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Masterton District Council PO Box 444 Masterton 5840

Quality Information

Document Asset Management Plan – Water Supply

Ref Version 6

Date March 2015

Prepared by; Tony Pritchard, David Hopman, James Li, & Tania Madden

Internal Review by;

External Peer Review;

Revision History

Revision Revision Date Details Authorised 1 1998 2 2004 3 2006 4 01/07/2009 Updated with financials 5 04/10/2011 Total review of plan T Pritchard 6 23/03/2012 Updated with financials D Paris 7 19/11/2012 Document Finalised D Hopman (VG) 8 27/03/2015 Total review of plan T Pritchard 9 07/04/2015 Updated with financials P Foreman 10

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Table of Contents

1. Executive Summary ...... 4

2. Introduction ...... 5

2.2 Scope of Plan...... 5

2.3 Summary of Assets ...... 6

2.4 Asset Management Drivers (Water) ...... 6

2.5 Goals and Objectives of Asset Ownership ...... 6

2.6 Asset Management Systems ...... 7

2.7 Standards and Guidelines (Water) ...... 7

2.8 Summary of Asset Management Practices ...... 7 3. Levels of Service ...... 8

3.1 Customers and Stakeholders ...... 8

3.2 Annual Residents Survey ...... 9

3.3 Public Meetings on Special Projects ...... 10

3.4 Community Outcomes Consultation ...... 10

3.5 Legislative and Other Requirements ...... 10

3.6 Levels of Service and Performance Measures ...... 11

3.7 Past Performance Measures ...... 16

3.8 Financial Summary ...... 17 4. Future Growth and Demand ...... 18

4.1 Introduction ...... 18

4.2 Population Effect ...... 18

4.3 Commercial Influences ...... 18

4.4 Climate Change ...... 19

4.5 Demand for Improvement in the Service Level ...... 19

4.6 Demand Forecast...... 19

4.7 Cost of Responding to Growth and Demand Changes ...... 19

4.8 Conclusion ...... 20 5. Risk Management ...... 21

5.1 Introduction ...... 21

5.2 Risk Management Process ...... 21

5.4 Summary of Trends in Risk Assessment ...... 22

5.5 Identification of Critical Assets ...... 22

5.7 Improvement Plan 2014 - Water ...... 28

5.8 Cost of Mitigating Identified Risks ...... 29

5.9 Conclusion ...... 29

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6. Lifecycle Management Plans ...... 30

6.1 Introduction ...... 30

6.2 Masterton’s Urban Water Supply ...... 30

6.3 Tinui Water Supply ...... 42 7. Financial Summary ...... 45

7.1 Introduction ...... 45

7.2 Previous Expenditure ...... 45

7.3 Estimated Future Public Debt ...... 46

7.4 Insurance Coverage ...... 46

7.5 Estimated Future Loan Repayment and Loan Interest Cost ...... 47

7.6 Estimated Future Operational Revenue ...... 47

7.7 Financial Forecasts – Capital Expenditure ...... 47

7.8 Future Depreciation Projections ...... 50

7.9 Financial Summary (including rates requirement) ...... 50

7.10 Changes in Service Potential ...... 50

7.11 Assumptions & Confidence Levels ...... 50

7.12 Funding Mechanism ...... 51 8. Plan Improvement and Monitoring ...... 51

8.2 Current Improvement Plan ...... 52

8.3 Monitoring and Review ...... 52 9. References ...... 53

1. Executive Summary

This Water Supply Asset Management Plan covers the water supply assets that Masterton District Council currently owns and operates. Within the supplied networks Council also provides a number of Upper Plain residents with potable water. Council owns non-potable rural water supplies at the Castlepoint (toilets), Wainuioru and Taueru areas, due to their small size, their local management and being non-potable supplies these supplies are not currently included in this plan but it is expected that the Plan may be extended to include their management in the future if the scope of these supplies is developed. Council supports, but does not own, a small number of rural water supplies at other locations (e.g. Castlepoint, Fernridge and Opaki). However because these networks are not owned by Council these supplies will not be included in this Plan. But the exclusion of these supplies from the Plan may be reviewed at a future date dependant on changes to legislation. This asset management plan should be read in conjunction with the Long Term Plan (LTP 2015-25) which is the Districts overall plan for the next ten years to promote the social, economic, environmental and cultural well-being of the community now and in the future. The plan contributes towards achieving the Masterton District Councils stated community outcomes of being an easy place to move around, achieving a strong sustainable economy, having an active, involved & caring community. Making us a sustainable, healthy natural environment, and also

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creating a knowledgeable resilient community. Strategic and tactical asset management also plays a role in improving social and environmental outcomes for Masterton. The Council owned water supplies comprise of the following, approximately 192 km of reticulation pipes varying diameters, material and condition. Including 13,000m2 of water storage in 5 reservoirs, a booster pump, & the treatment facilities at Kaituna & Tinui. From the information in the Councils rates records water is supplied to 8,351 customers. The delivery of water is funded through targeted location and usage rates per property. The total optimised replacement cost of water assets inclusive of supply, reticulation & rural supply’s as at 1 July 2014 was $80,200,000. With an optimised depreciated replacement cost of $36,434,000. Possible new Water assets are also funded from private developments. There are risks associated with the supply of water and these water assets, and the main risk identified that may pose a threat to the Councils water assets is possible climate changes which could affect the supply and the demand by our customers. Possible solutions through demand management would include restrictions on water use that was backed up by leak detection and zone monitoring in the network to preserve a secure pipework that conserves water prior to delivery to the customers. For more information see Council’s Potable Water Demand Management Plan (MDC, May 2011). Council believes it presently has sufficient capacity within its Masterton water supply infrastructure to continue to supply the current levels of potable water from Kaituna & Tinui to service and absorb possible expansions in its water network. Although the capacity of Masterton’s reticulation network is adequate to meet current and forecast demand for water supply, a lot of its age and condition does vary considerably. One of the supply (or trunk) mains was constructed in the late 1800s and while it’s still in use it has been planned for renewal over the next 5 years. The pipe network has been programmed for progressive renewal in the 30 year plan with an estimate of $1.690 million budgeted per year. Overall water supply assets including the rural assets have been programmed for renewal in a 30year plan at an overall estimated budget of $2,711 million per year. Continued leak detection surveys along with vigorous network condition assessments by Council Staff will continue to provide greater detail on what maintenance & renewal requirements there are.

2. Introduction

2.1 Background The purpose of this Water Asset Management Plan (“the Plan”) is to provide Masterton District Council (“Council”) with a tool to assist with the management of its water supply assets (“the assets”). This tool combine’s management, financial, engineering and technical practices and is intended to:  Ensure that an agreed level of service is provided to defined standards at optimum cost.  Be sustainable in the long term.  Comply with regulatory requirements.  Help Council to achieve the outcomes the community has defined. This Plan, prepared in 2015, supersedes Councils “Water Supply Asset Management Plan 2011”. 2.2 Scope of Plan Council owns, operates and maintains public water assets within the Masterton district located at Kaituna and Tinui. Council also supports, but does not own, several smaller water schemes in rural locations. These smaller, privately owned schemes are not currently considered in this Plan. This Plan was developed to provide Council with a long-term view of:

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 Where its water assets (those Council owns) are currently at  What issues are likely to impact on these assets in the future?  What level of service should be provided to the community in the future at a cost that can be afforded All of the figures in this plan are expressed in New Zealand dollar values as at 30 June 2014 and unless noted otherwise, are in GST exclusive terms. 2.3 Summary of Assets Opus (2005) grouped each population centre in the Masterton district into water aggregated communities for analysis. For the purposes of the assessment, only water supplies that have the potential to affect public health were considered (I.e. not for irrigation or industrial processes). The different water communities identified were:  Urban fully served. Masterton is the only community in this group to date.  Semi served (water only). Tinui is the only community in this group to date.  Unserved (roof water). Includes: Whakataki Mataikona Rural Schools (e.g. Mauriceville, Rathkeale, Whareama) Rural halls Private rural facilities (e.g. Ararangi Camp, Camp Anderson, Riversdale Motor Camp)  Unserved (ground/surface water). See above.  Unserved limited population. Not applicable to Masterton.  Industrial communities with Building Act requirements for water & wastewater  Private water supplies. This includes Castlepoint, Fernridge, Upper Plain, Mauriceville, Opaki, Taueru (Tauweru), and Wainuioru. The Council owned water assets are summarised in Table 2.1. Table 2.1 Summary of Total Masterton Urban & Rural Water Supply Assets Item Description Unit Comments Quantity 1 Water Intakes Ea. 1 Masterton 2 Bores / springs Ea. 1 Tinui 3 Treatment Plants Ea. 2 Kaituna (Masterton) & Tinui 4 Storage Tanks & m³ 13,000 Approximate Reservoirs No. 8 5 Pipelines km 192 40 to 600 mm dia. 6 Pumping Stations Ea. 1 Masterton boost 7 Valves Ea. 1048 Various use & sizes 8 Connections Ea. 8,351 Based on the no. of rateable properties 9 Identified Toby’s Ea. 7202 10 Hydrants Ea. 1110 Various sizes 2.4 Asset Management Drivers (Water) The delivery of water supplies is regulated and controlled by central government. Council’s role in advocating on behalf of the region’s water users, ratepayers and residents is a key driver of the asset management process. It enables sound arguments to be put to the appropriate bodies to ensure equitable access to, and funding for, the water supply networks. Asset management plans clearly define the communities, Council objectives and how these can be successfully delivered. 2.5 Goals and Objectives of Asset Ownership Council has adopted a funder-provider role and elected to deliver the water supply service using a combination of in-house (treatment works only) and contracted labour. Council attaches a high priority to the role that it plays in the provision of water supply services.

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Council has developed strategies for continued infrastructural development to meet the community’s requirements that minimise the adverse effects on the environment. These strategies also offer continued support for emergency preparedness measures throughout the district. Councils overall objectives for the water supply service are to:  Treat and distribute an adequate supply of potable water for human and commercial use in urban areas.  Support the provision of non-potable and water race supply in rural areas.  Provide an adequate capacity and pressure for fire fighters.  Ensure an effective, economic and secure distribution of potable water.  Ensure compliance with legislative requirements. The reasons why Council is involved in this activity are:  The effective management of water supply services is necessary in order to protect public health and the environment.  The Health Act 1956 requires every territorial authority to improve, promote and protect public health within its district. 2.6 Asset Management Systems Council’s services contract requires ongoing administration and monitoring of the works. This is to ensure the work is being carried out to Council’s satisfaction and in a cost effective manner. This contract has allowed for increased reporting on the information held on the asset. Further work is also anticipated in terms of physical inspection of the service. The WTP staff have developed an emergency response plan for the plants operation principally after a major earthquake disrupts the water supply. Council is currently installing an asset Management system called “Assetic – myData’ which is a central strategic register and asset management system for all asset classes. It includes in-built reporting, works tracking and life-cycle costing. It will be integrated with ‘myPredictor’ for a complete Strategic Asset Management planning and operational system capable of holding all water asset information. Council has also developed an Engineering Lifelines plan, which identifies vulnerable components of the water supply asset and ways of mitigating the degree of disruption likely to be incurred in a civil emergency. Mitigating work identified in the plan will be progressively implemented. 2.7 Standards and Guidelines (Water) In operating and maintaining its water supply assets, Council currently use the following standards and guidelines on a regular basis as appropriate:  Ministry of Health (2005) Drinking Water Standards for New Zealand  Standards New Zealand (2003) NZS3910: 2003 Conditions of Contract for Building and Civil Engineering Construction.  Standards New Zealand (2004) NZS4404: 2010 Land Development and Subdivision Engineering. 2.8 Summary of Asset Management Practices Table 2.1 compares the current and appropriate asset management practice. Table 2.1 Water Supply Asset Management Processes Asset Management Current Practice Appropriate Best Practice Activity Practice 1. Level of Service Review LOS & consult with community at least every 3 years √√ 2. Knowledge of Asset management system containing Assets all assets maintained. Supplemented by contractor/specialist 7

reports on serviceability & condition. √√ 3. Risk Management Strategic risk assessment at least every 6 years. Operational risk assessment at least every 3 years. √√ Emergency response plans have been developed. 4. Condition Largely based on contractor’s service Assessment records & Council records e.g. resource consents. Specialist √√ studies/reports supplement these records to build knowledge e.g. Leak Detection Study. 5. Accounting/ NCS accounting system. Accrual √ Economics based system. √ 6. Operations Service contractors are monitor & report on any operational issues. √√ Operated to appropriate MOH guidelines & NZ standards. 7. Maintenance Service contractors monitor the system and undertake/report on any √√ maintenance work required. Maintained to appropriate MOH guidelines & NZ standards. 8. Performance Reported annually as part of the Monitoring Annual Report process. √√ 9. Optimised Life Performance assessment used to √ Cycle Strategy prioritise lifecycle strategy. √ 10. Design/Project Expertise is contracted as required. Management √√ 11. Asset Utilisation derived from water use Utilisation/ data. Demand forecasting reliant on Demand historic usage records, staff √√ Modelling knowledge, the 2006 GHD report and Census data. 12. Quality Improvements identified and compiled Assurance/ into a Plan. √√ Continuous Improvement Appropriate Practice (√ = same as current pracce) Best Practice (√ = same as current pracce)

3. Levels of Service

3.1 Customers and Stakeholders Council’s water supply service customers include, Ratepayers, Residents, Local industries, Businesses, Health and Educational institutions, Fire service, Parks, Emergency services, and Carterton District Council. Council’s water supply service stakeholders include, Ministry for the Environment, Ministry of Health, Ministry of Agriculture and Fisheries, Carterton District Council, Local Iwi including, Rangitāne o Wairarapa, & Ngati Kahungunu ki Wairarapa, Department of Conservation, Wairarapa District Health

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Board, Federated Farmers, Greater Wellington Regional Council, Contractors, Subdivision developers, Landowners, and Fish & Game. 3.2 Annual Residents Survey Council conducts a resident’s survey and meets with focus groups to gain feedback on community perceptions of Council every year. The National Research Bureau (NRB) has carried out ‘Communitrak’ surveys for Council every year since 1993. This is a means of measuring Council’s effectiveness in representing the wishes and viewpoints of our residents. It provides a comparison for Council on major issues, and on our performance relative to the performance of our peer group. It also compares Council to other Local Authorities throughout New Zealand and to previous Communitrak results, where applicable. The most recent survey was done in 2014. Current performance based on recent survey results and compared to national and peer group averages is assessed as being adequate for the level of service desired by the community. The following table shows results of the Communitrak Surveys rating the level of service for water supply. Figure 3.1 Results of 2014 Masterton Communitrak Survey for Water Supply (Urban Ward Residents Only) Water supply

Very Satisfied %

Fairly Satisfied %

Not Very Satisfied % * Very Dissatisfied %

Table 3.1 Results of Survey for the Water Supply Service in Masterton Since 2001 Water supply Very Fairly Not Very * Very Don’t Satisfied % Satisfied % Satisfied % Dissatisfied % know 2014 25 68 6 1 0 2012 56 40 3 1 2011 48 41 11 0 2010 48 42 9 1 2009 50 44 6 0 2008 34 50 15 1 2007 17 44 26 13 2006 35 44 21 0 2005 9 48 31 12 2004 15 49 25 11 2003 39 37 10 14 2002 39 39 9 13 2001 33 45 9 13 Peer Group (provincial) 56 37 5 2 National Average 55 38 6 1 * Readings prior to 2014 had a different satisfaction scale.

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3.3 Public Meetings on Special Projects Public Meetings on Special Projects Council’s current policy is to ensure public consultation when undertaking any special projects. Formal public consultation has been undertaken for many capital projects. 3.4 Community Outcomes Consultation Council’s levels of service contribute to achieving the following community outcomes as listed below. The Community Outcomes were identified as part of the 2006-16 LTCCP process and were widely consulted on at that time. For more information re the Consultation process please refer to ‘Shaping Our Future Volume 1: Community Outcomes 2006-16’. A ‘levels of service’ consultation was carried out with the community in 2014 the results of this will be included into this asset management plan. Table 3.2 Community Outcomes that the Water Supply Assets Contribute To Community Outcome How Water Assets Contribute A Strong, Resilient Economy Ensure a continuous potable water supply for industrial and/or commercial purposes

A Sustainable, Healthy Extract, treat and distribute an optimum quantity of potable water Environment to meet the demand of current and future customers, whilst complying with relevant resource consents An Active, Involved and Ensure a continuous potable water supply that meets the Caring Community DWSNZ (2005) and contributes to the health of the community; Ensure a fair distribution of potable water supply to all parts of the community, delivered in a culturally sensitive manner 3.5 Legislative and Other Requirements Statutory requirements set the framework for the minimum standards of service, which the water assets have to meet, and are generally non-negotiable. The key legislation and policies relating to the management of the assets are listed below. 3.5.1 Relevant Legislation Affecting this Asset  The Local Government Act 1974 (Part XXXI).  The Local Government Act 2002.  The Climate Change Response Act.  The Civil Defence Emergency Management Act 2002 (Lifelines).  The Health Act 1956.  Health (Drinking Water Amendment Act) 2003.  The Resource Management Act 1991.  Building Act 1991.  Water Supply Protection Regulations 1961.  Health and Safety in Employment Act 1999.  The Local Government (Rating) Act 2002.  Public Bodies Contracts Act 1959.  Fire Service Act.  Fire Service Code of Practice.  Public Works Act 1981. 3.5.2 Relevant Regulations Affecting this Asset  Drinking Water Standards NZ 2005 3.5.3 Council Policies Affecting This Asset  Wairarapa Combined District Plan 2011  Financial/Rates Policies

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 Water Supply Bylaw 2012 3.5.4 Regional Council Policies and Plans Affecting this Asset  Regional Policy Statement  Freshwater Plan  Discharge to Land Plan 3.5.5 Council Strategic Planning and Other Documents Affecting This Asset  Long Term Council Community Plan (LTP) 2015-25  Communities for Climate Protection Community Plan 3.5.6 Other Planning and Other Reference Documents  NZS4404: 2004 Land Development and Subdivision Engineering Code of Practice 3.5.7 Other Organisations and Bodies that Council intends to work with Relating to this Asset  Central Government  Greater Wellington Regional Council  Masterton District Council  Carterton District Council  Rangitāne o Wairarapa  Ngati Kahungunu ki Wairarapa  The Department of Conservation  Wairarapa District Health Board including Wairarapa Public Health  Regional Public Health 3.5.8 Bylaws Affecting This Asset The Water Supply Bylaw Council enacted under the provisions of the Local Government Act 2002, the Health Act 1965 and the Ratings Powers Act 1988 covers:  Types of supply (definition of ordinary, extraordinary and restricted supply)  Use of fire hydrants  Working around buried services  Protection of water supply (entry to water reserves)  Conditions of supply (application for service, point of supply, metering level of service)  Continuity of supply (water restrictions, emergencies, scheduled maintenance / repair and liabilities)  Customer responsibilities (plumbing design and maintenance, provision of access for Council staff, back flow protection and payment of services)  Breaches, offences and disputes 3.6 Levels of Service and Performance Measures 3.6.1 Levels of Service, Performance Measures & Targets Council developed the current water asset levels of service, performance measures and targets shown in Table 3.4 to reflect:  Industry standards  Customer research and expectations  Legislative and other requirements  Strategic and corporate goals

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Table 3.4 Old Levels of Service, Performance Measures & Targets for Water Supply

Level of Service Performance Baseline Performance Targets Measures 2010/11 2012/13 2013/14 2014/15 Years 4-10 Provide efficient and Customer 89% Maintain Maintain Maintain Maintain effective water supply satisfaction with Peer group satisfaction satisfaction satisfaction satisfaction systems. urban water supply average: 93% and equal or and equal or and equal or and equal or services (within margin of exceed peer exceed peer exceed peer exceed peer error) group average group average group average group average Supply is restored 95% target met More than More than More than More than within four hours 95% of 95% of 95% of 95% of following a planned shutdowns shutdowns shutdowns shutdowns or emergency shutdown An alternative water No shutdowns 100% of 100% of 100% of 100% of supply is provided exceeded 24 occasions occasions occasions occasions when shutdown hours exceeds 24 hours

Proportion of the 100% 100% 100% 100% 100% time that treatment plants are able to receive and treat raw water Water supply assets Some work was Annual work/ Annual work/ Annual work/ Annual work/ managed to the level deferred due to projects are projects are projects are projects are specified and agreed planning and completed completed completed completed in the AMP design work not being completed Complete a Due: 2012 Completed on Completed on six- yearly time & 100% time & 100% assessment of water compliant with compliant with service provision in LGA 2002 LGA 2002 in the District 2018 Provide water supply Compliance with NZ 100% compliant 100% 100% 100% 100% services in a way that Drinking Water and rated Aa2 compliant and compliant and compliant and compliant and is acceptable, safe and Standards for urban rated Aa2 rated Aa2 rated Aa2 rated Aa2 has minimal supply environmental impact. Compliance with NZ 100% compliant 100% 100% 100% 100% Drinking Water compliant compliant compliant compliant. Standards microbiological criteria for Tinui rural supply

Water consumption/ 100% compliant 100% 100% 100% 100% conservation is compliant compliant compliant compliant managed to ensure compliance with river water flows (resource consents for drawing water) Water is available 100% compliant At least 99% At least 99% At least 99% At least 99% from Masterton with NZ Fire supply network for Service Fire firefighting purposes Fighting Water Supplies Code of Practice

1. Measured as the proportion of customers surveyed by NRB who report being very or fairly satisfied with the service. 2. Capital ‘A’ = Source & Treatment grading; completely satisfactory, extremely low level of risk. Lower case ‘a’ = Distribution zone grading; satisfactory, extremely low level of risk. Grading available from WWW.moh.govt.nz “Public Health Grading of Community Drinking-Water Supplies”, Levels of service were reviewed by consultation with the community in 2014 & 2015, Table 3.5 has been adopted by Council through the LTP process (2015-2025).

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Table 3.5 New Levels of Service, Performance Measures & Targets for Water Supply (2015)

Level of Service Performance Baseline Performance Targets Measures 2013/14 2015/16 2016/17 2017/18 Years 4-10

Provide efficient Customer satisfaction 93% satisfaction Maintain Maintain Maintain Maintain with urban water Peer group satisfaction and satisfaction and satisfaction and satisfaction and and effective water supply services average: 90% equal or exceed equal or exceed equal or exceed equal or exceed supply systems. (within margin of peer group peer group peer group peer group error) average average average average

Mandatory: New Measure Establish Maintain Maintain Maintain baseline data baseline baseline baseline The total number of complaints received for new Data is being mandatory by the local authority recorded for the about any of the measure current financial following: year. This will a) drinking water be available clarity after 30/6/15. b) drinking water taste c) drinking water odour d) drinking water pressure or flow e) continuity of supply, and f) the local authority’s response to any of these issues Expressed per 1000 connections to the local authority’s networked reticulation system.

Mandatory New Measure Where the local authority attends a call-out in response to a fault or unplanned interruption to its networked reticulation system, the following median response times measured:

(a) attendance for 60 minutes ≤60 minutes ≤60 minutes ≤60 minutes ≤60 minutes urgent call-outs:

from the time that

the local authority

receives notification

to the time that

service personnel

reach the site, and

(b) Resolution of 480 minutes ≤480 minutes ≤480 minutes ≤480 minutes ≤480 minutes urgent call-outs: from the time that the local authority receives notification to the time that service personnel confirm resolution of the fault or interruption. (c) attendance 7 days ≤7 days ≤7 days ≤7 days ≤7 days for non-urgent call- outs: from the time that the local authority receives notification to the time that service personnel reach the site, and 3 months ≤3 months ≤3 months ≤3 months ≤3 months 13

Level of Service Performance Baseline Performance Targets Measures 2013/14 2015/16 2016/17 2017/18 Years 4-10

(d) Resolution of non-urgent call- outs: from the time that the local authority receives notification to the time that service personnel confirm resolution of the fault or interruption. An alternative water No shutdowns 100% of 100% of 100% of 100% of supply is provided exceeded 24 occasions occasions occasions occasions when shutdown hours exceeds 24 hours

Provide water Mandatory The extent to which 130 Masterton supply services in the local authority’s urban water a way that is drinking water supply samples tested acceptable, safe complies with: and confirmed compliance with and has minimal the drinking environmental water impact. standards.

(a) part 4 of the 12 Tinui water 100% 100% 100% 100% drinking-water samples tested standards (bacteria and confirmed compliance criteria), compliance with and the (b) Part 5 of the microbiological drinking-water criteria for standards drinking water 100% 100% 100% 100% (protozoal standards compliance criteria). Mandatory New Measure The percentage of real water loss from 30% water loss < 30% < % for < % for < % for the local authority’s previous year previous year previous year reticulation system (calculated using minimum night flow). Mandatory New Measure The average consumption of 923 Litres/ < 923 Litres < Litres < Litres < Litres drinking water per day person/day /person/day /person/day for /person/day for /person/day for per resident within the previous year previous year previous year District.

The links between the Levels of Service and the Community Outcomes for water supply are shown in Table 3.6. Table 3.6 How Water Supply Levels of Service Contribute to our Community Outcomes Community Outcomes

Levels of Service A Strong Resilient Economy A Sustainable, Healthy Environment An Active, Involved and Caring Community A Knowledgeable Community An Easy Place to Move Around Provide an efficient and effective water supply system √ √ √ 14

This level of service: Aims to ensure the needs of local communities are met with regard to the treatment and supply of domestic and industrial water requirements. This contributes to both the public health of the community and the community’s capacity for growth and economic development, now and in the future. Provide water supply services in a manner that is acceptable, safe √ √ √ and has minimal environmental impact This level of service: Aims to ensure that services are provided in a way that is equitable and culturally acceptable, whilst maximising public health opportunities and minimising environmental impact. 3.6.2 Desired Levels of Service In 2014 invited stakeholders, service users and interest group representatives attended workshops to consider the different services Council offers. At each workshop, participants recorded what they liked and disliked about the service, and then listed suggestions for improvement. This feedback, along with information gathered from surveys, meetings, trends, Annual Plan submissions and a range of other sources was used to help Council review service delivery. By further improving the effectiveness and efficiency of its systems Council could improve service delivery. For example, by reducing leakage, we could enhance the system’s capacity especially during hot, dry seasons. Undertaking strategic reviews of water supply services will identify ways in which Council can further enhance the effectiveness and efficiency of the system. Through such reviews specific work and/or projects could be identified and assessed for affordability versus potential benefits. Table 3.7 Potential Enhancements / Improvements to Levels of Service

Option to Improve Service Level Justification Benefit Cost Enhance the Water Conservation Programme to better Demand Potential to enhance the $20,000 educate the community and commercial users on more management programmes reach and efficient water use impact

Potential for reduced demand of limited resources at times of traditionally high demand

Potential to reduce water restrictions over high demand periods

Enhance water Conservation by installing water meters Demand Improve data provision to $3,000,000 – management customers. $5,000,000 Implement actions arising from the strategic review of Customer feedback Better able to meet consumer Cost not urban water supply infrastructure e.g. automating WTP needs quantified operation, providing alternative mechanisms for supply, Demand and increasing water storage capacity management Enhances user services

Opportunity to add Reduced water restrictions value and enhance service

Review operation of rural water schemes Risk and asset Enhanced user services $350,000 management Enhanced risk management processes

Enhanced asset management processes Implementation of National Standards being developed New NZ Standards Levels of Service greater Cost not for Levels of Service for levels of service than currently in operation quantified

Improve chlorine monitoring at Upper Plain Reservoir Risk Management Enhanced user services $30,000

Enhanced risk management processes 15

3.6.3 Current and Desired Level of Service The desired levels of service were identified in 2012 as options for enhancing service levels. However, affordability is also a key consideration when establishing service levels. The current levels of service (refer Table 3.4) were agreed with our community in 2006. The results of the Public Health Risk Management Plan review, further leak detection studies and/or the planned network condition assessment may identify level of service ‘gaps’ and thus improvements to be made. Any identified opportunities for improvement will be incorporated into this Plan. As a result of changes in Ministry of Health legislation new standards will apply to the Tinui scheme from 2015. 3.7 Past Performance Measures Table 3.8 shows the performance measures for the water supply activity, and whether Council has achieved them. This information was obtained from the Annual Reports for each year. Note it gives a reasonably simplistic view of Councils performance and the reader is referred to the Annual Reports for further details. As can be seen, the discovery of cryptosporidium in the water supply in the 2003/2004 period had a significant effect on Councils performance against standards at that time. However, more recent data suggests public confidence in the water supply has returned. Table 3.8 Past Masterton District Water Supply Performance Trends

Performance 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 Measure 100% compliance with DWSNZ for Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved urban supply Continuous supply of water except for planned or emergency Not Not Achieved Achieved Achieved Achieved Achieved Achieved shutdowns. Achieved Achieved Shutdowns no longer than 2 hours on 95% of occasions Urban water supply Not satisfaction level Not Achieved Achieved Achieved Achieved Achieved Note 1 Achieved >than peer group Achieved (Note 2) average Compliance with microbiological Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved criteria (DWSNZ) for Tinui supply Water supply assets managed to a level Partly Partly Not Achieved Achieved On Track Note 1 Note 1 specified and agreed Achieved Achieved achieved to in the AMP 100% compliance with resource Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved consents for drawing water Water conservation Program programme Achieved Achieved Note 1 Note 1 Note 1 Note 1 Note 1 Dec-Mar implemented Compliance with requirements for Achieved Achieved Achieved Achieved Achieved Achieved Note 1 Note 1 95% of all fire hydrants *Note 1- Performance measure not used for this year. *Note 2 - Achieved 89% compared to peer group 93%. 3.7.1 Register of Community Drinking Water Supplies The Ministry of Health maintains the Register of Community Drinking Water Supplies in New Zealand. It provides a grading for all community water supplies based on the following:  The first letter of the grading relates to the source water and treatment plant  The second letter relates to the distribution zone 1. 16

Table 3.9 Register of Community Drinking Water Supplies Grading System Source/ Distribution Description Treatment Grading Grading A1 a1 Completely satisfactory, negligible level of risk, demonstrably high quality. A a Completely satisfactory, extremely low level of risk. B b Satisfactory, very low level of risk. C c Marginally satisfactory, low level of microbiological risk, moderate level of risk. D d Unsatisfactory level of risk. E e Unacceptable level of risk. U u Un-graded. Table 3.10 shows the grading for the Masterton water supply from 2008 to 2014. Although these grades are not currently in Councils level of service, it is considered useful to note them here. They may in future become part of Councils level of service. Table 3.10 Masterton Water Supply Grades Year Grade Comment (if any is attached to grade) 2008 Aa 2009 Aa 2010 Aa 2011 Aa 2012 Aa 2013 Aa 2014 Aa 3.8 Financial Summary 3.8.1 Current Costs In 2013/14 Urban Water Supply Services, delivered at current levels of service produced  Operating costs of $3,043,949  Rates funding of this was $2,818,305  Proportion of Total Cost: 92% In 2013/14 Rural Water Supply Services, delivered at current levels of service produced  Operating costs of $312,210  Rates funding of this was $154,377  Proportion of Total Cost: 49%

Note: Wainuioru Water Supply is funded by a directly invoiced charge rather than a property rate, hence the lower % of costs funded by rates. To maintain these current levels of service, maintenance and renewal work will need to be undertaken, as detailed in this AMP. For more information re specific projects identified, please refer to sections: 4 Future Growth and Demand; 5 Risk Management and 6 Life Cycle Management Plans. 3.8.2 Cost of Enhancing Current Levels of Service The key actions and issues identified in this section requiring attention and/or intervention, and the costs associated with the proposed work, are outlined in Table 3.11. It should be noted that the level of services provided through the upgrading of assets is subject to the availability of capital contributions for that service. Table 3.11 Work and Costs Required to Enhance Current Levels of Service

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Action/Work Driver for Action Estimated Cost Scheduled For How this will be funded Enhance water Potential to $20,000pa is No financial N/A conservation enhance current currently allocated enhancements programme LOS and reduce to water scheduled water restrictions conservation at peak periods initiatives. Any spend beyond this could be used to enhance the programme. Improve chlorine Improve the $20,000 2015/16 Rates monitoring at control of chlorine Upper Plain residuals Reservoir

Rural water Drinking water $350,000 2017/18 User charges scheme - standards assistance compliance Water metering Demand $3,000,000 – 2018/19 To be confirmed management $5,000,000

4. Future Growth and Demand

4.1 Introduction The objective of asset management is to create, operate, maintain, rehabilitate and replace assets at the required level of service for present and future customers in a cost effective and environmentally sustainable manner. The asset management plan must therefore forecast the needs and demands of the community in the future, and outline strategies to develop the assets to meet these needs. Council has considered the following factors in for the water supply in addition to those described in Part A to predict future demands:  Water demand and delivery of service  Tourism  Land use (including timber processing)  Changing legislative requirements  Commercial influences such as industrial expansion at Waingawa may increase demand for services, or result in demand for different types of services.  Private water schemes requiring intervention by Council. 4.2 Population Effect With a reasonably static population, Council does not expect the demand on water supply quantities to change significantly. The household distribution and urban/rural split should continue to be monitored. If the rural population does continue to increase on the outskirts of the urban area, this growth could be accommodated by expanding existing urban facilities. Some rural areas that have experienced population growth, such as Opaki, have their own water supply service and therefore growth in this area is currently beyond the scope of this Plan. However, this may be something Council will need to consider in the future if development in the Opaki area continues. At some stage the Opaki scheme may not be able to support its community and some Council assistance may be required. 4.3 Commercial Influences

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The key impact of industrial and commercial use on the water supply service is likely to come from industrial activity in the Waingawa area, and particularly industry related to forestry activity. There has been expansion in the Waingawa Industrial area and although this area officially sits in the Carterton District, water is supplied by Masterton. Masterton and Carterton District Councils have negotiated an agreement to provide water to the south of the Waingawa River from the Masterton water network. This agreement has a maximum take of 35 litres per second associated with 30 metres of residual pressure. The agreement is filed as document #1243 in the MDC agreements file. There is no forecasted growth of the Industrial area that is beyond its current capacity. 4.4 Climate Change Climate change is expected to have a significant effect on the water supply service, from both a supply and demand perspective. It could result in both a shortage of water for supply and at the same time, increased demand for services. Demand management practices can be used to help manage this. Council currently applies and enforces water restrictions in the hottest and driest months of the year and periodically publishes educational material re water conservation. For more information about Council’s demand management tactics please refer to the Potable Water Demand Management Plan (MDC, May 2011). Council also supports community groups like Sustainable Wairarapa to undertake education and awareness raising programmes relating to climate change mitigation and/or adaptation. There are projects underway that will ultimately enhance Council’s ability to supply water services. Ongoing leak detection surveys network condition assessments occur annually. This work helps inform Council and direct its maintenance and renewal programme. Repairs and improvements, once complete, will reduce the amount of water ‘lost’ in future years. Further monitoring and analysis work is recommended to gain a better understanding of how climate change may impact on water supply services in the Masterton District. 4.5 Demand for Improvement in the Service Level Feedback from customers and consultation processes suggest that, in general, the community is happy with the current level of service provided by Council. As a result of changes in Ministry of Health legislation, new standards will apply to the Tinui scheme from 2015. Council has enhanced its protozoa treatment performance. Improvements are scheduled to ensure compliance and funding has been allocated in anticipation of this. 4.6 Demand Forecast Table 4.6 summarises the impact of demand drivers on the water assets. It is recommended this table be completed at a later date. Table 4.6 Water Supply Demand Forecast for Masterton District Demand Driver Future Impact Future Demand (for the next ten years) Population No/Low Unlikely to impact on demand Commercial Influences Low/Med Demand is expected to increase at the Waingawa Industrial area Climate Med Demand likely to increase in hotter/ drier periods and ability to supply may be reduced Tourism No/Low Unlikely to impact on demand Land Use Low/Med Demand may increase from large wood processing sites supplied by Kaituna and/or Tinui Improvement in the level Med Impact of Tinui new standards is not known at this of service stage. Although demand for quantity is not expected to change, demand for improvement in water quality is anticipated 4.7 Cost of Responding to Growth and Demand Changes

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As noted, no specific work has been identified at this time. The key actions and issues identified in this section that may require attention and/or intervention, and the costs associated with the proposed work, are outlined in Table 4.7. Table 4.7 Water Supply work required to meet Growth & Demand Demand Driver Work/Action Required Estimated Cost & How this will be funded Climate Change It is possible that climate change Potential project costs are unknown, impacts will require future work to investigative work will be covered by mitigate and/or adapt. At this stage existing budgets. the extent and impact of climate change is unknown. Resilience Install new Lansdowne reservoir $1,000,000 In the projected years of 2020 - 2025 Resilience Construct new raw water dams or $3,000,000 to $30,000,000 contribute to Wairarapa Water Use In the projected years of 2020 - 2025 Project 4.8 Conclusion 4.8.1 Masterton Urban Water Supply Council’s water supply planning assumes that the impact of population growth on the infrastructure over the next ten years will be minimal. Council believes that it has spare capacity within its water infrastructure to absorb the impact of any population growth that does occur. Any increase in demand is more likely to come from industrial sectors, for example the Waingawa Industrial Park. Council believes that it has the spare capacity within its water infrastructure to absorb the impact of any expansion in its industrial base. Current demand management practices are limited to garden sprinkler restrictions during the summer months, with enforcement by Council staff and contracted security services. Water restrictions and water conservation messages are promoted via local media. See Council’s Potable Water Demand Management Plan (MDC, May 2011) for more information. Water use per capita for Masterton is significant at 900 L/p/d, indicating the potential for some leakage from the reticulation. An ongoing leak detection study commenced in 2008 and a condition assessment commenced in 2009. This work is ongoing with the findings informing Council’s maintenance and renewal programme. An alternative water source from the Waipoua River has been identified as a short-term option to be used in a civil emergency should the existing source become unavailable. Council will develop strategies for the various possible projections as to the likely risks of climate changes. 4.8.2 Tinui Water Supply Population growth is not expected to provide any constraints to the Tinui water supply in the context of the current consent. The local users administer this scheme, which Council owns, and currently no known demand management techniques are in place. However, media promotion of water conservation in the summer months does reach this area. The level of unaccounted for water (and potentially leakage) in Tinui is currently unknown. The current covered storage capacity for treated water is adequate to meet future demands.

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5. Risk Management

5.1 Introduction Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analysing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. Risk management is as much about identifying opportunities as avoiding or mitigating losses. Part A summarises risk relevant to all asset streams but there are risk management issues particular to the water supply, and these are identified below. 5.2 Risk Management Process The process followed for this Plan was: Strategic Level Risk Assessment:  Initiation of Risk Management Project in November 2005 to support Councils asset management planning processes and LTCCP  Introduction of Council staff to concepts of risk management via training workshops  Preparation of draft risk assessments by Council asset managers for their respective areas of responsibility, which were then reviewed by Waugh Consultants Ltd  Production of a report: Masterton District Council Asset Management Processes Risk Management (Waugh Consultants, 2006)  Identification of issues to be followed up  Review of Masterton District Council Asset Management Processes Risk Management (Waugh Consultants, 2006) in conjunction with asset managers and production of a revised report: Masterton District Council Asset Management Processes Risk Management (Waugh Consultants, 2011)  Risk Management Update (Waugh Consultants, 2014)  The impact of the Waugh Update (2011 & 2014) was reviewed at a strategic level in conjunction with the risk assessments carried out by Council staff. The risk management analysis is now consistently incorporated into all respective asset management plans. It is recommended that:  Further work, training and assessment be carried out as an ongoing process following the strategic review 5.3 Seismic Risk Mitigation Some of the inherent seismic vulnerabilities of water and wastewater systems include;  Many critical facilities, such as reservoirs, pump stations, and treatment plants, were designed and constructed before the adoption of seismic design standards that reflect the current state of knowledge of regional seismicity.  Pipeline networks include extensive use of non-ductile (inflexible) materials, such as concrete and cast-iron pipe, which tend to fail during strong ground motion. Pipelines are especially vulnerable to failure from permanent ground deformation (resulting from liquefaction), because the deformation causes push-on pipe joints to separate. An option to install seismic curtains has been raised as an option to retro fitting in the water reservoirs, cost is unknown and further work is required to measure the cost/benefit of pursuing this as a risk mitigation at this stage. 5.4 Operational Level Risk Assessment:

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 Ongoing Leak Detection Studies and Network Condition Assessment work identifies areas of concern, or risk, and informs maintenance and renewal programme.  Review of the Public Health Risk Management Plan (PHRMP), completed in 2014. 5.5 Summary of Trends in Risk Assessment The Waugh Update (2014) showed that there were a number of risk themes that were common to many activities. These themes are outlined in the Waugh Report (2014), and are identified for Councils consideration, rather than as a list of individual risk issues against each activity. Themes included:  CAPEX Programme Management and future funding  Unforeseen Natural Events  Health & Safety  Legislative Compliance  Policy & Process Development  Asset Renewals, Operations & Maintenance  Staff Resourcing & Training 5.6 Identification of Critical Assets The assets (both internal and external) that are critical to Councils solid waste activity were identified and consequences of their failure are discussed in Table 5.2. Assessment of the risks for the critical solid waste assets requires the analysis and rating of its probability and impact of occurrences, which are given below. Table 5.1 Risk Methodology & Scores

Community Risk Magnitude Legislation Financial Environment Expectation

Commissioners Expectations not Detrimental effects Widespread long term Extreme (4) Appointed obtainable > $0.5m effect

Adverse Audit Expectations not Detrimental effects High (3) Opinion or obtainable medium Long term effect > $50k Disclaimer term

Qualified Opinion; Expectations not Detrimental effects Short term reversible Medium (2) Warning over non‐ obtainable in short between $10k ‐ effect compliance. term $50k

Minor non‐ Faults within agreed Detrimental effects Reversible and Low (1) compliance LoS <$10k contained effect.

Expectations Negligible (0) Compliance No effect No effect reached Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] [E]Existing O C R O C R O C R O C R O C R [P]Proposed/Future [P] Population and demand changes forecast at least 30 years 4 2 0 4 3 2 4 3 2 2 4 1 16 12 5 forward, for individual communities served. District Plan …. Table 5.2 Critical Assets Critical assets to be defined, scored, consequences of impact determined. 5.7 Risk Analysis The risks specific to this asset were identified and assessed on the basis of existing conditions in Table 5.3. The higher the risk scores the higher the risk potential.

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Table 5.3: Risk Analysis Table Managerial and Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 1 Governance [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 1.1 Business Continuity Plan [E] Earthquake & Emergency Response Plans held; also SARS operator quarantine 3 1 0 3 2 1 3 2 1 1 2 0 8 7 2 plan. There are BCP associated with M1 emergency management. 1.2 Succession planning [E] No formal succession planning is carried out; insufficient employee numbers. Ensuring 1 1 0 2 2 1 2 2 0 1 1 0 6 6 1 M2 systems, data, records are of good quality. 1.3 Risk Register and Asset [P] Risk Control schedule to be developed for 1 2 0 2 2 1 2 3 1 1 2 0 6 9 2 Risk Plan all assets. M3 1.4 Corporate Risk Policy [P] Policy outlines Councils strategic 1 2 0 2 2 1 2 2 1 2 2 0 7 8 2 approach to risk management M4 1.5 Council Policy Document [E] The council has a corporate policy manual that records all policies. Staff know of the manual’s existence and it is being actively 2 2 0 2 1 1 2 2 0 1 1 0 7 6 1 used. [P] More policies are required in the water chapter. 1.6 Special Agreements [E] Adequate service agreements are in place. Departments in the organisation know “what, how and when” is expected. (e.g. 1 0 0 2 1 1 3 0 0 1 0 0 7 2 2 revenue/water liaison re connected properties) 1.7 Contracts Supervision [E] Contractors are supervised directly by staff from the Water Department. In some 2 0 0 3 1 1 3 1 0 3 0 0 11 2 1 cases contractors on Capital projects may be supervised by a consultant. 1.8 Completion of Work [E] Individual responsibility is defined in job descriptions and annual works programmes. Progress is monitored through staff meetings 2 1 0 2 1 1 3 1 0 3 1 0 10 4 1 and other communications. A formal review of staff performance is undertaken yearly. 1.9 Staff Resources [E] Staffing levels low and considered (NB: Licensed Treatment appropriate due to level of plant automation. Plant operators) Intermittent high project/consent/reporting 1 1 0 2 1 1 2 2 1 1 1 0 6 5 2 workload is handled economically with consultants. 1.10 Internal Monitoring and [E] Well established National reporting Reporting processes to demonstrate compliance due to 3 0 0 3 1 1 1 1 1 1 1 0 8 3 2 health risks associated with providing potable water. Risk Totals; % Reduction if all mitigation completed 76 52 15 80% Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 2 Service Delivery [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R

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2.1 Service Standards [E] Individual responsibility is defined in job descriptions and annual works programmes. 3 0 0 3 1 1 3 1 1 2 1 1 11 3 3 Well established NZ Standards and legislative requirements. 2.2 Service Levels [E] Contract specifications match required 1 0 0 2 1 1 2 1 1 1 1 1 6 3 3 LoS. 2.3 Monitoring and Reporting [E] The reporting on compliance of existing Service Levels is carried out annually in a 1 0 0 2 1 1 3 1 1 2 1 1 6 3 3 systematic manner. Risk Totals; % Reduction if all mitigation completed 23 9 9 61% Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 3 Financial [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 3.1 Completion of annual [E] Limited number of competent contractors; Capital Works programme resulting in necessary deferral of projects. [P] Obtain exec. Agreement so that desire to 2 1 0 3 2 1 3 2 1 1 1 0 9 6 2 employ locally is balanced against need to M5 attract resource from outside of MDC to deliver on time. 3.2 Insurance [E] All assets adequately insured 1 0 0 1 1 1 1 1 1 1 0 0 4 2 2 M6 3.3 Connected properties [E] Properties are appropriately charged as charged per Council policy and within the network 1 1 0 1 2 1 1 1 0 1 1 0 4 5 1 area. 3.4 Charges that ratepayers [E] Council’s survey indicates a clear prepared to pay preference by ratepayers that the service 1 1 0 2 2 1 1 2 1 1 0 0 5 5 2 they are receiving is of value. [P] Include M7 service in 2015 LTP focus groups. 3.5 Financial Costs for providing services portray The financial forecasts level of confidence are

the true costs for the as follows: following:  Operations and [E] High level of confidence as based on maintenance historical costs and known cyclic increases in 2 0 0 1 1 1 2 1 1 1 0 0 6 4 2 operational and maintenance costs.  Asset renewals [E] High level of confidence, costs based on 2 0 0 1 1 1 2 1 1 1 0 0 6 6 2 similar projects carried out in the past.  Future new Capital [F] Review rates to ensure estimates 2 1 1 1 2 1 3 2 1 1 0 0 7 5 3 works accurate. Minimal Capex budget. 3.6 Financial Assistance [E] Council aware of external funding sources (external sources) being and applies for these. [P] Network to identify 1 1 0 1 1 1 2 2 1 1 1 0 5 5 2 taken advantage of. other sources. Find a person prepared to M8 lobby in support of applications. 3.7 Asset Valuations [E] Valuations in accordance with FRS 3. [P] Review as-builting responsibility; Data from 2 2 0 2 1 1 4 2 0 1 0 0 9 5 1 M9 contractors is slow and poor quality. 3.8 Prevention of Cost [E] The council’s financial accounting system Blowouts has reporting facilities that allow managers to 1 1 0 2 1 1 3 1 1 1 0 0 7 4 2 be kept fully informed of expenditure on all 24

projects. 3.9 Development Contributions [E] Development contributions are fair, clear appropriate and properly enforced. [P] New LGA 2 1 0 1 1 1 2 2 1 1 0 0 6 4 2 M10 requirements will be reflected in next LTP. 3.10 Deferred maintenance [E] Low-level of deferred maintenance after 5 years catching-up. [P] Better asset info to 1 1 0 2 2 1 1 3 0 1 0 0 5 6 1 M11 avoid repeat of situation. 3.11 Delegation [E] Financial authority delegations are in place for all staff with defined purchasing 2 0 0 1 2 2 1 0 0 1 0 0 5 2 2 authority. 3.12 10 Year Replacement [E] Increased level of confidence in Programme replacement programme: condition 1 0 0 1 1 1 2 3 1 1 0 0 5 4 2 assessments undertaken, other attribute data M12 improvement. Risk Totals; % Reduction if all mitigation completed 83 55 26 69% Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 4 Physical Assets [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 4.1 As Built Plans New assets [E] Council has a documented process for recording changes to assets that occur during the Maintenance Contract and following 2 1 0 1 2 1 2 2 0 1 1 0 6 6 1 Renewal. [P] Consider undertaking as-built M13 surveys directly rather than relying on contractors/developers. 4.2 Standard of new [E] New assets are built to standard construction and of repair specifications, which are aimed at reducing work the risk of failure of an asset. Subdivisions are properly inspected and as-builds 2 1 0 2 1 1 3 1 0 1 1 0 8 4 1 completed to the required standards. Maintenance and repair work is inspected, supervised and approved by Council staff 4.3 Assets attributes [P] Council’s knowledge and understanding of assets attributes (condition, criticality, performance and remaining life) requires 1 1 0 2 2 1 2 2 1 1 0 0 6 5 2 further improvement to ensure the M14 replacement program is based on sound information. 4.4 10 Year Renewal [E] Increased level of confidence in Programme replacement programme of assets with the 2 1 0 3 2 1 3 2 1 1 0 0 9 5 3 condition assessments being undertaken. [P] Include risk factors. 4.5 Optimisation – Renewals [E] Optimisation approach is currently least cost. [P] Complete data attribute update for 2 2 0 3 1 1 3 2 1 1 1 0 9 6 3 risk based optimisation. 4.6 Lifelines [E] Lifelines determined by condition rating and lifecycle analysis carried out by both 3 1 0 1 1 1 1 2 0 1 0 0 6 4 1 external consultant and internal staff. [P] M15 Review lifelines report. 25

Risk Totals; % Reduction if all mitigation completed 44 30 11 75% Maintenance & Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 5 Operations [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 5.1 Operations/Maintenance [E] Maintenance and operation manuals manuals updated when equipment changes and reviewed at 5-year intervals. Risk higher 2 2 2 3 2 2 3 1 1 2 0 0 10 5 5 since no succession plans to be made. Licensed operator is essential. 5.2 Health and Safety Manuals [E] Available updated and adhered to. 2 1 1 2 1 1 2 1 1 2 0 0 8 5 3 5.3 Standard of new [E] Maintenance and repair work is inspected, construction and of repair supervised and approved by Council staff. 2 1 1 2 1 1 1 1 1 1 0 0 6 3 3 work 5.4 Service Agreements [E] Maintenance and Operation performed 1 1 1 1 1 1 1 2 0 1 0 0 4 4 2 under formal contract. 5.5 Fault Response [E] Faults or requests for service reported by the public are logged on common Council- contractor system. Response times are 1 1 0 2 1 1 2 2 0 1 0 0 6 4 1 specified in contract and monitored. [P] Integrating work orders against assets would be beneficial Risk Totals; % Reduction if all mitigation completed 34 21 14 59% Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 6 Legal [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 6.1 Legislative Compliance [E] All legislative requirements that impact on 3 1 1 2 1 1 2 1 1 1 0 0 9 3 3 water services being complied with. 6.2 Sub-divisional, [E] Appropriate attention to detail is being Development and Building paid during processing sub division, Consent processes. development and resource consent 1 1 0 1 1 1 2 1 0 1 1 0 5 4 1 applications. [P] Review LGA ‘developer- provided infrastructure’ provision (should we check designs?) 6.3 Councils Warrants [E] All relevant staff have the necessary warrants and properly trained for their use. 2 1 0 1 1 1 1 1 0 1 0 0 5 3 1 [P] Review training. 6.4 Bylaws [E] Bylaws are reviewed time to time. 1 0 0 1 1 1 1 0 0 1 0 0 4 1 1 6.5 Reserve Management N/A N/A 6.6 Industry Standards and [E] Compliant NZDWS; Health Act last 10 Guidelines years (historic cryptosporidium events). Code 2 0 0 3 1 1 2 1 1 4 0 0 11 2 2 of Practice adopted. 6.7 Designations [E] All relevant water assets properly designated in the District Plan. [P] Review 2 1 0 1 1 1 1 1 0 1 1 0 5 4 1 once – no planned additions. 6.8 Provisions of District Plan [E] All issues in regard to Water are 3 1 0 3 1 1 2 2 0 3 0 0 11 4 1 taken into Account considered. [P] Review when Plan updated. Risk Totals; % Reduction if all mitigation completed 50 21 9 82% 26

Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 7 Environmental [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 7.1 All relevant Consents held [E] Council holds all relevant consents. 2 0 0 1 1 1 1 1 1 2 1 1 6 3 3 7.2 Compliance with Resource [E] All resource consents are complied with. Consent Conditions Reporting procedures in place to ensure 3 0 0 2 1 1 1 1 1 2 0 0 8 2 2 M16 compliance. 7.3 Climate Change (incl [E] MfE Guidelines monitored and factored Drought) into AMPs. No adopted position. [P] Policy re- 3 3 0 4 4 1 3 2 2 2 2 0 12 11 3 DM7 funding future storage requirements. 7.4 Energy Management [E] No Council wide policies or commitment. Energy usage is monitored. Insufficient consumption to support investment unless 1 1 0 1 2 1 1 2 1 1 1 0 4 6 2 M17 aggregated over region. [P] Review joint purchase for lower tariffs/efficient devices. Risk Totals; % Reduction if all mitigation completed 30 22 10 67% Level of Compliance Risk Magnitude: Original [O] Current [C] Residual [R] 8 Other Risks [E]Existing [P]Proposed/Future O C R O C R O C R O C R O C R 8.1 Natural Events (severe [E] MDC has an approach for managing storms, seismic activity, damage; assessing the risks (Lifelines), and coastal or river erosion. exercises have been held in the past. [E] Earthquake & Emergency Response Plans 1 1 0 3 2 2 4 3 3 3 2 2 11 8 7 M15 held; also SARS operator quarantine plan. [P] The Lifelines planning/assessments are now old. Review; prepare additional ERP’s. 8.2 Damage by others [P] Consider additional security cameras. (excavations, vandalism 3 2 0 2 1 1 2 1 1 2 1 1 9 5 3 etc.) 8.3 Growth [E] 3 yearly projections are provided corporately and the impacts allowed for in AMPs. [P] 30-year projections are made; 3 2 0 4 2 1 2 3 1 2 1 0 11 8 2 DM1 impact of declining communities provided for in District Plan and AMP. 8.4 Damage by others [E] Water sources open to contamination: low (catchment risk) probability. Catchment Management Policy exists. Pest control in catchment. Dilution is a 3 1 1 2 1 1 2 0 0 2 1 1 9 3 3 mitigator. CCTV on intake, reservoir entries SCADA-monitored. Risk Totals; % Reduction if all mitigation completed 40 24 15 62%

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Followings are the risk categories based on the score of risk elements: Table 5.4 Risk Category Table Risk Attention required Risk Treatment Response Required by Key Extreme (11- Executive Action plans and management responsibility 12) Management specified High (8-10) Senior Management Management responsibility specified Medium (5-7) Specific monitoring Management responsibility specified or response procedures Low (1-4) Routine procedures Unlikely to need specific application of resources

5.8 Improvement Plan 2014 - Water Improvements identified below:

Table 5.4 Improvement Plan 2014 - Water Ref Item Description Score When Whom 1.1 Business continuity plan Develop a business continuity plan Partially M1 6 SMT Complete 1.2 Succession plan Ensure systems, data, records are of good M2 6 2015 SMT quality. 1.3 Risk control schedule Develop a risk control and criticality schedule Not M3 7 USM for Water Complete M4 1.4 Corporate Risk Policy Actively promote Water risk assessments, mitigation measures and processes corporately to assist with a Corporate Policy Partially 7 SMT development. Complete In the interim ensure insurance cover is reviewed and coverage is agreed corporately. M5 3.1 Completion of annual Following completion of condition assessment capital works programme and capacity checks work, a sustainable risk based Capital programme will be developed 6 On-going USM and implemented specifically targeting Steel and AC pipe. M7 3.4 Charges that ratepayers Continue to utilise Communitrak Survey to 7 On-going USM prepared to pay monitor customer satisfaction levels. M8 3.6 Financial assistance Council to actively seek Government (external sources) being 5 On-going USM Assistance (TAP) for rural water supplies taken advantage of. M10 3.9 Development Review development contributions to future 7 On-going MAO Contributions appropriate known growth areas M13 4.1 As built plans and new Refer M9, Review the need for a AM System Implemen assets to corporately store all asset related data, 6 tation On- MAO linked to a AM processes (AMS Purchased) going M14 4.3 Assets attributes Complete Condition assessments and update core attribute details (Install date, Material 8 On-going USM type, diameter and length) set data confidence levels based on asset criticality and apply. M15 4.6 Lifelines Update Lifelines through WELA Project and Not implement Lifelines projects. 6 USM Document existing processes Complete M16 7.2 Compliance with resource New consents to be applied due to inability to consent Conditions comply with some unreasonable existing 7 On-going USM conditions. Prepare information for application. M17 7.4 Energy Management Record and report energy usage annually 8 On-going MF Key: SMT – Senior Management Team, MAO – Manager Assets & Operations, MF – Manager Finance, USM – Utility Services Manager

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5.9 Cost of Mitigating Identified Risks The key risks identified in this section that requires attention and/or intervention, and the costs associated with proposed work, are outlined in Table 5.5. Table 5.5 Work and Costs to Mitigate Identified Risks

Action/Work Driver for Action Estimated Cost Scheduled For How this will be funded Increased staff training re Compliance with health $10,000pa 2014/15 – Rates – O&M Health & Safety and safety requirements. 2024/25 Improvements Risk mitigation. Public Health The review and updating $30,000 2017 Rates – O&M Assessments and of the PHRMP is a legal 2020 Strategic Reviews requirement and must be 2023 completed. Legislation also requires $20,000 2012/13 Rates – O&M a Sanitary Services 2018/19 Review every 6 years. Specific work and/or The potential cost of Council undertakes a Rates – O&M projects to reduce risk identified projects is Review of Water factors may be identified unknown at this stage Services every 6 years. as part of these This is part of the assessments/ reviews. Sanitary Services Review. Leak Detection Studies Potential risk factors and Funding has been Three studies are Within existing budget – specific work /projects to allocated for water mains complete. Results have collation of results are address these may be renewals and water been collated now. being completed in house identified once the results connection replacements of this study are collated. to reduce leaks (see Table 6.9). Network Condition Specific work and/or This is completed Per year No additional cost – work Assessment projects may be identified internally as part of to be completed in house once the results of this current operating costs. study are collated. Potential projects unknown. Additional technical To improve knowledge of To be confirmed Per year Rates – O&M investigations, monitoring asset condition, enabling and reporting better management of the water supply network. Treatment plant condition Regular check of $3,000 pa On-going Rates – O&M assessment treatment plant structures and seismic restraints A range of risks relevant Mitigation options Incorporate into work On-going Rates – O&M to systems, processes identified in Table 5.1 plans for appropriate and planning were require planning and staff. identified. See Table 5.1 policy work and/or the review or development of systems and procedures. Wairarapa Engineering Review of the WELA $30,000 for two years in 2014/15 Rates – O&M Lifelines Association 2003 report on the conjunction with the 2003 (WELA) possible effects from Territorial Authorities natural disasters including any possible climate change implications Sludge handling upgrade Assessment of new Estimated cost range – 2016/17 Loan - Rates sludge holding consent $50,000 - $1,000,000 will determine any further requirements 5.10 Conclusion Risks, at a strategic level, relevant to the water supply assets were identified and assessed by both Council staff and Waugh Consultants Ltd. Risks, at an operational level, relevant to the water supply assets have been identified as a result of this work, the 2014 PHRMP review, Leak Detection Studies and Condition Assessment. Operational risks identified through these projects have been assessed and incorporated into this Plan.

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6. Lifecycle Management Plans

6.1 Introduction Life cycle management plans were prepared for the water supply schemes that Masterton District Council owns and operates, i.e. Urban Masterton, Castlepoint, and Tinui. Other water schemes do exist within the District, however these are privately owned or are operated independently and are outside the scope of this Plan. Each lifecycle management plan includes the following information:  Asset description (including physical parameters, capacity/performance, condition, valuation, historical expenditure, critical assets, significant negative effects, resource consents, data confidence levels)  Design standards  Maintenance plan  Renewal/replacement plan  Asset creation plan  Financial forecast  Disposal plan 6.2 Masterton’s Urban Water Supply

6.2.1 Introduction This lifecycle management plan covers the water supply in the Masterton urban area, which is summarised in Table 6.1. Table 6.1 Masterton Water Supply Key Features Parameter Unit Quantity Comments Properties Connected Number 8,955 Based on the number of urban rateable properties and the number of commercial properties. Estimated Population Capita 18,135 NZ Census, 2013 (Urban Masterton) Served Catchment area km² 150 Approximately 20-30km² is farmed. The remaining area is Tararua Forest Park Intakes Number 1 Waingawa River Siphon Storage Number 5 Reservoirs Storage m3 13,000 1,000m³; 9,000 m3 And2,250 m3 Concrete; 2 @ 250 m3 timber

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Storage Days in winter 1 Storage Days in summer 0.5 Treatment Presedimentation, coagulation, sedimentation, filtration, chlorination, pH correction and fluoridation Pressure Zones Single (10m – 120m head) Pumped/Gravity Gravity fed from reservoirs with booster pump at Manuka Street Average Daily Demand m3/day (winter) 17,000 m3/day (summer) 25,000 Maximum Take m3/day 35,000 Reduces to 28,000 m3/day when the river flow drops to 1,900 l/s Resource Consent WAR 940080 Number (Water usage records sent to GWRC on a monthly basis.) WAR 120241 (Monitoring programme results forwarded annually to GWRC.) Consent Expiry 30 May 2020 16 September 2029 Water Grading (source Aa (2005) & treatment distribution) 6.2.2 Asset Description a) Source and Abstraction – Waingawa River, Water enters the system from the Waingawa River, which has a catchment area of approximately 150km². This catchment is principally unprotected bush on land principally owned by the Department of Conservation, with some low intensity farming (cattle and sheep) immediately upstream of the intake. b) Treatment and Delivery – Masterton Kaituna Water Treatment Plant (WTP) Water is siphoned via a 600mm diameter raw main to three raw water settlement ponds (60,000m³ total capacity). Automatic turbidity monitoring of the raw water aims to maximize the utilisation of the ponds and excess abstraction is returned to the river to achieve resource consent compliance. Water from the settlement ponds is treated using the following processes: Coagulation, flocculation and separation in a centrifloc clarifier  Rapid sand filtration  pH correction using hydrated lime  Disinfection using chlorine  Fluoridation Contact time for chlorination is achieved by passing water through the new 1,000m³ clear water tank reservoir and by utilising the time taken to travel through the trunk main from the plant to the Upper Plain Reservoir. Chlorine is added as a disinfectant to water to ensure a minimum free chlorine residual of 0.4mg/l is maintained throughout the reticulation system. c) Reticulation and Storage There is approximately 192km of reticulation pipework in Masterton. This pipe work varies in size from 12mm water laterals up to 600mm intake pipes at Kaituna. The pipe material is a mix of cast iron with lead packed joints, steel, asbestos, PVC and polyethylene with ages from the early 1900s up to the present day. Table 6.2 shows the lengths of Masterton’s water supply reticulation pipework by material and diameter.

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Table 6.2 Masterton Urban Water Supply Pipeline Lengths & Materials

Dia AC Steel Unknown Copper Cast Iron PVC PE Concrete E/W mm m m m m m m m m m 0-40 0 585 2,438 4,243 0 9,899 2,413 0 0 50-63 2,890 647 1,701 90 107 3,086 1,991 0 0 75 437 743 258 0 1,094 704 6,096 0 0 100 14,326 23,096 1,147 0 10,111 21,564 964 0 0 150 2,260 10,208 136 0 5,264 5,814 173 0 0 200 0 1,790 15 0 0 5,671 130 0 0 250 113 3,535 3,080 0 8,092 1,875 0 0 0 300 0 11,644 554 0 0 84 0 0 2,691 450 0 12,588 0 0 0 0 762 0 600 0 60 0 0 0 0 5,038 0 Total 20,028 64,900 9,335 4,336 24,671 48,703 11,771 5,800 2,691

25,000 AC 20,000 Steel

15,000 Unknown Copper 10,000 Cast Iron 5,000 PVC

0 PE 40 63 75

‐ ‐ Concrete 100 150 200 250 300 450 600 0 50

It can be seen in the above table that there is a reasonably high proportion of pipes that are older than the generally expected lifespan of 60years. The pipe lengths shown include the trunk mains. These pipes can still perform satisfactorily within the network. It would prove uneconomic to base renewal or replacement decisions for these pipelines based solely on an expiry date when the performance of these pipes has not diminished. Continued assessments and monitoring by Council Staff of these pipelines will assist with the renewal replacement programme considerations. The reticulation system is predominantly a single pressure zone – with a small high-level zone feeding parts of Lansdowne. The main town water storage reservoir of 9,000m³ is situated on an elevated terrace 5km west of Masterton. It was built in 1980/82 of reinforced concrete and pre-stressed panels. A single trunk main from a boost pump supplies this reservoir (600mm diameter concrete and 450mm diameter concrete lined steel) from the treatment plant.

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Two mains (450mm diameter concrete lined steel) take water away from the reservoir until they split into smaller feeder mains (250mm diameter cast iron, 300mm diameter steel riveted and 450mm diameter concrete lined steel) to supply the town. A 2,250m³ concrete reservoir is located on Titoki Street, Lansdowne and two 250m³ timber stave reservoirs are used to provide storage in a small high level area of Lansdowne. Note:  The 300mm diameter steel main was the original supply main to Masterton, laid in the late 1800s.  At Fernridge School on Upper Plain Road the three supply mains interlink and a new (1992) 450mm diameter concrete lined fully welded joint steel pipe runs across farm land to Westbush Road linking Ngaumutawa Road to boost supply to the south end of town.  The three supply mains again interlink at Ngaumutawa Road/Renall Street corner to feed the town with a 300mm diameter concrete lined steel pipe running north on Ngaumutawa Road to cross the Waipoua River on the railway bridge and end up in a 2,250m³ concrete reservoir built in 1962 on Titoki Street in Lansdowne. Two 250m³ timber stave reservoirs built in 1982 provide high level storage above the Lansdowne Golf Course to feed a high level zone of Lansdowne. Council uses electronic telemetry to monitor and manage the distribution process. 6.2.3 Asset Capacity/Performance a) Extraction and Treatment The extraction siphon can draw up to 38,000m³ per day depending on river levels. The treatment plant is capable of treating up to 35,000m³ per day. The current resource consent (renewed in 1997) allows the abstraction of up to 35,000m³ per day when river flow is above 1.9m³/s and 28,000m³ per day when river flow falls below this level. Daily demand ranges from 17,000m³/day in winter to 28,000m³/day in summer, so the Water Treatment Plant has the capacity to deliver beyond current peak demand. The performance of the treatment plant was subject to a major review in 2003/04 after the discovery of cryptosporidium in the treated water. The treatment plant operation achieves compliance with DWSNZ (2005). A comprehensive monitoring regime for water leaving the treatment plant and for water in the distribution zone provides evidence of compliance. Furthermore, a comprehensive PHRMP was prepared in 2004, reviewed in 2009, 2011, & 2014. This identifies any gaps in Council’s existing risk prevention measures and monitoring for the water supply system. It also identifies new measures for future programmes that should be implemented in priority of evaluated risk. Table 6.3 summarises the water quality targets for water leaving the WTP. Table 6.3 Masterton Water Supply Treatment Compliance Targets

Parameter Unit Target Notes Filtered Water Turbidity NTU <0.1 Continuously Treated Water pH N/A 7.5 Continuously Chlorine Residual g/m³ 0.4 minimum Continuously Fluoride g/m³ 0.7 Minimum 13 times per quarter E. Coli ml 0/100 Minimum 25 times per quarter b) Storage and Reticulation The principal reticulation network was modelled in 1991 using KY Pipe software to predict pressures and flows. Recommended improvements from that work were the subject of TC Consultants et al (1991) and were carried out between 1992 and 1995. The predominant material is PVC with concrete lined steel ranking second. To date the performance of both materials has a better maintenance record than asbestos cement, which represents only 11% by length of the mains reticulation.

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The reticulation system for Masterton is ‘a’ (completely satisfactory, extremely low risk). Public health risk mitigation measures for reticulation management are comprehensively addressed in the PHRMP. 6.2.4 Asset Condition a) Extraction and Treatment Councils WTP staff have assessed the condition of the various components of the treatment plant. A plant item inventory that has the maintenance schedule for each item of plant is continuously updated. Treatment plant equipment dates in age from 1980 to the present day. The intake and the raw water storage dams were installed in 1970 and are now approximately 41 years old. The extraction pipeline is a new CLMS 700mm welded line and was installed in 2006. The WTP and clarifier are 24 years old. Three original filters were replaced in 2014 adding two filters. Past maintenance work has ensured that these remain in good condition and, in the opinion of Council staff, they will (with the exception of the raw water storage dams) last a further 30 years before they will need to be replaced. They are more than capable of meeting not only current and forecast demand for treated water, but also of ensuring that it meets current and anticipated water quality standards. The compacted earth construction of the raw water storage dams is deemed to be a risk, potentially requiring replacement or upgrading. However, the failure mechanism is such that it is impossible to predict when failure might occur, nor the scale of such a failure. The clear water storage reservoir was originally of compacted earth construction as well. However, it was replaced in 2004 with a 1,000m³ concrete tank after the cryptosporidium incident. b) Storage and Reticulation Although the capacity of Masterton’s reticulation network is adequate to meet current and forecast demand for water supply, its age and condition varies considerably. One of the supply mains constructed in the late 1800s is still in use today, while other parts of the network are less than a year old and have an estimated service life in excess of 60 years. Some pipelines require minimal maintenance while others are in constant need of patch repair. Work towards a Network Condition Assessment commenced in 2009 and is ongoing. Historical repair records are being analysed and a list of Grade 5 water mains identified. The grading system given in NZ Infrastructure Asset Management Manual (1996) is being used to assess the condition of the reticulation. This grades the network from 1 (very good) to 5 (very poor). Pipeline age is not the sole determining factor for its projected lifecycle. Performance and condition assessments of pipelines along with the records of any pipeline failures assist with identification for renewal programmes by Council Staff. c) Leak Detection Study Findings Findings from the Leak Detection Studies that commenced in 2008 are being used to build a better understanding of the condition of Council’s water supply network and to inform Council’s repair and maintenance programme. Figures 6.1 and 6.2 reflect the number and severity of faults identified in the 2014 survey. Tables 6.4 to 6.7 summarise the Leaks identified in the 2014 survey.

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Figure 6.1 Number of Faults Identified in Figure 6.2 Severity of Faults Identified in 2014 Leak Detection Survey 2014 Leak Detection Survey

Table 6.4 Water Supply: Total Loss Breakdown from 2014 Leak Detection Survey Zone Council Leaks Residential Leaks Total Totals 30 52 82 Table 6.5 Water Supply: Leak Type from 2014 Leak Detection Survey Asset Service SV Main Toby Hydrant Res Type Conn PV Number 1 9 8 7 5 52 Table 6.6 Water Supply: Accounted for Water Balance from 2014 Leak Detection Survey Council Leakage Residential Leakage Total Accounted for Water (Conservative) (Conservative) (Conservative) 25.0 m3/hr. 14.2 m3/hr. 39.2 m3/hr. Table 6.7 Water Supply: Losses Extrapolated from 2014 Leak Detection Survey

L per sec m³ per m³ per 24 hrs. m³ per month m³ annually hr.

Council Leakage 6.9 25.0 5989 18,050 216,605 Residential Leakage 4.0 14.2 341 10,288 123,461 Total Leakage 10.9 39.2 940 28,338 340,066 Estimated Cost $7.83 $188 $5,667 $68,013 N.B. The bottom row showing a “cost” is based on a marginal operation cost estimate of 20c per m³. d) Minimum Night Flow Water Loss A part of the newly introduced mandatory reporting measures an estimate of the supply network water loss has been undertaken using a minimum night flow analysis. This analysis involves measuring the minimum flow supplied to the network over a 5 day period in the year when demand is lowest. This flow, after storage reservoir level changes and an allowance for 24 hour and night use is deducted, estimates the network losses for 2014 at 60 l/s or 30% of the annual water volume supplied. This measure will be reported annually as part of the new mandatory performance measure for evaluating the effectiveness of the leak reduction programme. e) Reticulation Modelling The use of reticulation network modelling to assist with demand and pressure management and leak detection will be reviewed with this AMP and implemented if cost benefits are identified.

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6.2.5 Asset Valuation The Water Supply asset components were valued as follows, as at 30th June 2014. Data was sourced from the MDC Annual Reports 2014. 6.2.6 Masterton Water Supply Assets Valuation Table 6.8 Masterton Water Supply Assets Valuation Item Optimised Optimised Annual Replacement Cost Depreciated Depreciation ($) Replacement ($) Cost ($) Intake, Vacuum System 273,000 85,000 9,305 Trunk Mains 5,928,000 2,384,000 59,985 Water Treatment Plant 12,538,000 5,785,000 272,365 Reservoirs 5,409,000 2,442,000 81,942 Fire Hydrants, Valves, Connections 8,099,000 5,063,000 90,167 Reticulation Pipelines 44,552,000 18,289,000 565,113 Valuation as at 30 June 2014. Location Assessment Area (Ha) Use 2014 No. Value Upper Plain Road 1792024100 12.000 Waterworks 360,000 Norfolk Rd, Carterton 1814001600 1.285 Water intake & pipeline 18,600 Mstn Castlepoint Rd. 1800001200 1.1625 Taueru water supply 132,000 Manawa Road 1797006300 4.2462 Tinui water supply - Forestry 21,200 Upper Plain Road 1792025600 0.7344 Waterworks - reservoir 103,000 Manuka St 1792075000 0.0180 Water Reservoir 13,000 Te OreOre Rd 1792076700 0.0394 Water Test Bores Site 21,000 Titoki St 1803059100 0.1520 Reservoir 140,000 Replacement cost is the cost of building a new infrastructure using present day technology but maintaining the originally designed level of service. Assuming current technology ensures that no value results from the additional cost of outdated and expensive methods of construction. Maintaining the original level of service ensures that the existing asset with all its faults is valued, not the currently desirable alternative. Values include actual purchase/construction price plus expenses incidental to their acquisition and all costs directly attributable to bringing the asset into working condition and location. These additional costs include:  Professional fees of all types.  Delivery charges.  Costs of site preparation and installation.  Non-recoverable GST and other duties and taxes. An additional 6%, 10% or 12% (depending on the complexity of the construction) has been added to construction costs to cover these items, with the exception of the valuation of land, where a fee of 16% has been used, following discussions with Valuation New Zealand. An establishment fee has also been added to some of the files as it is estimated that the establishment of these components is higher than other components. The basic value of the assets reduces in accordance with the wear and tear and deterioration undergone over their lives. This reduced value is called the depreciated replacement value and has been calculated as the replacement cost proportioned by the ratio of remaining useful life to economic life on a straight-line basis. This method provides an accurate reflection of the service potential of the assets.

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6.2.7 Historical Expenditure Council’s annual reports provide historical information in the financial costs for water supply along with commentary on the performance of the asset. The annual operational and capital expenditures over the last nine years are summarised in Table 6.9 and Figure 6.3. Table 6.9 Masterton Urban Water Supply Historical Expenditure

Year Renewal Costs of Total Expenditure Expenditure ($) Maintenance ($) ($) 2004-05 438,750 1,145,119 1,583,869 2005-06 945,199 1,443,599 2,388,798 2006-07 297,823 1,202,789 1,500,612 2007-08 486,003 1,310,839 1,796,842 2008-09 406,773 1,480,623 1,887,396 2009-10 829,330 1,452,157 2,281,487 2010-11 805,233 1,549,945 2,355,178 2011-12 1,395,216 1,651,521 3,046,737 2012-13 1,705,770 1,830,399 3,536,169 2013-14 2,221,656 1,847,675 4,069,331 Figure 6.3 Masterton Urban Water Supply Financial History

6.2.8 Critical Assets Council has identified the critical water supply assets as being;  The Kaituna Water Treatment Plant.  The trunk main from Kaituna to the Masterton urban area.  Urban storage reservoirs, Upper Plain, Titoki Street & Manuka Street. 6.2.9 Significant Negative Effects The significant negative effects of the water supply are outlined in Table 6.10. Table 6.10 Significant Negative Effects of the Masterton Water Supply Significant Negative Effects How We Will/Do Mitigate Social Normally, there would not be any Council has adopted practices in order significant negative effects from a social to minimise this risk, for example regular perspective. However, the water quality testing and sampling. consequences of a contaminated water supply could be severe. Cultural None identified Environmental Normally, there would not be any Council has adopted practices in order significant negative effects from an to minimise this risk, including operating environmental perspective. However, within its resource consent, enforcing over-extraction from the water source water restriction during peak demand, would have significant environmental promoting water conservation etc. 37

Significant Negative Effects How We Will/Do Mitigate effects, not to mention the effects on any downstream users. Economic None identified 6.2.10 Resource Consents Table 6.11 Masterton Water Supply Resource Consents Location Consent No. Purpose Date Granted Date of Expiry Waingawa River WAR 940080 To take up to 40,000m³ of 28 April 1997 28 April 2017 water/day (463 Ips) from the Waingawa River for public water supply. Upper Plain WAR 120241 To discharge supernatant to 16 September 16 Road, Masterton water from the water treatment 2014 September plant backwash recovery pond 2029 and to discharge sludge leachate to land from sludge dewatering ponds. Waingawa River WAR 000224 To extend the height of a 29 February 30 May 2020 natural weir through the 2000 deposition of boulders. To reinforce and maintain an existing weir. 6.2.11 Data Confidence Levels The data confidence levels for this asset are shown in Table 6.12 where, A = Highly Reliable, B = Reliable, C = Uncertain, D = Very uncertain Table 6.12 Water Supply Data Confidence Levels

Attribute D C B A

Physical Parameters

Asset Capacity

Asset Condition

Valuations

Historical Expenditures

Design Standards

6.2.12 Design Standards All water supply infrastructure installed in areas of new development must meet the requirements outlined in NZS4404: 2004 Land Development and Subdivision Engineering. The policy for reticulation network design endeavours to provide a grid network – and where “dead end” streets are unavoidable, rider mains are installed to minimise circulation problems (approximately 49% of installed water main lengths are rider mains). The current policy for backflow prevention is to install appropriate backflow devices on commercial premises according to the assessed level of risk. Documentation for the backflow prevention policy was a recommended implementation measure in the Public Health Risk Management Plan (PHRMP) (Opus, 2004). This has been addressed as part of the current PHRMP. 6.2.13 Maintenance Plan Maintenance of the water supply in the Masterton urban area includes the following items:  Water main repairs, flushing and inspections 38

 Water quality testing  Reservoir maintenance  WTP maintenance Council commenced Leak Detection Studies in 2008 and a Network Condition Assessment in 2009. This work is ongoing. Funding has been allocated to repairing leaks identified through these studies. See 6.2.2.3 (c) for more information. A review of the PHRMP was completed in 2009, and a further review was completed in 2014. The findings of these studies will assist with planning maintenance works. 6.2.14 Water Main Repairs, Flushing & Inspections These tasks are currently carried out by Council’s maintenance contractor, City Care Limited. They won Council’s water, wastewater and stormwater services maintenance contract for a three year renewable term in 2010. The term of contract has been granted extensions until 2017, as the Contractor has met the performance requirements specified in the contract. Masterton District Council will review the cost-effectiveness of the current arrangements for meeting the needs of the community within the district for good-quality local infrastructure, local public services, and the performance of regulatory functions according to the LGA act 2002 (section 17a) in July 2015. Their proposal included substantial added value in job management and asset data systems that will significantly advance the knowledge of our assets. Note:  The contract is a services delivery contract for the continued operation and maintenance of Council’s water, sewerage and stormwater services.  It excludes the water and sewerage treatment assets.  It is based on NZS3910 Conditions of Contract for Building and Civil Engineering Construction.  Water mains are to be repaired as and when reported both by Council’s maintenance contractors, Council staff and the general public.  Allowance is also made each year for pro-active leak detection to be carried out on the mains.  A mains flushing programme is carried out each year with all dead end mains to be flushed once a year, together with all scour valves.  Additional flushing is carried out when ordered, usually following a complaint on water quality which flushing would correct.  All hydrants are inspected, operated, repaired if necessary and lids painted once a year.  The cross-country mains are inspected once a year for leaks, and fittings accessible from the surface are inspected.  All water meters are read at three monthly intervals and any faults recorded for repair. Results of the Leak Detection Study and Network Condition Assessment are being used to inform maintenance and renewal programmes. See 6.2.2.3(c) for more information. 6.2.15 Water Quality Testing Water quality testing is carried out so as to meet the DWSNZ (2005). Currently 25 samples per quarter are taken from sites that are representative of the water in the distribution zone. Monitoring is carried out on different days throughout the week with a maximum interval between samples of 6 days. In addition, monthly samples are taken from the 3 reservoir sites.  Total and faecal coliforms  pH  Free available chlorine  Turbidity  Heterotrophic plate counts. Evidence of heterotrophic counts is acted on by ordering the main to be flushed.

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6.2.16 Reservoir Maintenance The Manuka Street, Titoki Street and Upper Plain Reservoirs and the Upper Plain clear water tank all have monthly security checks. The need to dewater and clean the reservoirs is assessed as it is required, the last reservoir clean was in 2010 and the expectation is for the next clean to be in 2015. In addition, power supply and telemetry maintenance is undertaken monthly, and random site maintenance is undertaken as required. 6.2.17 Water Treatment Plant Maintenance Maintenance at the WTP is scheduled using a Microsoft Access database, worked in conjunction with a manual diary system, which has all items of plant recorded with its own maintenance schedule. This gives frequency of inspection and details items to be maintained/checked with each inspection. This schedule covers all Council’s WTP and wastewater treatment plant (WWTP) mechanical items. From these inspections any plant requiring more than the normal maintenance work is scheduled for the necessary repair work. 6.2.18 Renewal/Replacement Plan The following renewals are proposed for the future:  Reticulation mains renewals, an estimated length of 2.5km annually based on asset condition data (section 6.2.2.3) and information summarised in table 6.8 and 6.9.  The scheduled replacement of 6.3km of trunk mains.  The ongoing review of equipment renewals relative to deterioration and legislation requirements at the water treatment plant will include such items as the WTP filters  Reservoir refurbishment and improvements  Leak Detection Studies commenced in 2008 this work is ongoing and will assist with planning renewal and replacement works  The ongoing programme of water connection replacement.  Lansdowne Reservoir upgrade.  Water storage dam renewal.

Note – Proposed renewal Layout map shown in Appendix E 6.2.19 Renewal Strategy – Optimised renewal decision-making (ORDM) framework The ORDM process is a risk based methodology which assesses the probability of each failure mode (including structural, hydraulic capacity, performance, operational and performance) and the consequence (or damages) of the failures. A scoring system of 1 to 5 is employed to quantitatively assess the risk components. For example, structurally failed sections will attract a failure mode probability of 5. The risks of failure (for each failure mode) of each section are assessed and calculated by quantifying the product of their probability and consequence of failure. Pipe sections with a high risk of failure are then ranked and the top group is included in the priority 1 list. 40

However, it must be noted that the ongoing programme of collecting further asset information and variation of market prices for water main renewal/replacement, as well new technology advances in the industry, mean that the priority list is provisional and will be subject to change with new information. 6.2.20 ORDM inputs for Water reticulation ORDM used the following information to assess the probability of water reticulation failure:  Structural Failure: CCTV records, age profiles, Material profiles, soil type profiles.  Hydraulic/Capacity Failure: Catchment (current/future) flow monitoring, low flow/pressure records.  Performance Failure: System performance, dirty water/low flow/low pressure incidents.  Operations and Maintenance Failure: Repair records, maintenance records and costs. Currently the ORDM for water reticulation failure probability assessment include the following factors:  Structural consideration based on CCTV (number and major/nature of faults, etc.)  Capacity considerations (current observation, future subdivision potential)  Performance considerations (dirty water, low pressure/flow etc.)  Maintenance considerations (leak/breakage etc.) The above probability rating is then multiplied by the consequence of failure rating to obtain the overall risk score. The utility service department maintains and updates a database on the reticulation network. Each year the highest ranked sites are considered for renewal/replacement. 6.2.21 Asset Creation Plan Development of the urban water scheme is largely through the private subdivision process. Council has planned for the eventual requirement to increase supply up to 35,000 m3 per day. The ability to supply this increase would be provided in stages. The first stage would be to duplicate the 450 mm diameter main from the manifold down to the Fernridge School interlink. This option also allows the old 250 mm and 300 mm diameter mains to be decommissioned as they are amongst the oldest in the supply system. The second stage would be to provide boost pumping on the supply mains during peak demand. An investigation into using bores at Te Ore Ore was carried out, augmenting supply and/or an emergency supply (TC Consultants et al, 1991) . Council has secured resource consent to take water from the three bores along Te Ore Ore Road as an emergency water supply. However, no physical work has been undertaken to treat the water which is high in iron and manganese, and no pumping or pipework is planned at this stage. This would prove to be more expensive than the gravity options from the existing source. Leak Detection Studies commenced in 2008 and a Network Condition Assessment commenced in 2009. Work is ongoing. The PHRMP was revised in 2009 and reviewed in 2014. The combined results of this work assist with planning renewal and replacement works. 6.2.22 Financial Forecast Council has made a strategic decision to maintain the current levels of service for this activity. Maintenance, renewal and capital costs scheduled to enable this are outlined in Table 6.13. Table 6.13 Urban Water Supply Maintenance, Renewal & Capital Costs Identified ($) Action/Work Driver for Action Estimated Cost Scheduled For How this will be funded

Water mains and trunk Renewals are required to $830,000pa 2014/15 – Depreciation mains renewals address actual and 2021/25 Fund potential leak issues, and to maintain current levels of service.

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Action/Work Driver for Action Estimated Cost Scheduled For How this will be funded

Water connection Repairs are required to $200,000pa 2014/15 – Depreciation replacements address actual and 2021/25 Fund potential leak issues, and to maintain current levels of service.

450mm Main trunk Renewal is required to $1,300,000 2015/16 Loan and replacement stage 1, 1.3 address actual and Depreciation Km potential leak issues, and Funds to maintain current levels of service. 450mm Main trunk Renewal is required to $1,450,000 pa 2016/17 – Loan and replacement stage 2, 5 km address actual and 2019/20 Depreciation potential leak issues, and Funds to maintain current levels of service. Water treatment plant Valve, gas monitor, and $50,000 2015/16 Depreciation road remedies. $30,000 2016/17 Fund $6,000 2017/18 Water treatment plant Renewals are required to $95,000pa 2014/15 – Depreciation equipment & infrastructure achieve compliance and to 2021/25 Fund renewals maintain current levels of service. Water treatment plant Asset condition. Upgrade is $39,000 2015/16 Depreciation buildings etc. upgrades required to maintain current Fund levels of service and $50,000 2019/20 prevent deterioration of the asset. WTP consent renewals Construct new raw water $3,000,000 – 2020 - 2025 Depreciation Water take storage dams, or contribute $30,000,000 Fund to the Wairarapa Water Use Project. Public health assessments See table 5.5 and strategic reviews Additional technical To improve knowledge of Within the existing On-going Rates investigations, monitoring asset condition, enabling budget and reporting better management of the water supply network. See table 5.4 Network Upgrades Lansdowne (water $1,000,000 2020 - 2025 Capital (Planned or in Progress) capacity) contributions Cashmere Oaks 6.2.23 Disposal Plan Water supply assets will be considered for disposal when a more cost effective alternative is available and/or there is a community consensus that the asset can be disposed of. 6.3 Tinui Water Supply 6.3.1. Introduction This LCMP covers the water supply in Tinui, which is summarised in Table 6.14. Table 6.14 Tinui Water Supply Key Features Parameter Unit Quantity Comments Status Potable Properties Connected Number 19 + schools etc. Est. Population Served Capita 120 Catchment area km² N/A Groundwater – Whareama catchment Intakes Number 1 Concrete box collection from two springs

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Storage Volume m3 85 Storage Days 1 Treatment Chlorination Sodium hypochlorite Pressure Zones Single Pumped/Gravity Gravity Estimated Daily Demand m3/day 60 Approximate Maximum Take m3/day 90 Resource Consent # WAR 010244 Consent Expiry 21 September 2036 Water Grading (source u Ungraded & treatment distribution) 6.3.1 Asset Description a) Source and Abstraction The water supply for the Tinui Township is sourced from two springs, covered by concrete collection boxes. These are located in the Tinui Taipo’s area of the District, north of the community. b) Treatment, Delivery and Storage The flow from the springs is collected by a 2.7 m3 holding tank, 20 m from the intake. The water is a relatively small gravity fed pressure zone (pressure ranging from 27m to 34m), containing approximately 1.7 km of pressurised pipe. Pipe sizes range from approximately 20mm to 100mm in diameter. Pipe materials include PVC for the reticulation system in the township and polyethylene from the springs to the collection and storage points. The reticulation system for Tinui is currently ungraded (u). The water leaving the treatment plant is currently ungraded (u). There is monthly testing of water with the sample point being the Tinui Store. No provision is made for treatment processes capable of protozoa removal or inactivation. 6.3.3 Asset Capacity / Performance The Tinui water supply daily capacity is 60 cubic meters per day. 6.3.4. Asset Condition The condition of the Tinui water supply will be investigated in 2015. 6.3.5. Asset Valuation The Tinui Water Supply asset components were valued as follows, as at 30th June 2014. Data was sourced from the MDC Annual Report 2014. Table 6.15 Tinui Water Supply Asset Valuation Item Optimised Optimised Annual Replacement Cost ($) Depreciated Depreciation Replacement Cost ($) ($) Tinui Water Supply 166,000 108,000 3,743 6.3.6. Historical Expenditure Council’s annual reports provide historical information in the financial costs for water supply along with commentary on the performance of the asset. The annual operational and capital expenditures over the last eight years is summarised in Table 6.16 and Figure 6.4.

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Table 6.16 Tinui Rural Water Supply Historical Expenditure Year Capital Expenditure ($) Maintenance Costs Total Expenditure ($) ($) 2005-06 1,526 8,500 10,026 2006-07 9,187 9,187 2007-08 2,334 9,169 11,503 2008-09 13,500 13,500 2009-10 7,200 7,200 2010-11 11,557 11,557 2011-12 15,441 15,441 2012-13 9,362 9,362 2013-14 20,160 19,366 39,526

Figure 6.4 Tinui Rural Water Supply Historical Expenditure

6.3.7 Critical Assets Council’s critical Tinui water supply assets are identified as being;  The reservoir 6.3.8. Significant Negative Effects The significant negative effects of the Tinui water supply are considered similar to those for the Masterton urban supply. 6.3.9. Resource Consents Table 6.17 summarises the resource consents Council currently holds that pertain to the Tinui water supply. Further information can be found in Council’s Resource Consent Database, which is updated regularly. Table 6.17 Tinui Water Supply Resource Consents Location Consent No. Purpose Date Granted Date of Expiry Whareama WAR 010244 To take up to 90m³ of 21 September 21 September River water/day, 7 days per 2001 2036 Catchment, week from a spring for Tinui public water supply. 6.3.10. Data Confidence Levels The data confidence levels for this asset are shown in Table 6.18. Where, A = Highly Reliable, B = Reliable, C = Uncertain, D = Very uncertain

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Table 6.18 Tinui Water Supply Data Confidence Levels

Attribute D C B A

Physical Parameters

Asset Capacity

Asset Condition

Valuations

Historical Expenditures

Design Standards

6.3.11 Design Standards Refer 6.3.2 for further information. 6.3.12. Maintenance Plan The Tinui water supply plant is attended bi-weekly by Environmental Health Officers. The solution tank is topped up and a general operation check completed. Service is provided as problems arise. 6.3.13. Renewal/Replacement Plan There is no current requirement for a renewal plan for Tinui however there may be the need for a renewal/replacement plan for the Tinui water supply to be developed in 2015 for the application of new standards. Council is currently in the process of replacing the flow meter, solution tank and pump system. 6.3.14. Asset Creation Plan There is no current requirement for a Tinui asset creation plan. 6.3.15. Financial Forecast Council has made a strategic decision to maintain the current levels of service for this activity. Council has no capital or renewal plans for this asset register. Table 6.19 Disposal Plan There is no current disposal planned for Tinui assets.

7. Financial Summary

7.1 Introduction This section outlines the following items for Council’s water supply services:  Operating costs, capital expenditure and rates requirements  Financial forecasts for the next ten financial years  Financial summary for the next three financial years 7.2 Previous Expenditure Table 7.1 and Figure 7.1 summarise previous expenditure on operating costs and physical works for the last eight years for the water supply services. This information was obtained from Council’s Annual Reports.

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Table 7.1 Previous Expenditure for Urban Water Supply Services in Masterton Financial Year Net Operating Costs Capital Expenditure Rates Required $ 000s (excl GST) (excl Depn) $ $ 2003/2004 1,834 1,711 1,513 2004/2005 1,264 591 1,625 2005/2006 1,444 974 1,740 2006/2007 1,203 310 1,699 2007/2008 1,311 535 1,791 2008/2009 1,481 415 2,040 2009/2010 1,452 938 2,079 2010/2011 1,550 838 2,274 2011/2012 1,651 1,434 2,474 2012/2013 1,829 1,737 2,701 2013/2014 1,847 2,221 2,818

Figure 7.1 Previous Expenditure for Urban Water Supply Services

7.3 Estimated Future Public Debt The Long Term Plan (LTP) financial model has been updated with the most up-to-date estimates of project costs. Loan/debt funding will be needed for three large capital projects over the course of the LTP – the water sludge disposal upgrade, the trunk main renewal and the provision of urban water meters. Some loan funding will be needed for the reticulation renewals also. In years 11-15, projects costs for raw water storage dams have been provisioned and will be loan funded.

7.4 Insurance Coverage The Council is a member of the Local Authority Protection Programme (LAPP). LAPP is a mutual insurance fund which provides for insurance cover over Council’s underground and generally uninsurable assets, to the extent of 40% of their value. The Government’s Disaster Recovery Fund is expected to cover 60% of the replacement cost of assets in the event of a disaster. Those above-ground assets that are not covered under the LAPP scheme are listed on the Council’s insurance material damage insurance policy. In the case of water assets this includes the water treatment plant buildings, filer structures, clarifier tank, clean water tank and reservoirs.

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Table 7.2 2014 Infrastructure Assets Covered by the LAPP Fund Covered by LAPP? 2014 Value (ORC) 2014 value Location Description (ODRC) Kaituna Raw water ponds LAPP 1,531,237 528,775 Kaituna Sludge ponds LAPP 571,493 295,385 Kaituna Clearwater tank Insurance 1,994,665 1,819,309 Kaituna Site works LAPP 871,270 393,914 Kaituna Clarifier Tank Insurance 2,523,049 1,310,645 Kaituna Filters Insurance 249,194 102,501 Kaituna Wash-water pipework LAPP 115,180 51,676 Kaituna Treatment plant (incl pipework) Insurance 3,667,,384 1,706,534 Kaituna Electrical Telemetry Insurance 1,014,568 423,317 Kaituna Intake & Pipeline LAPP 3,207,261 2,208,997 Kaituna Vacuum System LAPP 272,875 84,560 Kaituna Pipe bridge LAPP 135,394 70,357 Kaituna Pipeline – Treatment to Reservoir LAPP 2,208,862 573,184 Kaituna Mainline booster pump LAPP 332,266 219,467 Upper Plain Reservoir Insurance 1,846,885 1,171,411 Titoki Street Reservoir Insurance 2,619,696 1,055,602 Manuka St Reservoir Insurance 942,108 451,283 Masterton Trunk Mains LAPP 5,927,503 2,383,704 Masterton Fire Hydrants, Valves, Connections LAPP 8,098,585 5,063,417 Masterton Reticulation Pipelines LAPP 44,551,813 18,288,744 Tinui Water Supply Retic. Only 165,935 107,512 Taueru Water Supply Retic. Only 130,730 66,124 Upper Plain Water Supply Retic. Only 154,285 119,622 Castlepoint Water Supply Retic. Only 171,157 97,401 Water Races Opaki & TeOreOre Water Races No 138,238 119,690 Wainuioru Water Supply Retic. Only 1,998,967 1,161,278 7.5 Estimated Future Loan Repayment and Loan Interest Cost The LTP financial model includes interest costs and provision to make loan repayments. The level of debt related to the urban water supply infrastructure is relatively low at approx. $360,000. Loans taken out in the 1980s to build the current water treatment plant have been fully repaid. Loans taken funding significant water reticulation upgrade and water treatment programs on existing assets, will be repaid by 2033 or year 18. The water sludge handling upgrades, trunk line renewal projects and urban water meters are projected to be loan funded. In years 11 to 15, the raw water storage dams will also be loan funded. All other capital renewals are expected to be funded from depreciation funds. 7.6 Estimated Future Operational Revenue Operational revenue forecasts are incorporated into the LTP. Assumptions include low growth in the number of properties, so rates increases will be absorbed by the existing ratepayer base. Metered properties outside the urban area account for a very small proportion of the revenue generated. The majority of revenue for the urban water supply comes from property rates. Table 7.3 shows the forecasted cost of services as an extract from the 2015 LTP. 7.7 Financial Forecasts – Capital Expenditure Table 7.4 summarises the forecasted capital expenditure for the urban and rural water supply services over the next thirty years. The key items are;  Water mains and trunk mains renewals & water connection replacements  WTP component and infrastructure renewals  WTP take consent  WTP sludge handling  Reservoir upgrades  Water metering  Opaki water race consent renewal  Drinking standards compliance (rural water)  Riversdale water supply Note that figures have been adjusted for inflation. 47

Table 7.3 Cost of Service (from the 2015 LTP)

Urban Water Supply Annual Plan Cost of Service Statement 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2014/15 Operating Costs 1,161,260 Water treatment costs 1,115,044 1,163,014 1,191,736 1,211,908 1,305,586 1,347,545 1,362,907 1,395,355 1,445,969 1,466,754 753,479 Water reticulation costs 773,196 895,031 1,035,963 1,159,850 1,291,771 1,627,401 1,641,850 1,660,216 1,671,967 1,671,025 1,290,141 Depreciation 1,159,736 1,157,997 1,241,873 1,245,159 1,282,454 1,578,163 1,573,298 1,574,916 1,728,677 1,735,147 3,204,880 3,047,977 3,216,042 3,469,572 3,616,917 3,879,811 4,553,109 4,578,055 4,630,487 4,846,613 4,872,926 Operating Income 123,000 User charges & recoveries 220,200 229,354 237,053 243,844 251,217 259,109 267,724 277,061 287,138 297,938 Appropriations - Transfer from reserves ------Transfer to reserves ------244,926 Provision for loan repayments 255,110 311,361 151,539 211,806 292,286 430,643 475,079 522,680 567,087 618,656 (404,926) Reverse depreciation (115,110) (161,361) (111,539) (26,055) (74,279) (83,081) (92,207) - - - $2,921,880 Rates Requirement $ 2,967,777 $3,136,688 $3,272,519 $3,558,824 $3,846,601 $ 4,641,561 $4,693,203 $4,876,105 $5,126,562 $5,193,645 Rural Water Supplies Annual Plan Cost of Service Statement 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 '2024/25 2014/15 Operating Costs 247,359 Rural water supplies & races 243,595 252,684 260,732 271,960 281,446 289,792 298,805 308,617 319,278 330,865 56,250 Depreciation & decline in service 61,044 61,877 66,898 73,275 76,833 84,407 85,390 86,409 95,959 97,059 303,609 304,639 314,562 327,631 345,236 358,278 374,199 384,195 395,026 415,237 427,924 Operating Income 162,500 Rural water scheme charges 164,500 173,054 179,634 185,063 190,985 197,236 204,145 211,712 219,772 228,491 Appropriations - Transfer from reserves ------Transfer to reserves ------3,293 Provision for loan repayment 5,379 5,955 6,573 11,689 14,618 15,971 17,395 18,920 15,429 16,832 (25,180) Reverse depreciation (14,950) (12,192) (14,111) (14,043) (13,898) (18,647) (18,438) (18,119) (24,004) (23,656) $119,222 Rates Requirement $130,568 $135,271 $140,459 $157,819 $168,014 $174,287 $179,008 $184,116 $186,890 $192,609

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Table 7.4 Forecasted Capital Expenditure (30Years)

Urban water treatment 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2026-30 2031-35 2036-40 2041-45

WTP Consent Renewal - take - 176,460 ------

WTP sludge handling upgrade (incld. consent) - - - 1,103,000 ------

WTP - plant, equipment & infrastructure renewals 145,000 98,610 107,969 104,785 108,205 123,795 116,185 128,169 125,400 130,625 741,664 869,163 1,077,179 1,193,929

WTP - building renewals 39,000 - - - 57,520 ------

Water storage dams 7,325,000 - - -

Reseal Access Road WTP - 31,140 ------21,285 - 29,235 -

Total Urban water treatment 184,000 306,210 107,969 1,207,785 165,725 123,795 116,185 128,169 125,400 130,625 8,087,949 869,163 1,106,414 1,193,929

Urban water reticulation 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2026-30 2031-35 2036-40 2041-45

Water mains renewals (reticulation) 2,150,000 2,387,400 2,458,700 2,536,900 2,619,700 1,002,150 1,039,550 1,078,650 1,122,000 1,168,750 6,432,800 7,538,650 8,835,750 10,355,550

Water connections replacements 200,000 207,600 213,800 220,600 227,800 235,800 244,600 253,800 264,000 275,000 1,513,600 1,773,800 2,079,000 2,,436,600

Water Meters all urban properties - - - - 3,417,000 ------

Reservoir upgrades 45,000 ------1,663,000 - -

Total Urban water reticulation 2,395,000 2,595,000 2,672,500 2,757,500 6,264,500 1,237,950 1,284,150 1,332,450 1,386,000 1,443,750 7,946,400 10,975,450 10,914,750 12,792,150

Rural water supply 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2026-30 2031-35 2036-40 2041-45

Wainuioru water supply renewals 20,000 20,760 21,380 22,060 22,780 23,580 24,460 25,380 26,400 27,500 151,360 177,380 207,900 243,660

Rural drinking water standards - compliance - - 374,150 ------

Tinui water supply upgrades 5,000 5,190 5,345 5,515 5,695 5,895 6,115 6,345 6,600 6,875 37,840 44,345 51,975 60,915

Opaki water race consent renewal - - 63,000 26,387 ------

Te Ore Ore water race consent renewal ------

Total Rural water supply 25,000 25,950 463,875 53,962 28,475 29,475 30,575 31,725 33,000 34,375 189,200 221,725 259,875 304,575

Total 2,604,000 2,927,160 3,244,344 4,019,247 6,458,700 1,391,220 1,430,910 1,492,344 1,544,400 1,608,750 16,223,549 12,066,338 12,281,039 14,290,654

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7.8 Future Depreciation Projections Future depreciation expense will be based on existing depreciation that flows out of infrastructural valuations, plus the additional depreciation that is generated by new capital expenditure and the three-yearly revaluations, as required by accounting standards. The graph below shows total operating expenditure, depreciation expense and the capital expenditure on water assets.

Expenditure Forecasts $ millions Water Supplies 10 years 7.0 Operating expenditure (excl 6.0 depreciation) 5.0

Depreciation 4.0 3.0

2.0 Capital & renewals expenditure 1.0 ‐ 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25

7.9 Financial Summary (including rates requirement) Table 7.5 summarises the cost of service statements for the urban and rural water supplies for the next 10 years, as per the LTP. This includes operating costs, operating income, appropriations and rates requirements. 7.10 Changes in Service Potential Council maintains the assets so as to retain their functioning condition and overall value at nationally accepted levels. A programme of routine maintenance and renewal of underperforming components where and when required is used to achieve this. Depreciation is designed to measure the value of the decline in service, while renewals expenditure restores that value. 7.11 Assumptions & Confidence Levels  Basis of Preparation The financial information in this plan has been prepared following the provisions of Financial Reporting Standard 42 (FRS 42) Prospective Financial Statements. The purpose of the financial forecasts in this long term plan is to provide “best endeavours” costing of Masterton District Council’s plans to enable it to achieve its Community Outcomes, in collaboration with other stakeholders, over the 10 year period 2015-25.  Basis of Assumption Prospective information is based on a number of assumptions. Risks and uncertainties surround these assumptions. The basis of the assumptions surrounding the information is found in Planning Assumptions in the LTP. The information should therefore be used carefully, with this best endeavours purpose in mind. The Local Government Act 2002 Schedule 10 (1)(e) requires that information relating to levels of service, estimated expenses and revenue be provided in detail for three financial years, and indicative for the subsequent seven financial years. Over time, information becomes increasingly indicative from the time it was first prepared.

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The approach taken to budget development has been that of preparing ‘forecasts’ on a best estimate basis. In this case, a forecast refers to financial information based on assumptions on future events the Council expects to occur and on the basis of Council’s expected response to these events. The Council has not taken an approach where hypothetical (“what-if”) projections are used. The major limitation of the forecasting approach, as with any approach, is that events may change over time and undermine the accuracy of assumptions made. The actual financial results achieved for the period are likely to vary from the information presented and the variations may be material. The review of assumptions underlying the financial information was undertaken in preparation of the Long Term Plan (LTP).  Assumptions and Risk Assessments A number of assumptions were made in preparing the Draft Shaping Our Future 2015-25 Long Term Plan (LTP). These assumptions are necessary as the planning term is for 10 years and the stating of assumptions ensures that all estimates and forecasts are made on the same basis. There are three categories of planning assumptions in this document:  Demand Assumptions • Population and households • Demographics • District growth  Operating Environment • Economy, Employment & Affordability • Resource consents • Climate Change & natural disasters • Legislative change & local governance • Human resources • Sustainability • Other factors  Financial Assumptions (Please see the full LTP document for the assumptions detail.) 7.12 Funding Mechanism Operating costs are to be funded by rates and user charges as per the Council’s Revenue & Financing Policy. User pays charges include water-by-meter charges collected from those metered properties (generally outside the urban boundary). Urban water rates are split between two rates:  A uniform charge on each connected separately used or occupied property, and  A rate based on each serviceable property’s capital value  Non-residential properties are charged this value-based rate on a differential of 2 times. Three large capital project items will require loan funding. These are the treatment plant’s sludge handling upgrade in 2019 (year 4) the renewal of trunk water mains in 2016 to 2020, and urban water meters in 2020 (year 5). Raw Storage dams project in years 12, will also be loan funded.

8. Plan Improvement and Monitoring

8.1 Introduction In preparing this Plan there remain a number of areas where improvement to the level of detail is needed. This improvement will be phased reflecting a process of continuous enhancement of the management confidence provided by the Plan. This further work will have the effect of:

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 Enhancing analysis for planning purposes.  Improving operational efficiency.

An overall utilities improvement plan (covering water supply, wastewater, stormwater and solid waste services) will be developed following completion and review of the risk assessment processes (section 5). Overall priorities will then be assigned and resources allowed to deliver the outcomes. 8.2 Current Improvement Plan Recommendations for improvement were made throughout this Plan. These are summarised in Table 8.1. It is recommended that this table be updated to match the current Plan and again after an overall utilities improvement plan is established. 8.3 Monitoring and Review Table 8.1 Water Supply Asset Management Plan Improvement Plan No. Item Report Year By Who Section 1. Review current level of service every 3 years 3 Done - 2014 MDC 2. Incorporate the findings of the PHRMP, Leak Detection 3 As Completed Asset Manager Study & Network Assessment, including identified impacts on 4 or changes in: Service Levels; Growth & Demand; Risks; 5 Renewal & Replacement Planning; Asset Creation Planning; Options for Operating the Service 3. Update any service level gaps identified, and their impact on 3 By 2016 Asset Manager Growth & Demand. 4 4. Insert the new water grade from the latest assessment once 3 On-going Asset Manager it is confirmed. 5. Monitor trends identified in the Growth & Demand section 4 On-going Asset Manager and update this Plan accordingly. 6. Undertake further monitoring & analysis work to better 4 On-going Asset Manager understand the effect of climate changes on demand 7. Strategic Review of risk management for all services/ 5 2016 MDC activities Management 8. Following the review, undertake further work, training and 5 2016 Asset Manager assessment re risk management 9. Review valuation replacement costs for assets 6 2015 FM

10. Include schedule of when assessments are next due for 6 2016 Asset Manager urban reservoirs located in Manuka St, Titoki St and Upper Plain 11. Update Estimated Future Public Debt Section once data 7 2015 Asset Manager available 12. Update Estimated Future Loan Repayment and Loan 7 2015 Asset Manager Interest Cost Section once data available 13. Update Estimated Future Operational Revenue Section once 7 2015 Asset Manager data is available 14. Include Financial Summary once Draft LTP is completed 7 2015 Asset Manager

15. Complete assumptions & confidence levels section to match 7.10 2015 Asset Manager LTCCP assumptions 16. Update reference list Reference Ongoing Asset Manager List 17. Update appendices for inclusion in AMP Appendices On-going Asset Manager

The above ‘Improvement Plans’ should be monitored and reviewed once in every 12 months. Appropriate actions then can be taken for further improvement. This Plan will be reviewed every three years.

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9. References

1. GHD Ltd (2006) Report for Masterton Demographic Projection and Growth Forecast Review. 2. Masterton District Council (1996) Toward 2020 - Strategic Plan. 3. Masterton District Council (1997) 1997/98 Annual Plan, Long Term Financial Strategy and Funding Policy. 4. Masterton District Council (1997) District Plan. 5. Masterton District Council (1997) Infrastructural Asset Valuations. 6. Masterton District Council (1998a) 1998/99 Annual Plan and Long Term Financial Strategy. 7. Masterton District Council (1998b) Analysis of Depreciation and Decline in Service Potential. 8. Masterton District Council (1998c) Draft Statement on Levels of Service for Asset Management Planning. 9. Masterton District Council (1998d) Report number 043/98 - Community Views Survey. 10. Masterton District Council (1999) Services Maintenance Contract 1999/2002 Contract Documents (contract no. 3-99/02) 11. Masterton District Council (2005a) Annual Plan and Budget 2005 – 2006. 12. Masterton District Council (2005b) Infrastructural Asset Valuations, June 2005. 13. Masterton District Council (2005c) Shaping Our Future Draft Community Outcomes & Council Services. 14. Ministry of Health (2005) Drinking Water Standards for New Zealand. 15. National Asset Management Steering Group (1998) New Zealand Infrastructure Asset Management Manual. First ed, second issue. 16. National Asset Management Steering Group (2006) International Infrastructure Management Manual. Ver 3. 17. Opus International Consultants (2004) Masterton Water Supply Public Health Risk Management Plans 18. Opus International Consultants (2005) Masterton District Council Water and Sanitary Services Assessments. 19. Riskcorp (1994) Member Authority Risk Profile, Masterton District Council. 20. Royds Consulting/Montgomery Watson Harza Ltd (1995) Universal Water Metering Study. 21. Standards New Zealand (1998) NZS3910: 2003 Conditions of Contract for Building and Civil Engineering Construction. 22. Standards New Zealand (2004) AS/NZS 4360: 2004 Risk Management 23. Standards New Zealand (2004) NZS4404: 2010 Land Development and Subdivision Infrastructure. 24. TC Consultants, Royds Garden and MDC Services Engineer (1991) Water Supply Report: Stage 3. 25. Wellington Regional Council (1998) Resource consent number WAR 940080 (01) to (04).

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Appendix A – Masterton network

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Appendix B – Castlepoint network

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Appendix C – Taureu network

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Appendix D – Tinui network

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Appendix E – Masterton Urban - Pipes by Material

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Appendix F – 30 Year Renewal Proposal

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