Plains Water Supply Advisory Board 27 May 2016

PLAINS WATER SUPPLY ADVISORY BOARD MEETING FRIDAY, 27 MAY 2016 AGENDA

Meeting to be held in Committee Room 1,

Civic Centre, Commerce Street, Whakatane

at 10:00 am

Marty Grenfell CHIEF EXECUTIVE

20 May 2016

WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

TABLE OF CONTENTS

ITEM SUBJECT PAGE NO

1 Membership ...... 4

2 Apologies ...... 4

3 Announcements ...... 4

4 Public Forum ...... 5

5 Confirmation of Minutes ...... 6

5.1 Plains Water Supply Advisory Board Minutes 18 March 2016 ...... 6

6 Reports ...... 12

6.1 Action Sheet – Council 21 April 2016 ...... 12

6.2 Plains Water Scheme – Water Services Report from 1 July 2015 to 30 April 2016 ...... 13

6.2.1 Appendix 1 - Map of Pahipoto and Nga Maihi Indicated boundaries for Te Teko water Scheme ...... 18

6.2.2 Appendix 2 - Submission to Annual Plan 2016-17 for Plains Water Supply Advisory Board ...... 20

6.2.3 Appendix 3 - Edgecumbe and Te Teko Water Supplies Report to Extraordinary Council 11 May 2016 ...... 25 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

1 Membership

W N Checkley (Chairperson)

B Woods (Deputy Chairperson)

Councillor R N Orr

Councillor G F van Beek

Rangitāiki Community Board Member G Bourk

R Barkla

W Geddes (Alternate Member S Geddes)

W James

G Smeaton 2 Apologies

No apologies have been received at the time of compiling the agenda. 3 Announcements

Page 4 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

4 Public Forum

The Council has set aside time for members of the public to speak in the public forum at the commencement of each Council, Committee, Sub-committee and Community Board meeting (up to 30 minutes) when these meetings are open to the public. Each speaker during the public forum section of a meeting, may speak for three minutes. Permission of the Chairperson is required for any person wishing to speak at the public forum.

The public forum procedure does not apply in respect of any hearing, including the hearing of submissions where the local authority, committee or subcommittee sits in a quasi-judicial capacity.

With the permission of the chairperson, members may ask questions of speakers during the period reserved for public forum. If permitted by the chairperson, questions by members are to be confined to obtaining information or clarification on matters raised by the speaker.

Page 5 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

5 Confirmation of Minutes

5 Confirmation of Minutes 5.1 Plains Water Supply Advisory Board Minutes 18 March 2016

Details of PLAINS WATER SUPPLY ADVISORY BOARD MEETING HELD Meeting: IN COMMITTEE ROOM 1, CIVIC CENTRE, WHAKATĀNE ON FRIDAY, 18 MARCH 2016 COMMENCING AT 10:00 AM

Present: B Woods (Chairperson), Councillors R N Orr and G F van Beek, Rangitāiki Community Board Member G Bourk, Messrs R Barkla, W Checkley, W James and G Smeaton

In Attendance: M Grenfell (Chief Executive), D C Bewley (General Manager Planning, Regulatory and Corporate Services), H Barnes (General Manager Finance), S Agas (Manager Planning and Projects - Three Waters ), and C B Hair (Administration Officer Policy)

Apologies: None

Visitors: W Geddes and S Geddes

1. APPOINTMENT TO PLAINS WATER SUPPLY ADVISORY BOARD

Refer to pages 40-42 of the agenda.

RESOLVED:

1. THAT the report "Appointment To Plains Water Supply Advisory Board" be received; and 2. THAT the Plains Water Supply Advisory Board recommends to Council that the nomination of Winifred (Wini) Geddes to the Board be approved, with Simon Geddes as her alternate.

Woods/Checkley CARRIED

2. CONFIRMATION OF MINUTES: 20.12.1.1

Refer to pages 5-7 of the agenda.

RESOLVED:

THAT the minutes of the Plains Water Supply Advisory Board meeting held on 20 November 2015 be confirmed as a true and correct record.

Barkla/Wilson CARRIED

3. PLAINS WATER SCHEME – EDGECUMBE AND TE TEKO WATER SUPPLIES: 20.12.1

Refer to pages 8-25 of the agenda and tabled document 25A-B.

Page 6 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

5.1 Plains Water Supply Advisory Board Minutes 18 March 2016 (Cont.)

The General Manager Planning, Regulatory and Corporate Services spoke to his report and set out the five options that the Council was consulting on during the Annual Plan submission process to improve the quality of water supplied to Edgecumbe and Te Teko communities. He stated that while the LTP included a project to supply water from the Paul Road bore to Edgecumbe, the budget for this project had increased from $2.45 million to $3.9 million due to additional system requirements and to future-proof the supply. He stated that the Ministry of Health subsidy of $2.02 million was available for this project but this was due to expire in January 2017, although an extension had been applied for. He stated that during the consultation process as part of the resource consent applications for Paul Road bore to increase the water take for future expansion of the scheme, concerns were raised by Te Teko hapū about their community’s water supply and the Council was considering options to satisfy their concerns.

Five possible options had been put forward for consideration and the Council is seeking community views with consultation opening on 21 March to 22 April 2016 as all of the options developed would have rating implications for both Plains Water users and others on reticulated water schemes in the District.

The General Manager Planning, Regulatory and Corporate Services tabled a draft copy of the Consultation Document approved by the Council on 17 March 2016 to be delivered to all households in the District (refer to tabled document 25A-B) which set out the five different options and the advantages and disadvantages of each option.

3.1. Te Teko Water Supply

Discussion focused on the reasons why the Te Teko community seemed to favour having water supplied by the Paul Road bore (Option 3) instead of being supplied by the Tahuna Road bore (Option 2), given that the water from the Tahuna Road bore met the Drinking Water Standards for arsenic levels, was of high quality and would be a considerably cheaper project, by $750,000, and therefore a more affordable option. While it would require some modifications to the pipe network to isolate the system from the Braemar/Johnson Road water supply and some cost to secure the bore, Option 2 was seen as the most cost effective option and was the preferred option of the Council.

Mrs Geddes advised that there were cultural as well as territorial reasons for the Te Teko community requesting that the water for Te Teko be supplied from the Paul Road bore. She stated that the existing boundaries of the Te Teko township excluded a number of properties around Galatea Road, approximately 250 people, and it was important that these people be supplied with water.

The Manager Planning and Projects - Three Waters advised that all cost estimates for each option was based on the existing Te Teko water supply boundaries and if these boundaries were to expand the cost estimates would increase. He stated that the costs would be must less if the Tahuna Road bore was used to provide water to an expanded Te Teko scheme.

It was noted that there were a number of issues that needed to be considered. Firstly the need for quality water that met the drinking water standards, secondly securing the source of that water and the cost involved in supplying water from various sources and thirdly the possible extension of the Te Teko water supply boundaries, which would have budget implications for each of the options.

Mr Geddes advised that a hui would be held with the Te Teko community shortly, in conjunction with staff from the Council, to define the boundaries of the Te Teko water scheme. It was agreed to invite the Rangitāiki Ward Councillors to the hui where the definition of the boundary for Te Teko would

Page 7 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

5.1 Plains Water Supply Advisory Board Minutes 18 March 2016 (Cont.)

be discussed, as well as the source of the water. It was noted that the Chairperson of the Rangitāiki Community Board was looking to schedule community meetings in the Rangitāiki Ward during the Annual Plan consultation process and would be interested in attending.

3.2. Who pays for the improvements to Edgecumbe and Te Teko water supplies?

The issue of paying for good quality drinking water to Edgecumbe and Te Teko communities was discussed thoroughly. It was noted that while the draft Consultation Document had set out the various advantages and disadvantages for each scheme it did not provide sufficient detailed information on the cost impact of improvements to the Edgecumbe and Te Teko water supplies on those ratepayers who would be expected to pay for these improvements. The Chief Executive advised that the way Council services were funded meant that the wider community would help cover the costs of these improvements, and even with a subsidy from the Ministry of Health, the proposed improvements would be unaffordable to those communities if the costs were to fall on them alone.

The General Manager Finance advised that the improvements to the Edgecumbe water supply would impact on ratepayers who were part of the equalised water schemes including Whakatāne/Ōhope, Tāneatua, Matatā and Rūātoki. The improvements to the Te Teko water supply, as Te Teko was part of the Plains Water Scheme, would impact on all those paying water rates to this scheme.

In response to questioning as to whether a subsidy might be available for the improvements to the Te Teko water supply, staff advised that the Ministry of Health scheme had closed and there was no possibility of receiving funding at this point in time. The Bay of Plenty Regional Council had stated that they did not subsidise water schemes. However while the Regional Council was currently reviewing their policy in relation to infrastructure support, they had advised that they would not be offering any financial subsidy until their policy process had been completed.

In response to questioning the Manager Planning and Projects - Three Waters advised that the current costings for the options had taken into account the previous Council decisions that the construction of a pipe from Paul Road bore to the McDonald Road intersection would be of sufficient size to accommodate future growth in the eastern areas of the scheme and that the Paul Road bore would not be providing an emergency supply to Whakatāne/Ōhope water scheme.

The General Manager Finance advised that there was a need to develop a philosophy of paying for water schemes prior to determining costs e.g. if Te Teko cannot be physically isolated from the Plains Water Scheme then the costs for Te Teko cannot be separated and the users of the Plains Water Scheme would therefore contribute towards the costs of any improvements. She stated that the rates modelling would therefore be based on the existing funding structure, although it may be that the Council would need to review this structure to help spread costs more evenly in the future. Similarly equalisation of Edgecumbe’s water supply would enable the costs of metering to be spread over all schemes that were equalised. The General Manager Finance stated that she has modelled increasing the UAC from $120 to $130. However, there were many options that could be modelled and it came down to clearly establishing the philosophy before the options can be developed with any certainty.

Discussion focused on whether Edgecumbe should continue to be part of an equalised scheme. It was noted that Edgecumbe currently used water at a rate around two times higher per person than other comparable schemes in the District and the source of the leaks had never been clearly located to explain whether this higher level of consumption was genuine use, or came from water leaks from private property or from Council water pipes. As part of the improvements to Edgecumbe’s water supply, the Council was proposing to install water meters for Edgecumbe properties which would help identify the source of any leaks, and promote a more efficient use of the resource, which was

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5.1 Plains Water Supply Advisory Board Minutes 18 March 2016 (Cont.)

a requirement of the consent conditions. It was noted that the equalisation of the water supplies meant that Edgecumbe users would be charged a fixed connection charge and then a variable water by meter charge that would be $1.23 per cubic metre. It was noted that Edgecumbe had a maximum daily entitlement as it was considered a bulk user, like a large farm, and had never gone over that daily entitlement.

The Plains Water Supply Advisory Board agreed on the following broad principles:

Support for the development of the Paul Road bore to supply Edgecumbe with the use of the subsidy money from the Ministry of Health Support for the future proofing of the pipe size from Paul Road bore to the McDonald Road/SH2 intersection Support for the decision to not use Paul Road bore as an emergency water supply for the Whakatāne/Ōhope water scheme Support for water meters in Edgecumbe to identify the source of any leaks and promote the more efficient use of the water resource Support that any upgrade of the Te Teko water supply should consider the most cost effective solution to supply high quality water with good pressure to Te Teko residents Support for defining the Te Teko water supply boundaries, in conjunction with the Te Teko community, and determining the costs involved in providing a possible extension of the Te Teko water supply scheme Acknowledgement that the costs of Options 2, 3 and 4 and possible extension of the Te Teko water supply boundaries would impact on the users of the Plains Water Scheme, particularly the large users, effectively increasing the price of water for dairy farms, based on the current funding model in the next financial year. The need for future funding models to be developed and consulted on with key stakeholders and those paying for the upgrades and increase in levels of service

RESOLVED:

1. THAT the report "Plains Water Scheme – Edgecumbe and Te Teko Water Supplies” be received. 2. THAT a draft Annual Plan submission be circulated to all Boards Members for comment, along with information on the costs of extending the Te Teko water scheme boundaries following the upcoming Te Teko Hui, and that the Chairperson of the Plains Water Supply Advisory Board be authorised to finalise the submission and to speak to the submission on behalf of the Board.

Smeaton/Barkla

CARRIED

4. 2016-17 ANNUAL PLAN – PLAINS WATER

Refer to pages 26-35 of the agenda and tabled document 35A.

The General Manager Finance tabled a revised table showing income increases with various options e.g. increase by 1 cent, increase UAC by $10 and reduce by 2 cents (refer to tabled document 35A). The General Manager Finance was asked to check the Excess Water figures.

It was noted that the Awakeri Extension loan had been repaid and there was no requirement for a differentiation in rates as proposed in the recommendation.

Page 9 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

5.1 Plains Water Supply Advisory Board Minutes 18 March 2016 (Cont.)

The Board agreed to keep the rates at the same level as 2015/16 given the balance in the operating reserve.

RESOLVED:

1. THAT the report “2016/17 Annual Plan – Plains Water” be received; and

2. THAT the Plains Water Supply Advisory Board recommends to the Whakatāne District Council that the targeted rates as set out below be included within the Annual Plan for the 2016/17 financial year.

$120 Per separately used or inhabited part of a rating unit connected and metered Excl. GST

27 Cents Excl. Per cubic metre of all water supplied to each rating unit connected GST and metered

The Council sets an additional targeted rate for any excess water consumed that is over and above the purchased entitlement for each property connection to these water supplies. An overuse targeted rates is set for the excess volume consumed over and above the purchased entitlement of 90 cents per cubic metre.

van Beek/Wilson CARRIED

5. PLAINS WATER SERVICES REPORT FROM 1 JULY 2015 TO 29 FEBRUARY 2016: 20.12.1.1

Refer to pages 36-39 of the agenda.

Correction:

It was noted that on page 36, Water Production the second to last column should read July 2014 to June 2015 and not May 2015 as stated.

RESOLVED:

THAT the report "Plains Water Supply Services Report from 1 July 2015 to 29 February 2016" be received.

van Beek/Barkla

CARRIED

THE MEETING CLOSED AT 12:06 PM.

Page 10 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

5.1 Plains Water Supply Advisory Board Minutes 18 March 2016 (Cont.)

Confirmed this day of

CHAIRPERSON

Page 11 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6 Reports

6 Reports 6.1 Action Sheet – Council 21 April 2016

Resolution or Recommendation Resolution

To be confirmed as a true and Council 9 June 2016 correct record at:

File Reference: A1083262

1. Appointment to Plains Water Supply Advisory Board

Refer to page 19 of the agenda.

RESOLVED:

THAT the recommendation of the Plains Water Supply Advisory Board meeting held on 18 March 2016 be adopted and the Council approves the nomination of Winifred (Wini) Geddes to the Plains Water Supply Advisory Board, with Simon Geddes as her alternate.

van Beek/Orr CARRIED

AFTER MEETING ACTION:

Position Date

General Manager Planning, Regulatory and Corporate 1 22 April 2016 Services

2 General Manager Infrastructure 22 April 2016

3 Administration Officer Policy 22 April 2016

Page 12 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2 Plains Water Scheme – Water Services Report from 1 July 2015 to 30 April 2016

PLAINS WATER SCHEME – WATER SERVICES REPORT Subject: FROM 1 JULY 2015 TO 30 APRIL 2016

To: PLAINS WATER SUPPLY ADVISORY BOARD

Meeting Date: FRIDAY, 27 MAY 2016

Written by: MANAGER THREE WATERS - PLANNING AND PROJECTS

File Reference: 20.12.1 - A1088609

1. REASON FOR THE REPORT

This report provides information on water activity in the Plains Water Supply Scheme during the reporting period of 1 July 2015 to 29 February 2016.

2. WATER PRODUCTION

Production Year Braemar Te Teko Johnson Road

July 2006- June 2007 1,641,727 297,299 238,875

July 2007-June 2008 1,318,633 238,957 384,685

July 2008-June 2009 1,697,916 276,988 312,168

July 2009-June 2010 1,777,500 324,751 303,741

July 2010-June 2011 1,734,510 286,565 277,030

July 2011 - June 2012 1,713,543 301,519 210,943

July 2012 - June 2013 1,642,126 314,749 251,410

July 2013 - June 2014 1,789,851 291,324 300,225

July 2014 - June 2015 1,835,094 248,076 313,290

June 2015 - Apr 2016 1,871,703 307,092 316,167

Page 13 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2 Plains Water Scheme – Water Services Report from 1 July 2015 to 30 April 2016 (Cont.)

3. WATER CONNECTIONS

As at Braemar Te Teko Mapou Awakeri Total

June 07 981 245 65 364 1,655

June 08 1,001 245 65 368 1,679

June 09 1,044 249 65 391 1,749

June 10 1,050 249 66 400 1,765

June 11 1,055 250 66 428 1,799

June 12 1,058 254 66 433 1,811

June 13 1,060 255 67 437 1,819

June 14 1,072 255 67 448 1,842

June 15 1,075 255 67 457 1,854

May 16 1,081 256 67 460 1,864

4. PAUL ROAD WATER PROJECT

4.1. Community Consultation

The Council carried out community consultation to finalise an option to supply water to Edgecumbe and Te Teko communities. This consultation has been carried out as a targeted consultation with Iwi representatives and also as part of the 2016/17 Annual Plan community consultation process. Meantime, the working group established for Te Teko water supply met twice before the closure of annual plan submissions. During these meetings, the Iwi representatives expressed concerns about the present Te Teko water boundary and produced a map showing the area of Te Teko according to their definition of the Te Teko boundary. This map is attached to this report as Appendix 1.

Five options have been consulted on during the Annual Plan process for providing water to Edgecumbe and Te Teko. Four of the options were presented to the Board in the previous meeting and additional option (do nothing) was added for consultation. The Council’s preferred option was Option 2, which was providing water from Paul Road water source to Edgecumbe Township and from an improved and secured Tahuna Road water source to Te Teko Township and Mapou. The Board made an annual plan submission in support of Option 2. Refer to Appendix 2 for a copy of the Board’s submission.

The Council received 25 annual plan submissions on Edgecumbe, Te Teko and Plains water supplies. The majority of submissions were in support of improving water quality. There was a submission expressing concern over the implications on water rates for the wider plains water users as a result of improving water quality in Edgecumbe and Te Teko.

Page 14 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2 Plains Water Scheme – Water Services Report from 1 July 2015 to 30 April 2016 (Cont.)

4.2. The Council’s Decision on Annual Plan Submissions

Following the receipt of the annual plan submissions on Edgecumbe and Te Teko water options, the staff submitted a report to the Council meeting held on 11 May 2016, summarising the submissions received and making a recommendation for the way forward. The staff recommendation was to implement the Option 2 with refinements. In the report, the staff also made a recommendation to install water meters in Edgecumbe. This report is attached as Appendix 3 to this report.

Having considered the submissions to the annual plan and the staff report and recommendations, the Council at its meeting on 11 May 2016 resolved the following:

1. THAT the report "Edgecumbe and Te Teko Water Supplies Recommendation Report" be received; and 2. THAT the Council develop a single bore at Paul Road, install and pipe water from Paul Road bore to Edgecumbe in order to isolate Edgecumbe from the influence of Braemar/Johnson Road water; and 3. THAT the Council ensure that the Tahuna Road water supply is upgraded and secured in order to support isolation of the Te Teko community from the influence of Braemar/Johnson Road water; 4. THAT the two supplies (Paul Road bore to Edgecumbe and Tahuna Road supply) are linked (via the Te Teko to Edgecumbe Road existing pipe network); 5. THAT the Council approve a budget of $5.2 million to be included in 2016/17, being $4.2 million for Edgecumbe and $1.0 million for Te Teko, which is to be funded by a subsidy of $2.1 million from the Ministry of Health and the use of $500,000 from the Plains Reserve Fund, with the balance being loan funded, for the Council to provide water from the Paul Road bore to Edgecumbe and provide an extended water scheme to the Te Teko Community (upgrading Tahuna Road water supply and linking the two supplies). 6. THAT the Council provide water meters in 2016/17 to Edgecumbe township, with charges based on a metered water supply, commencing from 1 July 2017. 7. THAT the Council develop funding models for the domestic and farm water supplies on the Plains Water Scheme in 2016/17 for the 2017/18 financial year.

Reasons for Decision:

1. The Council considered the submissions and responses from iwi and hapū representatives from Te Teko; the Plains Water Supply Advisory Board; the Rangitāiki Community Board; and the public, as part of the 2016/17 Annual Plan consultation process and noted that there was a mixed response to the options proposed. 2. The Council has approved an amended approach to Option 2 for water supply upgrades which will link the Edgecumbe and Te Teko community reticulation systems and ensure their supplies meet national drinking water standards. The upgrading project will also allow both communities’ water reticulation systems to be isolated from the Braemar Springs and Johnson Road bore sources, thereby removing any possible arsenic content from those sources. 3. The Council believes that the linking of the two supplies (Paul Road bore to Edgecumbe and Tahuna Road supply) would also provide added resilience to the network and would go some way towards recognising the cultural link (whakapapa) that the Te Teko community has with the Paul Road water supply. 4. The Council acknowledges that the preference of the Te Teko community was for an extended water scheme supplied from the Paul Road bore. However, the Council noted that the cost of

Page 15 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2 Plains Water Scheme – Water Services Report from 1 July 2015 to 30 April 2016 (Cont.)

providing this supply to all properties within the boundary defined by the Pahipoto and Ngā Maihi hapū would increase the cost from $5.1 million to $6 -7 million, which the Council considered was prohibitive at this time. Given the high costs of extending the boundaries, the Council believes this project would require a staged approach, and would need to be considered as part of an overall Plains Water 50 Year Strategy. 5. While the Council recognised that the extended water scheme for the Te Teko Community does not extend as far as the outer boundaries defined by Pahipoto and Ngā Maihi hapū, and does not extend the current network, it would include additional areas along Te Teko Rd and along SH30 between Te Teko and Western Drain Road, and allow those areas to also be isolated from the influence of Braemar/Johnson Road-sourced water. 6. The Council recognises the need to develop funding models for domestic and farm water supplies served by the Plains Water Scheme in 2016/17, with a view to applying those models in the 2017/18 financial year. The Council acknowledges that unless the funding model is changed in the future, the costs will continue to predominantly fall on the higher volume users of the Plains water supply (dairy farmers), at a time when the dairy industry can least afford it. The Council is mindful that this creates issues of fairness and equity and raises the question of who pays for an increase in the levels of service for the domestic users on the Plains Water Scheme. The Council will investigate a range of funding models, including a move to charging domestic supplies at the District-wide ‘equalised’ rate, which ensures that consumers pay the same charges for the same service and contribute fairly to the supply cost and to future service expansions. However the Council is mindful that extending this funding model to domestic users on the Plains Water Scheme would need to be consulted on widely through a transparent process and would therefore be the subject of future consultation rounds. 7. The Council seeks to utilise the Ministry of Health subsidy of $2.1 million towards the cost of the water upgrades, and notes that any substantial delay in implementing the Edgecumbe component of the project could put the availability of this subsidy at risk. The Council resolved to use $500,000 of the funds available in the Plains water reserve account, with the remainder of the cost of the upgrades to be loan funded. The Council noted only a portion of the interest of the loan funding for these upgrades would be rated for in the 2016/17 year and this cost would not have a significant impact for Plains Water users. 8. The Council has approved the installation of water meters in Edgecumbe and notes that this will allow residents to assess whether they have any leaks on their properties and have them fixed before meter-based charges are introduced on 1 July 2017. 9. The Council recognises that the project does not provide for any expansion of the Paul Road bore to other areas of the Plains scheme (such as an Awakeri expansion) and this was due to the uncertainty around the granting of a new resource consent for additional water from the Paul Road bore, in the absence of new Freshwater Policy being developed by the Bay of Plenty Regional Council. 10. The Council further recognises that the project does not deal with the issue of arsenic levels in the Braemar and Johnson Road supplies that were above the drinking water standards and used for domestic supply in other parts of the Plains Water Supply Scheme.

4.3. Funding Model for Plains water Scheme

The Council resolved to develop funding models for the domestic and farm water supplies on the Plains Water Scheme in 2016/17 to take effect in the 2017/18 financial year.

The Board will be involved in the development of these funding models and it is expected these models will be available for public consultation during the draft Annual Plan 2017/18.

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6.2 Plains Water Scheme – Water Services Report from 1 July 2015 to 30 April 2016 (Cont.)

5. FINANCIALS

5.1. Capital Projects

Project Progress Budget ($) Expenditure year to date ($)

Pipe sampling and Pipe samples are 16,500 3,790 condition assessment collected when pipe breaks are occurred

Minor replacements Scheduled in May/June 20,000 Nil and projects 2015

Paul Road bore project Project on hold until 3,045,900 11,554 including Edgecumbe community supply main consultation and annual plan process is completed

5.2. Operations and Maintenance

Annual Plan Year to date Actual Variance ($) Explanation budget ($) budget ($) expenditure ($)

1,395,315 1,147,033 1,042,423 -104,610 This expenditure can be in line with the budget by the end of the financial year.

RECOMMENDATIONS:

THAT the report "Water Services Report from 1 July 2015 to 30 April 2016" be received;

Attached to this report:

Appendix 1 – Map of Pahipoto and Ngā Maihi hapū indicated water boundaries for Te Teko

Appendix 2 – Plains Water Supply Advisory Board Submission to the draft Annual Plan 2016/17

Appendix 3 – Report to Extraordinary Council 11 May 2016 – “Edgecumbe and Te Teko Water Supplies Recommendation Report”

Report Authorisation

Report writer: Santha Agas Manager Three Waters – Planning and Projects

Final Approval: Tomasz Krawczyk General Manager Infrastructure

Page 17 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2.1 Appendix 1 - Map of Pahipoto and Nga Maihi Indicated boundaries for Te Teko water Scheme

Page 18 WHAKATĀNE DISTRICT COUNCIL - FRIDAY, 27 MAY 2016 - PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

19 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2.2 Appendix 2 - Submission to Annual Plan 2016-17 for Plains Water Supply Advisory Board

Page 20 WHAKATĀNE DISTRICT COUNCIL - FRIDAY, 27 MAY 2016 - PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

YOUR DETAILS QUICK SURVEY

First Name: Bruce Improving water quality to

Surname: Woods Te Teko and Edgecumbe

Organisation (if applicable): Plains Water Supply Advisory Board The largest changes we are proposing to our Long Term Plan relate to the projects to

Phone: 027-4814148 improve water quality to Edgecumbe and Te Teko to meet national drinking water Email: [email protected] standards. Information about the options

and costs can be found on the ‘Have Your Postal address: 121 Grieve Road, Otakiri, R D 3, Whakatane 3193 Say’ pages of our website, or by contacting

the Council.

Please tick your preferred option:

PRESENTING YOUR SUBMISSION OPTION 1: Development of Paul Road  bore and connection to Edgecumbe. I wish to speak to my submission at a Council meeting to be held on 4 Further stages (including Te Teko)  or 5 May. considered in the future.

 OPTION 2: Development of Paul Road  bore and connection to Edgecumbe

SUBMISSIONS CLOSE 5PM, FRIDAY, 22 APRIL + Tahuna water supply upgraded for POST OR DELIVER TO: Whakatāne District Murupara Service Centre Te Teko. Council Pine Drive bore and connection to both Commerce Street Murupara OPTION 3: Development of Paul Road Private Bag 1002 

Whakatāne Edgecumbe and Te Teko. EMAIL SUBMISSIONS: [email protected] out above, with the addition of OPTION 4: This follows option two set SUBMIT ONLINE: www.whakatane.govt.nz/annual-budget-update 

EMAIL ENQUIRIES: [email protected] Te Teko connecting to the Paul Road PHONE ENQUIRIES: (07) 306 0500 bore in the long-term. current service. WEBSITE: www.whakatane.govt.nz  OPTION 5: Do nothing – continue the Whakatāne District Council. Annual Budget Update 2015/16 SUBMISSION ID:

21 WHAKATĀNE DISTRICT COUNCIL - FRIDAY, 27 MAY 2016 - PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

YOUR SUBMISSION Before each comment, please let us know the topic that you are submitting on:

See attached submission

If more space is required: Please attach a dditional paper with a page number and your name and pho ne number on each sheet.

Privacy: In accordance with the Local Government Act 2002,this submission may be ma de availa ble to the p ublic.

Forwarding your comments: Plea se note that yo ur comments may be re-directed where they relate to another process, or another orga nisation. If this occurs,yo u will be advised in writing.

Whakatane District Council. Annual Budget Update 2015/16 SUBMISSION I D:

22 WHAKATĀNE DISTRICT COUNCIL - FRIDAY, 27 MAY 2016 - PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

PLAINS WATER SUPPLY ADVISORY BOARD SUBMISSION

WHAKATĀNE DISTRICT COUNCIL ANNUAL PLAN 2016/17

1.0 Improving Water Quality to Te Teko and Edgecumbe Option 2 The Plains Water Supply Advisory Board (the Board) supports Option 2 – the development of the Paul Road bore and connection to Edgecumbe with the Tahuna Water Supply upgraded for Te Teko. The Board: • Supports the development of the Paul Road bore to supply Edgecumbe with the use of the subsidy money from the Ministry of Health • Supports the future proofing of the pipe size from Paul Road bore to the McDonald Road/SH2 intersection and acknowledges that this ought to be funded from Plains Water consumers • Supports the decision to not use Paul Road bore as an emergency water supply for the Whakatāne/Ōhope water scheme • Supports water meters in Edgecumbe to identify the source of any leaks and promote the more efficient use of the water resource • Supports that any upgrade of the Te Teko water supply should consider the most cost effective solution to supply high quality water with good pressure to Te Teko residents • Supports defining the Te Teko water supply boundaries, in conjunction with the Te Teko community, and determining the costs involved in providing a possible extension of the Te Teko water supply scheme and supports a robust public debate about who pays for increases in levels of service • Acknowledges that the costs of Options 2, 3 and 4 and the possible extension of the Te Teko water supply boundaries would impact on the users of the Plains Water Scheme, particularly the large users, effectively increasing the price of water for dairy farms, based on the current funding model in the next financial year 2.0 Future Funding Models for the Plains Water Scheme The Board requests the Council develop funding models and that these be consulted on with key stakeholders and those paying for the upgrades and increase in levels of service in the Plains Water Scheme. The Board requests that these new funding models be developed and consulted on within the 2016-17 and 2017-18 years and be ready for inclusion in the LTP 2018-28. See commentary section for the Board’s reasoning. 3.0 Plains Water Rates for 2016/17 The Plains Water Supply Advisory Board recommends to the Whakatāne District Council that the targeted rates as set out below be included within the Annual Plan for the 2016/17 financial year. $120 Per separately used or inhabited part of a rating unit connected and metered Excl. GST Per cubic metre of all water supplied to each rating unit connected and 27 Cents Excl. GST metered

23 WHAKATĀNE DISTRICT COUNCIL - FRIDAY, 27 MAY 2016 - PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

4.0 Commentary to support the Board’s submissions The issue of paying for good quality drinking water to Edgecumbe and Te Teko communities now, and in the future, is a complicated issue and one that has yet to be discussed in any detail with the public. While the draft Consultation Document sets out the various advantages and disadvantages for each option, it did not provide sufficient detailed information on the cost impact of improvements to the Edgecumbe and Te Teko water supplies on those ratepayers who would be expected to pay for these improvements. The Board acknowledges that the Council’s Revenue and Financing Policy includes a philosophy of equalisation of water schemes across the District in order that “everyone receiving a similar service pays the same regardless of the costs related to each individual scheme”1 and that smaller schemes benefit under this philosophy. However the Plains Water Scheme was exempt from this primarily because it is an agricultural scheme and has “a unique 50 year management strategy”2 The Board supports the implementation of the 50 Year Strategy and its intent to provide high quality water throughout the Rangitāiki Plains. The Board is aware of the changing legislative framework for efficient freshwater allocation, and the associated writing of policy, highlighting the need to secure water for domestic and stock drinking purposes into the future. The Board supports the Council in seeking renewal of the Johnson Road bore and its application to increase the water take from the proposed Paul Road bore. The Council needs to ensure the Ministry of Health subsidy remains available for the development of the Paul Road bore and new water line into Edgecumbe township. The Edgecumbe community appears to consume about twice the volume of water of other townships, and the source of any leaks have never been clearly located to explain whether this higher level of consumption is genuine use, or comes from water leaks from private property or from Council water pipes. The Board therefore favours the installation of water meters which will help identify the source of any leaks, and promote a more efficient use of the resource. In contrast, the improvements to the Te Teko water supply, as Te Teko is part of the Plains Water Scheme, will impact directly on all those paying water rates to this scheme. Any extension of the Te Teko water scheme, as requested by the Te Teko community will impact on current Plains users. This will impact on all users but particularly the large users, effectively increasing the price of water for dairy farms, based on the current funding model in the next two to three financial years. Given the current state of the dairy industry at this time, any price increases for water will impact significantly on dairy farmers, who will receive no increase in their own levels of service. Therefore there is an urgent need to develop a philosophy of who pays for increases in levels of service. The Board supports Option 2, which is the use of the Tahuna Road bore to supply Te Teko as it provides good quality water that meets the drinking water standards, once secured . This is the most cost effective option. The issue of extending the current levels of service to more consumers in Te Teko needs robust community debate; particularly around who pays for this increase in the levels of service. The Board supports the construction of a pipe from Paul Road bore to the McDonald Road intersection that is of sufficient size to accommodate future growth in the eastern areas of the scheme. This forward thinking will ensure that future growth can be accommodated. This is currently not budgeted in the cost estimate for the Options 2, 3 or 4.

1 LTP 2015-25, Revenue and Financing Policy, page 160 2 Ibid, page 160

24 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2.3 Appendix 3 - Edgecumbe and Te Teko Water Supplies Report to Extraordinary Council 11 May 2016

EDGECUMBE AND TE TEKO WATER SUPPLIES Subject: RECOMMENDATION REPORT

To: WHAKATĀNE DISTRICT COUNCIL

Meeting Date: WEDNESDAY, 11 MAY 2016

Written by: MANAGER THREE WATERS

File Reference: A398135

1. REASON FOR THE REPORT

The Council carried out community consultation to finalise an option to supply water to Edgecumbe and Te Teko communities. This consultation has been carried out as a targeted consultation with Iwi representatives and Plains Water Advisory Board and also as part of the 2016/17 Annual Plan community consultation process.

The reason for this report is to advise the Council on the responses received by the Council through the Annual Plan consultation process and recommend a way forward for Edgecumbe and Te Teko Water Supplies to provide water, which meets present drinking water standards.

2. BACKGROUND

In the present Long Term Plan (LTP), a sum of $3.05 million has been allocated to implement a project to supply water to Edgecumbe and in the future to Awakeri from a new water bore at Paul Road. The project components were: development of Paul Road bore, installation of a bulk main to supply water to Edgecumbe now, and later to Awakeri area in subsequent stages by installing new mains. The Ministry of Health has approved $2.02 million subsidy funds for the Edgecumbe component of the project. The project was proposed to be implemented in 2015/16 financial year.

The Council has already secured resource consent to abstract water from Paul Road water source at a rate of 61 litres per second. In order to secure more water to future Plains water supply from Paul Road, the Council applied for a variation to the existing consent to abstract more water from Paul Road bore. As part of the resource consenting process, the staff commenced consultation with the affected parties including Iwi groups.

During the consultation process, the Te Teko Iwi representatives made a strong demand to supply water to Te Teko from Paul Road water source and retain Tahuna Road water source for security of supply. They also wanted the Council to redefine the existing Te Teko water boundary.

Following discussions with Iwi representatives, the Council staff developed 5 options to provide water to Edgecumbe and Te Teko and Mapou townships and carried out community consultation through Annual Plan process. The options consulted were:

Option 1 – Develop Paul Road bore and provide water to Edgecumbe from Paul Road water source. Estimated cost of this option is $3.9 million.

Page 25 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2.3 Appendix 3 - Edgecumbe and Te Teko Water Supplies Report to Extraordinary Council 11 May 2016 (Cont.)

Option 2 - Develop Paul Road bore and provide water to Edgecumbe from Paul Road water source and upgrade Tahuna Road water source to meet present drinking water standards to provide water to Te Teko. Estimated cost of this option is $4.75 million.

Option 3 - Develop Paul Road bore and provide water to Edgecumbe and Te Teko from Paul Road water source. Estimated cost of this option is $5.5 million.

Option 4 - Develop Paul Road bore and provide water to Edgecumbe from Paul Road water source and upgrade Tahuna Road water source and treatment system to meet present drinking water standards to provide water to Te Teko. Connect Te Teko to Paul Road water source at a later stage. Estimated cost of this option is $6.1 million.

Option 5 – Retain status-quo. There is no cost to this option.

3. Discussion

3.1. Annual Plan Submissions

The Council received 25 annual plan submissions on Edgecumbe, Te Teko and Plains water supplies. Collectively, the submissions received can be categorised into those that respond to the Options proposed in the Plan or that raise broader strategic issues about the direction of the Plains Water Scheme.

The submissions generally indicate support for improving water quality to domestic users on the Plains. Those that oppose that view tend to do so because of the current funding model that will see costs fall on higher water users (mainly the dairy farming community); and whether there is a benefit for those likely to be paying the majority of the cost for the improvement. There is one submitter who seeks a uniform level of water quality across the District regardless of location.

Most of those who support an improvement in water quality for Edgecumbe agree that it should be supplied from Paul Road bore. One submitter opposes the use of Paul Road bore if it will reduce water for primary productive use.

There are two common views from submitters who support an improved water supply for Te Teko. Several seek water to be supplied from Paul Road bore, but for Tahuna Road supply to be secured for resilience. This is a common view from those who live in the Te Teko community. Others support the stated preferred option of the Council, which would see Te Teko supplied from a secured Tahuna Road supply. This includes the Rangitāiki Community Board and the Plains Water Advisory Board.

Several submitters consider consultation has been inadequate or the plans have been poorly communicated.

From a strategic viewpoint, there are submissions that:

Suggest no decisions should be made until the 50 Year Strategy has been finalised, including consultation; Seek consistent water quality across the district; Seek a review of the funding model for Plains Water. This is particularly so in the current financial situation facing dairy farmers; Redefine the Te Teko Community from a cultural and community perspective that is wider than the urban settlements of Te Teko and Mapou;

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6.2.3 Appendix 3 - Edgecumbe and Te Teko Water Supplies Report to Extraordinary Council 11 May 2016 (Cont.)

Argue that Paul Road bore should not be developed for a municipal supply as it will be needed for other primary productive uses; Seek to ensure any capital works undertaken now future proof options for expansion; Seek that a high quality supply of water (such as Paul Road bore) be used for domestic consumption; not used for stock water and dairy shed washing. Similarly, that Braemar supply not be used for domestic water but be made available for stock. The Whakatāne/Ohope supply should be considered as a higher priority than it appears to be; Recognise the Mataatua Declaration on Water.

3.2. Staff Recommendations for Way Forward

Having considered these submissions, it is recommended that the Council:

1. Confirm Option 2 as follows (with refinements):

a. Develop a single bore at Paul Road; install and pipe water from Paul Road bore to Edgecumbe. Isolate Edgecumbe from the influence of Braemar/ Johnson Road; b. Secure the Tahuna Road supply; c. Link these two supplies (via the Te Teko to Edgecumbe Road and other existing pipe network); d. Within the cost parameters set, provide this supply to an extended Te Teko Community. It is recognised that this may not be as far as the outer boundaries defined by Pahipoto and Ngā Maihi hapū, and does not extend the current network, however it would include areas along Te Teko Rd and areas area along SH30 between Te Teko and Western Drain Road. Isolate this supply from the influence of the Braemar/Johnson Road bore; e. Provide water meters in 2016/17 to Edgecumbe township, with charges based on a metered water supply commencing from 1 July 2017.

3.3. Advantages and Disadvantages of Recommended Way Forward

3.3.1. Advantages

These measures will achieve the following outcomes:

It will create a network that will provide a high quality of water that meets the drinking water standards predominantly used for domestic supply; Creating a network for predominantly domestic supply will allow future funding decisions to be made with this focus in mind; It will allow the Ministry of Health subsidy to be utilised; The linking of the two supplies will provide added resilience for this population; It attempts to recognise the cultural link (whakapapa) to the Paul Road supply for Te Teko, although it is acknowledged that the cost of providing this supply to all properties within the boundary defined by hapū is prohibitive at this stage; It attempts to manage the cost (and therefore where the cost lies) of the development at this stage recognising that this cost will fall onto high volume users (dairy farmers) at a time where this sector can ill afford increased costs. The cost of this refined option 2 is estimated to be $5.2m ($4.2m for Edgecumbe and $1m for Te Teko); This option does not rely on variations to or new resource consents.

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6.2.3 Appendix 3 - Edgecumbe and Te Teko Water Supplies Report to Extraordinary Council 11 May 2016 (Cont.)

The installation of water meters during the next financial year will allow water consumption to be monitored for part of the year, without any additional charge. That will allow problems to be identified and fixed, before water by meter charging starts at the commencement of the 2016/2017 year.

3.3.2. Disadvantages

The disadvantages of this option are:

While this option has been considered in the context of the strategy documents for the Plains Water Scheme that have been prepared to date, this decision is made in the absence of an adopted Strategy that has had the benefit of strong community engagement and discussion. It does not meet all the desires of the Te Teko community, primarily limited by cost. To supply water to the entire defined Te Teko community would be an additional $6m to $7m, and a lack of water to supply it. This may be able to be achieved in time but requires a staged approach at a high cost. Such costs make the option of treating arsenic levels at source more attractive. It does not provide for any expansion of the Paul Road bore to other areas of the Plains (such as Awakeri expansion), other an upgraded pipe from Paul Road bore to the State Highway. This is due to uncertainty around the granting of a new resource consent for additional water from the Paul Road bore in the absence of new Freshwater Policy being developed by the Regional Council. It does not deal with the issue of arsenic levels in the Braemar or Johnson supplies that are above drinking water standards and used for domestic supply on other parts of the Plains. Unless the funding model is changed, the costs will predominantly fall on higher volume users of the Plains water supply.

These issues are recognised and should be directed to and become the focus of the Plains Water Advisory Board.

4. ASSESSMENT OF SIGNIFICANCE

The proposal is to spend additional $2.2 million than budgeted in the LTP and changing the scope of the project. Therefore, the decision on this option is considered to be significant in accordance with the Council policy on determining significance.

5. COMMUNITY INPUT AND PUBLICITY

Apart from Annual Plan community consultation process, the Council has carried out targeted consultation with Iwi representatives and established a Te Teko water working party, which include Iwi representatives from Te Teko, Ngāti Awa and Council staff. This working party is still continuing. The Plains Water Supply Advisory Board has been updated with the latest developments.

6. CONSIDERATIONS

6.1. Financial/budget considerations

Funds available for this project in the present LTP is $3.05 million. In the proposed Annual Plan a sum of $4.1 million has been allocated to implement the preferred option 2. If the refined option 2 is implemented, additional $1.1 million is required to complete the project. A sum of $1.2 million is available in the Plains reserve fund which can be utilised for this project.

Page 28 WHAKATĀNE DISTRICT COUNCIL FRIDAY, 27 MAY 2016 PLAINS WATER SUPPLY ADVISORY BOARD - AGENDA

6.2.3 Appendix 3 - Edgecumbe and Te Teko Water Supplies Report to Extraordinary Council 11 May 2016 (Cont.)

6.2. Risks

The main risks are as follows:

1. The recommended solution may not be acceptable to all parties who have made the submissions 2. If there is a substantial delay in implementing Edgecumbe component of the project, the Council may lose the subsidy funds ($2.02 million) available from the Ministry of Health.

7. Conclusion

The Council received mixed responses from the public consultation carried out by the Council to identify a suitable solution to Edgecumbe and Te Teko water supplies. Having considered all the responses, the staff propose to implement the option 2 as mentioned in the Clause 3 with some modifications to allow both Paul Road and Tahuna Road water sources to be used to supply water to Edgecumbe and Te Teko at an estimated cost of $5.2 million.

RECOMMENDATIONS:

1. THAT the report "Edgecumbe and Te Teko Water Supplies Recommendatio Report" be received; and 2. THAT a single bore is developed at Paul Road; install and pipe water from Paul Road bore to Edgecumbe. Isolate Edgecumbe from the influence of Braemar/ Johnson Road; 3. THAT Tahuna Road supply is upgraded and secured; 4. THAT These two supplies are linked (via the Te Teko to Edgecumbe Road existing pipe network); 5. THAT Within the cost parameters set, provide this supply to an extended Te Teko Community. It is recognised that this may not be as far as the outer boundaries defined by Pahipoto and Ngā Maihi hapū, and does not extend the current network, however it would include areas along Te Teko Rd and area along SH30 between Te Teko and Western Drain Road. Isolate this supply from the influence of the Braemar/Johnson Road bore; 6. THAT Provide water meters in 2016/17 to Edgecumbe township, with charges based on a metered water supply commencing from 1 July 2017

Report Authorisation

Job Title: MANAGER THREE WATERS PLANNING AND Report writer: Santha Agas PROJECTS

Approval: Tomasz Krawczyk Job title: GENERAL MANAGER INFRASTRUCTURE

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