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REPORT

Survey – Asset Management Activities Hawkes Bay Region Local Authorities

20 JANUARY 2015

FINAL

This document has been prepared for the benefit of The Local Government Commission. No liability is accepted by MWH or any employee or sub-consultant of MWH with respect to its use by any other person.

This disclaimer shall apply notwithstanding that the report may be made available to other persons.

Prepared by MWH New Zealand LtdLevel 3, MWH House,

111 Carlton Gore Road

PO Box 9179

Newmarket, Auckland 1149

Tel. +64 9 580 4500

QUALITY STATEMENTPROJECT MANAGERAndrew Maughan

PREPARED BY ……………………………. 20/01/2015

Brian Sharplin

CHECKED BY ……………………………..... 20/01/2015…

Andrew Maughan

REVIEWED BY

……………………………...... ……/……/……

APPROVED FOR ISSUE BY ……………………………...... 20/10/2015

Andrew Maughan

2

FOREWORD

The Local Government Commission is considering the options relating to local government reorganisation in Hawkes Bay.

MWH (NZ) Ltd was tasked to carry out a survey of the four territorial authorities and the Regional Authority to:-

provide a summary of the current state of the key infrastructure assets each local authority manages;

identify the proposed expenditure on the key assets, and renewals and replacements identified in Long Term Plans;

provide a summary of the activities each local council plans to undertake in relation to its key assets in its Long Term Plan;

identify possible, asset related, issues not reflected in the current Long Term Plans; (and)

provide an opinion on the reliability of the current Asset Management Plans.

This report summarises the written responses received in answer to five questionnaires (some general questions and one for each of the roads, water supply, wastewater (sewage), and stormwater/flood control activities).

Brian Smith Advisory Services has prepared a report looking at the debt and investments side of the equation. This report looks at the assets side and the ten year and annual funding aspects.

MWH thanks the five councils for their ready co-operation.

_____________________________(Signature)

Brian Sharplin

Senior Consultant

MWH New Zealand Ltd

PO Box 9176, Newmarket 1149Auckland Tel: +64 9 580 4534 Mobile: +64 27 227 9047Email: [email protected]

20 January 2015

3

Contents

FOREWORD....................................................................................................................................3

SECTION 1......................................................................................................................................7

EXECUTIVE SUMMARY....................................................................................................................7

1. EXECUTIVE SUMMARY.............................................................................................................8

1.1 INTRODUCTION.......................................................................................................................8

1.2 FUTURE NEW CAPITAL EXPENDITURE.......................................................................................8

1.3 REFUSE DISPOSAL....................................................................................................................8

1.4 ASSET INFORMATION...............................................................................................................8

1.5 ASBESTOS CEMENT PIPES.........................................................................................................9

1.6 INTERGENERATIONAL EQUITY AND FINANCIAL SUSTAINABILITY................................................9

1.7 FUNDING RENEWALS V FUNDING DEPRECIATION...................................................................10

1.8 FUNDING RENEWALS BY HAWKES BAY DISTRICT COUNCIL “DIFFERENT”..................................11

1.9 THE OPERATING EXPENDITURE PLUS RENEWALS EXPENDITURE/THE DEPRECIATION PROVISION ‘BURDEN’ VARIES GREATLY BETWEEN COUNCILS....................................................................11

1.10 PLANNED NEW CAPITAL EXPENDITURE – COMPARISON..........................................................13

1.11 CONCLUDING REMARKS.........................................................................................................13

SECTION 2....................................................................................................................................15

BASE STATISTICS...........................................................................................................................15

2.1 THE LOCAL AUTHORITIES CONCERNED...................................................................................16

2.2 AREA.....................................................................................................................................16

2.3 POPULATION.........................................................................................................................17

2.4 RATEABLE PROPERTIES AND LAND USE...................................................................................18

2.5 TERRITORIAL AUTHORITIES – KEY FINANCIAL STATISTICS.........................................................19

SECTION 3....................................................................................................................................20

3. ASSET KNOWLEDGE...............................................................................................................20

3.1. ASSET TYPE............................................................................................................................20

3.2. ASSET DATA – COMPLETENESS & ACCURACY..........................................................................21

3.3. ASSET CONDITION, AGE & REMAINING LIFE............................................................................22

SECTION 4....................................................................................................................................23

4. DEFERRED MAINTENANCE, DEPRECIATION, RENEWALS AND REPLACEMENT.........................23

4.1. LEGISLATIVE REQUIREMENT...................................................................................................23

4.2. DEFERRED MAINTENANCE AND DEFERRED RENEWALS............................................................23

4.3. PLANNED RENEWALS AND REPLACEMENT AND EXPENDITURE................................................24

4.4. PLANNED RENEWALS AND REPLACEMENT EXPENDITURE SUFFICIENCY....................................25

4.5. ASSET CONDITION, AGE AND REMAINING LIFE........................................................................28

4.6. ASSET CONDITION – OTHER THAN ASBESTOS CEMENT PIPES...................................................30

4.7. ASBESTOS CEMENT PIPES.......................................................................................................31

SECTION 5....................................................................................................................................32

5. NEW CAPITAL EXPENDITURE.................................................................................................32

SECTION 6....................................................................................................................................35

6. TOTAL INFRASTRUCTURE COSTS............................................................................................35

SECTION 7....................................................................................................................................38

7. COMPARATIVE COSTS PER PROPERTY AND PER CONNECTION...............................................38

7.1. PLANNED TOTAL OPERATING EXPENDITURE PLUS RENEWALS EXPENDITURE 2014/15.............38

7.2. PLANNED TOTAL OPERATING EXPENDITURE PLUS THE PLANNED DEPRECIATION PROVISION 2014/15.................................................................................................................................39

7.3. PLANNED NEW CAPITAL EXPENDITURE 2012-2022..................................................................40

SECTION 8....................................................................................................................................41

8. OTHER OBSERVATIONS.........................................................................................................41

8.1 RISK MANAGEMENT AND FINANCIAL CHALLENGES.................................................................41

8.2 WEATHER TIGHTNESS............................................................................................................41

8.3 EARTHQUAKE STRENGTHENING.............................................................................................41

8.4 ‘COUNCIL OWNED’ REAL PROPERTIES (LAND AND BUILDINGS)................................................42

SECTION 9....................................................................................................................................43

GENERAL SUPPORTING INFORMATION.........................................................................................43

9.1. TERRITORIAL AUTHORITIES – ASSET DATA CONFIDENCE..........................................................44

9.2. GENERAL DISTRICT – WIDE STATISTICAL INFORMATION..........................................................45

9.3. RISK MANAGEMENT – TOTAL DISTRICT...................................................................................53

9.4 RESPONSES TO OTHER QUESTIONS.........................................................................................55

SECTION 10..................................................................................................................................57

ROADS..........................................................................................................................................57

10.1 ROADS – GENERAL INFORMATION..........................................................................................58

10.2 DEPRECIATION V RENEWALS - ROADS.....................................................................................64

10.3 ASSET CONFIDENCE – ROADS.................................................................................................66

10.4 RISK MANAGEMENT - ROADS.................................................................................................67

10.5 FINANCIAL/FUNDING CHALLENGES - ROADS...........................................................................68

5

10.6 SERVICE DELIVERY - ROADS....................................................................................................69


SECTION 11..................................................................................................................................76

WATER SUPPLY.............................................................................................................................76

11.1 WATER SUPPLY – GENERAL INFORMATION.............................................................................77

11.2 DEPRECIATION V RENEWALS – WATER SUPPLY.......................................................................83

11.3 ASSET CONFIDENCE – WATER SUPPLY.....................................................................................85

11.4 RISK MANAGEMENT – WATER SUPPLY....................................................................................86

11.5 FINANCIAL/FUNDING CHALLENGES – WATER SUPPLY..............................................................87

11.6 SERVICE DELIVERY – WATER SUPPLY.......................................................................................88


SECTION 12..................................................................................................................................95

WASTEWATER (SEWERAGE)..........................................................................................................95

12.1 WASTEWATER (SEWERAGE) – GENERAL INFORMATION..........................................................96

12.2 DEPRECIATION V RENEWALS – WASTEWATER (SEWERAGE)...................................................102

12.3 ASSET CONFIDENCE – WASTEWATER (SEWERAGE)................................................................104

12.4 RISK MANAGEMENT – WASTEWATER (SEWERAGE)...............................................................105

12.5 FINANCIAL/FUNDING CHALLENGES – WASTEWATER (SEWERAGE).........................................106

12.6 SERVICE DELIVERY – WASTEWATER (SEWERAGE)..................................................................107

12.7 RESPONSES TO OTHER QUESTIONS.......................................................................................108

SECTION 13................................................................................................................................113

STORMWATER & FLOOD CONTROL.............................................................................................113

13.1 STORMWATER & FLOOD CONTROL – GENERAL INFORMATION..............................................114

13.2 DEPRECIATION V RENEWALS – STORMWATER (FLOOD CONTROL).........................................120

13.3 ASSET CONFIDENCE – STORMWATER & FLOOD CONTROL.....................................................123

13.4 RISK MANAGEMENT – STORMWATER AND FLOOD CONTROL................................................124

13.5 FINANCIAL/FUNDING CHALLENGES – STORMWATER AND FLOOD CONTROL..........................126

13.6 SERVICE DELIVERY – STORMWATER AND FLOOD CONTROL...................................................127

13.7 RESPONSES TO OTHER QUESTIONS.......................................................................................128

REFERENCES...............................................................................................................................133

6

SECTION 1

7Section 1: Executive Summary

1. EXECUTIVE SUMMARY

1.1 INTRODUCTION

This report has been compiled primarily from the five Councils’ answers to a questionnaire and from a study of the information in their published 2012-2022 long-term plans and in their respective 2014/15 Annual Plans. Some quite significant inconsistencies between these two (and other) sources were identified during the study.

A more comprehensive exercise may change the degree of some of the conclusions reached but not the overall picture, The traditional practice of preparing (in most cases) asset management and long-term plans for only ten years is too short a period for determining precise infrastructure requirements and although this will be remedied by the new requirement to prepare 30 year infrastructure strategies in future, none of the Hawkes Bay Councils yet have such plans. Had there been more time the opportunity would also have been taken to question and test the completeness and correctness of some of the answers provided to the questionnaires.

1.2 FUTURE NEW CAPITAL EXPENDITURE

Apart from the possible new Ruataniwha Dam – a proposed 96 million cubic meter storage reservoir which if it proceeds will be built as a ‘BOOT Project’ and towards the cost of which the Regional Council has agreed to contribute ‘up to ‘ $80 million - the region doesn’t have any significant extraordinary future new capital needs.

Excluding this dam, new capital expenditure during 2012-22 (for roads, water supply, wastewater and stormwater) is forecasted to be $32.7m per year – half of which is for roads, (See Section 5). Some of this will be funded by NZTA subsidies and some by Development or Lump Sum Contributions.

1.3 REFUSE DISPOSAL

The jointly owned Napier/Hastings and the Wairoa and Central Hawkes Bay landfills all have substantial capacity for the foreseeable future.

1.4 ASSET INFORMATION

The local authorities believe they have quite good information about all of their assets but they have better and more reliable information about their road assets than they do about their water supply, wastewater and (especially) their stormwater assets (Figures 2.2 & Table 9.1).

Also a number of questions raised by the analysis of the answers to the questionnaires, and a study of the 2014/15 Annual Plans, of the ‘Waugh report’ that was done for Napier City, and of the report entitled ‘Exploring the Issues Facing the New Zealand Water, Wastewater and Stormwater Sector’ – published by Local Government New Zealand (LGNZ) – October 2014, indicates that the Councils’ knowledge of their assets or the way the data is being interpreted and managed (or both) may not be as good as is claimed. Weaknesses identified during the study included:

Annual depreciation under or over stated because not properly representative of remaining life;


EXECUTIVE SUMMARY

As mentioned above) apparent inconsistencies between the four information sources (i.e. The answers to the questionnaires , The Annual Plans, The Waugh Report, and the LGNZ Report); including inconsistent valuation information.

Asset condition not fully understood – causing inaccurate forecasts of future renewals/replacement needs;

Forecasts being prepared based on asset age rather than asset condition (when the true situation may be that the assets are still in good condition and won’t need renewal or replacement for some time);

A plethora of seemingly unduly complicated policies for the sustainable funding of renewals; and

VERY POOR understanding and transparency about what each council’s long-term funding approach for the renewals/replacement of its water supply, wastewater and stormwater systems, and the degree to which it is being adhered to, actually is;

It will be interesting to see how the newly required ‘30year Infrastructure Strategies’ compare. There is the potential for them to be quite different to the information in the current long-term plans and/or to what some of the councils say their present approaches are. The mandatory performance measure that requires Councils to report the ratio of ‘depreciation to capital expenditure, rather than to renewals capital expenditure, also doesn’t promote resolution of these sorts of problems.

1.5 ASBESTOS CEMENT PIPES

Asbestos cement pipes have shorter lives than most pipes made of other materials and it is reasonable to assume that all of them will need to be replaced in the next 10-30 years. The proportion of such water supply and wastewater pipes is relatively uniform across all councils (water supply average = 12%, wastewater average = 34%) (Figures 4.7A and 4.7B)

1.6 INTERGENERATIONAL EQUITY AND FINANCIAL SUSTAINABILITY

While there is little evidence that renewals work is not currently being undertaken when it is due longer term management of the water supply, wastewater and stormwater systems by all of the councils does raise come concerns;

Seemingly, none of the councils fully fund depreciation each year (and where they do at least partially so, some of them use the funds for purposes other than the direct funding of renewals).

The planned ten-year average ‘renewals expenditure to depreciation’ for all asset classes is significantly below the average for all councils nationally.

Table 1.6 - Average Renewals Expenditure to DepreciationAsset Class Nationally Hawkes BayRoading 91% 80%Water Supply 72% 47%Wastewater 58% 48%Stormwater 32% 22%

(See Table 4.4A and Figure 10 in ‘Water and Roads – Funding and Management Challenges’ by the Office of the Controller and Auditor General – November 2014)


By 2022, based on the forecasts in the long-term plans, half the water supply, wastewater and stormwater systems will have ‘depreciated values as a percentage of their estimated replacement cost ratios of less than 50%. (See Table 4.5B)

Notwithstanding that all but one of the councils have some renewals reserves, to varying degrees the way in which all of them are annually funding renewals (especially of their water supply, wastewater and stormwater systems) is contrary to intergenerational equity and isn’t sustainable. At some future time:

rates will need to increase substantially to meet the renewals needs (or loans will have to be raised); or

current levels of service will have to be reduced; or

both

meaning that the cost of replacing the assets or the necessity to accept lower levels of service) or both, will fall disproportionately on the then ratepayers/users rather than being spread more evenly across generations as the lives of the assets are consumed.

1.7 FUNDING RENEWALS V FUNDING DEPRECIATION

The ‘renewals funding’ situation in Hawkes Bay mirrors a problem the Auckland Council faced when reorganisation occurred there in 2010. This, and what that Council chose to do about it, is described in the following extract from its 2012/22 long-term plan

“While depreciation is a non-cash item, Auckland Council considers that It would be prudent for tis operating revenue to be sufficient to cover all cash and non-cash operating expenses including depreciation. The cash raised to cover depreciation would then be available to fund asset replacement.

The council considers this approach to be preferable to the alternative approach of raising operating revenue to cover the cash cost of asset replacements as they fall due, because asset renewal costs tend to spike in certain years while depreciation is smooth over time. In addition, funding depreciation is considered to better promote intergenerational equity as ratepayers pay for the cost of assets as they consume them.

However, the net financial position inherited from the former councils only funded around 63 percent of depreciation expense. While the council believes funding 100per cent of depreciation would make its financial position more prudent and sustainable, this would be neither fair nor affordable for current ratepayers.

To manage affordability for ratepayers, the council has decided to maintain funding of depreciation at this level for the first three years of this plan then move progressively to fully fund depreciation over the following 10 years.

In the first two years of the plan, the council’s projected cost of replacing assets is higher than the cash deficits which require borrowing to fund. This gives rise to a short-term rates funding gap and means that subsequent ratepayers will be paying more than their fair share for the replacement of assets.

While this means current ratepayers are not paying enough in those two years, the council believes this temporary situation represents a prudent balance between affordability, progress, intergenerational equity and financial sustainability.”


Source: - “Volume one: Overview of the next 10 years Auckland Council Long-term Plan 2012-2022 – Chapter 2 Page 35

Note: It isn’t possible to say at this point without an additional detailed study, what the current percentage of the depreciation expense funding in Hawkes Bay is.

1.8 FUNDING RENEWALS BY HAWKES BAY DISTRICT COUNCIL “DIFFERENT”

Although it doesn’t fully fund depreciation (and has no reserves for future renewals) the Central Hawkes Bay District Council stands out as spending proportionately more on renewals annually on the ‘Three Waters’ systems than the other councils do. (See Figure 4.4A and also the depreciation v renewals situation in sections 11.1, 12.1 & 13.1). On the other hand Central Hawkes Bay also says it has more water supply and wastewater pipes (other than asbestos cement pipes) currently in a ‘poor’ or ‘very poor’ condition than the other councils do (Figures 4.6A & 4.6B) – but it also has less asbestos cement pipes (Figures 4.7A & 4.7B).

1.9 THE OPERATING EXPENDITURE PLUS RENEWALS EXPENDITURE/THE DEPRECIATION PROVISION ‘BURDEN’ VARIES GREATLY BETWEEN COUNCILS

The annual total operating expenditure plus renewals (or operating expenditure plus the depreciation provision) ‘per connection’ for water supply and wastewater, ‘per urban property’ for stormwater and ‘per rateable property’ for roading varies greatly between the councils. (One year snapshot only)

Napier

Hastings

Central Hawkes Bay

Wairoa

449637

7261020

14421540

17722001

492623

809900

15921905

15481440

9411260

15351920

30343445

33203441

Figure 1.9 OPEX plus Renewals V OPEX plus the Depreciation Provision - Planned 2014-15 ($ 000) - Cost Per Property/Per Connection ($)

Three Waters Roading Note: First line = OPEX plus renewals Second Line = OPEX plus depreciation

For further details see Figures 7.1 & 7.2

The reasons for the differences between the Councils include:

The different ‘size’ of the road networks that have to be maintained and renewed, the type of country through which the roads pass and the number of properties that there are in each district to share the annual cost.

Table 1.9B Length of Roads per Rateable Property (Ms)Napier 15Hastings 53Central Hawkes Bay 165


Wairoa 85

The different types of land use amongst which to spread the roading costs (e.g. A rural property can expect to have to pay more for roading than a residential section).

(In the case of directly funding annual renewals rather than depreciation) the age (i.e. time in the asset lifecycle) and condition of the various water supply, wastewater and stormwater systems.Note:- Not an issue if depreciation is being funded

In the case of the water supply and wastewater systems the fact that it always costs considerably more per connection to provide small local systems – because of the cost of providing and maintaining them and the small number of users/consumers to share the cost.

The extent of each Council’s debt (i.e. annual financing costs)

Table 1.9C - Financing Costs included in Operating Expenditure 2014/15 ($ 000)

ActivityNapier Hastings

Central Hawkes Bay Wairoa

Finance Cost

Unit Cost

Finance Cost

Unit Cost

Finance Cost

Unit Cost

Finance Cost

Unit Cost

($ 000) ($ 0) ($ 000) ($ 0) ($ 000) ($ 0) ($ 000) ($ 0)Roading - - 1041 34 17 2 - -

Wastewater - - 1541 82 565 169 81 35Water Supply - - 925 38 157 40 107 58Stormwater - - 800 33 9 2 67 17

Total - - 4307 187 748 213 255 110Note: Unit Cost = Per connection for water supply and wastewater

Per urban property for stormwater Per rateable property for roading

In addition to the above:- Hastings has borrowed internally for roading ($1.57m, Wastewater $67,247 and water supply

($32,170) but does not charge any interest to the activities. In 2014/15 Napier is budgeting to pay interest on internal loans totalling $1.16m – $651,000

for roading, $235,100 for wastewater, $100,000 for water supply, and $176,900 for stormwater. These sums are included in the OPEX calculations in Figures7.1 & 7.2.


1.10 PLANNED NEW CAPITAL EXPENDITURE – COMPARISON

Figure 1.10 compares planned new capital expenditure per connection for water supply and wastewater, ‘per urban property’ for stormwater and ‘per rateable property’ for roading during the period of the Long-Term Plan (2012-2022).

Napier

Hastings

Central Hawkes Bay

Wairoa

2378

2739

2700

6686

2653

2802

822

516

5031

5541

3522

7202

Figure 1.10 - Planned New Capital Expenditure 2012/2022 - Cost Per Property / Per Connection ($)

Three Waters Roading Series3

Note: Wairoa includes a new wastewater scheme for Mahia Beach

For Further details see Figure 7.3

The comments coloured red in Sections 10.4 & 10.5 (Roading), 11.4 & 11.5 (Water Supply), 12.4 & 12.5 (Wastewater) and 13.4 & 13.5 (Stormwater) explain the Councils’ future renewals requirements.

1.11 CONCLUDING REMARKS

More detailed studies like the ‘Asset Management Lifecycle Review Report” prepared by Waugh Infrastructure Management Ltd would have to be carried out for all Councils before a more complete and accurate comparison of the infrastructure asset management situation in Hawkes Bay could be made. Amongst other things that report identified:-

Under Napier’s current renewal funding methodologies, rates will need to increase substantially in the future to meet renewal needs – alternatively debt funding will have to be used. In either case it is possible that the cost of replacing existing assets will fall disproportionately on future ratepayers; (page 22)

‘The 2011 valuation for water supply, wastewater and stormwater assets shows a substantial number of pipes with only 3 years of remaining useful life. After additional analysis it was agreed that the cast iron water pipes in this category in fact have a substantial remaining useful life. A second theoretical renewal programme was generated for water supply with these cast iron pipes’ lives extended by 100 years’. (page26)

The graphic shows 15.9km (of stormwater) main that has reached the end of its expected life, this is purely based on the expected lives and does not include any condition based assessments which may indicate the expected asset like may be expected. _ _ _ There was no supporting data


regarding condition of the pipe. The reviewers’ opinion, based on discussion and operational record review is that this pipe represents a data cleansing issue’. (page 45)

“The graphic shows that 46km of EW (wastewater) main has reached the end of its expected life. This is purely based on the expected lives and does not include any ‘condition based’ assessments, which may indicate that the expected asset life may be extended _ _ _ To better understand the condition _ _ _ condition records for this pipe were examined. That data _ _ _ showed that only 4.9 km (10.6%) of the 46 km within the 2012-2016 window had CCTV records _ _ _ NCC requires more information to better understand pipe renewals requirements and develop renewal programmes”.(pages 39 & 40)

“The theoretical renewals programme shows an inadequate requirement (in 2014) to replace the wastewater and stormwater assets. The expenditure requirement is in the order of $21m for wastewater and $12m for stormwater – which is not currently reflected in Napier City Council’s long-term plan”. (page 26)

“The Waugh Infrastructure Report determined that the road lives were significantly longer than the budget assumptions”. (Questionnaire response)

The foregoing comments are included here simply as an example – not as a criticism of Napier City. It is highly probable that similar studies of the other councils would identify the same sort of weaknesses. Nor are the weaknesses any different to what happens nationally. They are entirely consistent with comments by the Controller and Auditor General in “Water and Roads: Funding and Management Challenges” – November 2014: viz

“Our own observations and advice from experts is that other countries (such as the United States of America, The United Kingdom and Canada) have better quality data and collection practices than those our local authorities use to manage water and roading assets’ (page 5)

“Although local authorities tend to have a lot of data, they do not necessarily use it well, or use the best data, to support decision-making” (page 9)

“_ _ _We have found that the information to enable understanding and choices is not consistently available _ _ _this must change” (Page 10)

To these comments by the Auditor General, based on this study and what we have repeatedly seen in local authorities elsewhere in New Zealand, we would add:

“Councils also need to be much more ‘upfront’ and transparent about their approaches to the funding of renewals and replacements and how they are doing that in ways that are consistent with the principles of intergenerational equity and financial sustainability.”

Hopefully the 30year infrastructure strategies that are ‘currently being prepared’ will address these matters.

The questionnaire responses are summarised in Sections 9-13.


SECTION 2

15Section 2: Base Statistics

BASE STATISTICS

2.1 THE LOCAL AUTHORITIES CONCERNEDThese are five local authorities in Hawkes Bay:

The Hawkes Bay Regional Council;

Napier City;

Hastings City;

Central Hawkes Bay District; (and)

Wairoa District

This section provides a general overview of each district’s (size), of the regional population and land use types (which together determine the type and extent of the infrastructural services required), and of the Councils’ annual funding comparability.

2.2 AREA

Note 1: The area of the region includes parts of Taupo and Rangitikei Districts


Table 2.2A – Territorial Authorities – Area

AUTHORITY Area (km2)

Hawkes Bay Region 14,137

Napier 105Hastings 5,226Central Hawkes Bay 3,332Wairoa 4,077

12,740

Napier105

Hastings5226

Central Hawkes Bay3332

Wairoa4077

Table 2.2B - Territorial Authorities by Area (12,740km2)

km2

km2

km2

km2


2.3 POPULATIONThe Hawkes Bay regional population is currently estimated to be 158,950. It increased by 8,268 (or 6%) over the twelve year period 2001-2013. It is forecasted to increase by another 12,490 (or 8%) over the next 12 years.

Table 2.3A - Population Forecasts (No)

CensusAUTHORITY

Population Forecasted Population Increase (Decrease ) 2014-2031

%2001 2006 2013 2014 2026 2031

Hawkes Bay Region

159,000

175,880 16,880 10.6%

53,661 55,359

57,240 Napier

60,100

63,900

65,500 5,400 9%

67,425 70,839

73,245 Hastings

77,400

86,800

90,200 12,800 16.5%

12,825 12,954

12,717

Central Hawkes Bay

13,250

13,450

13,250 0 0%

8,913 8,481

7,890 Wairoa

8,200

7,290

6,880 -1320 16%

142,824 147,633 151,092 TOTAL 158,95

0 171,44

0 175,83

0 16,880 10.6%Note: Population Projections – Hastings and Napier ‘High’, Central Hawkes Bay and Wairoa ‘Medium’

Napier; 60,100

Hastings; 77,400

Central Hawkes Bay; 13,250

Wairoa; 8,200

Figure 2.3B - Current Population Spread

Note: The reason for the difference between the total population of the area covered by the Regional Council and that covered by the four Districts is because the Regional Council area includes a part of the Rangitikei and Taupo Districts.


2.4 RATEABLE PROPERTIES AND LAND USE75% of the rateable properties in Hawkes Bay are used for residential purposes.18% are rural. Half the rural properties in the region are in Hastings District

Table 2.4A - Rateable Properties and Land Use

AUTHORITY

Rateable Properties

ResidentialIndustrial

and Commercial

Rural Other TOTAL %

Hawkes Bay Regional CouncilNapier 21,770 1,644 1,211 138 24,763 35.5%Hastings 22,883 1,561 6,208 - 30,652 44.0%Central Hawkes Bay 4,217 365 2,759 319 7,660

11.0%

Wairoa 3,662 258 2,530 326 6,776 9.5%

TOTAL 52,532 3,828 12,708 783 69,851 100%

Napier; 24,763

Hastings; 30,652

Central Hawkes Bay; 7,660Wairoa; 6,776

Figure 2.4B - Rateable Properties Spread (Total 69,851)

Napier

Hastings

Central Hawkes Bay

Wairoa

Total

- 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00

87.91

74.65

55.05

54.04

75.21

6.64

5.09

4.77

3.81

5.48

4.89

20.25

36.02

37.34

18.19

0.56

-

4.16

4.81

1.12

Figure 2.4C - Land Use Type Mix - Rateable Properties(%)


KEY: Residential Industrial/Commercial Rural Other

2.5 TERRITORIAL AUTHORITIES – KEY FINANCIAL STATISTICS

Table 2.5 – Territorial Authorities - Key Financial Statistics

AUTHORITY Rate Levy 2013/14 ($mil)²

Capital Value of Average Residential

Property ($)

Rates & Charges Payable by an Average

Residential Property 2013/14 ($¹)

Napier 46.6 314,000 1,753Hastings 67.1 290,000 1,934Central Hawkes Bay 17.8 213,000 2,450Wairoa 10.1 130,545 2.490

1. From all rates and charges including all water supply and wastewater charges (including water by meter and wastewater by water volume etc.)

2. For all activities – not only roads, water supply, wastewater and stormwater.

3. The lower the average residential property value the higher the rates!


SECTION 3

3. ASSET KNOWLEDGE

3.1. ASSET TYPE

The replacement value of infrastructure assets (other than buildings) managed by the five Hawkes Bay local authorities is $4.26b. The first fundamental for responsible asset management is that each Council knows exactly what assets it owns – and the location, material type, condition, capacity, criticality, performance, age and remaining life of each. Figure 3.1 shows the ‘assets’ type mix’ and Figure 3.2 gives a snap shot of the councils’ assessment of the completeness and accuracy of the asset data.

Figure 3.1 – Assets’ Type Mix – Replacement Value ($m)

21Section 3: Asset Knowledge

Key: - Roads Water Supply Wastewater Stormwater/Flood Control

HASTINGS ($1,969 mil)

HAWKE'S BAY REGIONAL COUNCIL ($162 mil) NAPIER ($861 mil)

WAIROA ($332 mil)

CENTRAL HAWKE'S BAY ($939 mil) Total -All Territorials ($4,263 mil)

3.2. ASSET DATA – COMPLETENESS & ACCURACY

Roads Water Supply Wastewater Stormwater/Flood Control

0

2

4

6

8

10

12

14

16

18Figure 3.2 Territorial Authorities - Asset Knowledge

Confidence (No)

Data Highly Reliable (± 2%) Data Reliable (± 10%) Data Uncertain (± 25%)

Source: Responses from the four territorial authorities regarding the reliability of the asset description, quantity, age, condition and performance data.

A more detailed analysis is in Table: 9.1


3.3. ASSET CONDITION, AGE & REMAINING LIFEA good indication of the present general condition, age and remaining life of the assets is to compare their current value (depreciated replacement value) with their estimated replacement value. The situation (for all of the assets – roads, water supply, wastewater, and storm-water, and flood control) is as follows:

Note: - 1. The depreciated replacement value is the replacement cost of the assets less accumulated depreciation. This reflects their current condition and the ‘already consumed’ economic benefits to date.

2. Figures showing the depreciated replacement value: replacement cost for each activity are in the respective activity section and there is also a more detailed view in Table 4.5A. The percentages shown here are deceiving because (as Table 4.5A shows) they are consistently much higher for roads than they are for the other assets.


Table 3.3 - Asset Values

AUTHORITY REPLACEMENT VALUEDEPRECIATED REPLACEMENT

VALUEPERCENT

($m) ($m) (%)Hawkes Bay Regional Council 162 147 90%

Napier 861 498 58%

Hastings 1969 1521 77%

Central Hawkes Bay 939 685 73%

Wairoa 332 209 63%

Sub-totals –Territorials 4101 2913 71%

TOTAL 4263 3060 72%

SECTION 4

4. DEFERRED MAINTENANCE, DEPRECIATION, RENEWALS AND REPLACEMENT

4.1. LEGISLATIVE REQUIREMENT

Section 100 of the Local Government Act 2002 says:

‘1. A local authority must ensure that each year’s projected operating revenues are set at a level sufficient to meet that year’s projected operating expenses.

2. Despite subsection (1), a local authority may set projected operating revenues at a different level from that required by that subsection if the local authority resolves that it is financially prudent to do so, having regard to:

(i) the estimated expenses of achieving and maintaining the predicted levels of service provision set out in the long-term plan, including the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life; (and)

(ii) the projected revenue available to fund the estimated expenses associated with maintaining the service capacity and integrity of assets throughout their useful life; and

(iii) The equitable allocation of responsibility for funding the provision and maintenance of assets and facilities during their “useful lifetime”

4.2. DEFERRED MAINTENANCE AND DEFERRED RENEWALS

Perhaps the most important question relating to infrastructure management is whether or not there has been any maintenance, repair, restoration/rehabilitation or replacement work that has not been carried out when it should have been (or when it was scheduled to be) and which has been put off or delayed for a future period.

The councils say that the only deferred maintenance or deferred renewals work is as shown below – total $10.1m

Table 4.2 Deferred Maintenance and Deferred Renewals ($ mil)

Authority RoadsWater Supply Wastewater Stormwater total

Napier 1.1 1.1Hastings 1.0 7.3 8.3Central Hawkes Bay 0.1 0.1Wairoa 0.6 0.6

Total 1.6 0 8.4 0.1 10.1

Note: Hastings Wastewater $7.3m – Work now underway

24Section 4: Deferred Maintenance, Depreciation, Renewals and Replacement

Key: - Roads Water Supply Wastewater Stormwater

4.3. PLANNED RENEWALS AND REPLACEMENT AND EXPENDITURE

Tables 4.3A & Figures 4.3B-4.3C show the proposed renewals and replacement expenditure during the ten year period of the long-term plans (2012-22)

Table 4.3A - Proposed Renewals & Replacement Expenditure2012-2022 ($ 000)

Authority Roads Water Supply Waste -water

Storm water / Flood

Control

Total

Hawkes Bay Regional Council 4,357 4,357

Napier 42,594 7,300 23,961 10,186 84,041

Hastings 131,348 7,771 28,431 9 167,559

Central Hawkes Bay

88,357 6,106 6,748 2,198 103,409

Wairoa 38,339 3,506 1,071 861 43,777

Subtotal-Territorials

300,638 24,683 60,211 13,254 398,786

TOTAL 300,638 24,683 60,211 17,611 403,143

Regional Council $4

Napier $84

Hastings $168

Central Hawkes Bay $103

Wairoa $44

Figure 4.3B Renewals Expenditure -2012-2022 by Local Authority ($403 mil)

Roads $301

Water Supply $25

Wastewater $60

Stormwater/ Flood Control $18

Figure 4.3C Renewals Expenditure - 2012-2022 By Type ($403 mil)


4.4. PLANNED RENEWALS AND REPLACEMENT EXPENDITURE SUFFICIENCY

One indicator of the sufficiency of the extent to which the assets are being preserved in order to sustainably deliver the prescribed levels of service is comparison of the renewals expenditure with the depreciation provision. Depreciation is the degree to which the assets are being ‘consumed’ each year. ‘Renewals’ is the work carried out to restore or rehabilitate the assets to their original capacity or performance capability.

OVER TIME the totals of the two should be roughly about the same. In the words of the New Zealand Controller and Auditor General:

“When we compare renewals expenditure to depreciation, we assume total depreciation is a reasonable estimate of the capital expenditure needed to replace the existing asset base.

A result where renewals expenditure is equal to depreciation (100%) over time usually indicates that an asset (and therefore service) is sustainable”

Source – ‘Water and Roads: Funding and Management Challenges’. November 2014

A common way to ensure intergenerational equity (fairness of the distribution of costs and benefits across generations) is to fund the depreciation provision and use the proceeds only to fund renewals – retaining any balance in a ‘renewals reserve’ account until required. This also ‘smooths- out’ the funding burden. When councils don’t do this (and instead fund the renewals directly from rates or loans - when they deem the work to be required) there can be a tendency to defer it (in order to keep the total rate or loan requirement down) and not intervene at the most optimum time in the asset lifecycle. This happens more frequently relating to the underground assets like water supplies, wastewater and stormwater (whose current condition isn’t always as obvious as for the above-ground assets like structures and roads).

According to the questionnaire responses the Hawkes Bay local authorities fund their renewals in a variety of ways.

The Regional Council only funds depreciation ‘up to a cap’ – but uses the funds solely for funding renewals.

The Napier City Council says that it funds all depreciation (after making an allowance for subsidy received from the NZTA) and uses the funds solely for funding renewals. However this is contrary to what is said in a report prepared by Waugh Infrastructure Management Ltd in February 2014. In that report (page22) Waugh says :

“Rather than explicitly funding depreciation Napier City Council uses rates to fund assets’ replacement based on the renewals projections in the assets management plans. Because the estimates contain some uncertainty, any funds collected for renewals that are not expended in a given year accumulate into a renewals reserve. Funds in the reserve are invested and any interest accrued on the investment is added to the fund to protect against inflation” Source: ‘Napier City Council – Asset Management Lifestyle Review Final Report – February 2014 by Waugh Infrastructure Management Ltd”

The Council’s 2014/15 Annual Plan also says the fund is titled “Infrastructure Asset Renewal and Upgrade Fund”

Hastings:

doesn’t fund depreciation for roads. Renewals funding is based on the renewals needs as identified in the Asset Management Plan and agreed as a part of the long-term planning process;


doesn’t fully fund depreciation for wastewater (and the situation is unclear for water supply). All renewals expenditure is then loan funded and the funded depreciation is used to finance that debt.

doesn’t fund depreciation for stormwater at all because ‘the network is relatively new and has high debt levels’ (but this policy is being reviewed).The Council’s Statement that the network is relatively new also isn’t consistent with the fact that its ‘depreciated replacement value : replacement cost ratio is the same as for the councils’ water supply system – 61%, nor with the fact that it says that the ‘age condition and performance of the stormwater systems are ‘uncertain’.(see section 13.3),

Central Hawkes Bay

Funds depreciation for roads after making an allowance for subsidy received from the NZTA.

Only funds depreciation for water supply, wastewater and stormwater up to a level that can be afforded ‘based on the amount of funds available from a limited rating base’.

Uses all depreciation funds only for funding renewals.

Wairoa

With a minor exception relating to roading, funds depreciation and uses the proceeds solely to fund renewals.

Note: The above information needs to be interpreted with care. The work that was done for the preparation of this report raised a number of consequential questions that indicate some of the answers provided may be incomplete or not strictly correct

Table 4.4A shows the forecast renewals expenditure v depreciation comparison.

Table 4.4A Forecasted Renewals Expenditure As a Proportion of the Depreciation Provision - 2012/2022 (%)

Authority Roads Water Supply Wastewater Stormwater/ Flood Control Total

Hawkes Bay Regional Council 74% 74%

Napier 42% 43% 50% 44% 44%Hastings 92% 36% 47% 0% 65%Central Hawkes Bay 84% 88% 78% 90% 84%Wairoa 139% 50% 13% 40% 97%

TOTAL 80% 47% 48% 22% 65%

National Comparison 91% 72% 58% 32%

Note: See Sections 10.2 (Roads), 11.2 (Water Supply), 12.2 (Wastewater) and 13.2 (Stormwater/Flood Control) for details.

During the 2012-22 period the four territorial authorities are intending to depreciate their assets by $617m but only spend $398m on renewals :viz


Key: 0%-50% 51%-60% 61%-70% over 70%

Table 4.4B - Planned Renewal Expenditure Vs Depreciation 2012/22

Activity Depreciation Renewals %$m $ m

Roads 377 300 80%Water

Supply 53 25 47%Wastewate

r 126 60 48%Stormwater 61 13 22%Total 617 398 65%

The ‘National Comparison’ figures are the 10year averages identified in Funding Management ‘Water and Roads- Funding and Management Challenges’ – November 2014 – a report by the Office of the Controller and Auditor General about New Zealand local authorities’ asset management practices (page 32).

Napier road lives are to be extended based on a report by Waugh Infrastructure Ltd. The effect of this will be to reduce the annual depreciation requirement and therefore produce a higher percentage.

As at 30th June 2014 the councils had the following amounts in reserve funds for renewals. In their replies to the questionnaire the Councils indicated that these funds are set aside for renewals (or for the servicing of loans to fund renewals) but a study of their 2014/2015 Annual Plans indicates that may not always be so. In some cases a part of these funds are (or seem to be) used for other purposes – including ‘new’ or ‘upgrade’ capital expenditure or for the servicing of loans raised to fund new capital work.

Table 4.4C - Renewal Reserves as at 30 June 2014 ($ mil)

ActivityRegional Council Napier Hastings

Central Hawkes Bay Wairoa Total

Roading 1.6 4.5 6.1Water Supply 2.3 0.2 4.8 7.3Wastewater 8.9 3.8 12.7Stormwater 3.2 1.5 4.7Flood Control 3.2 3.2TOTAL 3.2 14.4 1.8 0 14.6 34


4.5. ASSET CONDITION, AGE AND REMAINING LIFE

Table 4.5A gives a more detailed view of the ‘depreciated replacement value : replacement cost” picture mentioned earlier (in Table 3.3)

Table 4.5A - Current Infrastructure Age and General Condition(Depreciated Replacement Value as a Percentage of the Replacement Value-2014)

AUTHORITY Roads Water Supply Wastewater Stormwater / Flood Control

Hawkes Bay Regional Council 90%

Napier 57% 63% 53% 64%

Hastings 90% 61% 54% 61%

Central Hawkes Bay 76% 52% 56% 65%

Wairoa 66% 59% 35% 33%

Total - Territorials 79% 60% 53% 61%

Table 4.5B shows how the 2014 depreciated value expressed as a percentage of the replacement cost (Table 4.5A) will in all cases, except for roads in Wairoa, further reduce based on the forecasts in the long-term plans.


Key: 0%-50% 51%-60% 61%-70% over 70%

Table 4.5B Depreciated Replacement Value As A Percentage of the Replacement Cost (%)Comparison 2014 V 2022

ServiceRegional Council Napier Hastings Central Hawkes

Bay Wairoa

2014 2022 2014 2022 2014 2022 2014 2022 2014 2022

Roads 57% 39% 90% 89% 76% 74% 66% 71%

Water Supply 63% 55% 61% 52% 52% 50% 59% 49%

Wastewater 53% 43% 54% 44% 56% 54% 35% -14%

Stormwater /Flood Control 90% 89% 64% 56% 61% 48% 65% 64% 33% 26%

Note: The 2022 percentages have been calculated using The Councils’ planned provision for depreciation and their proposed expenditure on renewals during the ten-year period 2012-22. For the detailed figures see sections 10.2, 11.2, 12.2 and 13.2.

The depreciation and renewals forecasts include inflation. The replacement cost is the forecasted current (most recent valuation) replacement cost. If inflation was added to it the 2022 percentages would be lower/worse.

Regarding the Napier City Council’s significant deterioration for roading between 2014 and 2022 the Council says the depreciation figures have since been reviewed based on a report by Waugh Infrastructure Management that determined the road lives are significantly longer than the budget assumptions – and that this matter will be reflected in its 2015-25 long-term Plan.


Key: 0%-50% 51%-60% 61%-70% over 70%

4.6. ASSET CONDITION – OTHER THAN ASBESTOS CEMENT PIPES

Tables 3.6A and 3.6B show the extent of pipes, other than asbestos cement pipes, that are currently in poor or very poor condition.

Napi

er

Hasti

ngs

Cent

ral H

awke

s Ba

y

Wai

roa

0%

20%

40%

60%

80%

100%

8% 11%

27%

0%

Figure 4.6A - Water Supply Pipes other than Asbestos Cement Pipes Cur-rently in 'Poor or Very Poor' Condition as % of The Overall Network

Poor/Very Poor

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa

0%

20%

40%

60%

80%

100%

7%0%

20%

0%

Figure 4.6B - Wastewater Pipes other than Asbestos Cement Pipes Currently in 'Poor or Very Poor' Condition as % of The Overall Network


4.7. ASBESTOS CEMENT PIPES

Pre the late 1970’s there was widespread use of asbestos cement pipes. These have shorter lives than most pipes made of other materials and it is reasonable to assume that all of them will need to be replaced in the next 10-30 years. The 30 year infrastructure strategy plans that are now required to be prepared by all councils within the next few months can be expected to identify the implications for each district. Figures 4.7A and 4.7B show the extent of asbestos cement use in the Hawkes Bay Region.

Napi

er

Hasti

ngs

Cent

ral H

awke

s Ba

y

Wai

roa

0%

20%

40%

60%

80%

100%

10% 8% 10%20%

Figure 4.7A - Water Supply Asbestos Cement Pipework as a % of The Overall Network

Asbestos Cement

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa

0%

20%

40%

60%

80%

100%

39% 37%

20%

39%

Figure 4.7B - Wastewater Asbestos Cement Pipework as a % of The Overall Network

Note: The above tables are not to be interpreted to imply that all asbestos cement pipes are currently in a poor condition


SECTION 5

5. NEW CAPITAL EXPENDITUREForecasted new capital expenditure for roads, water supply, wastewater, stormwater and flood control over the next ten years totals $327.2m, half of which ($161.4m) is for roads.

Table 5A - Proposed New Capital Expenditure 2012-2022 ($m)AUTHORITY Growth ILOS Total

Hawkes Bay Regional Council ●Flood Control 21.5 21.5

Napier

●Roads 42.4

61.3

23.3

61.5 122.8

●Water Supply 8.9 1.4

●Wastewater 2.6 9.3

●Stormwater 7.4 27.5

Hastings

●Roads 12.3

34.0

73.6

114.6 148.6

●Water Supply 8.9 18.1


●Stormwater 8.3 14.4

Central Hawkes Bay

●Roads 0

0.1

6.3

15.3 15.4

●Water Supply 0 0.7


●Stormwater 0 0.2

Wairoa

●Roads 1

13.6

2.5

5.3 18.9

●Water Supply 0 1.7

●Wastewater 12.6 0

●Stormwater 0 1.1

Total 109 218.2 327.2

Note: ILOS = Increased Levels Of Service.

Roads, $161.40

Water Supply, $39.70

Wastewater, $45.70

Stormwater, $58.90

Flood Control, $21.50

Figure 5B - Proposed New Capital Expenditure by Type 2012-2022 ($327.2m)

ILOS; $218.20

Growth; $109.00

Figure 5C - Proposed New Capital Expenditure by Growth Vs ILOS ($327.2m)

33Section 5: New Capital Expenditure

Figure 5D Growth Vs ILOS 2012/22 ($ mil) By Local Authority

ILOS; $21.5

Hawkes Bay Regional Council

Growth; $61 ILOS; $62

Napier

Growth; $34

ILOS; $115

Hastings

Growth; $0

ILOS; $15

Central Hawkes Bay

Growth; $14

ILOS; $5

Wairoa

(includes a new wastewater scheme for Mahia Beach)

Note1:-The Figures in this section do not include a possible capital investment by the Regional Council relating to a new Ruataniwha Dam – a long term sustainable water supply option for Central Hawkes Bay.

The Scheme will consist of a 96million cubic storage reservoir, storing water during periods of high flow and over winter and releasing water to achieve improved river flows through summer for river life and other river users and providing secure water for irrigators.

The proposed capital structure anticipates a mix of public and private sector capital from :


Hawkes Bay Regional Investment Co Ltd; Crown Irrigation Investments; Institutional Investors; IWI; (and) Hawkes Bay Public (predominantly farmers)

The Regional Council has agreed to vest up to $80million in the scheme providing it meets its uptake threshold and has workable consents by financial close (which is targeted to be the end of March 2015).

The scheme will be built as a ‘Build Own Operate and Transfer (BOOT) project. The capital structure is predicated on a limited partnership model, which will enable investors to take profits and losses on their own balance sheets while retaining a limited liability. It will transfer to public ownership at the end of the 70 year concession perion, with some intergenerational ownership rights potentially to be retained by IWI and some private investors.

2:-Proposed new capital roading projects in Hastings in the 2012/22 period include : Whakatu Arterial Link; Irongate Industrial Development; Arataki Development; Lyndhurst Development; (and) Medium Density Improvements

Other Projects scheduled for later include: North Eastern Connection; Tomoana Industrial Development; (and) Kaiapo Development

3:-Napier has what it refers to as ‘$41m of deferred capital roading works’ (see Napier City Council Annual Plan 2014/15 – Page 84). These are largely roads that do not meet the current standards as required by the Code of Practice for Subdivision and Land Development. There is also $12.4m worth of transportation and environmental projects in the CBD area that are to be done over time funded principally by financial contributions.


SECTION 6

6. TOTAL INFRASTRUCTURE COSTSTable 6A summarises the councils’ forecasted total infrastructure costs over the 10 year period of the long-term plan.

Table 6A - Forecasted Total Infrastructure Costs 2012/22 - ($ mil)

RoadsWater Supply Wastewater

Stormwater/ Flood

Control TotalHawkes Bay Regional Council ● Maintenance 57.4 57.4 ● Renewals 4.4 4.4 ● Sub-Total 0.0 0.0 0.0 61.8 61.8 ● New Capital 21.5 21.5 ● Total 0.0 0.0 0.0 83.3 83.3Napier

● Maintenance 32.9

11.5

11.0

7.3

62.7

● Renewals 43.0

7.0

24.0

10.0

84.0

● Sub-Total 75.9

18.5

35.0

17.3

146.7

● New Capital 66.0

10.2

12.0

35.0

123.2

● Total 141.9

28.7

47.0

52.3

269.9

Hastings


24.9

29.4

6.2

172.7

● Renewals 131.0

8.0

28.0

-

167.0

● Sub-Total 243.2

32.9

57.4

6.2

339.7


27.0

13.0

22.7

148.6

● Total 329.1

59.9

70.4

28.9

488.3

Central Hawkes Bay


16.7

13.1

2.8

70.4

● Renewals 88.0

6.0

7.0

2.0

103.0

● Sub-Total 125.8

22.7

20.1

4.8

173.4

● New Capital 6.3

0.7

8.3

0.2

15.5

● Total 132.1

23.4

28.4

5.0

188.9

36Section 6: Total Infrastructure Costs

Wairoa


9.8

9.1

1.0

55.2

● Renewals 39.0

3.5

1.0

1.0

44.5

● Sub-Total 74.3

13.3

10.1

2.0

99.7

● New Capital 3.5

1.7

12.6

1.0

18.8

● Total 77.8

15.0

22.7

3.0

118.5

Total


62.9

62.6

74.7 418.4

● Renewals 301.0

24.5

60.0 17.4

402.9

● Sub-Total 519.2

87.4

122.6 92.1 821.3


39.6

45.9 80.4 327.6

● Total 680.9

127.0

168.5 172.5 1148.9

Regional Council $83.3

Napier $269.9

Hastings $488.3

Central Hawkes Bay

$188.9

Wairoa $118.5

Figure 6B - Total Infrastructure Expenditure -2012-2022 by Local Authority ($1.15bil)


Maintenance $418.4

Renewals $402.9

New Capital $327.6

Figure 6C - Total Infrastructure Expenditure -2012-2022 by Type ($1.15bil)

Roads $680.9

Water Supply $127.0

Wastewater $168.5

Stormwater $172.5

Figure 6D - Total Infrastructure Expenditure -2012-2022 by Activity ($1.15bil)

Figure 6E - Total Infrastructure Expenditure 2012-2022By Activity by Local Authority ($ mil)


Roads $142

Watersupply $29

Wastewater $47

Stormwater $52

Napier

Roads $329

Watersupply $60

Wastewater $70

Stormwater $29

Hastings

Roads $132

Watersupply $24

Wastewater $28

Stormwater $5

Central Hawkes Bay

Roads $78

Watersupply $15

Wastewater $23

Stormwater $3

Wairoa


SECTION 7

7. COMPARATIVE COSTS PER PROPERTY AND PER CONNECTION

7.1. PLANNED TOTAL OPERATING EXPENDITURE PLUS RENEWALS EXPENDITURE 2014/15

Every Council’s annual revenue should at the very least, be sufficient to maintain service capacity and the integrity of the assets for their useful lives. (Section 100 Local Government Act 2002). An attempt was made to compare the total cost to each council of maintaining and renewing the assets. The result indicated however that the answers to ‘the cost of maintenance’ question may not have been compiled on the same basis so the Councils’ Annual Plans for 2014/15 were studied.

Figure 7.1 gives a ‘one year’ snapshot. It shows the planned total operating expenditure plus renewals expenditure cost per rateable property for roading, per connection for water supply and wastewater, and per urban rateable property for stormwater – for 2014/15.

N

apier ($ 941)

Hastings (

$1535)

Central Haw

kes Bay

...

Wairoa (

$3320)

Average

($1528)

0200400600800

100012001400160018002000

135 178586

1031

216216

457

760

680

36698

91

96

61

92

492809

1592 1548

854

449

726

14421772

674

Figure 7.1 - Proposed Total Operating Expenditure plus Renewals Expenditure 2014/15 - Per Property and Per Connection ($)

Water Supply cost per connection Wastewater cost per connectionStormwater cost per Urban Property Roading cost per Rateable Property Source 2014/15 Annual Plans

Note: Operating Expenditure includes: Payments to staff and suppliers Finance costs Internal charges and overheads(net) Other operating funding applications

40Section 7: Comparative Costs Per Property And Per Connection

7.2. PLANNED TOTAL OPERATING EXPENDITURE PLUS THE PLANNED DEPRECIATION PROVISION 2014/15

Figure 6.2 shows the comparative situation if (rather than rating just to fund the renewal costs) every Council was fully funding the depreciation provision in 2014/15, and using the depreciation proceeds to fund the renewals.

Napier ($ 1260) Hastings ($1920) Central Hawkes Bay ($3445) Wairoa ( $3441) Average ($1954)0

500

1000

1500

2000

2500

169 235605

1128

261301

591

832

752

468167

194

103

121

170

623900

19051440

965

637

1020

1540

2001

899

Figure 7.2 - Proposed Total Operating Expenditure plus the Depreci-ation Provision 2014/15 - Per Property and Per Connection ($)

Water Supply cost per connection Wastewater cost per connectionStormwater cost per Urban Property Roading cost per Rateable Property Source 2014/15 Annual Plans

Note: Operating Expenditure includes: Payments to staff and suppliers Finance costs Internal charges and overheads(net) Other operating funding applications


7.3. PLANNED NEW CAPITAL EXPENDITURE 2012-2022

Figure 6.3 shows the comparative situation relating to the councils’ planned new capital expenditure during the 10 year period of the long-term plan.

Napier ($ 5031) Hastings ($5541) Central Hawkes Bay ($3522) Wairoa ( $7202) Average ($50020

1000

2000

3000

4000

5000

6000

7000

8000

4001115

178919 713483

695 2478

5512

9341495

92944

255

10452378

2739 2700

6686

2692

2653 2802

822 516

2310

Figure 7.3 - Proposed New Capital Expenditure 2012/22 - Per Property and Per Connection ($)

Water Supply cost per connectionWastewater cost per connectionStormwater cost per Urban PropertyRoading cost per Rateable Property

NOTE:- The abnormally high wastewater expenditure by Wairoa relates to a proposed new wastewater scheme for Mahia


SECTION 8

8. OTHER OBSERVATIONS

8.1 RISK MANAGEMENT AND FINANCIAL CHALLENGES

When asked to identify their top five risks (for the Authority as a whole and for each activity separately) - and any significant financial/funding challenges – the answers varied quite widely. In addition to a long list of ‘operational type’ risks for each activity the main issues raised were:

Inadequate funding (especially from the New Zealand Transport Agency for roading)

(In the case of the Wairoa and Central Hawkes Bay Councils especially) insufficiently skilled human resources and works’ contracting weaknesses;

The impacts of Central Government decision-making including changes to the Local Government Act, Health and Safety legislative changes, the requirement for small water supply schemes to comply with the Drinking Water Standards and the potential effects of the proposed local government re-organisation;

The likely impacts on the local infrastructure of the Ruataniwha Water Storage Scheme, if it proceeds (Central Hawkes Bay);

The potentially adverse effects of forestry and heavier vehicles on the local roads; and

An increasing renewals requirement - (Water Supply, Wastewater & Stormwater) not immediately – but in the next 10/40 years.

8.2 WEATHER TIGHTNESS

The following councils have the following weather tightness claims relating to their responsibilities as building consent authorities, some of the costs of which can be expected to be paid by their insurers:

Table 8.2 Weather TightnessNapier $8.50m

Hastings $1.62m

Central Hawkes Bay $0.01m

Wairoa $0.05m

Total $10.18m

8.3 EARTHQUAKE STRENGTHENING

The estimated cost of the councils’ earthquake obligations relating to Council buildings is:-

Table 8.3 Earthquake Strengthening ObligationsNapier $1.5m

Hastings $10.6m

Central Hawkes Bay $0.6m

Wairoa $0.5m

Total $13.2m

43Section 8: Other Observations

8.4 ‘COUNCIL OWNED’ REAL PROPERTIES (LAND AND BUILDINGS)

The value of real properties owned by the councils is:

Table 8.4 Council Owned Properties - Value ($ mil)

Regional Council 12Napier 538Hastings 134Central Hawkes Bay 21Wairoa 13Total 718

44Section 8: Other Observations

SECTION 9

Key: -

45Section 9: General Supporting Information – Total District

TERRITORIAL AUTHORITIES – ASSET DATA CONFIDENCETable 9.1 – Territorial Authorities – Asset Data Confidence(Assessed Reliability of Data Completeness & Accuracy)

InformationRoads Water Supply Wastewater Storm water/Flood

ControlHR R UN HR R UN HR R UN HR R UN HR

Asset Description 1 3 2 2 2 2 3 2 8

Asset Quantity 1 3 1 3 1 3 2 3 5

Asset Age 3 1 1 3 1 3 2 2 1 4

Condition 4 1 2 1 3 1 1 2 2 2

Performance 4 1 3 1 2 1 1 3 1 3

TOTAL 2 17 1 6 13 1 5 13 2 9 12 4 22

GENERAL SUPPORTING INFORMATION

Confidence Grade DescriptionHR Highly reliable Data based on sound records, procedure, investigations and analysis, documented properly and recognised as the best method of

assessment. Dataset is complete and estimated to be accurate + 2%R Reliable Data based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example

some data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate + 10%

UN Uncertain Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data are available. Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated + 25%

Note: As assessed by the local councils themselves.


9.1. GENERAL DISTRICT – WIDE STATISTICAL INFORMATION

Nap

ier

Ha

stin

gs

Ce

ntr

al H

aw

kes.

..

Wair

oa0

1,000

2,000

3,000

4,000

5,000

6,0001

05

5,2

26

3,3

32

4,0

77

Area (km2)

Nap

ier

Ha

stin

gs

Ce

ntr

al H

awk

es B

ay

Wai

roa0

10,00020,00030,00040,00050,00060,00070,00080,00090,000

60

,10

0

77

,40

0

13

,25

0

8,2

00

2014 Population (No.)

Napi

er

Hasti

ngs

Cent

ral H

awke

s...

Wai

roa

0100002000030000400005000060000700008000090000

6210

0

8320

0

1350

0

7610

6390

0

6860

0

1345

0

7290

6550

0 8190

0

1325

0

6880

Future Projected Population (No.)

2021 2026 2031


Reg

ion

al C

ou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa -

10,000 20,000 30,000 40,000

50,000 60,000 70,000 80,000

69

,99

4

24

,76

2

30

,65

2

7,6

60

6,7

76

Rateable Properties (No.)

Total number of rateable properties =

Reg

ion

al C

ou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa -

10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000

14

,90

2

46

,63

2 67

,08

4

17

,83

6

10

,60

0

Total Rate Levy 2013/14 ($000) GST Exclusive

*All rates and charges including water by meter.

Regi

onal

Cou

ncil

Nap

ier

Has

tings

Cent

ral H

awke

...

Wai

roa0

500

1000

1500

2000

2500

213

1,88

3 2,18

8

2,32

8

1,55

9

Total Rate Levy per Rateable Property 2013/14 ($) GST Exclusive


Average = $

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa -

500

1,000

1,500

2,000

2,500

86

1

1,9

69

93

9

33

2

Replacement Value of Roads, Water Supply, Wastewater (Sewerage) & Stormwater Assets 2013/14 - ($m)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa -

200 400 600 800

1,000 1,200 1,400 1,600

49

8

1,5

21

68

5

20

9

Depreciated Replacement Value of Roads, Water Supply, Wastewater (Sewerage) & Stormwater Assets 2013/14 ($m)

Nap

ier

Has

tings

Cent

ral H

awke

s...

Wai

roa

Tota

l-TLA

s0%10%20%30%40%50%60%70%80%90%

58%

77%

73%

63% 71

%

Depreciated Replacement Value of Roads, Water Supply, Wastewater (Sewerage) & Stormwater Assets as a percentage of their Replacement

Value 2013/14 (%)

Perc

ent


Regi

onal

Cou

ncil

Nap

ier

Has

tings

Cent

ral a

wke

s Ba

y

Wai

roa0

100200300400500600

12

538

134

21 13

Capital Value of 'Council Owned' Properties - 2013/14 ($Mil)

Note: Includes Restricted Assets $101m

Regi

onal

Cou

ncil

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0

2,000

4,000

6,000

8,000

10,000

12,000

0 1,50

0

10,6

00

600

500

Estimated Cost of Earthquake Obligations ($000)

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0.0

1,000.02,000.03,000.04,000.05,000.06,000.07,000.08,000.09,000.0

8,50

0

1,62

0

10 50

Estimated Cost of Weather Tightness Issues - As the Building Consent Authority ($ 000)


Nap

ier

Has

tings

Cen

tral

Haw

kes

Bay

Wai

roa0

50

100

150

200

250

300

350

314

290

213

131

Capital Value of An Average Residental Property ($ 000)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes.

..

Wai

roa0

500

1,000

1,500

2,000

2,500

3,000

1,7

53

1,9

34 2,4

50

2,4

90

Total Sum Payable For All Rates & Charges By An Average Residential Property - 2013/14 ($)

GST Inclusive

Nap

ier

Has

tings

Cent

ral H

awk.

..

Wai

roa0

500

1,000

1,500

2,000

2,500

3,000

3,500

3,20

0

1,65

8

2,53

8

1,18

7

Total Amount Received From Rates & Charges for Refuse Collections and Disposal - Including Recycling in 2013/2014 ($ 000)


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

100

200

300

400

500

600

13

7

68

55

4

30

2

Total Amount Received From Rates & Charges for Refuse Collections and Disposal (including Recycling) Per Urban Rateable Property

2013/14 ($)

Comparison - Operating Costs plus Renewals

Napier Hastings


Total/ Average

Water Supply Operating costs $2,724 $3,963 $1,751 $1,503 $9,941

Renewals $712 $350 $551 $406 $2,019$3,436 $4,313 $2,302 $1,909 $11,960

Connections (No) 25,500 24,222 3,926 1,850 55,498Cost per Connection $135 $178 $586 $1,031 $216

WastewaterOperating costs $3,281 $5,461 $1,937 $930 $11,609Renewals $2,076 $3,079 $609 $625 $6,389

$5,357 $8,540 $2,546 $1,555 $17,998Connections (No) 24,814 18,706 3,349 2,286 49,155Cost per Connection $216 $457 $760 $860 $366

StormwaterOperating costs $1,847 $2,193 $240 $240 $4,520Renewals $458 $20 $199 $677

$2,305 $2,213 $439 $240 $5,197Urban Properties (No) 23,413 24,444 4,582 3,920 56,359Cost per Urban Property $98 $91 $96 $61 $92

RoadingOperating costs $8,009 $13,983 $5,025 $6,744 $33,760Renewals $4,190 $10,813 $7,171 $3,747 $25,921

$12,198 $24,796 $12,196 $10,491 $59,681Rateable Properties (No) 24,962 30,652 7,660 6,776 69,850Cost per Rateable Property $492 $809 $1,592 $1,548 $854

Comparison - Operating Costs plus Depreciation


Napier Hastings


Total/ Average

Water Supply Operating costs $2,724 $3,963 $1,751 $1,503 $9,941

Depreciation $1,579 $1,731 $627 $584 $4,521$4,303 $5,694 $2,370 $2,087 $14,462

Connections (No) 25,500 24,222 3,926 1,850 55,498Cost per Connection $169 $235 $605 $1,128 $261

WastewaterOperating costs $3,281 $5,461 $1,937 $930 $11,609Depreciation $4,181 $5,596 $849 $789 $11,415

$7,462 $11,057 $2,786 $1,719 $23,024Connections (No) 24,814 18,706 3,349 2,286 49,155Cost per Connection $301 $590 $832 $752 $468

StormwaterOperating costs $1,847 $2,193 $240 $240 $4,520Depreciation $2,060 $2,544 $233 $234 $5,071

$3,907 $4,767 $473 $474 $9,591Urban Properties (No) 23,413 24,444 4,582 3,920 56,359Cost per Urban Property $167 $194 $103 $121 $170

RoadingOperating costs $8,008 $13,983 $5,025 $6,744 $33,760Depreciation $7,433 $13,604 $9,569 $3,017 $33,623

$15,441 $27,587 $14,594 $9,761 $67,383Rateable Properties (No) 24,762 30,652 7,660 6,776 69,850Cost per Rateable Property $623 $900 $1,905 $1,440 $965


Comparison - Capital Expenditure

Napier Hastings


Total/ Average

Water Supply $10.2 $27.0 $0.7 $1.7 $39.6

Connections (No) 25,500 24,222 3,926 1,850 55,498Cost per Connection $400 $1,115 $178 $919 $713

Wastewater $12 $13 $8 $13 $46

Connections (No) 24,814 18,706 3,349 2,286 468Cost per Connection $483 $695 $2,478 $5,512 $934

Stormwater$35 $23 $0 $1 $59

Urban Properties (No) 23,413 24,444 4,582 3,920 56,359Cost per Urban Property $1,495 $929 $44 $255 $1,045

Roading$66 $86 $6 $4 $161

Rateable Properties (No) 24,762 30,652 7,660 6,776 69,850Cost per Rateable Property $2,653 $2,802 $822 $516 $2,310


9.2. RISK MANAGEMENT – TOTAL DISTRICT

The Councils’ top five risks of any type.

AUTHORITY RISK


The potential for water quality in the region to decline without proactive management by HBRC

Potential adverse effects on economic growth caused by HBRC failure to balance environmental protection and adequate supply for irrigation in its water allocation regime

The potential for inappropriate land use to adversely impact on water quality in the region’s rivers and reduce the land’s productive capacity.

Local government reform could result in significantly reduced commitment to regional council functions.

If effective working relationships are not developed and maintained with Hawkes Bay Treaty of Waitangi settlement groups or with other iwi organisations this could potentially lead to fragmentation of governance of natural resources regionally

Napier Natural Hazards/Disasters – including an abnormal flood event, earthquake, tsunami etc.

In the case of abnormal flooding , Council’s Stormwater Asset Management Plan and works Program reflect this risk

Compliance/Litigation risk where not covered by insurance. Council has identified potential contingent liabilities in its annual report. It would however be unlikely that the consequences of litigation would be such that it would affect Council’s ability to deliver services.

Health and Safety – As common to most organisations. Council however has robust Health and Safety practices in place

Amalgamation of local Council’s and the potential adverse effect of this on services.

Hastings Loss of organisation knowledge critical to maintaining current service levels due to

loss of staff

Changes to Local Government Act, including a rate cap, introducing new compliance requirements which could result in adverse impact on reputation id not met

A change to NZTA funding policies reduces the money available to undertake transportation maintenance and renewal programmes resulting in a general deterioration on roading network.

Business interruption caused by some event (e.g. power failure, fire) that compromises our ability to deliver our services

Fluctuations in interest rate affect the Council’s ability to maintain financial capabilities and capacity.

Central Hawkes Bay

Changes to NZTA funding policies and road network classifications that reduces the money available to undertake roading maintenance and renewal programmes that may result in a general deterioration on roading network

Health and Safety legislation changes

Ruataniwha Water Storage Scheme not going ahead

Changes if Local Government Act. Including a rate cap, introduction new compliance requirements which could result in adverse impact on reputation if not met


Amalgamation of the five Hawkes Bay Councils

Wairoa Major industry closing (AFCO)

Prolonged extreme weather event

Severe earthquake

Extreme Volcanic ash event

Extreme East Coast tsunami

Note: Red highlighting denotes comments re matters caused by Central Government decisionmaking (including local government reorganisation)Blue highlighting denotes comments re: natural hazards.Green highlighting denotes comments re: funding issuesYellow highlighting denotes comments re: human resources matters


9.4 RESPONSES TO OTHER QUESTIONS

General – Total Districts

Ref Question Haw

kes

b

ay

Reg

ion

al c

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

11 Has the Council addressed its potential earthquake obligations relating to Council assets?

‘Yes’ 1 3 5

‘No’ 2 4

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al c

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

8 Does the Council have any weather tightness issues relating to Council buildings?

‘Yes’ 5

‘No’ 1 2 3 4

‘Don’t Know’

1 - Wairoa - $50,000

Ref Question Haw

kes

B

ay

Reg

ion

al c

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

Does the Council have any weather tightness issues in its capacity as the building consent agency?

‘Yes’ 3 4 5

‘No’ 2

‘Don’t Know’


General – Total Districts

Ref Question Haw

kes

B

ay

Reg

ion

al c

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

If the answer to the previous question was ‘yes’ what is the contingent liability ($ 000) 162 10 50

Ref Question Haw

kes

B

ay

Reg

ion

al c

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

19 Are there any identifiable extraordinary cost issues relating to refuse collection and disposal within the next 30 years?

‘Yes’ 2 3

‘No’ 4 5

‘Don’t Know’

1 - Napier:- $12.5m landfill development next 30 years – Napier share3 - Hastings - $22.0m landfill development next 30 years – Hastings share5 - Wairoa Landfill has the capacity in excess of 250,000 tonnes. Current residual waste values are less than 2000 tonnes per annum


SECTION 10

ROADS

59Section 10: Roads

10.1 ROADS – GENERAL INFORMATION

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

5,000

10,000

15,000

20,000

25,000

30,000

35,0002

4,7

62

30

,65

2

7,6

60

6,7

76

Rateable Properties (No.)N

apie

r

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

200400600800

1,0001,2001,4001,6001,800

36

3

1,6

35

1,2

65

87

5

Road Length - (Kms)

Sealed Unsealed

Note: Of the 807km of unsealed roads in the region 708km (or 88%) are in the Wairarapa districts.

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

200

400

600

800

1,000

1,200

1,400

32

7

1,2

02

77

9

26

6

Road Assets Replacement Value 2013/2014 ($ mil)

60Section 10: Roads

Nap

ier

Has

tin

gs

Cen

tral

H...

Wai

roa -

200

400

600

800

1,000

1,200 1

86

1,0

79

59

6

17

7

Road Assets Depreciated Replacement Value 2013/14 ($ mil)

Nap

ier

Has

tings

Cent

ral H

awke

...

Wai

roa

Tota

l -TL

As0%

20%

40%

60%

80%

100%

57%

90%

77%

66% 79

%

Road Assets Depreciated Replacement Value as a Percentage of their Replacement Value (%)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

20.0

40.0

60.0

80.0

100.0

120.0

32

.9

11

2.2

37

.8

35

.3

Forecasted Maintenance & Operating Costs 2012-22 Total ($ mil)

Note ¹: Some doubts about whether the figures from each Council include (or don’t include) management costs & overheads.

61Section 10: Roads

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

1,000

2,000

3,000

4,000

5,000

6,0001

,32

8

3,6

60 4,9

38

5,2

09

Forecasted Maintenance & Operating Costs 2012-22 Per 2013/14 Rateable Property ($)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes.

..

Wai

roa0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

43

13

1

88

39

Forecasted Renewals Costs 2012-2022 - Total ($ mil)

Nap

ier

Has

tings

Cent

ral H

awke

s...

Wai

roa0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

101.

0

143.

0

105.

0

27.5

Forecasted Depreciation Costs 2012-2022 Total ($ mil)

62Section 10: Roads

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa

Tota

l - T

LAs -

2,000 4,000 6,000 8,000

10,000 12,000 14,000 16,000

4,0

89

4,6

65

13,

676

4,0

71

5,3

92

1,7

20

4,2

85

11,

534

5,6

58

4,3

04

Forecasted Depreciation/Renewals Costs 2012-2022 - Per 2013/14 Rateable Property ($000)

Depreciation Renewals

Nap

ier

Has

tin

gs

Cen

tral

Haw

k...

Wai

roa0.0

10.020.030.040.050.060.070.080.090.0

100.0

65

.7

85

.9

6.3

3.5

Forecasted New Capital Costs 2012-2022 - Total ($ mil)

Hastings includes:- Whakatu Arterial Link Irongate Industrial Development Omahi Road Development Arataki Development Lyndhurst Development Medium Density

Napier includes:- $41m deferred capital roading work - largely Taradale $12.4m worth of transportation and environmental projects in the CBD

63Section 10: Roads

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0

500

1,000

1,500

2,000

2,500

3,000

2,65

3

2,80

2

822

512

Forecasted New Capital Costs 2012-2022 - Per 2013/14 Rateable Property ($)

Renewals Depreciation$000 $000

Napier 4660 7072Hastings 8921 13163Central Hawkes

Bay 6885 8183Wairoa 2223 2947

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

0.2

0.4

0.6

0.8

1.0

1.2

0.0

1.0

0.0

0.6

Estimated Value of Deferred Maintenance and Deferred Renewals 2013/14 ($ 000)

64Section 10: Roads

Napi

er

Hasti

ngs

Cent

ral H

awke

s Bay

Wair

oa

02000400060008000

100001200014000

Actual Depreciation Provision v Actual Renewals Expenditure 2013/14 - ($ 000)

Renewals Depreciation

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

0.51.01.52.02.53.03.54.04.55.0

0.0

1.6

0.0

4.5

Reserve Funds Held for Roads' Renewals ($ mil)

65Section 10: Roads

10.2 DEPRECIATION v RENEWALS - ROADS

Depreciation Renewals$000 $000

2013 7127 41012014 5853 41902015 8170 41152016 8957 41632017 9721 42122018 10499 42612019 11331 43122020 12254 43622021 13190 44132022 14147 4465Total 101249 42594


2013 13210 85492014 13163 89212015 12443 111822016 13431 131722017 13553 135872018 14529 141842019 14570 146832020 15604 152272021 15651 159862022 16865 15986Total 143019 131348


2013 8888 82592014 8205 68852015 9566 74912016 9925 86172017 10271 86342018 10814 86532019 11017 94622020 11490 96662021 12023 96912022 12563 10999Total 104762 88357

Depreciation Renewals66

Section 10: Roads

2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

1000

2000

3000

4000

5000

6000

Wairoa


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

2000

4000

6000

8000

10000

12000

14000

Central Hawkes Bay


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

2000

4000

6000

8000

10000

12000

14000

16000

18000

Hastings


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Napier


$000 $0002013 2859 55902014 2947 39602015 2482 32712016 2482 34462017 2482 32792018 2728 34512019 2824 35772020 2720 37762021 3022 39242022 3040 4065Total 27586 38339


Napier 101249 42594Hastings 143019 131348

Central Hawkes

Bay 104762 88357Wairoa 27501 39339

Total 376531 300368

Napier 42%Hastings 92%Central Hawkes Bay 84%Wairoa 139%

67Section 10: Roads

2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

1000

2000

3000

4000

5000

6000

Wairoa


Napier Hastings Central Hawkes Bay Wairoa -

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Total - Territorials


Napier Hastings Central Hawkes Bay Wairoa0%

20%

40%

60%

80%

100%

120%

140%

160%

42%

92%84%

139%

Renewals Expenditure As A Proportion of the Depreciation Provision -2012-2022 (%)

10.3 ASSET CONFIDENCE – ROADS

ASSET CONFIDENCE - ROADS(Assessed Reliability of Data Completeness and Accuracy)

AUTHORITY Data Attribute Very Uncertain Uncertain Reliable Highly Reliable

Napier Asset DescriptionAsset QuantityAsset AgeConditionPerformance

Hastings Asset DescriptionAsset QuantityAsset AgeConditionPerformance

Central Hawkes Bay Asset DescriptionAsset QuantityAsset AgeConditionPerformance

Wairoa Asset DescriptionAsset QuantityAsset AgeConditionPerformance

Confidence Grade Description

Highly reliable

Data based on sound records, procedure, investigations and analysis, documented properly and recognised as the best method of assessment. Dataset is complete and estimated to be accurate + 2%

ReliableData based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example some data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate + 10%

Uncertain Data based on sound records, procedures, investigations and analysis which is incomplete or unsupported, or extrapolated from a limited sample for which grade A or B data are available. Dataset is substantially complete but up to 50% is extrapolated data and accuracy estimated + 25%

Very uncertain

Data based on unconfirmed verbal reports and/or cursory inspection and analysis. Dataset may not be fully complete and most data is estimated or extrapolated. Accuracy + 40%

68Section 10: Roads

10.4 RISK MANAGEMENT - ROADS

The Councils’ top five risks relating to the roads activity.

AUTHORITY RISK

Napier Structural failure of bridges and other structure

Inadequate funding to maintain the network in a cost effective manner

Lack of internal resources/retention of knowledge

Poor quality/below standard workmanship

Failing to meet legislative requirements

Hastings NZTA underfunding of network needs

Higher community expectations leading to escalating budget requirements

Future increase in renewals of roads (resulting from historic seal extensions) and bridges

Attracting and retaining suitably qualified staff

Political, legislative, economic and technological changes leading to uncertainty

Central Hawkes Bay

Lack of Human Resources

Shrinking contracting market

Government Funding

Price of bitumen

Catastrophic event

Wairoa Insufficient knowledge of communities desires resulting in inappropriate targets

Lack of technical expertise to provide planning/design

Insufficient resources to ‘hook in to’ funding mechanisms (time, cost, expertise etc.)

Inadequate maintenance and renewals fails to address deterioration of infrastructure

Insufficient knowledge of legislation (outside of consent conditions)

Note: Red highlighting denotes comments re: renewals.Blue highlighting denotes comments re: natural hazards.Green highlighting denotes comments re: NZTA subsidies/Funding issuesYellow highlighting denotes comments re human resources matters/contractors performance issues

69Section 10: Roads

10.5 FINANCIAL/FUNDING CHALLENGES - ROADS

AUTHORITY FINANCIAL/FUNDING CHALLENGES

Napier NZTA subsidy levels may vary in the future, which could lead to a reduction in the current

level of service “Assuming an appropriate renewal reserve is built up as per NCC’s current methodology,

sufficient funding should be available to invest in the renewal of roading assets well into the future (i.e. over the lifecycle of NCC’s roading asset base” (Waugh – Page 67)

Hastings NZTA funding constraints resulting in sub optimal renewal programs and potential for higher whole of life costs

Council’s ability to carry out transport activities without NZTA subsidy

Uncertainty about NZTA’s funding priorities

Major investments such as seal extensions in mid 1900s and bridges in early-mid 1900s leading to higher pavement and bridge renewals and strengthening, To get a better understanding of this we have completed 60yr performance/deterioration analysis of the major assets

Upgrade of sub-standard streetlight systems to LED

High Productivity Motor Vehicle (HPMV) impacts

Increasing and maximising capacity in key transport corridors (e.g. Havelock Road/Pakowhai Road) to meet multi-modal future demands

Central Hawkes Bay

If the Ruataniwha Storage Scheme proceeds then there will be an increased demand on the network spread throughout the western portions of the district rather than evenly. There may be also an increased usage in the urban area.

Ernslaw has a large forest located in the Tararua District which will begin to be harvested at 200,000 tonnes per year for the next 15 years at least. This will involve a substantial increase in the amount of logging trucks using at least 3 of the district’s roads.

Wairoa The bridge stock on average is in the second half of its service life requiring the

commencement of a renewals programme over the next 30 years

Note: Red highlighting denotes comments re: renewalsBlue highlighting denotes comments re: natural hazards.Green highlighting denotes comments re: NZTA subsidies/Funding issuesYellow highlighting denotes road use issues

70Section 10: Roads

10.6 SERVICE DELIVERY - ROADS

AUTHORITY ‘In-house’ ‘Out-sourced’

Partly ‘In-house and partly ‘Out-

sourced’

As a Council Controlled

OrganisationOther

Napier X

Hastings X

Central Hawkes Bay X

Wairoa

X

71Section 10: Roads

10.7 RESPONSES TO OTHER QUESTIONS

Roads

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

2 Climate Change: Does your Council Have A Climate Change Management Policy?

‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

2 - Napier- Roading has assessed the impacts of climate change – NWA 2008 report3 - Hastings - No specific policy. But climate change impacts are comprehensively managed and taken into account in growth planning and for projects proposed in the long-term

plan.

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

6 Future Demand: Are there any identifiable extraordinary ‘future demand’ issues or changes within the next 30 years relating to this activity?

‘Yes’ 4 5

‘No’ 2 3

‘Don’t Know’

2 - Napier - HPUDS growth study has not identified any significant growth issues over the next 30 years.4 - Central Hawkes Bay - If the Ruataniwha Storage Scheme proceeds then there will be an increased demand on the network spread throughout the western portions of the

district rather than evenly. There may be also an increased usage in the urban areas. Ernslaw has a large forest located in the Tararua District which will begin to be harvested at 200,000 tonnes per year for the next 15 years at least. This will involve a substantial increase in the amount of logging trucks using at least 3 of the district’s roads.

5 - Wairoa - Increasing logging to a sustainable peak in 2025 with increasing HPHV and VDAM

72Section 10: Roads

Roads

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

10 Deferred Maintenance & Renewals: Is there any deferred maintenance and/or deferred renewals (backlog) relating to this activity?

‘Yes’ 3 5

‘No’ 2 4

‘Don’t Know’

4 - Hastings - $1m resulting from NZTA funding shortfall5 - Wairoa $200,000 deferred reseals and $350,000 deferred rehabilitations

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

14 Depreciation: Are all of the infrastructure assets relating to this activity subject to the assessment of depreciation each year?

‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’

73Section 10: Roads

Roads

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

16 Is all depreciation relating to this activity fully funded each year? (Note:- Excludes formation which as a matter of industry practice isn’t depreciated)

‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

2 & 4 - Napier & Central Hawkes Bay –Only partially funded because subsidy received from NZTA 3 - Hastings funds the transport network based on the longer term renewal need as identified in the Asset Management Plan and agreed as a part of the long-tern Plan process 5 - Wairoa – Culverts < 600mm diameter considered to be maintained in perpetuity

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

18 Are depreciation funds used solely for funding renewals?

‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’

74Section 10: Roads

Roads

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

23 Maintenance & Operations: Can you foresee any significant extraordinary maintenance and operations costs relating to this activity in the next 30 years?

‘Yes’ 5

‘No’ 2 3 4

‘Don’t Know’

6 - Wairoa – Increased logging to a sustainable peak in 2025 while increasing HPMV and VDAM impacting road pavements and bridge structures

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

29 Renewals: Can you foresee any significant extraordinary renewals cost impacts relating to this activity in the next 30 years?

‘Yes’ 5

‘No’ 2 3 4

‘Don’t Know’

5 - Wairoa – See the answer to maintenance and operations above

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

36 New Capital: Can you foresee any significant extraordinary new capital costs in the next 30 years?

‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

75Section 10: Roads

Roads

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

40 Development Contributions: Does the Council charge development contributions or financial contributions for this activity?

‘Yes’ 2 3 4

‘No’ 5

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa

42 Other Matters: Are you aware of any other significant matters that may arise in the next 30 years relating to this activity that hasn’t been addressed by the above questions?

‘Yes’ 3

‘No’ 2 4 5

‘Don’t Know’

3 - Hastings - NZTA funding cuts and uncertainty about the NZTA’s funding priorities

Ref Question Haw

kes

B

ay

Reg

ion

al C

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

45 Has the Asset Management Plan for this activity been independently reviewed?

‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’

76Section 10: Roads

Roads

Ref Question Haw

kes

B

ay

Reg

ion

al C

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

47 Does your Council yet have an adopted 30 year infrastructure strategy for this activity?

‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

77Section 10: Roads

SECTION 11

WATER SUPPLY

78Section 11: Water Supply

11.1 WATER SUPPLY – GENERAL INFORMATION

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa

Tota

l - T

LAs0

10,000

20,000

30,000

40,000

50,000

60,0002

5,5

00

24

,22

2

3,9

26

1,8

50

55

,49

8

Water Supply Connections (No.)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

100,000

200,000

300,000

400,000

500,000

600,000

47

1,0

00

48

4,9

00

14

5,2

40

10

3,0

00

Water Supply Pipes - Length (Ms)


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa -

20.0 40.0

60.0 80.0

100.0 120.0

140.0 160.0

12

9.0

14

5.0

56

.8

33

.0

Water Supply Assets' Replacement Value 2013/14 ($Mil)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

20

40

60

80

100

81 8

9

29

20

Water Supply Assets' Depreciated Replacement Value 2013/14 ($ mil)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa

Tota

l-TL

As0%

20%

40%

60%

80%

100%

63% 61%52%

59% 60%

Water Supply Assets' Depreciated Replacement Value as a Percentage of their Replacement Value


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

5.0

10.0

15.0

20.0

25.0

30.01

1.5

24

.9

16

.7

9.8

Forecasted Maintenance & Operating Costs 2012-2022 - Total ($ mil)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

1,000

2,000

3,000

4,000

5,000

6,000

45

1

1,0

29

4,2

59 5,2

81

Forecasted Maintenance & Operating Costs 2012-22 - Per 2013/14 Connection ($)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

123456789

7.3 7

.8

6.1

3.5

Forecasted Renewals Costs 2012- 2022 - Total ($ mil)


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

5

10

15

20

251

6.8

21

.7

7.0 7.0

Forecasted Renewals Costs 2012- 2022 - Total ($ mil)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

200400600800

1,0001,2001,4001,6001,8002,000

28

6

32

2

1,5

53 1,8

95

Forecasted Renewals Costs 2012-2022 - Per 2013/14 Connection ($)


Napier 303 1467Hastings 857 1698Central Hawkes Bay

544 602

Wairoa 251 641


Napi

er

Hasti

ngs

Cent

ral H

awke

s Bay

Wair

oa

0200400600800

1,0001,2001,4001,6001,800

Actual Depreciation Provision v Actual Renewals Expenditure 2013/14 - ($000)


Nap

ier

Has

tings

Cent

ral H

awke

s...

Wai

roa

Tota

l-TLA

s0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,00065

8 894

1,77

3

3,77

9

944

286

320

1555 18

95

445

Forecasted Renewals Costs 2012-2022 - Per 2013/14 Connection ($)

Depreciations Renewals

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes.

..

Wai

roa0

5

10

15

20

25

30

10

.2

27

.0

0.7

1.7



Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

200

400

600

800

1,000

1,200

42

4

1,1

17

17

8

90

2

Forecasted New Capital Costs 2012-2022 - Per 2013/14 Connection ($ 000)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes.

..

Wai

roa0.0

0.2

0.4

0.6

0.8

1.0

0 0 0 0

Estimated Value of Deferred Maintenance and Deferred Renewals 2013/14 ($000)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

1.0

2.0

3.0

4.0

5.0

6.0

2.3

0.2

0.0

4.8

Reserve Funds Held for Water Supply Renewals ($ mil)



5%

10%

15%

20%

25%

30%

35%

40%

45%

39%36%

20%

39%

7%

0%

20%

0%

Percentage of Water Supply Pipes in Asbestos Cement Or in Poor or Very Poor Condition

Asbestos Cement Poor-Very Poor Condition


11.2 DEPRECIATION v RENEWALS – WATER SUPPLY

Depreciation Renewals$ 000 $ 000

2013 1419 3242014 1428 3032015 1575 7422016 1591 7652017 1577 7912018 1728 8162019 1745 8462020 1763 8762021 1977 9042022 1985 933Total 16788 7300


2013 1626 9902014 1696 10142015 1787 10722016 2010 5592017 2096 4812018 2294 5702019 2308 4012020 2506 6202021 2539 8162022 2810 1248Total 21672 7771


2013 504 5142014 555 5342015 625 5512016 649 5762017 661 5912018 731 6132019 748 6382020 760 6652021 857 6962022 871 728Total 6961 6106



2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

100

200

300

400

500

600

700

800

900

Wairoa


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

100

200

300

400

500

600

700

800

900

1000

Central Hawkes Bay


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

500

1000

1500

2000

2500

3000

Hastings


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

500

1000

1500

2000

2500

Napier


$ 000 $ 0002013 626 7952014 641 2512015 649 3372016 649 3942017 649 4222018 723 3502019 723 1922020 723 1812021 804 2232022 804 361Total 6991 3506

Depreciation RenewalsNapier 16,788 7,300Hastings 21,672 7,771Central Hawkes Bay 6,960 6,106Wairoa 6,991 3,506Total 52411 24683



2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

100

200

300

400

500

600

700

800

900

Wairoa


Napier Hastings Central Hawkes Bay Wairoa -

5,000

10,000

15,000

20,000

25,000

Total - Territorial Local Authorities



10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

43%36%

88%

50%

Renewals Expenditure As A Proportion of the Depreciation Provision - 2012-2022 (%)

11.3 ASSET CONFIDENCE – WATER SUPPLY

ASSET CONFIDENCE – WATER SUPPLY(Assessed Reliability of Data Completeness and Accuracy)

AUTHORITY Data Attribute Very Uncertain Uncertain Reliable Highly Reliable






Highly reliable




Very uncertain



11.4 RISK MANAGEMENT – WATER SUPPLY

The Councils’ top five risks relating to the water supply activity.

AUTHORITY RISK

Napier Contamination in the water reticulation

Power Failure

Critical Main Failure

Natural Hazards

Loss of Aquifier

Hastings Contamination outbreak – non chlorinated supply

Power Supply loss – heavy reliance on pumping\

39% brittle assets –resilience

Growth over and above forecasted in the regional strategy

Central Hawkes Bay

Capacity if the Ruataniwha Water Storage Scheme proceeds

Contractor not being available or not fulfilling his duties

Funding not meeting needs of network

Contractor not passing on Info about our networks

Lack of skill base to meet the needs of the systems

Wairoa Failure to meet the Water Supply standard requirements

Insufficient funding available to ensure that activity meets standards

Insufficient knowledge of what services are currently being delivered to that community

Insufficient funding available to enforce compliance

Inadequate planning for the implementation of the annual program

Note: Red highlighting denotes comments re: renewals.Blue highlighting denotes comments re: natural hazards.Green highlighting denotes comments re: funding issuesYellow highlighting denotes comments re: planning/human resources/ contractors performance issues


11.5 FINANCIAL/FUNDING CHALLENGES – WATER SUPPLY


Napier All major projects have been funded in the 10 year period. No significant renewal or growth issues during this period

“NCC is predicting to have a water pipe renewal peak during the period 2040-2060. This is absolutely typical of New Zealand cities and represents the end of asset life of the post WW2 development of New Zealand cities” (Waugh – Page 56)

Hastings Starting around the year 2036 a number of different pipe materials are all falling due at the same time. i.e. good quality Cast Iron from the early 1900’s and moderate quality Fibro Cement (AC) piped are reaching the end of their life at the same time. This raises the required level of renewals investments between the period 2030 and 2050.

HDC continues to analyse and enhance knowledge on AC watermain materials in advance of age based renewals predictions. Pressure reduction strategies are also helping to improve pipe longevity

Cast Iron mains are predicted to fail within the same period as the AC mains based on age. Conditions assessments on a small proportion on CI pipes indicate that they are in very good condition but joint integrity is a concern.

Napier City Council have recently added an additional 10 years to their existing CI mains based on some condition assessments and HDCs assets are similar in age and condition. Further Analysis on condition and performance will assist in confirming whether CI watermain pipes can be extended beyond currently adopted guidelines. However in context of the whole network this gap in knowledge is not currently significant.

Council’s Heretaunga Plains Urban Development Strategy (HPUDS) leads the planning for the next 30 years of growth. Growth is monitored against this strategy.

Central Hawkes Bay

Without a dam there will be limited growth. With the dam there is the potential for reasonable Industrial growth. An aging infrastructure. Limited rating based to fund to major projects etc. Work to meet the drinking water standards

Wairoa The requirement for small rural water supplies to have to comply with new legislation.

Note: Red highlighting denotes comments re: renewals.Blue highlighting denotes comments re: natural hazards.Green highlighting denotes comments re: funding issues

Yellow highlighting denotes comments re: planning/human resources/ contractors performance issues


11.6 SERVICE DELIVERY – WATER SUPPLY

AUTHORITY ‘In-house’ ‘Out-sourced’Partly ‘In-house and partly ‘Out-

sourced’


OrganisationOther

Napier X

Hastings

Reticulation maintenance and capital outsourced. Operators and maintenance of pumpstations of treatment plants managed in house

Central Hawkes Bay X

Wairoa X


11.7 RESPONSES TO OTHER QUESTIONSWater Supply

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

2 - Napier – Water supply has been assessed against the Climate Change – NIWA 2008 report4 - Central Hawkes Bay - No specific policy as such but climate change impacts are comprehensively considered via growth planning etc.

Ref Question Haw

kes

B

ay

Reg

ion

al C

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 4 5

‘No’ 2 3

‘Don’t Know’

4 - Central Hawkes Bay-The impact of the Ruataniwha Water Storage Scheme on Council infrastructure should it go ahead. Council is currently working on two potential development scenarios. One with the scheme and the other without.

5 - Wairoa – A new water supply for Mahia Beach (Apparently not reflected in the capital programme for 2012/22 – see the answer to question 34)


Water Supply

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’

Water Supply


Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

16 Is all depreciation relating to this activity fully funded each year?

‘Yes’ 2 3 5

‘No’ 4

‘Don’t Know’

4 - Central Hawkes Bay - The amount funded is limited by the rate funding available

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’ 2 4 5

‘No’ 3

‘Don’t Know’

3 - Hastings – Renewals loan funded and depreciation funds used to pay interest and loan repayments in relation to water supply debt.


Water Supply

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’ 4

‘No’ 2 3 5

‘Don’t Know’

4 - Central Hawkes Bay - Treatment upgrades to meet the New Zealand Drinking Water standards and a second pumping supply for Waipukurau Water


Water Supply

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’ 2 4 5

‘No’ 3

‘Don’t Know’

2 - Napier – New reservoir, land and trunk mains -2026/274 - Central Hawkes Bay Council is currently in the planning stage to resolve the Ruataniwha ‘dam no dam’ issue referred to earlier5 - Wairoa – new water supply for Mahia Beach

Ref Question Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’ 2 3 4

‘No’ 5

‘Don’t Know’


Water Supply

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

42 Other Matters: Are you aware of any other significant matters that may arise in the next 30 years relating to this activity that hasn’t been addressed by the above questions?‘Yes’ 4

‘No’ 3 5

‘Don’t Know’

2 - Napier – Resources consent renewal which depending on any changes to legislation or local impacts may result in a change to the consent conditions.4 - Central Hawkes Bay - Council is currently working on a 30 year Infrastructure Plan that is expected to highlight additional issues

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay


‘Yes’ 3 4 5

‘No’

‘Don’t Know’


SECTION 12

WASTEWATER (SEWERAGE)

98Section 12: Wastewater (Sewerage)

12.1WASTEWATER (SEWERAGE) – GENERAL INFORMATION

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa

Tota

l - T

LAs0

10,000

20,000

30,000

40,000

50,000

60,000

24

,81

4

18

,70

6

3,3

49

2,2

86

49

,15

5

Wastewater Connections (No.)

Hutt - Number of connections not available. Number of water supply connections used.

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

50,000100,000150,000200,000250,000300,000350,000400,000450,000

38

0,0

00

396

,70

0

82

,73

3

50

,00

0

Wastewater Pipes - Length (Ms)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

50

100

150

200

250

300

350

400

24

2

35

8

80

15

Wastewater Assets' Replacement Value 2013/14 ($Mil)


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

50

100

150

200

250

12

7

19

2

45

5

Wastewater Depreciated Replacement Value 2013/14 ($ mil)

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa

Tota

l - T

LAs0%

20%

40%

60%

80%

100%

53% 54% 56%

35%

53%

Wastewater Depreciated Replacement Value as a Percentage of their Replacement Value (%)

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

11.0

29.4

13.1

9.1

Forecasted Maintenance & Operating Costs 2012-2022 - Total ($Mil)


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

5001,0001,5002,0002,5003,0003,5004,0004,500

44

4

1,5

74

3,9

09

3,9

83

Forecasted Maintenance & Operating Costs 2012-2022 - Per 2013/14 Connection ($)

Nap

ier

Has

tings

Cen

tral

Haw

kes

Bay

Wai

roa0.0

5.0

10.0

15.0

20.0

25.0

30.0

24.

0

28.4

6.7

1.1


Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0

10203040506070

48

61

8.5

8.5

Forecasted Depreciation Costs 2012-2022 Total ($ mil)


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa

Tota

l - T

LAs -

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

1,9

37

3,2

63

2,5

66

3,6

55

2,5

65

96

5

1,5

20

2,0

14

46

8

1,2

24

Forecasted Depreciation/Renewals Costs 2012-2022 - Per 2013/14 Connection ($)



Napier 671 3559Hastings 2638 5539Central Hawkes Bay 573 852Wairoa 68 383

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

12

.0 13

.0

8.3

12

.6


Note: Wairoa – New wastewater scheme at Mahia Beach


Napie

r

Hasti

ngs

Centr

al Ha

wkes

Bay Wair

oa

0

1,000

2,000

3,000

4,000

5,000

6,000



Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

1,000

2,000

3,000

4,000

5,000

6,000

48

3

69

4

2,4

68

5,5

11

Forecasted New Capital Costs 2012-2022 - Per 2013/14 Connection ($)

Note: Wairoa – New wastewater scheme at Mahia Beach

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0.0

1.02.03.04.05.06.07.08.0

1.1

7.3

0.0

0.0

Estimated Value of Deferred Maintenance and Deferred Renewals 2013/14 ($ mil)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

1.02.03.04.05.06.07.08.09.0

10.0

8.9

0.0

0.0

3.8

Reserve Funds Held for Wastewater Renewals ($ mil)



5%

10%

15%

20%

25%

30%

10%8%

10%

20%

8%11%

27%

0%




12.2DEPRECIATION v RENEWALS – WASTEWATER (SEWERAGE)


2013 3558 16842014 3610 20852015 4591 21642016 4657 21352017 4578 24852018 5100 27902019 5157 25392020 5200 25622021 5777 26492022 5842 2868Total 48080 23961


2013 5489 10362014 5539 26372015 5657 14292016 5927 34512017 6004 30922018 6262 37322019 6280 29682020 6535 34742021 6542 27522022 6812 3858Total 61047 28431


2013 581 5682014 641 5902015 719 6102016 816 6312017 830 6542018 919 6782019 947 7062020 971 7362021 1078 7702022 1094 805Total 8596 6748


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

200

400

600

800

1000

1200

Central Hawkes Bay


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

1000

2000

3000

4000

5000

6000

7000

8000

Hastings


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

1000

2000

3000

4000

5000

6000

7000

Napier



2013 381 542014 446 682015 854 1772016 854 1802017 854 2602018 951 602019 951 622020 951 642021 1057 672022 1057 79Total 8356 1071

Depreciation RenewalsNapier 48080 23961Hastings 61047 28431Central Hawkes Bay 8596 6748Wairoa 8347 1071Total 126079 60211



2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

200

400

600

800

1000

1200

Wairoa


Napier Hastings Central Hawkes Bay Wairoa0

10000

20000

30000

40000

50000

60000

70000

Total Territorial Local Authorities



10%

20%

30%

40%

50%

60%

70%

80%

90%

50% 47%

78%

13%

Renewal Expenditure As A Proportion of the Depreciation Provision - 2012-2022 (%)

12.3ASSET CONFIDENCE – WASTEWATER (SEWERAGE)

ASSET CONFIDENCE - WASTEWATER(Assessed Reliability of Data Completeness and Accuracy)

AUTHORITY Data Attribute Very Uncertain Uncertain Reliable Highly

Reliable






Highly reliable




Very uncertain



12.4RISK MANAGEMENT – WASTEWATER (SEWERAGE)

The Councils’ top five risks relating to the wastewater activity.

AUTHORITY RISK

Napier Natural Hazards

Power failure (long term)

Awatoto marine outfall failure

Outfall pump station failure

Resource Consent compliance

Hastings Outfall diffuser pipe at end of life (now being replaced in 15/16)

Trunk sewer replacements – (mitigation programmed now and next 10 years)

Havelock North trunk sewer capacity upgrade

AC mains

Inflow and infiltration

Central Hawkes Bay






Wairoa Insufficient enforcement of third parties in relation to inflow

Inadequate maintenance and renewals fails to address deterioration of infrastructure

Insufficient knowledge of legislation (outside of consent conditions)

Absence of, or inaccurate, asset condition information resulting in inappropriate renewals

Absence of or inaccurate asset valuation information resulting in inappropriate depreciation provision




12.5FINANCIAL/FUNDING CHALLENGES – WASTEWATER (SEWERAGE)


Napier All major projects have been funded in the 10 year period. No significant renewal or growth issues during this period

“NCC is predicted to have a wastewater pipe renewal peak during the period 2030-2060. This is absolutely typical of New Zealand cities and represents the end of asset life of the post WW2 development of New Zealand cities”. (Waugh – Page 41)

Replacement of the Awatoto Marine Outfall ($9.2m allocated 2014/15)

Hastings There are no immediate major financial challenges for the wastewater activity. There are some major projects to be implemented in the next 10 years (trunk sewer renewals, outfall diffuser renewal, Napier Rd Trunk Main Duplication which is included in the LTP.

Further out (30+) the renewal of the outlet pipeline and potential consenting environment requirements will be worked through. Planning for this is allowed for in the LTP

Central Hawkes Bay

Without a dam there will be limited growth With the dam there is the potential for reasonable industrial growth. An aging infrastructure Limited rating base to fund major projects etc.

Wairoa Inflow and infiltration mitigation Renewing resource consent 2019




12.6SERVICE DELIVERY – WASTEWATER (SEWERAGE)

AUTHORITY ‘In-house’ ‘Out-sourced’ Partly ‘In-house and partly ‘Out-sourced’


OrganisationOther

Napier X

Hastings X1

Central Hawkes Bay

X

Wairoa X

1 : Hastings Maintenance – outsourced, Project Delivery – Alliance, Asset management – In house


12.7RESPONSES TO OTHER QUESTIONS Wastewater (Sewerage)

Ref Question Haw

kes

B

ay

Reg

ion

al C

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’

3 - Hastings - No specific policy – However climate change impacts comprehensively addressed via growth planning and long-term plan projects

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 4

‘No’ 3 5

‘Don’t Know’

2 - Napier – (Severe corrosion of the Awatoto Marine Outfall replacement necessary. Provisionally $9.2m provided and additional funding requirements will be determined after the detailed costs have been prepared (2014/15 Annual Plan page 93)

4 - Central Hawkes Bay - The impact of the proposed Ruataniwha Water Storage Scheme on Council Infrastructure - should it go ahead.


Wastewater (Sewerage)

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 3

‘No’ 4 5

‘Don’t Know’

2 - Napier – $1.14m relating to the Riverbend Road gravity trunk main4 - Hastings - $7.3m of sewer assessed at the end of their economic lives. Work underway

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 3 5

‘No’ 4

‘Don’t Know’

5 - Central Hawkes Bay - The amount funded is limited by the rate funding available



Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 4 5

‘No’ 3

‘Don’t Know’

3 - Hastings – Renewals loan funded and depreciation funds used to pay interest and capital on wastewater debt

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’

‘No’ 2 3 4 5

‘Don’t Know’



Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 4 5

‘No’ 3

‘Don’t Know’

2 - Napier – Sewerage main renewal (See the answer to question 6)4 - Central Hawkes Bay - New main sewage pumping station, major gravity main and several small networks pond upgrades5 - Wairoa – Infiltration and inflow mitigation. Reconsenting modification

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 4 5

‘No’ 2 3

‘Don’t Know’

4 - Central Hawkes Bay - Council is currently in the planning stage to resolve the Ruataniwha ‘dam no dam’ issue referred to earlier.5 - Wairoa – $500,000 upgrade of the Opoutama sewerage scheme

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 3 4


Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa

‘No’ 5

‘Don’t Know’


Ref Question Haw

kes

B

ay

Reg

ion

al C

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2

‘No’ 3 4 5

‘Don’t Know’

2 - Napier – Resource consent renewal depending on any changes and legislation or local inspection may result in a change to the consent conditions

Ref Question Haw

kes

B

ay

Reg

ion

al C

oun

cil

Nap

ier

Has

tin

gs

Cen

tral

H

awk

es

Bay

Wai

roa


‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’


SECTION 13

STORMWATER & FLOOD CONTROL

116Section 13: Stormwater and Flood Control

13.1STORMWATER & FLOOD CONTROL – GENERAL INFORMATION

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa

Tota

l0

10,000

20,000

30,000

40,000

50,000

60,000

70,00023

,413

24,4

44

7,66

0

3,92

0

59,4

37

Urban Rateable Properties (No.)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

22

6,0

00 3

29

,70

0

39

,34

4

39

,25

1

Stormwater Pipes - Length (Ms)

The Regional Council’s assets comprise Stopbanks (km) 235 Deflection banks (No) 302 Drains (Km) 715 Other structures (floodgates,

weirs, control gates etc.) (No) 195 Edge protection planting (km) 413 Bank Protection ,

rope & rail, akmons(No) 6,390 Flood detention dams(No) 12 Pump stations (No) 21


Reg

ion

al C

ou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

50

100

150

200

250

300

16

2

16

4

26

2

24

18

Stormwater/Flood Control Assets Replacement Value 2013/14 ($Mil)

Reg

ion

al C

ou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

20406080

100120140160180

14

7

10

4

16

1

15

6

Stormwater/Flood Control Assets Depreciated Replacement Value 2013/14 ($Mil)

Reg

ion

al C

ou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa

Toal

- T

LAs0%

20%

40%

60%

80%

100% 90%

64% 61% 65%

33%

61%

Stormwater Assets Depreciated Replacement Value as a Percentage of their Replacement Value (%)


Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0.0

1.0

2.03.0

4.05.06.0

7.08.0

7.3

6.2

2.8

1.0

Forecasted Maintenance & Operating Costs 2012-2022 - Total ($Mil)

Note: Regional Council – Flood Control - $57.5m

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

100200300400500600700

31

0

25

3

60

1

24

9

Forecasted Maintenance & Operating Costs 2012-2022 - Per 2013/14 Urban Rateable Property ($)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0.0

2.0

4.0

6.0

8.0

10.0

12.0

10

.0

0.0

2.0

1.0


Note: - Hastings – No funding provision for renewals over the 10 year period


Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0

510152025303540

23

34

2.5 2

Forecasted Depreciation Costs 2012-2022 - Total ($ mil)

Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa

Tota

l - T

LAs0

200400600800

1,0001,2001,4001,600

978

1,38

6

318 55

0

1,03

2

435

0

287

220

223

Forecasted Depreciation/Renewals Costs 2012-2022 - Per 2013/14 Rateable Property ($)


Note: Hastings – No funding provisions for renewals over the 1- year period


Hawkes Bay Regional Council 170 517Napier 74 1907Hastings 9 2510Central Hawkes Bay 192 192Wairoa 3 253


Napie

r

Hasti

ngs

Centr

al Ha

wkes.

..

Wair

oa

0

500

1,000

1,500

2,000

2,500

3,000

170 74 9 3



Nap

ier

Has

tings

Cent

ral H

awke

s Ba

y

Wai

roa0.0

5.0

10.0

15.020.0

25.0

30.0

35.0

40.0

35.0

22.7

0.2

1.0


Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

200400600800

1,0001,2001,4001,600

1,4

93

92

8

49 2

80

Forecasted New Capital Costs 2012-2022 - Per 2013/14 Urban Rateable Property ($)

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

102030405060708090

100

0 0

95

0

Estimated Value of Deferred Maintenance and Deferred Renewals 2013/14 ($000)

Note: Regional Council –‘Don’t Know’


Reg

ion

al C

ou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

Bay

Wai

roa0

0.5

1

1.5

2

2.5

3

3.5

3.2

3.2

0.0

0.0

1.5

Reserve Funds Held for Stormwater Renewals ($ mil)


2%

4%

6%

8%

10%

12%

1% 1%

4%

10%

2%

0%

10%

0%




13.2DEPRECIATION v RENEWALS – STORMWATER (FLOOD CONTROL)


2013 537 3792014 517 1702015 548 1912016 549 2342017 597 2962018 597 3062019 597 5642020 650 8352021 650 8892022 650 493Total 5890 4357

Note: Hawkes Bay Regional Council does not separately identify renewals for floodplain management


2013 1855 32014 1907 742015 2120 4772016 2171 4932017 2133 9632018 2394 5282019 2417 5442020 2433 18922021 2711 24932022 2756 2719Total 22897 10186


2013 2471 02014 2510 92015 2919 02016 3236 02017 3272 02018 3593 02019 3616 02020 3951 02021 3973 02022 7347 0Total 33888 9



2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

50

100

150

200

250

300

350

Central Hawkes Bay


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Hastings


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

500

1000

1500

2000

2500

3000

Napier


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

100

200

300

400

500

600

700

800

900

1000Hawkes Bay Regional Council

$ 000 $ 0002013 189 1852014 192 1922015 218 1992016 224 2052017 228 2132018 256 2212019 260 232020 264 2402021 300 2512022 308 262Total 2439 2198


2013 251 1242014 253 32015 187 812016 187 842017 187 842018 209 902019 209 932020 209 972021 232 1002022 232 105Total 2156 861

Depreciation

Renewals

Napier 22897 10186Hastings 33888 9Central Hawkes Bay 2439 2198Wairoa 2156 861Totals 61380 13254


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

50

100

150

200

250

300

Wairoa


2013 2014 2015 2016 2017 2018 2019 2020 2021 20220

50

100

150

200

250

300

350

Central Hawkes Bay


Napier Hastings Central Hawkes Bay Wairoa0

5000

10000

15000

20000

25000

30000

35000

40000

Total - Territorial Local Authorities



Note: The Hastings Council says that as its stormwater network is relatively new and has high debt levels, it does not fund for stormwater depreciation and also hasn’t made any provision in its 2012/2022 LTP for renewals and is reviewing this policy as a part of the development of a 30 year strategy.

We also question the appropriateness of the present policy. The estimated replacement cost of the stormwater system is $263m and the depreciated replacement cost is $161m. Depreciation during the 10 year period 2012/2022 is estimated to be $ 34 m. This means that already nearly 40% of the economic life of the system has been consumed and that by 2022 that will have increased to about 50%.



10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

44%

0%

90%

40%

Renewal Expenditure As A Proportion of the Depreciation Provision - 2012-2022 (%)

13.3ASSET CONFIDENCE – STORMWATER & FLOOD CONTROL

ASSET CONFIDENCE - STORMWATER & FLOOD CONTROL(Assessed Reliability of Data Completeness and Accuracy)

AUTHORITY Data Attribute Very Uncertain Uncertain Reliable Highly

Reliable

Hawkes Bay Regional Council Asset DescriptionAsset QuantityAsset AgeConditionPerformance






Highly reliable


Reliable Data based on sound records, procedures, investigations and analysis, documented properly but has minor shortcomings, for example some data is old, some documentation is missing and/or reliance is placed on unconfirmed reports or some extrapolation. Dataset is complete and estimated to be accurate + 10%


Very uncertain



13.4RISK MANAGEMENT – STORMWATER AND FLOOD CONTROL

The Council’s top five risks relating to this activity.

AUTHORITY RISK


Climate Change (accuracy of current predictions/effects)Caused By Changes to global climate Uncertainty of forecasts/prediction relating to the effects

Asset Failure – Stop bank Edge Protection)Caused by Debris Poor design and/or construction Lack of maintenance Excessive river bed movement or sediment build-up Stock damage Erosion Super design event Adverse land owner activities

Asset Failure – Pump StationsCaused by Debris Power outage Poor design and or construction Lack of maintenance Super design event Adverse land owner activities Vandalism and theft Mechanical failure Electrical failure

Asset Failure – Stop bank Edge Protection)Caused by Debris/weed Power outage Poor design and/or construction Lack of maintenance Super design event Adverse land owner activities Vandalism and theft Mechanical failure Electrical failure excessive sedimentation

Asset Failure – Stop bank Edge Protection)Caused by Debris Loss of power (pumps) Poor design Lack of maintenance Excessive river bed movement Asset malfunction (floodgate) Stock damage Erosion

Napier Natural Hazards


Non-compliance with resource consents (water quality)

Lack of skilled staff resources

Power failure affecting pump stations

Flooding of habitable floors

Hastings Legislative compliance – consents and Dam Safety

Stormwater quality – managing high risk sites

Stormwater quantity – mitigation of effects of growth, intensification and climate change

Overland flow – minimising risk to properties in exceedance events

Urban streams- intensification, erosion, detention dam management

Central Hawkes Bay






Wairoa Insufficient knowledge of legislation (outside of consent conditions)

Insufficient knowledge of what services are currently being delivered

Insufficient funding for monitoring and enforcement (i.e. smoke ) activities

Breakdown in communication between parties results in compliance failure.

Insufficient resources to ‘hook in to’ funding mechanisms (time, cost, expertise etc.)




13.5FINANCIAL/FUNDING CHALLENGES – STORMWATER AND FLOOD CONTROL



Changing demands of population protected by flood defences, i.e. desire to increase protection level.

Multi value approach rather than focus solely on flood control and drainage. This has resulted in extensive stream and river riparian enhancement work

Napier All major projects have been produced for in the 10 year period. No significant renewal or growth issues during this period.

“NCC is predicted to have a stormwater pipe renewal peak during the period 2050-2070. This is outside the 30 year Infrastructure Strategy analysis window” (Waugh –page 47)

Hastings Age related renewals due to start in 2030 Currently developing surface and pipe network models to identify any remaining capacity

related upgrades. Identifying and designating critical overland flowpaths Network modifications related to climate change Improving the quality of urban stormwater runoff, an potential for increased environmental

standards

Central Hawkes Bay

Without a dam there will be limited growth. With the dam there is potential for reasonable industrial growth With a dam there is potential for residential growth in Waipukurau and Waipawa where the

stormwater system may be stretched An ageing infrastructure Limited rating base to fund major projects etc.

Wairoa Ongoing programme of increasing the piped network Condition assessment of the existing network as its approaches the last third of its

design life




13.6SERVICE DELIVERY – STORMWATER AND FLOOD CONTROL

AUTHORITY ‘In-house’ ‘Out-sourced’

Partly ‘In-house and partly ‘Out-

sourced’


OrganisationOther


Independent Business Unit

Napier X

Hastings Underground maintenance by Network Contractor (City Care)

Specialist maintenance of open drains and streams (Regional Council)

Open drains’ or streams maintenance – In house

Professional Services (Council MWH Alliance)

Central Hawkes Bay

X

Wairoa X

Note


13.7RESPONSES TO OTHER QUESTIONS

Stormwater / Flood Control

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’

‘No’ 1 2 3 4 5

‘Don’t Know’

1 - Regional Council – References the Ministry for Environment Climate change impacts study, and takes the average estimates for climate change impacts , but that has not been adopted as policy

2 - Napier – Stormwater assessed against the impacts of climate change – NIWA 2008 report3 - Hastings - Doesn’t have a climate change policy but potential climate change impacts comprehensively considered

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’

‘No’ 1 2 3 4 5

‘Don’t Know’

1 - Regional Council – Climate change issues: Sea level change issues dealing with low lying or vulnerable coastal properties; Rainfall intensity increases - issues dealing with a decrease in the levels of service provided by flood defences and drainage

networks; (and) Flood control issues- increased development behind flood defences and of low lying land



Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 4

‘No’ 2 3 5

‘Don’t Know’ 1

1 - Regional Council –Reviews of all schemes are programmed over the next 10 years. These reviews may result in ongoing capital works programmes where there is a desire to retain current levels of service and protect against the impact of climate change, or improve levels of service

4 - Central Hawkes Bay -$ 95,000 carryover from the previous year

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 1 2 3 4 5

‘No’

‘Don’t Know’


Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 1 2 5

‘No’ 3 4

‘Don’t Know’

1 - Regional Council – ‘Up to a cap’3 - Hastings - As the stormwater network is relatively new and has high debt levels the Council considers it inappropriate to fund stormwater depreciation. No

funding provision in 2012/2022. This policy is to be reviewed during development of the Infrastructure strategy 4 - Central Hawkes Bay - Funding is based in the amount of funds available from a limited rate base

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 1 2 4 5

‘No’ 3

‘Don’t Know’

4 - Hastings - See the answer to the previous question. Depreciation not funded

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’

‘No’ 1 2 3 4 5

‘Don’t Know’


Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’

‘No’ 1 2 3 4 5

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 4

‘No’ 1 2 3 5

‘Don’t Know’

1 - Regional Council – But scheme reviews may identify new capital spending requirements (See the answer to question 10)4 - Central Hawkes Bay - Currently in the planning stage to decide the Ruataniwha ‘dam no dam’ options



Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 2 3 4

‘No’ 5

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Cou

nci

l

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’

‘No’ 1 2 3 4 5

‘Don’t Know’

Ref Question Haw

kes

B

ay

Reg

ion

al

Nap

ier

Has

tin

gs

Cen

tral

Haw

kes

B

ay

Wai

roa


‘Yes’ 2 3 4 5

‘No’

‘Don’t Know’


REFERENCES Five questionnaires prepared by MWH:

General Roads Water Supply Wastewater Stormwater

The Hawkes Bay Regional Council’s, Napier City Council’s and the Hastings, Central Hawkes Bay and Wairoa Districts’ 2014/15 Annual Plans

Office of the Controller and Auditor General – ‘Water and Roads: Funding and Management Challenges” - November 2014

Waugh Infrastructure Management Ltd – “Napier City Council – Asset Management Lifecycle Review – Final Report” – February 2014

Local Government New Zealand (LGNZ) – “Exploring the Issues Facing New Zealand’s Water, Wastewater and Stormwater Sector” – An issues paper prepared for LGNZ by Castalia Strategic Advisors – October 2014

Brian Smith Advisory Services – ‘Report to the Local Government Commission on Internal Borrowing at Hastings District Council and Napier City Council’ (January 2015).

Auckland Council – “2012-22 Long-term Plan”

136References

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