STORMWATER ASSET MANAGEMENT PLAN. Hauraki District Council June 2015 Version

Transcription

1 STORMWATER ASSET MANAGEMENT PLAN Hauraki District Council June 2015 Version

2 Table of Contents 1.0 OVERVIEW OF THE STORMWATER ACTIVITY History STORMWATER ACTIVITY GOALS & OBJECTIVES COMMUNITY OUTCOMES AMP Strategic Drivers and Consultation ASSET MANAGEMENT PLANNING POLICY AND COUNCIL COMMITMENT Council Commitment to Asset Management Level of Practice to be achieved in AM Areas THE SERVICE WE PROVIDE Introduction What Is Important to the Community Customer Levels of Service and Technical Levels of Service Levels of Service for the Hauraki Long-Term-Plan ASSET DESCRIPTION Stormwater Asset Description DEMAND AND GROWTH Future Demand Demand Management RISK MANAGEMENT Risk Management Scope Asset Based Risk Management Approach Identify Critical Assets Risk Register Risk Management Strategies for Critical Assets Procedures in place for Emergency Failures Risk Management at Corporate & Service Level Identify Significant Negative Effects Legislative Requirements for Risks Principles of Integrated Risk Management Risk Management Process Implementation Risk Management Plan linkage to AMP Data Collection for Risk Management Purposes Risk Standards & Code of Practice Risk Management Integrated with Corporate Processes Lifelines, Disaster Recovery & Business Continuity Plans Linkage to LoS LIFECYCLE MANAGEMENT Introduction: The Objectives of Lifecycle Management Lifecycle Management Strategy Life Cycle Analysis Expected Lives Operations and Maintenance Asset Condition and Performance Monitoring Renewal Creation and Acquisition FINANCIAL FORECASTS & MANAGEMENT Forecast Overview Financial Plan - 10 Year Operation and Maintenance Funding Of Stormwater Financial Policy EFFECTS OF THE STORMWATER ACTIVITY Environmental Effects Social Effects Cultural Effects Economic Effects 51 June 2012 General Summary Page 2 of 58

3 11.5 Sustainability Resource Consents STRATEGIC PRIORITIES FOR NEXT 3 YEARS Overland Flowpaths KEY PROJECTS LEGISLATION AND BYLAWS Relevant Strategies and Plans Legislation ASSET MANAGEMENT IMPROVEMENT PROGRAMME Improvement Program SIGNIFICANT ASSUMPTIONS AND UNCERTAINTIES Asset Condition & Confidence Levels 57 June 2012 General Summary Page 3 of 58

4 1.0 OVERVIEW OF THE STORMWATER ACTIVITY The Stormwater activity involves the disposal of excess rainfall runoff from urban areas using drainage systems which include natural watercourses, man-made drains, open channels, reticulated pipe networks and other structures for accepting stormwater runoff. The purpose of this activity is to ensure the safe removal of stormwater to keep transport and communication networks operable, minimise the risk of flooding to property and minimise the risk to human life in the urban communities of the District. The Hauraki District Council has a statutory obligation to provide stormwater services in some areas. However, there is also a community expectation that adequate stormwater services will be provided in urban areas and the Council is seen to be the most appropriate organisation to provide this service. The stormwater service in places discharges to the rural land drainage system, but rural land drainage systems and flood protection works do not form part of the Stormwater Group of Activities. The Council manages stormwater systems in the urban areas of Paeroa, Waihi, Ngatea, Turua, Kerepehi, Whiritoa, Mackaytown, Karangahake, Waikino and Kaiaua for the protection of the residents, property and the environment. The Stormwater activity assets include open drains (38.3km), piped network (92.4km), manholes (1,125) and pump stations (3). These assets operate in combination to remove surface water runoff that results from rainfall in urban areas. All stormwater systems, except in Whiritoa and Kaiaua, eventually discharge to either the Waihou or Piako Rivers via a tributary, or via a land drain. Waihi, Mackaytown, Karangahake and Waikino stormwater flows by gravity directly to the Ohinemuri River, and then to the Waihou River. Paeroa and Ngatea stormwater discharges to Ohinemuri and Piako Rivers respectively, via outlets controlled by the Waikato Regional Council floodgates and pump stations. Whiritoa and Kaiaua stormwater is discharged to the sea. In the Plains towns, the main drainage outlet channels also convey runoff from upstream rural catchments. The maintenance of these channels is the responsibility of the appropriate drainage committee. In Paeroa, the primary urban drainage channel is the Hape Stream (Paeroa Main Drain) which is maintained under the urban stormwater budget. This channel also conveys upstream rural catchment runoff. The Council was granted comprehensive stormwater discharge consents by the Waikato Regional Council for all urban areas in May 2003 for a term of 20 years, with five yearly review periods. These consents stipulate the monitoring and environmental requirements for stormwater discharge and provide guidance on monitoring processes. The stormwater service is funded from general rates and targeted rates. The map in Figure 1.1 shows the locations where stormwater systems are located in the Hauraki district. 1.1 History European settlement of the areas that became the urban towns of Paeroa and Waihi started in the 1870s and intensified with the gold mining activities in Waihi, Waikino and Karangahake. Paeroa became the river port for the shipping of coal and materials to serve gold mining. Installation of urban stormwater drainage started in Waihi in the period 1915 to 1920 with the first stormwater pipes being installed in Paeroa in June 2012 General Summary Page 4 of 58

5 Prior to 1908 the Hauraki Plains consisted of swamp and alluvial flats, subject to frequent inundation by the Waihou and Piako Rivers. The few patches of dry land that existed were able to support the milling of the extensive areas of Kahikatea Bush and the Flax Milling industry. The development of the Plains towns progressed in the early 20 th century with settlement, drainage of the peat swamps, and clearing of the bush for agricultural activity. Much of the piped reticulation in the Plains towns is relatively recent, mostly post WW2. The District s east coast resort of Whiritoa was developed in the 1960s and 1970s. The stormwater network serves only the roads. No provision for private property stormwater reticulation was made. This stormwater is disposed of to ground, or stored for domestic use. The Kaiaua coastal area has a small amount of reticulation serving the villages of Kaiaua and Whakatiwai. This reticulation was constructed since the 1960s. Figure 1.1: Map to show the location of Hauraki stormwater systems Kaiaua Ngatea Turua Whiritoa Kerepehi Paeroa Waihi Smaller Systems June 2012 General Summary Page 5 of 58

6 2.0 STORMWATER ACTIVITY GOALS & OBJECTIVES The Stormwater activity is responsible, as outlined in the 2010 amendment to the Local Government Act, for stormwater drainage and control and protection of urban property against flooding. The goal of this activity is: To protect people and property from flooding caused by extreme storm events, To minimise the nuisance of flooding, To protect the environment and public health by reducing stormwater pollutants To minimise runoffs that are discharged into natural waters. To achieve the required community and environmental outcomes, the council regulates land use activities and manages a stormwater network that conveys rainfall from urban and rural areas into streams, harbours, and groundwater aquifers. Treatment devices remove pollutants from stormwater runoff before it reaches the receiving environment. Technical management of the Stormwater activity involves land use planning, the provision of specialist stormwater infrastructure, the utilisation of other infrastructure types (such as roads), and protecting overland flow paths. Protecting and enhancing the receiving environments affected by stormwater is an integral part of managing this activity. The objectives of this Asset Management Plan are: To demonstrate that our assets are managed appropriately for the Hauraki community To outline how Council will meet its legal and regulatory obligations both as a local District Council and as operator of the public stormwater network To ensure and demonstrate that the Council has applied a long-term view in respect of environmental and financial sustainability To provide substantiated financial forecasts and projections demonstrating financial stewardship of the stormwater assets that Hauraki District Council manages on behalf of the community To promote and carry out a continuous improvement process that identifies both needs and opportunities for improvements in the management and operation of the stormwater activity The types of asset covered by this Plan are: All Council owned piped stormwater drains Streams/open drains administered by Hauraki District Council Stormwater related structures such as pump stations; manholes, inlet and outlet structures Service laterals providing points of connection to pipes and open drains from private property Beach outlets Floodways, stopbanks and other flood protection related assets Detention ponds Soak pits not associated with direct road runoff The following assets are not included in this plan: Road catch-pits and catch-pit leads Road related stormwater assets (for example, bridges and road culverts) Soak pits associated with direct road run off Private soak pits and detention tanks Streams/rivers administered by Waikato Regional Council June 2012 General Summary Page 6 of 58

7 3.0 COMMUNITY OUTCOMES As required by the Local Government Act 2002, Council has carried out a process to identify community outcomes by giving the community the opportunity to discuss what they think is important in terms of the present and future social, economic, environmental and cultural interests of their community. The community identified the following six community outcomes: PREPARED HAURAKI: We provide a range of services and facilities to meet our District's needs and expectations for a safe environment; INTERACTIVE HAURAKI: We are a proactive Council that provides leadership and communicates effectively with all sectors of our District; KOTAHITANGA HAURAKI: We take a collaborative approach with both Mana Whenua and Tangata Whenua in our District; LIFESTYLE HAURAKI: We provide an environment that encourages vibrant communities and an enhanced quality of life; PROGRESS HAURAKI: We have a positive climate that encourages balanced and sustained economic growth throughout our District; SUSTAINABLE HAURAKI: We plan for the wise use and management of all land and resources for the continued benefit of our District. The contribution made by the Stormwater service to Community outcomes is described in Table 3.1 Table 3.1: The Stormwater Service Contribution to Community Outcomes COUNCIL COMMUNITY OUTCOMES PREPARED HAURAKI We provide a range of services and facilities to meet our District's needs and expectations for a safe environment. KOTAHITANGA HAURAKI We take a collaborative approach with both Mana Whenua and Tangata Whenua in our District. LIFESTYLE HAURAKI We provide an environment that encourages vibrant communities and an enhanced quality of life. PROGRESS HAURAKI We have a positive climate that encourages balanced and sustained economic growth throughout our District. STRATEGIC OUTCOME Reticulated Stormwater is provided within town urban limits that protects the public from the risk of flooding. The stormwater system is operated in a manner that is sensitive to the natural environment. Reticulated Stormwater is provided within town urban limits that protects the public from the risk of flooding. Reticulated stormwater is provided within town urban limits, providing security for economic development. HOW THE STORMWATER ACTIVITY CONTRIBUTES By providing stormwater pipes and open drains with sufficient capacity to convey stormwater resulting from rainfall events. By ensuring that overland flow paths are protected and maintained. By ensuring that cultural values are taken into account when planning for future infrastructure in the District. By providing stormwater pipes and open drains with sufficient capacity to convey stormwater resulting from rainfall events. By ensuring that overland flow paths are protected and maintained. By providing stormwater pipes and open drains with sufficient capacity to convey stormwater resulting from rainfall events. By ensuring that overland flow paths are protected and maintained. June 2012 General Summary Page 7 of 58

8 COUNCIL COMMUNITY OUTCOMES SUSTAINABLE HAURAKI We plan for the wise use and management of all land and resources for the continued benefit of our District. STRATEGIC OUTCOME The stormwater activity is operated in a manner that is sensitive to the importance of its impacts on cultural, economic, environmental and social interests. HOW THE STORMWATER ACTIVITY CONTRIBUTES Mitigating adverse effects from the stormwater activity, assists in maintaining sustainable interests in environmental, social, cultural and economic benefits. 3.1 AMP Strategic Drivers and Consultation Figure 3.1 illustrates the primary linkages between some of the major council plans, strategies and legislative requirements. It shows how the concept of community well being links to the community outcomes, the LTP, legislation and other key strategies and documents. This figure represents an overview of the strategic landscape in which the Stormwater service is being operated and developed. The diagram also shows that consultation and the participation of the community underpin the strategic direction as well as business, tactical and operational planning for council activities. The community participation in general is represented by council. Hauraki district has created an additional initiative in this regard through the establishment of a Water and Wastes Consultative Committee to liaise and consult with relevant community and stakeholder groups on important issues regarding the water and waste services. The diagram shows how the stormwater Asset Management Plan (and AMP s in general) fits into the strategic and legislative framework for HDC. June 2012 General Summary Page 8 of 58

9 Figure 3.1: Linkages between strategic concepts, documents, plans and legislative requirements Environmental Cultural Community Wellbeing Economic Social Council Community Outcomes Water & Wastewater Consultative Committee Legislation Bylaws Key Strategies (local, regional, national plans) Long Term Plan AMP s Community Plans Council Policies Political Direction Community Consultation Internal Resources Professional Advice KEY: Legislative Drivers Enablers Planning Drivers June 2012 General Summary Page 9 of 58

10 4.0 ASSET MANAGEMENT PLANNING POLICY AND COUNCIL COMMITMENT The small population of the Hauraki District calls for a fit-for-purpose asset management approach within the district. The total number of properties provided with stormwater services within the district is less than 6,000, comprising residences, businesses and holiday homes. 4.1 Council Commitment to Asset Management The CORE level for stormwater asset management practice has been identified as appropriate, formally approved by Council and adopted within Council Policy. The asset management plans for the stormwater activity are updated and republished every three years. The published asset management plans are officially adopted by Council and any subsequent changes are captured in the Change Register. On behalf of the community, Council manages its physical assets to ensure they are capable of delivering the agreed levels of service over their lifetimes in the most cost effective manner. Replacement or disposal forms part of its asset, management and financial planning. Council has considered appropriate asset management levels for the organisation. For some activities or asset types a core approach has been found appropriate, for others a more advanced approach is required. The figure below provides a broad framework of the environments considered and analysed to develop the AM policy for Stormwater in Hauraki district. Figure 4.1: Drivers of Asset Management Policy The methodology for assessing the appropriate level of asset management applicable to Stormwater assets was developed by Waugh Infrastructure Management Ltd in conjunction with council officers. The appropriate asset management levels developed for Stormwater are shown in each section. The following table provides the criteria assessed, the results of the assessment and comments on the rationale for the assessment findings. June 2012 General Summary Page 10 of 58

11 Table: 4.1: Stormwater - Level of Asset Management, Factor Assessment Results CRITERIA ASSESSMENT COMMENTARY Population Core The initial population risk screen for urban areas, all township populations, and total district population showed that asset management practice should be Core District Risks Costs Benefits Legislative Requirements Wide and Size, Condition, Complexity of Assets Risks Associated with Failures Organisational Skills and Resources Customer Expectations Sustainability Core Based on the identified district wide risk factors, the suggested level of appropriate asset management practice for Hauraki District Council is Core with some extension of practice around the risk management issues identified 4.5% of rates The Stormwater budgets are relatively small but there are large economic impacts in the case of Stormwater system failure, and represent higher risks if AM practice is not at an appropriate level Meet minimum Normal Average + Normal Average Corporate sustainability policy Final AM Level Stormwater - Core Hauraki District Council policy is to meet minimum legislative requirements, or exceed requirements where deemed appropriate and cost effective. The asset management response to legislative requirements is a compliance based approach The size and complexity of assets is normal for a rural authority with small towns. The assets are generally in good condition. Assets are fit for purpose and generally not of unusual size or complexity. Integration of stormwater systems with regional land drainage assets adds some complexity Failure of Stormwater systems would lead to a range of issues including economic and property risks. Public health risks are associated with the mixing of stormwater and wastewater during flood events. This suggests a higher level of risk management practice Hauraki District Council is a small sized local authority. Internal and external resources have been maintained as required to deliver services. Operational knowledge has been retained by the organization. Succession planning has been identified as an issue and is being managed. Staff resourcing levels are stable, although there are longer term issues around recruitment and retention of suitable resources. Elected representatives are knowledgeable and engaged in community decisions. Identified resource gaps in technical expertise (Water and Wastewater) need to be managed. There is a lack of documented Standard Operating Procedures and Quality Plans Council has developed and maintained assets to a good standard. Maintenance of current service levels is important to the community Overall customer expectations are judged to be typical of a rural and small communities that is stable but with high expectations of maintaining and / or restoring service that have economic impacts on rural production and the district economy Hauraki District Council has a sustainability policy as outlined in the LTP that will be applied to all assets and management. Potential impacts of climate change and sea level rise require a longterm risk management approach Legislative changes currently being considered, and changes to regional and national standards may impact the activities Analysis of factors suggests that asset management practice should be Core for Stormwater June 2012 General Summary Page 11 of 58

12 4.2 Level of Practice to be achieved in AM Areas Further analysis of Stormwater practices and processes performed by Waugh Infrastructure Management Ltd and council staff provided a more detailed framework for the identification and future management of appropriate asset management levels. A summary of the practices and processes required for Stormwater to achieve the identified asset management level is provided in the table below: Table 4.2: Stormwater - Summary Level of Asset Management Practices Required AM ATTRIBUTE PRACTICES AND PROCESSES REQUIRED CORE 1. Levels of Service Define LOS or performance Linkage to strategic/community outcomes Links to other planning documents Levels of consultation identified and agreed Service life of network stated 2. Description of assets Process of Development: o Adequate Physical Description of Asset o Adequate Financial Description of Asset o Remaining useful life o Ability to Aggregate & Disaggregate Information 3. Managing growth Demand Forecasts (10 year) Demand Management drivers documented Demand Management strategies documented Sustainability Strategies 4. Risk Management Identify critical assets Identify associated risks and risk management strategies for critical assets Identify significant negative effects 5. Lifecycle (Optimised) Decision-making Lifecycle and Asset Management Practices: o Service capacity gap analysis o Evaluation and ranking based on criteria of options for significant capital invest decisions o Maintenance Outcomes, Strategies, Standards and Plans documented 6. Financial Forecasts AM reflected in 10 year Financial Plan Maintenance, Renewals, New Capital (LOS and demand). Validate the Depreciation/Decline in Service Potential 7. Planning Assumptions and Confidence Levels List all assumptions and possible effects Confidence level on asset condition Confidence level on asset performance Accuracy of asset inventory Confidence level demand/growth forecasts Confidence level on financial forecasts 8. Sustainability Compliance with LGA Outline Improvement Programmes 10. Planning by qualified persons Identify improvements to AM processes & techniques Identify weak areas & how they will be addressed Timeframes for improvements Identify resources required (human & financial) AM Planning should be undertaken by a suitably qualified person 11. Commitment AM Plan adopted by Council including improvement programme Council has defined the Appropriate AM Practice it has/is adopting Plan key tool to support LTP AM Plan regularly updated and should reflect progress on improvement plan 12. AMP Format Purpose of the plan June 2012 General Summary Page 12 of 58

13 5.0 THE SERVICE WE PROVIDE CORE levels of service apply to the following: Define LoS or performance. Linkage to strategic/community outcomes Links to other planning documents. Levels of consolidation identified and agreed. Service life of network stated. 5.1 Introduction Levels of Service (LoS) define the standard of service delivered to the community, over and above the legislative requirements. LoS represent an agreement between the Council and the Community defining what will and will not be provided by the service. The LoS targets impact on the cost of the service provided. Level of service targets guide the design and maintenance decisions Council s engineers and management have to make and ultimately affect the cost of stormwater service to customers. The LoS therefore represent an agreement between the Council and Community on what aspects of the stormwater service are important to the community, and what the community is prepared to pay for. The diagram below outlines the relationship between Levels of Service (LoS) and AM Planning and provides a platform for decision making relating to strategic asset and infrastructure management. Before developing detailed asset management strategies and levels of service, Council needs to consult with the community about the customer LoS. June 2012 General Summary Page 13 of 58

14 Figure 5.1: Creating Customer value through LOS Development Customer Consultation and Research Analyse customer demand Customer values Legislative & compliance requirements Strategic drivers Investigate: - Affordability - Funding options - Whole of life costs Assess resource capability & capacity Assess Life-Cycle Asset Management Solutions: Create/Acquire new assets Ongoing Review, Management & Performance monitoring Determine required technologies or options Operate & Maintain Develop Levels of Service (accessibility, affordability, quality, responsiveness etc) Mitigate & Manage Risks Refurbish / Upgrade Dispose / Decommission The diagram illustrates that customer consultation and research underpin the creation of customer value by utilising infrastructure assets (stormwater in this case). The development of customer levels of service is driven by customer values e.g. accessibility, affordability, quality etc. Legislative requirements (e.g. RMA) and strategic objectives also contribute to the development of service levels. New technologies, options and resources are investigated and assessed to provide new and improved assets. Risks are identified and managed. Assets are assessed and researched through their life cycle stages (Creation, Operation, Upgrade and Disposal). Affordability, funding options and total life cycle costs are investigated at each of these stages. Operational and day-to-day management, review and performance monitoring are also performed for the total asset base to ensure that the assets deliver on the agreed levels of service. The results of the monitoring and investigations are communicated to the customer on a regular basis in order to make decisions on the future of the assets. Appropriate levels of service are determined with reference to strategic organisational objectives, legislative requirements, public health considerations, customer expectations, effects on the environment and affordability. 5.2 What Is Important to the Community The following four aspects of the stormwater service were identified as those of greatest importance to the community: 1. Stormwater systems protect houses from flooding in urban areas. 2. Stormwater services meet regulatory requirements. 3. The stormwater service is reliable. 4. Customer requests are dealt with promptly and appropriately. June 2012 General Summary Page 14 of 58

15 All stormwater systems, except in Whiritoa and Kaiaua, eventually discharge to either the Waihou or Piako Rivers via a tributary, or via a land drain. Waihi, Mackaytown, Karangahake and Waikino stormwater discharges by gravity flow directly to the Ohinemuri River, and then to the Waihou River. Paeroa and Ngatea stormwater discharges to Ohinemuri and Piako Rivers respectively, via outlets controlled by the Waikato Regional Council floodgates and pump stations. Whiritoa and Kaiaua stormwater is discharged to the sea. In the Plains towns, the main drainage outlet channels also convey runoff from upstream rural catchments. The maintenance of these channels is the responsibility of the appropriate drainage committee. In Paeroa, the primary urban drainage channel is the Hape Stream (Paeroa Main Drain) which is maintained under the urban stormwater budget. This channel also conveys upstream rural catchment runoff. The Council was granted comprehensive stormwater discharge consents by the Waikato Regional Council for all urban areas in May 2003 for a term of 20 years, with five yearly review periods. These consents stipulate the monitoring and environmental requirements for stormwater discharge and provide guidance on monitoring processes. The cost of the stormwater service is funded from general rates and targeted rates. The Community Outcomes and Core Values of Stormwater customers are used as a basis to review Levels of Service and related performance measures. The Customer Performance Measures are intended to provide for easy understanding by the customers of the service and the wider community, of the Level of Service measurement and targets. The underpinning Technical Performance Measures are more defined and of a more operational or technical nature. Technical Performance Measures can be accurately reported on. 5.3 Customer Levels of Service and Technical Levels of Service Two types of Level of Service have been prepared: i. Customer Levels of Service; and ii. Technical Levels of Service. The customer levels of service are intended for the public; and encapsulate the four aspects of importance to the community. The Technical Levels of Service are the means by which Council meets its agreement with the community to provide a stormwater service of a stated standard at an agreed price. They are intended for use by Council management and engineers to help assess at a technical level whether or not the stormwater service is being managed in the manner than will deliver upon the Customer Levels of Service. The Customer Levels of Service are those that are described in the Hauraki Long Term Planning documents and this plan. 5.4 Levels of Service for the Hauraki Long-Term-Plan The reviewed levels of service for the 2015 Asset Management Plan reflect the four aspects of greatest importance to the community, listed above and are used to monitor achievement of these. The Levels of are listed in Table 5.1, page over: June 2012 General Summary Page 15 of 58

16 Table 5.1: Customer Levels of Service, Performance Indicator & Targets LEVEL OF SERVICE OBJECTIVE COMMUNITY VALUE BEING ADDRESSED PERFORMANCE INDICATOR TARGET To provide a stormwater service that protects legally consented residential and communal habitable dwellings in urban areas from flooding caused by extreme rainfall events up to the 1 in 50 year storm. Stormwater systems protect houses from flooding in urban areas. The number of legally consented residential and communal habitable dwellings flooded in a 1 in 50 year event. 0 To provide a stormwater service that protects legally consented non-residential buildings in urban areas from flooding caused by rainfall events up to the 1 in 10 year storm. Stormwater systems protect houses from flooding in urban areas. The number of legally consented nonresidential buildings flooded in a 1 in 10 year event. 0 The stormwater network capacity for regular rainfall will be delivered at a level of service community desires and is prepare to pay for Stormwater systems protect houses from flooding in urban areas. Residential and business customers are satisfied with the overall stormwater service More than 70% of respondents are satisfied with the stormwater service To meet the legal requirements for a stormwater service. Stormwater services meet regulatory requirements. Council will operate the stormwater service in line with all relevant acts & codes. Council receives no abatement notices and no enforcement proceedings. To maintain the stormwater network to minimise the risk of blockages causing flooding. Reliable stormwater service is provided. The number of calls about 'nuisance flooding' caused by blockages or partial blockages in the stormwater network. < 5 per 1000 customers Emergency, Urgent, Priority and Routine requests are responded to within an acceptable time. Timely response to customer requests. Council staff or contractors will arrive on site to assess the appropriate response within a prescribed time of notification % June 2012 General Summary Page 16 of 58

17 6.0 ASSET DESCRIPTION CORE levels of service apply to the following: Process of Development Adequate Physical Description of Asset Adequate Financial Description of Asset Remaining Useful Life Ability to Aggregate & Disaggregate Information 6.1 Stormwater Asset Description Hauraki District Council owns and operates the stormwater infrastructure in 7 townships within the District, serving 5,850 properties with 92km of piped network and 38km of open drains. These convey stormwater from the roads and dwellings through the network to mainly river outfalls. The infrastructure includes manholes, pipe work and pump stations. The Stormwater Schemes and their physical attributes, administered and managed by the Hauraki District Council (HDC), are shown in the table below. Table 6.1: Overall Scope of the Councils Stormwater Schemes within the District SCHEME LENGTH (KM) PROPERTIES SERVED PUMP STATIONS RETICULATION DRAINS (HDC) Paeroa 30.5km 17.1km 1,820 2 Ngatea 15.2km 4.1km Waihi 31.8km 8.1km 2,250 - Turua 3.9km 1.9km Whiritoa 3.8km 0.3km Kerepehi 5.4km 3.0km Kaiaua 1.8km 3.8km 300 Total 92.4km 38.3km 5,850 3 The 2014 valuation puts the total value of the Stormwater asset within the Hauraki District at approximately $30 million. The stormwater pipes and manholes form the largest proportion, 97%, of assets by dollar value with the balance being Open Drains, Stop Bank Protection, Pumps, Floodgates and Consents. June 2012 General Summary Page 17 of 58

18 Figure 6.1: Stormwater Valuation Summary June 2014 The total value of the stormwater assets in July 2014 was $30 million (reported value is Optimised Replacement Cost). Pipes themselves represent 81% of the stormwater asset value, indicating the appropriate focus for risk assessment. Table 6.2: Asset Valuation as June 2014 ASSET OPTIMISED REPLACEMENT COST 1 ($ million) FAIR VALUE 2 ($ million) Pipes Open Drains Manholes Stop Bank Protection Floodgates Consents Pumpstations Total June 2012 General Summary Page 18 of 58

19 1. Optimised replacement cost assesses the replacement cost of equivalent performance assets at the date of valuation. 2. Fair value is based upon the optimised depreciated replacement cost (ODRC). It defines the fair value of assets as the gross current replacement cost less allowances for physical deterioration, optimisation for obsolescence and relevant surplus capacity. June 2012 General Summary Page 19 of 58

20 7.0 DEMAND AND GROWTH CORE levels of service apply to the following: Demand Forecasts (10 year) Demand Management drivers documented. Demand Management strategies documented. Sustainability strategies. 7.1 Future Demand The population in the Hauraki District is projected to remain virtually static over the next 10 years followed by a slight decline to However the lack of population growth in the district population disguises changes that are expected to occur in the profile and spatial distribution of the population. While the demand may be low, there may be a requirement in future resource consents to provide a higher level of discharge quality, which in turn could incur some additional capital expenditure. The current Comprehensive Stormwater Discharge consent expires in 2023 The Effect of Climate Change on Stormwater Research undertaken by the University of Waikato (2011) indicates that, in the context of the Waikato Region, Hauraki District s exposure to climate change events is largely in terms of extreme future rainfall and drought conditions. This means that the District is expected to experience both an increased risk of heavy or prolonged rainfall and also extended periods of reduced rainfall. 7.2 Demand Management Based on the current levels of service and the community level of satisfaction of 74%, no need for significant changes to the stormwater asset is expected during the life of this Plan as a result of increased community expectations. The supporting assumptions of this Plan indicate that population is not expected to increase although there may be a small increase in the number of rating units. Therefore new demand to service growth in the urban areas is not expected to the extent where additional new infrastructure is needed. The existing stormwater infrastructure already has sufficient capacity for the expected growth. It is likely that climate change will impact on the stormwater asset and the Council may have to take this into account when it extends and/or undertakes maintenance on this asset in the future. For these expected changes to demands on the stormwater asset, the change is expected to be gradual and they are not expected to have a significant effect on the asset during the life of this Plan. Council has incorporated an allowance for increased rainfalls and short duration events in the design of piped infrastructure since The modelling of the stormwater network over time may indicate demand or demand management issues. June 2012 General Summary Page 20 of 58

21 8.0 RISK MANAGEMENT CORE level asset management applies to: Identify critical assets. Identify associated risks and risk management strategies for critical assets. Identify significant negative effects. A comprehensive risk analysis for the stormwater services and assets in Hauraki district was undertaken in the preparation for the 2012 AMP planning cycle. The foundation of the risk management strategy was developed by Waugh Infrastructure Ltd. Business risks as well as asset risks were identified and using the corporate risk evaluation frameworks were categorised into extreme, high, medium or low risk categories. 8.1 Risk Management Scope The scope of risk management is to ensure that: Risk is understood and identified. Hazards and practices that could cause financial loss, disruption to business goals, injuries to people or damage to the environment are controlled as far as practicable. Insurance or other financial arrangements are made to protect the community s interests should a loss damaging to the finances of the council occur. 8.2 Asset Based Risk Management Approach A review of the risk management profile and practices found that these were sufficiently thorough and still relevant to be included in the AMP planning cycle with only minor amendments Council s engineers assessed the likely consequence of assets failing, and measured that consequence against the impact of whether the LoS reliability criteria would be compromised by that failure. Individual assets, e.g. pumpstations, servicing large numbers of people showed up as requiring a high criticality rating due to their ability to affect a large number of people during a single outage. Other assets were deemed to be difficult to repair or replace within an eight hour time frame. Where repair or replacement in less than eight hours was deemed to be challenging, the asset s criticality rating was raised (if not already raised during the risk assessment). Some assets could be at risk of failure against both Level of Service criteria (number of people affected and time to repair). These assets have been given the highest asset criticality ratings. Mitigation strategies were reviewed to determine whether the mitigation measures would enable an unexpected failure to be quickly corrected, limiting the risk of failing to meet either of the two reliability criterion. Accumulation of debris, damage to the pipes and obstructions to overland flow paths were identified as being the highest risks of failing to meet interruption frequency criteria. The Council has an Operative Civil Defence and Emergency Management Plan which, in the event of an emergency, will see the establishment of an emergency management headquarters within the Hauraki District or the Thames Valley Combined District. In recent years declared emergencies have resulted from the effects of weather (e.g. flooding, wind). However, the Operative Plan caters for operational systems in response to all possible civil defence emergencies including earthquake, fire, hazardous substances, volcanic eruption and subsidence. June 2012 General Summary Page 21 of 58

22 The Council is an active member of the Waikato Civil Defence Emergency Management Group and the Thames Valley Combined Civil Defence Committee, which includes all local authorities within the Waikato Region including that of the Waikato Regional Council. This group was established under the Civil Defence Emergency Management Act 2002 (CDEM Act). The CDEM Group's members work together to manage the Waikato s hazards, so that the communities face only an acceptable level of risk. Arrangements for managing emergencies in a coordinated, multi-agency manner are specified in the Waikato CDEM Group Plan. As an integrated part of the Group Plan, this local arrangement specifies the unique local operational arrangements of the Hauraki District Council. Council also has a response plan for smaller operational failures. Emergencies are reported through a call centre and service request system. Operational staff are on standby and can respond to emergency situations that may occur. Risk will be managed in a manner that enables the key business objectives and community outcomes to be consistently achieved. In the risk management section potential risks to the stormwater services and assets are identified, analysed and mitigation strategies developed The diagram below outlines the process Council follows to ensure successful risk management procedures are applied to stormwater drainage significant/critical assets. June 2012 General Summary Page 22 of 58

23 Figure 8.1: Risk Management Framework & Process Establishing the context Risk Assessment Risk Identification Communication & Consultation Risk Analysis Risk Evaluation Monitoring & Review Risk Treatment The risk management processes aim to: Identify potential risks to the stormwater services and assets Discuss the context the risks must be evaluated in. Analyses the consequences and likelihood of those risks occurring Describes the treatments used to manage those risks. Residual risks remaining after the implementation of risk control strategies are also analysed and the effectiveness of treatment options and control processes evaluated. Risks are prioritised into extreme, high, medium or low. Each identified risk is allocated to an owner, with the responsibility to develop the identified mitigation strategy or to implement the control process. June 2012 General Summary Page 23 of 58

24 8.3 Identify Critical Assets The criticality of assets for Stormwater has not formally been identified and is not yet captured in the Authority Asset Management (AM) system. Risks can be seen to arise from many areas of the Stormwater Schemes, both in the physical aspect and business risks. Error! Reference source not found.8.1 identifies risks associated with the ongoing management, funding, planning, development and operation of the Council s Stormwater schemes. The mitigation strategies are detailed and the residual risks are then ascertained. The Stormwater Risk Control Schedule will be updated on a regular basis to ensure that all risks are relevant and understood. Where required the mitigation strategies have been noted in the improvement programme. In addition risks related to specific high and medium critical assets were also identified and analysed. Where the gross risk was analysed to be high or extreme further treatment options and risk control processes were developed. The residual risks, remaining after the risk treatment plans and controls are implemented, are assessed as part of the risk analysis. The risk management analysis process for stormwater services followed is: Establish the risk context Identify the risks Analyse the risks (determine likelihood and impacts then prioritise) Evaluate risks (whether to treat or not) Develop treatment plans Communicate and consult with relevant parties through this process Monitor and review the analyses, results and developments regularly The risk events with the highest priority are described in the table below. June 2012 General Summary Page 24 of 58

25 8.4 Risk Register Table 8.1 shows a summary of the Stormwater Risk Register and Control Schedule for gross risks assessed with an extreme or high priority. The full Risk Register with risk treatments, residual risk analysis outcomes and risk responsibility is located in Council s Data information system FRED document number Table 8.1: Risk Register Stormwater ASSET AREAS ASSET OR ASSET GROUPS RISK EVENT VULNERABILITY OR FLOW-ON EFFECTS OF RISK EVENT GROSS RISK PRIORITY MITIGATION STRATEGY STRATEGY TO DEVELOP RESIDUAL RISK PRIORITY RESPONSIBLE LEVELS OF SERVICE IMPACT BUSINESS RISKS Higher Level Policies, Procedures and Controls Adhoc/reactive decision making Loss, delay or additional cost of service delivery potential H Change control M Utilities Manager Management of stormwater services acceptable Higher Level Policies, Procedures and Controls Sub-standard operation of assets Assets are damaged, possible environmental effects or deliver below capacity E Public Health Risk Plans developed Implementation of proposed mitigation measures M Utilities Manager Quality stormwater services provided to all customers Higher Level Policies, Procedures and Controls Changing environmental standards Increased capital and operating expenditure to comply and require more rigorous conditions. H Align design standards, operational and maintenance practices with new standards Amend planning assumptions M Utilities Manager Management of stormwater services acceptable Financial Limited longterm financial planning Unplanned cost escalations such as increase in rates and deferred capital and renewals. H Asset management and LTCCP development Initiatives as identified in improvement plans M Utilities Manager Quality stormwater services provided to all customers June 2012 General Summary Page 25 of 58

26 ASSET AREAS ASSET OR ASSET GROUPS RISK EVENT VULNERABILITY OR FLOW-ON EFFECTS OF RISK EVENT GROSS RISK PRIORITY MITIGATION STRATEGY STRATEGY TO DEVELOP RESIDUAL RISK PRIORITY RESPONSIBLE LEVELS OF SERVICE IMPACT Financial Incorrect financial forecasting Insufficient Capex and Opex and increase in rates. E Certified valuers used. Work audited. Building of more robust planning models M Utilities Manager Quality stormwater services provided to all customers Organisation Outdated and inappropriate IT systems e.g. telemetry, GIS Inefficient use of staff, resources and technologies and increase cost of service. H Implement new fit for purpose systems Implementation of new AM system M Support Services Management of stormwater services acceptable Water Flaws in design / construction of assets Capacity to deliver LOS not provided which could result in additional costs to deliver these. H Case by case analysis of performance required of designers/constructors Performance requirements/bonding policies M Utilities Manager Stormwater systems provide efficient and reliable runoff removal Water Water borne disease in stormwater system Stormwater contaminated and serious health impacts. H Reactive management of events Plant and monitoring upgrades L Utilities Manager Quality stormwater services provided to all customers Asset Network modelling and condition assessments not current Inefficient use of resources and capital works programme not optimized. E Modelling has not been developed yet Modelling of all water supplies L Utilities Manager Management of stormwater services acceptable Asset As-built information slow / incorrect on database Incorrect LIM s provided causing additional costs and possible legal action. E LIMS prepared from GIS data - not reliable information Reliable data information M Utilities Manager Stormwater systems provide efficient and reliable runoff removal June 2012 General Summary Page 26 of 58

27 ASSET AREAS ASSET OR ASSET GROUPS RISK EVENT VULNERABILITY OR FLOW-ON EFFECTS OF RISK EVENT GROSS RISK PRIORITY MITIGATION STRATEGY STRATEGY TO DEVELOP RESIDUAL RISK PRIORITY RESPONSIBLE LEVELS OF SERVICE IMPACT Asset Contracts not monitored Major incident with service interruptions. H Monitor Contractors M Utilities Manager Management of stormwater services acceptable Resource Consents not applied for or conditions not met Environmental damage and possible legal action. H Monitor and report on compliance with consents. Programmed reporting/renewal M Utilities Manager Quality stormwater services provided to all customers ASSET RISKS Pump Stations Flood Washout, closure for repairs. E Flood control events / Insurance Spares & generators available M Utilities Manager Management of stormwater services acceptable Pump Stations Design fault Half capacity and structure failure H Review designs properly Strategy in place. Engineering sign-off M Utilities Manager Stormwater systems provide efficient and reliable runoff removal Pump Stations Corrosion Failure of equipment and gradual deterioration E Inspections regularly M Utilities Manager Stormwater systems provide efficient and reliable runoff removal Reticulation Major Flood System failure and widespread flooding H H Utilities Manager Quality stormwater services provided to all customers June 2012 General Summary Page 27 of 58

28 ASSET AREAS ASSET OR ASSET GROUPS RISK EVENT VULNERABILITY OR FLOW-ON EFFECTS OF RISK EVENT GROSS RISK PRIORITY MITIGATION STRATEGY STRATEGY TO DEVELOP RESIDUAL RISK PRIORITY RESPONSIBLE LEVELS OF SERVICE IMPACT Reticulation Changing Climate Increased runoff flows M M Utilities Manager Stormwater systems provide efficient and reliable runoff removal Reticulation Changing Environmental standards Systems need upgrading for increased water standards. M M Utilities Manager Quality stormwater services provided to all customers Reticulation Increasing customer expectations Systems need upgrading for increased levels of protection M M Utilities Manager Quality stormwater services provided to all customers June 2012 General Summary Page 28 of 58

29 8.5 Risk Management Strategies for Critical Assets The main purpose of the stormwater service is to protect urban areas namely residential, business and industrial areas from flooding and weather events. The activity per se is therefore a risk mitigation. Due to the impacts of global warming and the resultant climate change these extreme weather events are predicted to increase. The levels of service for stormwater and the risk mitigation and control processes for stormwater assets may increase in future. The Stormwater Risk Control Schedule will be updated on a regular basis to ensure that all risks are relevant and understood. Where required, the mitigation strategies have been noted in the improvement programme. Council s future strategic approach will be to increase the awareness and the implementation of risk management strategies throughout the Stormwater Scheme areas. The continuous monitoring of these strategies will ensure that changes/modifications in the management/operation of the Stormwater Schemes are effective. A risk analysis has been performed for risk events related to critical assets. The highest priority risk events, the analysis, risk priority, vulnerability or flow-on effects and their mitigation strategies are shown in Table 8.1. The adopted treatments to reduce exposure to identified high and extreme risk events are the following: Reduce probability of failure by capital works (renew, provide redundancy, upgrade), maintenance expenditure, operational documentation, training, etc. Reduce the impact of a failure by actions such as preparing emergency response plans. Accept some risk and carry the consequential costs. Change the level of service. Insure against the consequential costs. Various insurance products are available to insure against perils like fire, theft, vandalism and even environmental disasters like earthquakes (e.g. Material Damage (MD)). Other products will provide cover against risks such as public and professional liability, consequential loss (e.g. a crash due to traffic lights malfunctioning) etc. Council is also part of the LAPP 1 fund that may assist when a catastrophic event damage infrastructure not covered by MD policies. A combination of the above. 8.6 Procedures in place for Emergency Failures The Council has an Operative Civil Defence and Emergency Management Plan which, in the event of an emergency, will see the establishment of an emergency management headquarters within the Hauraki District or the Thames Valley Combined District. In recent years declared emergencies have resulted from the effects of weather (e.g. flooding, wind). However, the Operative Plan caters for operational systems in response to all possible civil defence emergencies including earthquake, fire, hazardous substances, volcanic eruption and subsidence. The Council is an active member of the Waikato Civil Defence Emergency Management Group and the Thames Valley Combined Civil Defence Committee, which includes all local authorities within the Waikato Region including that of the Waikato Regional Council. This group was established under the Civil Defence Emergency Management Act 2002 (CDEM Act). The CDEM Group's members work together to manage Waikato s hazards so that the communities face acceptable levels of risk. Arrangements for managing emergencies in a coordinated, multiagency manner are specified in the Waikato CDEM Group Plan. As an integrated part of the Group 1 Local Authority Protection Programme which is a mutual fund that will contribute to council s responsibility of paying 40% of damages in case of a catastrophic event destroying significant sections of reticulation and infrastructure not covered by standard material damage insurance policies. June 2012 General Summary Page 29 of 58

30 CULTURAL ECONOMIC ENVIRONMENTAL Stormwater Asset Management Plan Plan, this local arrangement specifies the unique local operational arrangements of the Hauraki District Council. 8.7 Risk Management at Corporate & Service Level The risk framework used to analyse and to prioritise risks is implemented at a corporate and service level. Risks across the total spectrum from catastrophic events e.g. earthquakes, tsunami s etc. to more regular occurring risks with smaller impacts e.g. corrosion, decay, flooding etc. are analysed using the same framework. The risk framework is also used to analyse risks across most asset activity areas e.g. water supply, wastewater, solid waste etc. Risks are identified and analysed for the business risks at all organisational levels (strategic, tactical and operational). The Risk Register, Table 8.1, identifies the extreme and high priority risk events linked to business risks, each asset group and high critical assets. 8.8 Identify Significant Negative Effects The positive and negative effects of Stormwater services have been identified in terms of the dimensions of community interests as is shown in Table 8.1. The following positive and negative effects were identified for the stormwater service and systems. Mitigation measures were also developed in order to address the possible negative effects related to stormwater activities. The effects and mitigations have been identified in terms of the sustainability elements (Environmental, Economic, Cultural and Social). Positive and negative impacts and mitigation measures for future generations were also developed. Table 8.2: Stormwater Negative and Positive Effects POSITIVE NEGATIVE MITIGATION Keeps properties dry Health issues decreased Keeps properties dry Health issues decreased Protects private, public and business property Transport corridors and utility infrastructure protected Encourages viable communities Protects community heritage Conveys pollution to natural waterways Pipe blockages cause local flooding May initiate erosion at outfalls Possible wastewater cross contamination Open drainage channels provide opportunity for rubbish dumping High capital and depreciation costs Ongoing maintenance costs Compliance Costs Loss of historic and heritage features Treatment Education Improved monitoring and maintenance Appropriate design Enforcement and education Improved monitoring and efficient maintenance Heightened awareness Good practice June 2012 General Summary Page 30 of 58

31 FUTURE GENERATIONS SOCIAL Stormwater Asset Management Plan POSITIVE NEGATIVE MITIGATION Encourages viable communities Health issues decreased Protects families and communities Provides a healthy environment Enables/protects parks and reserves and consequent social interaction Encourages viable communities and business Pollution causing health problems Potentially dangerous sites during storm events Forced regulations to improve safety will increase costs Education enforcement Encourage community driven enhancement programmes similar to Beach care Ensure safety of open drains Ensure safety of open drains 8.9 Legislative Requirements for Risks Risk management processes, analysis and strategies have been developed in line with risk standards namely AS/NZS 4360:2004 Risk Management Standard and AS/NZS 31000:2009 Risk Management Principles and Guidelines. AS/NZS 5050:2010 Business Continuity Management is the newest standard to be incorporated in the business processes of the organization. Waugh Infrastructure Management identified the high, medium and low criticality assets for to the stormwater services 2. In order to advance the level of asset management and to comply with the HDC AM Policy, the risks for relevant critical assets were also identified and analysed Principles of Integrated Risk Management Risk Management Process Implementation Risk management is applied across all areas of the Stormwater service. Options, risk mitigation strategies and control processes are summarised in the Risk Register. The diagram at the beginning of this section, outlines the process that Council follows to apply appropriate levels of risk management to significant/critical assets at an individual level, and to less critical assets at a group level Risk Management Plan linkage to AMP Risk management is cross referenced to various sections of the AMP. Risk mitigation strategies and control processes, identified in the risk analysis exercise, are programmed into the Improvement Plan for stormwater services. In the Risk Register, the Asset Manager responsible for development of each risk mitigation process is provided. The risk management section is also linked to each level of service section (Section 5). In the life cycle section (Section 9), the operational and maintenance risks and issues of the assets are discussed, in more detail. 2 HDC Water & Wastewater Reticulation Renewal Strategy DM June 2012 General Summary Page 31 of 58

32 8.11 Data Collection for Risk Management Purposes Failure data is used to identify weak links, and will be spatially mapped in AssetFinda. This will clearly indicate where the problem areas for reticulation and mains are. Material and length of pipes are captured for LAPP risk analysis purposes and to provide the basis of indemnity and replacement values for standard material damage policies Risk Standards & Code of Practice In 2008, a structured risk analysis and prioritisation exercise following Risk Standard AS/NZS 4360:2006 was performed. This exercise was performed for stormwater assets and services to guide the preparation of mitigation plans and strategies. The priority of risk events for business, asset & critical risks are reviewed three yearly as part of the AMP review process. The next review is scheduled for completion in 2018/19. There are improvement projects, in the current plan, programmed to achieve the requirements of AS/NZS/ISO 31000: Risk Management Integrated with Corporate Processes The Council s reporting and management system is primarily set up to manage assets and services on behalf of the consumers and community. The risks that may impact on these assets and services are identified though these corporate council processes and reports are submitted to Council to make a decision on how they will be mitigated or resolved. The valuation processes for infrastructure assets aim to determine replacement and fair values for individual assets on a componentised basis in order to align with and to develop reinstatement and indemnity insurance values. These values are also used for depreciation calculations to provide for renewal of assets when the risks to maintain or repair an asset exceed the cost of upgrade or renewal. Risk management for stormwater is integrated with a number of corporate processes. The review of insurance and LAPP is the primary corporate process where risk management is directly addressed. Others are project management, operation and maintenance of assets, service request processes, corporate planning processes e.g. District Plan, LTP, AMPs etc Lifelines, Disaster Recovery & Business Continuity Plans Disaster recovery plans for the information networks of Council are in place. HDC also has a Pandemic Response Plan in operation. The details of this plan mostly directed at the consequences and impact of swine flu pandemic. All information is available on the intranet. Improvement projects have been identified for the further development of lifelines, business continuity and pandemic plans Linkage to LoS The linkage to Levels of Services are identified in the Risk register, Table 8.1, and the existing and proposed control or mitigations for priority risk events are also identified in the register. June 2012 General Summary Page 32 of 58

33 9.0 LIFECYCLE MANAGEMENT CORE level asset management applies to: Lifecycle and Asset Management Practices. Service capacity gap analysis. Evaluation and ranking, based on criteria of options for significant investment decisions. Maintenance outcomes, strategies, standards and plans documented. 9.1 Introduction: The Objectives of Lifecycle Management Lifecycle Management aims to manage assets through the various lifecycle stages from conception to disposal whilst meeting levels of service, maximising benefits and minimising whole of life costs. The figure below illustrates the lifecycle stages from the definition of requirements through to disposal and the asset management functions relevant at each of the stages. Figure 9.1: Lifecycle Asset Management Processes Requirements Definition Disposal Disposal Asset Planning Renewal/ Rehabilitation Sustainable financial management. Lowest Long Term costs. Community Requirements & outcomes. Manage Risk Exposure. Adequate Demand Management Asset Creation Asset Monitoring Operation & Maintenance The basic premise of lifecycle management is that as an asset ages, its operating and maintenance cost and the risk of its failing, increases. At some point the cost of continuing to use and maintain the asset will exceed its replacement cost. This point-in-time is the point at which the maximum value of that asset has been extracted, and is the theoretical optimal time to replace the asset (Figure 9.2). June 2012 General Summary Page 33 of 58

34 Decisions around the optimal time to replace an asset must also consider intangible costs, such as the economic cost to the community of an interruption to the service in the event of an outage. The analysis of the optimal replacement time is therefore not a simple cost-based decision. Asset lifecycle is managed by balancing three programmes of work: i. The Operation and Maintenance Programme; ii. The Asset Renewals Programme; and, iii. The Capital Investment Programme. Figure 9.2: Theoretical example of the optimal time to replace an Asset Source: International Infrastructure Management Manual (2011) P67. The figure illustrates the theory that the cost of operating and maintaining an asset increases as the asset ages. The optimal time to replace the asset occurs when the cost of maintaining the asset (blue line) exceeds the cost of replacing the asset (red line). 9.2 Lifecycle Management Strategy Hauraki DC s lifecycle management strategy is to maximise the useful and economic lives of its assets. By maximising the lives of the District s assets, the Council is able to reduce the cost of the service to the community. To manage assets to best meet levels of service at a minimal whole life cost, it is necessary to balance three main programmes of work: The Operations and Maintenance Programme The Asset Renewals Programme The Development Works Programme The following figure further explains these programmes and their relative impact on levels of service. In the right combination these programmes combine to provide an optimal level of asset maintenance and renewal. June 2012 General Summary Page 34 of 58

35 Figure 9.3: Lifecycle Management Work Programs Operations & Maintenance Programmes Proactive Programmes Reactive Programmes Reactive and proactive maintenance and day-to-day operations ensure efficient operation and serviceability of the assets whilst maintaining levels of service over their useful lives. Asset Renewals Programmes Replacement Programmes Rehabilitation Programmes Renewals programmes allow for the progressive replacement of the asset base to restore assets to their original levels of service e.g. to restore capacity or performance. Replacement costs include from inception to asset disposal. Development Works Programmes Asset Creation Asset Disposal Development works involve the augmentation of assets to improve system capacity and performance where current levels of service are not being met or levels of service are to change. The Council intends to continue to own, control and manage all of the public systems. Operating and maintenance will continue to be conducted by Council s Business Units, Construction & Maintenance (C&M) and Tech Services (TS). The primary mechanism that Council uses to maximise the lives of the District s assets is through the management of: the consequential risks of an asset failing; and, the duration, frequency and extent of interruption to the service due to repair or replacement of an asset. Assets with high failure consequences are rated high criticality, and assets where failure consequences have minimal impact on the community are rated low criticality. The criticality rating process is a part of the Council s Risk Management activity, see Section Life Cycle Analysis HDC has overall responsibility for service delivery including formulation and implementation of management systems, policies and rules governing operation of the Stormwater Schemes. Council manages a stormwater collection and reticulation service on behalf of the community. The 2014 valuation puts the total value of the Stormwater asset within the Hauraki District at approximately $30 million. The stormwater pipes and manholes form the largest proportion, 97%, of assets by dollar value. The balance is made of Detention Structures and Pump Stations. June 2012 General Summary Page 35 of 58

36 Figure 9.4: Stormwater Valuation Summary June 2014 The total value of the stormwater assets in July 2014 was $30 million (reported value is Optimised Replacement Cost). Pipes themselves represent 81% of the stormwater asset value, indicating the appropriate focus for risk assessment. Table 9.2: Asset Valuation as June 2014 ASSET OPTIMISED REPLACEMENT COST 1 ($ million) FAIR VALUE 2 ($ million) Pipes Open Drains Manholes Stop Bank Protection Floodgates Consents Pumpstations Total Optimised replacement cost assesses the replacement cost of equivalent performance assets at the date of valuation. 2. Fair value is based upon the optimised depreciated replacement cost (ODRC). It defines the fair value of assets as the gross current replacement cost less allowances for physical deterioration, optimisation for obsolescence and relevant surplus capacity. June 2012 General Summary Page 36 of 58

37 Stormwater Redticulation Renewals ($) Stormwater Asset Management Plan The following figures provide renewals projections over a 100 year and 20 year period, this supports the age and expected useful lives of the assets. No major renewals are expected in the next fifty years. Some of these peaks will be reduced when a Stormwater Renewals Strategy is developed and implemented. There are gaps in the knowledge and data confidence on some stormwater assets. Improvement actions to improve knowledge about asset condition and lives may change the replacement profile in the next few years. Figure 9.5: 100 Year Renewals Profile for Stormwater Reticulation. 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - Renewal Year 100 Year Pipe 100 Year Manhole 101 Year Open Drain 100 Year Resource Consent 100 Year Average Renewal Expenditure 10 Year Rolling Average 5 Year Rolling Average The following figure shows the projected renewals profile over the next twenty year period. Improvement in asset knowledge and information may change this profile in the next few years. June 2012 General Summary Page 37 of 58

38 Stormwater Redticulation Renewals ($) Stormwater Asset Management Plan Figure 9.6: Potential 20-year Renewal Profile for stormwater network 400, , , , , , ,000 50, Renewal Year 100 Year Pipe 100 Year Manhole 101 Year Open Drain 100 Year Resource Consent 100 Year Average Renewal Expenditure 10 Year Rolling Average 5 Year Rolling Average The key life cycle issues identified for stormwater are: Condition and Performance data are assumed and need to be considered in more detail to assist with valuation and renewal activities. In Whiritoa storm water reticulation is only provided for the roading network, there is no reticulation from the land therefore storm water disposal is through soakage or detention. Some areas have no soakage capability. Waihi has a requirement for hydraulic neutrality, particularly relating to in infill development. Therefore development shall not increase runoff. This is managed by soakage where possible, and by detention structures. Plains and Paeroa have soil conditions that do not provide soakage, therefore all stormwater is reticulated. Waihi now has a defined storm water catchment and where owners request, Council will take over ownership and maintenance of open drains which were previously the owners responsibility. A number of requests are for piping of open drains. Council may share costs with owners/developers. One of the main reasons for piping of the open drains is to improve the amenity value, by addressing the problems of illegal dumping and rubbish ending up in the drains. Flooding issues are more evident in Paeroa. Some houses have floor levels below the District Plan minimum, and will flood in a major event, although this is not a widespread issue and only a few properties are affected. Council manages community detention ponds but there is no current inspection plan for private detention tanks. 9.4 Expected Lives As described above, Hauraki District Council s Lifespan Management and Risk Management strategies are reliant on an understanding of the expected lives of the Council s assets. One of the challenges for Hauraki District Council, with its relatively small asset base, is obtaining sufficient data on asset lives. June 2012 General Summary Page 38 of 58

39 For some types of asset, Council has a sufficient number in use to allow valid statistical conclusions to be drawn from assessments of the existing assets performance. For other types, Council draws upon the database experience of specialists or uses industry standard lives. Modelling Expected Lives Hauraki District Council has developed a statistical model to forecast the expected life of its assets. The model has been used where the Council has a sufficient number of assets to use as a foundation for analysis. For the AMP and 2015 renewals forecasts, the model has only been used on pipes and manholes. However, it is planned to include other assets within the modelling if and when sufficient data becomes available to use to calibrate the forecasts. Inputs required for the modelling process include: An industry standard life for the asset (used as a starting point for forecasts); Age of each individual asset; The type, material and size of the asset; The reason for failure; The number/length of the assets in use; and, All of the above details for assets that have already been retired within the district. Limitations of the model: The model can only be used where: there are enough assets with which to form valid statistical conclusions; The asset is already of a sufficient age where a significant percentage should have failed, relative to an industry standard life for that type of asset (e.g.: 5% or more should have failed). When neither of these two requirements can be met, Hauraki District Council has continued to use an industry standard life. Improvement of the model forecasts Asset data held by Hauraki on its active assets currently fulfils the requirements of the renewals model. However, the renewals model is reliant on good data being held on decommissioned assets. In the 1990 s and early 2000 s, information about decommissioned assets was not reliably kept. The industry had not yet foreseen the extent to which data about retired assets is utilised today for the purposes of good asset management. To address this going forward, Council intends to prepare guidelines for staff to help ensure that sufficient and appropriate data is captured and kept when assets are decommissioned. 9.5 Operations and Maintenance The objective of the operation and maintenance activities is to maintain and operate the system to meet the performance and reliability targets within the stormwater levels of service. The present level of maintenance and operation is sufficient to meet these targets. Operation and Maintenance Strategy Hauraki District Council s operation and maintenance strategy is to make informed decisions based upon data. The strategy relates not just to the operation and maintenance activity, but also to data captured through the operation and maintenance activity being used to support larger and longer-term decisions around capital investment and asset renewal. Reactive Maintenance June 2012 General Summary Page 39 of 58

40 Reactive maintenance is primarily handled through the Customer Service Request system. The customer services team is trained to assess the relative priority of the customer s request. Urgent requests are sent to the Council s field staff for immediate action. Non-urgent requests are filed with the stormwater Asset Manager in a similar manner that field staff lodge identified non-urgent maintenance. Again, this enables the Asset Manager to assess and prioritise the response. Forward Improvements Over the next three years Hauraki DC will be placing an emphasis on streamlining and improving the collection of data about the operation and maintenance activities carried out on the stormwater infrastructure. Areas for particular attention will be: improving the ability to efficiently measure level of service compliance; track operating costs; track repair and maintenance costs; track asset reliability; spatially present and analyse the data. Emphasis is on capturing sufficient data that enables informed decisions to be made. 9.6 Asset Condition and Performance Monitoring Performance relates to the ability of an asset to provide a required level of service the customer. Condition relates to the structural integrity of an asset. June 2012 General Summary Page 40 of 58

41 Strategy Hauraki has adopted a primarily performance based asset monitoring approach. Outside of the asset condition monitoring described within the Lifespan Management Strategy asset condition monitoring and assessment has been encapsulated within the level of service performance criteria. Specifically, following targets: Stormwater systems protect houses from flooding in urban areas; Stormwater services meet regulatory requirements. The levels of service also specify more traditional measures of performance, including: customer satisfaction and acceptable response times. Monitoring Performance The customer service requests database is also used to monitor the performance of the network. The customer service requests are reported on regularly, to Council. Opportunistic Condition Based Sampling Hauraki DC s Lifespan Management Strategy does not require proactive asset condition monitoring for Medium criticality, Low and Very Low criticality assets. The reasons for this are largely twofold: i. The cost exceeds the benefit for assets with these lower levels of criticality; ii. Because of Hauraki District Council s small size, a sub-sample of our already small asset base will have too few assets with which to draw valid conclusions from. However, over recent years Hauraki District Council has carried out opportunistic condition based sampling. The results of this initial work were considered beneficial, and obtained at relatively low cost. Opportunistic condition sampling opportunities present themselves when assets are already exposed for extensions, maintenance, or repair. Over the next 3 years, Hauraki District Council will investigate the merits of implementing an opportunistic condition based sampling program. Results would be stored in a spatial database. The intended use of this condition data is to help refine the accuracy of forecasts of the expected lives of the District s assets. 9.7 Renewal Council will continue to renew assets to sustain agreed levels of service targets. Prior to commissioning a renewal, Council will assess whether asset can be abandoned altogether. Assets are renewed on the following basis: Performance: o The existing asset is not able to meet the level of service performance targets, even with modification Reliability: o A Very High or High criticality pipe has reached the end of its useful life, and is being replaced to ensure the continued reliability of the service o A Medium criticality pipe has failed and has therefore been scheduled for replacement o A Very Low or Low criticality pipe has reached an age where it has started to fail at a frequency that exceeds the reliability targets specified within the levels of service Economic: o The asset has become uneconomic to maintain and operate; and net present value analysis (NPV) has shown that it is cheaper to replace the asset with a modern equivalent o NPV analysis shows that a modern equivalent operating cost is sufficiently lower than the existing asset to justify replacement June 2012 General Summary Page 41 of 58

42 Obsolescence: o The asset has become obsolete and needs to be replaced in order to integrate with wider Council systems Opportunistic: o Where other activities or maintenance has been carried out in the vicinity of an asset that is nearing the end of its economic were useful life, assets may be replaced early to tie in with those other activities or maintenance being carried out. An example would be a pipe buried underneath the road that is about to be dug up for repair. In this circumstance it may be cost effective to renew the pipe while the road is being repaired. o Opportunistic renewals will only be carried out when it is determined that premature renewal of the asset to coincide with the other activities or maintenance is likely to be the cheapest longterm option. Opportunistic renewals are assessed on a case-by-case basis. Identification of Renewals With the exception of opportunistic renewals, the data capture and analysis process as described within the operations and maintenance section (Section 9.5) are used by Council to identify assets that require renewal for one of the reasons listed above. Opportunistic renewals are currently identified through an ad hoc process, predominantly facilitated by departmental and interdepartmental team meetings. Longer Term Renewal Forecasts Longer term renewal forecasts are based upon the expected lives of the assets. The asset criticality is assigned to each asset within the Council s asset register. The safety margin applied to very high and high criticality assets may reduce the forecast useful life of these assets. Where sufficient data exists, the Council s annual forecasting model will be used to simulate the period when each asset is forecast to fail. The use of a Monte Carlo simulation enables an average renewals forecast to be derived, and the confidence intervals around the forecast to be understood. 9.8 Creation and Acquisition Because there is near zero population growth within the Hauraki District, the stormwater activity is largely been maintained in a maintenance of existing service mode. Asset Creation and Acquisition Policy Council policy requires a business case to be prepared for the creation or acquisition of any new significant assets. The business case must: show that the proposed asset represents good value for money for both households and businesses over the anticipated life of the service; and, Consider the risks that surround the creation or acquisition of the asset. Identification of the Need for Asset Creation In respect of new housing and commercial developments, the District Plan details where residential development and commercial activities are allowed to take place. Council will only construct new assets once it is sure that and new development will go ahead. In respect of new assets required to continue to meet, or lift substandard performance to a level that meets level of service targets; these assets will be identified through the data capture and analysis processes described within the operations and maintenance section (Section 9.5). As for renewals, reticulation assets will be sized to meet the needs of both current and future generations over the life of the asset, and include climate change allowances. June 2012 General Summary Page 42 of 58

43 10.0 FINANCIAL FORECASTS & MANAGEMENT CORE level asset management applies to: AM reflected in 10 year financial plan. Validate the depreciation/decline in service potential. The operational expenditure and capital investment forecasts included in this AMP cover a period of 10 years and are based on the latest asset information held by Council. The renewal forecasts have been prepared for a period of 30 years. This is to align with the requirements for councils to prepare 30 year Infrastructure Asset Management Strategy Plans. All values reported are presented in today s dollars ( ) for ease of presentation and interpretation. Escalated dollar amounts are provided in addition, as these figures are the ones to be approved by Council. Financial management in asset-intensive organisations is characterised by high asset values relative to the total value. The financial management principles important to these types of organisations are: Consumption of asset service potential Categorising expenditure appropriately Allocating costs to appropriate assets Preparing long-term forecasts Cost-effective financing Effective reporting of financial performance The figure below provides a representation of the accumulation of costs over the total lifecycle of an asset. June 2012 General Summary Page 43 of 58

44 Figure 10.1: Long-Term Lifecycle Asset Expenditure - DEPRECIATION - INTEREST - MANAGEMENT COSTS - OVERHEADS CUMULATIVE LIFECYCLE COSTS COSTS INITIAL CAPITAL COST CONSTRUCTION / CREATION ONGOING MAINTENANCE & OPERATIONAL COSTS REFURBISH / UPGRADE REPLACEMENT / DISPOSAL 0% 100% EFFECTIVE LIFE The figure shows how initial up-front capital costs often dominate the decision-making process when acquiring new assets. Recurring ongoing expenditure usually represent a high proportion of the total lifecycle costs of many assets (e.g. depreciation, loan, interest, overheads etc.). A rule of thumb is that the initial cost will comprise 30% of the total lifecycle costs and the recurrent expenditure 70% of total lifecycle costs Forecast Overview The 10 year forecast for operational expenditure and capital investment stormwater AMP takes account of expected static population growth forecast within the district. The forecast shows that the primary maintenance activity for the stormwater service will be renewing the existing pipe assets when they reach the end of their useful lives. Because stormwater assets are long-lived, a 30 year forecast horizon provides a better view of the state of the asset than a 10 year horizon. The renewals forecasts within the stormwater AMP are aligned with the 30 year forecast horizon of the Infrastructure Asset Management Strategy Plans Financial Plan - 10 Year The model below illustrates the links between community outcomes, levels of service, funding, lifecycle expenditure and future or required levels of service and key performance indicators. June 2012 General Summary Page 44 of 58

45 Figure 10.2: Levels of Service/Lifecycle/Expenditure Relationship Community Outcomes & Well Being Optimising Life-Cycle Service Level Current Service level Current Funding Level Resource Assessment Capital & Operational Expenditure Future Funding Level Future Service Level Current Customer KPI s Current Technical KPI s Life-Cycle Analysis Minimum 10 Year Planning Period Target Technical KPI s Target Customer KPI s Optimising Life-Cycle Cost Life-cycle Planning Period If a higher service level is required by the consumer it will provide improved customer satisfaction and therefore will impact on community outcomes and well being. Current service levels will be increased and that may lead to increase in current funding levels. This will obviously translate in increase in current customer KPI s, that in turn will impact on the related technical KPI s. The increased funding levels will be reflected in the assessment and utilisation of additional resources and may lead to increase in capital and/or operational expenditure. Obviously these assessment and forecasts for future service levels will be incorporated into the lifecycle analysis, 10-year forecasts and long-term plans. This in turn will translate in increased targets for technical KPI s and resultant increase in targets for customer KPI s. The 10-year plan, therefore reflect the increase or decrease in service levels and the contribution to the community outcomes and well being is clearly illustrated in the next few sections Operation and Maintenance The objective of the operation and maintenance activities is to: Maintain the stormwater system reliability to the levels described within the level of service targets; Maintain the infrastructure in a serviceable condition that minimises day-to-day operational costs over the long term. The summary of the 10 year plan below indicates the individual cost of asset groups which enables a good understanding of the capital, operational and maintenance expenditure and funding requirements for the land drainage assets and services. Table 10.1: Summary of Operational, Renewal & Capital Costs IN 2014 DOLLARS ($000) OPERATING EXPENDITURE DOLLARS Vegetation Control $13 $13 $13 $13 $13 $13 $13 $13 $13 $13 Maintenance/Fencing/Culverts $47 $47 $47 $47 $47 $47 $47 $47 $47 $47 June 2012 General Summary Page 45 of 58

46 Mechanical Cleaning $13 $13 $13 $13 $13 $13 $13 $13 $13 $13 Floodgates $5 $5 $5 $5 $5 $5 $5 $5 $5 $5 Pumps $10 $10 $10 $10 $10 $10 $10 $10 $10 $10 Overheads $169 $172 $176 $180 $184 $188 $193 $198 $203 $209 Other $165 $165 $165 $165 $165 $165 $165 $165 $165 $165 SUB TOTAL $422 $425 $429 $432 $437 $441 $446 $451 $456 $462 Depreciation $412 $414 $416 $416 $417 $418 $419 $420 $420 $422 Interest -$19 -$36 -$55 -$78 -$104 -$134 -$166 -$201 -$239 -$279 Total Operating $815 $803 $789 $771 $750 $725 $698 $669 $638 $605 CAPITAL EXPENDITURE DOLLARS Capacity Demand Increase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Level of Service Increases $15 $107 $65 $60 $45 $60 $45 $60 $45 $60 Renewals $110 $20 $22 $27 $30 $30 $33 $37 $40 $43 Other Capital Expenditure $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Capital $125 $127 $87 $87 $75 $90 $78 $97 $85 $103 TOTAL EXPENDITURE $940 $930 $876 $858 $825 $815 $776 $766 $723 $708 Table 10.2: Summary of Operational, Renewal & Capital Costs - INFLATED ($000) OPERATING EXPENDITURE - INFLATED Vegetation Control $13 $13 $14 $15 $15 $16 $17 $17 $18 $19 Maintenance/Fencing/Culverts $47 $49 $51 $53 $56 $58 $61 $64 $67 $70 Mechanical Cleaning $13 $13 $14 $14 $15 $16 $16 $17 $18 $19 Floodgates $5 $5 $5 $6 $6 $6 $6 $7 $7 $7 Pumps $10 $11 $11 $11 $12 $12 $13 $14 $14 $15 Overheads $169 $172 $176 $180 $184 $188 $193 $198 $203 $ Other $165 $170 $175 $180 $185 $191 $198 $205 $213 $221 SUB TOTAL $422 $433 $445 $458 $472 $488 $504 $522 $541 $562 Depreciation $412 $414 $442 $443 $444 $482 $483 $484 $532 $533 Interest -$19 -$36 -$55 -$78 -$104 -$134 -$166 -$201 -$239 -$279 Total Operating $815 $811 $833 $823 $812 $836 $821 $804 $834 $816 CAPITAL EXPENDITURE - INFLATED Capacity Demand Increase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Level of Service Increases $15 $21 $24 $30 $35 $37 $42 $50 $57 $64 June 2012 General Summary Page 46 of 58

47 Renewals $110 $111 $70 $67 $53 $73 $58 $81 $64 $89 Other Capital Expenditure $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Capital $125 $132 $94 $98 $88 $110 $100 $130 $120 $153 TOTAL EXPENDITURE $940 $943 $926 $921 $900 $946 $921 $935 $954 $969 Planned Operations and Maintenance Projects over the Next 3 Years The operation and maintenance of the stormwater network is event driven so maintenance is largely preventative or reactive. Preventative maintenance is mostly directed at the points of entry to the reticulation ie inlet structures and catchpits. This activity is prompted by weather event forecasts. The reactive maintenance is generally as a result of blockages of entry points during events. There is routine de-silting of detention ponds planned during the life of this plan. Routine monitoring and cleaning of road catch-pits, which are the main entry point to the stormwater reticulation network, is the responsibility of the roading maintenance contractor. Figure 10.3: Forecast Operation and Maintenance Expenditure June 2012 General Summary Page 47 of 58

48 10.4 Renewals As described in the Lifecycle Management section, council will continue to renew assets to sustain the agreed level of service targets. Renewals may be: 1. Performance-based; 2. Condition-based; 3. Economic; 4. Due to obsolescence; or 5. Opportunistic. Performance-Based Renewals Performance-based renewals will be commissioned if required where existing assets are not able to deliver specified levels of service. An example would be a stormwater pipe becoming undersized due to upstream development. Condition Based Renewals Condition based renewals are carried out in different manners depending on the criticality of the asset. Opportunistic Renewals Where other activities or maintenance has been carried out in the vicinity of an asset that is nearing the end of its economic or useful life, assets may be replaced early to tie in with those other activities or maintenance being carried out. Opportunistic renewals will only be carried out when it is determined that premature renewal of the asset to coincide with the other activities or maintenance is likely to be the cheapest long-term option. Opportunistic renewals are assessed on a case-by-case basis. Figure 10.4: Forecast Capital Expenditure and Depreciation June 2012 General Summary Page 48 of 58

49 Planned Renewals during the Next 3-Years Performance-based Renewals: There are no performance-based renewals planned for the stormwater network during the next three years. Condition-based Renewals: There are no known condition based renewals required during the next three years. Council s renewals forecasting suggests that a relatively small dollar value worth of condition based renewals will be required between June 2012 General Summary Page 49 of 58