Agenda of Audit and Risk Committee

PALMERSTON NORTH CITY COUNCIL

Audit and Risk Committee MEETING

6 May 2019

Order of Business

NOTE: The Audit and Risk Committee meeting coincides with the ordinary meeting of the Planning and Strategy Committee. The Committees will conduct business in the following order:

- Planning and Strategy Committee

- Audit and Risk 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 Audit and Risk Committee meeting of 18 February 2019 Part I Public be confirmed as a true and correct record.”

6. Health and Safety Report Jan - Mar 2019 Page 13

Memorandum, dated 29 April 2019 presented by the Human Resources Manager, Wayne Wilson.

7. Surveillance in Public Space in the City Page 21

Report, dated 5 April 2019 presented by the Legal Counsel, John Annabell.

8. Risk Management Progress YTD March 2019 Page 25

Memorandum, dated 12 April 2019 presented by the Risk Manager, Miles Crawford.

9. AMP Update - Property Asset Management Planning Page 29

Memorandum, dated 29 March 2019 presented by the Property Manager, Bryce Hosking and the Asset and Planning Manager, Jono Ferguson-Pye.

10. AMP Update - Wastewater Asset Management Planning Page 35

Memorandum, dated 29 April 2019 presented by the Transport & Infrastructure Manager, Robert van Bentum.

11. New Audit - Fixed Assets Management Process Page 47

Memorandum, dated 9 April 2019 presented by the Senior Internal Auditor, Vivian Watene.

12. Management Agreed Corrective Actions Implementation Progress March 2019 Page 53

Memorandum, dated 2 April 2019 presented by the Senior Internal Auditor, Vivian Watene.

13. Committee Work Schedule Page 83

14. 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

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), Chief Infrastructure Officer (Tom Williams), General Manager – Strategy and Planning (Sheryl Bryant), General Manager - Community (Debbie Duncan), Chief Customer and Operating Officer (Chris Dyhrberg), General Manager - Marketing and Communications (Sacha Haskell), Sandra King (Executive Officer) 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 Executive Leadership 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.

Committee Administrators (Penny Odell, Rachel Corser, Natalya Kushnirenko 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

Minutes of the Audit and Risk Committee Meeting Part I Public, held in the Council Chamber, First Floor, Civic Administration Building, 32 The Square, Palmerston North on 18 February 2019, commencing at 9.00am

Members

Present:

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

Non Members:

Councillors Brent Barrett, Rachel Bowen, Leonie Hapeta, Duncan McCann, Karen Naylor and Tangi Utikere.

Apologies:

The Mayor (Grant Smith) (for lateness, on Council Business), Deputy Mayor (Tangi Utikere) (for lateness) and Councillor Aleisha Rutherford.

Councillor Leonie Hapeta left the meeting at 11.23am during consideration of clause 5. She entered the meeting again at 11.33am during further consideration of clause 5.

1-19

Apologies

Moved Vaughan Dennison, seconded Susan Baty.

The COMMITTEE RESOLVED

1. That the Committee receive the apologies.

Clause 1-19 above was carried 13 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 and Bruno Petrenas.

The meeting adjourned at 9.03am

The meeting resumed at 10.57am

2-19

Confirmation of Minutes

Moved Vaughan Dennison, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the minutes of the Audit and Risk Committee meeting of 19 November 2018 Part I Public be confirmed as a true and correct record.

Clause 2-19 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 Tangi Utikere.

3-19

Business Continuity Planning, PNCC update

Memorandum, dated 29 January 2019 presented by the Head of Emergency Management, Stewart Davies.

Moved Vaughan Dennison, seconded Bruno Petrenas.

The COMMITTEE RESOLVED

1. That the Audit & Risk Committee note the report dated 29 January 2019 and titled `Business Continuity Planning, PNCC update’, the programme for and progress of the Business Continuity Planning within the organisation.

2. That Business Continuity Planning update be reported to the Audit and Risk Committee 6 monthly.

Clause 3-19 above was carried 15 votes to 0, the voting being as follows:

For:

4-19

Risk Management Report February 2019

Memorandum, dated 16 January 2019 presented by the Risk Manager, Miles Crawford.

Moved Vaughan Dennison, seconded Bruno Petrenas.

The COMMITTEE RESOLVED

1. That the Audit and Risk Committee note developments for risk management and reporting.

2. That the Audit and Risk Committee note Management’s progress made to the strategic and operational risk profiles

Clause 4-19 above was carried 14 votes to 0, with 1 abstention, 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, Leonie Hapeta, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Tangi Utikere.

Abstained:

Councillor Lew Findlay QSM.

5-19

Health and Safety Report - Oct - Dec 2018

Memorandum, dated 18 January 2019 from the Human Resources Manager, Wayne Wilson.

Councillor Leonie Hapeta left the meeting at 11.23am

Moved Karen Naylor, seconded Lorna Johnson.

The COMMITTEE RESOLVED

1. That the Audit and Risk Committee note the information contained within this report.

Councillor Leonie Hapeta entered the meeting at 11.33am

Clause 5-19 above was carried 13 votes to 0, with 2 abstentions, 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, Jim Jefferies, Lorna Johnson, Duncan McCann, Karen Naylor, Bruno Petrenas and Tangi Utikere.

Abstained:

Councillors Lew Findlay QSM and Leonie Hapeta.

6-19

2018/19 Internal Audit Plan 6-Month Progress Update

Memorandum, dated 15 January 2019 presented by the Senior Internal Auditor, Vivian Watene.

Moved Vaughan Dennison, seconded Leonie Hapeta.

The COMMITTEE RESOLVED

1. That the Committee note the internal audit progress made against the 2018/19 Internal Audit Plan in the Memorandum titled `2018/19 Internal Audit Plan 6-Month Progress Update’ dated 15 January 2019, and its five Appendixes.

Clause 6-19 above was carried 14 votes to 0, with 1 abstention, the voting being as follows:

For:

Abstained:

Councillor Lew Findlay QSM.

7-19

Library Building - Risk Assessment

Memorandum, dated 1 February 2019 presented by the Property Manager, Bryce Hosking and the Chief Infrastructure Officer, Tom Williams.

Moved Vaughan Dennison, seconded Lorna Johnson.

The COMMITTEE RECOMMENDS

1. That Council receive the Risk Assessments for the Central Library Service’s options regarding the occupation of the library building.

Clause 7-19 above was carried 14 votes to 0, with 1 abstention, the voting being as follows:

For:

Abstained:

Councillor Lew Findlay QSM.

8-19	Committee Work Schedule Elected members were of the view that Part II details that became public should be reported in a more robust, detailed and transparent way. It was agreed that the timeframe to provide for two years would be too short to be available by the February Council meeting.
	Moved Vaughan Dennison, seconded Bruno Petrenas. The COMMITTEE RECOMMENDS 1. That the Audit and Risk Committee receive its Work Schedule dated February 2019.
	Clause 8-19 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 Tangi Utikere.
	Moved Grant Smith, seconded Vaughan Dennison. 2. That the Chief Executive be instructed to report on all Committee/Council Part II matters that have been transferred to Part I (over the last 12 months), the establishment of a public register of transferred items, and a review of the process; such report to be presented to the next Council meeting.
	Clause 8-19 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 Tangi Utikere.
	Moved Vaughan Dennison, seconded Susan Baty. 3. That the balance of this term of Council (Committee/Council Part II matters to be transferred into Part I) be reported to the March 2019 Council meeting.
	Clause 8-19 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 Tangi Utikere.

The meeting finished at 12.12pm

Confirmed 6 May 2019

Chairperson

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Audit and Risk Committee

MEETING DATE: 6 May 2019

TITLE: Health and Safety Report Jan - Mar 2019

DATE: 29 April 2019

Presented By: Wayne Wilson, Human Resources Manager, Headquarters

APPROVED BY: Heather Shotter, Chief Executive

RECOMMENDATION(S) TO Audit and Risk Committee

1. That the Audit and Risk Committee note the information contained within the memorandum titled `Health and Safety Report Jan – Mar 2019’ dated 29 April 2019.

1. Report

This report covers the period 1 January to 31 March 2019. The information included in this report is discussed at the appropriate H&S Committee, the Main H&S Committee and Management Team.

Hazards, Incidents and Near Misses Reported

Quarter	Jun 17	Sep 17	Dec 17	Mar 18	Jun 18	Sep 18	Dec 18	Mar 19
Hazards	7	4	3	3	6	31	2	4
Incidents	20	58	12	33	37	21	36	24
Near Misses	28	27	8	23	18	25	20	26
Lost Time (days)	140	129.15	133.06	93.8	39.1	45.08	49	118.46
L.T. Injuries	9	17	9	12	8	8	6	12

Lost Time Injuries were higher in the quarter with a number of injuries requiring short periods of time off work. We are notified of contractor Incidents, but the reporting and recording of these is not consistent. We are working with our main contractors to rectify this.

Manual Handling

A comparative study was undertaken between the Council and Fonterra Research relating to the effectiveness of manual handling training. The main difference, which we have incorporated into our current training, is that we randomly select the groups whereas Fonterra Research undertook training in work teams. This enhanced the uptake of the stretching exercises in the work teams. Secondly, we analysed the past 2 years of injuries recorded as manual handling. These injuries accounted for 25% of injuries and 25% of lost time. There are three main causes; lifting, slips, and stepping down from height.

Steps taken to reduce the incidence:

Lifting – 157 staff undertaking training in April and May, two-person lift stickers placed on equipment requiring 2 people.

Slips – store reviewing footwear – a high proportion of slips occur in wet weather.

Stepping down from height (ladders or out of vehicles) – reminders at tailgate meetings.

Investigations

No investigations required this quarter.

Previous Investigations

Number of Recommendations 24

Number of Recommendations Completed 24

External Review

The formal external review of our H&S processes and procedures was completed by Safe On Site in April. A programme of work has been developed to address the suggestions and recommendations of the report. The number of recommendations and suggestions from the Audit is 29. 48 actions have been identified in the plan to address the issues.

Status of Actions High Medium Low

Completed 6 9 1

On-going action (completed but continues) 2 8

In Progress 9 3

Awaiting completion of a prerequisite action 6 5

On Hold (Timing) 3

The majority of the actions that are awaiting completion of a prerequisite action relate to standardised standard operating procedures.

Training

Attached is a report on H&S specific training undertaken this calendar year. This captures most of the training provided but not all, as H&S can be a component of other courses and it does not capture the on-the-job instruction type learning. The highlighted courses are those that new employees undertake. Not included is the H&S induction that all new staff receive.

Wellness

The Activate Wellness Gym data is not available for this period.

Annual leave.

Dec 17	Mar 18	Jun 18	Sep 18	Dec 18	Mar 19
2277	2433	1556	1660	3287	2051

Turnover for the quarter of permanent staff was 18 or 3.2%. The annual turnover rate was 12.9%. Normally we measure employee initiated turnover only which is 10.4%. Employee initiated turnover are resignations and retirements. Our benchmark is 12% which ensures that we have sufficient turnover to refresh the organisation.

Date	Dec 17	Mar 18	Jun 18	Sep 18	Dec 18	Mar 19
Employee Initiated	14	20	11	12	20	15
Other	2	3	0	0	11	3

Attachment One is the H&S report for the quarter that is discussed at H&S committees.

Event	Jun 18	Sep 18	Dec 18	Mar 19
Accident and Event Investigation				14
Arboriculture Workplace Assessor		1
Blood Levels Lead Based Paint
BRANZ Bracing Seminar
Brushwood Chipper Training
Business First Line Management L4
Chainsaws Use and Safety	8	6
Chemical Handling & Spill Management			1
Concrete Saw		20
Collections Induction
Confined Space Entry		11
Contractor Pre-Qualification	53
Customer Conflict Awareness	30
Dealing with Critical Incidents	35	11
Dealing with Difficult People
Dealing with Mental Health			23
Defibrillator Training			8
Drainlaying		2
Driver Assessment Training				28
Driver’s License – Class 1R (Restricted)			1
Driver’s License – Class 2L (Learners)	1
Driver’s License – Class 5L (Learners)
Driver’s License – Class 4L (Learners)
Driver’s License – Class 1 (Car License)	4	1		1
Driver’s License – Class 2 (Medium Rigid Vehicle)	1	1	1	2
Driver’s License – Class 3 (Medium Combination)			1
Driver’s License – Class 4 (Heavy Rigid)	2		1	1
Driver’s License – Class 5 (Heavy Combination)			1
Driver’s License – Class 6 (Motorcycle)			1
Drug Awareness Training for Managers				8
Electric Glass Truck		7
Electric Rearpacker Truck		7
Electrofusion Certificate	13
Elevated Working Platform (Scissor Lift and Boom)		4
Embracing Change		74
Emergency Management CIMS4
Endorsement (D) Dangerous Goods
Endorsement (F) Forklift
Endorsement (R) Roller	2	1	1	1
Endorsement (T) Tracks	2	1	1	1
Endorsement (W) Wheeled Special Type	2	1	1	1
Fall Arrest System Refresher, Rope & Abseiling Refresher
First Aid Certificate	7	30	9	5
Forklift OSH Certificate		1	4
Growsafe	12
Harassment Prevention and Awareness			26	35
Height Safety Advanced	3
Height Safety Intro			1
H&S Essentials	19
H&S Rep Stage 1	3	3
H&S Rep Stage 2	1
How To: Tell Your Story
ID Plant & Trees	1	3
Internal Training – Basic Asbestos Induction
Internal Training – Easy Start Orientation	4
Internal Training - Collections Induction Video
Internal Training – Forklift SOP
Internal Training – Notifiable Events
Kerbside Collection Traffic Leader	3
Managing Mental Health		30
Managing Performance Masterclass
Move at Work (Manual Handling)
NC in Sports Turf L5
NZ Certificate in Infrastructure Level 2
Other PCBUs – Dealing with Sub/Contractors			36
Playground Safety Inspections Level 2
Quad Bike Training		14
Resilience	15	11	10
Safe Work Zones
Site Induction Training: Depot	1
Site Induction Training: MRF	1
STMS Level 1 – Site Traffic Management	3	6	2
TC1 – Basic Traffic Controller Level 1	4	5	2	1
Tractor and LUV Training Level 2
Truck Loader Crane/Hi Ab
WCTL (Waste Collection Traffic Leader)				4
Total Number of Events	26	24	20	13
Total Number of Staff Attending	230	253	131	102

· Highlighted Courses are for new staff, in addition all new staff complete a H&S induction.

2. 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?		No
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 in The action is: Providing a safe and healthy workplace
Contribution to strategic direction	Providing a healthy and safe workplace.

Attachments

H&S Dashboard Report Jan - Mar 2019 ⇩

PALMERSTON NORTH CITY COUNCIL

Report

TO: Audit and Risk Committee

MEETING DATE: 6 May 2019

TITLE: Surveillance in Public Space in the City

DATE: 5 April 2019

Presented By: John Annabell, Legal Counsel, Strategy & Planning

APPROVED BY: Sheryl Bryant, General Manager - Strategy & Planning

RECOMMENDATION(S) TO Audit and Risk Committee

1. That the memorandum titled “Surveillance in Public Space in the City” dated 5 April 2019, be noted and be received for information.

1. ISSUE

The Audit and Risk Committee issued the following instruction from its meeting held on 19 November 2018:

That the Chief Executive be instructed to report on PNCC compliance with the Privacy Act 1993 with regards to the use of surveillance in public space in the city.

2. BACKGROUND

The Council owns or operates a number of surveillance systems which operate in the public space or in buildings to which the public have access. The systems and numbers of cameras involved are listed below, noting that in some instances cameras also operate in space to which the public does not normally have access:

· Civic Administration Building (26 cameras approximately)

· Central City Carpark areas (24 cameras)

· Conference and Functions Centre (23 cameras)

· Central Energy Trust Arena (18 cameras)

· Water and Wastewater Treatment Plants (10 cameras)

· Albert Street Depot and Recycling Centre (11 cameras)

· Awapuni Resource Recovery Park (16 cameras)

· Central Library and Youth Space (currently 24 cameras but to be replaced with 44 cameras)

· Te Patikitiki Library (8 cameras)

· Roslyn Library (7 cameras are proposed)

· Wildbase Facility (8 cameras)

· The Square and Central Business Area (12 cameras)

· The Pound (15 cameras are proposed)

Broadly speaking, there has been substantial compliance with requirements of the Privacy Act 1993. In particular:

· Surveillance is undertaken for a valid purpose. To date, systems have been installed for reasons of site and property security and/or to protect staff and members of the public, so that that they can feel safer and to deter others from carrying out criminal activities. For Wildbase, reasons include animal and pest monitoring.

· The information derived from security cameras is retained for only a short period. Most systems store data for a specified number of days before the data is automatically deleted. A typical retention period is about one to two months. However, in appropriate instances, it may be possible to make longer term records relating to specific incidents.

· Security camera footage is disclosed or made available only to appropriate personnel. These personnel are staff members having specified responsibilities for the facility concerned. Footage has also been provided to the Police either to report criminal activity observed by Council staff or in response to a request from the Police. Very occasionally, information has been made available to members of the public requesting access to images held about themselves. Such requests are typically responded to by providing a supervised viewing of the relevant video footage but not permitting any recording to be made or handed over. In the case of cameras located in The Square and immediate business area, these are monitored by the Police, assisted by members of Safe City Hosts.

· The main deficiency, however, is compliance with the need to provide the public with notice that surveillance cameras are operating, as this has been undertaken only on a partial basis. Notices are included in The Square, Albert Street Depot, Arena 1 Grandstand and at some of the entrances to the Civic Administration Building. No notices are displayed at any of the other locations.

The above comments are based on the outcome of a preliminary review undertaken by myself in conjunction with the operators of the various systems identified above. However, a full audit of these systems has been initiated by a Council project team but this is still a work in progress at the time this memorandum was prepared.

The purpose of this fuller audit is to provide a basis for enhanced controls over the various systems so that they are more integrated and can be better managed from an information management and legal compliance point of view. It is also likely that surveillance systems may be extended in the near future, for example, to those branch libraries which at present have no coverage. Other possibilities include the use of cameras to facilitate research such as recording pedestrian traffic movements and the use of mobile cameras for security purposes at public events.

3. NEXT STEPS

Within the next three months, it is proposed to provide further notice about surveillance of public space by locating more notices near to the cameras concerned and on the Council’s website. As per the suggestions of the Office of the Privacy Commissioner, notices in the field will be relatively brief, but with more detailed information displayed on the Council’s website.

We also propose to develop guidelines which can be applied to both existing surveillance systems and any new surveillance systems that may be established. Such guidelines would be based on the requirements of privacy legislation. It is anticipated that these guidelines will be reported to the Executive Leadership Team for approval within the next three months, then further reported to the Committee for its information.

The further report to the Committee will also be able to comment on compliance information in more detail, given that a full audit of surveillance systems operated or owned by the Council will have been completed by that time.

4. 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 3: A Connected and Safe Community
The recommendations contribute to the outcomes of the Connected Community Strategy
The recommendations contribute to the achievement of action/actions in the Safe Community Plan The action is: To be a city where people feel safe and are safe.
Contribution to strategic direction	Surveillance systems contribute to a safe urban environment and crime prevention initiative.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Audit and Risk Committee

MEETING DATE: 6 May 2019

TITLE: AMP Update - Property Asset Management Planning

DATE: 29 March 2019

Presented By: Bryce Hosking, Property Manager, Infrastructure

Jono Ferguson-Pye, Senior Policy Planner, Strategy and Planning

APPROVED BY: Tom Williams, Chief Infrastructure Officer

Sheryl Bryant, General Manager - Strategy & Planning

RECOMMENDATION(S) TO Council

1. That the Audit and Risk Committee receives the memorandum titled “AMP Update – Property Asset Management Planning” dated 29 March 2019.

1. ISSUE

1.1 On 2 August 2018 the Audit and Risk Committee resolved (22-18) that the Property Manager report back to the Committee with an update on the progress of Asset Management Planning in the Property Division.

1.2 This was resolved through the following resolution:

‘May 2019 – AMP Update: asset management planning in the Property area/ proposed 2019/20 AMP update schedule for members consideration.’

1.3 The purpose of this memo is to address this resolution by providing an update on:

· An overview of the current AMPs for the Property Division.

· Provide an update of the extent to which the Property Division has progressed asset management planning since August 2018.

· Provide clarity about plans to improve the AMPs in the Property Division moving forward.

2. overview of the current asset management plans

General Observations

2.1 Council Officers have reviewed the current Property Division AMPs and make, in no particular order, the following assessment and comments:

· The current AMPs are a static snapshot in time as opposed to a live document that is constantly referred to and updated throughout its life.

· At the time of writing the AMP, the information within them is correct, however, they are not updated until being reviewed every 3-years as part of the LTP cycle.

· AMPs provide a sound general history of the property.

· AMPs provide an overview of the upcoming large capital spend forecasted.

· There is little information in the AMPs on scheduled and unscheduled maintenance, asset service schedules and end of life replacement.

· There is little information in the AMPs regarding the compliance and risk matters the property is subject to i.e. Asbestos, Seismic, or Reputational risk.

· AMPs are currently aligned to asset class. A good example of this is the Arena being classed as a recreational property. As such, it sits within the greater recreational AMP.

· AMPs each have a 2017 Property AMP Improvement Plan, however, very little work has been undertaken to progress these improvement plans.

· Current AMPs are not directly aligned with or reference Council’s vision, goals, and strategic direction.

· Current AMPs are silent on certain asset classes such as stormwater and wastewater infrastructure and talks to the building only.

Summary Comments

2.2 Overall the current AMPs for the Property Division are not fit for purpose and require significant improvement.

2.3 Improved AMPs are needed to better inform the budgeted programme of works and the Infrastructure Strategy that delivers on Council’s vision, goals, and strategic direction.

2.4 The Property Division is currently not resourced to undertake strategic asset management planning. This is due to a capacity issue and this requires a specific skill set over and above that of project managers and facilities management.

3. ASSET MANAGEMENT PLANNING SINCE AUGUST 2018

3.1 The organisation’s approach to asset management has been reviewed which has allowed for the assessment and comments in Section 2 of this report. The issue is the approach to asset management across the organisation has been siloed and AMPs have been shoe-horned into the strategic context rather than being derived in a way that aligns with the strategic context as they are being developed.

3.2 In reviewing the organisation wide approach to asset management and how this has been given effect to through the Infrastructure Unit, it became apparent to Council Officers that there has historically been a lack of resourcing and focus on asset management planning across the Council. The whole of the asset management approach is not broken. However, the maturity of the approach to assessment management varies across the different asset groups.

3.3 Acknowledging this, and reviewing the Infrastructure Unit’s structure, it is being proposed that a new Asset Planning Division (APD) is being set up within the Unit. The new APD seeks to deliver on the CEO’s goal of organisational transformation and on strategic Goal 5 to be a driven and enabling Council. The APD will work towards achieving these goals by ensuring asset management delivers improved accountability, sustainability, risk management, financial efficiency and optimised asset investment.

3.4 The proposed APD is in the process of being resourced currently, and once operational will seek to refocus the organisation’s approach to asset management, including our approach to developing AMPs. The new approach is expanded on in Section 4 of this report.

3.5 In addition to the above, KPMG have been commissioned to review Council’s facilities management operations and activities. This review will provide a series of recommendations as to the way forward to achieve an enhanced service delivery model suitable for the Council and the desired future state.

3.6 The enhanced service delivery model will also allow for prudent asset management to be integrated into FM service provision. For example, when a contract is conducting service work in one of our facilities they are also reporting on the condition of the asset at the same time.

3.7 These recommendations will help to inform the model of how we do asset and facilities management going forward, which will have a direct improvement on the content of our AMPs. KPMG’s report is due mid-May 2019.

4. Improving Asset Management Plans Moving Forward

4.1 The purpose of the proposed APD is to:

· To provide a corporate-wide asset management and planning function to the organisation.

· Provide an asset management function that develops an Asset Policy, Strategic Asset Management Plan (SAMP), Asset Management Plans (AMPs) and an Infrastructure Strategy (IS) that align with the organisation’s vision, goals and strategic direction.

· To provide an asset planning function that develops a budgeted programme of works informed by Asset Management Plans and the Infrastructure Strategy that delivers on Council’s vision, goals, and strategic direction. The programme of works needs to:

- Be better supported by robust business case analysis;

- Be better supported by thorough options analysis; and

- Provide high level costings and clarity regarding the scope of costing for programmes robust enough to feed into LTP programmes.

· To provide asset information intelligence that better informs asset management planning at the operational, tactical and strategic levels and asset planning when developing priorities for the programme of works.

4.2 The new Division will take a whole of organisation approach to asset management and separate the operational (present day focus) from the planning function (forward looking focus). This approach will ensure asset management is given appropriate priority and is not crowded out by operational demands. The APD will seek to make asset management an organisational responsibility, not just the responsibility of those managing the core business of assets daily, and avoid a siloed approach. The proposed structure of the APD includes the following teams:

· Asset Management Team: responsible for developing an Asset Policy, SAMP, AMPs and an IS that aligns with the organisation’s vision, goals and strategic direction;

· Asset Planning Team: responsible for developing a costed and scoped programme of works informed by AMPs and IS; and

· Asset Information Team: responsible for providing asset information (data) intelligence that better informs development of AMPs and the programme of works.

4.3 The long-term benefits to the Council and the community of effective asset management include improved accountability, sustainability, risk management, financial efficiency and optimised asset investment.

4.4 In the short-term, the APD is commissioning an independent Asset Management Maturity Assessment and a review of AMP Improvement Plans (2017). The purpose of these reviews is to identify gaps in the Council’s approach to asset management and to better understand and prioritise tasks contained in AMP Improvement Plans.

5. NEXT STEPS

5.1 The APD to commission an independent Asset Management Maturity Assessment.

5.2 The APD to commission an independent review of the 2017 AMP Improvement Plans.

5.3 The APD to develop first Draft Asset Management Plans (for the 2021/31 LTP) and report to a Councillor workshop in December 2019.

5.4 Recommendations from the KPMG report to feed into the Property AMP being developed for the 2021 LTP.

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 in a plan under the Driven and Enabling Council Strategy The action is: There are no specific actions associated with this goal, however one of the aspirations of Goal 5 is “to meet, beyond expectations, our responsibility to manage and renew the infrastructure our community relies on for its health and wellbeing.”
Contribution to strategic direction	The establishment of the APD and the tasks described under the heading ‘Next Steps’ will assist governance to efficiently and effectively deliver the Goal 5 aspiration to meet, beyond expectations, our responsibility to manage and renew the infrastructure our community relies on for its health and wellbeing.

Attachments

Nil

PALMERSTON NORTH CITY COUNCIL

Memorandum

TO: Audit and Risk Committee

MEETING DATE: 6 May 2019

TITLE: AMP Update - Wastewater Asset Management Planning

DATE: 29 April 2019

Presented By: Robert van Bentum, Transport & Infrastructure Manager, Infrastructure

APPROVED BY: Tom Williams, Chief Infrastructure Officer

RECOMMENDATION(S) TO Council

1. That the That the Audit and Risk Committee receives the memorandum titled “AMP Update – Wastewater Asset Management Planning” dated 29 April 2019.

1. ISSUE

1.1 Council’s Audit & Risk Committee of 20 August 2018 resolved “that a rolling audit of the Asset Management Plans be established and that this item remain on the Committee’s work schedule until they are completed”. A reporting schedule has been established and to date the following have been presented to the Audit and Risk Committee:

· A general overview of AM planning has been presented the Committee - 20 August 2018.

· An update on the condition and performance of the footpaths - 19 November 2018.

1.2 The reporting schedule for the committee included a report on the condition and performance of the three water assets. Given the scope of the three waters area and the significant value and complexity of the assets being managed, separate reports for each of the three water’s activities is now proposed. This report deals with the condition and performance of the wastewater assets under the following headings:

· Overview of the wastewater network assets

· Current asset condition and performance understanding

· Current renewal strategy and priorities

· Improvement to the renewal strategy

· Summary

2. overview of the WASTEWATER Network ASSETS

2.1 The wastewater system comprises the following key asset components:

· 418 km of pipeline, 5,679 manholes and 27,800 lateral connections serving Asshurst, Aokautere, Longburn, Linton, Bunnythorpe and the city

· 35 net pumping stations

· Tertiary treatment facility at Totara Road with primary treatment and buffer storage via two oxidation ponds at Ashhurst

· Replacement value of the wastewater assets of $291M.

2.2 Figure 1 below illustrates the extent of the network with the major trunk mains highlighted.

2.3 The wastewater network dates from 1890 however around 70% of the network has been installed since 1960 with slightly over half the network made up of concrete pipes with smaller lengths of earthenware and more modern PVC pipes (refer figures 2 and 3).

2.4 The life expectancy of wastewater pipes and buildings and civil structures is typically 100 – 175 years in normal conditions. However mechanical and electrical asset components in pump stations and treatment plant have much shorter expected lives of between 10 -35 years. Council has been undertaking routine inspections particularly of buried pipeline assets to determine pipe condition and the urgency and level of renewals.

2.5 Asset condition is graded on a scale of 1 to 5 (excellent to poor) based on guidelines from the International Infrastructure Management Manual. The condition inspections undertaken to date indicate most of the network is in good physical condition with pipe deterioration having minimum impact on performance. This reflects the fact that the bulk of the pipes are in the young to middle part of their asset lifecycle.

Figure 1 Extent of the Wastewater Network

Figure 2 Age Profile of the Wastewater Network

Figure 3 Material Composition of the Pipe Network

3. current asset condition and performance Understanding

3.1 The collection of asset condition information including CCTV inspection data is critical to the management of the assets and the prediction of the likely renewal requirements. Current modelling of renewal funding highlights that the length of the pipe network reaching old age is steadily increasing. Additional operational intelligence is identifying other isolated parts of the network where there is accelerated deterioration due to local flow conditions (pump station rising mains) or other faults such as shallow grades.

3.2 Over the last 10 years an average of around 0.3 to 0.4% of the network has been renewed per year (1.5 km). With the aging of the network and other isolated deterioration, the portion of the network which requires renewal is increasing. If the pipes are not renewed, then higher operating and maintenance costs will be incurred to manage and respond to higher blockage and failure rates. Maintaining performance within target levels of service will require steadily increasing investment. Renewal planning undertaken for the 2018-28 LTP, predicts an increase in the funding required over the next 10 years to enable renewal of 2-3 km of pipe each year. The quantum of network renewals required is expected to go on increasing through to around 2070, subject to more detailed work on pipe deterioration modelling and expected remaining lives.

Year	18/19	19/20	20/21	21/22	22/23	23/24	24/25	25/26	26/27	27/28
$’000	1600	1845	2097	2148	2199	2254	2313	2373	2437	2505

Table 1 Renewal Funding for Wastewater Network – 2018-28 LTP

3.3 For other asset groups such as pump stations, while the basic pump station well and civil structure is in good condition, the electrical and mechanical components are needing to be replaced both due to age but also due to obsolescence, with replacement parts no longer available. Mechanical, electrical and control equipment in a significant number of pump stations installed in the 1990s is now reaching the end of its life. To ensure on-going reliability an enhanced level of renewal spending is required over the next 3 to 5 years.

3.4 Effective management of wastewater assets is designed to ensure that the assets are maintained and renewed to meet the required level of wastewater services committed to by Council. The levels of service are confirmed and adopted by Council through the 10-year Long Term Plan every 10 years. The current 2018-28 10-year plan includes the following specific KPIs relevant to the asset management of the wastewater activity:

· Dry weather overflows from Council’s wastewater system (Target is no more than 1 per 1000 connections per year)

· Compliance with resource consents for discharge from Council’s wastewater system (Target is zero non-compliances)

· Complaints in respect of the wastewater system related to odour, network faults and blockages (Target is no more than 15 per 1000 connections)

· A 30-year Asset Management Plan is in place for the wastewater activity

3.5 For the 2018-19 year, the numbers of dry weather overflows are tracking below the target. In addition, apart from a technical issue related to sampling for the Ashhurst wastewater ponds, there have also been no non-compliances. The only KPI which is not likely to be achieved is the complaints target and this relates to the very broad definition of complaint which records a wide variety of matters which are not related to any network deficiency.

3.6 A rise in the rate of blockages during the period 2012/13 to 2017/18 has been traced to third party damage from the Ultra-Fast broadband programme rollout in the city. Excluding this specific issue, the level of blockages and faults is within expected levels for a network of this size.

Figure 4 Lateral Blockage Rate

3.7 While compliance with the LTP performance indicators indicates effective asset management, there have been evidence of issues and concerns with the performance and reliability of some wastewater assets which highlight the need for the development of an optimised asset management strategy. Specific areas of concern include:

3.8 Wet Weather Overflows: The increasing frequency of wet weather overflows due to significant stormwater inflow and infiltration to the wastewater network. The condition of the network is such that with an increasing incidence of high intensity rainfall events, more frequent wet weather overflows can be expected. This is particularly an issue in some of the smaller communities of Longburn and Bunnythorpe with limited wet weather storage as well as lower parts of the city where the large wastewater trunk mains are surcharged during wet weather events.

3.9 Single Point of Failure Vulnerability. All the city’s wastewater is now treated through the Totara Road Wastewater Treatment Plant. The critical nature of reliable plant performance has been highlighted recently by failures of some key items of mechanical plant and equipment including the back-up generator. The consequences of failure include a significant discharge non-compliance and/or wet weather overflow from the network neither of which is considered acceptable.

3.10 Wet Weather Network Capacity Constraints: The need for pro-active renewal and upgrade of the critical network assets including large capacity sewer mains, sewer rising mains and wastewater pump stations is highlighted by the increasing incidence of wet weather overflows and surcharging. Council is pursuing several strategies such as implementing pressure sewers, increasing wet weather storage, and looking to identify and address stormwater inflow at source under a dedicated I&I programme. Renewal of the sewer network will remain a key approach to limit increasing wet weather flows.

3.11 Isolated Failures in the Trunk Network: While the average age of the network based on the known date of installation, indicates that most of the network has significant residual life, there have been several isolated failures in key parts of the network indicating a need for more detailed and complete condition assessment. This will confirm the extent of additional renewal funding required for the trunk network.

4. Wastewater Renewal Strategy and Priorities

4.1 The key objective of the current renewal strategy is to maintain the overall condition and service potential of the network and treatment plant. This is achieved by renewing the assets which have either reached the end of their functional life (non-critical) or before the end of the asset’s life where failure would result in unacceptable consequences (critical).

4.2 The approach to renewals is divided into non-critical and critical assets based on the following distinction and definition:

· Non-critical assets are those which can be allowed to fail before they are renewed on the basis that the consequences of failure are very localised and repairs can be undertaken in a cost-effective and timely manner with little impact on the community served

· Critical assets are those which cannot be allowed to fail based on the significant consequences of failure (e.g. consent non-compliance, public health) impacting large numbers of customers and repairs require specialist external resources which cannot be completed without significant delay

4.3 Based on this objective the key elements of the current renewal programme include:

· Non-critical: Pipe network renewals driven by condition inspection or operational information which identify problems such as root ingress, pipe blockages, pipe collapse resulting in overflows, loss of service and/or high levels of maintenance

· Non-critical: Minor pump station mechanical, electrical and control equipment renewal in response to unscheduled outages requiring unscheduled repairs and maintenance

· Critical: Pro-active scheduled renewal of large diameter mains (gravity and pumped) where condition inspections identify severe pipe deterioration or defects e.g. Western Trunk Sewer / Relining of Maxwell Trunk Sewer

· Critical: Pro-active renewal of Totara Road WWTP and major network pump station mechanical, electrical and control equipment renewals based on regular condition assessments with renewal timing scheduled prior to end of life

· Critical: Renewal of back-up generation and electrical power supply to ensure continuity of services during power outages.

4.4 In respect of the critical assets the understanding of asset condition is continuously developing as better information is obtained on the condition of the entire asset portfolio. With respect to the network pump stations, recent detailed condition assessments have identified a significant backlog of renewals, to replace components which are coming to the end of their life.

4.5 Renewal funding for the wastewater treatment plant to date has been largely focussed on renewal of the major mechanical components such as pumps and screens. Condition information on the large number of smaller mechanical and electrical components has been more limited and as this has been improved over the last year, a considerable backlog in respect of renewal has emerged.

4.6 It has become clear that levels of investment in critical plant and equipment renewal must increase significantly for the next few years. The scoping of the extent and detail of the additional renewal work required is on-going.

5. improvements to the renewal strategy

5.1 It is acknowledged that the current approach to renewal planning for the wastewater activity cannot provide the necessary certainty around renewal funding requirements nor the assurance that renewals have been optimised. The strategy for improvement is based around two key elements namely:

· Implement an organisational focus on asset management planning through the proposed establishment of the Assets and Planning Division within the Infrastructure Unit

· Invest in enhanced condition assessment and performance modelling to inform optimised renewal planning

5.2 Organisational Focus on Asset Management Planning

5.2.1 In reviewing the organisation wide approach to asset management and how this has been given effect to through the Infrastructure Unit, it became apparent to Council Officers that there has historically been a lack of resourcing and focus on asset management planning across the Council. While the whole of the asset management approach is not broken, the maturity of the asset management approach varies across the different asset groups. For example, the maturity of the asset management approach for wastewater assets is well advanced compared to property assets.

5.2.2 The proposed new Assets and Planning Division (APD) will take a whole of organisation approach to asset management and separate the operational (present day focus) from the planning function (forward looking focus). This approach will ensure asset management is given appropriate priority and is not crowded out by operational demands. The APD will seek to make asset management an organisational responsibility, not just the responsibility of those managing the core business of assets daily, and avoid a siloed approach.

5.2.3 The proposed APD is in the process of being resourced and once operational will seek to refocus the organisation’s approach to asset management, including our approach to developing the renewals programme for wastewater associated with AMPs.

5.3 Condition Assessment and Performance Modelling

5.3.1 Recent unexpected plant and equipment asset failures has identified the on-going need for investment in a continuous process of asset condition assessment. Early work started on developing 5 year rolling plant and equipment renewal plans will be extended to all wastewater asset groups. Council staff as well as contractors will be required to record and update asset condition as part of normal operation providing updated estimates of optimised remaining life.

5.3.2 A greater focus will be given to planning for renewal of critical assets to ensure that renewals are undertaken in a timely manner to limit the risk of major failure in any part of the system. The planning will extend to back-up systems such as generators and standby plant and equipment to ensure these are reliable and can operated when required.

5.3.3 Significant emphasis will be given to advancing multiple streams of work targeting reducing stormwater inflow and infiltration into the network, given that wet weather flows are the single biggest factor impacting conveyance, pumping and treatment capacity and any uncontrolled or consented releases of wastewater into the environment.

5.3.4 Use improved asset condition information and network and treatment plant modelling to identify the priorities for renewal funding so that Council can make choices about the level of renewal funding with the knowledge of the risks associated with not renewing specific infrastructure in a timely manner.

6. summary

6.1 Over the past 10 years around $14.6m has been spent on renewal of wastewater assets, represented some 98% of the budgeted funding collected by Council. While most of the wastewater network and facilities have been assessed as being in good physical condition, operational events and more detailed asset condition inspection information have identified some asset groups for which the risk of failure and the likelihood of significant negative impacts on levels of service compliance is high.

6.2 With more pipes approaching the latter part of their life cycle and the identified deficit in respect of plant and equipment renewals, increasing renewal investment requirements is certain. A significant increase in the next 2 to 3 years to address a renewal deficit in the plant and equipment assets is urgently required. The extent of future renewal funding increases particularly for pipeline assets is more uncertain and depends on improved data on asset condition as well as modelling of any network capacity constraints.

6.3 The establishment of the Assets and Planning Division will enable appropriate priority and focus to be given to asset management. This will be essential if Council is to move from the current largely descriptive Asset Management Plans to optimised asset management planning which consider lifecycle operation and maintenance costs as well as appropriate risk assessments to develop a range of alternative renewal investment profiles for consideration by Council.

7. 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 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: Planning for the renewal of the wastewater network and treatment facilities.
Contribution to strategic direction	Asset management planning for renewal of the wastewater system contributes to the community being provided with a safe and reliable collection, treatment and disposal of wastewater from residential and commercial properties in the city.

Attachments

Nil

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

1.	Appendix A Internal Audit Schedule ⇩
2.	Appendix B External Audit Schedule ⇩