revenue Forecast – IN 2014 DOLLARS ($000)

ACTUAL FORECAST2012-13 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

OPERATING EXPENDITURE - 2014 DOLLARS

Treatment $547 $540 $524 $585 $578 $578 $578 $596 $575 $581 $582 $582 $604 $582

Reticulation $160 $130 $114 $137 $81 $81 $81 $81 $81 $81 $81 $81 $81 $81

Other $150 $181 $287 $248 $286 $236 $226 $216 $216 $216 $216 $216 $216 $216

Fixed Costs $87 $86 $145 $105 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175

Major Maintenance $1 $0 $15 $56 $128 $118 $96 $71 $58 $58 $56 $51 $58 $58

Pumpstations $261 $239 $215 $259 $254 $254 $254 $254 $254 $254 $254 $254 $254 $254

SUB TOTAL $1,206 $1,175 $1,300 $1,390 $1,501 $1,441 $1,410 $1,393 $1,359 $1,365 $1,364 $1,359 $1,388 $1,366

Depreciation $1,183 $1,198 $932 $1,213 $965 $965 $965 $965 $965 $965 $965 $965 $965 $965

Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Operating $3,595 $3,548 $3,532 $3,993 $3,968 $3,848 $3,784 $3,750 $3,683 $3,695 $3,694 $3,683 $3,740 $3,697

CAPITAL EXPENDITURE - 2014 DOLLARS

Capacity Demand Increases $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Level of Service Increases $670 $110 $0 $0 $0 $0 $800 $0 $0 $0 $0

Renewals $1,584 $1,313 $1,475 $824 $366 $266 $179 $268 $88 $159 $145

Other Capital Expenditure $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Capital $0 $0 $0 $2,254 $1,423 $1,475 $824 $366 $266 $979 $268 $88 $159 $145

TOTAL EXPENDITURE $3,595 $3,548 $3,532 $6,247 $5,390 $5,322 $4,608 $4,117 $3,949 $4,674 $3,961 $3,771 $3,899 $3,843


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Table 12.3: Summary of Operational & Capital Expenditure and Revenue Forecast – INFLATED ($000)

ACTUAL FORECAST2012-

13 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

OPERATING EXPENDITURE - INFLATED

Treatment $547 $540 $524 $585 $605 $636 $660 $701 $699 $730 $756 $784 $845 $847

Reticulation $160 $130 $114 $137 $85 $90 $93 $96 $99 $102 $106 $110 $114 $118

Other $150 $181 $287 $248 $299 $260 $258 $254 $262 $271 $280 $291 $302 $314

Fixed Costs $87 $86 $145 $105 $183 $193 $200 $206 $213 $220 $227 $236 $245 $254

Major Maintenance $1 $0 $15 $56 $134 $130 $110 $83 $70 $72 $73 $68 $81 $84

Pumpstations $261 $239 $215 $259 $266 $280 $290 $299 $309 $319 $330 $342 $355 $369

SUB TOTAL $1,206 $1,175 $1,300 $1,390 $1,572 $1,587 $1,611 $1,639 $1,651 $1,713 $1,772 $1,831 $1,941 $1,986

Depreciation $1,183 $1,198 $932 $1,213 $1,010 $1,062 $1,103 $1,136 $1,172 $1,211 $1,254 $1,300 $1,350 $1,403

Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Operating $3,595 $3,548 $3,532 $3,993 $4,154 $4,236 $4,325 $4,414 $4,475 $4,638 $4,798 $4,961 $5,233 $5,376

CAPITAL EXPENDITURE - INFLATED

Capacity Demand Increases $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Level of Service Increases $670 $115 $0 $0 $0 $0 $1,004 $0 $0 $0 $0

Renewals $1,584 $1,374 $1,624 $942 $431 $323 $224 $348 $118 $223 $211

Other Capital Expenditure $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Capital $0 $0 $0 $2,254 $1,489 $1,624 $942 $431 $323 $1,228 $348 $118 $223 $211

TOTAL EXPENDITURE $3,595 $3,548 $3,532 $6,247 $5,644 $5,860 $5,267 $4,845 $4,798 $5,866 $5,146 $5,079 $5,455 $5,587


June 2015 79

12.3.2 NEW CAPITAL EXPENDITURE

Due to their being zero forecast population growth no capital expenditure is forecast to supportpopulation growth in the next 10 years. The new-capital expenditure is therefore entirely for level-of-service upgrades. There are two significant LoS capital expenditure periods programmed in the next10 years. These are: DAF sludge process upgrade at the Waihi treatment plant; and chemicalphosphorus removal at the Paeroa treatment plant. Both upgrades are aimed at lifting the treatmentstandards at the wastewater treatment plants.

Below is a graph profiling the new-capital expenditure for the next ten years. A detailed outline of thenew capital expenditure is summarized in Table 12.4.

Figure 12.4: Forecast New Capital Expenditure – 2015/25 ($million)

Table 12.4: Wastewater Major New-Capital Projects for 2015-25 (2014 dollars)

PROJECT YEARPROGRAMMED COST DESCRIPTION

DAF sludge processWaihi WastewaterTreatment Plant 2015/17 $0.5m

The tertiary treatment plant (DAF) produces a sludgewhich is currently discharged back into the wastewaterponds. The ponds have reached their capacity and thisproject is aimed at providing an alternative solution tosludge management.

ChemicalPhosphorus RemovalPaeroa WastewaterTreatment Plant

2021/22 $0.8m

A new consent is require for the Paeroa wastewatertreatment process. The timing of the consent coincideswith the expected date at which the current gravel bedswill no longer be effective. This project is aimed atbuilding an improved filtration process to comply withanticipated consent conditions.


June 2015 80

12.3.3 RENEWAL CAPITAL EXPENDITURE

As described in Section 9.5 Renewals Model Hauraki DC’s renewals model was used to forecast thelives of its pipes and valves, and for other assets the wastewater utilities manager manually prepareda forecast of the assets lives and renewal costs. These two forecasts were combined to produce therenewals model.

Hauraki DC’s flow gauging programme has identified three catchments that may require renewalswork. Two of these catchments have what appears to be excessive groundwater entering them (BanksCatchment, Waihi; and Waimarei South Catchment, Paeroa). The third catchment has had excessiverainwater infiltration measured (Taylor’s Ave Catchment, Paeroa).

The Taylor’s Ave catchment has been programmed for field work to correct the excessive flow. TheBanks and Waimarei catchments will be programmed if subsequent hydraulic modelling confirms thenecessity of field work to correct the situation. In anticipation of required works, budgets have beenallocated for either renewal works in the Banks and Waimarei Catchments, or alternatively catchmentaugmentation to increase downstream capacity, if hydraulic modelling shows this to be the preferableoption. These projects are categorised as performance-based level-of-service renewals in Figure 12.5.

Table 12.5: Wastewater LoS performance based Renewal-Capital Projects for 2015-25 (2014 dollars)

PROJECT YEARPROGRAMMED COST DESCRIPTION

Waihi Bank’s StreetCatchment LoSManhole Renewal

2015/18 $0.5m

Initial investigations show very high levels of groundwateringress in this catchment. The pipe work appears to be ingood condition. However, the jointing between themanhole risers and pipes appear to be allowing the largevolumes of groundwater in. Budget is to either stop thegroundwater entering, or carryout augmentationdownstream, in order pass the groundwater to thewastewater treatment plant. Hydraulic modelling will beused to confirm options.

Taylor’s AveCatchment LoSRenewal

2015/18 $1.7m

Initial investigations show very high levels of directrainwater ingress in this catchment. The pipe work isstructurally in good condition, however the pipe joints arelargely all displaced. Initial investigation into the lateralsshows similar issues to the public sewer. Budget is tocarry out complete renewal of the public sewer andlaterals in the catchment.

Waimarei SouthCatchment LoSRenewal

2015/18 $0.4m Project as per Waihi Bank’s Street Catchment.

Irrigation blockrenewalWhiritoa WastewaterTreatment Plant

2015/17 $0.3mThe Whiritoa wastewater is disposed of to a forestirrigation block. The current block requires expensivemaintenance every 5-7 years. This project is aimed atreplacing those trees with a low maintenance alternative.

Pond desludgingdistrict wide

2015 – 192035 – 2039

$0.9m$0.9m

Sewage treatment ponds fill with sludge over time. Thisreduces the treatment capacity of the ponds. This projectis to remove the sludge to ensure that the ponds continueto operate within their consented limits.


June 2015 81

Because of the uncertainty around the actual useful life of each asset, the renewals forecast has beenprepared using a Monte Carlo style simulation for the pipe and valve renewals model. The use of aMonte Carlo simulation for the pipe renewals has meant that the likelihood of either major (expensive)assets failing in any one year, and the consequential effect on the renewals expenditure for thoseyears can be assessed. Similarly, the Monte Carlo simulation also allows for the statistical likelihood ofa large number of minor (low cost) assets to fail in any one year to be assessed. These potentialeventualities are encompassed within the confidence bands presented below in Figure 12.5.

Figure 12.5: 30 year Renewal Expenditure Forecast – 2015-45

(reported values are the forecast renewal spend in 2014 dollars, with no allowance for inflation).

The plot presents:· The forecast average annual renewals spend;· The 5 and 95 percentile forecasts; and the 25 and 75 percentile forecasts (upper and lower quart) ;· When reading the percentile forecasts it is important to understand that the reported figures represent the

chance of the renewals spend being that value in any particular year. It would be extremely unlikely for two95 percentile renewals forecasts to occur back-to-back, for example.

· The percentile forecasts represent the statistical change of failure in a single year of a large asset, or thecoincidental failure of several smaller assets all occurring within a single year.

· The percentile forecasts are useful when planning the amount of money the Council should have thecontingency to draw upon in any single financial year to cover the risk of a large asset failing; or thecoincidental failure of several smaller assets within a 12 month period.

A confidence interval was also produced for the manually derived renewals forecasts, based upon theBinomial Distribution. The binomial formula was used to calculate the chance that fewer or greaterthan expected renewals would occur in each year. As for the pipe renewals model, these likelihoodswere calculated for the 5%ile, upper and lower quartile, and 95%ile confidence bands.

The confidence bands from both the pipe and valve renewals model and the manual renewals forecastwere combined to produce the overall confidence bands presented above in Figure 12.5.

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2015

/16

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

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2041

2042

2043

2044

2045

Rene

wal

Spen

din

Perio

d($

)

95% Upper Quart Lower Quart 5% Condition Based Renewals Performance Based Renewals


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12.4 DEPRECIATION

The three yearly valuations of wastewater assets have been performed by Opus InternationalConsultants with data taken as at 1 July 2014. Both underground infrastructure assets e.g. pipes,manholes etc. and above ground assets e.g. treatment plant assets, pump stations, structures etc.have been valued. The annual depreciation for each asset at an asset component level was alsocalculated.

12.4.1 ANNUAL DEPRECIATION FOR NEXT 10 YEARS

The depreciation was recalculated in line with the 2014 HDC Infrastructure Valuation. Depreciationimpacts on the total operating expenditure for wastewater as depreciation is treated as an operatingcost. Council fully funds its operating costs so these changes in depreciation have an impact on theoperating funding levels.

The Table 12.6 and 12.7 (page over) present the Optimised Replacement Cost (ORC), theDepreciated Optimised Replacement Cost (ODRC) and the Annual Depreciation Cost (AD) for thewastewater systems and assets. Figure 12.6 presents the current forecast renewal expenditurerelative to the depreciation charged against the wastewater assets.

Figure 12.6: Depreciation vs Renewal for the next Ten Years ($million)

$0.0 m

$0.5 m

$1.0 m

$1.5 m

$2.0 m

$2.5 m

$3.0 m

$3.5 m

$4.0 m

$4.5 m

$5.0 m

2015

/16

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Renewals(inflated)

Depreciation(inflated)


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The table below provides a summary of the values of Reticulation Assets for each wastewater systemand the annual depreciation calculated as part of the valuation.

Table 12.6: Valuation Summary of Reticulation Assets 2014

ASSET QUANTITY

OPTIMISEDREPLACEMENT

COST 1

($ million)

FAIR VALUE 2

($ million)

ANNUALDEPRECIATION

($000)

Gravity Sewers 128 km 33.7 19.7 370

Manholes 2,176 9.3 5.5 110

Laterals 6,152 8.1 5.1 90

Inspection Points 178 0.5 0.2 10

Rising Main 30 km 7.8 5.9 90

Total 59.4 36.4 670

The table below provides a summary of the values of Above Ground Assets (including intakes) foreach wastewater scheme and the annual depreciation calculated as part of the valuation.

Table 12.7: Valuation Summary of Above Ground Assets 2014

ASSET QUANTITY

OPTIMISEDREPLACEMENT

COST 1

($ million)

FAIR VALUE 2

($ million)

ANNUALDEPRECIATION

($000)

Kerepehi 1 1 0.6 34

Ngatea 1 0.9 0.3 28

Paeroa 1 4.1 2.2 157

Turua 1 0.2 0.1 6

Waihi 1 2.9 1.100 96

Waitakaruru 1 0.3 0.200 8.6

Whiritoa 1 0.6 0.200 18.4

Consents 7 0.055 0.01 3

Total 10.1 4.7 351


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12.5 DEPRECIATION POLICY

Council must revalue its assets every three years to assess total network values and to recalculatedepreciation based on those new values. Depreciation is an operating expense and must be funded.Depreciation is often referred to as the Decline in Service Potential (DISP) which represents thewearing out of the asset. Alternatively it is the assets inability to continue to deliver service at itsoriginal levels.

The basic value of an asset reduces in accordance with the wearing out or consumption of benefitsover its life arising from use, the passage of time, or obsolescence. This reduced value is called thedepreciated value and has been calculated as the depreciable component of the replacement costproportioned by the ratio of remaining useful life (RL) to economic life (EL) on a straight-line basis.This method provides a reasonable basis for the ‘return of capital’ over the economic life of the asset.Optimised depreciated replacement cost is given by:

ODRC = (Gross ORC-RV) RL/EL +RV

12.6 ASSET USEFUL LIVES & UNIT RATES

The Assumptions for Asset Useful Lives and Unit Rates are determined as part of the three yearlyasset lifecycle management processes. Unit rates are updated annually as part of the AnnualValuation of new assets created. Recently completed contracts are used to adjust unit ratesassumptions.

The Depreciation calculation is discussed in the Final Valuation Report 2014 by Opus InternationalConsultants. The annual depreciation is calculated by dividing the depreciable portion of thereplacement cost of an asset by its economic life. The annual depreciation is calculated by:

D = (Gross ORC-RV)/EL or = (ODRC-RV)/RL


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13 LEGISLATION AND BYLAWSCouncil’s authority and responsibility for providing wastewater services are outlined in variousgovernment acts and are supported by policies and bylaws. We summarise and note key legislationbelow:

· Local Government Act 1974 (sections not repealed in the LGA 2002)· The Health Act 1956 imposes a general public health responsibility on Council.· The Public Works Act 1981.· The Building Act 1991.· Resource Management Act 1991 and amendments;· Civil Defence Emergency Management Act 2002;· The Climate Change Response Act 2002.

The bylaws for wastewater are contained in Part 4 of the Hauraki District Council Consolidated Bylaw.

Relevant regulations and national standards affecting the wastewater activity are:· NZS 4404:2004 Land Development and Sub divisional Engineering· NZS HB 4360:2000 Risk Management for Local Government· NZS 4404:1981 Code of Practice for Urban Land Subdivision (superseded)· NZS 4404:2004 Land Development and Sub divisional Engineering


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14 RELEVANT STRATEGIES AND PLANSThis AMP is a part of a suite of planning documents, both within the local context of Hauraki DistrictCouncil, and the wider external context of the Waikato Region. These include:

· Hauraki District Council:o Asset Management Planning Policy;o Engineering Manual;o Development Contributions Policy;o Operative District Plan and Proposed District Plan;o Annual Plan;o Community Plan;o Long Term Council Community Plan.

· Waikato Regional Council policies and plans:o Operative Regional Policy Statement;o Proposed Regional Policy Statement;o Operative Regional Plan.

· The New Zealand Waste Strategy.· The New Zealand Government’s Sustainable Development Action Plan.

We expand on the purpose of some of these documents and plans below:

· Operative District Plan and Proposed District Plan - Provides a framework for thesustainable management of the natural and physical environment, and assists the Council tocarry out its functions in order to achieve the purpose of the Resource Management Act, 1991.

· Operative Regional Policy Statement, Proposed Regional Policy Statement andOperative Regional Plan - The Waikato Regional Council Plan and Policy Statements,developed under the Resource Management Act, 1991, detail how local authorities in theRegion must address regional responsibilities under that Act. Discharges of water,wastewater, solid waste, stormwater and land drainage to water and/or air all require resourceconsents under the provisions of the Regional Plan (at the scale carried out by the Council).

· Hauraki District Council Consolidated Bylaw - Provides laws applicable only to HaurakiDistrict that in general: protect the public from nuisance; protect, promote and maintain publichealth and safety; and minimise the potential for offensive behaviour in public places.

· Water and Sanitary Services Assessment - Consists of an assessment of water supply,wastewater services, stormwater, drainage, cemeteries, crematoria, public toilets and wastedisposal. Section 125 of the Local Government Act, 2002, states there is a need to assessthese services as they are vital to health and welfare.

· Development Contributions Policy - This policy makes provision for the Council to collectcontributions for development deemed to cause increased demand on Council infrastructureand community facilities. Payment of development contributions by those causing the demandis considered a fair and equitable way of dealing with the requirement for infrastructure andfacilities of increased capacity.


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15 PLANNING ASSUMPTIONS AND CONFIDENCELEVELS

The Asset Management Plan is a planning tool which sets out the future needs of the consumers andthe community, and presents the Council’s response to them by way of capital projects and forwardplanning. This plan is for the next ten years and is therefore based on a number of assumptions whichcarry varying degrees of uncertainty.

These assumptions include financial assumptions such as interest rates on investments, andpopulation projections. Schedule 10 of the LGA prescribes that the key assumptions and risks shouldbe transparent to the community so those reading the Wastewater AMP can accurately interpret therisks and assumptions associated with long term planning.

The second part of this section covers the level of confidence with the information this plan is basedon. It is not only about the accuracy and confidence with the asset data but also the accuracy offorecasts e.g. demand and financial forecasts etc.

15.1 SIGNIFICANT ASSUMPTIONS AND POSSIBLE EFFECTS

The significant assumptions have been identified and are summarised in Table 15.1. Theseassumptions and uncertainties represent the approach that has been outlined for the 2015/25 planningwindow.

Council is required to outline any reasons for uncertainty and what the possible effects might be onforecasts for the future in order to transparently show to the community the reasoning behind keydecisions and long term planning.


June 2015 88

Table 15.1: Summary of Assumptions for 2015/25 LTP and AMPs

ISSUE ASSUMPTIONS POSSIBLE EFFECTS

Population Growth

The population of the District willremain essentially static for the next10-years, following by a slightdecline to 2045.

Population falls: There will be fewer people to pay for the fixed infrastructure asset costs. This may increase thecost of the wastewater service per property.

Population growth occurs: new capital expenditure may need to be higher than forecast.

Rating Unit GrowthThere will be a slight increase in therating units cause by a shift to fewerpeople per household.

Rating unit growth does not occur: fixed costs per property will stay roughly the same as present.

Rating unit growth occurs to a greater extent than forecast: fixed costs per property will decrease due to there beinga larger number of properties to spread this cost over. Water use figures per person may increase slightly abovepresent levels.

Levels of ServiceCommunity expectations regardingthe level of service Council provideswill not significantly change.

Community expectations fall: Council will be able to stretch the existing infrastructure further, possibly translatinginto a lower cost of the wastewater service. Customer satisfaction levels may increase.

Community expectations rise: two potential outcomes:i) Council does not respond to this increased expectation, and continues to provide the same level of service.

The likely result would be decreased satisfaction levels.ii) Council responds to the increased expectations, and upgrades infrastructure to meet these expectations.

Customer satisfaction with the quality of water provided may remain at present levels, or potentially increase.However, the cost of the wastewater service provided would likely increase per customer.

Resource Consents

Conditions of resource consentsheld by Council for the District’swastewater treatment plantdischarged will not be alteredsignificantly.

Conditions are relaxed: little change to the existing operation of Council. In respect of minimising the impact uponthe environment, Council would continue to operate the wastewater service in the same manner that is beingcurrently operated, in order to minimise impacts on the environment.

Conditions are tightened: Council is forced to upgrade existing infrastructure to meet the new standards. This willraise the cost of the wastewater service provided to customers.

Resource Consents

At some stage during the next 30-years, the Waikato RegionalCouncil’s regional plan will lower thestatus of wastewater overflows fromits current status of ‘Prohibited’ toeither ‘Restricted Discretionary’ or‘Discretionary’, bringing the WaikatoRegional Plan in-line with theAuckland Regional Plan.

‘Prohibited’ status remains: Hauraki District Council will need to shorten the useful lives of its pipe and manholeassets. Pipe and manhole renewals will need to be carried out several years earlier than currently forecast. This willincrease the rate of depreciation on the wastewater network, which will translate to higher operational costs, andhigher charges to customers.

The Waikato Regional Council brings the status of wastewater overflows within the Waikato Regional Plan in linewith the Auckland Regional Plan at some stage during the next 30-years: no change to the current forecastmanhole and pipe useful lives used within renewals and depreciation forecasts, as this scenario has already beenassumed within the current renewals forecasts.


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Operating Environment

There will be no significantchanges to Council’s operatingenvironment which have notalready been planned for, e.g.natural disasters, healthepidemics, or changes tolegislation.

Possible effects caused by changes the operating environment cannot reasonably be foreseen with anydegree of confidence. As such, a reactionary approach will be required to these changes.

Asset Information

Condition data for assets thathave been replaced, or arenearing the end of their useablelives is reliable.

The data held of the age, material,and size of the assets within theCouncil’s asset register is reliable.

If the asset condition data is unreliable:Forecasts of the condition of other assets and their expected lives may be incorrect.The performance monitoring carried out by Council will over time show up any incorrectassumptions about the accuracy of Council’s understanding on the asset condition.

If, and once identified, Council’s existing processes will accommodate this new information aboutthe asset condition, and projects will be identified and programmed accordingly.

Council’s financial forecasts would need to be updated to reflect expenditure that is occurring earlierthan anticipated.

Inflation

The forecast wastewater specificinflation rates provided by BERL,will provide reasonablerepresentation of the futureoccurrence of inflation.

Council’s financial forecasts would need to be updated to reflect the different rates of inflation.

Interest

Interest rates on Term Debt willnot change sufficiently to requirechanges to the management ofthe wastewater activity.

Interest rates lower: this is foreseen as being highly unlikely, as interest rates are currently at record lowlevels. If it were to occur, the cost of the wastewater service could likely be provided at a cheaper rate forcustomers.

Interest rates increase: Hauraki District Council has not programmed any ‘nice to have’ projects. As such,there are no projects within the existing budgets that can be cut, if the levels of service and environmentalperformance is to be maintained. As no growth is foreseen for the District, increased interest rates will notaffect councils growth forecasts, as growth is already zero. The most likely result is that the cost of thewastewater would increase for customers. An alternative may be consultation with the community to reducethe level of service provided, potentially thereby providing some reduction to the cost of the wastewaterservice to offset the increased financing costs.

Asset ValueThe asset values provided byCouncil’s consultants for the assetvaluation is correct within reason.

Asset values were too high: the rate of depreciation allowed for the wastewater asset can be decreased. Thiswould likely translate into a reduced cost charged to customers.


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Asset values were too low: the rate of depreciation allowed for the wastewater asset will need to beincreased. This would likely translate into an increase cost charged to customers.

New Capital WorksCosts

On average, costs of major capitalworks will not vary significantlyfrom their estimated costs.

Capital Works costs are cheaper than budgeted: the savings from the reduced cost of works will reduce theloans taken out to finance them. This will follow through to a lower cost of providing the wastewater service.The rates charged for the wastewater service may be able to be reduced accordingly.

Capital Works costs are higher than budgeted: increase costs will result in greater borrowing to fund thewastewater activity. Current charges for the wastewater service may need to be increased accordingly.

Renewals Works CostsThe asset values provided byCouncil’s consultants for the assetvaluation is correct within reason.

Renewal Works costs are cheaper than budgeted: the savings from the reduce cost of works will reduce theforecast renewals budget. This will follow through to a lower cost of providing the wastewater service. Therates charged for the wastewater service may be able to be reduced accordingly.

Renewals Works costs are higher than budgeted: the forecast renewals budget will need to increaseaccordingly. The cost benefit decisions that trigger the renewals work may need to be re-evaluated. Councilmay consult with the community in respect of lowering existing level of service targets. If existing level ofservice targets are to be met, current charges for the wastewater service may need to be increasedaccordingly.

Asset Life

Approximately 70% of reticulationassets will reach the end of theiruseful life over a period of 30years (±15 years either-side of theexpected life of the asset).

The industry standard lives ofnon-reticulation assets arecorrect.

Asset lives are shorter than forecast: renewal works will need to be carried out earlier than scheduled. Thiswill likely increase the current renewals budget. The rates charged for the wastewater service may need toincrease accordingly.

Asset lives are longer than forecast: Council will be able to defer renewal works. This will likely reduce thecurrent renewals budget. The reduction in the renewals budget may follow through to a reduced cost of thewastewater service, resulting in lower charges to customers.


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15.2 DATA CONFIDENCE

15.2.1 CONFIDENCE LEVELS ON ASSET CONDITION & PERFORMANCE

The wastewater asset register is stored in the Council’s AssetFinda database. This asset register, isused to document the condition and performance of every single asset held by the Council, in additionto parameters that describe the physical dimensions of the asset.

Council’s overall assessment of the data quality is presented in the tables below:

Table 15.2: Data Confidence Grading Scale

CONFIDENCEGRADE

DEFINITION OFGRADE

Highly reliable Data based on sound records, procedure, investigations and analysis, documentedproperly and recognised as the best method of assessment

Reliable Data based on sound records, procedures, investigations, and analysis documentedproperly but has minor shortcomings, e.g. the data is old, some documentation ismissing, and reliance is placed on unconfirmed reports or some extrapolation.

Uncertain Data based on sound records, procedures, investigations and analysis which isincomplete or unsupported, or extrapolated from a limited sample for which grade A or Bdata are available.

Very Uncertain Data based on unconfirmed verbal reports and / or cursory inspection and analysis.

Table 15.3: Overall Data Confidence Rating

CATEGORY CONFIDENCE GRADE

HighlyReliable

Reliable Uncertain VeryUncertain

Quantity ü

Size / Capacity ü

Location ü

Age ü

Base Life ü

Condition ü

Performance ü

Unit Rate ü

Criticality ü


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DATA CONFIDENCE IN ASSET CONDITIONThe Risk and Lifecycle sections of this AMP describes the process that the Council is utilising to buildits understanding of the asset condition over time. The priority placed upon collecting asset conditiondata is dependent upon the criticality of the asset. As described elsewhere in the AMP, the AMPimprovement program details the creation of an Asset Criticality Management database that willdocument asset condition, and inspection data. Over time, the asset lifecycle management strategywill increase the degree to which this database is populated. In doing so, the Council’s confidence inits understanding of its asset condition will improve over time.

ASSET PERFORMANCEThe Lifecycle Management section of this AMP describes that hydraulic models will be prepared andupdated for the District’s water supplies on a 10 yearly cycle. Most of the District’s hydraulic modelsare now 10 years old, and due for update. Accordingly, model build and calibration projects for theDistrict’s wastewater schemes are programmed to be completed over the next three years.

These hydraulic models will be used to carry out system performance assessment, and will improvethe Council’s understanding of the wastewater asset performance. The results from the systemperformance assessments will be populated within the AssetFinda database.

15.2.2 Accuracy of Asset Inventory

Council has recently carried out assessments of both the accuracy and completeness of its asset data:· A data capture exercise on water, wastewater, and stormwater reticulation assets was across

large areas of the district between Jan to March 2014. This work has shown that the dataalready held was largely (estimated to be greater than 95%) accurate. The data captured fromthis exercise is still being processed back in the office, therefore final accuracy values are notyet known.

· An asset data stocktake was carried out in June 2014 as a part of the asset valuationexercise. All reticulation and plant asset data for water, wastewater, stormwater, and landdrainage assets were reviewed through this process. The stocktake found few errors. Thoseerrors that were identified have already been corrected within Council’s asset databases. Theasset data register is therefore considered to be accurate, as at June 2014.

15.2.3 Confidence Level on Demand/Growth & Financial Forecasts

These confidence ratings presented in the table below have been determined by the asset managersas part of the lifecycle analysis process.

Table 15.4 LTP and AMP Data Confidence Ratings

CATEGORYCONFIDENCE GRADE

Highly Reliable Reliable Uncertain Very Uncertain

Demand/Growth Forecasts ü

Financial Forecasts ü


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16 EFFECTS OF THE WASTEWATER SERVICEThe wastewater service has both positive and negative effects on the environmental, social, cultural,and economic well-being of the community. These include:

16.1 ENVIRONMENTAL EFFECTS

Table 16.1: Significant Positive, Negative Effects and Mitigations for Wastewater Service

POSITIVE NEGATIVE MITIGATION

EN

VIR

ON

ME

NTA

L

· A centralised public wastewaterservice, is easier to monitor thanindividual private systems. Bettermonitoring reduces the risks ofpotential adverse environmentaleffects.

· Poorly maintained privatewastewater treatment systems canallow untreated wastewater to leakinto the environment for yearsbefore anyone notices the problem.If a public wastewater service werenot provided, an additional 6,000private wastewater systems wouldneed to be installed in the District.This would greatly increase the riskof environmental problems causedby poorly maintained privatewastewater treatment systems.

· If the ingress of heavy rainfalland / or groundwater becomesexcessive, the publicwastewater networks canoverflow diluted sewerage intothe environment, if thenetwork doesn’t havesufficient capacity.

· Application of the LifecycleManagement strategydescribed within this AMP;combined with the assetknowledge gained throughdetailed flow gauging andhydraulic modelling of thenetworks will enable theperformance of the network tobe tracked over time.

· Tracking the networkperformance over timeenables trends to beidentified, and potentialproblems to be identifiedbefore they occur.

· Once identified, projects canbe developed andprogrammed to addressknown issues before theybecome problematic.

EC

ON

OM

IC

· The cost of a public wastewaterservice is lower than the life-cyclecosts of private wastewatersystems.

· When private wastewater systemsare used, they require time andeffort to maintain. The publicwastewater service frees people tofocus on other activities.Businesses are able to focus ontheir core business activities.

· The public wastewater serviceallows more intensive use of urbanproperty as space for disposalfields and tanks no longer needs tobe allocated within private property.

· The costs of the wastewaterinfrastructure can span morethan one generation. If notcarefully and responsiblymanaged and apportionedone generation could benefitat the expense of another.

· Encourage efficient use ofwater by customers connectedto the water supply.

· Universal water metering· Ensuring that appropriate

consideration is given to thefinancial management of thelifecycle costs of theinfrastructure, and that thecosts are spread fairly acrossgenerations.

CU

LTU

RA

L

· The involvement of Mana Whenuaand Tangata Whenua in themanagement of the wastewaterservice has helped to createmutual understanding of differentcultures’ beliefs and values, andhow those values can beincorporated into the managementand operation of the publicwastewater service.

· Potential conflicts betweendisposal of treated wastewaterand cultural values.

· Involvement andcommunication with the ManaWhenua and TangataWhenua in the managementof the wastewater service.

· Education.


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POSITIVE NEGATIVE MITIGATION

SO

CIA

L

· The public wastewater servicereduces the risk of waterbornediseases spreading through thecommunity.

· No negative social effectsarising from the provision of apublic wastewater service areforeseen.

-

16.2 SUSTAINABILITY

The wastewater activity generally has a positive impact on the social and environmental dimensions ofwell-being, creating a healthy and productive environment in which communities can thrive. Negativeimpacts are the cost to provide and operate these services. There is potential for the wastewaternetwork to have a detrimental effect on the environment if it were poorly managed and operated.Hauraki District Council is committed to minimising any detrimental effects of the wastewater activitywhere possible.

The simplest mitigation strategy described in Table 16.1 (above) is to continue to manage demandthrough the use of universal water metering. Universal water metering encourages efficient use ofwater by customers connected to the water supply. This in turn reduces the volume of water returnedto the wastewater sewer from residents, and commercial enterprises. Hauraki DC already employsuniversal water metering, and therefore this mitigation strategy is already in place.

The Sustainability Policy 2010 was adopted by Council in August 2010. This Policy formalisesCouncil’s mandate from the Local Government Act 2002 to act in a sustainable manner. The policyrequires staff to consider:

· the social, economic, and cultural well-being of people and communities;· the need to maintain and enhance the quality of the environment; and· the needs of future generations.

when making business and operational decisions.


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16.3 RESOURCE CONSENTS

Resource consents are required for discharging into natural water or onto land. These are issued byWaikato Regional Council.

HDC’s wastewater network currently discharges into six water bodies. The Whiritoa schemedischarges into a planted forestry block. Each of these discharges is subject to resource consents.

Each of these consents is subject to requirements that restrict the volume of water that can bedischarged, and stipulate the water quality parameters the discharged water must meet. HaurakiDistrict Council easily meets the resource consent capacity limits, and with the exception of theoccasional spike in some parameters, meets the water quality parameters as well.

All of these resource consents are due for renewal within the next six years. There is likely to besignificant staff resource and cost associated with renewal of each of these consents. However,Council does not currently foresee greatly increased environmental treatment standards beingimposed.

If the regional Council were to seek significant tightening of permitted water quality dischargeparameters, this could have very significant cost implications for the District.

Table 16.2: Resource Consent Capacities and Remaining Lives

SCHEME RESOURCE CONSENTCAPACITY

AVERAGEDISCHARGE (2013/14)

REMAINING LIFE

Kerepehi 834 m3/day 190 m³ 5

Ngatea 6,050 m3/day 300 m³ 1

Paeroa 4,000 m3/day (dry weather) 2,650 m³ 6

Turua 250 m3/day 100 m³ 4

Waihi 4,000 m3/day 1,480 m³ 6

Waitakaruru 75 m3/day 20 m³ 5

Whiritoa 392 m3/day 60 m³ 5


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Figure 17.1: Continuous Improvement Process

17 IMPROVEMENT PROGRAMME

17.1 2015-18 IMPROVEMENT PROGRAMThe primary focus of this improvementprogramme for the period between 2015-18 isto improve the efficiency of the datamanagement processes that support the assetmanagement planning activity.

The 2015-18 period will also see assetmanagement improvement projects beingstarted with a view towards completion in the2018-21 period. The primary focus of theselonger-term projects is to improve the datacaptured from the field about the behaviourand performance of the wastewater asset.

Table 17.1: Asset management improvementinitiatives for the period 2015-18

ASSET MANAGEMENT FUNCTIONIMPROVEMENT IMPROVEMENT ACTION

Improve the ability to forecast asset life andidentify performance based renewals

· Create and maintain a database that documents the location, dates ofpipe collapse / partial collapse / breaks / failures, and the failuremode.

· Formalise the use of opportunistic sampling and conditionassessments. Carry out staff training (as required) to support thisinitiative.

· Prepare a guide on what data needs to be captured whendecommissioning and asset, and how this data is to be stored.

Asset life-cycle risk management

· Establish and populate an asset criticality database;· Schedule inspection dates as required by asset criticality;· Medium, high, and very high criticality assets, assess time to repair.· Identify assets with long lead in times for repair/replacement.

Schedule appropriate inspection dates for these assets.· Prepare interruption management strategy for high and very high

criticality assets. This will include identifying:o Where redundancy exists;o Opportunities to hold back sewerage flows upstream, and

carry out bypass pumping while repairs are carried out.o Appropriate stocks of spare parts / spare assets.

Reactive maintenance: improvingpreparedness

· Review spare parts / spare assets held in stock;· Review ability to source spare parts / spare assets within 3 hour time

frame;· Review necessary equipment availability to undertake repairs;· Review staffing levels;· Carry out gap analysis for preparedness. Prioritise the gap analysis.

Accuracy and completeness of asset data

· Enter backlog of reticulation as-builts into GIS and AssetFinda;· Review AssetFinda database for obvious mistakes, such as pipe

material being listed at a time when that material did not exist or wasnot in use.

· Populate the AssetFinda database with improvements to the assetdata made whilst preparing the valuation data for the 2014 valuation.


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· Improve systems around the capture of new asset data, bothconstructed by Council and vested.

Capture of financial information

· Improve the systems that support the capture of project costs againstassets;

· Improve the systems that support the capture of the cost ofconstruction for vested assets;

· Develop a unit rate data base;

Improve understanding of asset performanceagainst level of service targets:

· Prepare calibrated hydraulic models;· Carry out network system performance using the models;· Report on compliance with level of service targets.

Table 17.2: Asset management improvement initiatives for the 6-year period between 2015-21


Capture of level of service performance data

· Improve customer service job logging system:o Need to align with new level of service targets;o Need to train customer service staff around new level of

service requirements;o Improve interaction between job creation by customer

service staff, and electronic delivery of job to field staff;tracking of job progress by field staff back to customerservice representatives; and

o Improve the flow of information from the customer servicerequest system through to asset performance reportingsystems;

· Improve electronic data exchange between office and field and viceversa

· Heading towards a system that enables informed decisions to bemade (6 year project):

o Spatial data on pump stations and pipes with high blockagefrequency and/or cleaning frequency.

o Develop an understanding of where groundwater andrainwater is entering the network (to the spatial resolutionof a mini catchment)

o Develop an understanding of areas that are running low onhydraulic capacity within the network. This will assist withdecisions on repair/renewal.

o Spatial plotting of condition-based appears to pipes andmanholes. This may help highlight larger trends in respectof the asset condition. If trends are noticed, they can beused to trigger further investigation.


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17.2 PROGRESS WITH 2012-15 IMPROVEMENT PLAN

Improvement actions from the 2012 AMP with a target completion date between 2012-15 are listed in Table 17.3below.

Table 17.3: Progress with the 2012 AMP Improvement Plan 2012-2015

NO IMPROVEMENT ACTION TAKEN OUTCOME /DECISION

2 Perform QA check of water utilities dataand data cleansing

A stocktake of completeness and accuracy ofreticulation and plant assets has been carried out.The focus was ensuring that all assets were includedwithin the asset register, and that nodecommissioned assets were still listed as active.

Minor deficiencies were identified through thestocktake process. Noted errors have been correctedwithin the asset register.

An audit of transfer of data between assetmanagement systems was carried out (the ConfirmDatabase was migrated to the Authority Database,which was subsequently migrated to the AssetFindadatabase). This audit found only a handful of errors,which have since been corrected within the assetregister.

There is still additional work to be carried out on themetadata associated with each asset.

Ongoing

3 Processes developed to update and tomaintain data in AM

Processes for vested assets, capital projects andmaintenance actions have been implemented, but stillrequire further work to streamline.

In progress

4 Develop monitoring strategies for thedevelopment of the electronic monitoringSCADA system

Upgrade of telemetry processes to a SCADA system Implementedand refining inprogress

8 Develop monitoring and reportingprocesses for resource consents

A structured monitoring and reporting process hasbeen implemented.

Completed.

24 Finalise renewal policy and seek Councilapproval.

Completed. Completedandimplementedwithin theLifecyclesection of this2015 AMP.

28 Optimise and document servicerequest/work orders and maintenanceprocesses.

Not started Planned startin 2015-18planning cycle.

29 Develop a strategy and long termprogramme to improve asset condition andperformance data and derive remaininglife.

Completed. Completed.

31 Finalise and document As Built processand workflow using cross functionalflowchart.

Completed.

Further work is required to make the processes moreefficient.

Implementedand refining inprogress

38 Complete and improve hydraulic models of3 main schemes (Plains, Paeroa, Waihi)

Plains hydraulic model – underway.Waihi and Paeroa models, not yet started.

Underway.

47 Development of standard reports fromasset management system to supportservice managers

Completed.

Further work is required to make the reportingprocesses more efficient.

Implementedand refining inprogress


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18 COUNCIL COMMITMENTThe Core Plus asset management practice for the wastewater activity has been formally adoptedwithin Council Policy, and approved by Council.

Hauraki DC has established an ‘AMP Development Team’. The AMP Development Team’s job is toformalize the project-management of the asset management planning processes within HaurakiDistrict Council. The wastewater activity and the wastewater asset management planning processesare overseen by the AMP Development Team.

The asset management plans for the wastewater activity are updated and republished every threeyears. The published asset management plans are officially adopted by Council and any subsequentchanges are captured in the Change Register.

Waihi Treatment Plant – valves & fittings


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APPENDICES

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APPENDIX A:MAP OF RURAL WASTEWATER SUPPLY ZONE

103

Rural wastewaterservice zone

INTERNAL DRAFT

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