Official Information Request - East Rotoiti/Rotoma Sewerage Scheme

Sent: Wednesday, May 22, 2024 2:26 PM
Subject: Official Information request - East Rotoiti/Rotoma Sewerage Scheme

I refer to your Official Information request of 29 April 2024 regarding the East Rotoiti/Rotomā sewerage scheme.

Please find below the responses to your questions:

1. When and how is RLC going to inform Rotoma residents of the proposal? I understand that submissions to the proposal close on 6 May 2024. Rotoma residents have had no information regarding the scheme from RLC since July 2021. How are residents supposed to make submissions when they have not been informed?

Council committed to a reticulated sewerage scheme for East Rotoiti/Rotomā in 2017/18 as part of the lakes restoration program. The 2024-2034 Long-term Plan Consultation Document is seeking community views on the funding of the scheme, in particular whether Council should increase its funding contribution from $1,500 per household to $2,700 per household towards the final costs of the scheme and in turn increase the Lakes Enhancement rate by $34.00 per Rotorua district ratepayer to repay the borrowing.

The July 2021 advice to residents highlighted variances between the concept estimate for the scheme in 2017 (prior to the consents conditions issued) and the emerging costs to comply with the consents and the emerging market conditions including construction inflation. The precise impact of those variances were not known at the time and efforts were underway to secure the appropriate additional funding support from the Crown. That advice also noted that once Council had certainty about the actual cost and the Crown’s position, it would strike the capital targeted rate and consult with the community. That is the current status of the scheme seeking community feedback.

2. A full break down of the cost to date - including the following specific costs:

• How much did the failed Manawahe site proposal and subsequent Environment Court case add to the project cost?
  The aborted 2012 scheme costs are not included in this scheme. Council absorbed those costs of roughly $3.0 million.
• What are the overall costs to date of the Cultural Impact team and any additional costs of consulting with iwi?
  Costs to date for the Cultural Impact Team including cultural monitoring is $924,773 as at the end of March 2024.
• What is the total cost of the variations per household - specifically the addition of concrete slabs around some tanks - who will pay for those variations and what were the criteria for households to elect to have them.
  There is no stand-alone concrete slab. The concrete Biolytix system comes with a trafficable lid. This is not a variation as there is an item rate of $5,288 for the installation of the concrete system. 186 installations were completed costing $983,568. This cost is shared by the community as was always the intention. The criteria was based on access, vehicle parking, boats, caravans and space availability.
• How were the reworks accounted for and how much have they added to the overall cost? (The additional visits required because tanks were installed incorrectly are well known in the community).
  The cost associated with any rework is borne by the contractor. The contract is a measure and value contract and the contractor is only paid once for the certified installation.

3. The original scheme that I was consulted on and agreed to, was for the grinder pumps. What additional cost did the change to the STEP system and the biolytix trial and installation cause?
The cost of meeting resource consent conditions added approximately $10.3 million to the budget. This includes on-property pre-treatment, treatment plant ultraviolet disinfection and compliance with the Cultural Management Plan mandated by the resource consent.

4. How many properties will not pay connection charges and what is the estimated cost of those connections?
All properties will pay the capital rate other than marae. The budget for connections to marae is $460,584.70 based on the tender prices.

5. Can you confirm that RLC staff agreed that the 7 Marae in the scheme will not pay for connection costs? How much are the Marae connection costs (given they are bigger than households) and how will those connections be paid for?

Marae are not required to pay the capital cost of connection but will be required to pay the ongoing annual operating costs. The exemption of Marae from the capital rate was part of the Heads of Agreement between the Council and Ngāti Pikiao as a resource consent condition.

The Resource Consent and Ngāti Pikiao Heads of Agreement anticipated that 7 Marae installations will take place. The capital costs of those will be shared between all 770 beneficiaries of the scheme. At the time of seeking tenders for the East Rotoiti on-property systems, a design scope for those Marae had been included and agreed by the procurement team that included the Iwi Group.

The tenders have resulted in the offers to deliver the design installations with an overall net price of around $460k. Each Marae has different demands. Nevertheless, the tendered costs are included in the projected overall cost for the scheme.

6. In addition to the Marae, what other community facilities are connected to the scheme? Are they being charged and if not, how are their connections being funded?

The following facilities are connected to the scheme and all are required to pay the capital cost of connection.

7. How was the figure of 750-770(?) properties determined? As I understand it there are only 630 current properties and some allowance has been made for future development. Why can’t the allowance for future development be increased to say 1000 properties which would then reduce the cost per household?
There are approximately 650 current properties and the scheme provides future capacity for another 120 properties (a total of 770). The 120 future properties were based on Council’s District Plan.

Increasing the number of future properties to an improbable level would reduce the cost per household but would lead to an unreasonable development projection and a shortfall in revenue required to fund the debt incurred for the scheme. Such shortfall would be carried out by the wider District community in terms of debt servicing and repayment.

8. Given that staff have been aware of the cost blow out for some years, what other options for funding have been researched by staff and why are those options not included in the Draft Plan for consideration?
Council has to date secured funding of approximately $26.0 million from the Ministry for the Environment, Bay of Plenty Regional Council, Ministry of Health and Rotorua Lakes Council. This equates to 46% of the capital costs of the scheme. As outlined in the consultation document, Council is working with the Ministry for the Environment to secure an additional $10 million loan (from the Ministry for the Environment). Council will be required to repay the $10 million. The repayment of this loan could be done through the Lakes Enhancement Rate, which is charged to all ratepayers within the Rotorua District (excluding Waikato Regional Council area).