Official Information Request - East Rotoiti/Rotomā 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 30 April 2024 regarding the East Rotoiti/Rotomā sewerage scheme.

Please find below the responses to your questions:

1. What is the official timeline for the lake's sewerage reticulation scheme? Can we have all timelines old, updated and current, commencing from the 1997 feasibility studies of thirteen small communities within the district - specifically as it relates to the Rotoiti, Rotoma, Rotoehu Rohe?

The following outlines the project to date. The Rotoiti/Rotomā Sewerage Scheme was originally proposed in 2010 to be implemented with low pressure grinder pumps installation (as applied to most of the earlier schemes). The wastewater treatment and land disposal system was proposed to be sited on Council land along Manawahe Road. Council developed the application for resource consent for the proposed wastewater treatment plant and the land disposal system in 2012. The resource consent application for the proposal failed in the Environment Court after strong opposition from iwi.

The Rotoiti/Rotomā Sewerage Steering Committee (“RRSSC”) explored ways to reach common ground and developed, out of a long list of options, a preferred option for the entire benefit area. The RRSSC were supported and advised by the Technical Advisory Group comprising independent, Iwi, Bay of Plenty Regional Council and Rotorua Lakes Council experts.

The RRSSC, in partnership with Rotorua Lakes Council and Bay of Plenty Regional Council, proposed the preferred concept plan option for the scheme. The preferred concept plan option was received and agreed by Rotorua Lakes Council in December 2014 and proposed, in summary, that:

• Both Rotoiti and Rotomā should be reticulated to a single wastewater treatment plant (ie: as a single scheme). Although Rotomā is not one of the targeted lakes, there was significant concern about the adverse effects of septic tanks leachate on the health of the community through faecal coliform/pathogens contamination (which was also the basis for the Ministry of Health funding contribution to the estimated costs for Rotomā);
• Low Pressure Grinder Pumps (LPGP) be installed on properties at Rotomā;
• On-site vermifiltration system (Biolytix or equivalent) pre-treatment system be installed at Rotoiti; and
• A reticulation network connecting both communities to a single Membrane Bioreactor Treatment Plant (“WWTP”) and a land-disposal system at Haumingi 9B3B land (subject to gaining the regulatory resource consent).

The scheme’s initial concept was further refined for the consent application in 2017 in an effort to address concerns of the land owners of the proposed WWTP site. Submissions on those resource consent proposals brought to the surface additional and culturally significant elements from beneficiaries of the land of Haumingi 9B3B (the proposed site for the WWTP).

The submitters strongly preferred on-property pre-treatment systems at Rotomā at least to the equivalent of vermifiltration before they would consent to the WWTP resource consent application.

In order to address the objections, so the scheme could be consented and to protect the Ministry of Health’s funding assistance, and after considerable engagement with stakeholders by the RRSSC, it was agreed to modify the initial concept proposal.

In parallel with the tendering process and following the granting of resource consents in late 2017, the scheme’s physical implementation begun from mid-2018 (after competitive tendering) and focused on the reticulation of Rotomā, the installation of trunk mains to Lake Rotoiti and the construction of the WWTP.

The construction of the WWTP was completed in late 2019. The Plant then commenced a testing routine as required by the consent and was successfully completed in around late 2020.

The installation of some 210 STEP (anaerobic) pre-treatment systems on each property at Rotomā was completed in parallel and these commenced conveying partially treated effluent to the WWTP in Rotoiti. Effectively the Rotomā community have had on-property systems operating since 2019.

Overall, some 35kms of main trunk pipes were in place for the conveyance of influent from the east (Rotomā) and from the west (Curtis Street) to the WWTP. Two major pump stations were also completed on the mains lines.

The procurement process for the East Rotoiti on-properties pre-treatment system and the local reticulation network was concluded with a preferred supplier identified in January 2021 with the participation of the Iwi Liaison Group representatives.

In summary, the lengthy procurement process (slowed down by the pandemic in 2020/21) identified two preferred systems for on-property pre-treatment of wastewater for East Rotoiti. While both systems had similar operational performance characteristics, the Biolytix BF2, although slightly more expensive to operate, better met the resource consent conditions, the agreements reached with iwi, the preferred recommendation by the RRSSC of 2014 and the option the Council adopted at the time.

The contract to implement the East Rotoiti on-property systems and related collection system submains was approved by Council in June 2021 and works commenced around April/May 2022.

An update on the status of the scheme was provided to all scheme property owners/ratepayers in July 2021 advising the status of the scheme and that final actual gross scheme costs are higher than the early concept estimates of 2014 which noted a 30% uncertainty, no forward inflation or the effects of the consent conditions that were unknown at the time. There are unique reasons for that variance, including the resource consent conditions, the need for a dedicated WWTP in this area, the extended trunk mains to connect all clusters of the local communities to the WWTP, managing sensitive water sites, water table limitations and challenging access in some areas, as well as compliance with the cultural management plan mandated by the resource consent.

2. When and why was the decision made to amortise costs across East Rotoiti and Rotomā?

Planning for the funding for the scheme has always been on the basis that the capital cost of the scheme less any external funding would be met by the ratepayers of East Rotoiti and Rotomā.

This was the basis of the recommendations to the Council in 2014 from the Community Reference Group.

3. How many ratepayers did the Scheme include when the initial feasibility studies were undertaken and how was this ascertained?

The estimated number of ratepayers to be included in the scheme has consistently been approximately 650 current properties and provision for future capacity for another 120 properties. The 120 future properties is based on Council’s District Plan estimated development capacity. The WWTP capacity can be enhanced in future years with additional treatment systems if required to be paid by the future development (if any) over that capacity.

4. How many ratepayers are currently in each community?

Rotomā = 215

Rotoiti = 436

Rotoehu/Ngamotu = 104

5. Why was Rotoehu excluded from the scheme, how many ratepayers did it involve and what was the decision-making process on this?

The Rotoehu community opted out of the proposed scheme in around 2014 and the Reference Group excluded them from the proposal subject to future decisions of the Bay of Plenty Regional Council to enforce the OSET Plan.

Fulton Hogan (incorrectly noted as InfraCore) was awarded the contract to install STEP tanks on private properties at Rotoma.

6. Who else bid for the contract?

Downer and Infracore.

7. What was lnfraCore's experience above other competing companies that won them the contract?

Fulton Hogan was awarded the installation contract. Infracore assisted as a subcontractor in some elements. Fulton Hogan is one of New Zealand’s largest civil works companies. You may explore their capabilities on-line.

8. What was the reason they (InfraCore) were replaced by Fulton Hogan as providers?

See above.

9. How many properties in Rotomā have STEP installed and are now connected to the reticulation system?

There are 209 properties actively connected out of 215.

10. How many were installed by lnfracore and over what period?

Fulton Hogan was awarded the installation contract.

11. What date did installation and connection in Rotomā begin and finish?

Mid-2018 and completed around September 2019.

12. Since commissioning, how many units have needed to have remedial work undertaken?

General maintenance work and minor adjustments are ongoing. No major remedial works have been undertaken outside the installation warranties of the installation contractor.

In reference to the installed Biolytx System it is understood that in 2016, Council was aware the system was not suitable for the particular lakeside environment and would require further development and modifications.

13. What was the cost to the scheme for the testing, development and modifications required to bring the Biolytix system up to specifications?

The Biolytix BF2 met the operational requirements of the trial while Biolytix BF6 did not. BF2 was the system adopted by Council in June 2021.

14. What other systems were being considered at the time?

Low Pressure Grinder Pumps, STEP systems.

15. Why was Biolytx chosen as the preferred system?

BF2 met the operational requirements and was in compliance with the resource consent conditions.

16. How many installations in Rotoiti have been completed and connected to the reticulation system as of 1st May 2024?

A total of 337 installations have been completed.

17. How many installations in Rotoiti are still to be completed?

Total of 84 (mostly on multiply-owned Māori Land – whenua Māori that require Māori Court decisions) and including the Marae.

18. Since commissioning, how many units have needed to have remedial work undertaken?

General maintenance and operations guidance only. A small number required connection improvements at the contractor’s cost.

Free Installations

19. How many installations have been, or are intended to be made free of capital charges (including residences, local Marae, sports facilities, community halls, schools, toilet blocks, fire stations) and who are they?

Marae are not required to pay the capital cost of connection but will be required to pay the ongoing annual operating costs.

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.

All other properties are required to pay the capital cost of connection.

20. What was the process for determining a free installation?

For Marae it was part of the Resource Consent and Ngāti Pikiao Heads of Agreement. Other than Marae, all other ratepayers/properties are required to pay the capital cost of connection.

21. When and how was the Rotomā/East Rotoiti community consulted on this, what cost was attributed to the installations during any consultation and what was the community response?

It was a compliance cost to the resource consent and part of the Resource Consent and Ngāti Pikiao Heads of Agreement – no community consultation was undertaken.

22. What is the current value of each of these instaIIations?

There are 7 Marae to be connected. The budget for connections to marae is $460,000.

23. Has the cost of these installations been included in the capital charge to ratepayers proposed by Council in the current LTP?

The capital cost of marae connections will be recovered through targeted capital rate on all other properties. This was the funding model preferred by the Rotoiti/Rotomā Sewerage Steering Committee which included community members and were supported and advised by the Technical Advisory Group comprising independent, Iwi, BOP Regional Council and RLC experts.

Costs/Funding

The overall scheme gross cost is rounded at $56.2 million.

Funding for the scheme (confirmed) is:

• Ministry for the Environment - $11.5 million
• Ministry of Health - $4.46 million
• Bay of Plenty Regional Council - $8.62 million
• Rotorua Lakes Council - $1.16 million

24. What is the cost breakdown for the scheme in its entirety including any abandoned solutions and the cost incurred from the two resource consents?

Or because the scheme is treated as a single project these elements can be presented/thought of as;

Subsidies rounded as $36.0mil.

25. Have any of these costs paid by Council and recovered by onward charge to all ratepayers or is it intended all costs be recovered via a targeted rate against Rotomā/East Rotoiti ratepayers?

The local properties will only pay the net costs (after subsidies), approximately $30.5 million. Council will carry the costs of the 120 future properties until they develop. The Long-term Plan consultation is seeking feedback on further increasing the subsidies (from $1,500 to $2,700) and using the Lakes Enhancement Rate to pay back the $10 million added support from the Crown where all district ratepayers pay.

26. Why was the Ministry of Environment $10m funding retracted?

Council has to date secured external funding of $11.5 million from the Ministry for the Environment (the Crown). As outlined in the Long-term Plan consultation document, Council is working with the Ministry for the Environment to secure an additional $10 million loan (from the Crown). 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).

27. What is Council's current interest charge on funds borrowed for this scheme?

Financing costs for this scheme are 6%.

28. How will new developments requiring connection to the reticulated scheme be charged?

The same targeted rate payable by current properties will apply to the future around 120 properties when they develop and at the time of obtaining building consent.

Given that Rotomā residents were given assurance from Council that, should the projected capital cost of $14,100 (incl. GST) per ratepayer rise significantly, the community would be consulted prior to commitment to the expenditure as had happened with the proposed change from LGPG to STEP.

29. What consultation has been made directly with Rotomā ratepayers since the completion of their segment of the scheme?

Council never promised a fixed cost. Council always stated that it will apply best efforts to keep net costs as low as possible. Rotomā residents were last updated in July 2021 and the Draft Long-term Plan currently being considered.

30. How and when was this undertaken?

Through the last update of the July 2021 and the Draft Long-term Plan currently being considered.

31. How did Council measure the community's agreement with the communication?

The community had always only two options. One was compliance with the OSET Plan at their own full costs or through a reticulation scheme. The reticulation scheme was proposed by the Reference Group and Council adopted the scheme as part of its consideration for the sanitary needs of the community. Council has the legal authority to adopt a reticulation scheme and to decide its Funding and Revenue Policy.