Finance and Performance Committee

Agenda

 

 

Notice of Meeting:

An ordinary meeting of the Finance and Performance Committee will be held on:

 

Date:                                     Wednesday 4 April 2018

Time:                                    9.30am

Venue:                                 Council Chambers, Civic Offices,
53 Hereford Street, Christchurch

 

 

Membership

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Deputy Mayor Andrew Turner

Councillor Vicki Buck

Councillor Jimmy Chen

Mayor Lianne Dalziel

Councillor Mike Davidson

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Yani Johanson

Councillor Deon Swiggs

Mr Mike Rondel (Non-Voting Member)

 

 

28 March 2018

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Aidan Kimberley

Committee and Hearings Advisor

941 6566

aidan.kimberley@ccc.govt.nz

www.ccc.govt.nz

Note:  The reports contained within this agenda are for consideration and should not be construed as Council policy unless and until adopted.  If you require further information relating to any reports, please contact the person named on the report.
To view copies of Agendas and Minutes, visit:
https://www.ccc.govt.nz/the-council/meetings-agendas-and-minutes/

 


Finance and Performance Committee

04 April 2018

 

Terms of Reference Finance and Performance Committee

 

Chair

Councillor Manji

Membership

Deputy Mayor Turner (Deputy Chair), Mayor Dalziel, Councillor Buck, Councillor Chen, Councillor Davidson, Councillor Galloway, Councillor Gough, Councillor Johanson, Councillor Swiggs and a non-voting independent member appointed by the Council.

Quorum

Half of the members if the number of members (including vacancies) is even, or a majority of members if the number of members (including vacancies) is odd.

Meeting Cycle

Monthly

Reports To

Council

 

Responsibilities

The focus of the Finance & Performance Committee is the financial and non-financial performance of the Council and its subsidiaries.

 

The Finance & Performance Committee:

·         Seeks to enhance the Council’s accountability with the community in relation to the Council’s financial and non-financial performance

·         Promotes active citizenship, community participation and community partnerships, including participatory budgeting

·         Works in partnerships with key agencies, groups and organisations

The Finance & Performance Committee considers and reports to Council on issues and activites relating to:

·         The preparation and adoption of the draft and final Annual Plan and Long Term Plan (based on the strategic direction of the Strategic Capability Committee)

·         Performance  against the  Long Term Plan (LTP) and  Annual Plan (AP), including financial performance and non-financial performance including:

-          medium to long term asset management

-          treasury investment and borrowings

-          organisational performance and capability

·         Insurance matters including to:

-          consider legal advice from the Council’s legal and other advisers,

-          approve further actions relating to the issues,

-          make recommendations to Council concerning formal actions.

·         Performance of a number of subsidiaries including Council Controlled Organisations (CCO). 

·         Recommendations   from   Council’s   Subcommittees,   Community Boards, the public, stakeholders and providers in relation to finance and performance.

·         Overseeing the development to the Annual Report for consideration by the Council

·         Development of the financial policy of the Council

·         Development of a Genuine Progress Indicator

 

Process for appointing Independent Members to the Finance and Performance Committee

 

The following principles will guide the appointment process for Independent Members of the Finance and Performance Committee:

 

1.              Council Officers, in consultation with Elected Members, will compile a longlist of candidates and provide this list to the General Manager Finance and Commercial for consideration.

 

2.              If appropriate, the Chair of the Finance and Performance Committee and the General Manager Finance and Commercial may endorse the nominations.

 

3.              Candidates will be contacted at the appropriate time to confirm their willingness to serve as an independent committee member and, if confirmation is received, appropriate background checks as determined by the General Manager Finance and Commercial will be conducted. Candidates will also be informed of Council policies.

 

4.              The Chair and Deputy Chair of the Finance and Performance Committee, and the General Manager Finance and Commercial, will review the candidates to develop a shortlist by assessing the following:

 

a.              Professional credentials and relevant experience.

b.             Their understanding of relevant legislation.

c.              Experience overseeing or assessing the performance of organisations.

d.             Potential conflicts of interest.

e.             Affiliations or connections with the Council and its related entities.

f.               Reference and background check reports.

 

5.              The shortlist of candidates will be presented to an Appointments Panel. The Panel will select from that shortlist the independent member to be appointed to the Committee. The resolution to appoint the independent member should specify the dates on which the appointment commences and concludes. 

 

1.         The Chair of the Panel will inform the Council in writing of the Panel’s decision.

 


Finance and Performance Committee

04 April 2018

 

Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

TABLE OF CONTENTS

 

C       1.       Apologies.......................................................................................................................... 5

B       2.       Declarations of Interest................................................................................................... 5

C       3.       Confirmation of Previous Minutes................................................................................. 5

B       4.       Public Forum.................................................................................................................... 5

B       5.       Deputations by Appointment........................................................................................ 5

B       6.       Presentation of Petitions................................................................................................ 5

STAFF REPORTS

C       7.       Asset Management Quarterly Report - Three Waters & Waste - Asset Valuation and Condition Assessment................................................................................................... 11

C       8.       Capital Endowment Fund 2 (Endeavour I-Cap Investment)...................................... 31

C       9.       Performance Reporting for February 2018................................................................. 35

A       10.     Capital Endowment Fund - Process for Distribution of Funds

This report will be separately circulated.

C       11.     Resolution to Exclude the Public................................................................................. 47  

 

 


Finance and Performance Committee

04 April 2018

 

 

1.   Apologies

At the close of the agenda no apologies had been received.

2.   Declarations of Interest

Members are reminded of the need to be vigilant and to stand aside from decision making when a conflict arises between their role as an elected representative and any private or other external interest they might have.

3.   Confirmation of Previous Minutes

That the minutes of the Finance and Performance Committee meeting held on Wednesday, 28 February 2018  be confirmed (refer page 6).

4.   Public Forum

A period of up to 30 minutes may be available for people to speak for up to five minutes on any issue that is not the subject of a separate hearings process.

5.   Deputations by Appointment

There were no deputations by appointment at the time the agenda was prepared. 

6.   Petitions

There were no petitions received at the time the agenda was prepared.


Finance and Performance Committee

04 April 2018

 

 

 

Finance and Performance Committee

Open Minutes

 

 

Date:                                     Wednesday 28 February 2018

Time:                                    9.30am

Venue:                                 Council Chambers, Civic Offices,
53 Hereford Street, Christchurch

 

 

Present

Chairperson

Deputy Chairperson

Members

Councillor Raf Manji

Deputy Mayor Andrew Turner

Councillor Vicki Buck

Councillor Jimmy Chen

Councillor Mike Davidson

Councillor Anne Galloway

Councillor Jamie Gough

Councillor Deon Swiggs

Mr Mike Rondel (Non-Voting Member)

 

 

27 February 2018

 

 

 

Principal Advisor

Carol Bellette

General Manager Finance and Commercial

 

Aidan Kimberley

Committee and Hearings Advisor

941 6566

aidan.kimberley@ccc.govt.nz

www.ccc.govt.nz

To view copies of Agendas and Minutes, visit:
www.ccc.govt.nz/Council/meetingminutes/agendas/index

 


Part A        Matters Requiring a Council Decision

Part B         Reports for Information

Part C         Decisions Under Delegation

 

 

 

The agenda was dealt with in the following order.

1.   Apologies

Part C

Committee Resolved FPCM/2018/00011

That the apologies from Mayor Dalziel and Councillor Johanson be accepted.

Councillor Chen/Councillor Davidson                                                                                                                  Carried

 

2.   Declarations of Interest

Part B

Mike Rondel declared an interest in Items 11 and 14 relating to the Christchurch Adventure park.

Councillor Chen declared an interest in item 15.

3.   Confirmation of Previous Minutes

Part C

Committee Resolved FPCM/2018/00012

Committee Decision

That the minutes of the Finance and Performance Committee meeting held on Wednesday, 31 January 2018 be confirmed.

Councillor Gough/Councillor Chen                                                                                                                       Carried

 

4.   Public Forum

Part B

There were no public forum presentations.

5.   Deputations by Appointment

Part B

There were no deputations by appointment.

6.   Presentation of Petitions

Part B

There was no presentation of petitions.

 

Councillor Buck and Deputy Mayor Turner joined the meeting at 09:35 a.m..

7.   AAC Hereford Street (Manchester - Madras) - Financial Report

 

Committee Resolved FPCM/2018/00013

Part C

That the Finance and Performance Committee:

1.         Receives the information in the report.

Councillor Davidson/Councillor Chen                                                                                                                  Carried

 

 

8.   Lichfield Car Park - Budget / Contingency planning vs Actual report

 

Committee Resolved FPCM/2018/00014

Part C

That the Finance and Performance Committee:

1.         Receives the information in the report.

Councillor Gough/Councillor Galloway                                                                                                               Carried

 

 

9.   Performance Reporting for January 2018

 

Committee Resolved FPCM/2018/00015

Part C

That the Finance and Performance Committee:

1.         Receives the information in the report.

Deputy Mayor/Councillor Chen                                                                                                                            Carried

 

Councillor Gough left the meeting at 10:47 a.m..

10. Regenerate Christchurch - Half year performance to 31 December 2017

 

Committee Comment

Ivan Iafeta and Jason Rivett of Regenerate Christchurch joined the table for this item.

Committee Decided FPCM/2018/00016

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Notes Regenerate Christchurch’s performance for the month of December 2017, and year to date to 31 December 2017; and

2.         Notes that Council staff and Regenerate Christchurch are working towards agreeing a process that is clear on engagement requirements between Regenerate Christchurch, staff and shareholders in order to progress the Cathedral Square and Surrounds’ strategy to completion.

Councillor Davidson/Deputy Mayor                                                                                                                    Carried

 

11. Development Christchurch Ltd - Status Report December 2017 - February 2018

 

Committee Comment

Rob Hall and Steve Clarke of Development Christchurch Limited joined the table for this item.

Committee Decided FPCM/2018/00017

Part A

That the Finance and Performance Committee recommends that the Council:

1.         Receives Development Christchurch Ltd’s Status Report for the period December 2017 - February 2018.

Councillor Chen/Deputy Mayor                                                                                                                            Carried

 

12  Resolution to Exclude the Public

 

Committee Resolved FPCM/2018/00018

Part C

That Rob Hall and Steve Clarke of Development Christchurch Limited remain after the public have been excluded for Item 14 of the public excluded agenda, and Leah Scales of Christchurch City Holdings Limited remains after the public have been excluded for items 14 and 15 of the public excluded agenda, as they have knowledge that is relevant to those items and will assist the Committee.

AND

That at 10:54 the resolution to exclude the public set out on pages 50 to 52 of the agenda be adopted.

Deputy Mayor/Councillor Galloway                                                                                                                       Carried

 

The public were re-admitted to the meeting at 11:32am.

 

   

Meeting concluded at 11:32am.

 

CONFIRMED THIS 4TH DAY OF APRIL 2018

 

Councillor Raf Manji

Chairperson

 


Finance and Performance Committee

04 April 2018

 

 

7.        Asset Management Quarterly Report - Three Waters & Waste - Asset Valuation and Condition Assessment

Reference:

17/1446461

Contact:

Wendy Walker

Wendy.Walker@ccc.govt.nz

941-8179

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is to inform the Finance and Performance Committee about the condition and value of Three Waters and Waste related assets.

Origin of Report

1.2       This report is being provided to fulfil Finance and Performance resolution FPCM/2017/00037 that the quarterly Asset Management Report includes data on asset condition and asset values.

2.   Significance

·    Not applicable

 

3.   Staff Recommendations

That the Finance and Performance Committee:

1.         Receives the information in the report

2.         Notes that feedback is sought on suitability of this template (see attachments), to provide information to the Finance and Performance Committee on Three Waters Asset Condition Assessment and Valuations.

 

4.   Context/Background

4.1       This is the first Three Waters contribution to the Asset Management quarterly report submitted in response to the request for information on condition assessment and valuation of assets for Three Waters and aims to develop the template and information contained within.

4.2       Asset Management Plans (AMPs) outline and recommend management requirements for the Christchurch City Council’s infrastructure assets to meet agreed levels of service and optimise whole of life costs, such that Council can meet the requirements of present and future citizens.

4.3       Council produces AMPs to provide technical detail on Council projects and programmes of work.  Data from AMPs is then summarised and feeds into the Service Plans and Long Term Plan (LTP).  Projects and programmes of work include remaining earthquake recovery works as well as all business as usual work.

4.4       Where the asset’s renewal methodology is based on run-to-failure there are, in addition to the planned renewals programmes, a number of reactive renewal programme budgets which are set based on increased likelihood of a failure and previous years’ trends.

5.   Key Points

5.1       Asset renewals are essential to fulfilling the local government purpose of meeting current and future needs of communities with good-quality local infrastructure and local public services (s10, Local Government Act 2002).

5.2       The attachments accompanying this report show the asset value and condition of the asset.  Condition is graded on a 1 – 5 scale and colour coded.  The percentage of assets at each grade for each asset group is shown visually on the ‘Condition Indicator’:-

5.2.1   Water Supply Condition Indicator – Attachment A

5.2.2   Waste Water Condition Indicator – Attachment B

5.2.3   Land Drainage Condition Indicator – Attachment C

5.3       Commentary about the Condition Assessment methodology and how it relates to each service (Water Supply, Waste Water and Land Drainage) is contained in Section 6 below.  Please note the commentary is based on asset type and not on the service the asset delivers in order to minimise repetition.  The five categories of asset types that deliver the Three Waters service to the community are:

5.3.1   Reticulation Asset type

5.3.2   Electrical Asset type

5.3.3   Electronic Asset type

5.3.4   Mechanical Asset type

5.3.5   Civil and Structural Asset type

5.4       This report shows that the condition assessment is based on traditional methodologies of visual inspection (including CCTV footage), faults and forecast length of life.  The implication of relying on these methods is that potentially assets may be replaced when they are still adequately delivering the service and conversely other assets may be subject to reactive maintenance, and the associated impact on budget forecasting and spend.

5.5       The Asset Management project ‘Asset Assessment Intervention Framework (AAIF) ’ is currently underway to develop a multifaceted asset assessment framework incorporating information on five of the Water NZ metadata schemas relating to the asset:

5.5.1   Condition

5.5.2   Criticality to the network and service delivery

5.5.3   Vulnerability of the asset

5.5.4   Repairs, Maintenance and Operations history of work on the asset

5.5.5   Design performance i.e. how long the asset is forecast to last based on the material it is made of

When this project is completed Three Waters will have a tool that will deliver a prioritised renewals list for reticulation assets. Furthermore the multi-criteria (schemas) can be weighted to create combinations that deliver differing renewals programmes that favour for example a risk based renewals programme. 

5.6       Asset data for this report was obtained from two Asset Management systems (one now utilised from the SCIRT systems transfer project) within Council and information obtained from City Care records to inform the Three Waters Condition and Value Dashboards. Attachments A, B and C. 

5.7       Condition data contained in this report for Three Waters assets is based on the same information used to build the renewals programmes in the 2018 LTP and forms the most recent and accurate view of our network condition.

5.8       Asset lives used for predicting age profiles were obtained from the 2018 Asset Management Plans.

5.9       Council has a great deal of information on the condition of its reticulation assets which account for 84%, 89% and 81% of the total value of Stormwater, Water Supply and Wastewater network assets respectively.

5.10    It is important to note that the activities carried out to assess the condition and performance of our networks have identified procurement and contract management as key improvement areas to enable condition data to be captured and utilised for renewal programme planning.  This fits well with the recent Council resolution that Asset Management and Procurement are to identify opportunities to improve the information captured about our assets.

5.11    Current water supply condition values have been estimated based on a mix of installation age, theoretical age profiles or inferred based on opportunistic condition assessments obtained on the back of reactive repairs/renewals.

5.12    Current wastewater and stormwater condition values are from CCTV inspections. Where CCTV inspection has not been completed, condition has been estimated as per 5.11.

 

6.   Service Provision

Water supply service provision

6.1       The Water Supply Network assets are currently valued at ~ $2.5billion

6.2       Christchurch City Council builds, owns, operates and maintains water sources, networks and treatment plants to provide safe drinking (potable) water to the community. The objective of the activity is to abstract, treat and distribute water in a way that protects public health without negative effects on the environment. As a Council we:

·    Provide a safe and reliable potable water supply

·    Secure and protect water from contamination

·    Monitor water quality for compliance with the Drinking-water Standards for New Zealand (DWSNZ)

·    Plan, regulate, build, maintain, manage and renew water supply systems.

6.3       The Council supplies water to approximately 160,000 residential and business customers through seven urban water supply schemes and four rural water supply schemes, via 700 km each of mains and sub-mains 42 reservoirs, 127 pump stations, 155 wells and 7 stream intakes and 7 water treatment plants.  The water supply system is monitored and controlled by an extensive SCADA (Supervisory Control and Data Acquisition) system.

6.4       Capital Renewal Programme – there are 16 Capital Renewal programmes and budgets for Water supply assets that underpin this service.  Capital renewals work is generally ranked on asset age, and criticality based mostly on pipe diameter. Priority is also given on the renewal of AC (asbestos cement) pipes whenever possible. Pipe condition is also assessed on an opportunistic basis when pipe samples are collected from water repair sites.

Wastewater service provision

6.5       The Wastewater Network assets are currently valued at ~ $3.6billion

6.6       Christchurch City Council builds, owns, operates and maintains wastewater networks and wastewater treatment plants to protect public health and the environment. Wastewater, also known as sewage, refers to the used water collected in internal drains from homes and businesses, and includes trade waste from industrial and commercial operations.  Wastewater does not include storm water drainage, which is collected, treated and re-introduced into the environment via a separate system.

6.7       The objective of this activity is to provide wastewater collection, treatment and disposal in a way that protects the public and the environment.  As a Council we:

·    Collect, convey and treat wastewater in a safe, efficient and reliable manner

·    Discharge treated wastewater to the environment in compliance with resource consents

·    Reuse and/or dispose wastewater treatment by-products, including biogas and biosolids

·    Provide laboratory services to monitor treatment processes and treated wastewater quality

·    Plan, regulate, build, maintain, manage and renew wastewater systems.

6.8       The Council collects wastewater from approximately 160,000 customers in Christchurch, Lyttelton, Diamond Harbour, Governors Bay, Akaroa, Duvauchelle, Tikao Bay and Wainui, through 945 km of laterals, 1,826 km of wastewater mains, 149 pump stations, 84 lift stations, and 34 odour control sites.  It provides treatment at eight wastewater treatment plants and disposal via one outfall pump station, six ocean/harbour outfalls and two land irrigation schemes.  The wastewater reticulation and treatment infrastructure is monitored and controlled by an extensive communications system (SCADA).

6.9       Capital Renewal Programme – there are 13 Capital Renewal programmes and budgets for Waste Water assets that underpin this service.  Capital renewals work is generally ranked on condition and criticality, as there is a wealth of CCTV data gathered during SCIRT asset assessment work.

Land Drainage service provision

6.10    The Land Drainage Network assets are currently valued at ~ $1.2billion

6.11    Christchurch City Council builds, owns, operates and maintains stormwater and flood protection and control infrastructure to protect the community and support public health and the environment.

6.12    The key physical assets used to deliver this activity are:

·   The underground conveyance networks comprising pipes, manholes, sumps, inlets, outlets etc.

·   Open channels and overland flow paths including natural waterways such as rivers, streams and creeks, constructed drainage channels, in-channel structures, lining and retaining walls etc.

·   Pump stations, and water flow control devices and structures such as valves

·   Stop-banks

·   Water quality treatment devices such as basins, wetlands, tree pits, raingardens and filtration devices.

·   Hydrometric monitoring devices, measuring rainfall along with surface water, sea and groundwater levels. 

6.13    Basins and wetlands serve a dual purpose of providing stormwater detention for reducing flood risk as well as providing water quality treatment.

6.14    A number of key stormwater pumping stations are monitored and controlled by an extensive SCADA system.

6.15    The Land Drainage Asset Management Plan covers both the Stormwater and Flood Protection & Control works activities. It outlines and recommends management requirements for the Christchurch City Council’s infrastructure assets to meet agreed levels of service and optimise whole of life costs, such that Council can meet the requirements of present and future customers and ratepayers.

6.16    Capital Renewal Programme – there are 12 Capital Renewal programmes and budgets for Land Drainage and Storm Water assets that underpin this service.  Capital renewals work is generally ranked on condition, risk, probability versus severity.

7.   Three Waters Asset Valuation Summaries

7.1       Water Supply Valuation Summary

Service

Asset Group

Quantity

Replacement Value (2019 dollars)

Annual Operational Expenditure (2019 dollars)

Water supply

Water Sources

155 Wells

$ 52.4 million

$ 5.2 million

7 Stream Intakes

Water Treatment

5 Water Treatment Plants

$ 23.0 million

Pumping and Storage

68 Primary Pump Stations

$ 201.7 million

59 Secondary Pump Stations

42 Reservoir Stations

Pipework

1773.6km Mains

$ 1,281.0 million

$ 5.0 million

1655.3km Sub-mains

$ 576.6 million

219.0km Laterals

$ 69.2 million

Fittings

35,409 Valves

$ 93.6 million

14,690 Fire Hydrants

$ 72.2 million

133,824 Water Meters and Restrictors

$ 126.2 million

 

 

Total

$ 2,496.4 million

$ 10.2 million

o       Source: DRAFT 2018 Water Supply Asset Management Plan TRIM://17/128457

7.2       Wastewater Valuation Summary

Service

Asset Group

Quantity

Replacement Value (2019 dollars)

Annual Operational Expenditure (2019 dollars)

Wastewater Collection & Treatment

Treatment Plants

8 Wastewater Treatment Plants

$ 515.2 million

$ 10.7 million

Pumping Stations

152 Pump Stations

$ 86.6 million

$ 5.7 million

85 Lift Stations

3 Vacuum Stations

38 Monitoring Stations

36 Odour Control Stations

10 Radio Repeater Stations

Reticulation

1,685.1km Gravity Wastewater Mains

$ 1,685.1 million

$ 4.0 million

172.5km Pressure Wastewater Mains

$ 262.3 million

8.1km Vacuum Mains

$ 4.8 million

2.9km Overflow Pipes

$ 3.3 million

1.6km Wastewater Syphons

$ 4.1 million

977.7km Laterals

$ 276.2 million

17.6km Biogas Pipes

$ 11.3 million

36,036 Accesses, Valves and non-pipe assets

$ 228.0 million

 

Total

$ 3,440.3 million

$ 20.4 million

Source: DRAFT 2018 Wastewater Asset Management Plan TRIM://17/128471

7.3       Land Drainage Valuation Summary

Service

Asset Group

Quantity 

Replacement Value (2019 dollars)

Annual Operational Expenditure (2019 dollars)

Stormwater Drainage

Reticulation

915 km Pipes

$1,012,876,772

$12.56 million

24,312 nodes

Waterway Lining

110km lined waterway (220km Total bank lining)

$106,459,737

Open Waterways

2,429km

$16,616,912

Open Waterway Structures (excl lining)

190 debris rack/pole sites and weirs

$887,414

Monitoring Equipment / Hydrometric

Estimated 70 sites

$386,355

Flood Protection & Control Works

Pump stations

44 Pumping Stations (inc Tidal barrage)

$8,024,126

Flood protection structures

12.1km Stop Banks
281 valves

$5,0002,001  

Treatment & Storage Facilities 

2012 swales
132 retention basins
46 detention basins
69 ponds
127 soak pits
40 rain gardens

$59,139,244

 

 

Total

$1,209.4 million

$12.56 million

Source: DRAFT 2018 Land Draiange Asset Management Plan TRIM://18/53056

8.   Three Waters Asset Condition Assessment and Renewal Methodologies

8.1       Reticulation Asset Types

Pipes

8.1.1   Wastewater & Storm water gravity pipes are physically assessed using CCTV inspection in accordance with the NZ Pipe Inspection Manual (NZPIM).  Inspection scores are converted to a 1 to 5 grade based on internal Council criteria as the NZPIM is known to be overly pessimistic. The majority of CCTV survey was obtained through SCIRT and there is CCTV available for 42% of the stormwater piped network and 55% for the wastewater piped network.

8.1.2   CCTV is currently requested on a reactive basis in response to operational issues or ahead of transport projects. The CCTV programme is under development and planned CCTV inspections are anticipated to continue in the future.

8.1.3   Water supply pipes, wastewater pressure pipes, storm water pressure pipes and gravity pipes where CCTV is not available are allocated a 1 to 5 condition grade based on the percentage of theoretical useful life remaining, or from the results of opportunistic sample testing.

8.1.4   Lab tests to determine remaining life and optimal renewal date are carried out on critical or otherwise expensive to renew pipes.  Lab test may also be carried out on normal pipes to help refine theoretical useful life estimates.

8.1.5   Condition of pressure pipes can be inferred through the frequency of repairs required; however this only applies to those pipes that have failed.

8.1.6   Pipe nodes on gravity pipes such as manholes, flush tanks, inlets and outlets are visually inspected by the Maintenance Contractor.  Inspection results are not reported to Council but remedial actions carried out to return the asset to an appropriate standard.  Where damage falls outside the scope of the maintenance contract the individual asset is reported to Council.

8.1.7   The condition of pipe nodes such as valves, hydrants and fittings are not yet assessed through a formal inspection process, but relies on routine visual inspections and reports by the maintenance contractor.

8.1.8   Approximately 200 of the 300 known debris/security grills have been visually inspected over the past 2 to 3 years through the LDRP and assigned a 1 to 5 condition grade in accordance with the Open Channels Condition Assessment Specification.

Station Pipework

8.1.9   Pipework within pump station properties is usually steel and can be expected to last as long as the pump station (80 years).  Replacement is usually driven by the need to upgrade other items such as wells.  Allowance has been made for the replacement of the well head and riser pipe with each well pump renewal.

Waterway Lining

8.1.10 Waterway lining has been visually inspected over the past 2 to 3 years through the LDRP and assigned a 1 to 5 condition grade in accordance with the Open Channels Condition Assessment Specification (TRIM://15/724077 Appendix A table - SW7 to SW11)).There is visual inspection condition data available for approximately 90% of waterway lining.

8.1.11 Where physical inspection has not been undertaken, a 1 to 5 condition grade has assigned based on the estimated remaining useful life.

Open Waterways

8.1.12 Open earth banks and beds of waterways have been visually inspected over the past 2 to 3 years through the LDRP and assigned a 1 to 5 condition grade in accordance with the Open Channels Condition Assessment Specification (TRIM://15/724077 Appendix A table – SW1 & SW2). There is visual inspection condition data available for approximately 52% of the open waterways that have been assigned a classification in the District Plan.

8.1.13 In addition to drainage condition, open waterways have also been assessed against the Council’s other 5 values (landscape, heritage, recreation, cultural and ecology).

8.2       Electrical Asset Types

8.2.1   This grouping of assets covers electrical equipment that generally does not contain any electronic components such as:
-Electrical switchboards comprising power distribution breakers, fuses, terminals etc. [40yr life]
-Motors as used for surface mounted pumps, fans, compressors etc. [40yr life]
-Electrical starters - Direct-On-Line (DOL) [25yr life]
-Motorised valve actuators (not containing communications modules) [  25yr Life]
-Flow, pressure and level switches [20-30yr Life]
- Aerials [Typically 15-20yr Life]

8.2.2   Most Electrical assets are very difficult to condition assess and are renewed using a strategy of planned renewals for critical assets and reactive renewals for non-critical assets. They are also renewed due to legislative changes, obsolescence and the result of specific cost benefit analysis or incentive schemes. E.g. Slip ring motors that are expensive to maintain and run. 

8.2.3   Electrical assets are visually inspected as part of the pumping station inspection schedule under the maintenance contract and at the CWTP by CCC maintenance staff.

8.2.4   Electrical assets undergo thermal imaging tests to identify hotspots that are often a precursor to failures. There is no formal thermal imaging program in place but testing is generally performed on assets following significant seismic events.

8.2.5   Condition assessment are planned to be made on all remaining overdue motor assets and on those close to the end of their predicted asset life. The assessment will be fine-tuned with hours running information and focus on inefficient motors, in particular motors greater than 22KW and slip ring motors that are expensive to maintain and run.

8.3       Electronic Asset Types

8.3.1   Electronic assets are also very difficult to condition assess and are renewed using a strategy of planned renewals for critical assets and reactive renewals for non-critical assets. They are also renewed in the event of regulatory changes or obsolescence.  

8.3.2   Electronic assets are generally connected to the councils SCADA system which generates an alarm when an asset fails.

Motor Soft Starters

8.3.3   Council employs a number of motor soft starters within its pumping stations and treatment plants. Soft Starters have a predicted asset life of 20 yrs.

Motor Variable Speed Drive Starters

8.3.4   Council employs a number of variable Speed (Frequency) drive (VSD) starters within its pumping stations and treatment plants. VSD’s are favoured as starters as they greatly reduce transients within the pipework and variability of supply pressures and flows. Variable Speed Drives have a predicted asset life of 10yrs

Electronic Controllers (RTU/PLC)

8.3.5   Electronic Controllers are essentially industrial computers that run logic to control plant equipment in the pumping stations and treatment plants and in most cases interface with SCADA to facilitate monitoring and supervisory control of motors, valves, instrumentation etc. found within our pumping stations and treatment plants. Electronic controllers have a predicted asset life of 15-20years.

Digital Instrumentation

8.3.6   Digital instrumentation including hydrometrics have a predicted asset life of 8-15years. Instrumentation is essential to the operation of our treatment plants and stations. They are typically used to measure Flow, Pressure, Speed, Voltage, pH, Turbidity, Residual Chlorine.

Communications Equipment

8.3.7   Council utilises UHF Radios, Cellular modems, Network switches, Radio frequency filters etc. as part of its SCADA infrastructure. Communications equipment is given a typical asset life of 8-15yrs. Critical communications equipment is monitored 24-7 under an SLA with the councils IT department.

Human Machine Interfaces

8.3.8   Human Machine Interfaces (HMI) are general LCD style interfaces used by operators and maintenance staff to monitor and control equipment within treatment plant and pumping stations. They have a predicted asset life of 15 years.

Computer

8.3.9   Council employs a number of desktop computers, laptops and servers which we collectively refer to as computers. These computers are fundamental to the successful delivery of its services. Critical computers are monitored 24-7 under an SLA with the councils IT department and their supporting contractor Computer Concepts. Computers are given a predicted asset life of 5-8yrs.

 

8.4       Mechanical Asset Types

Long life pump sets

8.4.1   Council employs a number of long life pumps within its pumping stations. Long life pumps have a predicted asset life of 50 yrs.

8.4.2   The decision to replace these pumps is made on the basis of cost-benefit analysis, taking into account power efficiencies and maintenance costs, rather than age.

8.4.3   Pump performance is monitored by undertaking pump tests at high usage stations and identifying any drop in efficiency of individual pumps. Currently there is no formal pump performance testing regime.

Short life pump sets

8.4.4   Council employs a number of short life pumps within its pumping stations. Short life pumps are further categorised as Surface or Submersible and have a predicted asset life of 20 yrs.

8.4.5   Pump replacement tends to be reactive when a pump fails, as overhauling these pumps is usually uneconomical.  This is particularly the case with well-pumps, where the cost of craneage and removal of the riser pipe would outweigh the cost of a replacement pump.

Ancillary pumps

8.4.6   Ancillary pumps include sump, flushing, cooling water and fuel pumps and have a predicted asset life of 15 yrs.

8.4.7   Ancillary pumps are generally run to failure and therefore funded out of the reactive renewals programme budget(s).  Back-up fuel and cooling water pumps are fitted to ensure that main equipment can still operate in the case of an ancillary pump failure.

Stand-by equipment

8.4.8   Council employs diesel generators and diesel driven pumps within a number of its critical pumping stations at treatment plants.

8.4.9   Standby equipment has a predicted asset life of 50yrs.

8.4.10 Standby equipment is routinely serviced and tested under the maintenance contract.

8.4.11 As each generator replacement is unique, pre-designs are undertaken prior to each LTP to firm up on the estimates prior to project inception to ensure that sufficient budget is secured for each renewal. Estimates for the replacement of an existing generator within an existing pump station building typically cover strengthening of the existing building, acoustics, ventilation and a new fuel tank.  The estimate does not include allowance for a switchboard, starters or RTU.


 

Fuel tanks

8.4.12 Fuel tanks provide diesel storage for standby equipment such as generator sets and diesel driven pumps at Council’s pumping stations and treatment plants and have a predicted asset life of 50 yrs. 

8.4.13 Fuel tanks are part of City Care’s maintenance inspection program and are re certified in accordance with statutory requirements.

8.4.14 Council undertook an intensive replacement program of underground fuel tanks prior to the 2011 Canterbury earthquakes in order to meet the HSNO Act (Hazardous Substances and New Organisms Act) requirements, the majority of these at water supply sites. 

 Gantry Cranes

8.4.15 The current SAP database only includes gantry cranes rated over 1 tonne.

8.4.16 Gantry cranes are installed at many of council’s medium and large pumping stations and treatment plants and have an indefinite asset life.

8.4.17 Gantry cranes are part of City Care’s maintenance inspection program. Regular load tests and re certification are undertaken in accordance with statutory requirements.

8.4.18 Renewals are scheduled based on the results of maintenance inspections.

 

8.5       Civil & Structural Asset Types

Buildings

8.5.1   The asset life for buildings and structures as defined by Asset Management to be 80 yrs. 

8.5.2   Building replacements are governed by maintenance costs and risk management and given site constraints, major refurbishment or construction of a new building/station in a different location is often preferable.

8.5.3   Given that pump station buildings are generally of solid construction and maintenance costs even on the oldest pump stations are very low, they may very well last longer than the predicted asset life of 80 yrs. 

8.5.4   Buildings are visually inspected under the maintenance contract.  

Radio Masts

8.5.5   The asset life for radio repeater masts is defined by Asset Management to be 80yrs.

8.5.6   Condition assessment is by ad-hoc visual inspections.

Access Tracks

8.5.7   A number of water supply sites in Banks Peninsula have access issues which make maintenance and operation of the pump stations difficult and in some cases it is not possible to gain access to the sites with suitable service vehicles with lifting equipment and tools due to the grade and surface of the access track.

8.5.8   The inability to access the tracks with suitable vehicles not only presents maintenance problems but is also a serious Health and Safety issue as personnel are required to walk up/down the tracks with lifting equipment and tools and carry pumps up and down.  During winter, this is dangerous and a number of H&S incidents have been reported with Operations staff slipping and injuring themselves.

8.5.9   Access tracks is an area requiring improvement to track and secure appropriate levels of funding in future LTP. 

Suction Tanks

8.5.10 Suction tanks are not necessarily replaced in major refurbishments if their integrity and capacity are sufficient.  Remaining life is considered during 4 year inspections.

Reservoirs

8.5.11 Given site constraints, major refurbishment of reservoirs is often preferable to complete replacement.  Remaining life is determined during 4 yearly inspections.

8.5.12 A number of water supply reservoirs in Banks Peninsula have insecure roofs (leaving them susceptible to contamination), are in poor condition and are located on unstable sites (and not on council owned land)

Wells and Bores

8.5.13 Council currently has 2 separate well renewal programmes in place. The Northwest DWSNZ (Drinking Water Standards NZ) Upgrade programme replaces shallow wells in the Northwest zone with deeper wells and will be completed in 2019.

8.5.14 The Water supply well renewals programme allows for the replacement of wells that have been scored as having a high renewal priority. The renewal Priority score is based on several factors including well age (asset life from valuation is 60 years), wellhead construction type (above ground vs below ground wellhead) and aquifer vulnerability (shallow vs deep well).

8.5.15 Wellheads are inspected by the maintenance contractor as required. In addition to operational inspections each wellhead is assessed at least every 5 years in accordance with the requirements set out in the DWSNZ (wellhead security assessments section).

8.5.16 Currently Council is scoping a large scale below ground wellhead improvement project which will ensure that all below ground wellheads will meet the requirements of the DWSNZ. This work started in mid-2017 but had to be expanded in scope due to recent DWSNZ wellhead security assessments identifying some issues.

Wet-Wells

8.5.17 The asset life for wastewater wet-wells as defined by Asset Management to be 80 years, matching the life of a typical pumping station. That said, wet-wells can be rehabilitated in many cases to prolong the asset life.

8.5.18 Wet-wells are visually inspected under the maintenance contract.  

 

Open Waterway Structures (Excl. Lining)

8.5.19 Open waterway structures such as weirs have a predicted asset life of 110 yrs. 

8.5.20 Some waterway structures such as weirs and debris racks have been visually inspected over the past 2 to 3 years through the LDRP and assigned a 1 to 5 condition grade in accordance with the “Open Channels Condition Assessment Specification”.

Flood Protection Structures

8.5.21 Visual inspection and levels surveys are undertaken for stop banks, but condition grades are not assigned.

8.5.22 Some valves have been visually inspected over the past 2 to 3 years through the LDRP and assigned a 1 to 5 condition grade in accordance with the Open Channels Condition Assessment Specification.

8.5.23 For valves where a physical inspection has not been undertaken and install date is known, a 1 to 5 condition grade has been assigned based on the estimated remaining useful life.

Stormwater Treatment & Storage Facilities

8.5.24 The condition of basin lining is inferred based on install date and expected useful life. There is currently no visual inspection of testing used to assign condition grades.

 

 

 

 

Attachments

No.

Title

Page

a

Asset Management Condition Indicator - Three Waters - Water Supply - February 2018

23

b

Asset Management Condition Indicator - Three Waters - Wastewater - February 2018

25

c

Asset Management Condition Indicator - Three Waters - Land Drainage - February 2018

28

 

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Author

Mark Johnson - Team Leader Asset Management

Approved By

John Mackie - Head of Three Waters and Waste

David Adamson - General Manager City Services

  


Finance and Performance Committee

04 April 2018

 

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04 April 2018

 

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Finance and Performance Committee

04 April 2018

 

 

8.        Capital Endowment Fund 2 (Endeavour I-Cap Investment)

Reference:

18/271110

Presenter(s):

 

 

 

1.   Purpose and Origin of Report

Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee to approve the amalgamation of Capital Endowment 2 Fund (CEF-2) with the main Capital Endowment Fund (CEF-1), on the grounds that the original purpose of the separate CEF-2 fund (namely to invest in local business) is now effectively redundant given the current policy that all funds be lent internally to Council rather than invested externally.

Origin of Report

1.2       This report is staff generated.

2.   Significance

2.1       The decision in this report is of low significance in relation to the Christchurch City Council’s Significance and Engagement Policy.

2.1.1   The level of significance was determined by the fact that there will be no change to any of Council’s actual investments.

2.1.2   No community engagement or consultation is required related to this report.

 

3.   Staff Recommendations

That the Finance and Performance Committee recommends that the Council:

1.         Agrees that the CEF-2 fund be merged into the main Capital Endowment Fund.

 

4.   Key Points

4.1       Council’s Capital Endowment Fund is split into two separate funds: CEF-1 holds the bulk of investments, and CEF-2 holds a single investment in a venture capital fund called Endeavour I-Cap (an original $5 million investment which has subsequently largely been either realised or written off).

4.2       The Endeavour I-Cap fund has performed poorly, and its underlying investments have been slowly liquidated since 2013.  The balance of CEF-2 is now around $2.6 million, made up of $0.4m remaining I-Cap investment and $2.2m of cash.  The remaining I-Cap investment is expected to be realised by September 2019.

4.3       Council’s current Investment Policy requires all amounts in both CEF-1 and CEF-2 to be lent internally to Council as they mature (or are otherwise realised), rather than being invested externally.

4.4       There is no longer any reason for CEF-1 and CEF-2 to be separated, as their different investment purposes are no longer relevant.  It is therefore proposed to re-combine them into a single Capital Endowment Fund.  There will be no impact on either the type of investments made or their interest return.

 

5.   Context/Background

5.1       Council established a Capital Endowment Fund in 2001, using a share of the proceeds from Orion Network’s sale of its investment in a gas company.  The purpose was to generate an income stream to be applied to economic development and civic and community projects.

5.2       In 2004, part of the Capital Endowment Fund plus a special dividend from CCHL, together amounting to $5 million, was placed in a separate CEF-2 fund.  The purpose of CEF-2 was to invest in a New Zealand venture capital fund called Endeavour I-Cap, which was seen as meeting the desire for local investment.  The I-Cap fund totalled $39 million, with the bulk of investment coming from ACC, New Zealand Venture Investment Fund Ltd (a government investment vehicle overseen by the Ministry of Business, Innovation, and Employment), and K1W1 (an investment company owned by Sir Stephen Tindall) – Ngai Tahu also invested $3 million.

5.3       I-Cap has performed poorly, and its underlying investments have been slowly liquidated since 2013.  A full exit is expected by September 2019.  The value of Council’s original investment now stands at around $2.6 million, being $0.4 million of remaining investment in I-Cap plus $2.2 million of cash from previous I-Cap distributions.

5.4       The history of I-Cap distributions and revaluations is shown in the table below:

·   The first pair of columns show I-Cap movements over the period – either cash distributions or accounting revaluations (both of which effectively reduce the value of the investment).

·   The second pair of columns shows the effective balance of the I-Cap investment and the CEF-2 fund – note that cash distributions do not affect the balance of CEF-2, as they are effectively just an exchange of investment for cash.

·   The overall loss on investment has been around $2.4 million (i.e. the difference between the cash distributions received, the remaining value, and the original $5 million investment).

 

5.5       Under Council’s Investment Policy, special fund balances should be invested internally (i.e. lent to Council) whenever possible to avoid external borrowing.  Since 2013, all maturing CEF-1 and CEF-2 investments have been lent internally to Council as they are realised.  By the end of the current financial year, all Capital Endowment Fund balances will be lent to Council except for the remnants of the I-Cap investment (currently held in CEF-2) and a $100,000 investment in a share portfolio called the Millennium Trust (currently held in CEF-1 – this investment was made by the former Banks Peninsula District Council and does not mature until November 2034).

 

 

Attachments

There are no attachments to this report.

 

Confirmation of Statutory Compliance

Compliance with Statutory Decision-making Requirements (ss 76 - 81 Local Government Act 2002).

(a) This report contains:

(i)  sufficient information about all reasonably practicable options identified and assessed in terms of their advantages and disadvantages; and

(ii) adequate consideration of the views and preferences of affected and interested persons bearing in mind any proposed or previous community engagement.

(b) The information reflects the level of significance of the matters covered by the report, as determined in accordance with the Council's significance and engagement policy.

 

Signatories

Authors

Steve Ballard - Manager Funds and Financial Policy

Bruce Moher - Manager Planning & Reporting Team

Approved By

Diane Brandish - Head of Financial Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

04 April 2018

 

 

9.        Performance Reporting for February 2018

Reference:

18/289090

Presenter(s):

Peter Ryan

 

 

1.   Purpose of Report

1.1       The purpose of this report is for the Finance and Performance Committee to note an update on LTP level of service performance.

2.   Staff Recommendations

That the Finance and Performance Committee:

1.         Receives the information in the report.

 

3.   Key Points

3.1       Staff forecasts as at 28 February 2018 indicate a high level of achievement (88%) which is in line with historical trends.

3.2       Individual level of service exceptions are set out in Attachment B.

 

 

 

Attachments

No.

Title

Page

a

Level of Service Forecast Delivery Graph February 2018

36

b

Level of Service Exceptions February 2018

37

 

 

Signatories

Author

Sung Jun Park - Performance Analyst

Approved By

Peter Ryan - Head of Performance Management

Carol Bellette - General Manager Finance and Commercial (CFO)

  


Finance and Performance Committee

04 April 2018

 

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04 April 2018

 

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Finance and Performance Committee

04 April 2018

 

 

11.  Resolution to Exclude the Public

Section 48, Local Government Official Information and Meetings Act 1987.

 

I move that the public be excluded from the following parts of the proceedings of this meeting, namely items listed overleaf.

 

Reason for passing this resolution: good reason to withhold exists under section 7.

Specific grounds under section 48(1) for the passing of this resolution: Section 48(1)(a)

 

Note

 

Section 48(4) of the Local Government Official Information and Meetings Act 1987 provides as follows:

 

“(4)     Every resolution to exclude the public shall be put at a time when the meeting is open to the public, and the text of that resolution (or copies thereof):

 

             (a)       Shall be available to any member of the public who is present; and

             (b)       Shall form part of the minutes of the local authority.”

 

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 which would be prejudiced by the holding of the whole or relevant part of the proceedings of the meeting in public are as follows:


Finance and Performance Committee

04 April 2018

 

 

 

ITEM NO.

GENERAL SUBJECT OF EACH MATTER TO BE CONSIDERED

SECTION

SUBCLAUSE AND REASON UNDER THE ACT

PLAIN ENGLISH REASON

WHEN REPORTS CAN BE RELEASED

12

Public Excluded Finance and Performance Committee Minutes - 28 February 2018

 

 

Refer to the previous public excluded reason in the agendas for these meetings.

 

13

Draft Statements of Intent for 2018/19 for Christchurch City Holdings Ltd and its subsidiaries

s7(2)(c)(i), s7(2)(f)(ii)

Protection of Source of Information, Protection from Improper Pressure or Harassment

Information contained in draft SOIs may be changed or omitted in the final documents as a result of shareholder's review and comment on the drafts.

When final SOIs have been published by the CCOs which is required to be by 31 July at the latest.

14

Draft Statements of Intent, 2018/19 for ChristchurchNZ Ltd, Central Plains Water Trust, Vbase Ltd, Transwaste Ltd, Civic Building Ltd, Riccarton Bush Trust, Rod Donald Banks Peninsula Trust

s7(2)(h)

Commercial Activities

To allow the sharing of commercially sensitive information between the CCOs and shareholders to substantiate performance forecasts, and to ensure the CCOs and shareholders have an undisturbed period to consider the proposed CCO activities.

After the CCOs have finalised and published their SOIs before 31 July.

15

Council-controlled organisations - Half year performance report to 31 December 2017

s7(2)(b)(ii), s7(2)(h)

Prejudice Commercial Position, Commercial Activities

Discusses the commercial activities of the entities.

When the information is publicly available.

16

Christchurch City Holdings Ltd - Recommended appointment of Chair-elect to the board of Lyttelton Port Company Ltd

s7(2)(a), s7(2)(f)(ii)

Protection of Privacy of Natural Persons, Protection from Improper Pressure or Harassment

To give Councillors the ability to make a decision without pressure from third parties.

If and when the candidate is appointed to the board

17

Capital Programme Watchlist and Major Cycleways Report

s7(2)(b)(ii)

Prejudice Commercial Position

Release of the information may prejudice ongoing commercial negotiations

Once Projects are completed

18

Provision of External Recruitment Services

s7(2)(h), s7(2)(i)

Commercial Activities, Conduct Negotiations

Contains confidential information that if released will compromise the Council's ability to a) complete the procurement process and b) once contract for the services is entered into, hinder the ability for the services to be delivered.

At the conclusion of the full contract terms and subject to the Council's Memorandum of Understanding obligations with the Ministry of Business, Innovation and Employment