Decision Required Report To: Engineering Services Committee
Meeting Date: 7 July 2016
Report Author: David Stephenson, Asset Engineer - Waste Management and Minimisation Report Number: RESC16-07-05
1 Summary
1.1 This report seeks approval to increase the capital works budget for site improvements at the Mariri Resource Recovery Centre to allow for the installation of a refuse compactor, make improvements to the waste pit and handling area, improve stormwater treatment and to make other safety improvements.
1.2 The proposed work is necessary to improve efficiency, reduce health and safety and other risks, ensure resource consent compliance, and meet our undertakings for transport of waste to the York Valley landfill in 2017/18.
1.3 Cost estimates for the proposed improvements exceed the available budget. To address this, we are seeking approval to reallocate other solid waste capital budgets, which will be carried forward from 2015/16 to 2016/17, and to bring forward of a budget from the 2017/18 year into 2016/17.
2 Draft Resolution
That the Engineering Services Committee:
1. receives the Solid waste - Amendment to Capital Budgets report; and
2. recommends to the Council a capital budget of $1,210,400 at the Mariri Resource Recovery Centre in the 2016/17 year for improvements to the waste tipping pit, procurement and installation of a waste compactor (including an upgrade to the site power supply), improvements to the bin storage area around the compactor (including a weighbridge to weigh waste bins), safety improvements on site, improvements to the stormwater treatment disposal system and traffic safety improvements;
3. recommends to the Council that funding for this work be provided from a carry forward of budgets from the 2015/16 year (consisting of $427,000 from the Mariri site,
$315,500 from the Eves Valley landfill and $161,000 from the Takaka site) and bringing forward a budget of $306,900 at the Mariri site from the 2017/18 year.
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3 Purpose of the Report3.1 This report seeks approval to increase the capital works budget for site improvements at the Mariri Resource Recovery Centre (Mariri RRC) to allow for the installation of a refuse
compactor, make improvements to the waste pit and handling area and to make other safety improvements.
4 Background and Discussion
4.1 At present general waste from the Mariri RRC is transported to landfill in open topped bins.
Waste is placed in the refuse tipping pit and loaded into the open top bins at a lower level, using an excavator above the pit (Photo 1). When full, these bins are covered and
transported to landfill by the Council’s contractor.
4.2 This methodology is in contrast to that at the other two large RRCs (Richmond and Takaka), where the waste is loaded into closed bins via a waste compactor (Photo 2).
Photo 1: Mariri open top waste loading Photo 2: Richmond waste compactor 4.3 The methodology used at Mariri has been identified as undesirable because it results in
lower payloads in waste bins (around 0.9 tonne less), increases litter at site and is less safe for the site operator. The compactor bins also provide greater load security when in transit.
The Long Term Plan (LTP) 2012-2022 included installation of a compactor at Mariri among the capital budgets for the Solid Waste Activity (Table 1 below). The two major projects at the Mariri site over the 2012-2015 period were the remediation of the closed landfill on site ($196,701) and installation of a waste compactor ($659,409).
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Table 1 : Solid waste capital budgets, LTP 2012-22
4.4 The capital budget for the supply and installation of the compactor at Mariri ($659,409) was confirmed in the Annual Plan 2013-2014, but this work was delayed while remedial work on the closed landfill on site was completed that year.
4.5 Later that year the work was further delayed by negotiations for improvements to the kerbside service and by consideration of a Materials Recovery Facility (MRF) at the Richmond RRC. A budget of $632,315 was carried forward by the Engineering Services Committee on 25 September 2014.
4.6 Initial funding of $800,000 for the Richmond MRF was approved by the Engineering Services Committee on 15 May 2014 and further funding was provided (in part) by transfer of
$480,000 of capital budget from the Mariri site. The remaining $152,312 of Mariri RRC capital budget for the installation of the compactor was carried forward by the Council on 10 September 2015.
4.7 The remedial works on the closed landfill at Mariri are now complete and earlier this year two compactor bins for Mariri RRC were purchased and are in service (at the Richmond and Takaka RRC sites).
4.8 The LTP 2015-2025 provided a budget of a further $360,735 for works at the Mariri site in 2015/16 (improvements to traffic flow). Combined with $152,312 carried forward from the 2014/15 year this provides a total budget of $513,047 to complete the outstanding work (installation of the waste compactor and improvements to traffic flow).
4.9 A preliminary design has now been developed for the waste compactor work. The scope of Mariri RRC work includes:
improvements to the stormwater treatment disposal system;
improvements to the waste tipping pit;
procurement and installation of a waste compactor (including an upgrade to the site power supply);
improvements to the bin storage area around the compactor (including a weighbridge to weigh waste bins); and
safety improvements on site (primarily fencing).
4.10 The safety improvements and improvements to the stormwater system and the bin storage area are an additional scope of work not included in original estimates, but are required for the compactor installation.
4.11 A revised estimate indicates that installation of the waste compactor and associated works will require a total budget of $1,107,000. This estimate exceeds the original budget for the compactor ($659,409) and the budget available this year ($513,047). The increase is
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primarily driven by the cost of the new stormwater works ($110,000), the proposed improvements to the bin storage area ($277,000) and additional safety works ($78,000).4.12 The stormwater treatment and disposal system is a consent requirement for the site (regardless of whether or not the compactor is installed) and has been priced for
construction by Council’s landfill contractor. The construction price of this work is expected to be $98,000 and we expect works to commence in July 2016.
4.13 The bin weighing and storage system has been included with the new scope because it will reduce waste transport costs by maximising bin payloads and reducing handling costs.
Earlier work has indicated that the payback period for these works is in the order of five years.
4.14 The projected cost of this project exceeds available budget and in this report we present alternative funding options for consideration by the Committee.
Solid Waste Capital Expenditure
4.15 Table 2 summarises the total capital budgets and expenditure for the solid waste activity to May 2016. It shows a total budget of $1,333,774, with expected expenditure to June of
$319,297. We expect to carry forward $1,078,500 into the 2016/17 year.
Table 2 – Summary of 2015/16 solid waste capital budgets Location Total
budget 2015/16 (incl. carry
forward)
Expenditure to May
Expected total to
end of June
Expected carry forward
Expected expenditure
in 2016/17
Available funds or shortfall
Eves Valley 488,605 67,894 67,894 420,500 105,000 315,500
Richmond 9,046 13,196 13,196 0 0 0
Mariri 518,162 90,998 90,998 427,000 1,107,000 -680,000
Takaka 313,609 53,209 82,209 231,000 70,000 161,000
Murchison 4,351 0 0 0 0 0
Total 1,333,773 225,297 254,297 1,078,500 1,282,000 -203,500
4.16 We have considered reducing the scope of works at the Takaka and Eves Valley sites with the view to freeing up capital budget to enable the work at Mariri to be completed in the 2016/17 year.
4.17 The unspent capital budgets at Eves Valley are made up of $181,705 carried forward from 2014/15 (for consenting Stage 3 of the landfill) and $306,900 in the 2015/16 budget (for capping of Stage 2 and for landscape planting on site). We are proposing to carry forward in the order of $420,500 from this site, with $45,000 allocated for landscape planting and screening and $60,000 as a contingency for a consent hearing for a resource consent which has been lodged for Stage 2.
4.18 Work on site this year at the Takaka RRC has included stormwater treatment and drainage improvements. We are also proposing to carry forward $231,000 of budget at the Takaka RRC site but to spend only $70,000 undertaking essential safety and drainage
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improvements around the waste compactor. We are proposing to cancel installation of a weighbridge at this site and any other improvements and to develop an integrated plan of improvements for this site (including a weighbridge) through the LTP process over the next year.
4.19 Combining these proposals still presents a funding shortfall of $203,500 to complete the waste compactor works at Mariri.
4.20 The LTP 2015-2025 includes a capital budget of $303,790 in 2017/18 for Stage 3 works (improvements to the greenwaste and hardfill reception areas on site).
4.21 We are requesting authorisation to bring forward this budget (and borrowing) into the
2016/17 year and to use this budget to procure and install the waste compactor, improve the bin storage area around the compactor, provide safety improvements on site and provide the stormwater treatment. We are also proposing the additional funding to make some
improvements to traffic flow to address safety concerns (as scheduled this year in the LTP, albeit on a reduced scope). The cost of bringing forward a capital budget of $303,790 is expected to have a one-off operating cost of $16,400.
4.22 We are proposing to cancel the improvements to the greenwaste and hardfill area but will reconsider these works when developing the LTP 2018-2028.
5 Options
5.1 When considering funding for capital works at the Mariri Resource Recovery Centre there are the following options to consider:
reduce the scope of work to meet the available budget;
delay the work until the 2017/18 financial year and authorise additional budgets through the 2017/18 annual plan;
increase the budget and authorise additional borrowing to fund this increase;
increase the budget and reduce other capital budgets to fund this increase;
increase the budget and fund the shortfall from the Solid Waste closed account.
5.2 We recommend a combination of increasing the capital budget for the works, transferring budgets from other solid waste sites and authorising new borrowing, through bringing forward a 2017/18 budget.
5.3 We have reviewed the scope of works for the Mariri RRC and do not recommend a reduction of scope. The waste compactor is required to increase efficiency and reduce risk in waste haulage. Transport of waste in closed bins forms part of earlier undertakings to Nelson City Council when negotiating access to the York Valley landfill. We also do not recommend removing the bins scales from the scope of works, as they increase efficiency and reduce traffic movements by ensuring payloads targets are met. The stormwater improvements are required by our resource consent conditions.
5.4 We do not recommend delaying the works until the 2017/18 year, due to the need to provide a waste compactor by 1 July 2017 for regional landfill services.
5.5 We do not recommend funding an increase in capital budget from the closed account due to uncertainty in expenditure during the transition to regional landfill activities over the next 12 months.
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6 Strategy and Risks
6.1 The proposed upgrade works at Mariri will improve efficiency and safety and ensure
compliance with resource consent requirements. Proceeding with the work is consistent with our strategic goals and approach to management of assets.
6.2 The existing waste handling pit at Mariri is showing significant wear and tear and renewal work should not be delayed. Delaying this work further would significantly raise the risk of asset failure.
6.3 Installing a waste compactor and moving from open top to closed container transport will improve transport efficiency and reduce risk during transport and in handling materials on site. The compactor will reduce falling risks around the site and reduce litter and litter concerns around waste transport. Delaying this work may leave the Council exposed to health and safety risks and compromise the Council’s ability to transport waste to York Valley landfill.
6.4 The improvement of the waste bin holding area and installation of weighbridge will improve the efficiency of waste transport and reduce total transport costs. Excluding this work will lead to higher longer term costs to the Council.
6.5 Improvements to traffic flows on the site are required to reduce traffic risks on site. A recent review has identified risks with mixing of light and heavy vehicles and this risk needs to be addressed.
6.6 The current stormwater treatment system is not able to treat and dispose of stormwater flows from the waste pit area and results in overflows from the septic tank system. The system needs to be improved to comply with our discharge consent and to reduce health risks from overflows.
6.7 The proposed reallocation of capital budget will reduce budgets at the Eves Valley and Takaka sites. We consider this to be a low risk.
6.8 The capital budget transferred from Eves Valley was originally for consenting of Stage 3 and for capping of Stage 2, which is no longer required with the proposed move to regional landfill operations with Nelson City Council. A contingency of $60,000 will be retained for an existing application for consenting of Stage 2 and landscaping and planting budgets will be carried over to meet consenting requirements.
6.9 It is proposed to cancel the installation of a road weighbridge at the Takaka RRC and reconsider this work in the LTP 2018-2028 review. We have recently reviewed the layout of the site and the operation of the waste compactor and identified areas that need
improvement. Installing a weighbridge on site at this stage would restrict our options future improvements to the site.
7 Policy / Legal Requirements / Plan
7.1 The scope of work proposed is consistent with the Solid Waste Activity Management Plan 2015 and the Council’s Infrastructure Strategy. The proposed work is also required to meet resource consent requirements and is consistent with the Council’s obligations for providing and maintaining a work environment that mitigate health and safety risks.
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7.2 The capital budget we request to be brought forward is included within the LTP 2015-2025 and the cost of bringing this budget forward is able to be accommodated within existing budgets.
8 Consideration of Financial or Budgetary Implications
8.1 The cost of bringing forward a capital budget of $303,790 is expected to have a one-off operating cost of $16,400.
8.2 The budget scheduled for Mariri in 2017/18 is for improvements to the greenwaste and hardfill loading areas. It is proposed not to proceed with these works at this stage and so the cost to the Council is one year of interest on the loan required for these works.
8.3 The additional borrowing will not significantly increase the Council’s borrowing or cause the Council to breach debt thresholds. The Council’s borrowings are currently significantly below the projections of the LTP 2015-2025.
9 Significance and Engagement
9.1 This decision has been evaluated in accordance with the Council’s Significance and Engagement Policy and has been assessed as having Low significance.
9.2 This decision is to amend the scope of work and budget at Mariri is generally within the overall scope of work expected. Some programmed work will no longer be completed in 2017/18 but the work proposed has a higher priority.
9.3 The reduction of work at Eves Valley is expected with the transition to the regional landfill activities. The reduction of work at Takaka will have a very minor impact on the public and will be reconsidered in the next LTP review.
9.4 The following table summarises the evaluation of significance for this decision.
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Issue Level of Significance Explanation of Assessment Is there a high level of publicinterest, or is decision likely to
be controversial? Low-
Moderate
This amendment of a project budget within a total capital works budget with a minor increase in overall budget. It may attract some public interest.
Is there a significant impact arising from duration of the effects from the decision?
Low The work proposed is within the scope of the existing activity management plan.
Does the decision relate to a strategic asset? (refer
Significance and Engagement Policy for list of strategic assets)
Low- Moderate
The scope of work at Mariri does not relate to a strategic asset. The reallocation of budgets from Eves Valley have been included in assumptions of work to date.
Does the decision create a substantial change in the level of service provided by Council?
Low- Moderate
This decision provides a moderate improvement to levels of service at the Mariri RRC.
Does the proposal, activity or decision substantially affect debt, rates or Council finances in any one year or more of the LTP?
Low
This decision causes a minor increase in the Council’s debt one year earlier than expected under the 2015-2025 Long Term Plan.
Does the decision involve the sale of a substantial
proportion or controlling interest in a CCO or CCTO?
Nil
This decision does not involve the sale of a substantial proportion or controlling interest in a CCO or CCTO.
Does the proposal or decision involve entry into a private sector partnership or contract to carry out the deliver on any Council group of activities?
Nil
This decision does not involve entry into a private sector partnership or contract to carry out the deliver on any Council group of activities.
Does the proposal or decision involve Council exiting from or entering into a group of
activities?
Nil
This decision does not involve the Council exiting from or entering into a group of activities.
10 Conclusion
10.1 The waste loading and handling facilities at the Mariri Resource Recovery Centre require renewal and improvement to increase efficiency, improve safety and ensure resource consent compliance, and enable us to transport waste to the York Valley landfill in 2017/18 in line with our undertakings. The estimated cost of these works exceeds the available budget.
10.2 There is capital budget available that is no longer required or is required for lower priority works at this and other sites. We recommend transfer of these budgets to allow the proposed works at Mariri to proceed.
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11 Next Steps / Timeline
11.1 We expect budgets and funding will be confirmed by the Council at its meeting on 11 August.
11.2 We will shortly issue a variation to Fulton Hogan to complete the stormwater improvements required at Mariri RRC, using existing budgets.
11.3 We will shortly commence detailed design for the work, using existing budgets. We expect to issue tender documents in the first quarter of the 2016/17 year and expect to have the compactor installed and commissioned in the third quarter of the 2016/17 year.
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