1. Mangawhai Wastewater
Strategy and Options
7 August 2017

2. Mangawhai Wastewater (MWW)
Objectives & Background
Part 1
System, Options, Growth & Demand
Part 2
Connection policies, Anomalies & Alternative funding options
Decisions required
MCWWS Advisory Panel recommendations
Conclusion

3. Objectives of MWW scheme & extension
Need to protect the Mangawhai Harbour
Support growth (Mangawhai Community Plan)
Honour commitments
Purpose of Local Government

4. Background
Past
Ground zero 2012
Phase
Phase
Phase 3 now

5. Ground zero & now Attribution of MWW debt to communities 2012 2017 $m
2012
2017 $m
Existing community (connected and connectable)
9.4
12.1
Mangawhai Harbour Restoration community 4
13.4
District wide- tranche 1 (balance capital cost)
11.3
9.8
District wide- tranche 2 (prior operating deficits)
7.1
0.6
18.4
10.4
Note 1
Sub-total current communities
31.8
22.5
Development years 1 – 10 6
Development years 11 and over
20.2
26.5
Sub-total future communities
26.2
Total
58.0
49.0
Note 1: to be finalised for year end

6. Need for MWW extension (ME3)
Growth is happening:-
Disposal will require expansion;
Treatment plant can handle more with $1.8m upgrade;
Reticulation needs to be extended.

7. Risks Managing capacity Estimating pace of growth Debt
high peak loading over the Christmas / New Year period;
long term increases in the average flows into the system due to ratio of permanent to holiday homes increasing
Estimating pace of growth
too fast, too slow
changing demographics
Debt
Potential for stranded debt
Managing extension

8. Part 1 ME3 System components & capacity Options, costs & funding
Growth and demand

9. System components & capacity
Private connections
Currently 1,956 connected; 486 capable (total 2,442 at May 2017)
Reticulation network
Capacity 2,500, 2020 based on medium growth (77 pa)
Treatment plant
Disposal of effluent
Capacity 2,600, 2021 based on medium growth (77 pa)
Total equivalent dwellings approx. 2,200

10. ME3 - Option 1- Do minimum
Extend disposal system, upgrade existing reticulation, upgrade treatment plant;
Capacity 3,300 connections; reached in 2030 based on medium growth scenario;
Cost over 10 years $4.35m.

11. ME3 - Option 2 - Reticulate Pockets
Extend disposal system, upgrade existing & extend reticulation, upgrade treatment plant;
Includes $3.7m to extend the reticulation;
Capacity 3,300 connections - reached in 2030 based on medium growth scenario;
Cost over 10 years $7.65m.
24 pockets.

12. ME3 - Option 3 - Ecological plus pockets
Extend disposal system, upgrade existing & extend reticulation, upgrade treatment plant;
Includes $12.4m to extend the reticulation;
Capacity 3,300 connections - reached in 2030 based on medium growth scenario;
Cost over 10 years $16.35m.

13. ME3 - Option 4 - Additional Disposal
Extend & additional disposal system, upgrade existing & extend reticulation, upgrade & augment treatment plant;
Includes $17.6m to extend the reticulation;
Includes $12.8m to augment the treatment plant;
Capacity 4,700 connections - reached in 2052 based on medium growth scenario;
Cost $34.78m mostly over 18 years.

14. ME3 – comparison of options
Uninflated $m
$ m
Option 1 - Service 3,300 connections
Extend irrigation system
0.95 -
Upgrade existing reticulation
1.20
0.20
1.00
Upgrade WWTP
1.80
0.80
Additional Capacity for Growth - Council
0.40
0.04
4.35
1.24
1.84
0.99
Option 2 - Reticulate pockets, 3,300
Extend reticulation (8 years)
3.30
0.41
7.65
1.40
0.45
Option 3 - Ecological + pockets, 3,300
12.00
1.50
16.35
2.49
1.54
Option 4 - Additional R, T & D, 4,700
New disposal system
2.23
1.49
Extend reticulation (13 years)
17.20
1.30
6.50
Augment WWTP
12.80
0.50
10.50
34.78
2.39
1.44
1.34
18.49

15. Growth & Demand Growth Demand
Using the medium growth scenario (77 dwellings pa)
Same basis as for the Mangawhai Community Plan
Demand
Determines where reticulation should go
Ecological option may divert away from demand areas

16. Summary of financial modelling
Base
ME3- Op1
ME3- Op2
ME3- Op3
ME3- Op4
MCP w Op2
average for 10 years
Rates $m
33.9
34.8
Rates increase %
2.6%
3.0%
Operating revenue
50.4
46.6
51.3
Capital revenue
9.8 10
10.1
10.2
10.6
Total revenue $m
60.2
56.6
60.5
60.6
60.4
61.9
Activity operating costs $m
37.5
38.2
38.1
38.5
39.6
Capital expenditure $m
Growth (base)
0.3
Level of service
4.3
Renewal
16.6
New
0.7
1.7
2.1
Total
21.2
21.5
21.9
22.9
23.3
position at year 10
Debt $m
36.5
45.7
47.6
60.9
61.7
62.5
Net debt as % of revenue (LGFA 175%, policy $170%)
103.7%
70.6%
73.6%
94.5%
95.7%
93.7%
Net interest as a % rates (Limit 25%)
9.7%
6.1%
6.3%
7.6%
7.7%
9.1%
Debt as a % net assets
8.9%
6.6%
0.3%
6.8%
13.1%
6.9%

17. Summary of Funding implications Development contributions$
(excl GST)
Current DC
21,237
Base
13,784
ME3 option 1 (do minimum)
17,111
ME3 option 2 (pockets)
17,959
ME3 option 3 (ecological)
20,193
ME3 option 4 (additional R, T & D)
20,027
ME3 option %
23,880
ME3 option %
19,966

18. Summary of Funding implications Rates

19. Part 2 ME3
Connection policies
Anomalies
Alternative funding options

20. Connections Policy Three parts to the Policy Requirement to connect
Private costs and funding
Operation and maintenance of private connections

21. Five Groups of Properties
Property Groups with connection potential A
Existing connectable properties with an existing dwelling (83[1]) B
Existing connectable properties without a dwelling (384) C
Future connectable properties with an existing dwelling (297) D
Future connectable properties without a dwelling (149) E
New properties created by subdivision or development (Estimate 2,765)
[1] All rating unit data is at 7 April 2017

22. Requirement to Connect
Options
Property Group A B C D E
Option 1 – Connection optional
Option 2 – Connecting promoted
As soon as practicable, eg on development or building consent or failure of on-site system
At time of development or building consent
As soon as practicable, eg on reticulation network extension or on development or building consent or failure of on-site system
At time of development or building consent
At time of development or building consent

23. Private Costs and Funding
Options for ownership, operation and maintenance
Property Group A B C D E
Option 1 – Full private cost
All full private cost including grinder pump. Grinder pump to vest in Council
Full cost including grinder pump. Grinder pump to vest in Council
After calendar Full cost including grinder pump. Grinder pump to vest in Council
Option 2 – Partial assistance
Before calendar Grinder pump funded by Council
Note: The Advisory Panel recommended that Council fund a grinder pump if required if the dwelling existed pre-2009

24. Operation and Maintenance
Situation X - Single dwelling private drain directly between the dwelling and the public drain; or
Situation Y - Multiple dwelling common private drain serving a number of dwellings/ premises and connecting the public drain; or
Situation Z - Cross-property private or common private drain, with the drain crossing other properties to reach the public drain.

25. Operation and Maintenance cont.…
Options
Option 1 – Full private responsibility
Option 2 – Council provision/ private responsibility
Option 3 – Private provision/ Council responsibility
Option 4 – Full Council responsibility 
Situation X – Single dwelling (Gravity)
All full private costs to be met by owner
Situation X – Single dwelling (Pressure)
Electricity costs only A, B C, D, E
Groups D, E
Groups A, B, C and replacement D, E
Situation Y – Multiple dwelling – common private drain (Gravity)
A, B, C, D, E
Situation Y – Multiple dwelling – common private drain (Pressure)
Situation Z – Cross property common or private drain (Gravity)
Situation Z – Cross property common or private drain (Pressure)

26. Anomalies Property “C”s
Historical exemption from paying “capable to connect”

27. Subsidised connection costs
Policy Costs
Grinder costs
Gravity/pressure ratio
No. of additional grinders required
Funding of any new grinders plus all depreciation
Subsidised connection costs
Capital contributions v DC’s
Group “C”s
PDA’s
Approx. $9,200 to supply & install a domestic grinder pump station.

28. Alternative funding options
Additional targeted rates for
Undeveloped land, and/or
Mangawhai harbour restoration or some other area
The purpose would be to manage
Debt & timing (financial exposure risk) issues, and/or
Reduce per unit DC’s, and/or
Reduce per SUIP network charges, and/or
Fairness & equity issues.

29. Decisions Required Provide for current requirements
Option 2 recommended
Plan for the future
Option 4 recommended
Policy decisions
Council policy stance
Connections policy
Financial & funding policies

30. MCWWS Advisory Panel recommendations
Material:
Advisory Panel Report - July 2015
Draft update on MCWWS Advisory Panel Recommendations - August 2017

31. Conclusion Must go forward Growth - but what pace?
The past is always with us
Significant policy & financial considerations
Debt management
Affordability
Distribution of costs
Fairness

32. Questions?