Agenda of Council meeting - Wednesday, 22 September 2021

Council Meeting Agenda

22 September 2021

MINUTES OF A Council Meeting OF THE Central Otago District Council
HELD AT Ngā Hau e Whā, William Fraser Building,

1 Dunorling Street, Alexandra
ON Wednesday, 11 August 2021 COMMENCING AT 10.30 am

PRESENT: His Worship the Mayor T Cadogan (Chairperson), Cr N Gillespie, Cr T Alley, Cr L Claridge, Cr I Cooney, Cr S Duncan, Cr S Jeffery, Cr C Laws, Cr N McKinlay, Cr M McPherson, Cr T Paterson

IN ATTENDANCE: S Jacobs (Chief Executive Officer), L Macdonald (Executive Manager - Corporate Services), J Muir (Executive Manager - Infrastructure Services), L van der Voort (Executive Manager - Planning and Environment), A Rodgers (Principal Policy Planner), D Rushbrook (General Manager, Tourism Central Otago), D Shaw (Property and Facilities Officer – Cromwell), T Bates (Property Officer), N Lanham (Economic Development Manager), Q Penniall (Environmental Engineering Manager), C Green (Infrastructure Finance Officer), A McDowall (Finance Manger), G Robinson (Property Manager), M De Cort (Communications Coordinator) and R Williams (Governance Manager)

1 Apologies

Resolution

Moved: Cadogan

Seconded: Jeffery

That apologies from Cr S Calvert be received and accepted.

Carried

2 Public Forum

Brent Nicolson from Rural Networks South Island Ltd spoke about the rent review for Rural Networks South Island Ltd before responding to questions.

3 Confirmation of Minutes

Resolution

Moved: McPherson

Seconded: Alley

That the public minutes of the Ordinary Council Meeting held on 30 June 2021 be confirmed as a true and correct record.

Carried

4 Declaration of Interest

Members were reminded of their obligations in respect of declaring any interests. Cr Alley declared an interest in item 21.6.2 and withdrew from discussion and voting on that item.

Note: Edward Guy and Emily Walker from Rationale and Tim Church and Stephanie Griffiths from Boffa Miskell joined the meeting for item 21.6.2.

Note: Cr Gillespie assumed the Chair as the Planning and Regulatory portfolio lead.

Note: Cr Alley declared an interest and withdrew from discussion and voting on this item.

5 Reports for Decisions

21.6.2 Draft Vincent Spatial Plan Engagement Document

To consider and approve the Vincent Spatial Plan preferred option engagement document for release.

Emily Walker from Rationale and Tim Church from Boffa Miskell spoke to a presentation about the process undertaken to date and how the options had been developed, incorporating the public feedback received before responding to questions.

Following discussion it was agreed that the consultation document would be circulated to councillors for input prior to public distribution.

Resolution

Moved: McKinlay

Seconded: Laws

That the Council

A. Receives the report and accepts the level of significance.

B. Approves the draft Vincent Spatial Plan preferred option.

C. Directs staff to develop a preferred option engagement document for release to stakeholders

Carried

Note: Cr Paterson left the meeting at 11.40 am and returned at 11.42 am.

21.6.3 Central Otago District Council Submission on Proposed Otago Regional Policy Statement

To consider and endorse Council’s submission on the Proposed Otago Regional Policy Statement.

Resolution

Moved: McPherson

Seconded: Alley

That the Council

A. Receives the report and accepts the level of significance.

B. Approves the lodging of the submission on the Proposed Otago Regional Policy Statement on behalf of the Central Otago District Council.

C. Directs staff to finalise the submission and lodge with the Otago Regional Council.

Carried

Note: Cr Jeffery assumed the Chair as Economic Development and Community Facilities portfolio lead.

Note: Cr Duncan left the meeting at 11.54 am.

21.6.4 Cromwell Bike Park Shelter Construction

To consider granting consent (under delegated authority), on behalf of the Minister of Conservation, permission for the Cromwell Bike Park Incorporated to construct a shelter over the existing starting ramps at the facility on the Neplusultra Recreation Reserve.

Resolution

Moved: Gillespie

Seconded: McKinlay

That the Council

A. Receives the report and accepts the level of significance.

B. Agrees to consent (under delegated authority), on behalf of the Minister of Conservation to Council granting approval for the Cromwell Bike Park to erect a shelter over the existing starting ramps subject to necessary consents being sought as per Clause 7.2 of the lease.

Carried

Note: Cr Duncan returned to the meeting at 11.56 am.

21.6.5 Request for approval to locate a Container at Cromwell Golf Club

To consider a granting consent (under delegated authority), on behalf of the Minister of Conservation, permission for the Cromwell Golf Club to site a 40 foot storage (shipping) container on the area as identified on the Recreation Reserve.

Resolution

Moved: Gillespie

Seconded: McKinlay

That the Council

A. Receives the report and accepts the level of significance.

B. Authorises the Cromwell Golf Club to locate a container within the area currently used for storage as indicated in Appendix 2 of the report.

C. Agrees to consent (under delegated authority), on behalf of the Minister of Conservation to Council granting approval for the Cromwell Golf Club to locate a container within the area used for storage as indicated in Appendix 2 of the report.

Carried

21.6.6 Cromwell Aerodrome - Refueling Facility

To consider a proposal from RD Petroleum to establish an aviation refuelling facility at Cromwell Aerodrome.

Resolution

Moved: McPherson

Seconded: Alley

That the Council

A. Receives the report and accepts the level of significance.

B. Agrees in principle to approve the issuing of a licence to occupy to RD Petroleum for refuelling facility at Cromwell Aerodrome comprising two 10,000 litre tanks for avgas and Jet A1 fuel.

C. Authorises the CEO to confirm approval of final location and design of refuelling facility to include safe and secure access for all potential users.

D. Authorises the CEO to approve acceptable terms and conditions for the Licence to Occupy similar to the Licence for the refuelling facility at Alexandra Airport and do all that is necessary to give effect to the resolutions.

Carried

21.6.7 WoolOn 2021 Event Request for Grant

To consider an application from WoolOn Creative Fashion Society Inc for a grant of $10,000 for the 2021 year event.

The Mayor and Cr McPherson noted their previous involvement with the event and noted they did not have a conflict of interest in the matter given the time that had lapsed since then.

During discussion, the potential of the event and its ability to showcase one of the district’s key industries was noted. However concern was expressed at the quality and timeliness of the application and that it had to be considered outside of the grants process.

Following discussion it was agreed adherence to the correct grant application processes would be a requirement for future applications and that assistance from staff for the event’s organising committee and the possibility of Council having a liaison position at the Board table may be considered.

Resolution

Moved: Duncan

Seconded: Claridge

That the Council

A. Receives the report and accepts the level of significance.

B. Approves a grant of $10,000 to the WoolOn Creative Fashion Society Incorporated for WoolOn creative fashion events 13 – 15 August 2021. The approved grant to be applied to venue costs, master of ceremonies, event marketing and communication only and is to be funded from district general reserves

Carried With Crs McKinlay, McPherson and Cooney recording their vote against.

21.6.8 Economic Recovery Plan Progress Report

To provide an update on the implementation of the 2020/2021 Economic Recovery Plan and provide the Economic Work programme for 2021/22.

Resolution

Moved: Duncan

Seconded: Alley

That the report be received and Council notes the work programme for 2021/2022.

Carried

Note: Cr McKinlay assumed the Chair as Three Waters and Waste portfolio lead.

21.6.9 Waste Services Review

To review public information prepared for community feedback on Council’s waste and recycling services.

Resolution

Moved: Duncan

Seconded: McPherson

That the Council

A. Receives the report and accepts the level of significance.

B. Approves the ‘Have Your Say on Our Waste Services’ document for community feedback.

Carried

Note: The meeting adjourned at 12.57 pm and reconvened at 1.32 pm.

Note: Cr Claridge returned to the meeting at 1.39 pm.

21.6.10 Appointment of Consultants for Water and Wastewater Technical Support for 2021-24

To consider the direct appointment of consultants for technical support for water and wastewater during the 2021-24 Long Term Plan period.

During discussion it was noted that the proposed recommendations were in line with Council’s procurement policy.

Resolution

Moved: Paterson

Seconded: Cooney

That the Council

A. Receives the report and accepts the level of significance and notes that resolutions B-G are consistent with Council’s procurement policy

B. Approves the direct appointment of Stantec for the provision of technical services for water and wastewater for the 2021-24 Long Term Plan period for Cromwell, Vincent and Maniototo areas.

C. Approves the direct appointment of Fluent Solutions for provision of technical services for water and wastewater for the 2021-24 Long Term Plan period for the Teviot area.

D. Approves the direct appointment of Beca for provision of technical services for water and wastewater for the 2021-24 Long Term Plan period for the Maniototo area, and reticulation renewals and operational support as required.

E. Approves the direct appointment of Beale Consulting for the provision of technical services for resource consent applications for the 2021-24 Long Term Plan period.

F. Approves the direct appointment of Rationale for the provision of strategic planning support for the 2021-24 Long Term Plan period.

G. Approves the direct appointment of Mott MacDonald for hydraulic modelling for the 2021-24 Long Term Plan period.

Carried

21.6.11 Naseby Water Supply

To consider upgrading of the Naseby treatment plant to provide service during climatic events which affect the quality of the source water.

Resolution

Moved: Claridge

Seconded: Alley

That the Council

A. Receives the report and accepts the level of significance.

B. Agrees to proceed with construction of a clarifier, pH correction, and flocculation tank to be funded from tranche 1 of the water stimulus funding.

C. Directs staff to investigate options for an alternative water source for the Naseby water supply, including consideration of a single Maniototo water treatment site.

Carried

Note: Cr Duncan assumed the Chair as the Roading portfolio lead.

21.6.12 Appointment of Consultant for Bridge Structural Advice for 2021‑24

To consider the direct appointment of a consultant for advice for bridges during the 2021-24 Long Term Plan period.

During discussion it was noted that the proposed recommendations were in line with Council’s procurement policy.

Resolution

Moved: Jeffery

Seconded: Paterson

That the Council

A. Receives the report and accepts the level of significance and notes that resolutions B is consistent with Council’s procurement policy.

B. Approves the direct appointment of Beca for the provision of structural advice for bridges for the 2021-24 Long Term Plan period.

Carried

21.6.13 Road Renaming Approval Report - Portion of Watson Road

To ratify the Vincent Community Board’s recommendation to rename a portion of Watson Road to Pīhoihoi Road.

Resolution

Moved: McPherson

Seconded: Alley

That the Council

A. Receives the report and accepts the level of significance.

B. Rename a portion of Watson Road to Pīhoihoi Road.

Carried

Note: The Mayor assumed the Chair.

21.6.14 Rural Networks South Island rent review

To provide further information for the purpose of reassessing the licence fees and power charges payable by Rural Networks South Island (the Company) for the licences and leases held over various Council reserves.

This item had been considered at the 24 March 2021 Council meeting (item 21.2.3) and left to lie on the table.

Resolution

Moved: Cadogan

Seconded: Alley

That the Council

A. Receives the report and accepts the level of significance.

B. Agrees to:

1. Reduce the licence fee for the Gilligans Gully site from $6,000 to $4,800 per annum plus GST.

2. Reduce the licence fees for the Clyde Lookout, Earnscleugh Road, and Sugarloaf sites from $5,000, to $1,900 per annum plus GST.

3. Reduce the rental for the Alexandra Airport site from $5,000 to $1,900 per annum plus GST, subject to the lessee continuing to provide free internet services to the Airport Terminal.

4. Charge a flat fee of $600 per annum plus GST (per tenant as applicable) for power at the Gilligans Gully and Clyde Lookout sites with that fee being subject to adjustment (increase) by 10% on renewal.

5. Backdate the revised fees and charges to the commencement of the new licences and leases being 01 July 2020.

C. Authorises the Chief Executive to do all that is necessary to give effect to the resolution.

Carried

21.6.15 Register of Delegations

To consider a change to the “Register of Delegations to Community Boards, Portfolios, Committees, and the Chief Executive Officer” in respect to the delegations to staff and to adopt the Delegated Authorities Operating Schedule – Resource Management Act, contained in the Staff Delegations Manual.

Resolution

Moved: Gillespie

Seconded: Jeffery

That the Council

A. Receives the report and accepts the level of significance.

B. Approves the deletion of sections 82 - 84 from the Register of Delegations and approves the following change to the Register of Delegations;

· Add the paragraph to section 81 as follows:

Council has approved the Resource Management Act (RMA) delegations, as outlined in the Statutory, Regulatory and Other Delegations to Officers section of the Staff Delegations Manual.

C. Adopts the Delegated Authorities Operating Schedule – Resource Management Act delegations

.Carried

21.6.16 Audit New Zealand Interim and Final Report of the 2021-31 Long-term Plan and Consultation Document

To receive Audit New Zealand’s Report on the audit of the 2021-31 Long-term Plan Consultation Document and supporting documentation, along with the final audit report of the 2021-31 Long-term Plan.

Resolution

Moved: Cadogan

Seconded: Gillespie

That the report be received.

Carried

21.6.17 Financial Report For The Period Ending 31 May 2021

To consider the financial performance for the period ending 31 May 2021.

Resolution

Moved: Duncan

Seconded: Jeffery

That the report be received.

Carried

21.6.18 Remuneration Authority Determination 2021

To provide an update from the Remuneration Authority regarding the 2021/22 Local Government Members Determination and to consider changes to the Elected Members’ Allowances and Reimbursement Policy.

Resolution

Moved: Cadogan

Seconded: McPherson

That the Council

A. Receives the report and accepts the level of significance.

B. Notes the Local Government Members (2021/22) Determination 2021 which took effect from 1 July 2021.

C. Approves the changes to the Elected Members’ Allowances and Reimbursement Policy as attached as Appendix 2 of the report.

Carried

6 Reports for Information

Nil

7 Mayor’s Report

21.6.19 Mayor's Report

The Mayor provided an update on issues and events since the previous meeting. The Deputy Mayor congratulated the Mayor for his interview on the Q+A talkback show.

Resolution

Moved: Cadogan

Seconded: Gillespie

That the Council receives the report.

Carried

8 Status Reports

21.6.20 August 2021 Governance Report

To report on items of general interest, receive minutes and updates from key organisations, consider Council’s forward work programme and the legacy and current status report updates.

Resolution

Moved: Cadogan

Seconded: Duncan

That the Council

A. Receives the report.

B. Ratifies both the Central Otago District Council’s and the Otago - Southland Councils’ joint submissions on the Natural and Built Environment Act (Exposure Draft).

Carried

9 Community Board Minutes

21.6.21 Minutes of the Vincent Community Board Meeting held on 20 July 2021

Resolution

Moved: Duncan

Seconded: Jeffery

That the unconfirmed Minutes of the Vincent Community Board Meeting held on 20 July 2021 be noted.

Carried

21.6.22 Minutes of the Maniototo Community Board Meeting held on 22 July 2021

Resolution

Moved: Duncan

Seconded: Jeffery

That the unconfirmed Minutes of the Maniototo Community Board Meeting held on 22 July 2021 be noted.

Carried

21.6.23 Minutes of the Cromwell Community Board Meeting held on 29 July 2021

Resolution

Moved: Duncan

Seconded: Jeffery

That the unconfirmed Minutes of the Cromwell Community Board Meeting held on 29 July 2021 be noted.

Carried

21.6.24 Minutes of the Teviot Valley Community Board Meeting held on 30 July 2021

Resolution

Moved: Duncan

Seconded: Jeffery

That the unconfirmed Minutes of the Teviot Valley Community Board Meeting held on 30 July 2021 be noted.

Carried

10 Date of Next Meeting

The date of the next scheduled meeting is 22 September 2021.

11 Resolution to Exclude the Public

Resolution

Moved: Cadogan

Seconded: Duncan

That the public be excluded from the following parts of the proceedings of this meeting.

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

General subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Ground(s) under section 48 for the passing of this resolution
21.6.25 - Private Plan Change 16 - Molyneux Lifestyle Village	s48(1)(d) - that a right of appeal lies to any court or tribunal against the decision of the Central Otago District Council in these proceedings	s48(1)(d) - that the exclusion of the public from the whole or the relevant part of the proceedings of the meeting is necessary to enable the local authority to deliberate in private on its decision or recommendation in any proceedings to which this paragraph applies
21.6.26 - Major Event Funding	s7(2)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.6.27 - Council's role in affordable housing: Policy direction	s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.6.28 - Gair Avenue, Cromwell	s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.6.29 - August 2021 Confidential Governance Report	s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.6.30 - Confidential Minutes of the Vincent Community Board Meeting held on 20 July 2021	s7(2)(b)(ii) - the withholding of the information is necessary to protect information where the making available of the information would be likely unreasonably to prejudice the commercial position of the person who supplied or who is the subject of the information s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.6.31 - Confidential Minutes of the Maniototo Community Board Meeting held on 22 July 2021	s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7
21.6.32 - Confidential Minutes of the Cromwell Community Board Meeting held on 29 July 2021	s7(2)(i) - the withholding of the information is necessary to enable Council to carry on, without prejudice or disadvantage, negotiations (including commercial and industrial negotiations)	s48(1)(a)(i) - the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding would exist under section 6 or section 7

Carried

The public were excluded at 2.44 pm and the Meeting closed at 4.04 pm.

22 September 2021

5 Reports for Decisions

21.7.2 Council Community Grant Applications 2021-24 Financial Year

Doc ID: 549365

1. Purpose of Report

To consider round one of applications to the 2021-22, 2022-23 and 2023-24 Council general grants fund and to determine the grant allocation of each applicant.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Considers the following applications:

i. Central Otago Health Inc to cover administration costs

2021/22 Requested: $7,556 Recommend Decline: $0

2022/23 Requested: $7,556 Recommend Decline: $0

2023/24 Requested: $7,556 Recommend Decline: $0

ii. Central Otago Heritage Trust to cover operational costs

2021/22 Requested: $40,000 Recommend Approve: $40,000

2022/23 Requested: $45,000 Recommend Decline: $0

2023/24 Requested: $50,000 Recommend Decline: $0

iii. Central Otago District Arts Trust to cover operational costs

2021/22 Requested: $47,488.10 Recommend Approve: $31,250

2022/23 Requested: $67,926.47 Recommend Decline: $0

2023/24 Requested: $63,458.16 Recommend Decline: $0

iv. Life Education Trust Heartland to cover operational costs in Central Otago

2021/22 Requested: $5,000 Recommend Approve: $3,000

2022/23 Requested: $5,000 Recommend Decline: $0

2023/24 Requested: $5,000 Recommend Decline: $0

v. Sport Otago for Sport Central operational costs in Central Otago

2021/22 Requested: $48,000 Recommend Approve: $41,549

2022/23 Requested: $48,960 Recommend Decline: $0

2023/24 Requested: $49,960 Recommend Decline: $0

vi. Sport Central for annual sports awards

2021/22 Requested: $1,000 Recommend Decline: $0

2022/23 Requested: $1,000 Recommend Decline: $0

2023/24 Requested: $1,000 Recommend Decline: $0

2. Background

A new grant policy was adopted by Council in 2019, which has resulted in all grants now going through a contestable and transparent application process. Through the 2021-2031 Long-term Plan, Council approved $151,000 per annum for district-funded community grants. This budget was to be allocated via two annual funding rounds. The current round is the first for the 2021/22 financial year and the second round will occur in the third quarter. Council may wish to consider any allocations in this round will have on its budget for the second round and any opportunities that come up then.

A hardship grant was introduced for groups who historically received money from Council to ensure that these groups did not experience financial hardship as a result of the new grants process. The Council received hardship grant requests from Central Otago District Arts Trust (CODAT) and Alexandra District Museum Inc. Through this process, CODAT was granted $8,750 to keep them going until the September round of funding. Therefore, the total amount of funding available for 2021-22 is $142,250. The 2022-23 and 2023-24 financial years both have $151,000 available.

All applicants who have historically received grants from Council and community boards through the Long-term Plan received correspondence in February 2021 advising them of the new process and when applications would be open. This included an initial email, followed by a phone call and final email, to ensure that the information was understood. Applications to grants, via the Council website, opened on 1 July 2021 and closed on 1 August 2021.

According to the grant policy, applicants can submit for up to three years of funding during year 1 of the Long-term Plan, and Council and community boards are able to allocate funding in advance on a recurring basis for up to three financial years. Seven applications have been submitted to the Council for community grants, as detailed below, and all applicants have applied for three years of funding.

A matrix evaluation has been completed to assist the Council in assessing applications against the grant policy and criteria for funding. Staff have completed a matrix for each financial year, assessing the applications against the policy. These matrices also demonstrate the availability of grant funds for the second funding round in this financial year, plus funding rounds in future years, should new applicants wish to apply (Appendix 1).

3. Discussion

Community grants support community-driven initiatives which enhance the well-being of residents. They fund projects which fall outside of the promotions grant criteria and demonstrate a clear connection to one or more aspects of community well-being (social, economic, environmental and cultural). These grants are funded through ward and Council rates.

Any grants approved for future years cannot be uplifted until the applicants have reported back on their previous year’s grant, including how the funds were used and outcomes that were delivered. If applicants are approved multi-year grants, they are still eligible to put in a second application for something else if they wish.

The total amount of funds requested in this first funding round for the 2021/22 financial year is higher than the entire year’s grant budget, as are the requested funds for 2022/23 and 2023/24. If Council chooses to fully allocate the community grants budget for the current year, plus years two and three of the Long-term Plan, this would result in no further opportunity to facilitate contestable community grant funding rounds.

The assessment matrices for 2022/23 and 2023/24 demonstrate a match with the current purpose and eligibility grant criteria for some applicants, and multi-year grants would provide greater financial security for projects that run over multiple years. However, staff advice is to be circumspect at committing grant funds from future years’ budgets:

· The majority of the contestable grant budgets will be used in this first round, leaving little opportunity for future applicants.

· Applicants receiving annual grants may not be incentivised to seek out alternative funding sources.

· Council’s grant policy is to be reviewed in November 2021 with the intent of providing clearer direction for applicants and decision-makers; this review may alter future eligibility criteria.

· Fully committing grant budgets in advance will mean there is less flexibility to respond to adverse financial situations, such as when Council agreed to reduce contestable grant budgets to zero for 2020/21 to reduce the impact of a rates rise during the COVID-19 pandemic.

· Multi-year funding may impact decision-making abilities for elected members voted into office at the next local authority elections, in 2022.

Staff have reviewed each of the applications and provided comment below to assist Council with their decision-making.

Application: Central Otago Health Inc Trust GRA10749852 (App. 2)

Project: Administration of Incorporated Society

Amount Requested: 2021/22 $7,556

2022/23 $7,556

2023/24 $7,556

· Council has been providing financial support to the Trust since 2000, with an annual grant of $7,556 introduced in the 2016/17 financial year.

· The Trust administers the assets of Dunstan Hospital on behalf of the community.

· Funding from Council is used toward administration costs, secretarial services, advertising and associated costs for director recruitment, accounting costs, and applying for grants.

· If Council does not continue to fund the Trust, funds will have to be used from income received from Dustan Hospital, which would decrease the amount of funds available to purchase equipment for the hospital.

· Not a clear alignment with community well-being, community outcomes or Council strategies.

Application: Central Otago Heritage Trust GRA210707636 (App. 3)

Project: Central Otago Heritage Trust (COHT)– Programme Coordination

Amount Requested: 2021/22 $40,000

2022/23 $45,000

2023/24 $50,000

· Central Otago Heritage Trust (COHT) was established in 2008, with a working heritage strategy in place since 2012.

· The Trust was awarded $40,000 per annum through the 2018-28 Long-term Plan process, and has uplifted the full amount for the past three years.

· COHT is made up of a large amount of member groups, and represents the collective interest of the groups in protecting, preserving, and celebrating local heritage.

· The applicant has included seven letters of support from Trust members, including four community-led museums, as well as other local Trusts and a local historian.

· COHT provides an important connection between various heritage related groups across the district, and provides ongoing facilitation and support in this space, including to the museum sector.

· Funding from Council is used to pay a part-time coordinator and some administration costs. This includes: a quarterly newsletter which is circulated electronically, as well as in hard copy format to members; the hosting and updating of two websites; the printing of a heritage trails brochure (in the 2021/22 financial year).

· The application aligns with the purpose and criteria for Council’s community grants, with the sole exception of becoming self-sustaining.

Application: Central Otago District Arts Trust GRA210739079 (App. 4)

Project: Central Otago District Arts Trust (CODAT) Operational Costs

Amount Requested: 2021/22 $47,488.10 (pro rata for nine months)

2022/23 $67,926.47

2023/24 $63,458.16

· Central Otago District Arts Trust (CODAT) has been receiving an annual grant of $35,000 from Council since 2011. This has been used for the salary costs of the part-time coordinator (25 hours/week).

· CODAT works towards ensuring Central Otago arts and artists are well resourced, promoted, supported, and fully integrated into the local community.

· CODAT’s work is guided by the Central Otago Arts Strategy, which it refers to on a regular basis to ensure it is achieving the outlined objectives. It revises this strategy annually and ticks off high-priority tasks as they are fulfilled and creates a new focus document for the year going forward.

· CODAT works with artists, art organisations, event organisations and the community, as required, and continues to seek feedback to ensure the services offered continue to be relevant and achieve positive outcomes.

· If CODAT does not receive funding from Council, it will not be able to continue to operate. While it does seek funding for additional projects, Council funds all of the core operational costs of the Trust.

· The application aligns with the purpose and criteria for Council’s community grants, with the sole exception of becoming self-sustaining.

Application: Life Education Trust Heartland Otago Southland GRA210707797 (App.5)

Project: Costs towards delivery of the Life Education programme

Amount Requested: 2021/22 $5,000

2022/23 $5,000

2023/24 $5,000

· The Trust runs a health and wellbeing programme in schools covering topics such as: respect for yourself and others; reinforcing the ability to resist peer pressure through building self-esteem; developing strategies and resilience to cope with bullying; healthy living and eating; drug, alcohol, and nicotine use.

· The Trust develops lesson overviews and provides teachers with teaching resources to create a continuous learning experience. Schools choose which areas they want to focus on.

· A fully qualified specialist is employed and travels around the region with a mobile classroom to each of the schools.

· The programme is available to around 1,510 young people across Central Otago; it reaches 90% of children between the ages of 5 years and 13 years.

· The programme reaches all primary and intermediate schools across the district on a biennial schedule. The Trust has a goal to scale up resources to be able to offer more services.

· The Trust was awarded a three-year grant through the 2018-28 Long-term Plan process and has received $2,500 for the past three years.

· In 2020/21 other council contributions were as follows:

o Clutha District Council: $5,133

o Gore District Council: $2,500

o Dunedin City Council: $3,000

o Queenstown Lakes District Council: $0

· The Trust’s application meets all funding criteria, with the exception of becoming self-sustaining, and some of the grant purposes.

Application: Sport Otago GRA210739299 (App. 6)

Project: Sport Central – Operational Funding

Amount Requested: 2021/22 $48,000

2022/23 $48,960

2023/24 $48,960

· Sport Otago has received an annual grant from Council since 2001, and this has remained at $41,549 per annum since 2015.

· In addition to this grant application, Council’s Parks and Recreation budget funds $9,890+GST to cover the cost of renting office space at the Cromwell Pool. This could arguably be considered as additional grant funding, albeit non-contestable.

· The requested funding contributes to salaries for three staff based in Central Otago, and includes human resources, programme delivery resources, general operational costs and travel costs.

· Central Otago based staff also work across Queenstown Lakes, and Queenstown Lakes District Council contributes towards Sport Central’s operating costs.

· The Community and Schools Advisor focuses on children ages 0-13 years through Wriggle and Rhyme, On Your Marks, Physical Activity Leaders programmes and potentially some new ‘Play’ based initiatives. The Sport and Active Recreation Coordinator works with youth aged 12-18 years to facilitate opportunities for them to engage in sport and active recreation. They also play a role working alongside sport and recreation clubs to build their capability and increase and enhance the quality of physical activity opportunities (including facility and hub development).

· Sport Otago manages the Central Lakes Swim Safe programme from Dunedin.

· Sport Central staff promote three community funds to support active recreation.

· Sport Otago works with Council’s Parks and Reserves team annually to adjust work plans and set priorities.

· The application aligns with the purpose and criteria for Council’s community grants, with the sole exception of becoming self-sustaining.

Application: Sport Central GRA210756824 (App. 7)

Project: Central Otago Sports Awards

Amount Requested: 2021/22 $1,000

2022/23 $1,000

2023/24 $1,000

· The Central Otago Sports Awards were first held in 2021, and the intention is now to make it an annual event.

· Council funding will be used to attract an inspiring public speaker, who would be available to speak at Council or a community event.

· The Sports Awards are about inspiring, sharing, and empowering the sporting community, as well as encouraging connections.

· The event has wide community sponsorship.

· Candidates from the Central Otago Sports Awards go on to compete in the Otago Sports Awards.

· The 2021 annual awards were held in Wanaka, and the application indicates that the 2022 awards may be held in Queenstown. Grant funding is specifically for activities within the Central Otago District area.

· Community grants have not previously been used to fund speakers.

4. Options

Option 1 – (Recommended)

That Council considers the applications received and reviews the recommended grant amounts as specified in the grant assessment matrix for each of the three years of the 2021-2031 Long-term Plan.

That the Council allocates grants for the following applicants:

Name of Applicant	2021/22	2022/23	2023/24
Opening balance	$151,000	$151,000	$151,000
Less hardship grant (CODAT)	$8,750	-	-
Proposed applicant funding:
· Central Otago Heritage Trust	$40,000	-	-
· Central Otago District Arts Trust (CODAT)	$31,250*	-	-
· Life Education Trust Heartland Otago and Southland	$3,000	-	-
· Sport Otago	$41,549	-	-
Total amount allocated in this round:	$115,799
Total 2021/22 grants budget remaining:	$26,451	$151,000	$151,000

* Reduced amount in lieu of the hardship grant paid earlier this financial year.

That the Council declines grants for the following applicants:

Name of Applicant	2021/22	2022/23	2023/24
Central Otago Health Inc Trust	$7,556	$7,556	$7,556
Central Otago Heritage Trust	-	$45,000	$50,000
Central Otago District Arts Trust (CODAT)	$16,238	$67,926	$63,926
Life Education Trust Heartland Otago and Southland	$2,000	$5,000	$5,000
Sport Otago	$6,451	$48,960	$48,960
Sport Central Sports Awards	$1,000	$1,000	$1,000
Total applied for but not allocated:	$33,245	$180,442	$181,442

Advantages:

· The recommended allocation is within community grant budgets: $33,245 remains in the 2021/22 budget and the full budget allocation remains in the 2022/23 and 2023/24 financial years.

· Most applicants receive all or a partial amount of what they asked for, which will allow them to carry out their projects.

· Arts and heritage are all being funded at an equivalent amount, reflective of the similar value that they contribute to the community.

· While not receiving the amount requested, Sport Otago’s operational grant will be consistent with previous years.

· The Council is declining applicants whose projects do not clearly align with the 2019 Grant Policy.

· Remaining funds are available for a second funding round in 2021/22 and full budgets are available for future years.

Disadvantages:

· The recommended grant amounts are insufficient to allow those applications seeking operational support to increase staff wages as budgeted.

· Two applicants will not receive any funding, which may compromise the quality of their service delivery.

· Limiting grant funding to a single year reduces financial stability for applicants running longer term projects and may jeopardise their ongoing functionality.

Option 2

The Council consider allocating different amounts of funding to applicants, in line with the grants criteria and available budget, taking into consideration the following:

· Alignment with the grants criteria.

· Total budget and available funds.

· Ongoing functionality of well-performing community organisations.

· A second funding round to be advertised in the third quarter of the 2021/22 financial year, and two funding rounds per year in the 2022/23 and 2023/24 financial years.

Advantages:

· Council has the discrepancy to allocate grants of a lesser or greater amount, in line with the 2019 Grant Policy and assessment matrix, and within the set budgets.

Disadvantages:

· Recommendations have been made with consideration to the available budgets, and the 2019 Grant Policy and assessment matrix.

5. Compliance

Local Government Act 2002 Purpose Provisions	This decision promotes the (social/cultural/economic/environmental) wellbeing of communities, in the present and for the future by providing financial support for community-led projects and initiatives.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	Yes
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Yes, consistent with the 2019 Grant Policy.
Considerations as to sustainability, the environment and climate change impacts	None
Risks Analysis	There is a risk that some applicants may not be able to carry out their projects as outlined due to insufficient funding.
Significance, Consultation and Engagement (internal and external)	None required

6. Next Steps

The Council agrees on and resolves the grant amount for each applicant.

The applicants are advised in writing of the Council’s decision, with information about any conditions applied to the approved grant, and the process for uplifting the grant if relevant.

If approved, payment of the approved grant is made once an accountability form has been submitted for any previous grants, and an invoice is received.

7. Attachments

Appendix 1 - Council Community Grant Assessment Matrix 21-24.pdf ⇩

Appendix 2 - Central Otago Health Inc Grant Application.pdf ⇩

Appendix 3 - Central Otago Heritage Trust Grant Application.pdf ⇩

Appendix 4 - Central Otago District Arts Trust Grant Application.pdf ⇩

Appendix 5 - Life Education Trust Heartland Otago Southland Grant Application.pdf ⇩

Appendix 6 - Sport Otago Grant Application.pdf ⇩

Appendix 7 - Sport Central Grant Application.pdf ⇩

Report author:	Reviewed and authorised by:

Nikki Aaron	Sanchia Jacobs
Community Development Officer	Chief Executive Officer
3/09/2021	15/09/2021

22 September 2021

21.7.3 District Museum Function

Doc ID: 547712

1. Purpose of Report

To consider options on the sector-led delivery of the district museum function following deliberations and direction from councillors on the Long-term Plan 2021-31.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Notes eight sector-led models were considered and analysed to provide the delivery of the district museum function.

C. Notes a sector-led trust model is likely to be the most effective mechanism to deliver the district museum function.

D. Endorses the establishment of a new sector museum trust to deliver the district museum function.

E. Approves a portion of the $50,000 allocated to this function is retained for staff to facilitate the establishment of the trust by paying legal fees to review the trust deed and establishing the new trust.

F. Authorises the Chief Executive Officer to enter into a performance agreement with the new entity upon which overall delivery will be measured against.

G. Approves on the evidence of the establishment of the trust and the signing of the performance agreement the remaining balance of the $50,000 is transferred to this new entity.

H. Approves that council will have active involvement in the trust with the appointment by the Chief Executive Officer of one staff member as a council representative on the trust.

I. Approves that the district museum function will be delivered by the new trust for a trial period of two years with regular reporting to council on progress and delivery.

J. Notes that any decision regarding funding beyond the two-year period will be considered under the museum investment framework soon to begin.

2. Background

In 2019 council staff led a series of workshops with the sector to initiate work on the development of a museum strategy. Among other issues, a key issue that came from these workshops was the need for better sector collaboration. Council has historically provided funding to the Alexandra District Museum Incorporated to deliver a district museum function. For various reasons over the years this has proven challenging. Given both the sector and council see this as a key priority, the mechanism to deliver this function was considered and consulted on in the Long-term Plan 2021-31.

Four options for delivering a district museum function were put out for consultation:

1) An in-house museum function

2) Status quo

3) No funding

4) Expanded heritage/museum role

Feedback from the community during the consultation favoured option one. However, an alternative proposal put forward by a united sector to establish an independent trust to deliver the district museum function was considered during deliberations.

Following the deliberations and evidence of strong collaboration and willingness by the sector, councillors believed there was merit in this proposal and asked for further scoping work to be carried out. Council, therefore, chose to adopt option one, an in-house museum function delivered by council, but delay implementation to enable sector feedback on alternative options to be worked through.

The alternate option was to be worked up and reported back to Council within three months for final determination whether Council will apply the funding to an in-house role or to a sector led model.

3. Discussion

Process and consultation with the sector

The sector consists of five main museums from across Central Otago: Alexandra District Museum Incorporated, Clyde Historical Museums Incorporated, Cromwell Museum Trust, Maniototo Early Settlers Association, and the Teviot District Museum. The Central Otago Heritage Trust have also been actively involved.

Staff have worked in collaboration with the sector to work through alternative sector-led models, including three meetings with the wider sector, two meetings and ongoing correspondence with representatives from both the museum and from the heritage sector. These meetings have included discussions on a range of models for sector delivery, as well as discussions on council involvement in the preferred model.

Legal structure

The following structures for the new entity were considered and analysed:

· Unincorporated group

· Incorporated society

· Registered charitable trust (trust based)

· Registered charitable trust (society based)

· Company

· Industrial and provident society

· Council Controlled Organisation

· Umbrella group

Each legal structure was considered against the objectives of both the sector and council requirements. Criteria included limiting legal liability to members, enabling the sector to apply for and access other sources of funding, ensuring transparency in the use of council funding, and ensuring reporting requirements were reasonable and were not too onerous for both the sector and council.

Each legal structure has been analysed and this is contained in appendix 1. On balance, staff consider the establishment of a trust entity is the most effective structure to deliver the district museum function. Such a structure will enable the sector independence while still ensuring transparency for spending ratepayers’ money. Given this is a new entity and to ensure delivery of the function as council has intended it is recommended that a performance agreement be entered into between the new entity and council.

The sector felt the registered charitable trust (trust based) best met their needs and have worked together to develop a draft trust deed (appendix 2). It is proposed the new entity would appoint a contractor to assist and this is primarily where the funding would be spent (see appendix 3 for a draft job description).

Relationship with Council

To ensure effective communication between the new trust entity and council, it is proposed that there be a council representative on the trust. Two options were considered by staff: an elected member or a member of staff. The Central Otago Heritage Trust has a model whereby a senior staff member sits as a representative without voting rights. Such a model enables communication and facilitates relationships while protecting elected members from any real or perceived conflicts. This model has been working effectively for the Central Otago Heritage Trust. As such, it is proposed to replicate this arrangement in the new museum trust. The sector are supportive of having a council representative on this new entity and the attached draft trust deed has been drafted to include provision for a staff member representative.

Sector Strategy and funding objectives

The primary objective of the district funding is to deliver on the district museum function. The sector has worked in collaboration to develop a sector strategy (appendix 4). This strategy clearly articulates the strategic objectives of the sector and their goals. While this document originally began its origin as a council-led document with council functions and responsibilities within, during the course of this work council has been separated out. This document not only is important for the sector but is pivotal for the next stage of the museum work (investment framework). The next stage of this work will articulate council’s roles and functions as well as deliver on the investment model for museum funding.

The delivery of a district museum function is central to the attached sector strategy document, and it is recommended that the delivery of this strategy becomes the primary measure upon which success of this function is measured in any performance agreements.

Funding period

Staff recommend Council consider a trial period for the operation of the new trust as the provider of the district museum function. There are three key reasons for this approach that are related to ensuring Council meets its financial prudence obligations.

The core consideration for Council is how to balance the needs of the sector with the responsibility of financial prudence under the Local Government Act 2002. The sector would prefer the funding be provided as an ongoing line item in the budget. The certainty in future funding is important for their business planning, particularly in attracting and giving certainty to the contracted employee.

On the other hand, Council is responsible for the use of ratepayer funds. It is expected that funding is transparent, purposeful, outcome driven, and in line with community expectations.

Council had previously provided funding for a district function that had been challenging to deliver. Although the new body is not accountable for previous funding, it does reflect a need for a higher level of scrutiny to ensure the funding is now purposeful and aligned with council objectives.

Similarly, this new trust was proposed through the long-term plan consultation period and had not existed prior. With full confidence in the sector and in the new trust, an initial ‘settling in’ period ensures the trust forms and operates in line with financial expectations before committing to funding long term.

The final reason for this recommendation is due to the public consultation that already took place, and the potential for further consultation at the end of the trial period. Of the options given, the community opted for an in-house model at a cost of $50,000 annually. The sector lead trust model was not part of the consultation, as it was proposed through the process. While no further consultation is required at this point (as there is no rates impact) it would be prudent to implement a trial period in the event further consideration of the delivery model is required.

Council will receive updates on progress against the performance agreement from the new trust at the following intervals (subject to finalisation of the Council meeting schedule for 2022 and 2023):

- March 2022

- September 2022

- March 2023

Through these updates, it is expected that the requirements for financial prudency will be satisfied. Following the March 2023 update, Council would consider the following decision points:

- Continuing to provide funding for a district museum function and delivery of the sector strategy

- Whether the funding is contestable or rolls over (to be considered under the museum investment framework piece of work)

- If further consideration of the mechanism to deliver the district function is required

- Council involvement in the next strategic planning process (sector strategy)

Combining with other sector trust bodies

At the Long-term Plan 2021-31 deliberations meeting in June 2021, Council asked for advice on whether a combined model with the existing Heritage and Arts Trusts to form one group would work. On reviewing the purposes of these groups, while connected they do have independent goals and purposes (and given the independent nature of the current trusts in existence this would require their buy-in and is likely a significant piece of work). Further, to give this new museum trust entity the greatest chance of success, their focus needs to be on the museum sector. While this could be a future state to combine some/all of these trusts’ functions staff recommend for the near future that independence is maintained.

4. Options

Option 1 – (Recommended)

Support implementing a sector lead trust model, with the following:

· staff supporting the establishment of the trust (facilitating obtaining legal advice)

· the Chief Executive Officer entering into a performance agreement for the delivery of the district function with the new entity

· the balance of the $50,000 after legal costs transferred to the new entity on proof of establishment and execution of a performance agreement with council

· the Chief Executive Officer appointing a staff representative on the new entity

· an initial two-year trial period with regular reporting to council as outlined in this report

· ongoing funding to be considered as part of the museum investment framework piece of work.

Advantages:

· Enables the new trust to begin delivering immediately after establishment

· Analysis reveals a trust model is likely to be the most effective sector-led delivery method

· Ensures transparency of ratepayers’ funds

· Balances the needs of the sector and the responsibilities of Council

· Ensures further decision making is aligned with the overall museum funding approach and considerations.

Disadvantages:

· None identified.

Option 2

To implement another one of the seven sector led models analysed in this report with the same conditions as outlined in option 1.

Advantages:

· None identified.

Disadvantages:

· Likely to create additional reporting and governance dependent on what model is preferred

· Will likely delay the appointment of a contractor to undertake the district function

· Will delay action and delivery of the sector strategy

· Is not the preferred option of the sector.

Option 3

Do not adopt the sector lead trust model and proceed with in-house model that was proposed as the preferred option in the Consultation Document for the 2021-31 Long-term Plan.

Advantages

· Was the preferred option from the community.

Disadvantages

· The sector has collaborated in recent months on a model that is likely to be more effective than an in-house function

· The analysis showed the alternative model proposed by the sector has merit

· Not the referred option for the sector.

Option 4

Endorse the establishment of a sector led trust model (outlined in option one) with the appointment of a councillor as a representative on the new trust rather than a staff member.

Advantages

· Greater level of elected member involvement, oversight and accountability

Disadvantages

· Elected member time constraints

· May create real or perceived conflicts if decisions need to be made in the future on the funding to this trust and the relationship with council.

5. Compliance

Local Government Act 2002 Purpose Provisions	This decision promotes the cultural and social wellbeing of communities, both in the present and for the future by celebrating museums contribution to cultural and social wellbeing
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	The funding has been allocated as part of the 2021-31 Long-term Plan.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	This is consistent with the approach to Heritage and the Arts. It is generally consistent with the Long-term plan and is consistent with the direction Council gave staff following Long-term plan deliberations.
Considerations as to sustainability, the environment and climate change impacts	T There are no direct environmental or sustainability links.
Risks Analysis	The financial prudence obligation under the local Government Act 2002 seeks the appropriate and transparent use of funds. The recommendations in the paper are consistent with these requirements.
Significance, Consultation and Engagement (internal and external)	The decision arose through the consultation process and was championed by the sector collectively. While it does diverge from the option preferred by the community as a whole, for an in-house function the recommendations allow opportunities for further consultation if and as required.

6. Next Steps

Pending endorsement by Council, staff will work with museum sector representatives to establish the trust and implement the agreed recommendations.

7. Attachments

Appendix 1 - Further detail on potential legal structures of new entity ⇩

Appendix 2 - Draft Central Otago Museum Trust Deed ⇩

Appendix 3 - Draft Central Otago Museums Coordinator Job Description ⇩

Appendix 4 - 2021 Sector-led District Museum Strategy.pdf ⇩

Report author:	Reviewed and authorised by:

Alix Crosbie	Saskia Righarts
Senior Strategy Advisor	Chief Advisor
8/09/2021	13/09/2021

Council meeting

22 September 2021

· Museum District Function

Further detail on potential models for new sector body

The legal structure of the new representative body was a key consideration.

For the sector, the chosen structure needs to:

· Provide opportunities for input from all museums, rather than focus on one or two voices as representative

· Allow museums to source and access other sources of funding

· Limit the level of personal liability that members face

· Minimise reporting requirements to ensure sole employee is able to focus on core role

For Council, the chosen structure needs to:

· Provide visibility and transparency on the use of council funding

· Be consistent with the public position consulted on through the Long-term plan

· Enable the sector to deliver on strategic objectives

· Facilitate a relationship between council and the sector

· Work for the sector

· Limit reporting requirements to ensure funding can deliver on strategic objectives

The following legal structures were considered:

Unincorporated group	An unincorporated group is any group of people that gets together for some purpose. It includes groups set up for socialisation or providing a service, and groups gathering to change something in the community. Unincorporated status tends to suit social groups or those formed to address an urgent, short term issue. Unincorporated groups have no legal identify or legal status and members are able to join or leave at will. Rules and processes should exist and be recorded, however there is no legal requirement to do so. Resolving disputes can, therefore, be problematic. There are few legal or administrative requirements and a flexible structure with few rules or restrictions. This does reduce the reporting requirements and associated costs, however Council is likely to require a higher degree of reporting to meet financial prudency obligations under the Local Government Act 2002. It also presents a significant disadvantage to the sector as an unincorporated group has no legal standing to enter into contracts, own property, or borrow money. Consequently, all members may be personally liable for debts and other obligations. Surplus assets are able to be distributed among members. It was decided by both the sector and council staff that the unincorporated model is unsuitable for an on-going group employing staff and receiving external funding from Council.
Incorporated society	An incorporated society is made up of individuals (15), corporate bodies (5), or a mix of both. Decision making is by members at general meetings or by committee. As an unincorporated group, members of an incorporated society are personally liable for debts and other obligations. Reporting requirements include notifying the Register of Incorporated Societies of changes of rules and office annual financial statements (unless registered under the Charities Act 2005). It has a democratic, membership-based structure and is seen as an easy and efficient structure for a smaller non-profit organisation. Finding and maintaining the required 15 members can be difficult and there is a risk of committees being overturned annually at each AGM, which can lead to short-term decision making. Both the sector and Council staff were less keen on this model due to the personal liability on members.
Registered charitable trust (society-based)	A registered charitable trust (society based) requires 5 individuals or an existing society to register with the Registrar of Incorporated Societies. Decision making is made by members at general meeting or by board. In general, there is limited personal liability for members of a registered charitable trust. The Registrar of Incorporated Societies requires notice of changes of rules and office. A registered charitable trust (society based) is considered good for most not-for-profit groups with a charitable purpose. It provides a better framework for governance than incorporated societies and only requires five members to incorporate charitable status. Groups need to have a charitable purpose and cannot distribute profits to members. The registered charitable trust model (society based) is one the sector strongly considered, particularly as it would enable applications for other sources of funding.
Registered charitable trust (trust-based)	A registered charitable trust (trust-based) is similar to the society-based model, with some notable differences. It would require just two or more trustees to form and decisions would be made by trustees/a trust board. Control is kept in a few hands (those of the trustees) with limited liability. This provides longer term stability, however control remains with the trustees and there is no formal accountability to a wider membership base. Trustee succession is usually by Trustee appointment. The registered charitable trust model (trust based) is a model favoured by the sector. It also enables the sector to apply for further funding by other agencies.
Company	Forming a company would require providing the Companies Office with: annual return and changes of name, office, rules, and directors. It is easier to obtain loans and undertake commercial activities, however generally too complex for charitable community organisations as the reporting requirements are more onerous than other structures and Directors may be liable if they fail to meet obligations. It would exclude the sector from applying for additional funding as a charity.
Industrial and provident society	A minimum of seven individual members can form an Industrial and Provident Society. Decisions are made my members at general meeting or by committee. It is a model generally good for co-operatives with a business or commercial purpose. They work (industrial) and receive benefits (provident) as a collective. A co-operative taxi society is a good example, with independent operators benefitting from group car insurance schemes and radio booking systems. Industrial and provident societies are relatively rare and there are limited professionals with a full understanding how they work. The reporting requirement is an annual return to the Registrar of Industrial and Provident Societies and some may need to file financial statements.
Council controlled organisation	Council controlled organisations are public companies in which the council has the responsibility to appoint at least 50 per cent of the board of directors or trustees. A council controlled organisation would require: - Appointing directors for the new entity - Managing an effective relationship with the CCO - Setting an appropriate monitoring framework - Accountability and reporting documents prepared under the Local Government Act There is a concern that the reporting requirements of a council controlled organisation will be too onerous for this level of funding.
Umbrella group	An umbrella group allows groups to work successfully without incorporation by going under the wing of an umbrella group. The umbrella group is usually a larger organisation that is an incorporated body and can provide resources and backing to smaller groups that work in similar areas and/or share similar goals. There are multiple benefits in saving on costs and working in partnership in the community, depending on the set up of the group. Limitations can include limiting eligibility for grants, confusing employment arrangements, full disclosure of financial information to the umbrella group, complexity in how assets will be managed when problems arrive, and potential issues with liability. There is a potential future state where the heritage, museum, and arts trusts may formally align, whether under an umbrella or other model. Presently, it was determined that there needs to be a focus on the museum sector and operating without the additional complexity would give the best chance of success. Over time, particularly as networks are built between the various organisations, opportunities for sharing resources or collaborating for stronger results should be considered.

Following this review, the sector determined that the registered charitable trust (trust-based) model best met their needs. This is consistent with council requirements.

Reference and further detail on the models:

NZ Navigator Trust, Characteristics of different organisational legal structures, Community Net Aotearoa, viewed June 2021. https://community.net.nz/resources/community-resource-kit/characteristics-of-different-organisational-legal-structures/

Council meeting

22 September 2021

DRAFT POSITION DESCRIPTION

Central Otago Museums Trust Coordinator

The Central Otago Museums’ Trust (the Trust) is looking for a part-time coordinator to support the Trust in implementing its Museum Sector Strategy.

Museums play an important role in preserving, protecting, and celebrating community stories and artifacts for current and future generations. There are five museums in Central Otago, each with their own unique stories to tell. The Central Otago Museums’ Trust brings the sector together to:

· Support the success of achieving goals and actions agreed to in the Central Otago District Museums Strategy

· Strengthen individual museum’s unique point of difference within the sector

· Foster greater sharing of resources

· Improve consistent policy development, particularly collections policies

· Support connectivity with community resources

Purpose of role

The Central Otago Museum Sector Coordinator will assist the Trust in achieving the goals and tasks set out in the Central Otago Museum Sector Strategy (2021 – 2024). This strategy will engage the five Central Otago Museums to work as a cohesive network.

Working from a museums network perspective:

· Supports the success of achieving goals and actions agreed to in this Strategy.

· Acknowledges that each museum has a unique point of difference that can be clearly used to promote their “World of Difference” within the network

· Fosters greater sharing of resources – human and physical

· Improves consistent policy development, particularly collections policies

· Supports connectivity with community resources

Key Relationships

Internal

External

Central Otago Museums’ Trust

· Staff and volunteers from the five Central Otago Museum:

i. Central Stories Museum and Art Gallery

ii. Clyde Museum

iii. Cromwell Museum

iv. Maniototo Early Settlers Museum

v. Teviot District Museum.

· Otago Museum

· Te Papa - National Services Te Paerangi

· Central Otago Heritage Trust

· Central Otago District Council

Key Accountabilities

· In consultation with the Trust, develop and implement a two-year schedule for achieving the tasks set out in the Central Otago Museum Sector Strategy (2021 – 2024)

· Work with museum staff and volunteers to identify training and skills development to enhance and promote best practice in relation to governance and collections policies, customer service and relationships with communities

· Establish a series of practical workshops for museum staff and volunteers based on the identified needs of the sector

· Build and maintain positive relationships Te Papa National Services Te Paerangi and the Otago Museum to develop training and collaborative programming opportunities

· Build and maintain a positive working relationship with relevant Central Otago District Council staff

· Encourage museums to be used as a place for the community to gather (including schools and other community groups)

· Assist the volunteer museums in Central Otago in preparing grant applications for ongoing collection and programming needs as well as special projects.

· Assist in the development of museum collections, including deaccession, to align with each museum’s point of difference

· Develop a sector wide marketing plan and associated collateral to promote the Central Otago museums as a network

· Develop strong relationships with museum staff and volunteers within the district.

· Research and develop timely reports to the Trust within the areas of shared resources, collection and conservation material and storage requirements, museum and exhibition display and the identification of key Southland stories

· Researching and drafting submissions on behalf of the COMT as and when required

· Maintaining the Trust's relationships with funding bodies and actively seeking funding for projects related to the tasks set out in the Central Otago District Museum Sector Strategy

· Other administrative duties as required by the position

· Provide accountability reports to Central Otago District Council as and when required

Knowledge, Experience and Skills

· Ability to think at a strategic level and to design and implement new programmes necessary to meet the goals and tasks set out in the Central Otago Museum Sector Strategy

· Working with community groups and volunteers

· Knowledge of and experience in working from a matauranga Māori perspective

· Ability to work independently as a contractor

· Experience in project management

· Demonstrated practical leadership

· Be highly motivated, creative, flexible and an innovative thinker

· Experience with completing grant applications

· Excellent organisational and multi-tasking skills

· Strong computer skills

· A willingness to work flexible hours including weekends and evenings

· Collection management and conservation principles

· Experience with working with community groups in museum outreach or in the context of cultural

· Demonstrated confidence in working with high profile projects which may attract media interest

· Holder of a current and valid NZ Driver's licence

Working for Central Otago Museums’ Trust means being part of a caring, dynamic and effective customer-focused team who is committed to making a positive difference in the community we serve. If you'd like to be part of this team, contact us now.

Enquiries about this position should be directed to XXX

Please note you must be eligible to work in New Zealand.

Location: XXX

Closing Date: XXX

DRAFT CONTRACT FOR SERVICES

Contract for Services

1. PARTIES

This contract is made between:

the Central Otago Museums Trust, (‘COMT’), (‘the Trust’),

AND

NAME, (‘the Contractor’),

together, ‘the parties’.

2. TERM

This contract shall commence on XXX and shall continue until XXX unless terminated by either party giving one month’s notice.

The contract is an annual contract renewable for three years subject to the receipt of an annual grant to the COMT from the Central Otago District Council.

3. INDEPENDENT CONTRACTOR

The relationship between NAME and the COMT is that of an independent contractor and nothing expressed or implied herein shall constitute the relationship of employer and employee between the parties.

4. SERVICES

The Contractor will deliver the Services set out in the position description (‘the Services’), and any services incidental to the Services, on the terms set out in this contract.

5. CONTRACTOR’S OBLIGATIONS

The Contractor will, in the performance of the Services:

(a) at all times promote and protect COMT’s interests and reputation;

(b) comply with all reasonable and lawful directions;

(d) carry out the Contractor’s obligations under this contract in a prompt, efficient, and diligent manner consistent with professional practices and standards, and use all reasonable care, attention and skill in the performance of those obligations.

6. REMUNERATION

The Contractor will be renumerated monthly, based on XXX hours per week, to a total of XXX hours per annum, at the rate of $XX per hour.

The Contractor will also be reimbursed for travel, internet, telephone and all other reasonable expenses incurred in relation to the performance of the Services. The Contractor will provide receipts and any other supporting documentation associated to the claiming of expenses.

The Contractor’s travel via vehicle will be calculated at the Inland Revenue 2020 rate of XX cents per kilometre.

The Contractor acknowledges that there is no entitlement to payment from the COMT for injury, sickness, Kiwisaver, holidays or redundancy.

7. PAYMENT FOR DELIVERY OF SERVICES

The Contractor will provide the COMT with an invoice that details the Services delivered during the time period stated on the invoice. The Contractor will also provide a monthly progress report with the invoice that sets out a record of hours and expenses to the COMT, summarising the progress of agreed projects.

8. WORKING ARRANGEMENT

The Contractor will perform the Services from their home office or other such locations as required by the Contractor.

The Contractor proposes to provide the Services during the hours of XXX each week, however the Contractor will also provide the Services outside of these hours, as and when required.

It is the Contractor’s responsibility to fulfil the requirements of XXX hours per week.

9. PERFORMANCE REVIEW

The Contractor agrees for the COMT to conduct a performance review of the Contractor at the end of the term of this contract.

10. TAX

The Contractor is responsible for paying the Contractor’s income tax and any other tax obligations associated with the Contractor.

11. EQUIPMENT

The Contractor shall provide her own equipment at her own cost in providing the Services.

12. ASSIGNMENT

This contract is between the COMT and NAME and may not be assigned or sub-contracted unless with the prior written approval of the parties.

13. TERMINATION

Either party may terminate the contract by providing one month’s notice of termination in writing.

The COMT may terminate this contract with immediate effect by providing written notice if the Contractor:

(a) breaches this contract, fails, is negligent in the performance or is unable to perform the Services;

(b) commits any act or is subject to any proceeding, which, in the reasonable opinion of the COMT, has brought or may bring, the COMT into disrepute; and

14. CONFLICT OF INTEREST

The Contractor, will not, without the COMT’s prior written consent, provide services to any other person or entity or be involved in any employment, activity or business that conflicts or may conflict with the interests of the COMT or interferes or may interfere with the Contractor’s ability to perform the Services.

15. CONFIDENTIAL INFORMATION

The terms of this contract shall remain confidential to the parties.

In the course of this contract, it is acknowledged that the Contractor may acquire confidential information relating to the COMT and its member groups. The Contractor shall keep this confidential information strictly confidential at all times, including both during and after the termination of this contract.

The Contractor agrees never to use the information or attempt to use it for its own personal gain or that of any other person.

Upon termination of this contract, or upon request, the Contractor will promptly deliver to the COMT all COMT property and documentation, records or papers in the Contractor’s possession (in hard copy or electronic).

Upon termination of this contract, the Contractor will stop using the email address associated with this contract indefinitely and provide access to this email account to the COMT.

16. INTELLECTUAL PROPERTY

The Contractor acknowledges that any work and intellectual property created or arising during the term of this contract is, and shall remain, the property of the COMT.

17. DISPUTE RESOLUTION

If a dispute arises, the parties will meet in good faith to try and resolve the dispute informally.

If the dispute has not been resolved within 14 days after the dispute has been notified by a party in writing, either party may give the other written notice requiring the parties to try and resolve the dispute at mediation. The parties will agree on a mediator and the costs of the mediation will be shared equally (excluding each parties’ costs).

18. VARIATION

It is agreed by both parties that this contract constitutes the entire agreement between the parties and replaces any previous agreements and understandings. Any variation of this contract must be agreed and signed by both parties in writing.

Contractor name:

Signed:

Date:

Central Otago Museums’ Trust representative:

Signed:

Date:

22 September 2021

21.7.4 Next Stages of Three Waters Service Delivery Reform

Doc ID: 552213

1. Purpose of Report

To update Council on the Government’s 30 June 2021 and 15 July 2021 Three Waters Reform announcements, which change the reform process previously outlined in 2020, the specific data modelling Council has received to date, the implications of the revised Three Waters Reform proposal for Council alternative service delivery options and next steps (including uncertainties).

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Notes the Government’s 30 June and 15 July 2021 Three Waters Reform announcements

C. Notes officer’s advice on the accuracy of the information provided to Council in June and July 2021 as a result of the RFI and WICS modelling processes.

D. Notes officer’s analysis of the impacts of the Government’s proposed three water service deliver model on the Central Otago community and its wellbeing, including the impacts on the delivery of water services and water related outcomes, capability and capacity, Central Otago District Council’s sustainability (including rate impact, debt impact, and efficiency).

E. Notes the analysis of three waters service delivery options available to Council at this time provided in this report.

F. Notes that a decision to support the Government’s preferred three waters service delivery option is not lawful (would be ultra vires) at present due to section 130 of the Local Government Act 2002 (LGA), which prohibits Council from divesting its ownership or interest in a water service except to another local government organisation, and what we currently know (and don’t know) about the Government’s preferred option.

G. Notes that Council cannot make a formal decision on a regional option for three waters service delivery without doing a Long-term plan amendment and ensuring it meets section 130 of the LGA.

H. Notes that the Government intends to make further decisions about the three waters service delivery model after 30 September 2021.

I. Notes hat it would be desirable to gain an understanding of the community’s views once Council has further information from the Government on the next steps in the reform process.

J. Requests the CEO to give feedback to the Government on the following changes to the Government’s proposal:

· Entrenching protections against privatisation in legislation in such a manner that these cannot be overturned by a simple majority of parliament.

· Requirements for entities to develop strong relationships with councils in respect to planning for growth

· Legislative requirements to use growth projections and spatial plans as a basis for planning for future growth, with 30 year plans which demonstrate that capacity requirements for growth have been incorporated into forward work planning.

· That the entities be required to implement a funding mechanism similar to development contributions to enable cumulative effects of growth to be funded in an equitable manner across the entity area.

· Establishment of a water ombudsman, as well as further legislative mechanisms that ensure consumer rights.

· Legislative requirement for standardised pricing for baseline services that is a level of service that meets minimum compliance requirements irrespective of location.

· That service levels higher than baseline could be paid for by the specific community who receives that benefit

· Government review the rating legislation around the 30% uniform annual charges cap. This will need to be reviewed with consideration given to increasing the cap to possibly 40%. Alternatively, Central Government may need to consider funding rating reviews for all councils that will breach the 30% cap under the current regime.

· That certainty be provided to local providers and contractors to ensure there is no negative financial or economic impact on local economies.

· Competency-based non-iwi appointments to the representative group should reflect the community in which they deliver services to (such as rural and urban representatives). Individuals who have local government experience (such as former mayors and local government staff) should be eligible for appointment.

K. Notes that the Chief Executive will report back once they have received further information and guidance from Government, LGNZ and Taituarā on what the next steps look like and how these should be managed.

L. In noting the above, agrees it has given consideration to sections 76, 77, 78, and 79 of the Local Government Act 2002 and in its judgment considers it has complied with the decision- making process that those sections require (including, but not limited to, having sufficient information and analysis that is proportionate to the decisions being made).

2. Executive Summary

Over the past four years central and local government have been considering the issues and opportunities facing the system for regulating and managing the three waters (drinking water, wastewater, and stormwater) – Three Waters Reform. The background is provided in Appendix 1 including information on Taumata Arowai (which became a new Crown entity in March 2021 and will become the dedicated water services regulator later this year).

The Government has concluded that the case for change[1] to the three waters service delivery system has been made [please see Appendix 2 for further information] and during June and July 2021 it released information and made announcements on:

· the direction and form of Three Waters Reform, including the proposed four new Water Service Entities their indicative boundaries, their governance arrangements and public ownership.

· individual Council data based on the information supplied under the RFI process, and analysed by the Water Industry Commission of Scotland (WICS), on behalf of the New Zealand Government.

· a $2.5b package of investment for councils to invest in the future for local government, urban development, and the wellbeing of communities, ensuring no council is worse off as a result of the reforms, and funding support for transition.

· an eight-week process for councils to understand the implications of the reform announcements, ask questions and propose solutions and for Government to work with councils and mana whenua on key aspects of the reform (including governance, integrated planning and community voice).

Central Otago District Council has been placed in Entity D and our better-off funding allocation is $12,835,059. If Council proceeds with the reform process a quarter of this funding would be available from 1 July 2022, with the remainder available from 1 July 2024.

While the Government and LGNZ consider that national case for change has been made, each council will ultimately need to make a decision based on its local context if the process to join one of the proposed entities remains voluntary.

This report provides Council with the staff analysis of the information provided and assesses the Government’s proposal and currently available service delivery options. The Local Government New Zealand, Taituarā, and Te Tari Taiwhenua Internal Affairs guidance[2] has been used to prepare information to assist Council to understand the information that has been provided to date and enable Council to prepare for future decisions and consultation and engagement with communities.

Key risks considered are documented in the report and Appendices 5 and 7.

In summary,

· Whilst unable to accurately confirm the forecast costs for either Council delivered service, or Entity D in 30 years time, the trend in a higher cost for Council delivered service compared to the cost of service delivered by Entity D looks broadly correct.

· Given the peer reviews of the modelling and underlying assumptions (which always carry a degree of uncertainty) no further analysis of this work has been done or is proposed and staff have focussed on the reasonably practicable options and their implications for Council and the community. It is worth noting that in addition to the peer reviews of the Government’s proposed model by Beca and Farrierweir, Morrison Low have been engaged specifically by the Otago and Southland Councils to undertake analysis of the data on our behalf, and believe the cost of service if it were continued to be delivered by Council relative to Entity D could be higher by at least 40%.

· Doing nothing is not an option as Council must continue to deliver services within a new regulatory framework which will require consistently meeting the New Zealand Drinking Water Standards, and expected higher environmental standards for all three waters services.

· Under all options except the Government proposal, Council bears the risk of meeting the new water standards, environmental requirements and achieving compliance. There are also implications and challenges for non-council supplies to meet water quality requirements, with the risk that these supplies might default to council in the future.

· Other Government reforms (Resource Management Act, Future of Local Government) pose opportunities and challenges for each option.

· If the Government’s proposal were to proceed, effective management of the transition by Council, Government and partners will be critical, and present significant challenges.

· The law currently prohibits Council’s deciding to opt-in to the current proposal (given section 130 of the Local Government Act 2002 and what we know about this option at present). Current decision-making requirements, including the need to take account of community views and strategic nature of the assets involved, would also preclude Council deciding to opt-in at this time without consultation.

· Similar requirements apply if the Council wishes to consider alternative arrangements that involve asset transfers, divestment, change in ownership and or the setting up of a Council Controlled Organisation (CCO) to deliver water services in the future.

· There are a number of issues, concerns and uncertainties for the Government and councils to work through before a robust Council decision (and decision-making process) can be produced, including whether legislative change will enable or require the Water Services Entity approach to be adopted. Therefore, there is no expectation that councils will have had to make a decision to opt-in (or out) or commence community engagement or consultation over the eight-week period.

Councils have been specifically asked to provide solutions to three outstanding issues during the next eight weeks:

o ensuring all communities have both a voice in the system and influence over local decisions

o effective representation on the new water service entities’ oversight boards, including preventing future privatisation

o ensuring integration between growth planning and water services planning.

Staff therefore request Elected Members consider the issues that arise from the Government’s proposal and any potential solutions so these can be raised with Government and LGNZ before the end of September 2021.

Government decisions on entity boundaries, governance and transition and implementation arrangements will occur after the eight week-process ends (30 September 2021) however there is no certainty on how this will occur.

On the assumption that the reform goes ahead, it is anticipated that councils will continue to deliver water services until at least early 2024 and council involvement in transition will be required throughout.

3. Background

Following the serious campylobacter outbreak in 2016 and the Government’s Inquiry into Havelock North Drinking Water, central and local government have been considering the issues and opportunities facing the system for regulating and managing the three waters (drinking water, wastewater, and stormwater).

The focus has been on how to ensure safe drinking water, improve the environmental performance and transparency of wastewater and stormwater network and deal with funding and affordability challenges, particularly for communities with small rating bases or high-growth areas that have reached their prudential borrowing limits.

The Government’s stated direction of travel has been for publicly-owned multi-regional models (with a preference for local authority ownership). The Department of Internal Affairs (DIA), in partnership with the Three Waters Steering Committee (which includes elected members and staff from local government) commissioned specialist economic, financial, regulatory and technical expertise to support the Three Waters Reform Programme and inform policy advice to ministers.

The initial stage (Tranche 1 - MOU, Funding Agreement, Delivery Plan and Request For Information (RFI) process) was an opt in, non-binding approach. It did not require councils to commit to future phases of the reform programme, to transfer their assets and/or liabilities, or establish new water entities. The 2020 indicative reform programme and then anticipated next steps can be found in Appendix 1.

Council completed the RFI process over Christmas and New Year 2020/21 and the Government has used this information, evidence, and modelling to make preliminary decisions on the next stages of reform and has concluded that the case for change has been made Appendix 2.

4. Governments June and July 2021 Announcements and Information Release

In June 2021 a suite of information was released by Government that covered estimated potential investment requirements for New Zealand, scope for efficiency gains from transformation of the three waters service and the potential economic (efficiency) impacts of various aggregation scenarios.[3]

In summary the modelling indicated a likely range for future investment requirements at a national level in the order of $120 billion to $185 billion, an average household cost for most councils on a standalone basis to be between $1910 and $8690 by 2051. It also estimated these average household costs could be reduced to between $800 and $1640 per household and efficiencies in the range of 45% over 15-30 years if the reform process went ahead. An additional 5,800 to 9,300 jobs and an increase in GDP of between $14b to $23b in Nett Present Value, (NPV) terms over 30 years were also forecast.

As a result of this modelling, the Government has decided to:

· establish four statutory, publicly-owned water services entities that own and operate three waters infrastructure on behalf of local authorities

· establish independent, competency-based boards to govern

· set a clear national policy direction for the three waters sector, including integration with any new spatial / resource management planning processes

· establish an economic regulation regime

· develop an industry transformation strategy.

The newly established entities are designed to remain fully and purposefully in public ownership in perpetuity and protection mechanisms would be built through the entity design approach and through legislation to ensure this. The proposed safeguards against privatisation can be found on page 26 of the DIA’s summary of the case for change.

Both DIA and LGNZ have produced two page national overviews, available on the DIA website[4] and LGNZ websites[5] respectively. Appendix 2 contains more detail on the national context and Appendix 3 provides the DIA/LGNZ overviews.

Central Otago District Council have been placed in Water Services Entity D, which follows the Ngāi Tahu Takiwa boundary, although the precise boundaries are still up for discussion.

Funding for Councils

On 15 July, in partnership with LGNZ under a Heads of Agreement[6], the Government announced a package of $2.5 billion to support councils to transition to the new water services entities and to invest in community wellbeing. This funding is made up of a ‘better-off’ element ($500 million which will be available from 1 July 2022 with the investment funded $1 billion from the Crown and $1 billion from the new Water Services Entities) and a ‘no council worse off’ element (available from July 2024 and funded by the Water Services Entities). The “better off” funding can be used to support the delivery of local wellbeing outcomes associated with climate change and resilience, housing and local placemaking, and there is an expectation that councils will engage with iwi/Māori in determining how to use their funding allocation.

Under the proposal Central Otago would receive a better-off funding allocation of $12,835,059. The detail of the funding (including expectations around the use of reserves) and the full list of allocations can be found in Appendix 4. Conditions associated with the package of funding have yet to be worked through.

The Reform Process Now

In addition to the funding announcements, the Government has committed to further discussions with local government and iwi/Māori on:

· the boundaries of the Water Service Entities

· how local authorities can continue to have influence on service outcomes and other issues of importance to their communities (eg chlorine-free water)

· ensuring there is appropriate integration between the needs, planning and priorities of local authorities and those of the Water Service Entities

· how to strengthen the accountability of the Water Service Entities to the communities that they serve, for example through a water ombudsman.

As a result, the original timetable for implementing the reform (outlined in Appendix 1) and for councils to consult on a decision to opt-in (or not), no longer applies. Further advice on the difficulties and risks of making a decision to opt-in or not is included at section 10 of this report.

Next steps are expected to be announced after 30 September 2021, which would include the timeframes and responsibilities for any community or public consultation.

It is also important to note that the Government has not ruled out legislating for an “all-in” approach to reform to realise the national interest benefits of the reform.

In the interim the DIA continues to engage with council staff on transition matters on a no regrets basis should the reform proceed. These discussions do not pre-empt any decisions about whether to progress the reforms or whether any individual council will transition.

5. Central Otago District Council Specific Information and Analysis

While the Government and LGNZ consider that national case for change has been made, each council will ultimately need to make its own assessment of the pros, cons and risks of reform based on its own unique local context.

Councils do not have a national interest test for their decision making. Councils are required to act in the interests of their communities and the community’s wellbeing (now and into the future), provide opportunities for Māori to contribute to their decision-making processes, ensure prudent stewardship and the efficient and effective use of its resources in the interests of the district or region (including planning effectively for the future management of its assets) and take a sustainable development approach[7].

Council currently delivers three waters as a mix of inhouse and contracted out service. These teams have built an understanding of Council’s asset base, service delivery challenges and opportunities, and community needs and expectations over an extended period of time.

The Government’s case for change is largely premised on the outcomes of economic modelling completed by the DIA and WICS. This modelling considered the current and future investment needs of Councils to deliver services and compared there to expected costs under a reformed model. The outputs of this modelling/analysis are presented neatly in publicly available dashboards that can be found on the DIA website. Central Otago District’s dashboard looks like this:

22 September 2021

The number of full time equivalent staff presented on the dashboards is incorrect, or not comparable as it has not been reported in the same manner by the councils. There are 13 full time equivalents employed directly by Council for three water activities, and 28 full time contracted staff. These staff work on both operations and capital work.

The reason for the difference in the number on the dashboard is that each of these staff were entered into the RFI separately under water, wastewater, and stormwater, with the same person often working across two or three of the activities. The dashboard then adds these together resulting in double, and in some cases triple counting of these roles.

The Central Otago District, and the dashboards of other councils can be accessed on this site[8].

The key aspects Council should note are detailed below

Average cost of three waters per household

	Government modelling / Analysis	Council’s own figures / projections
Current cost for 3 waters per household in Central Otago	$1,070	$639
Future costs for 3 waters per household in Central Otago (without reform)	$6,466 (at 2031) $7,790 (at 2051)	$988 (at 2031 uninflated)
Future costs for 3 waters per household in Central Otago (with reform)	$1640 (at 2051)	Not calculated

Note that the Council’s own figures do not include projections for increased regulatory compliance and necessary investment in infrastructure that reforms will require.

Debt

Council has a maximum debt to revenue ratio of 175%. This differs to the 250% used in the DIA modelling, as Central Otago is not a shareholder of the Local Government Funding Agency. The following graph shows the forecast council debt to income including three waters, based on the expenditure planned in the 2021 Long-term plan.

*Average headroom $40.6M

The following graph below shows the forecast debt to income excluding three waters, based on the expenditure planned in the 2021 Long-term plan. Council’s capacity to raise debt for work other than three waters would increase significantly if council was not responsible for three waters.

*Average headroom $65M

The graph above, and below demonstrate that three waters disproportionally consumes Council’s debt capacity.

*Breaches Debt covenant

In addition to having a maximum debt to revenue ratio of 175%, council can also only borrow up to 10% of its asset value. The following graph shows the forecast of Council debt to asset value including three waters, based on the expenditure planned in the 2021 Long-term plan.

The graph above, and below demonstrate that council leverages the value of other asset groups, such as roading, to ensure that debt required for three waters is within the 10% asset value limits.

*Average headroom $33.6M

*Average headroom $59.8M

*Breaches Debt covenant

Capital Expenditure Forecast

The Government modelling forecasts $572 million over the 10 years between 2022 and 2031 (excluding cumulative depreciation on new assets). Our own information demonstrates that there is significant investment required over the next 10 years of our Long-term Plan ($133 million excluding cumulative depreciation on new assets) and out across 30 years in our infrastructure strategy.

Capital investment planned in the 2021 Long-term Plan and 30 Year Infrastructure Strategy is shown on the graphs below:

Recently received information indicates that treatment upgrade costs for the smaller water schemes, at Naseby, Patearoa, Ranfurly, and Omakau are likely to be significantly higher than allowed for in Council’s budgets which make no provision for the management or upgrading of private water supplies or the assumption that regulatory standards will tighten and there will be more monitoring and enforcement in the future. There has also been no provision made in Councils budgets for changing existing wastewater discharges to water, or for providing treatment for stormwater discharges. Further monitoring of discharge quality is required before any estimates of the level of investment in stormwater treatment can be made.

Council has only programmed to undertake renewals at the rate of depreciation of the stormwater assets. No provision has been made for treatment of stormwater that discharges to waterways.

Our confidence levels for asset data, condition, performance for

· Water, wastewater, and stormwater pipe assets is medium

· Water and wastewater plant assets is low

· Non-pipe assets is low

Council officers believe that the valuation and depreciation costs for three waters will increase once the current project to improve asset data relating to above ground assets is completed.

Our maintenance budgets are adequate for this year. Our Long-term plan included an assumption that approximately $700,000 of operational improvements would continue to be funded from stimulus grant funding beyond year 1, for year 2 and 3. This assumption has now been shown to be incorrect, and will result in rates increases in years 2 and 3 of the Long-term plan. Future operation costs for the upgraded, more complex treatment plants may be understated in Councils budgets.

Council officers acknowledge that with more investment in asset management, and increased resource capacity and capability in asset management potential cost efficiencies could be gained from more accurate forecasting of renewal requirements. There is a national shortage of these skill sets within the workforce and council has been unable to recruit staff to fill these roles.

Sustainability

Three waters greenhouse gases contribute to 20% of Council’s total gas emissions. Treatment of Central Otago’s wastewater accounts for 73% of emissions from three waters.

Council’s emissions management and reduction plan sets a target of reducing Council’s gross emissions by 52% by 2024/25.

There are no projects in the Long-term plan which will result in lowering emissions from three waters. In fact, the increased treatment processes being implemented through capital upgrades will result in higher energy use in the future which will increase greenhouse gas emissions for three waters. In order for council to reduce greenhouse gas emissions beyond 2025, additional investment would need to be made in carbon reduction projects for three waters.

The impacts of climate change on three waters infrastructure includes:

· Higher intensity and more frequent extreme rainfall events in the headwaters of the Otago lakes and rivers will lead to increased frequency of flooding in the Clutha and Manuherekia River catchments. This will impact on water supplies due to dirtier water needing to be treated, and flooding of vulnerable bore sites. Affected treatment sites are located at Roxburgh, Alexandra, Clyde, Omakau and to a lesser extent, Cromwell. The Omakau wastewater treatment site is also at risk of flooding from extreme events in the Manuherekia catchment.

· Higher intensity and more frequent extreme rainfall will lead to increased recurrence of damage from alluvial fans in the Teviot area which damage the water and wastewater reticulation in Roxburgh and Lake Roxburgh Village.

· Increased frequency of drought, particularly in the Maniototo are which has significant implications for the resilience of water supply for its towns.

· Storm events during winter may result in very high snowfall which has implications for road availability and management, and access to treatment plants.

Growth

The growth projections that were prepared in 2020 for forecasting in the 2021 Long-term plan project that the district population will increase by 55% between 2018 and 2050. This equates to an average annual growth rate of 1.3%. The average annual growth rate between 2006 and 2019 was 2.3%, and ranged from 0.6% in the Teviot Ward to 4.4% in the Cromwell Ward.

	2020 Usual Resident Population	2020 Peak Population	2050 Usual Resident Population	2050 Peak Population
District	23,528	45,696	34,474	65,591
Cromwell	9,036	17,375	15,350	27,173
Maniototo	1,697	3,294	1,663	3,873
Teviot Valley	1,225	3,399	1,926	4,943
Vincent	10,938	20,996	15,536	29,604

Projects within the Long-term plan include capacity to meet longer term future growth where it is most cost effective to include this at the time of construction (for example pipe sizes). In many cases provision has been made for increased capacity to be added in the future when this is needed, rather than building it too soon and not using it (for example booster pumps, additional bores and water treatment membranes).

There is likely to be further growth-related infrastructure requirements in addition to those identified in the Long-term plan if growth occurs faster than the annual average forecast.

Other Considerations

Council has budgeted to comply with the legal requirements, and any applicable standard, rules or enforcement undertakings that were in place at the time of preparing the Long-term Plan budgets in 2020.

It is likely that staffing levels, and contract costs will increase as a consequence of changes in management requirements that are being introduced through the Water Services Bill. Given the difficulty to predict these at this stage, operational budgets were not increased to allow for these in the Long-term plan.

Council has a number of significant capital upgrades occurring to treatment processes on water supplies across the district, as well as the Alexandra wastewater treatment upgrade. While provision was made for increased operational costs as a consequence of these projects, more recent data indicates that this has been under-estimated.

The current three waters operations contract is a traditional contract model that has a combination of lump sum, and unit rates. This contract expires on 30 June 2022. The current market conditions would indicate that a significant increase on the cost of this contract is likely due to a lack of resources within the industry, and increased material costs. No provision has been made for increased contract, or material costs in the Long-term plan, other than normal inflation provisions.

Against the above information, the significant increased annual cost for three waters shown on the Dashboard is considered to be broadly accurate when compared with councils own information, Long-term plan and 30 year Infrastructure Strategy.

While prepared at the national level, the Government modelling has been peer reviewed by Farrierswier and Beca to ensure that both the modelling and underlying assumptions are reasonable in the New Zealand context. Morrison Low have also undertaken specific and targeted reviews of the Government modelling and found directional consistency without any noted significant concern with the direction or approach of the reform programme based on the numbers. It therefore provides a reasonable indication of the “order of magnitude”[9] of the gains that can be delivered though the new system and the level of future investment Council is likely to need to make over the next 30 years.

At this stage it is not possible to fully test the projections as the standards for Aotearoa New Zealand out to 2051 are not known, although it is reasonable to assume that there will be greater community and mana whenua expectations around environmental performance and quality, tougher standards to meet for water quality (drinking and receiving environment) and that monitoring, compliance and enforcement will be greater than it is now. This affects both operational and capital expenditure (costs will go up), including the number of staff (or contractors) that council will need to ensure Council outcomes for water and community and legal requirements are met.

There is always a level of uncertainty and therefore risk around assumptions and forecasts, whether prepared by council officers for the Long-term plan or by others such as Government to facilitate policy decisions, such as the current Three Waters Reform process.

Council has limited resources to undertake a revised forecast of three waters cost across the Long-term plan period during September, when feedback is only required to be provided on the current government proposal. A review of the budgets and the assumptions for the Long-term plan can be undertaken after the 8 week period to provide council with updated future cost estimates for the next stage of the reform process.

Council staff have used the above dashboard and additional information, and Council plans and studies (as described above) to define the status quo option below.

To assess whether the proposed better-off ($12,835,059) and no worse-off funding to Council is sufficient further information is needed on the conditions that will be associated with that funding. For the purposes of the following analysis it is assumed that this funding would provide Council with an opportunity to address a range of issues and opportunities to improve community wellbeing in partnership with mana whenua and the communities Council serves.

6. Options

In line with section 77[10] of the LGA the following section presents reasonably practicable options for three waters service delivery in order to assess the advantages and disadvantages of each option. Council is not being asked at this time to decide on any option.

Option 1 – Status Quo

Council currently delivers three waters services itself through a mixed model of in-house and contracted services.

In continuing to deliver its water, wastewater and stormwater responsibilities council is required to respond to the changing legislative environment related to the safety of drinking water, and environmental standards. The status quo is therefore not a practicable option and is not assessed further.

Option 2 – Modified Status Quo - Council continues to deliver three waters but at a higher level of compliance and investment

This option is a modified version of Council continuing to deliver services to reflect the anticipated regulatory environment for three waters delivery.

This option requires making assumptions about the future regulatory requirement (potentially using the assumptions underpinning the WICS modelling and the Government’s proposal and draft/emerging standards and compliance regimes e.g. those coming from Taumata Arowai) and the ability of non-Council water supplies to meet standards and requirements and the risks to Council and would ideally include the production of business cases for investment and enhanced activity and asset management planning to be robust.

Council staff have assessed our ability to do this work in the current operating environment (delivering business as usual, stimulus projects, other Government reform workloads, consultant availability etc) and concluded that only a very high level of analysis of this option could be done in the available timeframe. This is included in section 8 below.

Option 3 – Government Proposal

Under this option, Central Otago District is in entity D, a publicly owned water services entity that owns and operates three waters infrastructure on behalf of councils, mana whenua and communities.

The ownership and governance model is a bespoke model, with councils listed in legislation as owners, without shareholdings or financial interests, but an advocacy role on behalf of their communities. Iwi/Māori rights and interests are also recognised and representatives of local government and mana whenua will sit on the Regional Representative Group, issue a Statement of Strategic and Performance Expectations and receive a Statement of Intent from the Water Services Entity. Entities must also consult on their strategic direction, investment plans and prices / charges.

The law currently prohibits Council deciding to opt-in to the current proposal (given section 130 of the LGA, which prevents councils from divesting their ownership or interest in a water service except to another local government organisation such as a Council Controlled Organisation) and what we know about this option at present.

7. Risk Analysis

A high level analysis of the relative risks for Option 2 – Modified status quo (Council continues to deliver three waters but at a higher level of compliance and investment), and Option 3 – Government proposal is shown on the table below.

Risk	Option 2 - Modified Status Quo	Option 3 - Government Proposal
Financial capacity and funding	Higher risk	Lower risk
Financial sustainability	Higher risk	Lower risk
Underestimating the investment required	Similar risk	Similar risk
Community push-back on funding of increased costs	Higher risk	Lower risk
Compliance failure	Higher risk	Lower risk
Cost of works	Higher risk	Lower risk
Workforce, skills, technical capability	Higher risk	Lower risk
Economies of scale	Higher risk	Lower risk
Council plan implementation and integration	Lower risk	Higher risk
Household ability to pay	Higher risk	Lower risk
Long term outcomes and wider wellbeing outcome	Higher risk	Lower risk
Gaps in service delivery and funding responsibilities	Lower risk	Higher risk
Research and development funding opportunities	Higher risk	Lower risk
Increased incident response time	Lower risk	Higher risk
Additional water capacity (water source)	Similar risk	Similar risk
Reduction in the local contractor capacity	Lower risk	Higher risk
Partnerships (ineffective)	Similar risk	Similar risk
Compliance monitoring	Similar risk	Similar risk
Industry support	Similar risk	Similar risk
Value of council services	Lower risk	Higher risk
Community perception; loss of interest in council – effect on candidacy	Lower risk	Higher risk
Regional investment (lack of additional in the district due to current asst condition)	Higher risk	Lower risk
More efficient water use (within wider entity area)	Higher risk	Lower risk
Reduced ability to promote sustainable resource use	Similar risk	Similar risk
Failure to recognise cultural knowledge in design	Higher risk	Lower risk
Entity priorities differ to council goals	Lower risk	Higher risk
Loss of community engagement	Lower risk	Higher risk
Lack of service integration	Lower risk	Higher risk
Lack of understanding of growth requirements	Lower risk	Higher risk
Unclear responsibility for environmental impacts	Similar risk	Similar risk
Gaps in infrastructure data	Similar risk	Similar risk
Procurement outcomes	Higher risk	Lower risk
Litigation	Higher risk	Lower risk
Reduced levels of service / optional service level increases	Lower risk	Higher risk

8. Discussion

Option 2 - Modified status quo (Council continues to deliver three waters but at a higher level of compliance and investment)

In summary, the potential benefits of this option include greater Council control and more certainty over local infrastructure integration (planning and delivery) with land use plans and council objectives.

However, Council faces significant risks over the medium to long term including potentially high costs, in meeting the new water standards, environmental requirements and achieving compliance. In addition, contractor availability is limited, the construction pipeline is already substantial and inflationary pressures are growing, meaning costs are rising.

The ability of non-Council water supplies to meet standards and requirements also poses a high risk to Council and the community. Default of any non-Council water supplies would exacerbate Council’s risk profile and financial position.

These present affordability challenges for households in the future, exacerbating our current affordability challenges.

Council is also experiencing workforce challenges to meet the current requirements of three waters service delivery, Government reforms and an enlarged investment programme created by stimulus funding. This is exacerbated by an aging workforce, and a shortage of qualified and experienced people within the infrastructure and construction industries. These challenges would be further exacerbated if Councils neighbouring districts joined Entity D.

This option becomes less sustainable if those around us move to some form of aggregated model. This will adversely affect our ability to retain and attract workers, access technical, financial or construction support, and procure cost effective contracts to deliver services and capital works.

Without an adequately resourced, qualified, and experienced workforce there are significant risks to Council’s ability to deliver the services and work programs.

The causes of most of these risks are not within Council’s control. This makes mitigation difficult, and many potential mitigation options (such as greater investment, larger costs than currently planned, lower levels of service, compliance risk) may not be palatable to Council or the community.

Given the Government has rejected this as a sustainable solution for three waters service delivery there should not be an expectation that the Government would be willing to financially support councils to meet the new regulations beyond existing Tranche 1 stimulus funding.

There may also be broader implications for our relationship with Government, iwi/Māori and key stakeholders.

Given the analysis to date, Council continuing to deliver the three waters as a standalone entity is unlikely to be sustainable in the medium to long term.

Option 3 – Government Proposal

In summary, the greater financial capability, efficiency, affordability and community/water benefits (published by Government) of delivering three waters to the community are likely to be of significant value if they can be realised.

The key opportunities our own analysis identifies include reducing the Council’s current risk profile (when considered against the status quo) including compliance risk and the risk of not meeting standards. The proposed reform programme also presents opportunity for a meaningful role for iwi/Māori in decision making.

Risks that need to be mitigated include integration with spatial, growth and local planning and transparent prioritisation, households’ ability to pay, and Council’s financial sustainability.

Our analysis suggests that the key risk theme for this option is the loss of community/local voice in decision-making and subsequent reduced outcomes for local connected water users.

Further risks that need to be mitigated are:

· Protection from privatisation by future governments.

· Meeting the needs of growth.

· Consumer protections.

· Standardised charging for a baseline level of service, with communities who want a higher level of service (e.g no chlorination) paying for the costs of that increased level of service.

· Review of local government rating legislation and the 30% uniform annual charges cap

· Supporting procurement from local businesses

· Governance provisions to reflect the diversity of the communities within the entity (i.e rural, provincial, and urban)

These are explained in more detail in Appendix 7 – Three Waters CODC feedback.

Transition risks are dealt with in section 9 below and Appendix 5.

9. Transition

If the Government’s proposal were to proceed, effective management of the transition by Council, Government and partners will be critical. Transition will require considerable effort and resourcing.

Transitioning to a modified status quo option (council continues to deliver three waters but at a higher level of compliance and investment) also carries inherent risk.

Key risks relating to transition include retention of staff, workloads on staff to facilitate transition, contract management and transfer, data and institutional knowledge transfer and loss, and management of development and subdivisions, speed of change, community uncertainty, asset valuations returning a different value than expected and affecting Council’s financial position and poor transition management.

10. Council Decision Making and Consultation

Part 6 of the LGA, sections 76 to 90, provide the requirements for decision making and consultation, including the principles of consultation and information that needs to be provided including the reasons for the proposal and the reasonably practicable options.

In particular, section 76 requires that in making a significant decision, which a decision on the future management and or ownership of three waters assets will be, councils must comply with the decision-making provisions. This is a ‘higher bar’ than the “promote compliance with” that applies for ordinary decisions.

Section 77 states that councils must seek to identify all reasonably practicable options and then assess the advantages and disadvantages of each option.

Section 78 requires that in the course of making a decision a Council must consider community views but section 78(3) explicitly says that consideration of community views does not require consultation, which is reinforced by case law.

Section 79 gives Council discretion to decide how the above Part 6 requirements are met including the extent of analysis done etc. Therefore, while a decision could be challenged, a judicial review is unlikely to be successful unless the decision made by council was manifestly unreasonable, the process was flawed or the decision was beyond its powers (as given in law, ie the council did not act within the law).

However, despite section 79 of the LGA, a decision to transfer the ownership or control of a strategic asset from the council (or to it) must explicitly be provided for in the council’s Long-term plan (and have been consulted on specifically in its consultation document).

Council’s existing Long-term plan and the consultation information and process used to develop it will not suffice to meet this test, as Council did not itself have adequate information on the options and the implications earlier this year when it consulted on the Long-term plan. A Long-term plan amendment and commensurate consultation process on the ownership and governance arrangements and asset transfers proposed would be necessary.

There are also provisions in the LGA that relate to unlawful decisions to sell or dispose of assets, which can be investigated by the Auditor-General.[11]

A decision to opt-out would also be affected by the consultation and decision-making requirements set out in this report, including the need to follow a robust process that could survive a judicial review, as well as make a final decision that was not manifestly unreasonable in the circumstances.

Given the Government’s:

· 8 week period of engagement with mana whenua and councils

· commitment to explore issues such as council and community influence of service outcomes, integration with other reform proposals, spatial and local planning

· request for councils to give feedback on the proposal, identify issues and solutions, and

· uncertainty around next steps, including whether the reform may become mandatory or legislative change will remove legal barriers to opting in

it would be premature to make a decision to opt in or out of the reform process and may expose the Council to litigation risk.

A Government Bill to progress the reforms could address the issues raised above, for example removing the section 130 requirements has explicitly been raised.

At this stage no decision is required on future delivery arrangements. Based on the analysis in this report, Council should wait until it has further information before consulting on and/or making a decision on the Government’s proposal.

It is recommended that the Council therefore notes the options canvassed in this report, the high-level analysis of them and the information and decisions that are yet to be made.

If reform is not made mandatory, to ensure sufficient information is available to meet the moral and legal requirements of Council decision-making staff will further develop the analysis of options (based on further information from the Government, advice on next steps, and regional discussions) prior to Council decision making and consultation on future water services delivery. Whether this is ultimately required will be dependent on where the Government gets to with the reform process and the decisions it makes after 30 September 2021.

11. Conclusion

While there is uncertainty about the future steps in the Government’s reform proposal, and current legislative impediments to it, the current eight-week period gives Council the opportunity to understand the information it has received (and will continue to receive) from the RFI and modelling processes.

It also provides an opportunity for Council to understand its potential options, including the financial, workforce and sustainability impacts for Council and the wider economic, social and cultural implications of each option, using the guidance that has been issued. It also provides an opportunity to engage in discussions with other councils in its entity grouping, share information and ask questions and propose solutions to issues it sees to Government and LGNZ.

All of this information will be useful to inform future decision making by both council and Government and consultation and engagement with mana whenua and communities.

12. Compliance

Local Government Act 2002 Purpose Provisions	Compliance with the Local Government Act 2002 is discussed in section 10.
Financial implications – Is this decision consistent with proposed activities and budgets in Long-term plan/annual plan?	At this point council is not making a decision that will have financial implications. Council may wish to provide feedback to the government on the need for a review of rating legislation if the reforms were to proceed.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	This report however does not commit the council to a decision.
Considerations as to sustainability, the environment and climate change impacts	Climate considerations (both mitigation and adaptation), resilience and environmental impacts are drivers of the reform process. While there are no specific impacts arising from this report the decisions that occur post September 2021 will have an impact on climate and environmental issues. Some of these impacts have been included in this report within the risk/options analysis that can be done with currently available information. Further consideration of sustainability, and climate change impacts of three waters specific to Central Otago are outlined in section 5.
Risks Analysis	Significant risks, legal responsibility and financial implications have been identified in analysing reform proposals and completing analysis in this report. A high level analysis of the relative risks of the options is outlined in section 7. It is important to note that no decision is required, other than to note those issues and to request further information from Government if the Council wishes to do so to reduce the risks and implications to Council and its communities.
Significance, Consultation and Engagement (internal and external)	The future of water services delivery is a significant issue. A decision to transfer the delivery of the three waters network as a whole would be a significant decision, and require public consultation. This report however does not commit the council to a decision relating to transfer of delivery of three waters activities. Instead it provides initial analysis of the reform proposals for Council’s information and highlights the uncertainties around information and next steps. As such the significance of this report does not trigger public engagement requirements. Further advice regarding any future consultation requirements will be provided after September 2021. In the interim Council has made information regarding the reform process and background available to the public through its website, Facebook page, and media articles.

13. Next Steps

There are still several issues that need to be resolved, including:

· the final boundaries

· protections from privatisation

· consultation with communities and mana whenua

· how will community voice be heard and what influence will local authorities have (and what can the community realistically expect the council to influence particularly if it is not on the regional Representation Group)

· representation from and on behalf of mana whenua

· integration with other local government reform processes

· integration with spatial and local planning processes and growth

· prioritisation of investment

· workforce and capability – we don’t have enough of the right people now to deliver three waters and we need to retain our people through the transition

· what will a Government Bill cover and whether the reform will be mandatory

· conditions associated with the Government’s package of funding for local government

· transition arrangements, including our own workforce challenges (without transition challenges on top) and due diligence for asset transfers etc.

Staff will stay engaged on these issues as they develop and provide further advice on next steps after the 8 week period.

Council is invited to discuss whether there are specific information needs, issues or solutions that the Council would like staff to convey to the DIA or LGNZ, An initial list of questions is contained in Appendix 6. Suggested feedback on the proposal is contained in Appendix 7.

14. Attachments

Appendix 1 - 2020 Background (including Taumata Arowai information and Indicative Reform Programme) ⇩

Appendix 2 - The Government’s conclusion ⇩

Appendix 3 - DIA two-page summary ⇩

Appendix 4 - Funding to invest in the future of local government and community wellbeing ⇩

Appendix 5 - Transition ⇩

Appendix 6 - Questions from Central Otago District Council for DIA and LGNZ ⇩

Appendix 7 - Three Waters CODC feedback ⇩

Report author:	Reviewed and authorised by:

Julie Muir	Sanchia Jacobs
Executive Manager - Infrastructure Services	Chief Executive Officer
13/09/2021	16/09/2021

22 September 2021

21.7.5 Ripponvale Water Supply

Doc ID: 551499

1. Purpose of Report

To gain approval to undertake the necessary works on the Ripponvale Water Supply Scheme in order to improve its long-term resilience and ensure it complies with any requirements of the New Zealand Drinking Water Standards.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Notes the revised programme of work on the Ripponvale Water Supply Scheme.

C. Agrees that Fulton Hogan are engaged to undertake the work as a variation to the maintenance contract.

D. Notes that $300,000 of the upgrade is funded through Stimulus Funding.

E. Notes that stimulus funded work must be complete by 30 March 2022.

2. Background

In November 2020 Council agreed to take over responsibility for the ownership and operation of the Ripponvale Community Water Supply scheme. At that meeting the following was resolved:

A. Receives the report and accepts the level of significance.

B. Agrees that properties on the Ripponvale Community Water Scheme pay half the $600,000 costs of upgrading the Ripponvale network to meet the New Zealand Drinking Water Standards, and minimum engineering standard requirements.

C. Agrees that the Council share of $300,000 be funded from the water stimulus fund allocation.

D. Agrees that Ripponvale Community Water Scheme accumulated $100,000 funds can be used to contribute to the $300,000 to be funded by properties on the Ripponvale Community Water Scheme.

E. Agrees that existing properties on the Ripponvale Community Water Scheme will have the option of paying their share of the $300,000, less any contribution by the Ripponvale Community Water Scheme, by either a lump sum payment or as a targeted rate.

F. Agrees that transfer of the scheme will occur on 30 March 2021, and that Council will not meet any costs accrued prior to 30 March 2021.

G. Agrees that properties on the Ripponvale Community Water Scheme be charged the standard rates for a council water connection from 30 March 2021.

H. Agrees that properties within the Ripponvale Community Water Scheme supply area be included within the Cromwell Water Supply Area, and that development contributions be applied to all properties that connect to this supply from 30 March 2021.

The Ripponvale Community Water Scheme provides water to more than 100 people and is required to meet the New Zealand Drinking Water Standards for small supply.

Central Otago District Council received a request to take over the management and operation of the Ripponvale Community Water Scheme in 2019.

Council agreed to this in principle and commissioned a review of the assets, the asset condition, and improvements required to meet the New Zealand Drinking Water Standards and Council’s level of service. This assessment identified critical upgrades of various parts of the scheme that are necessary to meet compliance requirements to:

· Ensure that the water in the zone meets New Zealand Drinking Water Standards requirements.

· Allow testing of the scheme water at appropriate locations to meet the Drinking Water Standards requirements.

· Enable efficiency with telemetry controls consistent with council requirements to enable remote monitoring of the scheme.

· Ensure operational condition and appropriate level of service for restricted rural water supplies.

There are also issues regarding capacity of the supply to meet potential future development demand. The scheme currently operates as a low-pressure supply, with onsite tanks and it is anticipated this will remain the case once future upgrades are implemented. Hydraulic modelling to identify the most appropriate way of managing future demand will be included as part of the Cromwell water investigation project this financial year.

Since taking over the scheme Council along with contractors and consultants have undertaken more thorough asset investigations and have found a number of issues that have altered the priority of some of the upgrade works previously identified. These are largely based around the ability of the scheme as a whole to cater for potential future demand and the urgent need to replace an overland section of pipework extending into the Kawarau Gorge which regularly freezes over the winter period and results in loss of supply to customers at the end of the scheme. Significant leakage has also been identified on pipework prior to this overland section. It is therefore proposed that the previously approved budget of $600,000 be used to deliver this work as well as provide basic telemetry capability at two pump stations on the scheme.

3. Discussion

Recent history and scheme summary

The Ripponvale water supply has been run as a private network for many years. The network is supplied water via an 80mm bulk meter on Waenga Drive. A booster pump takes water from the supply main and boosts it up to three tanks on private land. These tanks provide water pressure to much of the scheme (main pressure zone). A second small booster pumpstation provides water to tanks on a hill on the western edge of Ripponvale and this supplies water to about 10-15 properties (upper pressure zone). The whole scheme is a trickle feed supply, meaning that all connections have a restrictor in place before private tanks.

The scheme operators handed over responsibility of the scheme to Central Otago District Council in March 2021.

Problem statement

The water supply has not been constructed, operated or maintained as a normal Council supply, with numerous physical and legal/landowner issues which need addressing. Council has undertaken to upgrade the supply to ensure expected levels of service are met. This includes ensuring that the water is always safe to drink and limiting outages that could result in ‘no-water’ requests for service.

Some of the upgrades require investigation before they can be implemented.

Funding is available to carry out some upgrades in 2021/2022. The best way to allocate this money in the short term has been considered and is presented below. Further ongoing investigation will allow the long-term future of the scheme to be decided whilst this work is being carried out.

After taking over the scheme, some previously unknown problems became evident.

In summary, the main scheme issues are:

· Some of the assets are in a poor state of repair and need replacing. Some also need upsizing. The assets do not always meet council’s standards and of insufficient diameter to cater for potential future demand.

· The as-built drawings are not accurate and are missing details of some key assets (including some pipe locations).

· Some assets, such as valves, have been lost (buried) over time.

· The location of the lateral to each customer and the location of their restrictors is not documented.

· It is considered possible that they may be some unrestricted connections on the supply that need to be resolved.

· The size of individual storage tanks is unknown at certain properties but considered to be less than appropriate.

· The water main along Kawarau Gorge was found to have been laid above ground and is subject to freezing in the winter. This leads to supply outages to customers in this area on cold days and has resulted in 2021 for the need to tanker water to these properties on a number of occasions. The original buried supply pipe in this area it is understood was leaking very badly and was abandoned by the previous operator.

· Some of the assets are on private land, in particular the pumpstations and reservoirs with no landowner agreements or easements in place to allow appropriate access.

· There is no telemetry in place at the scheme, meaning that the reservoir levels, flows or pump operation cannot be monitored remotely. When there is a pump outage, Fulton Hogan will likely not know about it until a customer runs out of water and calls for assistance.

· There is only a single pump in each of the pumpstations, meaning that if it fails, the scheme stops supplying water. There are no spares or standby pumps.

· The supply only has one connection to the Cromwell supply, though the Waenga Drive connection. This means that supply to the scheme is currently restricted, limiting any potential growth in the future.

Initial proposals for scheme upgrade

Initial scheme upgrade proposals were presented in an October 2020 Stantec report and they included: replacement of key assets (mains and tanks), chlorine dosing, installation of duty/standby pumps and telemetry.

After some initial investigation, the chlorine level in the scheme appears to be acceptable, although further monitoring is required after extra sample taps are installed. Chlorine booster dosing is therefore not being considered further at this stage.

A quote for adding telemetry to the main assets was previously gained and was being considered. A site investigation found that addition of duty/standby pumps to the pumpstations would be possible and was being considered as an appropriate upgrade.

Previous plan for short term upgrade

The report approved by Council in November 2020 highlighted the following work to be undertaken:

· New connection to Cromwell network to improve water pressure and reduce depreciation costs

· Replace two leaking tanks, and install tank isolation valves

· Flushing valves

· Property connections (to reduce backflow risk and provide metering)

· Additional chlorine dosing

· Minor works not included in above, and contingency

· Investigation and management costs

Total cost of these work was estimated at $600,000. This excluded two further packages of work to install a telemetry system to the pump stations and a ring feed from Bannockburn.

Current plans for short term upgrade

The current plan for upgrade involves replacement of water mains and connections to the main in Ripponvale. This work can be undertaken now with less risk that any future plan/modelling will mean the work is superseded and so won’t be money well spent.

Fulton Hogan have recently provided pricing for what is now proposed to be highest priority options:

1. Replacement of the main along the full length of Ripponvale Road with an option to upsize (from 20mm and 50mm) to 100/ 150mm to accommodate future demand and provide surety of supply. As part of this replacement, the following would be included:

- replacement of laterals to the boundary (and possible beyond if in poor shape)

- replacement of restrictor units at the boundary. Including installation of proper meter boxes

- replacement of valves, air valves, hydrants and other assets where necessary, including proper surface marking

2. Replacement (and potential upsizing) of part or all of the main in Kawarau Gorge. Works in this area are difficult due to the nature of the road; being a state highway, having a constant traffic of fast- moving cars and a narrow verge to work in. There is also potential increase in demand along this supply line due to the existence of workers accommodation that needs to be confirmed

3. Temporary, low- cost telemetry at the key sites (PSs) which can alert Fulton Hogan to key water supply issues in the short term. This also includes the possible reinstatement of existing audible/visual alarms at the pumpstations which could alert the nearby homeowners of a problems so that they can call Council.

4. Purchasing spare pumps/critical spares to match the existing so that in a failure they can be quickly plumbed in and minimise risk of unplanned outages.

Estimates indicate that this work can be delivered within the currently approved $600,000 budget.

Reasons for change of priority

The following section detail some of the reasons why it is now proposed to change the priority from what was proposed previously to what is currently being proposed.

· A more detailed site inspection of the main assets has led to re-evaluation of some priorities.

· The tanks will not need replacing if a pumped system can work, as they will be decommissioned. If that is found to not be possible/the best option, we will go back to replacing the tanks as proposed. This will depend on the outcomes of future modelling to help determine longer term needs for the scheme.

· The above ground pipe in the gorge was only identified after the scheme was handed over to Council.

· Water quality has been found to be better than anticipated, but needs more monitoring, and so extra chlorine dosing is not required at this stage.

· Council didn’t know how much the scheme struggled with high water use and small assets (small pumps, tanks and pipes). As Fulton Hogan have not operated the scheme through a summer yet, and no detailed flow monitoring has been done there remains a level of uncertainty. Also, any over-use found could be due to removed restrictors and /or leaks (a common scenario across rural water supplies).

· Flushing valves will be installed as the mains are replaced, which will be as proposed.

· The ‘minor works’ stated included all sorts like sample taps, new valves, leak repairs and new pipework. One sample tap has already been added, and a couple of valves.

· Telemetry will be needed in the scheme.

· The other ‘deferred’ option of a link to Bannockburn Road is still being considered but relies on an updated Cromwell water model and some bigger thinking around what the long term plan for this area is.

Funding of current proposed works

The current proposed works will be funded through the same mechanism as previously approved i.e. that Council would fund $300,000 through the Stimulus funding with the remaining balance ($300,000) paid for by the Ripponvale users. It is considered that this funding mechanism is still the most appropriate to cover the current work.

Procurement and delivery of current upgrades

It is noted that $300,000 of the approved budget is Stimulus funding and needs to be spent by the end of March 2022. It is proposed to award the work to Fulton Hogan as a variation to the maintenance contract. This approach is consistent with the current Procurement Policy given the specialist nature of the work and the need to complete in a restricted timeframe.

Investigation of future long term upgrades

After discussion between Council and Fulton Hogan about long term options for the supply, a new long term-proposal is being considered that will require modelling as part of the Cromwell hydraulic model. This involves the possible addition of a new booster pumping system which could supersede the requirement to maintain the existing main reservoirs and pumpstation.

Some development is ongoing/proposed in the area between Ripponvale and Cromwell/Bannockburn. The possibly of more water being required in this area in the short or long tern needs to be considered. There is also an option to loop the Ripponvale extension by connecting it to the Bannockburn supply line at the end of Pearson Road which will add considerable resilience to the scheme.

The model and proposed spatial plan for the area need to be checked to ensure that the existing scheme can cope with increased flows and whether growth/change of use in the area between Ripponvale and Cromwell/Bannockburn will see increased demand for water. It is understood that some further works will need to be carried on the model before this work can be complete.

If the existing Cromwell supply will not be adversely affected by a new booster pumpstation, the possible location of this new pumping station building needs to be investigated (hydraulic requirements/land ownership/power supply) and a design progressed so that an estimate of costs can be sought.

Further site and customer investigations will be carried out to determine the condition and location of customer connections.

Extra sample lines and flush points at strategic locations will also be considered if appropriate.

4. Options

Option 1 – (Recommended)

Approve the variation to Fulton Hogan’s contract and approve the current plans for the proposed short term upgrade these being:

· Replacement of the main along the full length of Ripponvale Road

· Replacement (and potential upsizing) of part or all of the main in Kawarau Gorge.

· Temporary, low-cost telemetry at the key sites

· Purchasing spare pumps/critical spares

Advantages:

· Can be delivered within the previously approved budget

· Adds significant resilience into the Ripponvale scheme

· Caters for future development and subdivision within the current network area

Disadvantages:

· None

Option 2- (Not Recommended)

Do not approve the variation to Fulton Hogan’s contract and continue to undertake the scope of work as previously outlined these being:

· New connection to Cromwell network to improve water pressure and reduce depreciation costs

· Replace two leaking tanks, and install tank isolation valves

· Flushing valves

· Property connections (to reduce backflow risk and provide metering)

· Additional chlorine dosing

· Minor works and contingency

Advantages:

· Programme will remain as per the previous scope

Disadvantages:

· Will not deliver optimum outcome based on additional information since the scheme was taken over

· Will not cater for future demand

· Not replacing the Kawarau Gorge line will result in further costs associated with trucking water to customers when the overland line freezes each winter

· Lack of telemetry in pumping stations continues to be a key vulnerability

· Lack of critical spares will also remain a key vulnerability

5. Compliance

Local Government Act 2002 Purpose Provisions	This decision promotes the (social, economic and environmental) wellbeing of communities, in the present and for the future by ensuring the supply of safe drinking water.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	The decision has financial implications outlined in previous reports. Funding the Council share from Stimulus funding has minimal implications. The remaining $300,000 will be funded from the water renewal budget in the short term.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Yes
Considerations as to sustainability, the environment and climate change impacts	Meets Council’s sustainability objectives for affordable and equitable provision of services to promote wellbeing, and appropriate infrastructure.
Risks Analysis	The decision to take over the Ripponvale scheme has risk implications as highlighted in previous reports. Undertaking the currently proposed work is seen as a step towards mitigating those risks.
Significance, Consultation and Engagement (internal and external)	This decision does not trigger Council’s significance threshold. No further engagement is required.

6. Next Steps

· Design work will be completed on the key immediate upgrades as proposed through this report

· Fulton Hogan will be instructed to undertake the work

· Council and Fulton Hogan will undertake further investigation across the Ripponvale network to identify other areas that may require future attention.

· Continue to consider long term future options to provide a greater level of resilience across the network including a potential ring feed from the Bannockburn Road main.

7. Attachments

Nil

Report author:	Reviewed and authorised by:

Ian Evans	Julie Muir
Water Services Manager	Executive Manager - Infrastructure Services
9/09/2021	9/09/2021

22 September 2021

21.7.6 Procurement for Three Waters Stimulus Projects

Doc ID: 550649

1. Purpose of Report

To receive an update on the procurement of three waters projects and consider a change in procurement approach for the remainder of the work under the Three Waters Stimulus programme.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Notes the update on the Three Water Stimulus programme of work.

C. Rescinds the decision to run an open tender for the stimulus funded falling main project and Manuherekia pipe crossing (Part of Resolution 21.2.15B).

D. Agree that remaining work to be funded with water stimulus funding be undertaken as a variation to the Water Services Maintenance Contract.

2. Background

Council approved the following projects for the Three Waters Stimulus programme up to the value of $9.46 million on 26 August 2020:

· Separating Alexandra pump station and new Manuherekia river crossing

· Cromwell pump station capacity and resilience upgrades

· Falling water main replacements

· Omakau water pressure upgrades

· Flood protection of Roxburgh water treatment plant

· Additional Alexandra northern water reservoir

· Data collection

· Additional staff to deliver the program

· Regional work program contributions.

On 24 March 2021 Council approved the procurement process for construction of:

· Cromwell pumpstation upgrades

· Alexandra northern water reservoir

· Manuherekia river pipe crossing

· Falling water main replacements - Roxburgh and Bridge Hill

· Clyde wastewater pumpstation.

All this work except for the Clyde wastewater pumpstation is funded under the Three Waters Stimulus funding which requires the work to be completed by 31 March 2022. The status of the construction projects is shown on the following table:

Project	Number of tenders	Status
Cromwell pumpstation upgrades	2	Awarded, construction commencing September.
Alexandra Northern Reservoir	2	Awarded, construction commencing in October.
Manuherekia Pipe Crossing	0	Alternative option designed.
Clyde Wastewater Pumpstation		Delayed due to pump being withdrawn from market. Tenders close on 14 September.
Falling water main replacements		Design completed September.
Flood protection of Roxburgh water treatment plant		Complete.

Council staff have discussed the Manuherekia Pipe crossing tender with two large local contractors. The reason there were no tenders received for this work was due to the complexity of constructing a piped river crossing, the risks associated with this, and limited capacity to undertake this work.

3. Discussion

The Clyde wastewater pumpstation construction was tendered in April but had to be withdrawn after the manufacturer withdrew the pump from the market due to a defect. An alternative pump of the same capacity was unable to be found. This has required re-design of the pumping of wastewater from Clyde to Alexandra. This is now being managed by using a smaller pump at Clyde and bringing the Clyde main pipe into the Alexandra network at the Wrightson pumpstation.

Increased storage capacity needs to be provided at the Wrightson pumpstation to achieve this. It is proposed to re-allocate the funding for the Manuherekia pipe crossing project to fund the Wrightson pumpstation capacity upgrade. This will increase the resilience at the Wrightson pumpstation, and manages wastewater flows better to improve operational management at the Alexandra treatment site. The Clyde wastewater will be connected into the Wrightson pumpstation and then transported with Alexandra wastewater. This will reduce surges at the treatment plant.

The Clyde pumpstation is currently being tendered, and the tender period was extended from 7 September to 14 September due to the second COVID-19 lockdown.

Council staff have spoken to another two small to medium sized contracting companies who advised that they were unlikely to tender for pipe replacements that had tight construction periods or were in challenging terrain. There is currently significant work available, particularly in the Queenstown area, and on subdivision developments.

The Bridge Hill falling main is a complex project, which requires significant design. Design and construction will not be able to be completed by 31 March. This has been replaced with the Clyde falling main replacement, and the bridge hill work will now be funded from the renewal budget that existed for the Clyde falling main. There is no change to the overall pipe renewal program, this just enables management of delivery risks for the Three Waters Stimulus programme.

The end date of the Funding Agreement between the Department of Internal Affairs and Central Otago District Council is 31 March 2022. There is no guarantee that there will be an extension of time if the money is not spent, though the Department of Internal Affairs has the discretion to extend this date.

An exemption from open advertising is available under the current Procurement Policy with approval where there is limited time for the procurement process, and it is not practical or cost-effective to conduct an open tender or proposal.

Due to the lack of market interest in tendering for work that needs to be completed by the 31 March 2022, it is proposed that the Roxburgh and Clyde falling mains, and Wrightson pumpstation upgrade be undertaken as variations to the current Water Services Maintenance Contract.

4. Options

Option 1 – (Recommended)

Rescind the decision to run an open tender for the stimulus funded falling main project and Manuherekia pipe crossing and agree that remaining water stimulus funded work be undertaken as a variation to the Water Services Maintenance Contract.

Advantages:

· Reduces time risk for delivery of the Three Waters Stimulus program.

· All construction contracts for the stimulus programme will be awarded.

· Work can start straight away.

· Ensures delivery of essential work within a resource constrained market.

Disadvantages:

· Reduces the opportunity for new players to access the local market.

Option 2

Tender the work and do not agree the remaining water stimulus funded work be undertaken as a variation to the Water Services Maintenance Contract.

Advantages:

· Would enable other contractors to tender if they have capacity.

Disadvantages:

· High risk that the Three Waters Stimulus program will not be completed by 31 March 2022.

· Increased risk that all the stimulus funding will not be spent, and this funding will be lost to Central Otago.

· There is a high risk that we will receive no tenderers for this work making the tender process an ineffective use of time.

5. Compliance

Local Government Act 2002 Purpose Provisions	This decision promotes the social and economic wellbeing of communities, in the present and for the future by providing good quality infrastructure in a way that is most cost effective for households and businesses.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	Yes. This work will be undertaken within the Three Waters Stimulus Grant budget.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Yes. Variations to existing contracts is in accordance with the Procurement Policy. An exemption from open advertising is permitted, when supported by special circumstances, including where there is limited time for the procurement process, or it is not practical or cost-effective to conduct an open tender or proposal.
Considerations as to sustainability, the environment and climate change impacts	This decision will enable work which will contribute to improved climate resilience and sustainability to be undertaken.
Risks Analysis	There is a risk to Council if we are unable to deliver the Three Waters Stimulus programme by the end of March 2022.
Significance, Consultation and Engagement (internal and external)	This decision is not significant and does not meet the thresholds of Council’s Significance and Engagement Policy.

6. Next Steps

If Council agrees to the variation to the existing Water Services Maintenance Contract the work will commence immediately. If not, then a tender process will be initiated.

7. Attachments

Nil

Report author:	Reviewed and authorised by:

Chantal Green	Julie Muir
Infrastructure Finance Officer	Executive Manager - Infrastructure Services
6/09/2021	10/09/2021

22 September 2021

21.7.8 Appointment of a consultant for the development and tender of Council's Waste Contract

Doc ID: 551688

1. Purpose of Report

To consider the direct appointment of a consultant to support the development and tender of all stages of Council’s new waste services contract.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Approves the direct appointment of Morrison Low for the development and tender of Council’s waste services contract.

2. Background

All of Council’s contracts for waste services (kerbside refuse and recycling collections, resource recovery centres and transfer stations) expire in June 2023, except waste disposal to landfill which expires in 2029. Council has the opportunity to amalgamate the contracts into a single, long‐term waste services contract, with the aim of delivering value for money for residents whilst supporting Council’s objectives for waste management and minimisation.

Morrison Low are familiar with waste services in the Central Otago and neighbouring Queenstown Lakes district, having supported both Councils on several waste projects in recent years including bylaw development, transfer station review and previous waste contract development.

Morrison Low has recognised specialists in providing strategic advice to local and central government in New Zealand and Australia on waste management and procurement. Morrison Low have been involved in almost all of the waste service changes implemented by New Zealand councils in the last five years.

3. Discussion

Subject to approval, the current Procurement Policy allows an exemption from open advertising under certain circumstances. Some of these circumstances include:

· Where the services required are specialist technical or professional services.

· When it is not practical or cost-effective to conduct an open tender or proposal.

· Where there is limited time for the procurement process.

The proposed programme of work to be completed by Morrison Low is as follows:

· Stage 1: Waste Services Review (April 21 to November 21)

· Stage 2: Procurement Planning (September 21 to January 22)

· Stage 3: Evaluation and award (January 22 to June 22)

· Stage 4: Mobilisation (July 22 to June 23)

When an exemption from open advertising is recommended, approval is on a one-up basis.

The total amount of the professional services for stages 1 - 3 of the work is $180,000. Additional support from Morrison Low may be required through the mobilisation process and coordination with other Council’s for facility access and operation. This is estimated to be $25,000

As the total of all stages is in excess of $200,000, Council approval is required to use direct appointment as the alternative procurement method.

There is a time and cost requirement for tendering work. A tender process for this work is expected to take 12 weeks, and preparation of tender documents and evaluation is expected to take approximately 80 hours of senior staff time. This means that while the tender process will add time and cost to progressing work, it is unlikely to deliver any added value.

The contracts for technical services are usually awarded on qualities relating to experience with little to no weighting given to price. The expertise, experience and innovation of the individual people who work on the project have more of an impact on the cost than the differences in the fees charged for the work.

There is a shortage of experienced consultants to undertake the work that is currently planned and consultants are now in the position where there is more work than capacity to deliver. Building on existing strategic relationships is likely to be more effective in ensuring delivery of Council’s work programme than tendering will be.

Given Morrison Low’s positive history of work with Council on solid waste, their technical expertise and the constraints mentioned above, it is recommended to make a direct appointment of Morrison Low for the waste services review and procurement instead of going through an open tender process.

4. Options

Option 1 – (Recommended)

Make a direct appointment to Morrison Low for all stages of the waste services review and procurement.

Advantages:

· Will fast-track consultant engagement, resulting in reduced staff and consultant input being required.

· Will utilise the knowledge that Morrison Low have gained through waste projects to be carried through to option analysis and development of the tender.

· Will enable our waste service contract to be tendered and awarded with enough time for mobilisation.

Disadvantages:

· Reduces opportunity for other players to access the local market.

Option 2

Tender the work.

Advantages:

· Open transparent and competitive process.

Disadvantages:

· Will create cost for consultants to tender in a market where there is more work than resource available. This could result in no tenders being received.

· Will require staff time which will result in lost opportunities to progress other items of work.

· If a different consultant was selected then the benefits of work undertaken to date could be lost.

5. Compliance

Local Government Act 2002 Purpose Provisions	This decision promotes the social and economic wellbeing of communities, in the present and for the future by providing good quality infrastructure in a way that is most cost effective for households and businesses.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	Yes. The work will be undertaken within existing budgets provided for this work.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Yes, with approval an exemption from open advertising can be used in certain circumstances. These include when the services required are specialist technical or professional services, where it is not practical or cost-effective to conduct an open tender or proposal and where there is limited time for the procurement process.
Considerations as to sustainability, the environment and climate change impacts	This decision will enable development of a new waste contract which promotes more efficient and effective waste management.
Risks Analysis	There is a risk in managing peak workload with limited resources if the recommended option is not approved. There are risks to Council if appropriate technical expertise is not included in the development and delivery of Long-Term Plan programmes. There are minimal risks to Council in undertaking direct appointment for the scale of work that is proposed.
Significance, Consultation and Engagement (internal and external)	This decision is not significant and does not meet the thresholds of Council’s Significance and Engagement Policy.

6. Next Steps

If Council approves the recommendation Morrison Low will be appointed for all stages of the waste services review and procurement.

7. Attachments

Nil

Report author:	Reviewed and authorised by:

Quinton Penniall	Julie Muir
Environmental Engineering Manager	Executive Manager - Infrastructure Services
9/09/2021	9/09/2021

22 September 2021

21.7.9 Maniototo Bridges and District Wide Bridge Strategy Update

Doc ID: 551311

1. Purpose

To provide an update for the three Maniototo Bridges currently closed to traffic, along with an update on the development of a district wide bridge strategy.

Recommendations

That the report be received.

2. Maniototo Bridges

After the significant weather event in January 2021, three bridges in the Maniototo were closed to traffic. This was due to damage caused by the weather event accelerating pre-existing deterioration on the old timber structures that were already nearing the end of their useful life.

The bridges are:

§ Bridge no. 121 - Scott Lane, Kyeburn River

§ Bridge no. 145 - Maniototo Road (Halls Ford), Taieri River

§ Bridge no. 160 - Linnburn Runs Road, Taieri River

The three bridges were closed in early January 2021. Council do not have in-house staff that can undertake structural inspections and outsource this work to specialist engineering consultants.

Beca were engaged to undertake general inspections on bridges that had likely suffered damage as a result of the significant weather event in January.

A general inspection involves a visual check of everything that a structural engineer can assess from either the bridge itself or any areas that are easily accessible around the structure. A general inspection is a good starting point to determine if there is any obvious damage or issues that need a more detailed principal inspection.

Due to the issues found on the Maniototo Road (Halls Ford) and Linnburn Runs Road structures during their general inspections, Council have engaged Beca to undertake a more detailed principal inspection of them.

The principal inspections of these two structures will involve specialty access (ropes, boat access and physical material sampling). This will determine the overall existing condition of the structure by assessing all of its structural components. Having the information of its current condition will aid to determine what loading (if any) each structure may be able to withstand.

Scott Lane had four sections physically swept away during the January weather event, so there was no point in undertaking a principal inspection at this location. This bridge was in poor condition and weight restricted prior to the January weather event.

The structural inspections have taken longer to complete than originally anticipated. This has been due to vacancies within the roading team and demand on a small resource pool of structural engineers in the South Island. This has been further impacted by the significant weather events in Canterbury and Marlborough in recent times.

Principal inspections were programmed in July but had to be delayed due to high flow in the Taieri River and then the second COVID-19national lockdown.

Inspections are programmed to resume on 20 September.

Scott Lane

The 13-span timber bridge at Scott Lane was significantly damaged in the weather event, with four of its 13 spans being physically swept away.

The Scott Lane timber bridge is 91 years old and was at the end of its economic life. It was heavily restricted to heavy vehicles prior to this weather event and subsequent closure and repair of the existing bridge is not a viable option.

Beca are investigating more cost-effective options that may service this area. While the bridge has been closed, road users have been utilising an existing ford crossing point. Council’s contractor has been undertaking basic maintenance on the ford crossing point and this has provided access under the normal low flow conditions of the Kyeburn.

A more permanent option is being investigated for this location, and it is possible that a concrete wash over box culvert may be able to service Scott Lane users - with the exception of high flooding situations when an alternative route is available.

A concrete wash over box culvert would be a much more cost-effective and resilient solution compared to a new replacement bridge. Although the investigation phase is well underway, it is too early to estimate costs involved.

A report will be provided to Council outlining available options and the costs involved when the investigation is completed.

Scott Lane bridge damage

Maniototo Road (Halls Ford)

This bridge was closed to traffic because at least one of the primary load bearing timber beams is showing significant longitudinal cracking. It was also noted that other timber components were in poor condition due to their age (warped primary load carrying beams, deep cracking, bowed beams etc.).

At 91 years of age, the Maniototo Road bridge was nearing the end of its useful life and was already heavily restricted to large vehicles prior to this flood event. There was already existing deterioration occurring in most of its structural timber components.

This bridge will have a principal inspection undertaken by Beca in September, from which will determine what loading this bridge is capable of in its current condition or if moderate repairs (if possible) were made.

There is a possibility this bridge could be opened to light vehicles (<3500kg) with moderate repairs, but this cannot be confirmed until the principal inspection and site testing have been undertaken. The overall deterioration of this structure (due to its age) may also make reopening challenging if further significant issues are found during the inspection.

This location is also known as Halls Ford, and there are suggestions this was historically a ford crossing point on the Taieri River. Assessment on site has determined a ‘deep ford crossing’ (600mm depth approx.) may be possible to construct on site.

Construction of a deep ford crossing would involve excavating suitable approaches on each side of the riverbank and placing rock stabilised platform across the bed of the river, to an estimated overall cost of $15,000. This would only be suitable for the likes of farm equipment that is capable of crossing such a depth.

Maniototo Road bridge damage

Linnburn Runs Road:

This bridge was closed because it has unsupported beams at two locations resulting in an unsafe load path through the deck members. There was also severe decay present at various beam ends and visible sag on one span.

There is no definite age for this bridge recorded, but old plans suggest it is at least 70 years of age and is primarily constructed from timber with steel tramway rail piles.

It is anticipated that this bridge may be possible to open to light vehicles (<3500kg) with moderate repairs, but this cannot be confirmed until the principal inspection and site testing have been undertaken. The overall deterioration of this structure (due to its age) may also make reopening challenging if unexpected results are found during the inspection.

This site was not deemed appropriate for a ford crossing due to the depth of the river. Cost-effective bridge alternatives are not considered favourable for this site, however Council will discuss this in more detail with the Structural Engineer when on site for the principal inspection.

Linnburn Runs Road bridge damage

3. District Wide Bridge Strategy Update

The Maniototo bridge closures, among other known bridge related issues have highlighted the importance of progressing an overall district wide bridge strategy.

Council has 179 maintained bridges within the district.

These bridges greatly vary in terms of:

§ Condition

§ Age

§ Historical significance

§ Type of structure

§ Utilisation (i.e. current traffic volumes, are there alternative routes that could be/are used in lieu of the structure)

§ Maintenance and renewal requirements going forward

§ Physical location of structure (i.e. some extent of network bridges are not even on Council land or serve only one property)

Since March 2021, Council’s Roading team have been putting together the early stages of an overall district wide bridge strategy.

This is a large piece of work and will take time to fully complete. There has never been an overall bridge strategy of this detail to date for the district and this will be a very comprehensive document.

Known issues relating to the bridge network include:

§ There are many bridges coming to the end of their economic life or have significant component replacement imminent.

§ Council do not know what will be needed in terms of renewals across the entire network for the next 1-30 years (or the priorities).

§ There are some clear priority bridges that Council don’t have enough information on to understand what future renewal cost and implications may apply.

§ Council know about the short term/immediate bridging issues – such as the current Maniototo bridge closures – but do not have an understanding on how they should be prioritised against the remainder of the bridges in the district.

§ Some bridges are not maintained, are not even located on legal road reserve or only serve one property.

§ Expectation that total network costs to maintain the existing level of service for our bridges will exceed the community (and possibly Waka Kotahi) willingness and/or ability to fund.

A bridge strategy will provide Council with a plan for the replacement, renewal and disposal for all bridges in the district. This will include consideration of required levels of service and potential replacement of some bridges with wash-over structures.

Analysis will include:

§ General inspection of all bridges – essentially a line in the sand of their current condition and immediate/upcoming maintenance requirements (to date approx. 45 of 179 bridges have had a general inspection since March 2021).

§ Understanding the full renewal requirements, timing and costs

§ Knowing what the absolute network need is from a public access and loading requirement. What bridges are essential lifelines, what bridges have alternative options/routes to consider.

§ Knowing the options for bridges that require replacement

§ Knowing what component renewals will provide a long period until the next significant renewal on each bridge is required (striving for value for money)

§ A level of service statement – where, when and what.

§ Inspection schedule – how often for each bridge (i.e. determine if/what historical bridges may need more detailed and frequent inspections)

Next Steps:

§ Completion of full network inspections – Early/Mid 2022

§ Draft Bridge Strategy – Late 2022

§ Consultation – Early 2023

§ Development of 2024 Long Term Plan funding requests – July-October 2023

§ Final Bridge Strategy approved – Mid 2023

4. Attachments

Nil

Report author:	Reviewed and authorised by:

James McCallum	Julie Muir
Roading Manager	Executive Manager - Infrastructure Services
9/09/2021	9/09/2021

22 September 2021

21.7.11 Proposed Road Stopping - Unnamed Road off Tarras-Cromwell Road

Doc ID: 551527

1. Purpose of Report

To consider a proposal to stop the end of an unnamed unformed road off Tarras-Cromwell Road in accordance with the provisions of the Local Government Act 1974.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Approves the proposal to stop approximately 430 square metres (the western end) of the unnamed unformed road off Tarras – Cromwell Road as shown in figure 4, subject to:

- Public notification and advertising in accordance with the Local Government Act 1974.

- No objections being received within the objection period.

- The land being exchanged for an easement (in gross) in favour of the Central Otago Queenstown Trails Network Trust over the area marked “1” in figure 2.

- The land being amalgamated with Record of Title OT365/40 (Section 1636R Block III Tarras Survey District).

- The Central Otago Queenstown Trails Network Trust paying all other costs associated with the stopping.

C. Authorises the Chief Executive to do all that is necessary to give effect to the resolution.

2. Background

The Central Otago Queenstown Trails Network Trust (the Trust) is working to create a world class cycling network. The Trust’s work includes extending, upgrading, and creating new trails. Once completed, the trial network will span more than 500 kilometres of the Central Otago and Southern Lakes areas.

Among the Trust’s first projects is the recently completed Lake Dunstan Trail. The Lake Dunstan Trail links Cromwell to Clyde, and to the Otago Central Rail Trail. Other plans include upgrading 17 kilometres of existing trails around the Cromwell basin. New trails include linking Bannockburn to the Gibbston Valley, and Cromwell to Wanaka via Tarras.

While many trails traverse conservation or reserve land, some trails pass over private land. Where this occurs, the Trust must negotiate access agreements or easements from landowners. The final design of each new trail is subject to rights which the Trust is able to negotiate.

The Trust is currently working on the trail through Lindis Crossing. Much of the trail through this area will pass over conservation land. A plan of the trail through Lindis Crossing is mapped in red below in figure 1. Other existing trails are mapped in blue.

Figure 1 – Plan of new trail through Lindis Crossing mapped in red. (Existing trails are shown mapped in blue).

To construct the track legally, the Trust has negotiated easement agreements with three private landowners. Plans of the three easements (which are not to scale) are highlighted and numbered in pink below in figure 2.

Figure 2 – Plans of the three private easements required at Lindis Crossing

While designing the trail and negotiating the easements shown in figure 2, the Trust noted that the dwelling on Section 1636R Block III Tarras Survey District (Section 1636R) encroaches onto an adjacent unnamed unformed legal road.

The unnamed unformed road (the Road) adjoins the western side of the Tarras – Cromwell Road approximately 350 metres south of the Lindis River Bridge. It is a short no exit road which is about 370 metres long. It has an area of just over 8000 square metres.

The Road is shown highlighted in red below in figure 3.

Figure 3 – Overview of the unnamed unformed road off Tarras – Cromwell Road

On its northern boundary, the Road adjoins Part Section 1 Survey Office Plan (SO) 24921 (Part Section 1). Part Section 1 is conservation land. The conservation land stretches from the Tarras – Cromwell Road in the east, to the Clutha River Mata-Au in the west. A parcel of marginal strip lies to the western end of the Road.

The majority of the southern boundary adjoins Section 31 Block III Tarras Survey District (Section 31). While this means Section 31 can be legally accessed from almost anywhere along the Road, it has sealed access from the Tarras – Cromwell Road.

The last 20 metres of the Road adjoins Section 1636R. Section 1636R is a narrow elongated parcel of land about 260 metres long by 20 metres wide. The landowner accesses the dwelling on Section 1636R from the Road. Access to the southern end of Section 1636R can also be gained from the Tarras – Cromwell Road.

To assist with the construction of the trail, the landowner has granted the Trust an easement over the southern half of Section 1636R. In return, the Trust have agreed to apply to stop the western end of the unnamed unformed road on behalf of the landowner.

To legalise the encroachment the Trust have applied to stop an area of 430 square metres of the Road. A plan of the area to be stopped is shown below in figure 4.

Figure 4 – Plan of the Road which the Trust have applied to stop

3. Discussion

Evaluation of Application

An evaluation of the proposal to stop the Road is shown in the table below.

Item	Criteria to be considered	Evaluation
District Plan	Has the road been identified in the District Plan for any specific use or as a future road corridor?	The Road is shown on District Plan Map 48. It is not identified for any specific purpose or as a future road corridor.
Current Level of Use	Is the road used by members of the public for any reasons?	The Road may be used to access the marginal strip that described as Crown Land Block III Tarras Survey District, however. The marginal strip is generally accessed via the various tracks on the neighbouring conservation land which is described as Part Section 1 SO Plan 24921. Section 31 Block III Tarras Survey District can be accessed from the Road. Section 31 also has existing sealed access off the Tarras – Cromwell Road. Stopping the end of the Road will not impact any access options which are currently available to Section 31. The owner of Section 31 supports the proposal.
	Does it provide the only or most convenient means of access to any existing lots?	The Road terminates at the marginal strip which is immediately adjacent to the northern end of the applicant’s property. The applicant’s property is the only property which is most conveniently accessed from the Road.
	Will stopping the road adversely affect the viability of any commercial activity or operation?	No commercial activity is located on land adjacent to, or accessed from, the Road.
	Will any land become landlocked if the road is stopped?	No.
Future Use	Will the road be needed to service future residential, commercial, industrial, or agricultural developments?	The land to the north of the Road is conservation land. This means it is protected and will not be developed. The property immediately to the south of the Road, Section 31 Block III Tarras Survey District, can be accessed from the Road but has sealed access from the Tarras – Cromwell Road. Stopping the end of the Road will not affect any access options which are currently available to Section 31.
Future Use	Will the road be needed in the future to connect existing roads?	The Road is a no exit road. It does not offer any level or possibility of connectivity.
Non-traffic Uses	Does the road have current or potential value for amenity functions, e.g., walkway, cycleway, recreational access, access to conservation or heritage areas, park land?	The Road has no existing or future recreational or amenity potential functions. The area is currently serviced by a variety of informal cycling and walking tracks through the adjacent conservation land. The proposal to stop the end of the Road is subject to the granting of an easement in favour of the Trail Network. The easement will enhance public access. This enhancement is recognised by Walking Access New Zealand, Central Otago Recreational Users Forum, and Fish & Game New Zealand, who all support the proposal.
	Does the road have potential to be utilised by the Council for any other public work either now or potentially in the future?	The Road does not have the potential to be used for any other public work.
	Does the road have significant landscape amenity value?	The Road does not have any significant landscape amenity value.
Access to Waterbody	Does the road provide access to a river, stream, lake or other waterbody?	The Road does not provide access to any waterbody.
Access to Waterbody	If so, there is a need to consider Section 345 of the Local Government Act, which requires that after stopping the land be vested in Council as an esplanade reserve	N/A (refer above).
Infrastructure	Does the road currently contain any services or other infrastructure, such as electricity, telecommunications, irrigation or other private infrastructure?	No.
Infrastructure	Can the existing services or infrastructure be protected by easements?	N/A.
Traffic Safety	Does the use of motor vehicles on the road constitute a danger or hazard?	There is no danger or hazard associated with using a motor vehicle on the Road.

As shown in the evaluation table, the Road is not identified or required for any other roading purpose. The proposal to stop the western end of the Road will have no effect on the existing roading network.

The Road does not provide access to a waterbody or to any public or other land that cannot be otherwise accessed via the adjacent conservation land. In fact, stopping the western end of the Road in return for the easement in favour of the Trust, will enhance public access.

Legislation and Policy

Council’s Roading Policy determines the appropriate statutory procedure for stopping a legal road or any part thereof. The policy for selecting the correct statutory process is as follows:

The Local Government Act 1974 road stopping procedure shall be adopted if one or more of the following circumstances shall apply:

a) Where the full width of road is proposed to be stopped and public access will be removed as a result of the road being stopped; or

b) The road stopping could injuriously affect or have a negative or adverse impact on any other property; or

c) The road stopping has, in the judgment of the Council, the potential to be controversial; or

d) If there is any doubt or uncertainty as to which procedure should be used to stop the road.

The Local Government Act process requires public notification of the proposal. This involves erecting signs at each end of the road to be stopped, sending letters to adjoining owners/occupiers and at least two public notices a week apart in the local newspaper. Members of the public have 40 days in which to object.

The Public Works Act 1981 road stopping procedure may be adopted when the following

circumstances apply:

e) Where the proposal is that a part of the road width be stopped and a width of road which provides public access will remain.

f) Where no other person, including the public generally, are considered by the Council in its judgment to be adversely affected by the proposed road stopping;

g) Where other reasonable access will be provided to replace the access previously provided by the stopped road (i.e. by the construction of a new road).

As the full width of the road is to be stopped and public access removed, it is proposed that Local Government Act 1974 procedure be adopted for this application.

An application to stop a road under the Local Government Act 1974 requires public consultation with the members of the public having a right to object to proposal.

Council’s Roading Policy states that:

If an objection is received then the applicant will be provided with the opportunity to consider the objection and decide if they wish to continue to meet the costs for the objection to be considered by the Council and the Environment Court.

If an objection is received and it is accepted by the Council then the process will be halted and the Council may not stop the road.

If the objection is not accepted by the Council then the road stopping proposal must be referred to the Environment Court for a decision. The applicant is responsible for meeting all costs associated with defending the Council’s decision in the Environment Court.

Financial

The applicants are required to pay all costs associated with the proposal to stop the Road. Costs include legal and consultancy fees, and having the land surveyed and valued.

Having the land valued carries a fee of approximately $1,500. Using a recent comparable valuation report, the land is estimated to have a value of around $35,000 - $45,000 per hectare. This means the parcel of stopped road would have a value of around $1,500 to $2,000. This means it is not considered economical to obtain a valuation.

Instead, it is proposed that an equality of exchange approach be adopted with the land being gifted to the landowner in return for the easement in favour of the Trust.

As this stopping will be undertaken in accordance with the provisions of the Local Government Act, costs will also include those associated with public advertising. These include:

· creating and erecting signs at each end of the road to be stopped;

· sending letters to adjoining owners/occupiers; and,

· publishing the two public notices in a local newspaper.

Community Board Recommendation

A report on this matter was presented to the Cromwell Community Board (the Board) for consideration at their meeting of 07 September 2021.

On consideration the Board resolved (Resolution 21.7.7) as follows:

B. Recommends to Council to approve the proposal to stop approximately 430 square metres (the western end) of the unnamed unformed road off Tarras – Cromwell Road as shown in figure 4, subject to:

- Public notification and advertising in accordance with the Local Government Act 1974.

- No objections being received within the objection period.

- The land being exchanged for an easement (in gross) in favour of the Central Otago Queenstown Trails Network Trust over the area marked “1” in figure 2.

- The land being amalgamated with Record of Title OT365/40 (Section 1636R Block III Tarras Survey District).

- The Central Otago Queenstown Trails Network Trust paying all other costs associated with the stopping.

4. Options

Option 1 – (Recommended)

To approve the proposal to stop approximately 430 square metres (the western end) of the unnamed unformed road off Tarras – Cromwell Road as shown in figure 4, subject to:

o Public notification and advertising in accordance with the Local Government Act 1974.

o No objections being received within the objection period.

o The land being exchanged for an easement (in gross) in favour of the Central Otago Queenstown Trails Network Trust over the area marked “1” in figure 2.

o The land being amalgamated with Record of Title OT365/40 (Section 1636R Block III Tarras Survey District).

o The Central Otago Queenstown Trails Network Trust paying all other costs associated with the stopping.

Advantages:

· The landowner’s occupation of the Road will be legalised.

· Public access to the Clutha River Mata-Au and to the surrounding conservation land will be enhanced.

· The exchange recognises the contributions and benefits to all parties.

· All costs associated with the stopping will be paid by the applicants.

Disadvantages:

· None.

Option 2

To not approve the proposal to stop approximately 430 square metres (the western end) of the unnamed unformed road off Tarras - Cromwell Road.

Advantages:

· None.

Disadvantages:

· The landowner’s occupation of the Road will not be legalised.

· The Central Otago Queenstown Trails Network Trust will not be granted an easement over Section 1636R Block III Tarras Survey District.

5. Compliance

Local Government Act 2002 Purpose Provisions	This decision promotes the economic wellbeing of the community by enabling the construction of a trail from Cromwell to Wanaka and enhancing access to the Clutha River Mata-Au and other conservation land in Lindis Crossing area.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	No negative financial implications for are related to the recommended option. The applicants are required to pay all costs associated with the stopping.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Council’s Road Stopping Policy applies to this application. Consideration of this policy has ensured that the appropriate statutory process, being to stop the road in accordance with the provisions of the Local Government Act 1974, has been chosen.
Considerations as to sustainability, the environment and climate change impacts	No sustainability, environmental or climate change impacts are related to the decision to stop this short unnamed unformed road.
Risks Analysis	No risks to Council are associated with the recommended option.
Significance, Consultation and Engagement (internal and external)	The Significance and Engagement Policy has been considered, with none of the criteria being met or exceeded. Public notices and advertising in accordance with the provisions of the Local Government Act 1974 will be posted. Notice of the completed road stopping will be published in the New Zealand Gazette.

6. Next Steps

The following steps have been/will be taken

1. Community Board approval September 2021

2. Council approval September 2021

3. Survey October/November 2021

4. Survey plan approved Late 2021

5. Public notification commences Late 2021

6. Public notification ends Early 2022

7. Gazette notice published Early 2022

7. Attachments

Nil

Report author:	Reviewed and authorised by:

Linda Stronach	Julie Muir
Statutory Property Officer	Executive Manager – Infrastructure Services
8/09/2021	9/09/2021

22 September 2021

21.7.12 Plan Change 18 Cromwell Industrial Resource Area Extension

Doc ID: 546603

1. Purpose of Report

To consider a plan change to extend the Industrial Resource Area in Cromwell.

Recommendations

That the Council

A. Receives the report and accepts the level of significance.

B. Recommends that Plan Change 18 be notified and processed in accordance with the First Schedule to the Resource Management Act 1991.

2. Background

On 24 March 2021 Council approved the District Plan review programme. The extension of the Industrial Resource Area in Cromwell to reflect the Cromwell Masterplan was indicated as one of the priority plan changes in the review programme.

The Cromwell Masterplan commenced in 2018 and included a number of workstreams. One of those works streams was the development of a spatial plan for Cromwell (the Spatial Plan).

The proposed plan change will give effect to the outcome of the Cromwell Spatial Plan by extending the industrial area in Cromwell, zoning approximately 50.9 hectares of land on Bannockburn Road to Industrial Resource Area. The area has since been extended to include an additional area fronting onto State Highway 6 between Cemetery Road and McNulty Road, connecting with the existing industrial land on McNulty Road. The latter was identified in the Cromwell Masterplan “Let’s Talk Options” consultation document but was not included in the final Spatial Plan as approved in 2019 (see Figure 1 below).

The “Let’s Talk Options” survey was consulted on from Friday 19 October until Monday 19 November 2018. A total of 477 responses were received, analysed and published in “Let’s Talk Options: Survey Analysis” in November 2018. No submissions or feedback were received regarding the extent of the extension to the industrial land identified in the consultation document.

Advice received at that time was that the land adjacent to the State Highway provided more industrial yield that was considered necessary and was subsequently removed from the final Spatial Plan.

Since 2019 there has been a considerable increase in demand for industrial zoned land in Cromwell. Land previously identified for industrial use adjacent to State Highway 6 is now considered appropriate for inclusion in the industrial plan change, to ensure future demand is met.

Figure 1 - Extension to Cromwell Industrial Resource Area as identified in the Cromwell Masterplan “Let’s Talk Options” consultation document

Plan Change 18 amends Maps 15 and 44 to include approximately 50.9ha of land described as Lots 3-4 DP 526140 and Section 2 SO 526035, as contained in OT 894762 from Rural Resource Area to Industrial Resource Area. The Plan Change also proposes amending Map 44 to include a further area of approximately 11ha described as Lot 1 DP 390710 and Lot 2 DP 390710 and part Lot 3 DP 505292.

The proposed plan change seeks to extend and consolidate land zoned for industrial activity in Cromwell.

The land is located between Bannockburn Road and Cemetery Road, north of the Schaffer Beetle Reserve, and will extend the existing Industrial Resource Area and fronting onto State Highway 6 between the intersections of Cemetery Road and McNulty Road (see Figure 2 below).

Council land to the west of the cemetery has not been included in the plan change, other than a small strip along the boundary that will provide access opportunities to the proposed industrial land adjacent to the State Highway. This area west of the cemetery will be maintained for future expansion of the cemetery, consistent with the Cemetery Management Plan.

Figure 2 - Proposed Extension to Cromwell Industrial Resource Area

3. Discussion

Plan Change 18 gives effect to the outcome of the Cromwell Masterplan process and the significant engagement and consultation both in the community and with key stakeholders undertaken as part of that process.

Cromwell’s Industrial Resource Area is an important and strategically located transportation, processing and distribution hub for Central Otago and the wider Otago region. The industrial sector is also a significant employer in Cromwell and for the Central Otago District. It is strategically important to take the opportunity to ensure there is sufficient supply to meet future demand, and to consolidate land zoned for industrial activity to assist with management of effects such as transportation and noise.

Currently, opportunities for industrial expansion are limited, and the proposed plan change provides an opportunity to consolidate industrial zoned land in Cromwell.

The current plan change seeks to re-zone land as industrial, proposing only minor changes to the District Plan provisions in relation to access onto Bannockburn Road and State Highway 6 and a requirement for a buffer along the Bannockburn Road frontage. Access to Bannockburn Road will also be limited to a single intersection designed to be suitable for light vehicles only. All heavy traffic to the industrial extension will be through the Cemetery Road and McNulty Road intersections. No accesses or new intersections will be permitted onto State Highway 6.

Transport and noise reports have been commissioned and discussions have been initiated with Waka Kotahi in relation to transport routes and intersections with State Highway 6 at Cemetery Road and McNulty Road.

The Council is not being asked to consider the merits of the plan change, as these will be fully considered and assessed through the statutory process under the provisions of the Resource Management Act 1991 (RMA).

A comprehensive review of the Industrial Chapter of the operative District Plan is underway and is expected to be notified in the latter part of this year.

4. Options

Option 1 – (Recommended)

Approve notification and processing of Plan Change 18 in accordance with Clause 5 of the First Schedule to the Resource Management Act 1991.

Advantages:

· The enable the release of additional industrial land reflecting the Cromwell Masterplan

· Provide for future economic growth

Disadvantages:

· No obvious disadvantages

Option 2

Not approve notification and processing of Plan Change 18 in accordance with Clause 5 of the First Schedule to the Resource Management Act 1991.

Advantages:

· No obvious advantages

Disadvantages:

· Lack of availability of land for industrial use in Cromwell

· Lack of consolidation of industrial land in Cromwell

· Not meeting community expectation to give effect to the Cromwell Masterplan outcomes

5. Compliance

Local Government Act 2002 Purpose Provisions	The plan change process under the Resource Management Act is a statutory process and requires an assessment of the social, economic, environmental, and cultural well-being, which will be included in the section 32 analysis.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	The costs associated with the processing of the plan change including technical expertise will be accommodated in existing budgets. Any appeals to the Environment Court would result in additional costs in terms of legal advice.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	Approving that the plan change be processed reflects the outcome of the Cromwell Spatial Plan. It is consistent with the Cemetery Management Plan.
Considerations as to sustainability, the environment and climate change impacts	Approving that the plan change be processed does not impact on these matters, and the merits of the plan change are considered against the RMA framework.
Risks Analysis	There are no risks associated with this request.
Significance, Consultation and Engagement (internal and external)


AGENDA Ordinary Council Meeting Wednesday, 22 September 2021
Date:	Wednesday, 22 September 2021
Time:	10.30 am
Location:	Ngā Hau e Whā, William Fraser Building 1 Dunorling Street, Alexandra Due to COVID-19 restrictions and limitations of the physical space, public access will be available through the livestream and Microsoft Teams. The link to the livestream will be available on the Central Otago District Council’s website.
Sanchia Jacobs Chief Executive Officer

Name	Member’s Declared Interests	Spouse/Partner’s Declared Interests	Council Appointments
Tamah Alley	Manuherikia Irrigation Co-operative (shareholder) Cromwell Youth Trust (Trustee) Blue Light Central Lakes (Chair) NZ Police (Sworn Constable) Oamaru Landing Service (OLS) (family connection) Cliff Care Ltd (family connection)	Manuherikia Irrigation Co-operative Society Ltd (shareholder) Emergency Management Otago Group Controller (employee)
Tim Cadogan	Alexandra Musical Society (member) Otago Chamber of Commerce Central Otago Advisory Group member Dunstan Golf Club (member) Alexandra Squash Club (member)	Two Paddocks (employee) Blossom Festival Committee member FarmFresh (Family member sells for this entity)	Airport Reference Group Maniototo Curling International Inc Eden Hore Steering Group Tourism Central Otago Advisory Board Ministerial Working Group on Responsible Camping LGNZ Governance and Strategy Group
Shirley Calvert	Central Otago Health Services Ltd (Employee) Cromwell Rotary (member) Cromwell and District Community Trust Old Cromwell Town (subscription member)		Central Otago Wilding Conifer Group
Lynley Claridge	Affinity Funerals (Director) Central Otago Chamber of Commerce (Advisory Panel)	Affinity Funerals (Shareholder)	Alexandra Council for Social Services
Ian Cooney	Castlewood Nursing Home (Employee)		Omakau Recreation Reserve Committee Promote Alexandra
Stuart Duncan	Penvose Farms - Wedderburn Cottages and Farm at Wedderburn (shareholder) Penvose Investments - Dairy Farm at Patearoa (shareholder) Fire and Emergency New Zealand (member) JD Pat Ltd (Shareholder and Director)	Penvose Farms - Wedderburn Cottages and Farm at Wedderburn (shareholder) Penvose Investments - Dairy Farm at Patearoa (shareholder)	Otago Regional Transport Committee Patearoa Recreation Reserve Committee Design and Location of the Sun for the Interplanetary Cycle Trail Working Group
Neil Gillespie	Contact Energy (Specialist - Community Relations and Environment) Clyde & Districts Emergency Rescue Trust (Secretary and Trustee) Cromwell Volunteer Fire Brigade (Deputy Chief Fire Officer) Cromwell Bowling Club (patron) Otago Local Advisory Committee - Fire Emergency New Zealand		Lowburn Hall Committee Tarras Community Plan Group Tarras Hall Committee
Stephen Jeffery	G & S Smith family Trust (Trustee) K & EM Bennett’s family Trust (Trustee) Roxburgh Gorge Trail Charitable Trust (Chair) Roxburgh and District Medical Services Trust (Trustee) Central Otago Clutha Trails Ltd (Director) Teviot Prospects (Trustee) Teviot Valley Community Development Scheme Governance Group Central Otago Queenstown Network Trust
Cheryl Laws	The Message (Director) Wishart Family Trust (Trustee) Wooing Tree (Assistant Manager - Cellar Door) Daffodil Day Cromwell Coordinator	Otago Regional Council (Deputy Chair) The Message (Director)	Cromwell Resource Centre Cromwell Historical Precinct
Nigel McKinlay	Transition To Work Trust (Board member) Gate 22 Vineyard Ltd (Director) Everyday Gourmet (Director) Central Otago Wine Association (member) Long Gully Irrigation Scheme (member)
Martin McPherson	Alexandra Blossom Festival	CODC (employee) CODC (employee) (Daughter)
Tracy Paterson	Matakanui Station (Director and shareholder) Matakanui Development Co (Director and shareholder) A and T Paterson Family Trust (trustee) A Paterson Family Trust (trustee) Central Otago Health Inc (Chair) Bob Turnbull Trust (Trustee / Chair) John McGlashan Board of Trustees (member) New Zealand Wool Classers Association (board member) Central Otago A&P Association (member)	Matakanui Station (director and shareholder) Matakanui Development Co (director and shareholder) A Paterson Family Trust (trustee) A and T Paterson Family Trust (trustee) Federated Farmers (on the executive team) Omakau Irrigation Co (director) Matakanui Combined Rugby Football Club (President) Manuherikia Catchment Group (member) Omakau Domain Board	Central Otago Health Inc Manuherikia River Group

Processing Charge (from 1 Aug)	Previous processing charge	Difference ($)
$195.00 / tonne	$165.00 / tonne	$30 / tonne

Local Government Act 2002 Purpose Provisions	This decision promotes the environmental well-being of communities in the present and for the future by ensuring that recycling is processed in a manner which manages environmental effects.
Financial implications – Is this decision consistent with proposed activities and budgets in long term plan/annual plan?	Costs from Financial Year 2021/22 will result in increased expenditure of $30,000 for recycling processing charges.
Decision consistent with other Council plans and policies? Such as the District Plan, Economic Development Strategy etc.	The following Council polices were considered: · Waste Management and Minimisation Plan 2018. · Sustainability Strategy. · Long Term Plan. · Annual performance measures.
Considerations as to sustainability, the environment and climate change impacts	Considerations of transportation effects were considered in the options analysis.
Risks Analysis	There is financial risk if this request is not approved as the current budget for recycling charges will not cover the increased processing costs.
Significance, Consultation and Engagement (internal and external)	A decision to continue to dispose of recycling at an estimated increased cost of $30,000 does not meet the significance threshold.

Report author:	Reviewed and authorised by:

Faye Somerville	Julie Muir
Roading Administration Assistant	Executive Manager - Infrastructure Services
1/09/2021	8/09/2021