WATER SUPPLY ASSET MANAGEMENT PLAN · 9. lifecycle management 17 9.1 introduction: the objectives...

ExecutiveSummary

2015 - 25

DRAFT FINALHauraki District CouncilJune 2015 Version

WATER SUPPLYASSET MANAGEMENT PLAN

Table of Contents1. OVERVIEW OF THE WATER SUPPLY ACTIVITY 1

2. WATER SUPPLY ACTIVITY GOALS & OBJECTIVES 2

3. COMMUNITY OUTCOMES 2

4. ASSET MANAGEMENT PLANNING POLICY AND COUNCIL COMMITMENT 44.1 COUNCIL COMMITMENT TO ASSET MANAGEMENT 4

5. THE SERVICE WE PROVIDE 55.1 INTRODUCTION 55.2 WHAT IS IMPORTANT TO THE COMMUNITY 55.3 CUSTOMER LEVELS OF SERVICE AND TECHNICAL LEVELS OF SERVICE 55.4 LEVELS OF SERVICE FOR THE HAURAKI LONG-TERM-PLAN 5

6. ASSET DESCRIPTION 76.1 OVERVIEW 76.2 INDIVIDUAL SCHEMES WITHIN THE DISTRICT 76.3 UPGRADES TO MEET THE LATEST VERSION OF THE NEW ZEALAND DRINKING

WATER STANDARDS 76.4 WATER SUPPLY ASSET DESCRIPTION 8

7. DEMAND AND GROWTH 107.1 FUTURE DEMAND 107.2 DEMAND MANAGEMENT 12

8. RISK MANAGEMENT 158.1 ASSET BASED RISK MANAGEMENT APPROACH 158.2 SUMMARY OF KEY RISKS 16

9. LIFECYCLE MANAGEMENT 179.1 INTRODUCTION: THE OBJECTIVES OF LIFECYCLE MANAGEMENT 179.2 LIFECYCLE MANAGEMENT STRATEGY 179.3 MANAGING RISK 199.4 EXPECTED LIVES 199.5 OPERATIONS AND MAINTENANCE 209.6 ASSET CONDITION AND PERFORMANCE MONITORING 219.7 RENEWAL 229.8 CREATION AND ACQUISITION 22

10. FINANCIAL FORECASTS & MANAGEMENT 2410.1 FORECAST OVERVIEW 2410.2 Operation and Maintenance 2410.3 CAPITAL INVESTMENT 2510.4 RENEWALS 2510.5 FUNDING OF WATER SUPPLY 2710.6 FINANCIAL POLICY 27

11. EFFECTS OF THE WATER SUPPLY ACTIVITY 2811.1 ENVIRONMENTAL EFFECTS 2811.2 SOCIAL EFFECTS 2811.3 CULTURAL EFFECTS 2811.4 ECONOMIC EFFECTS 2811.5 SUSTAINABILITY 2911.6 RESOURCE CONSENTS 29

12. STRATEGIC PRIORITIES 29

12.1 STRATEGIC PRIORITIES PAST 3-YEARS 2912.2 STRATEGIC PRIORITIES NEXT 3-YEARS 29

13. KEY PROJECTS 3013.1 KEY PROJECTS PAST 3-YEARS 3013.2 KEY PROJECTS NEXT 3-YEARS 30

14. LEGISLATION and BYLAWS 3114.1 LEGISLATION 3114.2 WATER SERVICES ASSESSMENTS 3114.3 RELEVANT STRATEGIES, PLANS, AND POLICY 31

15. ASSET MANAGEMENT IMPROVEMENT PROGRAMME 3215.1 PROGRESS WITH 2012-15 IMPROVEMENT PLAN 3215.2 2015-18 IMPROVEMENT PROGRAM 32

16. SIGNIFICANT ASSUMPTIONS AND UNCERTAINTIES 36

Executive Summary – Water Supply Asset Management Plan June 2015 1

1. OVERVIEW OF THEWATER SUPPLYACTIVITY

The public water supply network supplies waterfor domestic, commercial, industrial, andagricultural use to 11,700 people within theHauraki District.

Eight water treatment plants (Table 1.1) currentlysupply customers connected to the public watersupply network throughout the district. However,projects are currently in place to decommissionthe four smallest of these treatment plants. Thenetworks served by the water treatment plantsplanned for decommissioning will instead beserved by the nearest major water treatmentplant in the district. Projects are currentlyunderway to design and build the pipesinterconnecting these networks.

The consolidation of water treatment to the fourmajor water treatment plants within the districtensures that all water supplied by the publicwater supply network meets the national drinkingwater standards (version 2008) by the end of2018. The continuity of supply for customers whoreceive water from the small soon to bedecommissioned water treatment plants shouldalso improve, as the raw water sources for thefour small water treatment plants were affectedby summer drought.

The treated water is delivered to approximately7,080 properties via 580 km of pipes. All suppliedproperties have their water use measured byindividual customer meters. They are invoiced atagreed rates for the water they consume.

Hauraki District Council provides water supply forfirefighting purposes in towns of: Ngatea,Kerepehi, Turua, Paeroa, Waikino, and Waihi.

The Hauraki District is reasonably unique in NewZealand in that nearly 80% of the water producedand supplied by Council to the public watersupply network is consumed by the ruralcommunity for agriculture. On the farm, theCouncil supplied water is used to provide drinkingwater to cows, and within dairy sheds. Thefarmers’ households also typically source theirwater from the public water supply. Farmers donot use the public water supply for irrigationpurposes, because the cost of the water suppliedprohibits its use for this activity.

In November 2010 the Kaiaua area wasincorporated into the Hauraki district. There were

no water supply systems transferred to HDC. Allcurrent water supply systems in the area areprivately owned and operated.

Apart from the public water supply systemsapproximately 6,000 people on 4,500 propertiesobtain their water supply from their own rainwatertanks, private bores, or a small number of minorreticulated supplies.

Council is currently undertaking a significantinvestment programme to lift the standard ofwater treated by the District’s water treatmentplants to meet the latest drinking waterstandards; and to shore up supplies of raw waterduring periods of summer drought.

Table 1.1: Water Treatment Plants and Raw WaterSources in the Hauraki District (Listed West to East)

WATER TREATMENTPLANT

RAW WATERSOURCE

Waitakaruru Waitakaruru River bydirect take and viaraw water storage inTetleys Quarry pit.

Kerepehi Waihou River

Paeroa Waitawheta River

Kaimanawa- scheduled for decommissioning

prior to 2018; - interconnection to be made to

the Paeroa water treatmentplant prior to decommissioning.

Paiakarahi Stream

Mackaytown - scheduled for decommissioning

prior to 2018;- interconnection to be made to


Apakura Stream

Karangahake - scheduled for decommissioning



Groundwater Spring,located onKarangahakeMountain

Waikino - scheduled for decommissioning


the Waihi water treatment plantprior to decommissioning.

Mangakara Stream

Waihi Walmsley Stream(a new raw water takefrom the OhinemuriRiver is due to becommissioned by2015).


2. WATER SUPPLYACTIVITY GOALS &OBJECTIVES

Legislation requires Council to identify the needfor potable water supplies. Council may providethe water supply itself, as is currently being done,or maintain an overview of supply provided byothers.

In respect of meeting the water supply needs ofthe community, the Council’s water supplystrategic goals are:

· To provide reticulated water supply toresidential, commercial, and industrialproperties within town urban limits;

· To provide a rural water supply serviceto properties within the serviced ruralwater supply district (Appendix A);

· To provide water for firefighting purposeswithin the urban areas of: Ngatea,Kerepehi, Turua, Paeroa, Waikino, andWaihi.

· To operate the water supply in a mannerthat is sensitive to the naturalenvironment;

· To encourage efficient use of water andminimise potable water wastage.

The objectives of this Asset Management Planare:

· To demonstrate that our assetmanagement strategies are carried outat an appropriate level for the Haurakicommunity;

· To outline how Council will meet its legaland regulatory obligations both as a localDistrict Council and as operator of thepublic water supply;

· To ensure that water supply demandsare managed in a cost-effective andsustainable manner;

· To ensure and demonstrate that theCouncil has applied a long-term view inrespect of environmental and financialsustainability;

· To provide substantiated financialforecasts and projections demonstratingfinancial stewardship of the water supplyassets that Hauraki District Councilmanages on behalf of the community;

· To promote and carry out a continuousimprovement process that identifies bothneeds and opportunities forimprovements in the management andoperation of the water supply activity.

3. COMMUNITYOUTCOMES

As required by the Local Government Act 2002,Council has carried out a process to identifycommunity outcomes by giving the communitythe opportunity to discuss what they think isimportant in terms of the present and futuresocial, economic, environmental and culturalwellbeing of their community.

The community identified the following sixcommunity outcomes:

PREPARED HAURAKI:· We provide a range of services and

facilities to meet our District's needs andexpectations for a safe environment;

INTERACTIVE HAURAKI:· We are a proactive Council that provides

leadership and communicates effectivelywith all sectors of our District;

KOTAHITANGA HAURAKI:· We take a collaborative approach with both

Mana Whenua and Tangata Whenua in ourDistrict;

LIFESTYLE HAURAKI:· We provide an environment that

encourages vibrant communities and anenhanced quality of life;

PROGRESS HAURAKI:· We have a positive climate that

encourages balanced and sustainedeconomic growth throughout our District;

SUSTAINABLE HAURAKI:· We plan for the wise use and management

of all land and resources for the continuedbenefit of our District.

The contribution made by the water supplyservice to Community outcomes is described inTable 1.2, page over.


Table 1.2: The Water Supply Service Contribution to Community OutcomesCOUNCIL COMMUNITYOUTCOMES STRATEGIC OUTCOME HOW THE WATER SUPPLY ACTIVITY

CONTRIBUTES

PREPARED HAURAKI

We provide a range ofservices and facilities tomeet our District's needsand expectations for a safeenvironment.

Reticulated Water is provided within townurban limits;Water for firefighting purposes isprovided.

By providing:A source of water that is safe to drink;Fire hydrants for use by the fire service areprovided in the urban areas.

KOTAHITANGAHAURAKI

We take a collaborativeapproach with both ManaWhenua and TangataWhenua in our District.

To operate the water supply in a mannerthat is sensitive to the naturalenvironment.

By ensuring that cultural values are taken intoaccount when planning for the future taking ofnatural water and for the management of theaffected water sources in the District.

LIFESTYLE HAURAKI

We provide an environmentthat encourages vibrantcommunities and anenhanced quality of life.

Reticulated Water is provided within townurban limits;

Water supplied through the public reticulationnetwork meets the needs of the community;visitors to the district; business; and industry;and thereby contributes to quality home lifefor residents, a quality stay for the District’svisitors, and jobs for the District’s residents.

PROGRESS HAURAKI

We have a positive climatethat encourages balancedand sustained economicgrowth throughout ourDistrict.

Reticulated Water is provided within townurban limits;Reticulated Water is provided to theserviced rural water supply district.

Water provided within the urban boundariesof the district meets the needs of businessand industry;Some of the rural areas in the district areunable to access water for agricultural usethrough groundwater bores, streams orrivers. To help facilitate the productivity of thisfarmland, the Council has provided waterwithin the serviced rural water supply districtto address their inability to source waterprivately.By providing and maintaining an adequaterural water supply, Council contributes to theeconomic growth and wellbeing within thedistrict.

SUSTAINABLEHAURAKI

We plan for the wise useand management of all landand resources for thecontinued benefit of ourDistrict.

To operate the water supply in a mannerthat is sensitive to the naturalenvironment.To encourage the efficient use of waterand minimise potable water wastage.

By ensuring that water takes are operated inline with their consent conditions, Council alsoensures that water is taken in a way that issensitive to the natural environment;

By working to lower the pressure of deliveredwater, Council reduces the energy required topump the water through the network; whilstalso reducing inefficient water use by thecommunity; and lowering leakage from thepublic distribution network. The lowerpressures thereby reduce the amount of waterdrawn from the District’s water takes.

Council encourages efficient use of water andminimisation of the wastage of water throughthe use of universal customer water metering;proactive communication of the need for waterconservation within the community; and,network maintenance projects that worktowards meeting the unaccounted for water(water loss) targets outlined within this AMP.


4. ASSET MANAGEMENTPLANNING POLICY ANDCOUNCIL COMMITMENT

The small population of the Hauraki Districtcalls for a fit-for-purpose asset managementapproach. For comparison, the total populationprovided with water within the district (11,600people) is fewer than the population of mostsuburbs in Auckland City.

The appropriate level for Council commitmentfor the Water Supply AMP has beendetermined as ‘Core’ for all aspects of thewater supply asset management activity,except risk management. For the riskmanagement aspect of the water supplyactivity it was determined that ‘advanced’ or‘comprehensive’ asset management wasrequired. The differing levels ofcomprehensiveness that asset managementpractise is applied over are described in detailin the International Infrastructure ManagementManual (IIMM).

4.1 COUNCIL COMMITMENT TOASSET MANAGEMENT

The Core Plus asset management practice forwater supply has been formally adopted withinCouncil Policy, and approved by Council.

Hauraki DC has established an ‘AMPDevelopment Team’. The AMP DevelopmentTeam’s job is to formalize the project-management of the asset managementplanning processes within Hauraki DistrictCouncil. The water supply activity and thewater supply asset management planningprocesses are overseen by the AMPDevelopment Team.

The asset management plans for the watersupply activity are updated and republishedevery three years. The published assetmanagement plans are officially adopted byCouncil and any subsequent changes arecaptured in the Change Register.

The Waitawheta River


5. THE SERVICE WEPROVIDE

5.1 INTRODUCTIONLevels of service (LoS) define the standard ofservice delivered to the community, over andabove the legislative requirements. LoSrepresent an agreement between the Counciland the Community defining what will and willnot be provided by the service.

The LoS targets impact on the cost of theservice provided. Level of service targets guidethe design and maintenance decisionsCouncil’s engineers and management have tomake and ultimately affect the cost of thewater supply service to customers.

The LoS therefore represent an agreementbetween the Council and Community on whataspects of the water supply service areimportant to the community, and what thecommunity is prepared to pay for.

5.2 WHAT IS IMPORTANT TO THECOMMUNITY

The following seven aspects of the watersupply service were identified as those ofgreatest importance to the community:

1. The cost of the water supply service;2. That water is safe to drink;3. That water is delivered in a manner that

is acceptable to customers (i.e. pressure/ flow / taste, etc);

4. That the community and environment isprotected (fire, rivers)

5. That the water supply is reliable;6. That the Council is quick to respond to

interruptions to the supply if and whenthey occur;

7. That customer service requests are dealtwith promptly and appropriately.

5.3 CUSTOMER LEVELS OF SERVICEAND TECHNICAL LEVELS OFSERVICE

Two types of Level of Service have beenprepared:

i. Customer Levels of Service; andii. Technical Levels of Service.

The customer levels of service are intended forthe public; and encapsulate the seven aspectsof importance to the community.

The Technical Levels of Service are the meansby which Council meets its agreement with thecommunity to supply water of a statedstandard at an agreed price. They are intendedfor use by Council management and engineersto help assess at a technical level whether ornot the water supply is being managed in themanner that will deliver the Customer Levels ofService.

The Customer Levels of Service are those thatare described in the Hauraki Long TermPlanning documents and this executivesummary. The Technical Levels of Service aredescribed in the main body of this AMP

5.4 LEVELS OF SERVICE FOR THEHAURAKI LONG-TERM-PLAN

The levels of service have been revised for the2015 Asset Management Plan to reflect theseven aspects of greatest importance to thecommunity list above.

Eight Levels of Service are used to monitorwhether the aspects important to thecommunity (Section 5.2) are being met, referTable 1.3, page over:


Table 1.3: Customer Levels of Service, Performance Indicator & Targets

LEVEL OF SERVICEOBJECTIVE

COMMUNITYVALUE BEINGADDRESSED

PERFORMANCEINDICATOR TARGET

Council provides water supplyservices at agreed levels ofservice.

1. The cost of the watersupply service

Customers are satisfiedwith the cost of watersupplied by the Council.

2015-18: Equal to orgreater than 60%

Water services meet regulatoryrequirements.

2. That water is safe to drink

4. That the community andenvironment is protected(rivers)

The water supply service isoperated in compliancewith regulatoryrequirements.

No abatement noticesreceived.

No enforcement noticesreceived.

Water is safe to drink. 2. That water is safe to drink Water treatment plants willcomply with the NewZealand Drinking WaterStandards 2008.

Kerepehi WTP willmaintain compliance

The following WTPs willachieve compliance by 30June of the listed year:· Waitakaruru 2016· Waihi 2015· Paeroa 2015

Good quality water is suppliedto consumers.

3. That water is delivered isa manner than is acceptableto customers (i.e. pressure /flow / taste, etc);

Annual customersatisfaction survey

2015-18: Equal to orgreater than 80%

Protection is provided to thecommunity and environment

4. That the community andenvironment is protected(fire)

Fire hydrants are providedto urban districts within a135 metre radius of theclosest property boundary.

Equal to or greater than95% of properties.

Reliable water supply isprovided

5. That the water supply isreliable;

Number of customerswhose water supply isinterrupted more thantwice in a 12 month perioddue to unplanned loss-of-supply incidents.

No more than 5 customersper 1000 connections

Timely response to customerrequests.

6. That the Council is quickto respond to interruptions tothe supply if and when theyoccur;

7. That customer servicerequests are dealt withpromptly and appropriately.

Customer requests areresponded to within targettimeframes:

Emergency call outs:resolved Less than 1 hour

Urgent customer requests: Response within 1 hour

Priority customer requests: Assessed within 4 hours

Routine customerrequests: Call back within 3 working days

Emergency call-outs: 100%

Urgent customer requests: 80% or better

Priority customer requests: 80% or better

Routine customerrequests: 85% or better.


6. ASSET DESCRIPTION6.1 OVERVIEWHauraki District Council owns and operates theinfrastructure to draw raw water from the rivers, treatthe water, and deliver the treated drinking water tocustomers’ houses. In other words Hauraki DistrictCouncil owns and operates all water’s infrastructurebetween the river and the customer’s house.

Infrastructure required to deliver the service includes:· raw water intakes and pipelines; and the

consents required to permit the drawing of waterfrom streams and rivers;

· water treatment plants;· water mains which comprise:

o large diameter transmission mains; toconvey large volumes of water acrossthe district; and,

o small diameter in street reticulationused to deliver the water to individualhouses.

· customer service connections between the localreticulation on the street and the private propertyowners land; and

· lastly the meter that reads the volume of waterconsumed by the customer.

The 2014 valuation puts the total value of the watersupply asset within the Hauraki District at $118 million.

By far the largest asset, by dollar value, are the watermains and raw water pipes. Together, they comprise65% of the total value of the water supply assets. Thewater treatment plants are the second-largest valueasset, representing 20% of the total value of the watersupply asset. The remaining 15% of the asset value ismade up of fire hydrants, valves and fittings, theservice connections, customers’ water meters, andresource consents.

Figure 1.1: Water Supply Valuation Summary – 2014

The total value of the water supply asset inJuly 2014 was $118 million

(reported value is Optimised Replacement Cost).

6.2 INDIVIDUAL SCHEMES WITHINTHE DISTRICT

Seven individual water supply schemes exist within theHauraki District. Of these, three are very smallschemes each serving less than 100 people in ruralcommunities. A fourth provides water to a township ofless than 200 people.

Figure 1.2 illustrates the size of each of the sevenschemes by presenting the total volume of waterconsumed daily by each scheme:

Figure 1.2: Size of the Schemes operated within theHauraki District

(reported value is volume of water sold in m3 per day).

The Plains scheme is serviced by two water treatmentplants with two separate raw water sources (Kerepehiand Waitakaruru Water Treatment Plants). In July2014, each of the other schemes listed is currentlyserviced by its own individual water treatment plant,and source of raw water (Table 1.1).

6.3 UPGRADES TO MEET THE LATESTVERSION OF THE NEW ZEALANDDRINKING WATER STANDARDS

As required by regulation, Hauraki District Council is inthe process of upgrading all of its water supplies tomeet New Zealand Drinking Water Standards, DWSNZv2008. In order to meet the standards, the treatmentprocesses within the plants need to be upgraded.

The Council has prioritised the WTP upgrades by thevolume of water treated by each plant. The largestwater treatment plants are being upgraded first. Theupgrade to the largest water treatment plant, Kerepehi,was completed in Dec 2012. Upgrades to the treatmentfacilities at the Paeroa and Waihi water treatmentplants are currently underway, scheduled to becomplete by June 2015. The Waitakaruru WTPupgrades are in the design stage and are scheduled forcompletion by June 2016.

Treatment Plant$24.7m

RawWaterPipes

$10.2m

Water Mains$67.9m

Valves / Fittings$1.6m Fire Hydrants

$1.9m

ServiceConnections $6.1m

Customer WaterMeters $4.7m

Consents $0.8m

Plains 8,720

Paeroa 2,230

Waihi 1,400

Kaimanawa 480

Waikino 80Mackaytown 50

Karangahake 30


Because of the small populations served, it isuneconomic to upgrade the four smallest watertreatment plants to meet the New Zealand DrinkingWater Standards, DWSNZ v2008. Instead, it has beendetermined that the cheapest option to meet DWSNZv2008, is to connect these small communities into thenearest larger water supply scheme. Once theinterconnection is completed, the small water treatmentplants servicing the small water supply schemes will bedecommissioned. We summarise the interconnectionsbelow:

Table 1.4: Interconnections of small water supply schemesinto larger schemes in order to ensure that all waterprovided in the district meets DWSNZ v2008.

SMALLWATERSUPPLYSCHEME

INTERCONNECTEDINTO LARGERSCHEME

WATER WILLBE SUPPLIEDBY

Kaimanawa Paeroa Paeroa WTP

Mackaytown Paeroa Paeroa WTP

Karangahake Paeroa Paeroa WTP

Waikino Waihi Waihi WTP

Hauraki DC successfully applied for governmentfunding to assist small communities lift their watersupply to meet DWSNZ v2008. This governmentsubsidy was intended for small water supply schemeswhere the required upgrades were un-economicbecause of the small size of the community beingserved.

The interconnections are being partially funded by thissubsidy. The interconnections for all four schemes arescheduled for completion by June 2018.

POST UPGRADEOnce all upgrades and interconnections are complete,the number of water treatment plants currentlyoperative within the District will have been reduced tofour.

In 2018, the four remaining water treatment plants willbe (from West to East):· Waitakaruru WTP;· Kerepehi WTP;· Paeroa WTP;· Waihi WTP.

6.4 WATER SUPPLY ASSETDESCRIPTION

The two largest asset classes by value are pipes andtreatment plants. The investment program to lift thestandard of water treatment up to meet DWSNZ v2008means that the much of the water treatment assets inthe District will have been renewed by the end of 2015.Because of this renewal, the water treatment plantswithin the district are not expected to need furthersignificant investment for at least another 30 years.

Pipes represent 65% of the water supply asset value.This large percentage of the total asset value alsoindicates that from an asset management perspectivethe pipe network represents the majority of the risk.

Figure 1.3: Water Main Installation Profile

Table 1.5: Asset Valuation as 30 June 2014

ASSET QUANTITYOPTIMISED

REPLACEMENT COST 1

($ million)

FAIR VALUE 2

($ million)

Treatment Plant 8 24.7 13.9

Raw Water Pipes 27 km 10.2 2.9

Water Mains 551 km 67.9 40.8

Valves / Fittings 1,504 1.6 0.9

Fire Hydrants 907 1.9 0.5

Service Connections 7,075 6.1 5

Customer Water Meters 8,444 4.7 1.9

Consents 16 0.8 0.4

Total 118 661. 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 grosscurrent replacement cost less allowances for physical deterioration, optimisation for obsolescence and relevant surplus capacity .

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The majority of the reticulated network within thedistrict has been installed post-1970 (Figure 1.3).Therefore, relative to many other districts within NZ,the Hauraki District has relatively young water supplyinfrastructure.

The pipe material distribution is presented inFigure 1.4. This shows that by far the longest lengthof pipe material used within the district is AsbestosCement. This represents a risk to the district,because asbestos cement is expected to have arelatively short lifespan of between 60 and 80 years.Hauraki DC addresses this issue, by proactivelymonitoring its asbestos cement pipes. The renewalforecasts and financial implications of renewing theasbestos cement pipes are discussed in therespective sections of this executive summary, andthe main body of the AMP.

Figure 1.4: Water Main Material Profile

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The cell-membrane filtration process recently installed as a part of the treatment process upgrade at theKerepehi Water Treatment Plant


7. DEMAND ANDGROWTH

7.1 FUTURE DEMANDThe population in the Hauraki District is projected toremain virtually static over the next 10 years followedby a slight decline to 2045. However the lack ofpopulation growth in the district population disguiseschanges that are expected to occur in the profile andspatial distribution of the population.

Most significantly, is the change in the age profilewithin the district, characterised by a markedlyageing population and matched by a decline in thepopulation below 64 years of age. The changing ageprofile of the district’s population is expected to affectthe average household size which is projected tocontinue to reduce over the long term.

From a water supply perspective, the decrease inaverage household size is likely to increase wateruse per capita. Studies indicate that households witha higher number of people use their water moreefficiently per person, as daily tasks such asdishwashing and clothes washing require a similardaily volume of water irrespective of the number ofpeople living in the household.

Projections also indicate that the majority of dwellinggrowth is likely to occur outside of existingsettlements. The forecasts identify much of thishappening in the Plains Ward. As the Plains Ward isalready largely serviced by the rural water supply,the rural shift in this instance may not result in anincrease in the demand for water from the publicsupply. Instead a shift in the location of the demandis forecast.

Hauraki District Council is already taking the forecastmovement in population within the district intoaccount when designing water supply infrastructure.

AGRICULTURAL WATER USEHauraki District Council has sought advice from therural community about the potential growth inagricultural water use. Scientific institutionscontacted by Hauraki District Council were reluctantto go on record in respect of long-range (30 yearplus) forecasts for dairy farm productivity andpractices. Their reluctance was driven by concernabout come back about such forecasts beingincorrect. However, the consultation revealed thatseveral sources had independently come to thesame conclusion. This was that ‘while grown-on-farmfeed remains the primary feed stock for dairyfarmers, farm stocking rates, and therefore wateruse, have likely reached their maximum, or close totheir maximum ’.

It was not considered likely that off-farm feed wouldbecome a significant supplement to farm-grown feed.The rural community advised that for this scenario toeventuate, a ‘sizeable’ increase in the farm gateprice paid for milk would be required, otherwisesignificant use of off-farm feed was not economic.The rural community did not foresee farm gate milkprices increasing to levels high enough to supportsignificant use of off-farm feed within the foreseeablefuture.

Change in the demand for water by the District’sfarmers due to the effects of climate change has alsobeen considered. As climate change is forecast tomake growing conditions for feed more difficult, it isexpected to lower agricultural demand for waterwithin the district. This is discussed in greater detailon the following page under the heading The Effectof Climate Change on Water Supply Demand.

COMMERCIAL WATER USECouncil is actively promoting the Hauraki District toindustry. Industrial uses, depending on the nature ofthe industry, can be very large users of water. Itwould not be uncommon for a ’wet’ industry toconsume 1,000 m3 of water per day. This volume ofwater would represent roughly half of the dailyconsumption of the Paeroa water supply network;and 70% of the Waihi water supply daily demand.

Because a single wet industry customer can increasedemand by such a large percentage, wet industryrepresents an unknown area of risk in respect of thegrowth in demand within the district.

However, the cost of increasing capacity to meetfuture industrial demands can be passed on to theincoming industry. Industrial applications to connectto the public water supply are dealt with on theircommercial merits. Dealing with applications toconnect from industrial customers on theircommercial merits transfers the unquantifiable risksurrounding unknown future industrial demand awayfrom the existing community and onto theprospective industrial customer. This transfer of riskalso means that the risk no longer needs to bemanaged as a part of current asset managementplanning processes.


THE EFFECT OF CLIMATE CHANGE ONWATER SUPPLY DEMANDResearch undertaken by the University ofWaikato (2011) indicates that, in the context ofthe Waikato Region, Hauraki District’s exposureto climate change events is largely in terms offuture extreme rainfall and drought conditions.This means that the District is expected toexperience both an increased risk of heavy orprolonged rainfall and also extended periods ofreduced rainfall. Such events have implicationsfor the management of the water supply.

Heavy or Prolonged RainfallProlonged rainfall impacts the water supplywithin the district by raising river levels, andincreasing the sediment carried by the river.This makes the treatment of water drawn fromthe district’s rivers more difficult. Currently, thePaeroa WTP struggles to treat water drawnfrom the river when the sediment levels areelevated. However, the upgraded watertreatment process (refer 6. Asset Description)will resolve this issue.

Longer, more severe and frequent DroughtPeriods without rain during summer months areexpected to become more prolonged as a resultof climate change. As 80% of the waterconsumed in the district is used for agriculture,we consider the impact of the drought on ouragricultural customers first:

· The District’s farmers do not currently use thepublic water supply for irrigation purposes,because the public water supply is tooexpensive for this form of use. On this basis, it isassumed that even in a period of drought, thepublic water supply will still be too expensive tobe used for irrigation.

· Past experience has shown that during periodsof prolonged drought, grass growth slows.Farmers respond to this by reducing milkingfrom twice a day to once a day. Cows are alsodried off earlier during periods of drought.

· The effect of reduced milking and drying off ofthe dairy cows is that water supply demand isactually reduced during periods of prolongeddrought within the district.

In respect of urban water, universal metering in thedistrict means that the use of the public water supplyto irrigate lawns and gardens has a direct cost to thecustomer. This encourages urban residents withinthe district to use the water efficiently.

Past summers have shown that water use forirrigation of urban lawns and gardens does notgreatly increase the water demand in the district

(Figure 1.8). Council interprets this data to mean thatthe volumetric charging for water has been asuccessful means to achieve efficient use of water.Prolonged drought caused by climate change is notexpected to change this behaviour.

THE EFFECT OF CLIMATE CHANGE ONRAW WATER AVAILABILITYRaw water availability during summer drought hasbeen an issue for the Council for several decades.By June 2018, the raw water supply issues faced bythe district should have been largely mitigated.

The key projects that will improve raw wateravailability are:

· The interconnection of the small ruralsupplies into the larger town schemes; and,

· The Waitakaruru WTP raw water storagefacility.

· The construction of a new raw water intakefor the Waihi WTP.

Water Supply scheme interconnection

The aforementioned small rural water supplies havedrawn their water from small streams and riverswithin the district. During summer drought, becauseof the small catchment feeding these small streamsand rivers, the flow substantially reduced. Thisrestricted the amount of water available to the peopleconnected to the small schemes. Theinterconnection of the small schemes into the largersupplies eliminates this problem as the larger watersupply schemes also draw their water from largerrivers.

The interconnection and subsequentdecommissioning of the raw water takes and smalltreatment plants feeding these small water schemeswill have follow-on benefits for the environment.Water that was siphoned off for use in the publicwater supply during drought will no longer be taken,and will remain in the stream and river benefiting thehealth of the aquatic environment.

Waitakaruru WTP Raw Water Storage Facility

The Waitakaruru raw water storage facility wascompleted in the summer of 2013/14. The pit formedby the operation of the now decommissionedWaitakaruru quarry is being used to store water.which will be drawn down during periods of summerdrought.

Only small natural water courses are available on theWestern side of the Hauraki Plains. This limits theamount of water the Council can take from thestream during periods of drought. This raw waterstorage scheme has been designed to fill the storage


facility in winter, when the stream flows are elevated.During periods of drought, when the stream flow islow, water that would have been previously takenfrom the stream for the public water supply will be leftin the stream benefiting the aquatic environment.

Waihi WTP Raw Water IntakeThe Waihi WTP previously drew water from twostreams, the Waitete and the Walmsley. The Waitetestream and take ceased being used in 2014and is tobe decommissioned in 2015. For the last few yearsWaihi has been supplied solely by the Walmsleystream.

During summer drought, water demand exceededCouncil’s permitted take, and Council had to bannon-essential water use, and reduce supplypressures throughout the township.

A project is currently underway to address thissituation. A raw water intake is being built to sourcewater from the Ohinemuri River. The OhinemuriRiver has a significantly larger catchment than theWalmsley stream, and therefore more substantialflows during a summer drought. Once completed, itis expected that the water restrictions required overthe last few summers will no longer be requiredexcept in extreme circumstances.

7.2 DEMAND MANAGEMENTDEMAND MANAGEMENT TARGETSHauraki District Council has set demandmanagement targets for both urban and ruralcustomers. The targets are:

· Urban water use:o Average annual water consumption

within urban communities is less than300 L per person per day.

· Rural water use:o Average annual water consumption

within the district by ruralcommunities is less than 300 L perhectare (of service farmland) per day.

Benchmarking the urban water use across otherdistricts in NZ, shows that urban water use within theHauraki District is low to normal when measured ona per capita basis. Because of this, Hauraki’sdemand management targets are static, i.e. we donot see the need for a ‘sinking lid’ reduction target.

Water usage data over the past three years showsthat both the urban and rural water use targets arebeing met. Over the past three years the water useper person and per hectare has increased slightly.Council is aware of this issue and is monitoring it tosee whether it is part of a longer term trend, orsimply a short-term blip in usage patterns.

URBAN WATER DEMAND MANAGEMENTAs described in section 7.1 Future Demands, above,demand management is not seen as a major issuewithin the district. As discussed in Section 7.2,benchmarking shows that urban water use within thedistrict is low to normal; when compared with otherareas in NZ. Furthermore, the water use per capitalis below internal targets for set for the HaurakiDistrict.

Hauraki DC employs universal water metering, whichis one of the most effective methods available forreducing water consumption.


Figure 1.5: Urban Water Use per Capita vs. DemandManagement Targets

The values presented are averaged over the FinancialYear 1 July to 30 June. They include all urban water useby residential, commercial, and industrial water users.

Figure 1.6: Rural Water Use per hectare vs. DemandManagement Targets

The values presented are averaged over the FinancialYear 1 July to 30 June.

Several other districts in NZ have trouble managingtheir water supplies in respect of the increase indemand caused by the use of the public water supplyto irrigate gardens and lawns. Water used forirrigating urban gardens and lawns is not an issuewithin the Hauraki District. Analysis of urban wateruse during drought shows that water use for irrigation(watering lawns and gardens) in the district does notgreatly increase the demand for water (Figure 1.8).

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The recently created raw-water storage reservoir at Tetley’s Quarry.The reservoir supplies water to the Waitakaruru Water Treatment Plant and has helped to improve the health of the

Waitakaruru Stream. The reservoir has reduced the need to draw water from the stream when the stream’s flows are low.During periods of drought, the Council can cease abstraction from the stream altogether, sourcing 100% of the treatment

plant’s raw water from the reservoir.


RURAL WATER DEMAND MANAGEMENT

Water use for agriculture represents 80% of totalwater use within the district. Again, because wateris charged for, farmers are incentivised to usewater efficiently. Feedback from farmers suggeststhat they regularly read their water metersthemselves, to check for any water leaks withinthe privately owned on-farm water reticulation.This practice confirms farmers desire to use waterfrom the public water supply efficiently.

The public water supply is used by farmers toproviding drinking water for cows, within the dairyshed, and potable use within houses on the farm.The cost of the water from the public water supplymakes it un-economic to use for farm irrigationpurposes.

Analysis by Hauraki District Council has shownthat the volume of water used on farms is closelyrelated to temperature. On hot days the cowshave a greater thirst for water. The other largeconsumer of water is the dairy shed. Waterconsumption drops significantly when the cowsare dried off, and are no longer being milked.

The peaks and troughs of water demand foragricultural use are smoothed by many farmersmaintaining storage tanks on their farms. Thetanks are filled by the public water supply, andduring times of peak demand, such as dairy shedwash-down, water is pumped from these tanks.The use of tanks on farms smooths the demandfor water over the 24-hour day.

The smoothed demand profile for agriculturalwater, thanks to the use of on-farm tanks tospread demand, enables Council to deliver waterto the rural community at a lower cost. Thesmoothed demand enables smaller diameterpipes to be used to the distribute water. Thisreduces the cost of maintaining the network. Thesmoothed demand also enables the networkpressure to be maintained at a lower level, whichreduces the cost of pumping, the stress on thenetwork (thereby extending the life of the pipeassets), and helps to reduce any leakage from thepublic water mains.

The relatively smooth demand profile from theagricultural customers, particularly during summerdrought, is evidence that the use of storage tankson farms is achieving the desired outcomes.

Figure 1.7: Urban vs. Rural Water Use in the District

Figure 1.8: 24-hour Water Demand Profile

The values presented are taken during peak demand in the2008 drought.

The smoother Rural Water (lower peak demand and highernight time demand) is a result of the buffering in demandprovided by farmers using on-farm storage. The publicwater supply tops up the farm storage tanks overnight,

reducing peak demands during the day.

The lack of a large increase demand in the early evening(6to 8pm) shows that an insignificant amount of water is

being used for garden and lawn watering. (In communitiesthat use large amounts of water to irrigate their gardens andlawns, the evening peak is typically larger than the morning

peak.)

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8. RISK MANAGEMENTThe Hauraki DC asset management policy specifiesthat the appropriate level of asset managementpractice for risk management is “Core Plus”. This isthe exception to the rest of the asset managementpractices for the water supply activity, which aremanaged with “Core” asset management practices.

Core Plus asset management practice basicallyrequires risk to be proactively managed. Proactivemanagement of risk means that potential risks to thewater supply services and assets are identifiedthrough planning and workshop exercises.Appropriate mitigation strategies are developed todeal with identified risks.

A comprehensive risk analysis for the water supplyservices and assets in Hauraki district wasundertaken in the preparation for the 2012 AMPplanning cycle. The foundation of the 2012-2015 riskmanagement strategy was developed by WaughInfrastructure Ltd. Business risks as well as assetrisks were identified and analysed using thecorporate risk evaluation frameworks, into extreme,high, medium or low risk categories.

8.1 ASSET BASED RISKMANAGEMENT APPROACH

In preparation for the 2015 AMP planning cycle, the2012-2015 risk management profile and practiceswere reviewed. This review found that the 2012-2015risk profile and practices were thorough and largelystill relevant to the 2015-2018 AMP planning cycle.As such, the 2012-2015 risk management practiceshave largely only required a ‘refresh’ for the 2015-2018 planning cycle.

RISK REVIEW CRITERIACouncil’s level of service targets define Reliability asone of the key aspects that the Council must deliverto the community. The degree of reliability that is tobe delivered is measured against two keyperformance criteria (Table 1.6):

Table 1.6: Level of Service Reliability CriteriaCOMMUNITYVALUE

PERFORMANCEMEASURE

TARGET

The watersupply service isreliable.

Frequency ofinterruptions andnumber ofpeople affected.

No more than 5customers per1,000 connectionshave water supplyinterrupted morethan twice in a 12month period due tounplanned loss-of-supply incidents

The Council isquick to respondto interruptionsto the watersupply if andwhen they occur

Time to reinstatethe water supplyservice.

99% or more ofinterruptions to thewater supply arerestored within 8hours of beingreported to Council.

Table 1.7 The Consequence of an Asset Failingdetermines each Asset’s Criticality Rating

AssignedCriticality

Consequence of Failure

Very high criticality Failure of the asset isunacceptable

High criticality Significant and widespreadconsequences of failure, suchas:

· Loss of supply to 1000or more people for 8-hours or more;

· Potential disruption tothe activities of 1000 ormore people for morethan 8-hours;

· Significant potential fordamage to multiplebuildings.

Medium criticality More than minorconsequences of failure, suchas:

· Loss of supply to:o 100 or more people

for 8-hours or more;o 1000 or more

people over 4-hours;

· Potential disruption tothe activities of:o 100 or more people

for 8-hours or more;o 1000 or more

people for over 4hours;

· Significant potential fordamage to one or morehabitable buildings.

Low criticality Isolated impacts from failure,such as:

· Loss of supply to lessthan 10 people for 8-hours or more;

· Potential disruption tothe activities of less than100 people or more for8-hours or more;

· Low potential to damagebuildings.

Very low criticality Minimal impacts from failure,such as:

· Loss of supply likely tobe restored in less than8-hours;

· Minor or no disruption tothe community;

The water collection, treatment, and reticulationassets were reviewed for the 2015-2018 andplanning cycle against the reliability level of servicecriteria (Table 1.5).

Council’s engineers assessed the likelyconsequence of assets failing, and measured thatconsequence against the impact of whether the LoSreliability criteria would be compromised by that


failure. Individual assets servicing large numbers ofpeople showed up as requiring a high criticality ratingdue to their ability to affect a large number of peopleduring a single outage. Other assets were deemed tobe difficult to repair or replace within an eight hourtime frame. Where repair or replacement in less thaneight hours was deemed to be challenging, theasset’s criticality rating was raised (if not alreadyraised during the 2012-15 risk assessment). Someassets posed risks against failure for both Level ofService criteria (number of people affected and timeto repair). These assets have been given the highestasset criticality ratings.

Mitigation strategies were reviewed to determinewhether the mitigation measures would enable anunexpected failure to be quickly corrected, limitingthe risk of failing to meet either of the two reliabilitycriterion.

Assets for which failure could potentially affect largenumbers of people, and for which present a risk oftaking longer than eight hours to repair havereceived the highest criticality rating for the 2015 –2018 review. An example of such an asset is the rawwater transmission main for the Kerepehi WTP.

Power supply failures were identified as being one ofthe highest risks of failing to meet interruptionfrequency criteria. Large diameter pipes traversingthe district state highways were frequently identifiedas assets that might compromise the repair with aneight hour criteria.

8.2 SUMMARY OF KEY RISKSHigh business risks for the 2015-2018 planning cyclewere identified to be:

· Ad-hoc and reactive decision making with aresultant loss of focus on long termobjectives;

· Changing environmental standardsrequiring increased capital and operatingexpenditure to comply with standards;

· Incorrect financial forecasts, which couldlead to pressure on Capex, Opex and LOSdecline or rates increase.

· Flaws in design / construction of assetsresulting in insufficient capacity to meetLevel of Service targets; or additionalongoing costs.

· Consents not applied for or conditions notmet resulting in environmental effects andpossible legal action.

High event based risks related to critical assets wereidentified to be:

· Power supply failures preventing theproduction of treated water, or distributionof treated water to customers;

· Major Flood resulting in a washout, watercontaminated and subsequent healthissues to the community;

· Soil movement in the Hauraki Plains. Thismovement is the leading cause of jointfailure and loss of supply in the district.

Critical water supply assets were identified to be:· Waihou River Intake and pumping station;

· The Kerepehi, Paeroa, and Waihi rawwater transmission mains;

· The Kerepehi, Paeroa, and Waihi watertreatment plants;

· The large diameter treated water mainsfeeding water out of the Kerepehi, Paeroa,and Waihi WTPs. Specifically:

o Waihi, Bulltown Road 300mm diapipe to the Bulltown Road,William St junction;

o Paeroa, the twin AC pipes takingwater from the WTP to the Dellpumping station.

o Paeroa, the pipes spanning theCriterion bridge.

o Kerepehi, the section of the 460dia PE pipe that passes under SH2.

Risk control processes and mitigation strategies arediscussed in detail in the Risk section of the mainbody of the AMP. The procedures to mitigatesignificant negative effects, the impact on lifelinesand emergency management (Civil DefenceManagement Act) are discussed, as are Corporateinsurance policies.


9. LIFECYCLEMANAGEMENT

9.1 INTRODUCTION: THE OBJECTIVESOF LIFECYCLE MANAGEMENT

The objective of lifecycle management is themanagement of assets from conception to disposalwhilst meeting levels of service, maximising benefitsand minimising whole of life costs.

At its simplest level, the basic premise of lifecyclemanagement is that as an asset ages the cost ofoperating and/or maintaining that asset increasesand the risk of the asset failing increases. Therefore,at some point in that asset’s life, the cost ofcontinuing to use and maintain that asset will exceedthe cost of replacing that asset. This point-in-time isthe point at which the maximum value of that assethas been extracted, and is the theoretical optimaltime to replace the asset (Figure 1.9).

In the real-world the benefit-cost decisions aroundthe optimal time to replace the asset are complicatedby intangible costs, such as the economic cost to thecommunity of an interruption to the water supplyservice in the event of an outage. The analysis of theoptimal replacement time is therefore not a simplecost-based decision.

Asset lifecycle is managed by balancing threeprogrammes of work:

i. The Operation and MaintenanceProgramme;

ii. The Asset Renewals Programme; and,iii. The Capital Investment Programme.

Figure 1.9: Theoretical example of the optimal time toreplace an Asset

Source: International Infrastructure Management Manual (2011) P67.

The figure illustrates the theory that the cost of operatingand maintaining an asset increases as the asset ages. Theoptimal time to replace the asset occurs when the cost of

maintaining the asset (blue line) exceeds the cost ofreplacing the asset (red line).

9.2 LIFECYCLE MANAGEMENTSTRATEGY

Hauraki DC’s lifecycle management strategy is tomaximise the useful and economic lives of its assets.By maximising the lives of the District’s assets, theCouncil is able to reduce the cost of the water supplyservice to the community.

The primary mechanism that Council uses tomaximise the lives of the District’s assets is throughthe management of:

· The consequential risks of an asset failing;and,

· the duration, frequency and extent ofinterruption to the water supply due to repairor replacement of an asset.

Assets with high failure consequences are rated highcriticality, and assets where failure consequenceshave minimal impact on the community are rated lowcriticality. The criticality rating process is a part of theCouncil’s Risk Management activity, see Section 8.

The asset criticality determines the extent of the riskmitigation undertaken to limit the extent andfrequency of any interruption caused by theunexpected failure and/or repair/maintenance of theasset. The risk mitigation measures utilized by theCouncil are summarised below:

9.2.1 RISK MITIGATION VS ASSET CRITICALITY

VERY HIGH CRITICALITY AND HIGHCRITICALITY ASSETS:· Very-high and high criticality assets are

proactively managed to prevent interruption tothe water service that would exceed the level-of-service reliability targets;

· The management process consists of:o Critical assets are monitored throughout

their life for performance indicators of apotential premature deterioration in theasset’s condition. A database of criticalassets is being established that will be usedto track repairs and other indicators thatmight signal that the condition of the assethas deteriorated;

o Opportunistic sampling of the condition iscarried out if and when such opportunitiesarise;

o Proactive condition sampling is carried outwhen the asset reaches 80% of its expectedlife, or if performance indicators suggestpremature deterioration of the asset;


o Data from asset condition inspections(opportunistic or proactive), will be used tore-project the asset’s life, and schedule thenext condition inspection. If the inspectionfinds that replacement is required, the assetwill be scheduled replacement;

o Industry information about the various typesof water supply infrastructure installed inHauraki DC will be referenced whereavailable. Problems with specific types ofinfrastructure typically manifest themselveswith other water supply operators severalyears before they become problematic forthe Hauraki District because Hauraki’sinfrastructure is largely younger than otherCouncil’s infrastructure.

o Council will document an InterruptionManagement Strategy within the criticalassets database for unexpected failure ofeach Very-High and High criticality asset.Examples may include asset duplication;carrying spare / replacement parts; orreconfiguration of the network. Theprogramming of inspections for Very-Highand High criticality assets will be maintainedwithin the critical-asset database that isbeing created.

MEDIUM CRITICALITY ASSETS:· The condition of Medium criticality assets is not

proactively monitored throughout the assets’ lifesince the consequence of an unexpected failureof a Medium criticality asset is not expected towarrant the cost of proactive monitoring;

· Instead, the time to repair will be assessed foreach Medium criticality asset and stored withinthe criticality database;

· Where in the event of a failure of the asset, thewater supply service can continue to supplywater, or be reinstated within 8-hours; MediumCriticality assets will be kept in service until:

§ Economics indicate that it is cheaper toreplace than repair / maintain the asset;or

§ They can no longer meet the reliabilitytargets specified in the levels-of-service; or

§ The asset’s performance has degradedto the point where the Council’sperformance based level-of-servicetargets are no longer being met.

· If the supply of water will be interrupted in theevent of a failure and/or repair; and the assetcannot be repaired or replaced within 8-hours,then:

§ A formal assessment of the asset’scondition will be carried out when theasset reaches 80% of its expected life,or if performance indicators suggestspremature deterioration of the asset;

§ The condition data will be used tore-project the asset’s life, and schedulethe next condition inspection or thereplacement of the asset;

§ Duplication or replacement will beconsidered at the first failure of theasset.

LOW AND VERY-LOW CRITICALITY ASSETS:· Low and Very Low criticality assets will be kept

in service, repaired and maintained until:§ Economics indicate that it is cheaper to

replace than repair / maintain the asset;or

§ They can no longer meet the reliabilitytargets specified in the levels-of-service; or

§ The asset’s performance has degradedto the point where the Council’sperformance based level-of-servicetargets are no longer being met.

SUMMARYThe criticality vs. useful-lifespan process describedabove enables the Council to maximise the usefullives of its assets, while balancing the risks, costs,and consequences of each asset failing to both theCouncil and the wider community.


9.3 MANAGING RISKRisk Management is an inherent part of the Council’sLifecycle Management Strategy (described above).However, in order for the Council’s LifecycleManagement Strategy to work, other risks also needto be managed. We provide an overview below:

REACTIVE MAINTENANCE:MAINTAINING PREPAREDNESS

Council’s Lifecycle Management Strategy forMedium, Low and Very-Low criticality pipes relies onits ability to carry out repairs and replacement in atimely manner without compromising level-of-servicetargets around reliability. The Council’s levels ofservice targets stipulate required repair times, andthe maximum frequency with which the water supplyservice can be interrupted.

In order for the Council be able to repair assetswithin the stipulated time frames requires a state ofpreparedness to be maintained. This required anadequate supply of spare parts and pipes to bestocked; and suitably qualified staff and appropriatemachinery to be available.

The water supply asset manager reviews the watertreatment plant assets and reticulation assets three-yearly, and ensures:· That appropriate suite of pumps and pipes of

varying sizes, and associated valves and fittingsare either warehoused by the Council within theDistrict, or are available under contract within asufficiently short period of time that the repair /replacement can be completed within 8-hours offailure;

· Assets with long lead-in times for replacement(eg: months) are identified and reviewed 3-yearly. Spares are either stocked at theCouncil’s depot, or alternatively, the assets arescheduled for proactive condition inspection.

9.4 EXPECTED LIVESAs described above, Hauraki District Council’sLifespan Management and Risk Managementstrategies are reliant on an understanding of theexpected lives of the Council’s assets.

One of the challenges for Hauraki District Council,with its relatively small asset base, is obtainingsufficient data on asset lives.

For some assets, such as pipes of a commondiameter, commonly used valves (such as firehydrants), Hauraki District Council has a sufficientnumber of assets in use that valid statisticalconclusions can be drawn from assessments of theexisting assets’ performance. For other assets,Hauraki District Council draws upon the experienceof specialists in infrastructure Management whomaintain their own databases; or industry standardlives.

MODELLING EXPECTED LIVESHauraki District Council has developed a statisticalmodel to forecast the expected life of its assetswhere old-age is the most-likely reason for theasset’s future retirement. The model has been usedwhere the Council has a sufficient number of assetsto use as a foundation for analysis.

For the 2015-25 Water Supply AMP and 2015renewals forecasts, the model has only been usedon pipes, valves, and fittings. However, the Councilhas plans to include other assets within themodelling if and when sufficient data becomesavailable 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 number/length of the assets in use; and,· All of the above details for assets that have

already been retired within the district.o The records on retired assets must

include the reason for the assetbeing retired, to ensure that only agerelated issues are included in themodel for calibration purposes;

Limitations of the model:The model can only be used where:

· There are enough assets with which to formvalid statistical conclusions;

· The asset is already of a sufficient age wherea small percentage has already been retireddue to age-related issues (eg: 2% or moreshould have been retired).

When neither of these two requirements can be met,Hauraki District Council has continued to use anindustry standard life.

The 8-hour repair time arises from theCouncil’s Level-of-Service commitment to

restore the water supply in less than 8-hours.


Improvement of the model forecastsAsset data held by Hauraki on its active assetscurrently fulfils the requirements of the renewalsmodel. However, the renewals model is reliant ongood data being held on decommissioned assets.

Back in the 1990s and early 2000’s, informationabout decommissioned assets was as not reliablykept. The water supply industry had not yet foreseenthe extent to which data about retired assets isutilised today for the purposes of good assetmanagement. To address this going forward, Councilintends to prepare guidelines for staff to help ensurethat sufficient and appropriate data is captured andkept when assets are decommissioned.

Over coming years, Council hopes to expand therenewals model forecast beyond pipes valves andfittings. Other assets that the Council is consideringto include in the life-cycle model are pumps andmotors, for example. Records on these shorter livedassets were not as complete as the records held onreticulation assets, particularly in respect ofinformation about decommissioned assets. Councilwill work to improve the records held with a viewtowards enabling life-cycle forecasting to be carriedout across other asset areas.

The larger the number of assets included in themodel, the better the forecasts. Council intends toapproach other water supply operators with a view tosharing each other’s asset condition data.

9.5 OPERATIONS AND MAINTENANCEThe objective of the operation and maintenanceactivities is to maintain and operate the system suchthat the performance and reliability targets within thewater supply levels of service are met. The presentlevel of maintenance and operation is sufficient tomeet these targets.

OPERATION AND MAINTENANCE STRATEGYHauraki District Council’s operation and maintenancestrategy is to make informed decisions based upondata. The strategy relates not just to the operationand maintenance activity, but data captured throughthe operation and maintenance activity being used tosupport larger and longer-term decisions aroundcapital investment and asset renewal.

MONITORING COMPLIANCE WITH LEVEL-OF-SERVICE TARGETS AND LEGISLATIVEREQUIREMENTSThe water supply asset manager is required to reportto the Council’s senior management team quarterlyon performance and reliability level of service targetsand legislative compliance. For measures that onlychange slowly over time, yearly reporting is required.The details of what is reported, how frequently it isreported, and how it is measured are described in fullwithin the Level-of-Service and PerformanceMeasurements section of the main body of the AMP.

PROACTIVE OPERATION AND MAINTENANCEIn a top level down approach: the quarterly reportingprocess outlined above enables the water supplyasset manager, and Council management to identifyany issues that are arising with the water supplyactivity and address them in a timely manner.

In a bottom level up approach: maintenance issuesidentified by operators and field staff are logged withthe water supply asset manager. This enables theasset manager to assess and prioritise the responseto such issues. Centralising maintenance in thismanner, helps to keep track of larger issues that maybe developing, and prevent excessive reliance onreactive maintenance.

REACTIVE MAINTENANCEReactive maintenance is primarily handled throughthe Customer Service Request system. Thecustomer services team trained to assess the relativepriority of the customer’s request. Urgent requestsare sent to the Council’s field staff for immediateaction. Non-urgent requests are filed with the watersupply asset manager in a similar manner that fieldstaff lodge identified non-urgent maintenance. Again,this enables the asset manager to assess andprioritise the response.


FORWARD IMPROVEMENTSOver the next three years Hauraki DC will be placingan emphasis on streamlining and improving thecollection of data about the operation andmaintenance activities carried out on the watersupply. Areas for particular attention will be:

· improving the ability to efficiently measurelevel of service compliance;

· track operating costs (eg: electricity);· track repair and maintenance costs;· track asset reliability;· spatially present and analyse the data.

Emphasis on capturing sufficient data that enablesinformed decisions to be made.

9.6 ASSET CONDITION ANDPERFORMANCE MONITORING

“Performance” relates to the ability of an asset toprovide a required level of service the customer.

“Condition” relates to the structural integrity of anasset.

STRATEGYHauraki has adopted a primarily performance basedasset monitoring approach. Outside of the assetcondition monitoring described within the LifecycleManagement Strategy asset condition monitoringand assessment has been encapsulated within thelevel of service performance criteria. Specifically, thereliability and unaccounted for water targets:

· The “Unaccounted for Water” technicallevel-of-service measure includes bothcustomer meter inaccuracies and water thatleaks from the network;

· The unaccounted for water target thereforeencapsulates both the condition of the watermeter fleet, and the condition of the pipenetwork.

· A water supply asset that is in poorcondition, or fails regularly will not be ableto meet the reliability targets specified in thelevels of service.

The levels of service also specify more traditionalmeasures of performance, including: the minimumpressure and flow targets; and for rural customers aminimum volume of water that will be available perday.

MONITORING PERFORMANCEHydraulic models of the water supply network areused to monitor many of the performance targets.Because of the low population growth in the district,the hydraulic models do not need frequent updates inorder to remain current. Level of servicemeasurement criteria specifies that the hydraulicmodels are to be updated every 10 years. However,when necessary, updates are carried out morefrequently.

Hydraulic models are the most cost-effective way tomeasure many of the performance measures,because they can also be used to identify and designthe cost-effective solutions where performance isfound to be lacking. The models are also used todesign replacements when assets are due forrenewal.

The customer service requests database is alsoused to monitor the performance of the network. Thecustomer service requests are reported on quarterly,to Council senior management. Any spike incomplaints is investigated, as it may signal a suddenproblem with the network. Long-term trends aretracked and monitored by both the water supplyasset manager and Council management.Deterioration in long-term trends is investigated, as itmay indicate deterioration in the performance of thenetwork that needs to be addressed.

The Drinking Water Standards of New Zealand(v2008) specify the sampling required to prove toauthorities that the District’s water supplies meet thestandards. Council carries out this sampling asrequired.

The Council’s resource consent conditions specifyspecific measurements required to demonstratecompliance. These measurements are carried out,and reported to the Waikato Regional Council asstipulated within the resource consent conditions.

OPPORTUNISTIC CONDITION BASED SAMPLINGHauraki DC’s Lifecycle Management Strategy doesnot require proactive asset condition monitoring forMedium criticality, Low and Very Low criticalityassets. The reasons for this are largely twofold:

i. The cost exceeds the benefit for assets withthese lower levels of criticality;

ii. Because of Hauraki District Council’s smallsize, a sub-sample of our already smallasset base will have too few assets withwhich to draw valid conclusions from.

However, over recent years Hauraki District Councilhas carried out opportunistic condition basedsampling. The results of this initial work wereconsidered beneficial, and obtained at relatively lowcost.

Opportunistic condition sampling opportunitiespresent themselves when assets are alreadyexposed for extensions, maintenance, or repair.

Over the next 3 years, Hauraki District Council willinvestigate the merits of implementing anopportunistic condition based sampling program.Results would be stored in a spatial database. Theintended use of this condition data is to help refinethe accuracy of forecasts of the expected lives of theDistrict’s assets.


9.7 RENEWALCouncil will continue to renew assets to sustainagreed levels of service targets.

Prior to commissioning a renewal, Council willassess whether the need for the asset remains. If noongoing need is identified, the asset will bedecommissioned and not renewed.

Assets are renewed on the following basis:· Performance:

o The existing asset is not and cannot (withmodification) meet the requiredperformance level of service targets;

· Reliability:o A Very High or High criticality asset has

reached the end of its useful life, and isbeing replaced to ensure the continuedreliability of the service;

o A Medium criticality asset that is timeconsuming to repair or replace has failedand has therefore been scheduled forreplacement;

o A Very Low, Low, or Medium criticalityasset has reached an age where it hasstarted to fail at a frequency that exceedsthe reliability targets specified within thelevels of service.

· Economic:o The asset has become uneconomic to

maintain and operate; and net presentvalue analysis (NPV) has shown that it ischeaper to replace the asset with amodern equivalent.

o NPV analysis shows that a more modernasset has an operating cost is sufficientlylower than the existing asset to justify thereplacement of the aged asset;

· Obsolescence:o The asset has become obsolete and

needs to be replaced in order to integratewith wider Council systems;

· Opportunistic:o Where other activities or maintenance has

been carried out in the vicinity of an assetthat is nearing the end of its economicwere useful life, assets may be replacedprematurely to tie in with those otheractivities or maintenance been carriedout. An example would be a pipe buriedunderneath the road that is about to bedug up for repair. In this circumstance itmay be cheaper to renew the pipe whilethe road is being repaired.

o Opportunistic renewals will only be carriedout when it is determined that prematurerenewal of the asset to coincide with theother activities or maintenance is likely tobe the cheapest long-term option.Opportunistic renewals are assessed on acase-by-case basis.

IDENTIFICATION OF RENEWALSWith the exception of opportunistic renewals, thedata capture and analysis process as describedwithin the operations and maintenance section(Section 9.5) are used by Council to identify assetsthat require renewal for one of the reasons listedabove.

Opportunistic renewals are currently identifiedthrough an ad hoc process, predominately facilitatedby departmental and interdepartmental teammeetings, or offers from external agencies.

LONGER TERM RENEWAL FORECASTSLonger term renewal forecasts are based upon theexpected lives of the assets. The asset criticality isassigned to each asset within the Council’s assetregister. The safety margin applied to very high andhigh criticality assets reduces the forecast useful lifeof these assets.

Where sufficient data exists, the Council’s annualforecasting model will be used to simulate the periodwhen each asset is forecast to fail. The use of aMonte Carlo simulation enables an average renewalsforecast to be derived, and the confidence intervalsaround the forecast to be understood.

SELECTION OF AN APPROPRIATEREPLACEMENTBecause reticulation assets are long-lived, hydraulicmodels of the water supply network are used toensure that the replacement pipe is sized correctly tomeet the needs of current and future generationsover the life of the asset.

As treatment assets usually are part of a larger plant,they are usually replaced like-for-like, unless a newtechnology has been developed that supersedes theexisting asset. In this circumstance, and where theeconomics justify the investment, the plant may bemodified to accommodate the newer technology.

9.8 CREATION AND ACQUISITIONBecause there is near zero population growth withinthe Hauraki District, the water supply activity islargely been maintained in a “maintenance ofexisting service” mode of operation.

The previous 3 years and following 3 years are anexception to the status quo. The six-year period hasseen significant capital investment in the watersupply infrastructure. The drivers for this capitalinvestment were primary twofold, legislativerequirements requiring water to be treated to ahigher standard; and the need to identify larger, morereliable raw water sources from which water can bedrawn from in a manner that is sensitive to thenatural environment.


ASSET CREATION AND ACQUISITION POLICYCouncil policy requires a business case to beprepared for the creation or acquisition of any newsignificant assets. The business case must:

· show that the proposed asset representsgood value for money for both householdsand businesses over the anticipated life ofthe service; and,

· Consider the risks that surround thecreation or acquisition of the asset.

IDENTIFICATION OF THE NEED FOR ASSETCREATION

Following the completion of the current watertreatment and raw water upgrades, the primarydrivers for the creation of new assets are foreseen tobe:

i. new residential housing and commercialdevelopments; and

ii. new assets required to continue to meet orlift substandard performance to a level thatmeets level of service targets.

In respect of new housing and commercialdevelopments, most of the required newinfrastructure is built and paid for by the landdeveloper. This infrastructure is then subsequentlyvested with Council.

The District Plan details where new residential andcommercial development is allowed to take place. Indoing so, the District plan prevents ad hoc growthwithin the district. This ensures that appropriateinfrastructure can be provided to areas designatedfor new development.

In some cases, the extension of the water supplyreticulation will require upgrades to the existinginfrastructure such that it may support the newdevelopment. The additional capacity provided bysuch upgrades is funded from a financial contributionfrom the developer to the extent that it is needed toserve the development itself. Beyond thisdevelopment contributions can be utilised to createadditional capacity. Upgrades of this nature alsoprovide an opportunity (where necessary) to improvethe level of service delivered to existing customers.Any increase to the level of service of existingcustomers facilitated by such upgrades would befunded by Council subject to the necessary publicconsultation..

In respect of new assets required to continue tomeet, or lift substandard performance to a level thatmeets level of service targets; these assets will beidentified through the data capture and analysisprocesses described within the operations andmaintenance section (Section 9.5).

Newly created assets are sized to meet the needs ofboth current and future generations over the life ofthe asset.

Puke Boat Ramp


10. FINANCIALFORECASTS &MANAGEMENT

The operational expenditure and capital investmentforecasts included in this AMP cover a period of 10years and are based on the latest asset informationheld by Council. The renewals forecasts cover aperiod of 30 years due to the forecast shift from aninvestment phase to a maintenance phase beginningin July 2018.

All values reported are presented in today’s dollars(2014-15). Council consider that presenting theforecasts in ‘today’s dollars’ makes it easier to readand interpret the forecasts.

10.1 FORECAST OVERVIEWThe 10 year forecast for operational expenditure andcapital investment has been deemed appropriate forthe water supply AMP due to the static populationgrowth forecast within the district. The periodbetween 2012-2018 is a period of significant capitalinvestment in the water supply assets is by theHauraki District Council. As discussed elsewherewithin this executive summary, this capitalinvestment has been driven by the need to lift thedistrict water supplies to meet the New Zealanddrinking water standards (DWSNZ v2008); and tosource more reliable raw water supplies in order tomeet the District’s needs for water during periods ofdrought.

This investment phase is forecast to be complete atthe end of June 2018. Beyond this date, HaurakiDistrict Council’s forecasts indicate that the assetmanagement of the water supply activity will shift intoa ‘maintenance’ mode for at least a further 30 years.The shift into a maintenance mode will occur due tothe forecast zero population growth within the district,and the fact that the District’s water supplies, oncethe current capital investment phase is complete in2018, will meet the needs of the district.

In line with this shift to a maintenance phase,renewal forecasts have been prepared for a period of30 years. This is to align with the requirements forcouncils to prepare 30 year Infrastructure AssetManagement Strategy Plans. Council’s forecastshow that the primary activity required to maintainthe water supply service after 2018 will be renewingthe existing pipe assets when they reach the end oftheir useful life. Because water supply assets arelong-lived, a 30 year forecast horizon provides abetter view of the state of the asset than a 10 yearhorizon. For this reason, it was deemed appropriateto align the renewals forecasts within the waterSupply AMP with a 30 year forecast horizon of theInfrastructure Asset Management Strategy Plans.

10.2 Operation and MaintenanceFigure 1.9: Forecast Operation and MaintenanceExpenditure

(reported values are the operation and maintenance spend in2014 dollars, with no allowance for inflation).

The objective of the operation and maintenanceactivities is to:

· Continue to produce water that is safe to drink,and meets DWSNZ v2008

· Maintain the water supply system to ensurethat it meets the reliability targets describedwithin the level of service targets;

· Continue to provide “good quality water” tocustomers that meets the levels describedwithin the level of service targets (i.e.: meetingthe pressure and flow targets specified in theLoS section of the AMP); and

· Maintain the fire fighting capabilities of thewater supply network;

· Strive to achieve the unaccounted for waterLoS targets described in the AMP; and

· Maintain the infrastructure in a serviceablecondition that minimises day-to-dayoperational costs over the long term.

PLANNED OPERATIONS AND MAINTENANCEPROJECTS OVER THE NEXT 3 YEARSOver the next three years Council plans to invest inimproved operation and maintenance of the networkby:

· Establishing water supply pressure zones;· Identification of suitable locations for bulk

metering into and out of water supply zones;· Improving data held on customer water meter

accuracy;· Improve the flow of information from field

maintenance crew back into the office, and thestoring of this information against the assetmanagement registers.

· Work to reduce leakage from the public watermains, targeting areas that are known to havehigh rates of leakage.


10.3 CAPITAL INVESTMENTHauraki District Council is three years into a six-yearinvestment cycle to lift the standard of watertreatment within the district to meet the NewZealand drinking water standards (DWSNZ v2008) ;and to source more reliable raw water supplies inorder to meet the District’s needs for water duringperiods of drought.

It is forecast that the Council will shift into amaintenance mode upon the completion of thiscapital investment cycle. Beyond this horizon, noknown significant capital investments are required toensure the continued operation of the water supplynetwork meets the level of service targets.

PLANNED CAPITAL INVESTMENT DURINGNEXT 3-YEARSThe significant capital investment projects underwayor planned between 2015-2018 are:

· Interconnection of the Kaimanawa,Mackaytown, and Karangahake watersupply schemes into the Paeroa watersupply scheme;

· Interconnection of the Waikino watersupply scheme into the Waihi water supply;

· Decommissioning of the Kaimanawa;Mackaytown; Karangahake; and Waikinowater treatment plants;

· Treatment process upgrades at the:Paeroa, Waihi, and Waitakaruru watertreatment plant;

· Construction of a new raw water pipelinefeeding the Waihi WTP from the OhinemuriRiver; and associated River intakestructure.

· A treated water storage reservoir for theHauraki Plains.

Figure 1.10: Forecast Capital InvestmentExpenditure

(reported values are new capital spend in 2014 dollars, with noallowance for inflation).

10.4 RENEWALSAs described in the Lifecycle Management section,council will continue to renew assets to sustain theagreed level of service targets. Renewals may be:

1. Performance-based;2. Condition-based;3. Economic;4. Due to obsolescence; or5. Opportunistic.

PLANNED RENEWALS DURING THE NEXT3-YEARSPerformance-based Renewals:There are no performance-based renewals plannedfor the water supply network during the next threeyears. However, hydraulic modelling studies of thePaeroa and Waihi water supply networks areplanned to be commissioned and completed withinthe next three year planning cycle. It is likely thatthese modelling studies will identify performance-based renewals to address sub- areas of thenetwork that are not meeting level of service targets.Projects that arise from these modelling studies willbe described in the 2018 water supply AMP.

Reliability-based Renewals:There are no known reliability based renewalsrequired during the next three years. Council’srenewals forecasting suggests that a relatively smalldollar value worth of reliability based renewals willbe required between 2015-2018. These forecastsindicate around $95,000 of condition-basedrenewals would be required over this three yearperiod.

Council’s uncertainty forecasting puts the requiredcondition based renewals spend between 2015-2018 somewhere between $80,000 and $120,000,with a 50% likelihood of the spend being betweenthese two values. At a 95% likelihood, the requiredrenewals spend is forecasts to be between $60,000and $245,000 (Figure 1.11).

Figure 1.11: Renewal Forecast – 10-year

(reported values are renewal capital spend in 2014 dollars,with no allowance for inflation).


Figure 1.12: Renewal Forecast – 30-year

(reported values are the forecast renewal spend in 2014 dollars, with no allowance for inflation).

The plot presents:· The forecast average annual renewals spend;· The 5 and 95 percentile forecasts; and the 25

and 75 percentile forecasts (upper and lowerquart) ;

· When reading the percentile forecasts it isimportant to understand that the reportedfigures represent the chance of the renewalsspend being that value in any particular year. Itwould be extremely unlikely for two 95percentile renewals forecasts to occur back-to-back, for example.

· The percentile forecasts represent thestatistical change of failure in a single year of alarge asset, or the coincidental failure of severalsmaller assets all occurring within a single year.

· The percentile forecasts are useful whenplanning the amount of money the Councilshould have the contingency to draw upon inany single financial year to cover the risk of alarge asset failing; or the coincidental failure ofseveral smaller assets within a 12 monthperiod.

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95% Upper Quart Lower Quart 5% Condition Based Renewals Performance Based Renewals


10.5 FUNDING OF WATER SUPPLY

Council’s current funding approach is:

· Operating costs are funded by acombination of uniform annual charges, anda charge per cubic metre of water supplied.

· All connected properties pay a commonannual charge.

There are three categories of meteredcharges:

· Paeroa, Plains and Waihi consumers pay a‘fully treated’ charge per cubic metre ofwater supplied.

· Kaimanawa, Karangahake, Ohinemuri andWaikino consumers pay a ‘partially treated’charge per cubic metre of water supplied.

· Rating units connected to a raw water mainpay a ‘raw water’ charge per cubic metre ofwater supplied.

All rating units in the Karangahake SpecialRating Area that did not make a lump sumcontribution also pay an additional annualcharge for repaying the Karangahake WaterLoan.

10.6 FINANCIAL POLICYCouncil will continue to fund depreciation of thewater supply assets.

Water supply renewals will be funded by theannual depreciation; the positive differencebetween annual depreciation and annualrenewals will be used as internal revenue andloaned to fund new capital activities atorganisational level. The loan ceiling willremain unchanged

Water Clarifiers at the Kerepehi Water Treatment Plant


11. EFFECTS OF THEWATER SUPPLYACTIVITY

The water supply has both positive and negativeeffects on the environmental, social, cultural, andeconomic well-being of the community. Theseinclude:

11.1 ENVIRONMENTAL EFFECTS· Negative: the public water supply draws water

from the rivers and streams within the district.This reduces the flow in the streams.

· Positive: The volume of water the Council candraw from the streams is stipulated in theresource consents that give Council permissionto take water. The resource consent conditionsmake sure that the effect of the council watertake is less than minor.

· Positive: the alternative to a public watersupply would be an additional 7,000 propertieshaving to source water privately. The watersupply infrastructure required to do this wouldhave to be duplicated 7,000 times within thedistrict. This would inevitably involve somecombination of 7,000 storage tanks, 7,000pumps, and 7,000 sets of pipes and fittings; allof which would consume significant resources.The rain water and/or groundwater collected byprivate systems would no longer find its wayinto the local streams and rivers, which wouldreduce the flow, in a less controlled mannerthan the public water supply does.

· Conclusion: the net environmental effects ofthe public water supply are probably positive. Ifa public water supply was not provided, privatewater supply systems would also reduce riverand stream flows within the district. Thecentralisation of the infrastructure is likely moreresource efficient over the long term thanprivate infrastructure, because private watersupplies would require the duplication of assetsfor every property.

11.2 SOCIAL EFFECTS· Negative: the ease with which clean water that

is safe to drink is obtained by people connectedto the public water supply, can lead to wastefuluse.

· Positive: the public water supply promoteshealth amongst the community through accessto water that is safe to drink, prepare food andmanage personal hygiene. The public watersupply reduces the risk of waterborne diseasesspreading through the community.

· Conclusion: the net social effect of the watersupply activity is positive, with the health

benefits outweighing the potential for wastefuluse.

11.3 CULTURAL EFFECTS· Negative: potential conflicts between use of the

resource and cultural values. Many within thecommunity have expectations of a right towater, and that water should be free of charge.

· Positive: the involvement of Mana Whenuaand Tangata Whenua in the management ofthe water supply has helped to create mutualunderstanding of different cultures’ beliefs andvalues, and how those values can beincorporated into the management andoperation of the public water supply.

· Conclusion: The cultural effect is positive. Theinvolvement of Mana Whenua and TangataWhenua has improved the way in which thepublic water supply is operated and managed.One of the key aspects of this improvement isthe value that Maori place on water, therequirement for the Mauri of the water to berespected. The incorporation of Maori valuesinto the operation and management of thewater supply has reduced the impact that thewater supply activity has on the localenvironment.

11.4 ECONOMIC EFFECTS· Negative: The costs of the water supply span

more than one generation. If not carefully andresponsibly managed and apportioned onegeneration could benefit at the expense ofanother.

· Positive:o Water sourced from the public water

supply is cheaper than water sourcedprivately.

o When water is sourced privately, itrequires time and effort to maintain thesupply. The public water supply freespeople to focus on other activities.Businesses are able to focus on theircore business activities.

o Several rural communities within thedistrict do not have access to naturallyoccurring fresh water suitable foragricultural purposes. The provision ofthe public water supply to these areasenables more productive use of thisfarmland.

o The public water supply allows moreintensive use of urban property.

o The availability of easily accessedwater for firefighting purposes reducesthe risk of fire damage within thecommunity.

· Conclusion: The net economic effect of thewater supply is positive.


11.5 SUSTAINABILITYThe water supply activity generally has a positiveimpact on the social and environmental dimensionsof well-being, creating a healthy and productiveenvironment in which communities can thrive.Negative impacts are the cost to provide andoperate these services and to the environment ifnatural resources are over-utilised. Hauraki DistrictCouncil is committed to minimising any detrimentaleffects of the water supply activity in and wherepossible.

11.6 RESOURCE CONSENTS

Resource consents are required for taking naturalwater, or discharging into natural water. These areissued by Waikato Regional Council.

HDC’s supply network currently draws water fromten surface water bodies. Each of theseabstractions is subject to resource consents. Thedecommissioning of the four smallest watertreatment plants in the district will reduce thenumber of consents required for the water supplyactivity to six.

Each of these consents is subject to requirementsthat restrict the volume of water that can be takenduring periods of drought. However, in suchcircumstances, the priority for use ensures that thecommunities served by the public water supply arenot at risk in terms of public health.

Until the interconnections between the large andsmall water schemes are completed, customersconnected to the small schemes, which all rely onwater taken from small streams and rivers, may beexposed to restrictions during periods of low flow.

The operation of the water supply activity alsoincludes two discharge consents for the backwashprocesses of both the Kerepehi and Waihi watertreatment plants.

12. STRATEGICPRIORITIES

Hauraki DC’s strategic priorities over the past 3-years remain largely the same as the next 3-years.That the strategic priorities remain the same for thefollowing 3-years is positive because it helps toshow that:

· The Council is following its long-termstrategy;

· The Council is working in a pro-active styleof operation;

Council expects to deliver on several of the strategicpriorities set out in the 2012 AMP over the next 3-years. The 2015 AMP also introduces new strategicpriorities as described below:

12.1 STRATEGIC PRIORITIES PAST 3-YEARS· Lift the standard of all water supplied in the

district to meet the New Zealand DrinkingWater Standards v2008.

· Abandon water takes from non-sustainableraw water sources;

· Drought-proof the raw-water supplieswithin the District;

· Upgrade the aged telemetry systems to amodern equivalent;

· Digitise (where sensible) field-data capturewhere manual methods are currently used.

12.2 STRATEGIC PRIORITIES NEXT 3-YEARS· Completion of the five priorities listed

above within the next 3-years,

Plus, the following strategic objectives which have a6-year target timeframe:

· Improve the efficiency of in-officeinformation management:

o The flow of data from the field tooffice, and office to field;

o Asset data capture;o Tracking of costs against an

asset, or group of assets;· Improve the operational efficiency of the

network;· Improve the reliability and resilience of the

network;· Work towards reducing the volume of

unaccounted for water, with a view tomeeting the level-of-service target, on-average, across the District;

· Improve the measurement of Council’sdelivery of level-of-service to customers;

· Improve data held on asset condition.


13. KEY PROJECTSThe Council’s key projects over the past and coming3-years are focused on delivering on the Council’sStrategic Priorities described in the Section above.

13.1 KEY PROJECTS PAST 3-YEARSThe key projects and their linkage to the strategicpriorities of Council are listed below:

· Lift the standard of all water supplied in thedistrict to meet the New Zealand Drinking WaterStandards v2008:o Upgrade to the treatment processes at the

Kerepehi Water Treatment Plant(completed);

o Commencement of upgrades to thetreatment processes at the:

§ Paeroa WTP;§ Waihi WTP; and,§ Commencement of design of

upgrades to the WaitakaruruWTP;

o Commencement of the design of theinterconnections of the small water supplyschemes in the District, into their nearestlarger scheme:

§ Kaimanawa water supply schemeinterconnection with the Paeroasupply;

§ Mackaytown to Paeroa;§ Karangahake to Paeroa;§ Waikino to Waihi.

· Drought-proof the raw-water supplies andabandon water takes from non-sustainable rawwater sources:o Construct a raw-water quarry storage

facility at Waitakaruru and pipeline toconnect the reservoir to the watertreatment plant (completed);

o Construct an alternate raw-water intake forthe Waihi WTP, sourcing raw water fromthe Ohinemuri River (underway);

o Interconnection of small water supplyschemes into the nearest larger scheme(as listed above).

· Upgrading telemetry systems (underway);· Provide field-staff with mobile electronic devices

that enable them to enter and receive field-datadirectly into the devices. This eliminates theinefficient double-handling of information whichused to be typed into computer systems fromhand-written notes (underway).

13.2 KEY PROJECTS NEXT 3-YEARS· Completion of all active projects listed above

within the next 3-years,

Plus, the following key projects which have a 6-yeartarget timeframe for completion:· Improve the efficiency of in-office information

management. (Details are yet to be scoped,however, current objectives are):o Improved cost allocation against assets;o Improved office to field, and field to office

data integration;o Improved systems around asset data

capture;o Improved customer service request job-

management.· Improving the reliability and resilience of the

network:o Design and construction of treated water

storage within the Hauraki Plains network;o Review of preparedness to repair

interruptions to the water supply servicewithin the target timeframes outlined in theLevels of Service.

· Improving the operational efficiency of thenetwork:o Decommissioning of the smaller water

treatment plants through theInterconnection project. Plants to bedecommissioned are: Kaimanawa;Mackaytown; Karangahake; and Waikino.

o Creation of water supply pressure zonesand a review of supply pressuresthroughout the District;

· Working towards reducing the volume ofunaccounted for water to meet Level-of-ServiceTargets:o Improve understanding of customer water

meter accuracy within the district;o Review of need vs. cost for the

implementation of pressure zone metering;o Identification of potential priority areas for

detailed leak detection work within thepublic water supply network.

· Improving the measurement of Council’sdelivery of level-of-service to customers:o Complete hydraulic modelling of the water

supply network performance across thedistrict;

o Improved customer service request job-management (as listed above).

· Improved data held on asset condition:o Work with other Councils with a view

towards data sharing;o Development of internal procedures in

respect of data capture on asset condition;o Training of staff on asset condition data

capture.


14. LEGISLATION andBYLAWS

14.1 LEGISLATIONCouncil’s authority and responsibility for providingwater supply services are outlined in variousgovernment acts and are supported by policies andbylaws. We summarise and note key legislationbelow:

· Local Government Act 1974 (sections notrepealed in the LGA 2002)

· The Health Act 1956 imposes a generalpublic health responsibility on Council.

· The Health (Drinking Water) AmendmentAct 2007 (07/92) provides for ensuringadequate quantities of safe andwholesome drinking water to communities.

· Fire Code of Practice 2008 andamendments;

· Civil Defence Emergency Management Act2002

· Resource Management Act 1991 andamendments;

The bylaws for water supply are contained in Part 5of the Hauraki District Council Consolidated Bylaw.

14.2 WATER SERVICES ASSESSMENTSPart 7 of LGA 2002 requires Council to assess theprovision of water supplies within its district fromtime to time. The last Assessment was prepared in2005. Since that time, the District has beenenlarged through the inclusion of the Kaiaua areathat was formerly part of the Franklin District.Furthermore, new drinking water standards wereestablished in 2008 and a new Regional Planbecame operative in 2010.

In light of these changes, and the ten years thathave passed since the last assessment, Hauraki DCcommissioned a Water Services Assessment in2014 in preparation for the 2015-25 Council LongTerm Plan.

The scope of the Water Services Assessmentreview for 2014 is defined within Section 126 of theLGA, which states that “the purpose of theassessment is to assess, from a public healthperspective, the adequacy of water and sanitaryservices available to communities”. In making such

an assessment the following matters need to beconsidered:

(a) the health risks arising from anyabsence or deficiency in water or othersanitary services;(b) the quality of services available tocommunities within the district;(c) the current and estimated futuredemands for such services;(d) the extent to which drinking watermeets applicable regulatory standards and(e) The actual or potential consequencesof stormwater or sewage discharges withinthe district.

The outcomes of the 2014 Water Servicesassessment were not available while this 2015-18AMP was being prepared. If any significant issuesare identified, required projects or civil works toaddress, then these projects will be detailed in thewater supply section of the Council’s Annual Plandocuments, that will be prepared for the interim2016 and 2017 years of the lifespan of this AMP.

14.3 RELEVANT STRATEGIES, PLANS,AND POLICY

The following documents are applicable to watersupply:

· Asset Management Planning Policy;· Hauraki District Council Engineering

Manual;· Water Supply Strategy;· Development Contributions Policy;· Operative District Plan and Proposed

District Plan;· Annual Plan;· Community Plan;· Long Term Council Community Plan;· Waikato Regional Council policies and

plans:o Operative Regional Policy

Statement;o Proposed Regional Policy

Statement;o Operative Regional Plan.


15. ASSET MANAGEMENTIMPROVEMENTPROGRAMME

15.1 PROGRESS WITH 2012-15IMPROVEMENT PLAN

Improvement actions from the 2012 AMP with atarget completion date between 2012-15 are listedin Table 1.10, two pages over.

15.2 2015-18 IMPROVEMENT PROGRAMThe primary focus of this improvement programmefor the period between 2015-18 is to improve theefficiency of the data management processes thatsupport the asset management planning activity.

The 2015-18 period will also see projects beingstarted with a view towards completion in the 2018-21 period. The primary focus of these longer-termprojects is to improve the data captured from thefield about the behaviour and performance of thewater supply asset.

Table 1.8: Asset management improvement initiatives for the period 2015-18

ASSET MANAGEMENT FUNCTIONIMPROVEMENT IMPROVEMENT ACTION

Improve the ability to forecast asset life andidentify performance based renewals

· Create and maintain a database that documents the location, dates ofpipe breaks/failures, failure mode, and customers affected by anyinterruption to the water supply;

· Formalise the use of opportunistic sampling and conditionassessments. Carry out staff training (as required) to support thisinitiative.

· Prepare a guide on what data needs to be captured whendecommissioning and asset, and how this data is to be stored.

Progress towards meeting the unaccounted forwater loss targets

· Improve understanding of customer water meter accuracy.· Prepare a prioritised list of known areas within the network that have

high leakage.

Asset life-cycle risk management

· Establish and populate an asset criticality database;· Schedule inspection dates as required by asset criticality;· Medium, high, and very high criticality assets, assess time to repair.· Identify assets with long lead in times for repair/replacement.

Schedule appropriate inspection dates for these assets.· Prepare interruption management strategy for high and very high

criticality assets. This will include identifying:o Where redundancy exists;o Opportunities to reconfigure the network to mitigate the

impact on customers in the event of an asset failure;o Appropriate stocks of spare parts / spare assets.

Reactive maintenance: improvingpreparedness

· Review spare parts / spare assets held in stock;· Review ability to source spare parts / spare assets within 3 hour time

frame;· Review necessary equipment availability to undertake repairs;· Review staffing levels;· Carry out gap analysis for preparedness. Prioritise the gap analysis.

Accuracy and completeness of asset data

· Enter backlog of reticulation as-builts into GIS and AssetFinda;· Review AssetFinda database for obvious mistakes, such as pipe

material being listed at a time when that material did not exist or wasnot in use.

· Populate the AssetFinda database with improvements to the assetdata made whilst preparing the valuation data for the 2014 valuation.

· Improve systems around the capture of new asset data, bothconstructed by Council and vested.

·

Capture of financial information

· Improve the systems that support the capture of project costs againstassets;

· Improve the systems that support the capture of the cost ofconstruction for vested assets;

· Develop a unit rate data base;


Table 1.9: Asset management improvement initiatives for the 6-year period between 2015-21

ASSET MANAGEMENT FUNCTIONIMPROVEMENT IMPROVEMENT ACTION

Progress towards meeting the unaccounted forwater loss targets

· Continue work that improves understanding of customer water meteraccuracy.

· Better pressure management and enhancing ability to detect leakagefrom the public water supply network:

o Complete planning study to identify suitable water supplypressure zones and locations to undertaken bulk-meteringof flows into and out of water supply zones.

o Develop prioritised schedule for subsequent installation ofbulk meters.

o Completion of the installation of priority bulk meters isplanned for the period 2018-21.

· Review bulk meter flow data to identify potential water leakageproblems. Update the prioritised list of areas of high water leakage.

Improve understanding of asset performanceagainst level of service targets:

· Prepare calibrated hydraulic models;· Carry out network system performance using the models;· Report on compliance with level of service targets.

Capture of level of service performance data

· Improve customer service job logging system:o Need to align with new level of service targets;o Need to train customer service staff around new level of

service requirements;o Improve interaction between job creation by customer

service staff, and electronic delivery of job to field staff;tracking of job progress by field staff back to customerservice representatives; and

o Improve the flow of information from the customer servicerequest system through to asset performance reportingsystems;

· Improve electronic data exchange between office and field and viceversa

· Heading towards a system that enables informed decisions to bemade (6 year project):

o Spatial data on water breaks + ability to review breakfrequency spatially would assist with decisions onrepair/renew.

o Ability to track breaks would enable customer service staffto avoid duplicating jobs for field staff where multiple callsexist for the same incident.


Table 1.10: Progress with the 2012 AMP Improvement Plan 2012-2015

NO IMPROVEMENT ACTION TAKEN OUTCOME /DECISION

2 Perform QA check of water utilities dataand data cleansing

A stocktake of completeness and accuracy ofreticulation and plant assets has been carried out.The focus was ensuring that all assets were includedwithin the asset register, and that nodecommissioned assets were still listed as active.

Minor deficiencies were identified through thestocktake process. Noted errors have been correctedwithin the asset register.

An audit of transfer of data between assetmanagement systems was carried out (the ConfirmDatabase was migrated to the Authority Database,which was subsequently migrated to the Asset Findadatabase). This audit found only a handful of errors,which have since been corrected within the assetregister.

There is still additional work to be carried out on themetadata associated with each asset.

Ongoing

3 Processes developed to update and tomaintain data in AM

Processes for vested assets, capital projects andmaintenance actions have been implemented, but stillrequire further work to streamline.

In progress

4 Develop monitoring strategies for thedevelopment of the electronic monitoringSCADA system

Upgrade of telemetry processes to a SCADA system Implementedand refining inprogress

8 Develop monitoring and reportingprocesses for resource consents

A structured monitoring and reporting process hasbeen implemented.

Completed.

24 Finalise renewal policy and seek Councilapproval.

Completed. Completedandimplementedwithin theLifecyclesection of this2015 AMP.

28 Optimise and document servicerequest/work orders and maintenanceprocesses.

Not started Planned startin 2015-18planning cycle.

29 Develop a strategy and long termprogramme to improve asset condition andperformance data and derive remaininglife.

Completed. Completed.

31 Finalise and document As Built processand workflow using cross functionalflowchart.

Completed.

Further work is required to make the processes moreefficient.

Implementedand refining inprogress

38 Complete and improve hydraulic models of3 main schemes (Plains, Paeroa, Waihi)

Plains hydraulic model – underway.Waihi and Paeroa models, not yet started.

Underway.

47 Development of standard reports fromasset management system to supportservice managers

Completed.

Further work is required to make the reportingprocesses more efficient.



50 Review AMP structure and location ofcontent to ensure suitable flow ofinformation

Completed.Significant changes to the format of the 2015 AMPwere made to improve the ability to extract desiredinformation.

Significantchange madeto the 2015version.

Furtherrefinement isrecommendedfor the 2018AMP.

60 Review population demographicsprojections and ascertain effects onservice (strategic planning role)

Completed. Complete

74 Rollout portable computing technology tofield operations staff.

Underway – rollout to water operators in hand. Yet tobe extended to reticulation staff.

Further work is required to integrate the portablecomputers with head-office systems.


76 Review of asset lives in registers to ensurethat remaining lives are updated

Underway. Underway.

78 Schedule deferred renewals and considerimplications of those deferrals on servicedelivery.

No necessary. Notnecessary.

102 Establish Condition deterioration Model forcritical assets

Not started. Insufficientdata heldlocally for thismodelling. Willseek to obtainaccess to alarger datasetfrom a largerCouncil.

103 Develop long term renewal forecasts. Completed Completed.

159 Develop predictive model for remaining lifeprojections.

Completed.

Further work would help to refine model forecasts.



16. SIGNIFICANTASSUMPTIONS ANDUNCERTAINTIES

Below is a summary of the assumptions that relateto water supply asset management planning activity.

Table 1.11: Summary of Assumptions for2015-25 LTP and AMPs

ISSUE ASSUMPTIONS

Population Growth

The population of the District willremain essentially static for thenext 10-years, following by aslight decline to 2045.

Rating Unit GrowthThere will be a slight increase inthe rating units cause by a shift tofewer people per household.

Levels of Service

Community expectationsregarding the level of serviceCouncil provides will notsignificantly change.

Resource ConsentsConditions of resource consentsheld by Council will not be alteredsignificantly.

Operating Environment

There will be no significantchanges to Council’s operatingenvironment which have notalready been planned for, e.g.natural disasters, healthepidemics, or changes tolegislation.

Asset Information

Condition data for assets thathave been replaced, or arenearing the end of their useablelives is reliable.

The data held of the age, material,and size of the assets within theCouncil’s asset register is reliable.

Interest

Interest rates on Term Debt willnot change sufficiently to requirechanges to the management ofthe water supply activity.

Capital Works CostsOn average, costs of major capitalworks will not vary significantlyfrom their estimated costs.

Renewals Works CostsThe asset values provided byCouncil’s consultants for the assetvaluation is correct within reason.

Asset Life

Approximately 70% of reticulationassets will reach the end of theiruseful life over a period of 30years (±15 years either-side of theexpected life of the asset).

The industry standard lives ofnon-reticulation assets arecorrect.

Asset ValueThe asset values provided byCouncil’s consultants for the assetvaluation is correct within reason.

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