Notice of Meeting:
I hereby give notice that an ordinary meeting of the Infrastructure Services Committee will be held on:
Date: Tuesday 17 September 2024
Time: 1.00 pm (or at the conclusion of the previous meeting, whichever is later)
Venue: Council Chamber, Dunedin Public Art Gallery, The Octagon
Sandy Graham
Chief Executive Officer
Infrastructure Services Committee
PUBLIC AGENDA
MEMBERSHIP
Chairperson |
Cr Jim O'Malley |
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Deputy Chairperson |
Cr Brent Weatherall |
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Members |
Cr Bill Acklin |
Cr Sophie Barker |
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Cr David Benson-Pope |
Cr Christine Garey |
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Cr Kevin Gilbert |
Cr Carmen Houlahan |
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Cr Marie Laufiso |
Cr Cherry Lucas |
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Ms Donna Matahaere-Atariki |
Cr Mandy Mayhem |
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Ms Marlene McDonald |
Mayor Jules Radich |
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Cr Lee Vandervis |
Cr Steve Walker |
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Cr Andrew Whiley |
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Senior Officer Scott MacLean, General Manager Climate and City Growth
Governance Support Officer Rebecca Murray
Rebecca Murray
Governance Support Officer
Telephone: 03 477 4000
governance.support@dcc.govt.nz
Note: Reports and recommendations contained in this agenda are not to be considered as Council policy until adopted.
Infrastructure Services Committee 17 September 2024 |
ITEM TABLE OF CONTENTS PAGE
1 Karakia Timatanga 4
2 Public Forum 4
3 Apologies 4
4 Confirmation of Agenda 4
5 Declaration of Interest 5
6 Confirmation of Minutes 15
6.1 Infrastructure Services Committee meeting - 19 August 2024 16
Part A Reports (Committee has power to decide these matters)
7 Confirmation of 2024-27 National Land Transport Plan (NLTP) funding allocation for Transport Maintenance, Operations and Renewals 22
8 Local Water Done Well - Water Services Delivery Plan - Requirements and Process 27
9 Items for Consideration by the Chair 112
Resolution to Exclude the Public 113
Infrastructure Services Committee 17 September 2024 |
1 karakia timatanga
The meeting will open the meeting with a Karakia Timatanga.
At the close of the agenda no requests for public forum had been received.
At the close of the agenda no apologies had been received.
Note: Any additions must be approved by resolution with an explanation as to why they cannot be delayed until a future meeting.
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Infrastructure Services Committee 17 September 2024 |
EXECUTIVE SUMMARY
1. Members are reminded of the need to stand aside from decision-making when a conflict arises between their role as an elected or independent representative and any private or other external interest they might have.
2. Elected or independent members are reminded to update their register of interests as soon as practicable, including amending the register at this meeting if necessary.
That the Committee:
a) Notes/Amends if necessary the Elected or Independent Members' Interest Register attached as Attachment A; and
b) Confirms/Amends the proposed management plan for Elected or Independent Members' Interests.
Attachments
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Title |
Page |
⇩a |
Infrastructure Services Committee Register of Interest |
6 |
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Infrastructure Services Committee 17 September 2024 |
Infrastructure Services Committee meeting - 19 August 2024
That the Committee:
a) Confirms the minutes of the Infrastructure Services Committee meeting held on 19 August 2024 as a correct record.
Attachments
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Title |
Page |
A⇩ |
Minutes of Infrastructure Services Committee meeting held on 19 August 2024 |
16 |
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Infrastructure Services Committee 17 September 2024 |
Infrastructure Services Committee
MINUTES
Minutes of an ordinary meeting of the Infrastructure Services Committee held in the Council Chamber, Dunedin Public Art Gallery, The Octagon on Monday 19 August 2024, commencing at 10.00 am
PRESENT
Chairperson |
Cr Jim O'Malley |
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Deputy Chairperson |
Cr Brent Weatherall |
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Members |
Cr Bill Acklin |
Cr Sophie Barker |
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Cr David Benson-Pope |
Cr Christine Garey |
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Cr Kevin Gilbert |
Cr Carmen Houlahan |
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Cr Marie Laufiso |
Cr Cherry Lucas |
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Cr Mandy Mayhem |
Ms Marlene McDonald via Zoom |
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Mayor Jules Radich |
Cr Lee Vandervis |
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Cr Andrew Whiley |
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IN ATTENDANCE |
Scott MacLean (General Manager Climate and City Growth), Jeanette Wikaira (General Manager Arts, Culture and Recreation), Carolyn Allan (Chief Financial Officer), John McAndrew (Acting Group Manager 3 Waters), Jared Oliver (Manager 3 Waters Planning), Jeanine Benson (Group Manager Transport), Simon Spiers (Team Leader Transport Regulation Management), Simon Smith (Manager Transport Asset and Funding), Chris Henderson (Group Manager Waste and Environmental Solutions) and Clare Sullivan (Manager Governance) |
Governance Support Officer Rebecca Murray
1 karakia timatanga
Ms Marlene McDonald opened the meeting with a Karakia Timatanga.
2 Public Forum
2.1 Speed Limits of Motorised Vehicles in the City
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Jakub Závacký addressed the meeting regarding speed limits of motorised vehicles in the city. He requested Council consider reducing the speed limits in the residential areas to 30 km for the safety of children and responded to questions. |
2.3 Reducing Waste
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Cr Andrew Whiley withdrew from this public forum presentation and sat back from the table.
Rob Riddell Tigier addressed the meeting with an overview of the work Dunedin Community House had undertaken on waste minimisation. He requested Council build on this work by providing the infrastructure needed to enable more easily accessible recycling stations that included cardboard in the central city area and responded to questions.
Cr Vandervis entered the meeting at 10.12 am. |
2.2 Petition - SH1 Waitati Speed Reduction
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Amee Parker presented an online petition on SH 1 Waitati Speed Reduction which as at 13 August had 876 online signatures. Ms Parker provided an overview of the traffic movements, accidents, incidents and near misses on the stretch of road at the Waitati bend. She advised that while there were a few options that would improve the safety of this stretch of road immediate action was required to reduce the speed until infrastructure could be put in place and responded to questions.
Cr Carmen Houlahan entered the meeting at 10.23 am. |
3 Apologies |
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Apologies were received from Ms Donna Matahaere-Atariki and Cr Steve Walker. |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Accepts the apologies from Ms Donna Matahaere-Atariki and Cr Steve Walker.
Motion carried (ISC/2024/036) |
4 Confirmation of agenda |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Confirms the agenda without addition or alteration.
Motion carried (ISC/2024/037) |
5 Declarations of interest
Members were reminded of the need to stand aside from decision-making when a conflict arose between their role as an elected representative and any private or other external interest they might have.
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
a) Notes the Elected or Independent Members' Interest Register; and b) Confirms the proposed management plan for Elected or Independent Members' Interests. Motion carried (ISC/2024/038) |
6 Confirmation of Minutes
6.1 Infrastructure Services Committee meeting - 18 June 2024 |
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Moved (Cr Jim O'Malley/Cr Andrew Whiley): That the Committee: Confirms the minutes of the Infrastructure Services Committee meeting held on 18 June 2024 as a correct record. Motion carried (ISC/2024/039) |
Part A Reports
7 Actions from Resolutions of Infrastructure Services Committee Meetings |
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A report from Civic provided an update on the implementation of resolutions made at Infrastructure Services Committee meetings.
General Manager Climate and City Growth (Scott MacLean), Acting Group Manager 3 Waters (John McAndrew) and Manager 3 Waters Planning (Jared Oliver) responded to questions. |
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Moved (Cr Jim O'Malley/Cr Mandy Mayhem): That the Committee:
Notes the Open and Completed Actions from resolutions of Infrastructure Services Committee meetings. Motion carried (ISC/2024/040) |
8 Infrastructure Services Committee Forward Work Programme |
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A report from Civic provided an update on the Infrastructure Services Committee forward work programme.
General Manager Climate and City Growth (Scott MacLean) responded to questions. |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Notes the Infrastructure Services Committee forward work programme. Motion carried (ISC/2024/041) |
9 3 Waters - Integrated System Planning |
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A report provided an updated on the strategic planning work that 3 Waters had undertaken through the Integrated System Planning (ISP) programme. Acting Group Manager 3 Waters (John McAndrew) and Manager 3 Waters Planning (Jared Oliver) responded to questions. |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Notes the 3 Waters – Integrated System Planning report. Motion carried (ISC/2024/042) |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Adjourns the meeting until 12.10 pm.
Motion carried |
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The meeting adjourned at 12.00 pm and reconvened at 12.11 pm. |
10 Proposed Parking Changes - Hearings Committee July 2024 Recommendations |
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A report presented recommendations of the Hearings Committee meeting, held on 10 July 2024 on proposed changes and corrections to parking restrictions. Group Manager Transport (Jeanine Benson) and Team Leader Transport Regulation Management (Simon Spiers) responded to questions. Cr Andrew Whiley entered the meeting at 12.12 pm |
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Moved (Cr Jim O'Malley/Cr Mandy Mayhem): That the Committee:
Adjourns the meeting for 5 minutes.
Motion carried |
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The meeting adjourned at 12.15 pm and reconvened at 12.20 pm. |
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Ms Marlene McDonald left the meeting at 12.25 pm. |
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Moved (Cr Jim O'Malley/Cr Cherry Lucas): That the Committee:
a) Adopts the proposed changes to parking and traffic restrictions shown in the July 2024 update of the Dunedin City Council's traffic and parking restrictions database Webmap - General Parking Changes - July 2024 b) Notes that Committee has considered feedback from consultation on the proposed changes to parking restrictions. c) Notes that all parking restrictions previously approved by Council remain unchanged. Motion carried (ISC/2024/043) |
11 Transport Activity Report for the Period Ending 30 June 2024 |
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A report provided an update on Transport activities for the period ending 30 June 2024. Group Manager Transport (Jeanine Benson), Team Leader Transport Regulation Management (Simon Spiers) and Manager Transport Asset and Funding (Simon Smith) responded to questions. |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Notes the Transport activity report for the period ending 30 June 2024. Motion carried (ISC/2024/044) |
12 Waste and Environmental Solutions Activity Report for the period ending 30 June 2024 |
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A report provided an update on Waste and Environmental Solutions activities for the period ending 30 June 2024. Group Manager Waste and Environmental Solutions (Chris Henderson) responded to questions.
Cr Lee Vandervis left the meeting at 1.14 pm.
Cr Carmen Houlahan left the meeting at 1.26 pm and returned to the meeting at 1.27 pm. |
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Moved (Cr Jim O'Malley/Cr Brent Weatherall): That the Committee:
Notes the Waste and Environmental Solutions activity report for the period ending 30 June 2024. Motion carried (ISC/2024/045) |
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Items for consideration by the Chair:
Cr Andrew Whiley: Requests, for consideration, that with any new central city water infrastructure network projects being undertaken by the DCC, Council looks to install drinking water fountains where there is known or potential demand. He also requested that drinking water fountains around the centre city being referenced in future project work and reporting to the Infrastructure Services Committee.
Cr Jim O’Malley: Speed limit petition regarding Waitati. Progress towards removal of utilities in the Caversham tunnel to be reported on in the Transport Activity Report or Forward Work Programme.
Cr Sophie Barker: 3 Water Strategy be included in the Infrastructure Services Committee Forward Work Programme. |
14 Karakia Whakamutunga |
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Cr Jim O’Malley closed the meeting with a Karakia Whakamutunga. |
The meeting concluded at 1.32 pm.
..............................................
CHAIRPERSON
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Infrastructure Services Committee 17 September 2024 |
Confirmation of 2024-27 National Land Transport Plan (NLTP) funding allocation for Transport Maintenance, Operations and Renewals
Department: Transport
EXECUTIVE SUMMARY
1 This report provides an update on the final Waka Kotahi NZTA funding approvals for the 2024-27 period for Maintenance, Operations, and Renewals (MOR).
2 The confirmed co-funding from Waka Kotahi NZTA is sufficient to support the delivery of the 2024-27 Transport MOR programme.
3 New capital and the low-cost low risk programme were announced at the end of August 2024 and staff are working through the outcomes of that which will be reported on at the October 2024 Infrastructure Services Committee meeting.
That the Committee:
a) Notes the Confirmation of 2024-27 National Land Transport Plan (NLTP) funding allocation for Transport Maintenance, Operations and Renewals.
BACKGROUND
4 Through the National Land Transport Plan (NLTP) process DCC Transport bid for co-funding to meet the following expenditure from the National Land Transport Fund (NLTF):
· $158.0m in Maintenance, Operations and Renewals.
5 The amount is the total spend with the approved programme co-funded at a rate of 51% by Waka Kotahi NZTA, with DCC contributing 49%.
6 The Government Policy Statement (GPS) on Land Transport (which sets out the Government priorities for transport funding) has resulted in a change in policy and establishment of the following three activity classes for the MOR programme: -
· Operations
· Pothole Prevention (resealing, rehabilitating and drainage maintenance on the transport network)
· Walking and Cycling
7 Over previous NLTP periods it has been possible to under and over claim across activities within the MOR programme as long as we have bottom line funding availability. Changes to Waka Kotahi NZTA policy means we can only under and over claim across work categories specifically within the three defined activity classes.
DISCUSSION
8 Approval for Operations is $47.3m which is 96% of the bid of $49.2m.
9 Approval for Pothole Prevention is $85.0m which is 93% of the bid of $91.1m
10 Approval for Walking and Cycling is $4.3m which is 24% of the bid of $17.7m
11 DCC operational budgets were maintained at 2022/23 levels resulting in a shortfall in local share available to meet the co-funded programme for operations and pothole prevention.
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NZTA funding allocation |
DCC Budget |
Funding Surplus/ (shortfall) |
Total Local road operations |
$47.4 |
$43.9 |
$3.5 |
Total Local road pothole prevention |
$85.0 |
$83.0 |
$2.0 |
Total Walking and cycling improvements |
$4.3 |
$19.5 |
($15.2) |
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$136.7 |
$146.4 |
($9.7) |
12 Approved total funding versus indicative DCC budget is as follows:
13 DCC took a conservative budgeting approach to the revenue associated with co-funded renewals, assuming a 10% uplift in overall funding from the 2021-24 NLTP period and reduced FAR of 39%.
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Total 2024-27 |
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$m |
NZTA approved Funding |
136.7 |
DCC Indicative Budget |
146.4 |
DCC Indicative Budgeted Revenue |
(65.3) |
Revenue if expenditure to indicative budget |
(66.9) |
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Revenue (increase)/decrease |
(1.6) |
14 Approved co-funding related revenue exceeds DCC indicatively budgeted revenue for the 2024-27 NLTP period. This allows for full programme delivery within allocated budgets.
OPTIONS
15 As this is an update report there are no options.
NEXT STEPS
16 Staff will deliver the 2024-27 Transport MOR programme within approved annual budgets.
17 Staff will report on new capital programmes as part of the NLTP bid (including Low Cost Low Risk) at the October 2024 Infrastructure Services Committee meeting.
Signatories
Author: |
Simon Smith - Asset and Funding Manager |
Authoriser: |
Scott MacLean - General Manager, Climate and City Growth |
There are no attachments for this report.
SUMMARY OF CONSIDERATIONS
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Fit with purpose of Local Government This decision enables democratic local decision making and action by, and on behalf of communities. This decision promotes the social well-being of communities in the present and for the future, the economic well-being of communities in the present and for the future, the environmental well-being of communities in the present and for the future and the cultural well-being of communities in the present and for the future. |
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Fit with strategic framework
This report has been prepared with reference to the Dunedin strategic framework. |
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Māori Impact Statement Mana whenua have not been directly engaged with relation to the NLTP bid. |
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Sustainability There are no implications for sustainability. |
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LTP/Annual Plan / Financial Strategy /Infrastructure Strategy Considerations for the LTP are covered in this report. The NLTP bid is driven by the asset management plan and as such is reflected in the infrastructure strategy. |
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Financial considerations Financial considerations are covered in this report. |
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Significance This decision is considered low in terms of the Council’s Significance and Engagement Policy. |
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Engagement – external There has been no external engagement. |
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Engagement - internal There has been internal engagement with other Council groups such as City Development in the development of the asset management plan which the NLTP is based upon. |
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Risks: Legal / Health and Safety etc. There are no legal or health and safety risks. |
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Conflict of Interest There are no conflicts of interest. |
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Community Boards There are no implications for Community Boards. Staff regularly update Community Boards on forward work programmes driven by the asset management plan and subsequently co-funded through the NLTP bid. |
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Infrastructure Services Committee 17 September 2024 |
Local Water Done Well - Water Services Delivery Plan - Requirements and Process
Department: Legal Services
EXECUTIVE SUMMARY
1 The Local Government (Water Services Preliminary Arrangements) Act 2024 (Preliminary Act) became law on 2 September 2024. As a result, Council is now required to prepare and submit a Water Services Delivery Plan (WSDP) to the Secretary for Local Government by 3 September 2025.
2 The Preliminary Act represents the second stage of a three-stage legislative process in implementing Local Water Done Well (LWDW). Further legislation is expected to be introduced to Parliament in December 2024 with possible enactment mid-year 2025.
3 In addition to the legislation passed to date, guidance has now been released by the Department of Internal Affairs (DIA) on both the future water services delivery system and on completing the WSDP (Guidance). The Guidance will be subject to further amendment through the legislative process later in 2024 and 2025 and any other Government direction.
4 To prepare the WSDP, further technical and rigorous analysis will be required as well as further discussion with other territorial authorities and mana whenua.
5 The purpose of this report is to:
· provide an overview and update the Committee on LWDW;
· outline the proposed process for Council to prepare and adopt the WSDP (subject to further Government direction or legislation); and
· signal that there will be subsequent reports coming to Council on the WSDP, including further information on potential service delivery models and the requirements for ringfencing and financial sustainability for the delivery of water services.
That the Committee:
a) Notes that Council must prepare a Water Service Delivery Plan and submit a Water Service Delivery Plan to the Secretary for Local Government by 3 September 2025.
b) Confirms the proposed timeline and process, subject to amendment required by further Government direction and further legislation.
c) Notes that the proposed process includes further discussion with other territorial authorities and mana whenua, and public consultation regarding potential water services delivery models.
BACKGROUND
History of Water Reform
6 Over the years, respective governments have implemented a series of steps to progress water reform following both an inquiry into Havelock North’s drinking water and the Government’s Three Waters Review, which commenced in 2017.
7 The approach and timeline to water sector reform has changed significantly over a relatively short period. A timeline of water reform from 2017 to date is set out in Attachment B of this report.
8 The Council has actively participated in the reform process, including through written submissions on the Bills associated with water reform.
Local Water Done Well
9 In December 2023 the current Government outlined their LWDW reform programme with the following key principles*:
· Introducing greater central government oversight, economic and quality regulation.
· Fit-for-purpose service delivery models and financing tools, such as improving the current council-controlled organisation model and developing a new class of financially separate council-owned organisation.
· Setting rules for water services and infrastructure investment.
· Ensuring water services are financially sustainable. Financial sustainability means revenue sufficiency, balance sheet separation, ring-fencing and funding for growth.
* Source: Letter to the Mayor from Minister of Local Government December 2023.
10 Further detail from the Government was announced in early 2024 and proposed a three-stage process to enabling LWDW as shown in the table below:
LWDW Stage/Timing |
Action |
Legislation |
Stage One |
Repeal of legislation relating to water services entities |
Water Services Acts Repeal Act 2024 |
Stage Two |
Establishes a framework for local government to manage and deliver water services – setting out the preliminary arrangements including the detail required for Council to prepare and submit a WSDP as well as timing. |
Local
Government (Water Services Preliminary Arrangements) Act 2024 became law on 2 September 2024 Council made a Submission dated 19 June 2024 on the Preliminary Act. |
Stage Three |
Framework for economic regulation and the more detailed powers and duties for service delivery models. Provide enduring settings going forward. |
Bill Number Three - Local Government Water
Services Bill |
11 Stage Two of LWDW has now been implemented by the Government with the Preliminary Act becoming law on 2 September 2024. The Preliminary Act provides the following key points:
· Council must prepare a one-off WSDP by 3 September 2025.
· Foundational information disclosure will be provided through the WSDP to lay the groundwork for comprehensive economic regulation.
· Introduces an alternative streamlined consultation and decision-making process (as opposed to the standard requirements under Part 6 of the Local Government Act 2002 (LGA 2002)) that:
i) may be used for consulting and decision making on establishing, joining or amending a water services council-controlled organisation (WSCCO) (or are deciding whether or not to do so), or a joint local government arrangement (made under section 137 of the LGA 2002) (or are deciding whether or not to do so); and
ii) must be used for consulting or decision making in relation to an anticipated or proposed model or arrangement for delivering water services; and other parts of the WSDP if consulted on.
12 Guidance on the future water services delivery system was released by the DIA on 8 August 2024. This was based on the LWDW Cabinet decisions announced by the Minister of Local Government in August 2024. Key Factsheets in the Guidance have been provided at Attachment C. Further Guidance was also released by the DIA on 3 September 2024, specifically in relation to WSDPs and provides a template for Council to develop the WSDP content.
13 However, it is important to note that the Guidance will be subject to amendment as the December 2024 Bill proceeds through the parliamentary process. Although the Bill is expected in December 2024, the Bill may not be enacted until mid-2025.
DISCUSSION
Key Considerations
14 Council needs to prepare a WSDP in accordance with the Preliminary Act. This will require Council to consider several key matters which are outlined further under this discussion including service delivery models, ringfencing and financial sustainability of water services, and consultation requirements.
15 To provide context, a summary of the WSDP requirements and the process under the legislation is set out below.
Water Service Delivery Plans
16 Council must submit and give effect to a compliant WSDP. Failure to do so could result in ministerial intervention by a Crown facilitator or Crown water services specialist (in addition to ministerial powers under the LGA 2002).
17 A WSDP must identify the current state of the Council’s water services and outline how the Council will deliver water services in a way that:
a) Ensures that all relevant regulatory quality standards will be met for stormwater, wastewater and water supply networks;
b) Is financially sustainable;
c) Ensures the Council will meet all drinking water quality standards;
d) Supports housing growth and urban development, as specified in the Council’s LTP.
18 The table below shows the key elements of the WSDP as required by the Preliminary Act:
Timing |
Required to submit a WSDP to the Secretary for Local Government by 3 September 2025. Extension - The only exception to this timing is where an extension has been granted in accordance with section 19 of the Preliminary Act which requires an application for extension no later than 3 August 2025. WSDP is a one-off document. |
Joint WSDP (optional) |
Council may submit a joint WSDP with one or more territorial authorities in relation to delivering water services in the joint service area covered by a joint arrangement (Section 10). |
Period Covered |
Must cover a period of not less than 10 consecutive financial years starting with the 2024-25 financial year; and May include information that covers an additional 20 consecutive years if the information identifies investment requirements for water services infrastructure or to support future housing growth and urban development (Section 15). |
Content |
The Preliminary Act sets out at section 13 the information required within the WSDP. A table setting out the contents and an indication of availability of information for Council is set out at Attachment E of this report. The Secretary may make rules for three months following enactment of the Preliminary Act in relation to the WSDP specifying additional information that must be included, or the manner and form in which the information must be included in a WSDP. |
Effect |
Requires Council to give effect to the proposals or undertakings relating to the future delivery of water services specified in the WSDP (Section 22) and not doing so could be a ground for appointing a Crown facilitator (Section 25). |
Council Adoption Process |
WSDP must be adopted by resolution of Council (Section 17(1)), and certified that the WSDP complies with the Preliminary Act and is true and accurate by the Chief Executive (Section 18(2)). |
Consultation |
Provides for alternative decision making and consultation (modifying existing processes in the LGA 2002) for some decisions – discussed in further detail below and shown as a diagram at Attachment F]. Note: The Preliminary Act does not require consultation on a draft or final WSDP except for an anticipated or proposed model or arrangement for delivering water services (Section 17(3)). |
Amendment |
May amend WSDP and resubmit amended WSDP in certain circumstance (Section 23). |
19 Preparing the WSDP will require technical and rigorous analysis. This will involve significant work from staff and require further direction from Council particularly relating to information that is not readily available to staff including:
· The anticipated or proposed model or arrangements for delivering water services (including whether the territorial authority is likely to enter a joint arrangement).
· Summary of consultation undertaken as part of developing the information required in the preceding bullet point.
· Explanation of how revenue from and delivery of, water services will be separated from other functions and activities.
· Explanation of how Council proposes to ensure delivery of water services will be financially sustainable by 30 June 2028. Ringfencing and financial sustainability is discussed later in this report.
Service Delivery Model
20 There are several possible delivery model options for delivering water services. The Guidance set out at Attachment C provides examples of possible options and is summarised in the table below:
21 However, the Guidance states that councils will be able to design their own alternative delivery arrangements, provided these arrangements meet the minimum requirements set out in the legislation. The minimum requirements for all service delivery models according to the Guidance are likely to include the following:
22 A water services “provider” means all forms of local government providers including councils that continue with direct (in-house) delivery.
23 The term “water organisation” refers to a separate organisation that Council may establish to provide water services and does not include in-house delivery.
24 There are likely to be further legislative requirements if forming a “water organisation” (which could affect the organisation’s ownership, governance and structural arrangements).
25 Further provisions will also likely apply if a consumer trust is adopted.
26 The Guidance has posed several questions for councils to consider, including:
· Whether to deliver water services in-house or establish a water organisation?
· Whether to deliver services on a stand-alone basis or establish a joint arrangement with other councils?
· How to structure ownership and governance arrangements for any water organisation? and
· How to set up water organisations to facilitate access to long-term borrowing for water infrastructure?
27 The above questions will be discussed in a subsequent report to Council. That report is likely to be early next year, so that the report can be informed by the Morrison Low Report that is due in November 2024 and the December 2024 Bill.
Regional Collaboration
28 Following the introduction of LWDW by the Government, an Otago/Southland Regional Local Water Done Well Working Group (Working Group) was formed in April 2024. That Working Group is overseen by the Chief Executive Officers of each council and reports to the Otago/Southland Mayoral Forum.
29 Council staff have membership on the Working Group along with staff from other Otago and Southland councils.
30 The Working Group’s purposes are:
i) To assess and determine a range of, implementable, collaboration topics that can usefully support common activities across Otago/Southland; and
ii) To explore pathways for service delivery in the two regions and provide a short list of options; and
iii) To assess and determine a range of, potential, collaboration topics at a national or sub-national level.
31 The Working Group has arranged a report by Morrison Low to develop a first principles approach to identify the range of pathways and the short list of options for service delivery in the two regions. The Morrison Low report is due to be completed November 2024.
32 A high-level schedule of the Working Group’s deliverables along with a list of participants is provided in Attachment D as extracted from the Working Group briefing dated 10 September 2024.
33 The Working Group presented an update to the joint Otago/Southland Mayoral Forum on 6 September 2024. At that meeting, members endorsed the five investment objectives shown on Attachment G.
34 It was also agreed that each individual council should seek feedback from its elected members on the following five options:
i) The status quo of having water services delivered in house by councils;
ii) Joint contracts;
iii) Shared services arrangements provided through a formal entity;
iv) A management CCO; and
v) A multi-council water services organisation.
35 When considering feedback on the options, councils were asked to focus on their priorities, initial responses to the options and on any concerns. There is no expectation that any council will rule any option in or out at this point.
36 A further joint Otago/Southland Mayoral Forum has been scheduled for 23 September 2024 to consider the initial feedback from councils.
37 The timeframe for feedback on the above listed options is very tight and the timeframes do not align with the proposed timeline and process for Council, as shown on Attachment A.
38 It is difficult to fully assess or provide advice on the above listed options given the lack of financial information, where the Council is at in its 9 year plan process and without having seen the December 2024 Bill. Further, the above listed options do not fully align with the DIA examples and do not include bespoke options that may be available to Council.
39 The Council has not yet had an opportunity to formally engage with mana whenua over water service delivery options and this is planned to happen in advance of the formal report in late January 2025.
40 Given these factors, staff recommend that the Infrastructure Services Committee does not take a formal position on the Morrison Low options but continues to engage fully in the Working Group and the regional discussions leaving all options on the table.
41 Staff will ensure regular reporting to either Council or the committee and will work toward the timeline and process outlined in Attachment A. This means that the Council will be in a position to formally make an “in principle” decision on its preferred option in late January 2025 which will then be subject to formal consultation with the community.
Ringfencing and Financially Sustainable
42 A WSDP needs an explanation of how revenue from and delivery of water services will be separated from other functions and activities, as well as how Council proposes to ensure delivery of water services will be financially sustainable by 30 June 2028.
43 The Guidance states that ringfencing requires that:
i) Water revenues be spent on water services; and
ii) Water services charges and expenses be transparent and accountable.
44 The Preliminary Act defines ‘financially sustainable’, in relation to a council’s delivery of water services, as:
a) The revenue applied to the council’s delivery of those water services is sufficient to ensure the council’s long-term investment in delivering water services; and
b) The council is financially able to meet all regulatory standards and requirements for the council’s delivery of those water services.
45 The Guidance suggests that to assess whether a council’s water services delivery is financially sustainable, the WSDP templates ask councils to provide information about three components:
a) Revenue sufficiency – is there sufficient revenue to cover the costs (including servicing debt) of water services delivery?
b) Investment sufficiency – is the projected level of investment sufficient to meet regulatory requirements and provide for growth?
c) Financing sufficiency – are funding and finance arrangements sufficient to meet investment requirements?
46 The Guidance makes further recommendations about how councils can demonstrate ringfencing. It also provides further information about financial sustainability as well as providing a template for financial projections and a financial sustainability test (See link Guidance for preparing Water Services Delivery Plans).
47 Council is not subsidising other activities with three waters funding.
Consultation
48 A diagram showing the various consultation and decision-making requirements required under the Preliminary Act, is provided as Attachment F.
49 Section 17 of the Preliminary Act requires that in relation to an anticipated or proposed model or arrangement for delivering water services in its WSDP, a council must undertake consultation and ensure its consultation and decision-making complies with sections 61 to 64 of the Preliminary Act. The Preliminary Act otherwise does not require a council to consult any further on a draft or final WSDP. However, if a council decides to consult further on a part of its WSDP, then it must do so in accordance with sections 62 to 64.
50 Section 58 of the Preliminary Act introduces an alternative consultation and decision-making process (as opposed to the standard requirements under Part 6 of the LGA 2002) that:
i) may be used for consulting and decision making on establishing, joining or amending a water services council-controlled organisation (WSCCO) (or are deciding whether or not to do so), or a joint local government arrangement (made under section 137 of the LGA 2002) (or are deciding whether or not to do so); and
ii) must be used for consulting or decision making in relation to an anticipated or proposed model or arrangement for delivering water services; and other parts of the WSDP if consulted on.
51 Under Council’s Significance and Engagement Policy, the following are all listed as Strategic Council-Owned Assets:
a) Stormwater collection and disposal system
b) Wastewater collection, treatment and disposal system
c) Water collection, storage, treatment and distribution system
52 A summary of the alternative consultation and decision-making requirements are set out below as sourced from the Guidance:
53 Council is required to consult with mana whenua under both section 77(1)(c) and section 81 of the LGA 2002 given both references are included under section 60 of the Preliminary Act. Further section 14(1)(d) of the LGA 2002 also provides that a local authority should provide opportunities for Māori to contribute to its decision-making processes.
Consultation and the Long Term Plan
54 Given Council did not adopt a Long Term Plan (LTP) in 2024, Council could look at combined consultation on both the LTP to be adopted in 2025, and those aspects of the WSDP requiring consultation.
55 If combined consultation was to be undertaken, it may be most effective to prepare separate consultation documents to ensure clarity.
Expected Content in December Bill - Enduring Settings for Water Services Delivery
56 While the December Bill has not been released, the Guidance has provided further information relating to the likely ongoing framework and enduring settings that Council will be subject to under LWDW.
57 In summary (including links to the relevant Factsheet in the Guidance (and also attached at Attachment C) the Guidance suggests the following settings will likely be included in the December Bill:
Possible Content in December Bill |
Key Features |
Planning and accountability |
New planning and accountability framework fit for purpose comprising three core documents: 1 Statement of Expectations (for Water Organisations only). 2 Water Services Strategy – single comprehensive water focused document -how the provider is proposing to perform, respond to local expectations and priorities and meet regulatory and financial sustainability requirements. Also includes financial forecasting information over 10 year period and infrastructure and investment information over 30+ year period. 3 Water Services Annual Report – water service provider’s actual performance against the expectations and proposals in the above documents. 4 Also required to develop standalone financial statements for all water services. 5 Replace and/or modify current requirements under Part 6 and Schedule 10 LGA 2002 e.g., LTP. Councils that continue to deliver water services in-house will need to prepare the strategy and annual report, instead of including extensive information on water services in their general long-term plan, infrastructure strategy, financial strategy, and annual report. 6 Will include the principle that ‘water revenues should be spent on water services’. Factsheet Link Planning and accountability for local government water services |
Future arrangements for stormwater |
1 Council will retain legal responsibility and control of urban stormwater(sw) services but will be able to choose arrangement most suited, i.e., continue to deliver sw services, contract a new water organisation to deliver aspects of those sw service delivery; or transfer aspects of sw service delivery to a water organisation. 2 If Council chose to transfer some or all aspects of the delivery of sw services, they will still be responsible for determining the levels of service and performance targets (subject to regulatory requirements and community preferences). Council would also be able to still recover costs of providing sw services that they continue to deliver for ratepayers. 3 Changes to improve management of overland flow paths and urban watercourses. 4 Maintain the incentive on councils to align land use planning, stormwater services and investment to support the management of sw services and continue to leverage councils’ existing networks with the communities. 5 Current funding arrangement for sw services retained. If council contracts or transfers delivery of sw to a water organisation, the revenue collected through rates may be allocated between council and the organisation. Factsheet Link Future arrangements for stormwater |
Economic regulation and consumer protection |
1 Economic regulation tools available to the Commerce Commission include: · Information disclosure, revenue thresholds, financial ringfence, quality standards and performance requirements, price-quality regulation. 2 Consumer protection tools available to the Commerce Commission include: · Complaints regulations, dispute resolution regulations, guidelines on service quality codes; and a mandatory service quality code. 3 Economic regulation regime will be risk-based and flexible. Based on information supplied in WSDP and information disclosure requirements, the regulator will be able to set individual requirements for certain providers and common regulations where appropriate. 4 Economic regulation will apply to drinking water and wastewater services and will provide flexibility to include stormwater services at a later date if necessary. 5 Cost of the regulator due to providing economic regulation of water services, will be funded through a levy on local water services providers. Factsheet Link Economic regulation and consumer protection |
Drinking water regulation |
1 Changes aim to reduce the cost and burden for drinking water suppliers associated with complying with the Water Services Act 2021. Changes are designed to improve the efficiency and effectiveness of the drinking water regulatory regime and the approach Taumata Arowai takes to regulating. 2 Propose to reduce regulatory burden on small suppliers, by excluding ‘shared domestic supplies’ serving 25 consumers or fewer from regulation. Higher risk community supplies (such as community halls and marae) would not be covered by this exclusion. 3 Amend legislation to refer to ‘Water Services Authority – Taumata Arowai’. 4 Changes to provide clarity around how to give effect to Te Mana o te Wai. Factsheet Link Drinking water quality regulation |
Standards to help reduce water infrastructure costs |
1 Proposals relating to wastewater environmental performance standards and national engineering design standards, are intended to reduce costs, inefficiencies, and regulatory compliance processes associated with providing water infrastructure. Factsheet Link Standards to help reduce water infrastructure costs |
Financing for councils and water organisations |
1 LGFA has confirmed that it will provide financing to support water council-controlled organisations established under LWDW and look to assist high growth councils with additional financing. 2 Councils continuing to provide water services in-house will also retain the ability to borrow through LGFA. Factsheet Link Financing for councils and water organisations |
Proposed Timeline and Process
58 Given the above considerations, staff have prepared a proposed timeline and process (shown at Attachment A). The timeline and process would guide Council’s preparation and submission of the WSDP. The proposed timeline and process is subject to amendment required by Government direction or legislative changes.
59 Based on the proposed timeline a decision ‘in principle’ would be required in late 2024/early 2025 before proceeding to consultation.
Constraints
60 The WSDP requires Council to state their anticipated or proposed model or arrangements for delivering water services by 3 September 2025. However, while the policy intent available through the Guidance explaining the available options, tools and models is now available, the models available to choose from will only be passed into law (mid 2025) shortly before the due date for submission of the WSDP. The Guidance is therefore subject to amendment throughout the legislative process. It is understood that there will be an opportunity for Council to make submissions on the content of the December Bill possibly in early 2025.
61 Likewise, the Preliminary Act requires financial sustainability by 30 June 2028. This includes meeting regulatory requirements. However, details around the comprehensive economic regulation regime will only be passed into law in mid-2025.
62 There is also the risk of further Government mandate or intervention requiring Council to proceed a certain way particularly so if Council is unable to comply with its requirements for the WSDP. There is also the risk that further information may be required in the WSDP should the Secretary for Local Government direct for the three-month period from 3 September 2024.
OPTIONS
63 There are no options listed because the preparation and adoption of a WSDP is a legislative requirement under the Preliminary Act.
NEXT STEPS
64 Staff will:
a) undertake further technical analysis on content required in the WSDP including delivery model and financial considerations;
b) advance discussions with other parties (including mana whenua) to enable Council to make future decisions on the content of the WSDP; and
c) report back to full Council with further technical analysis and an update on discussions with others (including mana whenua) in accordance with the proposed timeline set out in this report.
Signatories
Author: |
Nadia McKenzie - In-House Legal Counsel Karilyn Canton - Chief In-House Legal Counsel |
Authoriser: |
David Ward - General Manager, 3 Waters and Transition Sandy Graham - Chief Executive Officer |
|
Title |
Page |
⇩a |
Proposed Timeline and Process (subject to amendment) |
43 |
⇩b |
History of Water Reforms |
45 |
⇩c |
DIA Guidance |
47 |
⇩d |
Working Group High Level Plan |
105 |
⇩e |
Water Service Delivery Plans - Content Requirements - Section 13 |
107 |
⇩f |
Consultation Diagram - Russell McVeagh |
110 |
⇩g |
Investment Objectives proposed by Working Group |
111 |
SUMMARY OF CONSIDERATIONS |
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Fit with purpose of Local Government This report enables democratic local decision making and action by, and on behalf of communities and promotes the social, economic environmental and cultural well-being of communities in the present and for the future. |
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Fit with strategic framework
This report has been prepared with reference to the Dunedin strategic framework. |
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Māori Impact Statement Council is required to consult with mana whenua under both sections 77(1)(c) and section 81 of the LGA 2002 given both references are included under section 60 of the Preliminary Act. Further section 14(1)(d) of the LGA 2002 also provides that a local authority should provide opportunities for Māori to contribute to its decision-making processes. The timeline proposed has formal engagement with mana whenua as the next step. The form of the engagement has not yet been finalised but will run throughout the process. |
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Sustainability Financial sustainability of local government water services is a key objective of the Government’s ‘Local Water Done Well’ policy. The Preliminary Act is designed to implement this policy and ensure delivery of water services is financially sustainable. |
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LTP/Annual Plan / Financial Strategy /Infrastructure Strategy There are significant implications for the LTP and Annual Plan, and the associated documents. This will be discussed further in subsequent reports. |
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Financial considerations This is a noting only report. |
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Significance The matters discussed in this report are considered high in terms of the Council’s Significance and Engagement Policy. Any water services delivery models will be the subject of public consultation. |
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Engagement – external There will be engagement with other territorial authorities and mana whenua. |
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Engagement - internal Staff from the Legal Team, 3 Waters Group, and the Executive Leadership Team have contributed to this report. |
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Risks: Legal / Health and Safety etc. There are no identified risks related to this report. |
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Conflict of Interest There are no known conflicts of interest. |
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Community Boards There are no specific implications for Community Boards, although the LWDW reform will affect all areas. |
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Infrastructure Services Committee 17 September 2024 |
Items for Consideration by the Chair
Any items for consideration by the Chair.
Infrastructure Services Committee 17 September 2024 |
Resolution to Exclude the Public
Pursuant to the provisions of the Local Government Official Information and Meetings Act 1987, exclude the public from the following part of the proceedings of this meeting namely:
This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987, and the particular interest or interests protected by Section 6 or Section 7 of that Act, or Section 6 or Section 7 or Section 9 of the Official Information Act 1982, as the case may require, which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as shown above after each item.