Agenda of Finance and Performance Committee

PALMERSTON NORTH CITY COUNCIL

Finance and Performance Committee MEETING

15 October 2018

Order of Business

NOTE: The Finance and Performance Committee meeting coincides with the extraordinary meeting of the Sport and Recreation Committee. The Committees will conduct business in the following order:

- Finance and Performance Committee

- Sport and Recreation Committee

1. Apologies

2. Notification of Additional Items

Pursuant to Sections 46A(7) and 46A(7A) of the Local Government Official Information and Meetings Act 1987, to receive the Chairperson’s explanation that specified item(s), which do not appear on the Agenda of this meeting and/or the meeting to be held with the public excluded, will be discussed.

Any additions in accordance with Section 46A(7) must be approved by resolution with an explanation as to why they cannot be delayed until a future meeting.

Any additions in accordance with Section 46A(7A) may be received or referred to a subsequent meeting for further discussion. No resolution, decision or recommendation can be made in respect of a minor item.

3. Declarations of Interest (if any)

Members are reminded of their duty to give a general notice of any interest of items to be considered on this agenda and the need to declare these interests.

4. Public Comment

To receive comments from members of the public on matters specified on this Agenda or, if time permits, on other Committee matters.

(NOTE: If the Committee wishes to consider or discuss any issue raised that is not specified on the Agenda, other than to receive the comment made or refer it to the Chief Executive, then a resolution will need to be made in accordance with clause 2 above.)

5. Confirmation of Minutes Page 7

“That the minutes of the Finance and Performance Committee meeting of 17 September 2018 Part I Public be confirmed as a true and correct record.”

6. Treasury Report for 3 months ended 30 September 2018 Page 15

Memorandum, dated 8 October 2018 presented by the Strategy Manager Finance, Steve Paterson.

7. Quarterly Performance and Financial Report - Quarter Ending 30 September 2018 Page 23

Memorandum, dated 5 October 2018 presented by the Finance Manager, Stuart McKinnon and the Head of Community Planning, Andrew Boyle.

8. Proposed Increase to the Admission and Concession Rates at The Lido and Freyberg Aquatic Facilities Page 97

Memorandum, dated 24 September 2018 presented by the Acting Property Manager, Bryce Hosking.

9. Report on Bacterial Status of Palmerston North Groundwater Bores Page 101

Memorandum, dated 26 September 2018 presented by the Transport & Infrastructure Manager, Robert van Bentum.

10. Committee Work Schedule Page 121

11. Exclusion of Public

To be moved:

“That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under Section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

General subject of each matter to be considered		Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution
12.	Minutes of the Finance and Performance Committee meeting - Part II Confidential - 17 September 2018	For the reasons setout in the Finance and Performance Committee minutes of 17 September 2018, held in public present.

This resolution is made in reliance on Section 48(1)(a) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by Section 6 or Section 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public as stated in the above table.

Also that the persons listed below be permitted to remain after the public has been excluded for the reasons stated.

Chief Executive (Heather Shotter), Chief Financial Officer (Grant Elliott), Acting Chief Infrastructure Officer (Ray Swadel), Acting General Manager – Strategy and Planning (David Murphy), General Manager - Community (Debbie Duncan), Acting General Manager – Customer (Sheryl Bryant), Human Resources Manager (Wayne Wilson), General Manager - Marketing and Communications (Sacha Haskell), Acting Operations Manager (Ray McIndoe) because of their knowledge and ability to provide the meeting with advice on matters both from an organisation-wide context (being members of the Council’s Management Team) and also from their specific role within the Council.

Legal Counsel (John Annabell), because of his knowledge and ability to provide the meeting with legal and procedural advice.

Acting Governance and Support Team Leader (David Murphy) and Committee Administrators (Penny Odell, Rachel Corser and Courtney Kibby), because of their knowledge and ability to provide the meeting with procedural advice and record the proceedings of the meeting.

[Add Council Officers], because of their knowledge and ability to assist the meeting in speaking to their report and answering questions, noting that such officer will be present at the meeting only for the item that relate to their respective report.

[Add Third Parties], because of their knowledge and ability to assist the meeting in speaking to their report/s [or other matters as specified] and answering questions, noting that such person/s will be present at the meeting only for the items that relate to their respective report/s [or matters as specified].

PALMERSTON NORTH CITY COUNCIL

Palmerston North City Council

Minutes of the Finance and Performance Committee Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 17 September 2018, commencing at 9.00am

Members

Present:

Councillor Susan Baty (in the Chair), The Mayor (Grant Smith) and Councillors Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Karen Naylor and Bruno Petrenas.

Non Members:

Councillors Brent Barrett, Rachel Bowen, Duncan McCann and Aleisha Rutherford.

Apologies:

The Mayor (Grant Smith) (early departure on Council Business), Councillor Vaughan Dennison (early departure), Leonie Hapeta (late arrival) and Tangi Utikere.

Councillor Leonie Hapeta entered the meeting at 9.50am during consideration of clause 66. She was not present for clauses 64 to 65 inclusive.

The Mayor (Grant Smith) left the meeting at 11.00am during consideration of clause 67. He was not present for clauses 67 to 71 inclusive.

64-18

Apologies

Moved Susan Baty, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 64-18 above was carried 14 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

65-18

Confirmation of Minutes

Moved Jim Jefferies, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the minutes of the Finance and Performance Committee meeting of 20 August 2018 Part I Public be confirmed as a true and correct record.

Clause 65-18 above was carried 13 votes to 0, with 1 abstention, the voting being as follows:

For:

Councillors Brent Barrett, Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Abstained:

The Mayor (Grant Smith).

66-18

Palmerston North Airport Limited - Annual Report for 12 months ended 30 June 2018 & Instructions relating to Annual Meeting

Memorandum, dated 30 August 2018 presented by the Chief Financial Officer , Grant Elliott.

Councillor Leonie Hapeta entered the meeting at 9.50am

Moved Jim Jefferies, seconded Susan Baty.

The COMMITTEE RECOMMENDS

1. That the Annual Report and Financial Statements of Palmerston North Airport Limited for the year ended 30 June 2018 be received.

2. That the Council shareholder representative be instructed to support the proposed resolutions to be considered at the Annual Meeting of Palmerston North Airport Limited to be conducted by way of resolution in writing.

Clause 66-18 above was carried 9 votes to 5, with 1 abstention, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Lew Findlay QSM, Jim Jefferies, Duncan McCann and Aleisha Rutherford.

Against:

Councillors Brent Barrett, Vaughan Dennison, Lorna Johnson, Karen Naylor and Bruno Petrenas.

Abstained:

Councillor Leonie Hapeta.

On a motion `That clause 2.10.3 of the memorandum dated 30 August 2018 and titled `Palmerston North Airport Limited – Annual Report for 12 months ended 30 June 2018 and Instructions relating to Annual Meeting’ be replaced with: Approving the total remuneration of directors being $99,000 per annum’ the motion was tied 7 votes to 7, with 1 abstention, the Chairperson declared the motion lost due to a lack of majority, the voting being as follows:

For:

Councillors Brent Barrett, Adrian Broad, Lew Findlay QSM, Lorna Johnson, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Against:

The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Gabrielle Bundy-Cooke, Vaughan Dennison, Jim Jefferies and Duncan McCann.

Abstained:

Councillor Leonie Hapeta

On a motion `That the Council shareholder representative be instructed to support the proposed resolutions (excluding 2.10.3) to be considered at the Annual Meeting of Palmerston North Airport Limited to be conducted by way of resolution in writing’ the motion was lost 5 votes to 9, with 1 abstention, the voting being as follows:

For:

Councillors Brent Barrett, Lorna Johnson, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

Against:

The Mayor (Grant Smith) and Councillors Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Jim Jefferies and Duncan McCann.

Abstained:

Councillor Leonie Hapeta

The meeting adjourned at 10.21am

The meeting resumed at 10.35am

67-18

Recommendation for Adoption 2017/18 Annual Report

Memorandum, dated 4 September 2018 presented by the Finance Manager, Stuart McKinnon.

The Mayor (Grant Smith) left the meeting at 11.00am

Moved Susan Baty, seconded Leonie Hapeta.

The COMMITTEE RECOMMENDS

1. That the 2017/18 Annual Report and 2017/18 Summary Annual Report be adopted.

2. That Council note that an Auditor’s “opinion” from Audit New Zealand would be expected to be received immediately following recommended adoption by Council on 24 September 2018 and Council signing of the reports.

3. That delegated authority is given to the Chairperson and Deputy Chairperson of the Finance and Performance Committee to make minor amendments to the 2017/18 Annual Report and 2017/18 Summary Annual Report.

Clause 67-18 above was carried 15 votes to 0, the voting being as follows:

For:

The Mayor (Grant Smith) and Councillors Brent Barrett, Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

68-18

Papaioea Place Redevelopment Quarterly Update

Memorandum, dated 29 August 2018 presented by the Acting Property Manager, Bryce Hosking.

Moved Aleisha Rutherford, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the memorandum dated 29 August 2018 and titled `Papaioea Place Redevelopment Quarterly Update’ be received for information.

Clause 68-18 above was carried 14 votes to 0, the voting being as follows:

For:

Councillors Brent Barrett, Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

69-18	Water Source Development and Security - Programme Budget Adjustments Memorandum, dated 21 August 2018 presented by the Water & Waste Services Manager, Robert van Bentum.
	Moved Lorna Johnson, seconded Lew Findlay QSM. The COMMITTEE RECOMMENDS 1. That the budget for the 2018/19 Capital New Programme 985 “Kelvin Grove Water Supply Zone - New Bore” be revised from $537,000 to $887,000 by utilising: · savings of $100,000 from 2018/19 Water Capital New Programme 592 “Turitea WTP – Sludge Handling and Disposal Improvements, · savings of $100,000 from 2018/19 Water Programme 1005 “Industrial Growth – Installation of Water Supply Systems to an Expanded NEIZ, and · reallocating funding of $150,000 from Capital New Programme 246 Water Subdivision Contributions. 2. That a new 2018/19 Capital New Programme called “UV Treatment for Papaioea Park Bore 3” with a budget of $550,000 be approved by: · reallocating budget of $130,000 from 2018/19 Capital New Programme 1404 “Turitea WTP – New Retaining Walls on Access Road and · approving additional unbudgeted funding of $420,000. 3. That approval be given to bring $750,000 forward two years in the LTP from 2020/21 to 2018/19 for Programme 1384 – Citywide New Water Reservoirs to Enhance Supply Storage to enable construction of a contact tank at Railway Road bore. 4. That the budget for the 2018/19 Water Capital New Programme 593 “Water Safety and Security Mitigation” be revised from $23,000 to $264,500 by approving an additional $241,500 in unbudgeted funding.
	Moved Brent Barrett, seconded Bruno Petrenas. 5. That the Chief Executive be instructed to provide a report on biological contamination status of each bore in the city’s reticulated water network to the October 2018 Finance and Performance Committee meeting.
	Clause 69-18 above was carried 14 votes to 0, the voting being as follows: For: Councillors Brent Barrett, Susan Baty, Rachel Bowen, Adrian Broad, Gabrielle Bundy-Cooke, Vaughan Dennison, Lew Findlay QSM, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Aleisha Rutherford.

70-18

Committee Work Schedule

Moved Susan Baty, seconded Vaughan Dennison.

The COMMITTEE RESOLVED

1. That the Finance and Performance Committee receive its Work Schedule dated September 2018.

Clause 70-18 above was carried 14 votes to 0, the voting being as follows:

For:

Exclusion of Public

71-18

Recommendation to Exclude Public

Moved Vaughan Dennison, seconded Aleisha Rutherford.

The COMMITTEE RESOLVED

“That the public be excluded from the following parts of the proceedings of this meeting listed in the table below.

General subject of each matter to be considered		Reason for passing this resolution in relation to each matter	Ground(s) under Section 48(1) for passing this resolution
12.	Supply of Two Side Arm Kerbside Collection Vehicles	Commercial Activities and Negotiations	s7(2)(h) and s7(2)(i)
13.	Award of Contract 3614 - New Artificial Turf at CET Arena	Commercial Activities	s7(2)(h)
14.	Funding Request	Negotiations	s7(2)(i)

Also that the persons listed below be permitted to remain after the public has been excluded for the reasons stated.

Chief Executive (Heather Shotter), Chief Financial Officer (Grant Elliott), Acting Chief Infrastructure Officer (Ray Swadel), Acting General Manager – Strategy and Planning (David Murphy), General Manager - Community (Debbie Duncan), Acting General Manager – Customer (Leigh Sage), Human Resources Manager (Wayne Wilson), General Manager - Marketing and Communications (Sacha Haskell), because of their knowledge and ability to provide the meeting with advice on matters both from an organisation-wide context (being members of the Council’s Management Team) and also from their specific role within the Council.

Legal Counsel (John Annabell), because of his knowledge and ability to provide the meeting with legal and procedural advice.

Acting Governance and Support Team Leader (Stuart McKinnon) and Committee Administrators (Penny Odell, Rachel Corser and Courtney Kibby), because of their knowledge and ability to provide the meeting with procedural advice and record the proceedings of the meeting.

Acting Property Manager (Bryce Hosking), Logistics and Support Manager (Paul Compton), Waste Operations Manager (Stewart Hay), Head of Planning Services (Simon Mori), Manager – Venues Palmerston North (John Lynch), and Acting Operations Manager (Ray McIndoe) because of their knowledge and ability to assist the meeting in speaking to their report and answering questions, noting that such officer will be present at the meeting only for the item that relate to their respective report.

Rodney Wong – Wildbase Recovery Trust Representative because of his knowledge and ability to assist the meeting in speaking to the report and answering questions, noting that such person will be present at the meeting only for the item that relates to their respective report.

Clause 71-18 above was carried 14 votes to 0, the voting being as follows:

For:

The public part of the meeting finished at 12.15pm

Confirmed 15 October 2018

Chairperson

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 October 2018

TITLE: Treasury Report for 3 months ended 30 September 2018

DATE: 8 October 2018

PRESENTED BY: Steve Paterson, Strategy Manager Finance, Finance

APPROVED BY: Grant Elliott, Chief Financial Officer

RECOMMENDATION TO FINANCE AND PERFORMANCE COMMITTEE

1. That the performance of the treasury activity for the 3 months ending 30 September 2018 be noted.

1. ISSUE

To provide an update on the Council’s treasury activity for the 3 months ended 30 September 2018.

2. BACKGROUND

The Council’s 10 Year Plan Budget for 2018/19 forecast additional debt of $38.71m would need to be raised during the year to fund the $47.89m of new capital expenditure programmes (including assumed carry forwards from 2017/18). In June 2018 the Council resolved to specifically authorise the raising of up to $39m of additional debt.

Council’s Financial Strategy (updated version adopted 25 June 2018) contains the following ratios which the Council has determined to be prudent maxima:

• Net debt as a percentage of total assets not exceeding 20%

• Net debt as a percentage of total revenue not exceeding 200%

• Net interest as a percentage of total revenue not exceeding 15%

• Net interest as a percentage of annual rates income not exceeding 20%

The Treasury Policy (embracing the Liability Management and Investment Policy), adopted in December 2017 and updated on 25 June 2018, also contains a number of other criteria regarding debt management.

3. PERFORMANCE

Following the latest annual review published on 9 April 2018 Council’s S&P Global Rating’s credit rating remains unchanged at AA / A-1+.

Schedule 1 attached shows the details of Council’s debt as at 30 September 2018. Debt levels were within the policy parameters outlined in section 2 of this report.

The summarised gross term debt movements are shown in the following table:

10 Year Plan Budget for year (2018/19)

$000

Actual – 3 months (2018/19)

$000

Debt Balance at 1 July 2018

New Debt #

Debt repayments #

106,153

38,710

99,875

15,000

(2,875)

Closing Balance

Comprising:

Bank advance (on call)

LGFA short term advance

LGFA & Council stock

144,863

112,000

10,000

102,000

# A portion of the Council’s debt is drawn on a daily basis – daily drawdowns & repayments are not included in these figures but the net draw or repayment for the year to date is shown as part of new debt or debt repayment as appropriate.

* $15m new debt was raised in July to pre-fund debt maturing in March 2019.

Net debt at 30 September 2018 was $106.175m (i.e. gross $112m less short-term deposits of $1m & call investments of $4.825m) compared with $98.875m at 1 July 2018 (i.e. gross $99.875m less short-term deposits of $1.0m).

Movements in recent years are shown in the following graph:

Actual finance costs incurred during the 3 months (including interest, line fees & the effects of swaps) amounted to $1.5m compared with the budget for the year of $7.284m.

The Council has entered financial instruments related to its debt portfolio utilising swap trading lines established with Westpac and ANZ. The details of these are shown in Schedule 2 attached.

The value of these instruments is measured in terms of its “mark-to-market” i.e. the difference between the value at which the interest rate was fixed and the current market value of the transaction. Each of these transactions was valued at the date they were fixed and again at the reporting date. Financial reporting standards require the movement in values to be recorded through the Council’s Statement of Comprehensive Income (Profit & Loss Account). They have been revalued as at 30 September 2018 and show a decrease in book value of $127k for the quarter.

The Council’s Treasury Policy contains guidelines regarding the measurement of treasury risk as follows:

· Interest rate risk is managed by the Council maintaining the ratio of debt that is subject to floating versus fixed interest rates within pre-set limits.

· Funding and liquidity risk is managed by the Council maintaining a pre-set portion of its debt in a range of maturity periods eg < 1 year, 1 – 3 years, 5 years +.

The position compared to the policy is illustrated in the graphs in Schedule 3. The overall ratio of fixed v floating interest rate debt is based on the assessed level of total debt in 12 months’ time.

The interest rate risk position graph shows that based on forecast debt of $120m, then 68% of the interest exposure is fixed. However the budget for 2018/19 assumes $39m of additional debt will need to be raised during the year if the full capital expenditure programme is completed. If this forecast is used for this policy then 59% of interest is currently fixed. The policy requires that at least 55% is fixed.

As at 30 September 2018 all of the policy targets had been met.

Council’s credit lines with the banks include a $18m four-year credit facility with Westpac Bank (maturing 31 July 2020) and a revolving $25m three-year facility with ANZ Bank (maturing 31 March 2021).

4. CONCLUSION & NEXT STEPS

Finance costs for the 3-month period (including interest, line fees & the effect of swaps) was $1.5m compared with budget for the year of $7.284m.

In conjunction with Council’s treasury advisors hedging instruments are regularly reviewed in an effort to ensure the instruments are being utilised to best advantage as market conditions change. The level of hedging cover is also reviewed as the forecasts of future debt levels are revised.

Council’s borrowing strategy is continually reviewed, in conjunction with Council’s treasury advisors, to ensure best advantage is taken of Council’s quality credit rating.

A further performance report will be provided after the end of the December 2018 quarter.

5. Compliance and administration

Does the Committee have delegated authority to decide?	Yes
Are the decisions significant?	No
If they are significant do they affect land or a body of water?	No
Can this decision only be made through a 10 Year Plan?	No
Does this decision require consultation through the Special Consultative procedure?	No
Is there funding in the current Annual Plan for these actions?	Yes
Are the recommendations inconsistent with any of Council’s policies or plans?	No

The recommendations contribute to Goal 5: A driven and enabling Council
The recommendations contribute to the outcomes of the Driven and Enabling Council Strategy
The recommendations contribute to the achievement of action/actions Not Applicable
Contribution to strategic direction	Routine

Attachments

Schedules 1 - 3 ⇩

PDF Creator

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 October 2018

TITLE: Proposed Increase to the Admission and Concession Rates at The Lido and Freyberg Aquatic Facilities

DATE: 24 September 2018

PRESENTED BY: Bryce Hosking, Acting Property Manager, Infrastructure

APPROVED BY: Ray Swadel, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That Council approve a 10% increase to the admission and concession rates for the Lido and Freyberg Aquatic Facilities to be effective from 1^st July 2019

1. ISSUE

1.1 Council has a long-term Aquatics Facilities Management contract with CLM, who are required to run these facilities in a financially sustainable and robust way. Admission and concession prices have not increased since 2014.

1.2 Given the high number of classes, swim schools, activities, life guards, and operational staff needed to run the facilities effectively, a major portion of CLM’s expenses is staff and wage related.

1.3 Since 2014, the minimum wage has increased by 16%, and is set to continue to increase in the foreseeable future.

1.4 Compounding the rise in wage costs, the charges from numerous external suppliers have also increased from April 2018.

1.5 CLM, who manage Council’s pool facilities, require their operational business of both the Lido and Freyberg Pools to be profitable, which CLM report it has not been the case cumulatively over the last 3 years.

1.6 If the operational business continues to be unprofitable, CLM may seek to make changes to the services provided under the contract.

2. BACKGROUND

2.1 As stated in 1.1, admission and concession prices for both pools have remained static since 2014. CLM made a submission for a 10% increase in August 2018.

2.2 Clause B1.11.6 of the Aquatics Facilities Management contract between Council and CLM discusses the setting and review of admission and concession charges. It can be paraphrased as “The maximum admission and concession charges set by Council can be reviewed annually prior to 30 June, and price adjustments shall be effective from 1 July immediately following the review. CLM may make submissions to Council prior to the review to be considered, although Council is not bound by these submissions. Once a final decision is made, they cannot be disputed by CLM.”

2.3 While the Lido’s public usage numbers have improved in the 2017/18 year to date compared to the previous year; Freyberg’s performance suffered significantly in the 2017/18 year due to the operational challenges caused by the Toddler Pool realignment project. With the complications of this project resulted in a significant drop in public usage.

2.4 Historically to date, Freyberg and the Lido admission and concession prices have been the same. This allows dual membership at both facilities and cross promotion between both PNCC facilities.

2.5 To give context, below is a table showing the changes to the admission prices from a 10% increase to admission fees:

Admission/ Concession Type	Current Rates	Proposed Increased Rates
Adult	$ 5.00	$ 5.50
Child	$ 4.00	$ 4.40
Senior Citizen	$ 4.00	$ 4.40
Community Service Card	$ 4.00	$ 4.40
School	$ 3.50	$ 3.85
Family Pass	$ 13.50	$ 14.85
Hydro-slides	$ 6.00	$ 6.60
Adult Concession Card - 10 Swims	$ 39.60	$ 43.56
Adult Concession Card - 20 Swims	$ 74.80	$ 82.28
Adult Concession Card - 50 Swims	$ 176.00	$ 193.60
Adult Concession Card - 100 Swims	$ 330.00	$ 363.00
Child/Senior Concession Card - 10 Swims	$ 29.70	$ 32.67
Child/Senior Concession Card - 20 Swims	$ 56.10	$ 61.71
Child/Senior Concession Card - 50 Swims	$ 132.00	$ 145.20
Sauna/Swim Concession Card - 10	$ 81.00	$ 89.10
Medical Concession Card – 10 Swims	$ 23.00	$ 25.30

2.6 Even with a 10% increase to the fees, pool prices will still be in line with facilities in other regional centres such as Nelson, Rotorua (both are 10% higher than our current levels), but still cheaper than the rates many other centres are charging including Whangarei, Richmond (Nelson), and Invercargill.

3. NEXT STEPS

3.1 The admission and concession rates for both aquatic facilities will increase by 10% to the proposed rates in the table above effective 1^st July 2019.

3.2 CLM to notify public well in advance of the increase from 1^st July 2019.

4. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual <Enter clause>		No
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 3: A Connected and Safe Community
The recommendations contribute to the outcomes of the Creative and Liveable Strategy
The recommendations contribute to the achievement of action in the Active Community Plan The action is that Council will: · Provide excellent sports and recreation options and events to ensure the city is healthy and active. · Promote the city’s strength in sport development, capability and participation.
Contribution to strategic direction	· By keeping the management of facilities profitable, it can continue to be run at a professional and high standard with the full list of services being offered at both pools. · Even increasing the admission fees by 10%, Freyberg and the Lido will still be cheaper than many comparable centres in the country.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Finance and Performance Committee

MEETING DATE: 15 October 2018

TITLE: Report on Bacterial Status of Palmerston North Groundwater Bores

DATE: 26 September 2018

PRESENTED BY: Robert van Bentum, Transport & Infrastructure Manager, Infrastructure

APPROVED BY: Ray Swadel, Acting Chief Infrastructure Officer

RECOMMENDATION(S) TO COMMITTEE

1. That the Committee note the bacterial status of Palmerston North groundwater bores as provided in the memorandum dated 26 September 2018 and titled `Report on Bacterial Status of Palmerston North Groundwater Bores.’

1. ISSUE

1.1 Council adopted recommendations of the September 2018 meeting of the Finance and Performance Committee approving additional expenditure to complete the commissioning and development of new bores at Railway Road, Papaioea Park and Keith Street. Additional budget was approved to install ultraviolet light (UV) disinfection of the new Papaioea Park Bore 3 to treat for persistent low levels of coliform bacteria.

1.2 To understand the water quality issues for the remaining groundwater bores Councillors passed a resolution requesting a report detailing biological water quality testing undertaken at all the bores within the city as follows:

That the Chief Executive be instructed to provide a report on biological contamination status of each bore in the city’s reticulated water network to the October 2018 Finance and Performance Committee meeting.

1.3 This brief report summarises the biological water quality testing currently undertaken by Council of both the raw and treated water from the groundwater bores prior to any treatment. Twelve months of test result data is provided.

2. Water quality testing – Raw, Treated and distribution sytems

2.1 The requirement for water quality testing of groundwater sources is detailed in the New Zealand Drinking Water Standards for New Zealand 2005 (revised 2008) (DWNZ) Section 4.5. All the existing bores in current use in Palmerston North are assessed to be secure by the Drinking Water Assessor (DWA). The on-going bore monitoring requirements for both raw and treated water are set out below in Table 1, along with the current testing undertaken by Council.

2.2 Raw water testing and monitoring requirements under the DWSNZ include E. coli and water residence time. Council has elected to also test and monitor raw water quality for total coliform and Heterotrophic Plate Counts (HPC). The current DWSNZ do not have requirement to monitor the treated water for bacteriological compliance. Council has elected to undertake E. coli, total coliform and HPC a sample per quarter. The DWSNZ specified the E. coli monitoring requirements according to the population that the distribution zone services. Again, Council monitoring additional testing beyond the requirements of the DWSNZ including total coliform, HPC, pH, FAC, Mono-chloramine, Di-chloramine and Turbidity. In respect of E. coli Council undertakes 50% more tests than required by the DWSNZ for the zones with most of the population. Council also monitors pH, FAC, Mono-chloramine, Di-chloramine and Turbidity from the Central Environmental Laboratory tap every day.

Table 1. Schedule of DWSNZ and Actual PNCC Water Testing

Test type	DWSNZ Minimum Requirement	PNCC practice
Raw Water
E. coli	quarterly	quarterly
Residence time	every 5 years	every 5 years
HPC 35°C	Not required	quarterly
HPC 20°C	Not required	quarterly
Total Coliforms	Not required	quarterly
Treated Water
E. coli	Not required	Quarterly
HPC 35°C	Not required	Quarterly
HPC 20°C	Not required	Quarterly
Total Coliforms	Not required	Quarterly
Distribution Systems
E. coli	111 per quarter (12 zones)	154 per quarter (12 zones)
HPC 35°C	Not required	154 per quarter
HPC 20°C	Not required	154 per quarter
Total Coliforms	Not required	154 per quarter
pH, FAC, Mono-chloramine, Di-chloramine, Turbidity	Not required	154 per quarter

2.3 Council also undertakes a full chemical water quality analysis of a sample from each of the bores ever 6 monthly intervals and uses this to identify any measurable changes in chemical composition which may indicate a significant change to bore or aquifer structure due to earth movement which may impact on the bore secure status. An example analysis for one of the bores is included as Attachment 1.

3. Specific microbial indicators and tests

3.1 Total coliform, E. coli and Heterotrophic plates counts (HPC) are all tests for the presence of bacterial organisms.

3.2 HPC 20°C is a test in which a sample of water is incubated at 20°C on a non-selective agar medium. The test records the number of bacterial colonies which form. The test will detect a wide range of bacteria in the environment most of which cannot cause illness in humans. The test is designed to identify the level of background bacteria with high levels e.g. >10,000 cfu/ml considered indicative of a potential contamination risk from the water. Low levels of HPC bacteria may occur due to environmental influences.

3.3 HPC 35°C is a test in which a sample of water is incubated at 35°C on a non-selective agar medium. The test is more specific to bacteria adapted to line in the human gut and so will detect thermotolerant organisms from both the environment including some of faecal origin from humans and other animal species. A significant increase in the count levels for this test is considered an early sign of potential contamination. Generally low levels of these bacteria should be expected e.g. <20 cfu/mL for disinfected water and <200 cfu/mL for undisinfected water in a well-run large municipal supply in New Zealand.

3.4 Total coliforms is a test for a wide range of bacteria occurring naturally in the gut of humans and animals, but also many bacteria that are commonly found in the plant and soil environment. A positive Total Coliforms test is considered an indicator of contamination due to the environment e.g. soil or vegetation in origin. Coliform bacterial are unlikely to cause illness, but are an indicator of possible faecal contamination of the sample.

3.5 E. coli – is a subgroup of total coliform bacteria. It is used as an indicator of faecal contamination as it is nearly always present in the gut of humans and animals. Most E. coli bacteria are harmless, however, the presence of E. coli in a water sample means that there is a possibility that the sample also contains other disease-causing organisms of faecal origin such as Salmonella, Shigella, Giardia, Campylobacter and Vibrio cholerae. DWSNZ requires that E.coli be monitored in the raw groundwater and in the reticulation.

4. Sampling and Testing Results for Raw Bore Water

4.1 Tables 2 to 5 which follow, summarises the results of raw water microbial testing undertaken on the 9 bores in Palmerston North. In all the bores there was no recorded incidence of E. coli or Total Coliforms. Small numbers of HPC were found in several of the bores, however at very low levels. In only one bore Roberts Line Bore 2, were elevated levels of HPC results detected. This occurred in late March 2018 following the installation of a new submersible pump. Follow-up testing of the bore water has confirmed that the bore is now clear and HPC levels are back to very low levels again.

Table 2 E. coli Test Results for 2017-18 for PNCC Raw Groundwater Supplies

E.coli Counts (CFU / 100 mL)
Sample Date	20 Nov 2017	15 Mar 2018	8 May 2018	15 Aug 2018
Ashhurst Bore	0	0	0	0
Bunnythorpe Bore	0	0	0	0
Longburn Bore	0	0	0	0
Takaro Park bore	0	0	0	0
Keith St Bore	0	0	0	0
Papaioea Park Bore 1	0	0	0	0
Papaioea Park Bore 2	0	0	0	0
Roberts ln Bore 1	0	0	0	0
Roberts ln Bore 2	0	0	0	0

Table 3 Total Coliforms Test Results for 2017-18 for PNCC Raw Groundwater Supplies

Total coliforms (CFU / 100 mL)
Sample Date	20 Nov 2017	15 Mar 2018	8 May 2018	15 Aug 2018
Ashhurst Bore	0	0	0	0
Bunnythorpe Bore	0	0	0	0
Longburn Bore	0	0	0	0
Takaro Park bore	0	0	0	0
Keith St Bore	0	0	0	0
Papaioea Park Bore 1	0	0	0	0
Papaioea Park Bore 2	0	0	0	0
Roberts ln Bore 1	0	0	0	0
Roberts ln Bore 2	0	0	0	0

Table 4 HPC at 20°C, Test Results for 2017-18 for PNCC Raw Groundwater Supplies

HPC at 20°C, 72 hours (CFU / mL)
Sample Date	20 Nov 2017	15 Mar 2018	8 May 2018	15 Aug 2018
Ashhurst Bore	0	0	0	0
Bunnythorpe Bore	14	1	0	0
Longburn Bore	0	0	1	0
Takaro Park bore	1	0	0	0
Keith St Bore	0	0	0	0
Papaioea Park Bore 1	1	0	0	0
Papaioea Park Bore 2	0	0	0	0
Roberts ln Bore 1	0	0	0	0
Roberts ln Bore 2	0	0	>300	9

Table 5 HPC at 35°C, Test Results for 2017-18 for PNCC Raw Groundwater Supplies

HPC at 35°C, 24 hours (CFU / mL)
Sample Date	20 Nov 2017	15 Mar 2018	8 May 2018	15 Aug 2018
Ashhurst Bore	0	0	0	2
Bunnythorpe Bore	0	0	0	0
Longburn Bore	0	0	0	0
Takaro Park bore	0	0	0	1
Keith St Bore	0	0	0	0
Papaioea Park Bore 1	0	1	0	2
Papaioea Park Bore 2	0	0	0	0
Roberts ln Bore 1	0	0	0	0
Roberts ln Bore 2	0	0	73	0

5. Roberts Line Bore 2 – Sampling and Testing Post Bore Pump Installation

5.1 A new submersible pump was purchased and installed in Roberts Line Bore 2 to increase the yield from the bore following the steady fall in the yield of the well, to provide greater supply security for the Kelvin Grove zone until the Railway Road and Keith Street bores are commissioned. As is current practice, following any major works on a bore such as the installation of the new submersible pump, additional follow-up testing and monitoring in undertaken.

5.2 In the case of Roberts Line, additional sampling and testing was undertaken for three weeks following the work. Small numbers of both total coliforms and HPC at both incubation temperatures were detected following the work. No E. coli was detected in any test. The levels fell over the 3 weeks of testing. Follow-up testing in August 2018, shows that the raw water to be almost totally clear of bacteria. Note, that during this time treated water testing undertaken identified only one HPC at 20°C which suggests the bacteria which persisted post disinfection is of a type which does not pose any risk to human health.

5.3 Table 6 below summarises the tests and results for the three rounds of testing for the raw water.

Table 6 Bacterial Test Results for Roberts Line Bore 2 Post Pump Installation

Sample Date	E. coli (CFU/100mL)	Total coliforms (CFU/100mL)	HPC at 20°C, 72 hours (CFU/mL)	HPC at 35°C, 24 hours (CFU/mL)
Raw Water
26/03/2018	0	81	n/a	n/a
28/03/2018	0	260	>300	>300
4/04/2018	0	5	>300	>300
10/05/2018	0	0	0	0
15/08/2018	0	0	9	0
Treated Water
4/04/2018	0	0	1	0

6. monitoring of new bores prior to commissioning

6.1 Prior to commissioning and connection of a new bore to the network, the DWSNZ requires comprehensive sampling and testing of the raw water to confirm that the bore can be given status of a secure bore. The requirements include daily E. coli for the first three month and reduced to once per month for the rest of the nine months. If all these tests are negative then the bore will be granted secure status. The 12 months monitoring must start again if any positive E. coli is detected.

6.2 Over the last 12 months, Council has been constructing three new bores at Railway Road, Keith Street and Papaioea Park Bore 3. For each of the bores E. coli and Total Coliform sampling and testing has been undertaken in accordance to the DWSNZ. The interim results of this testing are summarised in the following sections.

6.3 For the Railway Road bore, sampling and testing has been undertaken daily since January 2018 for three months until April 2018 and then monthly for the next 9 months to enable an application for secure bore status to be made. Figure 1 below plots the monitoring results. While there was a single incidence of Total Coliforms in mid-March 2018, all subsequent Total Coliforms test and all E. coli tests have been negative for the presence of any bacteria.

Figure 1. Plot of Total Coliforms and E. coli for Raw Water from Railway Road Bore

6.4 The new bore at Keith Street has also been sampled and tested for both Total Coliforms and E. coli bacteria since late August 2018 on daily basis i.e. for just over 4 weeks. No total coliform or E.coli bacteria have been detected in any of the samples.

6.5 The Papaioea Park 3 bore has also been sampled and tested since early 2018, and as reported to this Committee at the September 2018 meeting, elevated levels of Total Coliforms and a single positive test result for E. coli has been detected. Sampling and testing is on-going but at this stage there is no sign of the raw water being clear of the coliform bacteria. Based on the raw water quality to date, the bore will not receive interim secure status to enable the bore to be connected to the network, unless a full 12 months of both bacteria and protozoa free testing is achieved. As a result Officers sought and had approved additional funding to install UV disinfection to enable the bore to be commissioned as soon as possible. A plot of the Total Coliform and E. coli test results is provided in Figure 2 below.

Figure 2. Plot of Total Coliforms and E. coli for Raw Water from Papaioea Park 3 Bore

7. summary

7.1 Council undertakes quarterly sampling and analysis of raw water from all bores within the city. Monitoring of raw water undertaken over the last 12 months shows no E.coli. Low levels of total coliforms were detected at the Roberts Line Bore 2, after the new submersible pump was installed however these levels have subsequently fallen to almost zero and in all cases current chlorination disinfection is effective at ensuring there is no residual bacteria in the treated water supply.

7.2 Council also undertakes sampling and analysis of treated water and distribution system from various supply zones in line with DWSNZ requirements. Council takes 50% more samples than required for the zones with most of the population. There has not been any positive E. coli test result for treated water nor the distribution zones from any of the groundwater or surface water supplies in the city for more than 15 years. In addition to the sampling and testing all groundwater bores are also continuously monitored for pH, turbidity and chloramine levels in the treated water to provide confidence that all water delivered to the network is free from bacteria, safe to drink and will remain safe up until the point of delivery in the household or business.

7.3 Raw water quality testing is also undertaken for all new bores prior to commissioning to prior to an application for secure status. For all previous bores effective disinfection of the bore headworks and any down hole components such as pumps and pipework has resulted in no sustained detection of bacteria after construction. Both the new Railway Road and Keith Street bores have followed this pattern and well on the way to achieving interim secure status. Papaioea Bore 3 has persistently returned positive results for the presence of coliform bacteria albeit at much reduced levels post comprehensive disinfection. However in the absence of 12 months of clear water quality records, UV disinfection is now required to achieve secure status.

8. Compliance and administration

Does the Committee have delegated authority to decide? If Yes quote relevant clause(s) from Delegations Manual 166		Yes
Are the decisions significant?		No
If they are significant do they affect land or a body of water?		No
Can this decision only be made through a 10 Year Plan?		No
Does this decision require consultation through the Special Consultative procedure?		No
Is there funding in the current Annual Plan for these actions?		Yes
Are the recommendations inconsistent with any of Council’s policies or plans?		No
The recommendations contribute to Goal 4: An Eco City
The recommendations contribute to the outcomes of the Eco City Strategy
The recommendations contribute to the achievement of action/actions in the Three Waters Plan The action is: Provision of safe and secure drinking water.
Contribution to strategic direction	The report provides confirmation of the comprehensive testing being undertaken in excess of that required by the DWSNZ. It also confirms the high quality of both the raw and treated water from all the existing bores and two of the three new bores recently constructed (Railway Road and Keith Street).

Attachments

Quarterly Comprehensive Bore Raw Water Quality Test Results ⇩

Susan Baty (Chairperson)
Jim Jefferies (Deputy Chairperson)
Grant Smith (The Mayor)
Adrian Broad	Leonie Hapeta
Gabrielle Bundy-Cooke	Lorna Johnson
Vaughan Dennison	Karen Naylor
Lew Findlay QSM	Bruno Petrenas

1.	Section one, two September Quarterly Performance and Finance Report ⇩
2.	Section three September Quarterly Performance and Finance Report ⇩