strategic business plan for sewerage services · 2011-11-15 · page ii summary nambucca shire...

STRATEGIC BUSINESS PLAN FOR

SEWERAGE SERVICES

Final Draft November 2011

Nambucca Shire Council Strategic Business Plan for Sewerage Service

Acknowledgment

This Strategic Business Plan was prepared by Nambucca Shire Council with the assistance of the Strategic Water Management Unit of NSW Public Works - Water Solutions.

The Plan is based on a workshop held on 23 - 24 February 2011 in which Councillors and senior Council staff were represented.

Strategic Business Plan for Sewerage Service Nambucca Shire Council


Contents

Summary .............................................................................................................................i

Introduction........................................................................................................................1 Why This Plan Has Been Developed .......................................................................1 Structure of the Plan ................................................................................................3

PART A: OPERATING ENVIRONMENT ............................................................................5

Council’s Vision and Mission ...........................................................................................7

Operating Environment.....................................................................................................9

Sewerage Scheme ...........................................................................................................13 Existing Sewerage Schemes .................................................................................13 Future Development...............................................................................................22

Levels of Service .............................................................................................................25

Principal Issues ...............................................................................................................29

Best Practice Management .............................................................................................31

PART B: STRATEGIC PLAN............................................................................................33

Planning Strategy ............................................................................................................35

Customer Service ............................................................................................................39 Levels of Service Review.......................................................................................40 Areas Serviced.......................................................................................................42 Sewer Load Management ......................................................................................45 Service Pricing .......................................................................................................48 Customer Relations................................................................................................51 Community Involvement.........................................................................................53

Environment.....................................................................................................................55 Integrated Water Cycle Management (IWCM) .......................................................56

Total Asset Management ................................................................................................59 Operations Plan .....................................................................................................62 Maintenance Plan ..................................................................................................66 Capital Works.........................................................................................................69

Work Force.......................................................................................................................71

Finance .............................................................................................................................75

PART C: DETAILED INFORMATION...............................................................................77

Financial Management ....................................................................................................79 Overview of Financial Planning..............................................................................79 Model Description ..................................................................................................80 Modelling Methodology ..........................................................................................80

Projected Cost Schedules ..............................................................................................85

Financial Modelling Outcomes.......................................................................................91

Operating Environment Review .....................................................................................97 Institutional Arrangements .....................................................................................97 Legislative Framework ...........................................................................................99 Stakeholder Analysis..............................................................................................99

Strategic Business Plan for Sewerage Service Nambucca Shire Council

Service Provision ................................................................................................... 99 Corporate Policies and Practices......................................................................... 101 Service Delivery................................................................................................... 101

APPENDICES................................................................................................................. 105

FIGURES

Figure 1 - Map of Nambucca Shire Council ...................................................................... 16

Figure 2 – Map of Bowraville Sewerage Service Area ...................................................... 17

Figure 3 – Map of Macksville Sewerage Service Area...................................................... 18

Figure 4 – Map of Scotts Head Sewerage Service Area................................................... 19

Figure 5 – Map of Nambucca Heads Sewerage Service Area.......................................... 20

Figure 6 – Map of Valla Beach Sewerage Service Area ................................................... 21

Figure 7 – Nambucca Shire Council Population Growth Projections ................................ 22

Figure 8 - Best Practice Asset Management Approach .................................................... 59

Figure 9 - Operations Flowchart........................................................................................ 62

Figure 10 - Maintenance Flowchart................................................................................... 66

Figure 11 - Capital Works Flowchart ................................................................................. 69

Figure 12 – Organisation Structure of Engineering Services ............................................ 72

Figure 13 - Detailed Capital Works Schedule for Sewerage ............................................. 87

Figure 14 - Detailed Recurrent Cost Schedule for Sewerage ........................................... 88

Figure 15 - Capital Works Plan for Sewerage ................................................................... 89

Figure 16 – Recurrent Cost Plan for Sewerage ................................................................ 89

Figure 17 - Sewerage Capital Works Summary ................................................................ 90

Figure 18 - Typical Residential Bill for Sewerage.............................................................. 91

Figure 19 - Cash and Borrowing Projection for Sewerage ................................................ 92

Figure 20 - Projected Financial Results for Sewerage ...................................................... 93

Figure 21 - Sensitivity of Typical Residential Bill for Sewerage ........................................ 94

Figure 22 - Sensitivity of Cash Levels for Sewerage......................................................... 94

Figure 23 – Sensitivity of Borrowing Levels for Sewerage ................................................ 95

Figure 24 - Effect of Sensitivity on the Typical Residential Sewerage Bill ........................ 95


APPENDICES

Appendix A Abbreviations

Appendix B Inputs for Reporting under IPR Framework

Appendix C Legislation Affecting Sewerage Services

Appendix D Stakeholder Review

Appendix E Performance Indicators

Appendix F Financial Input Data

Appendix G Detailed Projected Financial Statements

Nambucca Shire Council Summary Page i Strategic Business Plan for Sewerage Service

Nambucca Shire Council Strategic Business Plan for

Sewerage Service 2010 - 11

Summary

Introduction

This Strategic Business Plan covers the development and operation of Nambucca Shire Council’s Sewerage Schemes. It provides supporting information for Council's Management Plan.

Corporate Objective for Sewerage

Council has adopted the following objective for its sewerage services:

To ensure that the community has a sewerage service that complies with health and environmental standards and meets community expectations

Council’s corporate policies and objectives also place specific requirements on the sewerage schemes. These are detailed in Part A of this Business Plan under Operating Environment.

Scheme Outline

Nambucca Shire Council operates four reticulated sewerage schemes servicing each of the main urban centres namely Bowraville, Macksville, Nambucca Heads and Scotts Head. All other villages and rural settlements in the Council area are serviced by on-site sewage management systems.

Descriptions and schematics of service areas of Council’s sewerage service schemes are presented in Part A of this Business Plan.

Operating Environment Review

This review explores the internal and external conditions under which Council delivers services now and those likely to prevail in the future. Details are provided in Part C of this Business Plan.

Page ii Summary Nambucca Shire Council Strategic Business Plan for Sewerage Service

Principal Issues

Current services are generally satisfactory. There are however, some issues, which need to be addressed. These are:

• Meeting NOW Best Practice Management Guidelines and the adopted levels of services

• Managing inflow and infiltration and sewer overflows

• Equitable service pricing including trade waste fees and developer charges

• Meeting customer services expectations

• Meeting DECCW licence conditions for effluent discharge and reuse

• Managing and funding the long-term capital works program

• Systematic rehabilitation and renewal of ageing assets

• Optimising costs of pumping

• Maintaining skilled staff

Service Provision

Levels of Service

Council's primary objective with sewerage services is to meet the adopted Levels of Service, which cover the following areas:

• Service complaints

• System failures

• Response times

• Odour complaints

• Flow problems

• Discharge quality

Levels of Service with planned improvements are summarised on the following page.

Nambucca Shire Council Summary Page iii Strategic Business Plan for Sewerage Service

Summary of Levels of Service Improvements

LEVEL OF SERVICE DESCRIPTION UNIT

Current Target

SYSTEM FAILURES Category One:

− Failure due to rainfall and deficient capacity (overflows to the environment)@

No./year

< 50

< 10

Category Three:

− Failures due to main blockages and collapses@

No./ year

< 100

< 50

Response Times for System Failures (Defined as the maximum time to have staff on site to commence rectification)

Priority One:

(Major spill, significant environmental or health impact, or affecting large number of consumers i.e. a major main)

− During working hours:

− During after hours:

Minutes

Minutes

180

180

90

120

Priority Two:

(Moderate spill, some environmental or health impact, or affecting small number of consumers i.e. other mains)



Minutes

Minutes

180

180

90

120

CUSTOMER FEEDBACK / COMPLAINTS@

Service complaints No./ 1000 connections

< 10 <5

Odour complaints

− Pumping Stations

− Reticulation system

No./ 1000 connections

<1

<1

0

0

Environment@

Sewage treated to

− Primary level only

− Secondary level

− Tertiary level

% of total volume of sewage treated

100

100

30

100

100

90

Effluent discharge compliance with licence limits

% of samples/ year

98 100

@ - NWI Performance Indicators; for a full list of the Levels of Service see Part A, Levels of Service.

Page iv Summary Nambucca Shire Council Strategic Business Plan for Sewerage Service

Objectives

Council has recognised five Key Result Areas that must be managed well to achieve success in the long-term provision of sewerage services to its customers. These are:

• Customer service,

• Environment,

• Total asset management,

• Work force, and

• Finance.

Objectives and Performance Targets have been set in these Key Result Areas. These are summarised on page v, and given in detail in Part B of this Plan.

Actions

Strategies were identified for achieving the objectives, and then specific actions were listed for implementation of these strategies.

The notable actions Council proposes to take over the next 10 years include:

• Nambucca Heads STP upgrade

• Upgrading Nambucca Heads SPS 1,3,6 and 7

• Upgrading Valla Beach SPS 5 and 7

• New SPS 15 and 16 (DCP17) for Macksville

• Chemical dosing facility for Scotts Head STP

• Emergency storage capacity augmentation at Macksville SPS 2

• New sewer mining plants for Valla UGA and South Scotts Head

• Investigation and remedial works to reduce inflow and infiltration

Nambucca Shire Council Summary Page v Strategic Business Plan for Sewerage Service

Objectives

Key Result Area Objective Performance Target

To provide services that are sustainable, financially affordable and meet currently documented levels of service

Update Strategic Business Plan with documented levels of service

Quarterly report on compliance with documented levels of service

To provide services to all properties within urban areas for environmental and/or public health reasons, and where economically feasible

Prepare scheme development concept for future growth areas by June 2014

Investigate and review feasibility for service extension to unsewered areas by 2015

Minimise hydraulic load due to infiltration, inflow and illegal connections and manage any industrial and commercial pollutant load

Commence implementation of a 10-year Infiltration/Inflow (I/I) program by July 2011

Review and update of Liquid Trade Waste Policy by June 2013

Ensure pricing regime achieves full cost recovery for current and future service provision and complies with NOW Best Practice Guidelines

Review and update sewerage tariff structure that complies with NOW Best Practice Management Guidelines by June 2011

Review and update Development Servicing Plan by first quarter of 2012

Keep the community informed of major issues relating to the sewerage services and provide services in a professional and efficient manner

Conduct customer survey every 3 years

No increase in customer complaints of a substantive nature

Customer Service

Raise awareness through community education on sewerage services and consult community on major expenditure decisions

No complaints regarding lack of community involvement in major capital expenditure decisions

Environment

Manage the sewerage services in an environmentally responsible and ecologically sustainable manner and acceptable to the community

Comply with all regulatory requirements and current best practice

Greenhouse gases (GHGs) reduction from scheme operation to year 2000 level by 2025

Page vi Summary Nambucca Shire Council Strategic Business Plan for Sewerage Service

Key Result Area Objective Performance Target

Ensure safe operating practices of the system at optimal operating costs to provide desired levels of service

Prepare an Operations Plan by June 2012

Prepare emergency response plan by June 2013

Maximise overall system reliability at minimum cost to meet agreed levels of service

No failures due to lack of appropriate maintenance

Prepare a Maintenance Plan by June 2014

Total Asset Management

Provide capital works to meet levels of service for existing and future customers at optimal life cycle cost

Projects carried out on time and to budget to provide agreed levels of service for existing and new developments

Work Force

Provide appropriate level of skilled staff to meet the service delivery objectives

No failure to meet levels of service due to human resources deficiencies

Finance

Provide full cost recovery for scheme operation and asset replacement at an affordable level of cost to customers

Financial Plan in place for quarterly review and annual updating

Nambucca Shire Council Summary Page vii Strategic Business Plan for Sewerage Service

Summary of Projected Financial Position

Following Table presents the summary of projected financial position of Nambucca Shire Council’s sewer fund over the next 30 years at five-year intervals. The typical annual residential bill forecast for the same period is shown graphically below the Table. The values are all in 2010/11 dollars.

Summary of Projected Financial Position

Financial projections include the subsidy already secured for the Nambucca Heads STP upgrade works. No other subsidy/grant has been considered in the forecast.

Financial modelling has demonstrated that the current typical residential sewerage bill, of $439 (in 2010/11 $), need to be increased by $90/year for three years starting 2012/13 to $ 709 p.a. in 2014/15 and thereafter to be maintained at that level of charge for the remaining forecast period (see Figure below). This level of charges is sufficient to maintain liquidity with a minimum of $ 500,000 of cash in hand over the period.

Typical Residential Sewerage Bill

709 709709

415

439

529

619

709 709

400

480

560

640

720

800

2010

/11

2011

/12

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

2018

/19

2019

/20

2020

/21

2021

/22

2022

/23

2023

/24

2024

/25

2025

/26

2026

/27

2027

/28

2028

/29

2029

/30

2030

/31

2031

/32

2032

/33

2033

/34

2034

/35

2035

/36

2036

/37

2037

/38

2038

/39

2039

/40

Financial Year

Rea

l (20

10/1

1$)

Page viii Summary Nambucca Shire Council Strategic Business Plan for Sewerage Service

The sewerage TRB forecast by the model in inflated $ for the next three years are shown below.

• TRB for 2012/13 - $561 p.a.

• TRB for 2013/14 - $676 p.a.

• TRB for 2014/15 - $798 p.a.

All the planned capital works for the next 30 years will be funded internally and through external borrowings, with the maximum utilisation of existing cash reserves and revenues.

See Part C for more financial projection details.

Nambucca Shire Council Introduction Page 1 Strategic Business Plan for Sewerage Service

Introduction

Why This Plan Has Been Developed

In 2010, a new planning and reporting framework (Integrated Planning and Reporting Framework – IPR, 2010) under Section 402 of the Local Government Act 1993 has been introduced for NSW local government. These reforms replace the former Management Plan and Social Plan with an integrated framework. IPR requires all Local Councils to prepare, adopt and implement the following:

• 10-year Community Strategic Plan;

• Resourcing Strategy;

• 4 year Delivery Program;

• Annual Operational Plan;

• Annual Report;

Strategic Business Plans for each of Council’s businesses such as water supply, sewerage, stormwater, roads and buildings, parks and gardens etc., form the basis for Council’s Community Strategic Plan. The key elements of a Strategic Business Plan namely the long term Financial Plan and Total Asset Management Plan are the Council’s resourcing strategy for these services.

The relationship between Council’s Community Strategic Plan and the Strategic Business Plans is shown on the right.

Strategic Planning Benefits

The strategic business plan aim to:

• Provide information for Council's Community Strategic Plan;

• Detail information of ratepayers and customers, elected representatives, management, staff, Government and relevant external bodies;

• Focus attention on the key issues affecting day to day operations;

• Explore how to share the limited resources available in an equitable manner;

• Demonstrate to stakeholders that the schemes are well managed;

• Identify financial and other resources required to operate these services on a commercial basis;

Strategic Business Plan for Sewerage

Financial Plan

Customer Service Plan

Resourcing Strategy


Plan

Community Strategic Plan

Introduction Nambucca Shire Council Strategic Business Plan for Sewerage Service

• Provide a long term price path for each service;

• Assist in development of an affordable capital works program;

• Enable Council to model ‘what-if’ scenarios and see their rating impact; and

• Allow future financial performance indicators to be calculated, such as return on capital invested.

Strategic Business Plans are considered desirable for all councils but specifically NSW Office of Water (NOW) has now made them a prerequisite for the provision of financial assistance. Some other drivers for preparing strategic business plans include the need to comply with the following requirements:

• Council of Australian Governments (COAG) – National Water Reform 1994, National Competition Policy 1996 and National Water Initiative 2004 and National Urban Water Planning Principles 2009

• National Water Initiative – National Performance Reporting 2006, Urban Water Reforms 2010 and Pricing Principles 2010

• Independent Pricing and Regulatory Tribunal (IPART) – Competitive neutrality and Pricing Principles.

The Plan also communicates scheme and service information to stakeholders and demonstrates that the scheme is being well managed.

Planning Cycle

Management Report

Annual Report

Financial Accounts AuditSBPReview

BudgetManagement Plan

FinancialReview

Capital Works

Financial Report

July October January March June

Nambucca Shire Council Introduction Page 3 Strategic Business Plan for Sewerage Service

Structure of the Plan

The strategic business plan is presented in three parts. The elements of each part are shown on the diagram below.

Human Resources

Asset Management

Environment

Customer Service

Principal Issues incl. Best Practice Management

Levels of Service

Sewerage Schemes


Vision and Mission for Nambucca Shire Council

Part CDetailed

Information

Summary

Introduction

Appendices

Part BStrategic

Plan

Objectives, performance targets

and strategies

Financial Modelling and Stakeholders

Review

Finance

Part A Operating

Environment

Current operation and controlling

factors

Nambucca Shire Council Part A - Operating Environment Page 5 Strategic Business Plan for Sewerage Service

PART A: OPERATING ENVIRONMENT

Part A of the Plan provides a review of the system and the operating environment prior to undertaking planning. Part A is the starting point of the planning process and comprises:

Vision and Mission of Nambucca Shire Council looking to a 30-year planning horizon

Operating Environment

Review of Existing Sewerage Scheme

Levels of Service

Principal Issues

Best Practice Management.

Part B is the Strategic Plan for the sewerage schemes, and Part C is the Detailed Information for achieving the Business Plan’s performance targets.

Part A - Operating Environment Nambucca Shire Council Strategic Business Plan for Sewerage Service


Council’s Vision and Mission This section contains Council’s corporate vision and mission

statements which indicate the future planning direction

Strategic planning aims to optimise service delivery in terms of long term cost effectiveness and sustainability and the prime driver is Council’s vision of the future and definition of a mission statement.

Corporate Vision

Council’s corporate vision is:

Nambucca Valley ~ Living at its best

Corporate Mission

The corporate mission of the Council is:

The Nambucca Valley will value and protect its natural environment, maintain its assets and infrastructure and develop opportunities for

its people

Corporate Values

Council has adopted a set of corporate values, which are intended to reflect the vision of the Council and to provide broad corporate objectives. These are:

• Effective leadership

• Strategic direction

• Sustainability of infrastructure and assets

• Community involvement and enhancement through partnerships with Council

• Enhancement and protection of the environment

• Maximising business and employment opportunities through promotion of economic development

• Addressing social and cultural needs of the community through partnerships and provision of facilities and services

• Actively pursuing resource sharing opportunities


Objective for Sewerage

Council has adopted the following objective for its sewerage services:

To ensure that the community has a sewerage service that complies with health and environmental standards and meets community expectations

The implications of Council’s vision and mission statements for the provision of the sewerage services are:

• To strive for excellence in customer service;

• To ensure a sustainable infrastructure and assets;

• To have a strong economic base;

• To meet community expectations;

• To maintain suitably experienced staff;

• To provide necessary services efficiently;

• To be dynamic and responsive to change; and

• To be environmentally committed and responsible.

In order to continue effective service provision Council needs the support of the community. For this to occur, however, the general public needs to be made more aware and knowledgeable about sewerage planning issues.


Operating Environment The delivery of sewerage services to the schemes’ customers is subject to a large number of constraints, requirements, guidelines and other factors, which collectively are referred to as the operating environment. The five major elements of the operating environment are shown in the chart below.

Sewerage Scheme

Council's corporate

policies and objectives

Stakeholders

Regional development

Institutional arrangements

Legislation

Delivery ofService

Customers


In expanding Council’s vision for a 30-year planning horizon for sewerage services, changing service requirements due to the key factors influencing the operating environment need to be accounted for. Council considers the following factors as having significant influence on the provision of sewerage services in future and the quality of life in general of the residents of Nambucca Shire Council:

Growth and Development • ABS Census data, 2006 indicates that population in the Council has been

growing at a compounding annual growth rate of 0.7% p.a. during the last decade and a half.

• Council forecasts that the long-term average population growth rate may go up to the order of 1% p.a. for the future

• Potential growth areas within the Shire include South Macksville (285 lots), South Scotts Head (227 lots) and Valla UGA ( 350 lots)

Commerce and Industry

• Major engineering and extractive industrial operations in the Shire include coach and horse trailer building, quarrying, wind mills manufacturing, concrete batching and precast concrete manufacturing.

• Timber mills, aquaculture (oyster farming) and meat rendering are other industrial and commercial operations that provide local employment to the Shire population.

• Agricultural activities of the Shire include macadamia nut production, dairy farming, animal husbandry, nurseries and fruit and vegetables growing.

Health, Education and Environment

• Macksville Health Campus is the main hospital facility for the Nambucca Valley. Services of two ambulance stations, number of general and dental medical practitioners and ancillary medical services such as X-ray, pathology and therapies are available in the Shire.

• Nambucca Shire boasts 6 pre-school facilities, 11 primary schools and 3 secondary schools. There is also a TAFE campus at Macksville. Ngurrala Aboriginal Corporation provides educational and training facilities and job services to the indigenous community

• It is Council’s vision to protect the Shire’s natural environment and applies ecologically sustainable development (ESD) principles as referenced in the Local Government Act.

• Council has identified 75 environmental indicators to best represent and measure Council’s progress year on year basis. Five of the environmental indicators were to monitor Council’s movement towards achieving sustainability goals

• The effect of climate change on Council’s water sources is unknown at this stage but Council is aware that there will be consequences and will monitor any forecasts that will affect the Shire’s water security and in turn the sewerage services


Transport and Tourism

• Tourism is a major and growing industry for Nambucca Shire. Key tourist attractions of the Shire include its nature reserves, unpolluted beaches, recreational fishing and water sport activities

• The North Coast Rail Line (Sydney – Brisbane) and the Pacific Highway pass through Nambucca Shire. Macksville is about halfway between Sydney and Brisbane. The nearest airport is located at Coffs Harbour, which is 50 minutes drive to the north from Macksville.

Technology and Information

• Council recognises difficulties in predicting the impacts of rapidly changing technologies and is prepared to be flexible to adopt new technologies that provide benefits and opportunities to Council’s in serving the rate payers better.

• Good telecommunication, internet, tele-conferencing and satellite communication network, wireless internet using Next-G Telstra network are available in the Council area

Government Legislation/ Policy

• More regulation, stringent enforcement and fewer subsidies from Government is expected to impose heavy burden on Council’s management responsibilities and hence on its finances

• Latest government policies transfer more regulatory requirements to Local Government and require additional operational responsibilities and hence on their finances


Sewerage Scheme This section describes the main components of the existing

sewerage schemes, and the plans for their future development.

Existing Sewerage Schemes

Nambucca Shire Council operates four reticulated sewerage schemes servicing each of the main urban centres. All other villages and rural settlements in the Council area are serviced by on-site sewage management systems.

Bowraville Sewerage Scheme

The entire Bowraville population is served by the Bowraville Sewerage Scheme consisting of a centralised 1,200 EP trickling filter (TF) STP achieving secondary treated effluent.

Bowraville STP and the sewer network were originally built in 1968 and in the late 1990s effluent reuse facilities were added. All effluent gravitates to wet-weather storage adjacent to the STP.

100% of ADWF is reused on a nearby dairy farm for pasture irrigation. The effluent is disinfected with chlorine prior to reuse. Overflows from the wet-weather storage are discharged into the Nambucca River. All properties connected to the Bowraville Sewerage Scheme drain within a single sewer pump station (SPS) catchment.

Macksville Sewerage Scheme

The majority of Macksville residents are served by the Macksville Sewerage Scheme consisting of a centralised 5,500 EP Intermittently Decanted Extended Aeration (IDEA) STP. There are a number of properties within the Macksville urban area that are connected to the Nambucca District Water Supply (NDWS) scheme but not connected to the Macksville Sewerage Scheme.

Two stage chemical dosing is employed before and after the IDEA reactor to reduce phosphorous levels to meet general waters discharge criteria. Following UV disinfection, the effluent is discharged to the Nambucca River. Currently there is no reuse of treated effluent from this scheme.

Properties connected to the Macksville Sewerage Scheme drain into one of 15 existing SPS catchments. The Nambucca River Tourist Park (North Macksville) pumps effluent through a private line and discharge into the catchment of SPS 2. The Macksville Showground and two adjacent rural properties (North West of Macksville) also pump through a private line and discharge into SPS 2. SPS 8 and SPS 9 pump sewage into the Macksville STP. Two additional SPS (15 and 16) are proposed to account for urban expansion in South-West Macksville.

Scotts Head Sewerage Scheme

The sewerage scheme for township of Scotts Head comprises 8 sewage pumping stations and a centralised 2,000 EP Pasveer Channel STP. SPS 1 pumps sewage into the STP. Council plans to investigate options to improve the performance of the STP during peak holiday periods. One of the options considered is installing a chemical dosing facility by 2013 to augment the treatment capacity to an additional 2,500 EP during peak periods.


Secondary treated effluent is currently discharged to exfiltration beds adjacent to Warrell Creek. The effluent is currently not disinfected and there is no reuse of effluent.

Nambucca Heads and Valla Beach Sewerage Scheme

Properties within Nambucca Heads urban area connected to sewerage drain into one of the existing 15 SPS catchments. Two SPS (4 and 8) then pump sewage into the Nambucca Heads STP located north of the township. There are a number of properties within the urban area that are connected to the NDWS but not connected to sewerage.

The Nambucca Heads Sewerage Scheme also treats sewage collected from Valla Beach and Hyland Park. Connected properties in the Valla Beach urban area drain into one of 14 SPS catchments. SPS5 transfers the Valla Beach sewage across Deep Creek to SPS7 at Hyland Park. Hyland Park has 3 SPS catchments contributing to SPS7. The combined sewage is transferred to Nambucca Heads STP from SPS7.

There are a small number of properties within Valla Beach that are connected to the water supply but not connected to the Nambucca Heads Sewerage Scheme.

The total treatment capacity of STP is 10,000 EP comprising a 5,000 EP trickling filter and a 5,000 EP IDEA reactor. Tertiary treated effluent is currently discharged via overflow from treatment ponds into a forest swamp upstream of SEPP14 Wetland No. 359 and Deep Creek. The effluent undergoes passive or natural disinfection in the treatment ponds prior to discharge. There is currently no reuse of treated effluent discharged from the Nambucca Heads STP.

Following the development of IWCM strategies, Council is currently constructing a new 10,000EP IDEA reactor to give a total biological loading capacity of 15,000 EP (including chemical dosing). The 5,000 EP trickling filter will be decommissioned once the new reactor comes into operation by 2012.


Assets Summary

Nambucca Shire Council has prepared an Asset Register and the locations of all major sewerage supply assets have been recorded. Council is continuously updating the asset register.

Council completed a valuation of their sewerage assets in 2007 as required by the Department of Local Government. According to the Asset Valuation Report 2007, most sewerage assets are ageing but considered to be in reasonably good condition.

No detailed condition audit of underground assets has been carried out as yet. So Council does not really know the cost or timing of the real replacement needs. At this stage it must be assumed that there is a growing liability that will have to be met at some point in time and the level of cost is indicated by the accumulated depreciation less cumulative replacement expenditure.

The condition of Council’s major sewerage assets is presented in the following Table.

Asset No./ Length/ Capacity

Average Remaining Life (Years)

Condition 1 – As new

5 – Poor

Sewer Mains (trunk and reticulation mains) including manholes

140.2 Km 34 3

Sewage Pumping Station 55 Nos. 20 3

Rising mains 22.6 Km Included above

Sewage Treatment Plant 4 Nos. 16 3


Figure 1 - Map of Nambucca Shire Council


Figure 2 – Map of Bowraville Sewerage Service Area


Figure 3 – Map of Macksville Sewerage Service Area


Figure 4 – Map of Scotts Head Sewerage Service Area


Figure 5 – Map of Nambucca Heads Sewerage Service Area


Figure 6 – Map of Valla Beach Sewerage Service Area


Future Development

Growth Projections

Nambucca Shire Council has had a compounding population growth of 0.7% p.a. during the 15-year period between 1991 and 2006 (Based on ABS data – Regional Population Growth, Local Government Areas, NSW - 1991 – 2006, December 2007, Ref. 3218.0).

The ABS Census data and the 2004 - NSW Planning forecasts are shown graphically in the Figure below.

Council estimates that Shire-wide population will grow at a long-term average rate of 1.0% p.a. for the next 30-years. For the sewerage services, the recently adopted Integrated Water Cycle Management Strategies consider a serviced population growth rate of 0.8% p.a. and has already planned to expand sewerage infrastructure capacity to service this population growth. The same service population growth rate has been adopted in this Strategic Business Plan and for the financial projections during the 30-year forecast period.

Figure 7 – Nambucca Shire Council Population Growth Projections

The projected number of assessments for financial modelling purposes is based on the 5,891 (Residential: 5,390; Non-residential: 501) assessments in June 2010 as adopted by Council for developing IWCM strategies and factored up on a pro-rata basis in line with the above forecasts.

1817

1 1878

8 1951

2

2065

3

2164

0 2230

4

1882

0

1908

0

1937

0

1964

0

1985

0

1821

9

1814

1

1673

0

1763

9

2290

8

1856

0

1817

0

1760

0

15000

17500

20000

22500

25000

1991 1996 2001 2006 2011 2016 2021 2026 2031 2036YEAR

POPU

LATI

ON

ABS Population Census Data

Council Residential Population Projection @ 0.8% p.a.

NSW Planning 2004 Population Projection


Capital Works Program The following is a summary of the major sewerage capital works planned for Nambucca Shire Council over the next 10 years. The justification for why they have been planned is also shown below

Proposed Capital Work Year Justification

Nambucca Heads STP upgrade 2010 - 2012 Capacity augmentation for improved levels of service and to cater for growth

Upgrading Nambucca Heads SPS 1,3,6 and 7

2010 - 2012 Asset renewal and capacity augmentation to cater for growth

Upgrading Valla Beach SPS 5 and SPS 7

2010 - 2012 Asset renewal and capacity augmentation to cater for growth

New SPS 15 and 16 (DCP17) for Macksville

2011 - 2012 Servicing new developments

Chemical dosing facility for Scotts Head STP

2012 - 2013 Capacity augmentation to cater for growth

Emergency storage capacity augmentation at Macksville SPS 2

2013 Improved levels of service and regulatory compliance

New sewer mining plants for Valla UGA and South Scotts Head

2016 - 2017 Improved levels of service and water conservation

Stakeholders

Stakeholders are individuals and organisations, both internal and external, with an interest and/or equity in the sewerage services provided by the Council. The stakeholders for include:

Residents/Families Property Owners/Ratepayers

Councillors Pensioners

Commercial and Industrial Consumers

Council Employees

Technical Management Staff Tourists

Government Agencies Special Interest Groups

Stakeholders have different expectations, which have a significant impact on the development and operation of the schemes. The expectations of the stakeholders cover a wide spectrum of issues and aspects of sewerage services. Refer to Appendix C for a list of issues/ aspects that different stakeholders will be interested in.

While Council endeavours to meet these expectations, it is aware that the extent to which these expectations can be met will vary. The bottom line for Council, however, is to operate, maintain and deliver the services with a view to close-in any perceived gap between the stakeholder expectations and the services provided.


Levels of Service Define explicitly the standards required from sewerage scheme and

are an extension of Council’s corporate objectives

The Levels of Service:

• define explicitly the standards required from the sewerage system;

• are an expansion of the mission statement; and

• will largely shape Council's detailed planning.

The Levels of Service define the deliverables and are the driving force for the sewerage schemes’ management and development. Achieving the target Levels of Service is the PRIMARY GOAL.

While minimum standards in some areas such as effluent quality, noise, odour, effluent discharges and sludge management are covered by statutory and license requirements, the community may desire levels of service, which are more stringent than the regulatory requirements. These levels of service may be seen as reflecting local community aspirations. There are also operational levels of service relating to service reliability, responsiveness to complaints, etc, which are not covered by regulation.

The current and target levels of service, which the Council aims to achieve, are shown overleaf.

In a recent customer survey (November 2007), Shire ratepayers indicated a high level of satisfaction with the provision of sewerage services.

As Council and customers are satisfied with the current levels of service provided, a majority of the target levels of service remains unchanged. Notable improvements that Council plans to achieve regarding the levels of service are:

• reducing the number of system failure; and

• quicker response time to system failures

It should be noted that while the current Levels of Service are the target, which Council aims to meet, they are not intended as a formal customer contract at this stage. Rather Council’s responsibility is to achieve these levels and then to achieve them more cost effectively through a process of continual improvement.


Levels of Service – Sewerage


Current Target

SERVICE AVAILABILITY − Extent of area serviced

% Service area

99% of urban areas

100% of current and future urban

areas

SYSTEM FAILURES Category One:

− Failure due to rainfall and deficient capacity (overflows to the environment)@

No./year

< 50

< 10

Category Two:

− Failures due to pump or other breakdown including power failure

No./ year

0

0

Category Three:

− Failures due to main blockages and collapses@

No./ year

< 100

< 50

Response Times for System Failures (Defined as the maximum time to have staff on site to commence rectification)

Priority One:

(Major spill, significant environmental or health impact, or affecting large number of consumers i.e. a major main)



Minutes

Minutes

180

180

90

120

Priority Two:

(Moderate spill, some environmental or health impact, or affecting small number of consumers i.e. other mains)



Minutes

Minutes

180

180

90

120

Priority Three:

(Minor spill, little environmental or health impact, or affecting a couple of consumers)

− During working hours

− During after hours

Minutes

Minutes

180

180

180

180



Current Target

CUSTOMER FEEDBACK / COMPLAINTS@

Service complaints No./ 1000 connections

< 10 <5

Odour complaints

− Treatment works (outside designated buffer zone)

− Pumping Stations

− Reticulation system

No./ 1000 connections

0

<1

<1

0

0

0

Billing and account complaints No./ 1000 connections

< 10 < 10

Other complaints No./ 1000 connections

< 10 <10

Response Times for Feedback/ Complaints

Average connect time to a telephone operator@

Seconds 30 30

General complaints and inquiries:

− Written complaints

− Personal/ oral complaints

Note: Times apply for 95% of complaints

Working days

Working days

10

5

10

5

Environment@

Sewage treated to

− Primary level only

− Secondary level

− Tertiary level

% of total volume of sewage treated

100

100

30

100

100

90

Recycle/ reuse of effluent % total volume of sewage treated

8 8

Effluent discharge compliance with licence limits

% of samples/ year

98 100

@ - NWI Performance Indicators

Note: The Levels of Service are the targets, which Council aims to meet; they are not intended as a formal customer contract.


Principal Issues Looks at the key concerns facing Council in the future

A number of issues have been identified as important to the future operation of the sewerage schemes. Below is a list of these issues and where they have been addressed in this Strategic Business Plan.

Issue Section Where This Is Addressed

Meeting NOW Best Practice Management Guidelines and the adopted levels of services

Objective 1 – Levels of Service Review (Performance Management)

Managing inflow and infiltration and sewer overflows

Objective 3 – Sewer Load Management

Objective 10 – Capital Works

Equitable service pricing including trade waste fees and developer charges

Objective 4 – Service Pricing

Meeting customer services expectations Objective 5 – Customer Relations

Objective 6 – Community consultation

Meeting OEH licence conditions for effluent discharge and reuse

Objective 7 – Environment

Objective 10 – Capital works

Managing and funding the long-term capital works program


Systematic rehabilitation and renewal of ageing assets

Objective 9 – Maintenance


Optimising the cost of pumping Objective 8 – Operations

Objective 9 – Maintenance


Maintaining skilled staff Objective 11 – Human Resources


Best Practice Management NSW Office of Water Best Practice Guidelines

The NSW Office of Water (NOW - previously Department of Water and Energy) has prepared Guidelines for Best-Practice of Water Supply and Sewerage pursuant to section 409(6) of the Local Government Act 1993. A summary of Nambucca Shire Council’s current compliance status of the criteria is as follows:

Issue Status

Strategic Business Plan (including Financial Plan)

This document represents the Strategic Business Plan and Financial Plan.

Sewerage and Trade Waste Pricing

Pricing with appropriate cost recovery, without significant cross subsidies has been addressed for the sewerage business including appropriate residential sewerage tariffs; two-part non-residential tariff and liquid trade waste fees and charges are under review for adoption from July 2011.

Developer Charges Development Servicing Plan with commercial developer charges has been implemented from 2005/06 onwards. Developer charges are under review for adoption by first quarter of 2012.

Liquid Trade Waste Management

Complying liquid trade waste fees and charges already in place. Liquid trade waste approvals will continue to be issued to each application from a liquid trade waste discharger connected to the sewerage system. The issues in the NOW Trade Waste Check List have already been addressed.

Annual Performance Reporting

Performance Reporting Forms were completed prior to September 2010 and issues in the NOW Performance Reporting Check List have been addressed.

Occupational Health and Safety*

Council will comply with the OHS Act 2000 and OHS Regulation 2001, address the issues in the NOW OHS Checklist and issue a statement confirming compliance to NOW by December 2011.

Asset Management* 30-year Capital Works Plan, listing the proposed projects for each of backlog, growth and renewals has been reviewed and updated in December 2010; an Operations and Maintenance Plan will be developed by June 2012.

Integrated Water Cycle Management

Integrated Water Cycle Management strategies addressing all the issues in the IWCM checklist developed and adopted for implementation in November 2010.

* - Not a requirement of NOW Best Practice Guidelines

Nambucca Shire Council Part B - Strategic Plan Page 33 Strategic Business Plan for Sewerage Service

PART B: STRATEGIC PLAN

Part B of the Plan provides a detailed description of Service Provision Objectives, Strategies, Performance Measures and Actions in the key result areas in which Council must perform successfully to fulfil its corporate objective for sewerage.

Council has developed five key result areas in Service Provision Strategies covering:

Customer Service

Environment


Work Force

Finance

Part C contains a more detailed examination of selected service provision areas.

Part B - Strategic Plan Nambucca Shire Council Strategic Business Plan for Sewerage Service


Planning Strategy The relationship between ‘Service Solutions’ and ‘Asset Strategy Planning’ can be represented as follows:

The progression from ‘Identifying Service Goals’ to ‘Achieving Service Goals’ is summarised as follows:

SERVICE SOLUTIONS Identifying Service Goals

Objective (Goal) Defines how key result areas contribute to service goals

Performance Targets Expected Outcomes

IMPLEMENTATION Achieving Service Goals

Strategies The plan for achieving the objective(s)

Actions Specific tasks to implement strategies and achieve objective(s)

Responsibility Person in charge of task completion

Cost Implementation (Implement) – One off cost

Ongoing – Cost incurred annually over a number of years or at regular intervals


Service Planning

There is a relationship between the Levels of Service (LOS) to be provided to consumers and the actions that will be undertaken by Council. The following table shows the relationship between each of the objectives and related Levels of Service. As such, it would be expected that any changes to current LOS would be addressed in the indicated objectives.

This table is a summary of how the Levels of Service map into the key result area action-planning framework.

OBJECTIVES LEVEL OF SERVICE

Service Management Sustainability

Area Serviced Availability of Service

Sewer Load Management Discharge – Trade Wastes

Failures (Inflow/ Infiltration)

Pricing Availability – user pays

Rebates – pensioners

Customer Relations Availability of Service

Service requests

Complaints/Enquiries

Community Consultation Service pricing

Environment

Environment Overflows

Sewage treatment

Effluent and sludge disposal - compliance

Operation Failure – blockages

Response times

Maintenance Failure - breakdowns

Capital Works Availability – capacity

Failure – design

Failure – replacement program

Effluent disposal – compliance

Human Resources Complaints/ Enquiries

Response Times

Financial Affordability - model


Abbreviations Used

In addition to the general abbreviations listed in Appendix A, the following abbreviations have been used in the Action Plans presented in this section of the plan.

GM General Manager

DES Director Engineering Services

DEP Director Environment and Planning

MA Manager Assets

MCW Manager Civil Works

MFS Manager Financial Services

MHR Manager Human Resources

MPD Manager Planning and Development

MWS Manager Water and Sewerage

WSE Water and Sewerage Engineer

WSS Water and Sewerage Supervisor

TOWS Technical Officer Water and Sewerage

NAE No Additional Expenditure (above current levels)


Customer Service

This section details Nambucca Shire Council’s objectives relating to customer service, including Levels of Service, customer relations, community involvement, pricing and sewer load management.

The Customer Service Plan covers activities, which involve interaction between Council, its customers and the wider community.

This Section of the Plan covers the following areas:

• The Levels of Service provided to customers;

• Current and future sewerage service areas;

• Sewer load management;

• The pricing of services (including trade waste pricing and developer charges);

• Customer relations with Council; and

• Community consultation initiatives.


Levels of Service Review

The Levels of Service discussed in part A, are designed to reflect an optimisation of the desired service provision, that is affordable, and within the system’s capability. These considerations take into account legislative requirements, industry standards and customer demands.

This section reviews the services currently provided by the Council’s sewerage scheme. In addition to identifying areas where improvement is necessary, the review also refers to aspects of the operation that are being performed well.

The Levels of Service objective should enable the community to be aware of, and endorse the Levels of Service provided. As a public document, this report provides the necessary background information.

To demonstrate continuous improvement, Council will seek to provide the target Levels of Service in the most efficient manner. A number of items are of particular importance and these will be addressed under the relevant key result areas.

Under the NOW Best Practice Management Guidelines, a performance review is required to demonstrate that Council is either achieving the Level of Service or improving towards achieving the target levels. Monitoring and benchmarking are needed to help Council determine if their methods are appropriate or more effective than other shires. Performance data is forwarded to NOW in September each year.

In accordance with the Inter-Government Agreement on a National Water Initiative signed between the Commonwealth and the State Governments, NOW has introduced independent auditing of the performance data reported by all non-major water utilities (currently applicable only for utilities having more than 10,000 connections only and hence not applicable to Nambucca Shire Council) for a comprehensive set of performance indicators developed by the National Water Commission (Reference: National Performance Framework – 2009-10 Urban Water Performance Report Indicators and Definitions Handbook). The audit verifies the reliability and accuracy of the performance data reported by Water Utilities and enables meaningful state-wide and nation-wide comparison of key issues affecting water utilities and their customers. The performance audit needs to be undertaken at least once in three years.

A benchmarking exercise is then conducted to ensure Levels of Service are comparable to others in the industry at present. The outcome of the benchmarking exercise is provided as a feedback from NOW to the Councils as a 2-page TBL report. The TBL report should be reviewed and an action plan to address areas of under-performance prepared by the Council.

In general, Council has been performing well in respect of Levels of Service. Council plans the following service level improvements in the near future:

• Increasing the percentage of sewage treated to tertiary level

• Reducing the number of sewage overflows to the environment

• Improving treated effluent quality to comply with regulatory requirements

• Increasing the volume of recycled effluent


Objective 1: Performance Management (Levels of Service Review)

To provide services that are sustainable, financially affordable and meet currently documented levels of service Performance Targets

Update Strategic Business Plan with documented levels of service

Quarterly report on compliance with documented levels of service Strategy

Maintain a current Business Plan with documented levels of service and report on performance

Cost $000 Objective 1: Actions Start End Responsible

Implement OngoingStrategy 1

Review current operations for annual report

Annually MWS NAE

Review and update Strategic Business Plan

2011 5 yearly MWS 15

Public display of SBP and adoption by Council

As required

MWS NAE

Implement and monitor SBP Action Plans

Ongoing MWS As documented in this Plan

Best Practice Management Compliance Audit

October 2011

Nov 2011 (Ongoing)

MWS 5 3

Monitor and review LOS targets and report performance to NOW

Sept Annually

Ongoing MWS NAE

Report key performance indicators and TBL reports to Council

Annually MWS NAE

Input and review of special schedules for Dept. of Local Govt. in the financial statements

Annually MFS NAE

DECCW/EPA compliance reporting for licence renewal

Annually MWS NAE

SoE reporting Annually DPE NAE


Areas Serviced

This section of the Customer Service Plan addresses Council’s intentions in the provision of services for the next thirty years.

The extension of sewerage services is dependent on a range of factors, the most important of which are:

• the growth in urban settlements,

• the impact on levels of service to existing customers

• the environmental impact of the works.

• Cost to ratepayers associated with extending services.

When extending services, Council will:

• Treat all residents as equal for the provision of services

• Consider residents expectation of service.

• Consult community when considering new development areas or backlog programs

• Ensure sewerage services planning is integrated with overall Council planning to eliminate pressure from developers and avoid the under-utilisation of services

The main considerations while extending wastewater services are:

• There are no rural residential zoned areas served at present

• Priority will be given to sewerage backlog areas that have water but no sewerage services

• There may be problems with septic tanks in unsewered areas in terms of contamination of sources of Nambucca water supply. Quantification of problems in these areas will be taken up progressively.

• Lower Nambucca and Macksville comprise some areas that are environmentally sensitive due to high water table. Problem areas will be addressed by the backlog sewerage program (pressure sewers) if economically viable and agreed by the community on a ‘user pay’ basis.

Rural residential holdings with minimum lot sizes do not require sewerage under current planning requirements. Lot sizes are considered large enough for the proper operation of on-site sewage treatment systems and are not considered to pose any health related risks.


Table below summarises the details of current and future sewerage service areas within the Council.

Current Service Future Service Town/ Villages

Availability Equivalent Population

(2007)

Availability Equivalent Population

(2046)

Bowraville Sewerage 1,207 Sewerage 1,251

Macksville Sewerage 3,611 Sewerage 6,130

Nambucca Heads Sewerage 7,771 Sewerage 9,872

Valla Beach (including Hyland Park and Valla UGA)

Sewerage 1560 Sewerage 2499

Scotts Head Sewerage 942 Sewerage 2,882

Kingsworth and Gumma On-site Systems

257 On-site Systems

700

Lower Nambucca On-site Systems

150 Pressure sewer

250

Other Rural Areas On-site Systems

5179 On-site Systems

5792

As indicated by the table, Council is currently not planning to extend sewerage services to the villages in the near future. Extension of the sewerage services to a number of isolated settlements within the local government area of the Council is neither affordable for the community nor the Council. Emerging technologies for both wastewater transportation and treatment may make service provision viable in the future.


Objective 2: Areas Serviced

To provide services to all properties within urban areas for environmental and/or public health reasons, and where economically feasible Performance Targets

Prepare scheme development concept for future growth areas by June 2014

Investigate and review feasibility for service extension to unsewered areas by 2015 Strategies

Formulate and implement plans for future service extensions



Review designated service area as marked in LEP

April 2011 Ongoing as

needed

DEP NAE

Prepare scheme development concept for future growth areas

− South Scotts head

− - Valla UGS

− Macksville

July 2012 June 2014

MWS Included in the Capital Works Program

Undertake feasibility studies to extend service to unserviced areas

− Lower Nambucca

− Eungai

− Eungai Rail

October 2014

Ongoing

June 2015

MWS

10


Sewer Load Management

This section of the Plan outlines Council's intention in the management of loadings on the sewerage systems. While the impacts and management practices are of concern to the Customer Service Plan, the solutions must be an integrated part of the Asset Management Plan since they involve long-term system maintenance strategies.

Reducing hydraulic and biochemical loading on the system can:

• Effectively prolong the life of the existing assets;

• Defer new works programs;

• Make treatment processes more effective

• Reduce siltation in the system and reduce pump wear;

• Reduce operation costs; and

• Improve environmental performance.

Problems of load management may occur due to changing development patterns affecting design capacity, trade waste discharges, stormwater, or ground water.

Inflow and Infiltration Management

Although water demand management can reduce the hydraulic load on the treatment works, the major factor is usually the ingress of water into the system. The challenge is to control and reduce any significant inflow and infiltration (I/I).

Inflow, by definition, is due to direct ingress from illegal connections of roof drains, back yards and low gullies, manhole covers, surface water drain connections etc.

Infiltration, by definition, is a result of damage to the sewers themselves due to cracking, breakage, open joints and broken junctions etc. Infiltration can occur in dry weather as well as wet weather if the pipes are below the water table, or adjacent to a streambed (refer to Sewerage inflow and infiltration management study, June 1996 issued to all Councils by NOW).

Council plans to address the following main issues in this regard:

• Wet weather inflow and infiltration (I/I) caused by combination of illegal connections, defective pipes and defective access chambers.

• Wet weather hydraulic loads and associated operational impacts on STPs


Trade Waste Management

The treatment system functions can also be jeopardised by high biological shocks or toxic chemical loading exerted by liquid trade wastes. Therefore, the Council needs to assess the current levels of liquid trade waste discharges by non-residential customers into the town sewer system.

Council has already developed and adopted a trade waste policy to control commercial/industrial discharges into the system. Council is planning to review and update the liquid trade waste policy and the liquid trade waste regulatory framework for full implementation in accordance with NOW guidelines by June 2013.

Further, as industry develops, trade waste policy will be reviewed to outline service expectations to developers, targeting in particular, chemicals, fuels, oils and hospital discharges and would start with a survey to determine the contributors.


Objective 3: Sewer Load Management

Minimise hydraulic load due to infiltration, inflow and illegal connections and manage any industrial and commercial pollutant load Performance Target

Commence implementation of a 10-year Infiltration/Inflow (I/I) program by July 2011

Review and update of Liquid Trade Waste Policy by June 2013 Strategies

Develop and implement I/I reduced to sustainable levels

Monitor liquid trade waste discharges



I/I investigation program for

− Macksville

− Bowraville

− Nambucca Heads

2011

2012

2013

2012

2013

2014

MWS (Included in Capital Works Plan)

(100)

(150)

(200)

Send out notices and enforce removal of illegal connections

Ongoing MWS NAE

Prepare Analysis/ Defects Report and identify work program

July 2011

June 2014

MWS 100 (25 per year included in Capital

Works Plan)

Implement I/I management work program

July 2011

Ongoing (for 10 years)

MWS 500/ year (Refer to Capital Works Plan in

Part C)

Strategy 2

Review and update liquid trade waste policy and regulatory framework

July 2012

Ongoing MWS 40 5 every 2 years

Trade waste awareness campaign

Ongoing MWS Included inabove

Monitor oil & grease traps services

Ongoing MWS/ TOWS NAE

Monitor septic tank waste transfers

Ongoing MWS/ TOWS NAE


Service Pricing

This section of the Plan outlines Council's intentions regarding the pricing of sewerage services.

Council's pricing policy should conform to the following general principles:

Equity - adoption of user pays principles in accordance with the August 2007 NOW Guidelines. Residential tariff to be a fixed charge and non-residential revenue to be collected via a two-part tariff which reflects the level of water used and hence the load on the sewer system through discharge. (It is considered equitable that people pay for the cost of the services they use).

Financial - provision of adequate cash flows to meet operating costs and to fund future capital works (as determined in the financial plans).

Customers - provision of a service of desired quality and reliability at a fair and affordable price.

Cross subsidies - should be fully disclosed in Council’s reporting.

Community service obligations - provision of services to pensioners, disadvantaged groups and general community amenities, to be recognised.

Other - simplicity of pricing structure for ease of understanding by customers and stability of income.

Sewerage Tariff structure

Council has removed the ad valorem sewerage tariff and adopted service charges independent of land value for residential and non-residential customers. Council adopted “user pays” system has features such as:

• A two-part, access and usage charges for non-residential assessment;

• Trade waste charges set for identified industrial categories; and

• Percentage charge of water consumed reassessed for exceptional circumstances businesses e.g. a nursery, where most water is consumed on water plants.

Current (2010/11) residential sewerage charge is $415 p.a. For non-residential customers, current access charge for 20mm meter size is $ 174 p.a. and usage charge: $2.38 /KL

As part of the current 30-year Financial Plan, financial models using NOW’s FINMOD software have been developed to generate long-term forecasts of the level of total revenue to meet the costs of scheme operation, maintenance and development, renewal and replacement.

Council is currently reviewing annual sewerage charges will be structured to match the long-term price path suggested by the Financial Plan and in accordance with the NOW Best Practice Guidelines.


Section 64 Developer Charges Developer Charges are up-front charges levied under Section 64 of the Local Government Act to recover part of the infrastructure costs incurred in servicing new developments or additions/changes to existing developments. Developer charges serve two related functions:

• They provide a source of funding for infrastructure required for new urban development.

• They impact on the costs of urban development and thus encourage less costly forms and areas of development.

Council has adopted developer charges to be charged under Section 64 of Local Government Act, 1993 from 2006 onwards.

Following adoption of IWCM strategies in December 2010, Council is currently reviewing the developer charges. Comparison of existing and calculated Sec.64 developer charges for sewerage for 2011/12 is shown in the table below.

2011/12 Sec.64 charge ($) Urban Catchment

Existing Calculated

Nambucca Heads/ Valla 4,276 8,627

Macksville 4,276 6,417

Bowraville 4,276 6,442

Scotts Head 3,030 15,084

Weighted Average of Calculated Sec.64 Charges: $ 9,203

The development servicing plan will be revised and updated with the new developer charges adopted by Council in first quarter of 2012.


Objective 4: Service Pricing

Ensure pricing regime achieves full cost recovery for current and future service provision and complies with NOW Best Practice Guidelines

Performance Target

Review and update sewerage tariff structure that complies with NOW Best Practice Management Guidelines by June 2011

Review and update Development Servicing Plan by first quarter of 2012 Strategies

Adopt best practice pricing and developer charges guidelines



Review and adopt revised best practice tariff structure

January 2011

April 2011

MWS 10 5 every 5 years

Adjust tariffs for CPI Annually MWS NAE

Review and update developer charge calculations

January 2011

October 2011


Review, update and adopt Development Servicing Plan

January 2011

March 2012

MWS Included above

Adjust developer charges for CPI

Annually MWS NAE


Customer Relations

This section of the Plan outlines Council's intentions in customer relations to ensure its customers are satisfied with the sewerage services provided.

Customer satisfaction can be measured in a variety of ways to give a valid indication of the extent to which customers feel satisfied with the type, quality, cost and performance of service provided. Keeping customers informed is agreed by Council to be important for good customer relationship. Methods employed include:

• Public meetings (as required)

• Customer Surveys

• Customer contact – phone and front desk

• Management Plans /Annual Reports/ Business Plans on display

• Council Website

Adherence to the published levels of service is important and notification of any planned failure to comply should be given wherever possible. Performance monitoring and reporting is very important for updating and review of the Strategic Business Plan.

The Council should record problems and complaints and analyse them to identify where conditions are deteriorating. Actions should then be seen to be taken to improve these situations.

In order to carry out Council’s mission to focus on the community expectations, a level of communication is required so that the community is satisfied that the Council’s decisions are responsive to their needs. A customer requests management system does exist that classify and record customer enquiries and complaints.

Council promotes a customer focussed, socially responsive communications culture for service provision issues. Findings of a ‘Customer Satisfaction Survey’ conducted in November 2009 indicated that of the 26 Council services and facilities, customers rated water supply and sewerage services as of high importance and expressed high levels of satisfaction.

Council has identified the following areas of improvement in sewerage services in regard to customer relations:

• New staff receiving induction training including on customer relations

• Staff training on customer relations procedures as part of Council-wide initiative


Objective 5: Customer Relations

Keep the community informed of major issues relating to the sewerage services and provide services in a professional and efficient manner

Performance Targets

Conduct customer survey every 3 years

No increase in customer complaints of a substantive nature

Strategies

Provide efficient and responsive customer service



Staff training on customer relations

Ongoing MHR NAE

Review customer communications policy

− Print Media

− Radio/ TV

− Letter box drops

− Education (Save Water campaign)

Every 3 years

GM NAE

Develop and implement an after-service customer call back system

July 2011

Ongoing MWS NAE

Plan and conduct customer survey

Ongoing GM 2 every 3 years

Analyse and monitor feedback reports

Ongoing MWS NAE

Benchmark level of complaints against industry standards

Ongoing MWS NAE


Community Involvement

This section of the Plan outlines Council’s intentions in involving the community in decision-making during the development of schemes. Community consultation is not only highly desirable in terms of major capital works, but there are requirements under the Environmental Planning and Assessment Act and the Local Government Act, which need to be satisfied. The aims of community consultation are to:

• Develop ownership of the service delivery issues by the community, and to gain agreement that action is required;

• Ensure that the concerns of the community, particularly social and environmental concerns, are taken into account;

• Allow the community to propose options it wants evaluated and ensure that the costs associated with decisions are acceptable; and

• Demonstrate to the community that Council is making the best decisions after proper evaluation of all the issues.

Development and review of the Local Environmental Plan, new sewage pumping stations, sewage treatment plant process improvements, revision of sewerage tariff structure and developer charges works, water reclamation and recycle strategies all benefit from direct involvement of the community. Periods of public display, public comment and notices to ratepayers and business groups to advertise the opportunity to comment are typical consultation processes. Methods that may be used by Council to consult the community include:

• Project specific advisory committees

• Community meetings

• Public meetings and village tours (as required)

• Project-specific community opinion surveys

• Public forum at Council meetings

• Councillors' feedback

Following aspects need to be considered when undertaking community consultation:

• Members of community who are not directly affected by a project may also have concerns;

• There must be a balance between due process and risks in order that a satisfactory level of progress can be maintained;

• While community consultation on projects is highly desirable, it can be a lengthy and costly process. Project lead times and budgets need to be programmed to take account of this.

Proposed sewerage service related works that would benefit from community consultation include:

• Revised tariff structure

• Upward revision of Section 64 charges for sewerage services

Council intends to maintain the existing methods of consultation for all major capital works or decisions.


Objective 6: Community Involvement

Raise awareness through community education on sewerage services and consult community on major expenditure decisions Performance Targets

No complaints regarding lack of community involvement in major capital expenditure decisions Strategy

Promote education in community about sewerage service issues

Facilitate community consultation for major projects as needed



Raise community awareness on sewerage service issues through

− Flyers

− Letter box drops

− Bill boards

− Open days

July 2011

Ongoing MWS NAE

Standardise procedures for community consultation and review appropriateness on a regular basis

March 2011

June 2011

GM NAE

Review of prospective consultation program and report to Council

As required

MWS NAE

Prepare and adopt Management Plan including community consultation

April Annually

June Annually

MWS NAE

Liaise with the community and carry out stakeholders consultation for projects identified in the 30-year capital works plan

As required

MWS Included in Capital Works cost estimates


Environment

This section details Nambucca Shire Council’s objective relating to environmental protection.

The Environment objective addresses Council's intentions in managing the sewerage schemes to minimise the impact on the environment, protect environmentally sensitive areas and promote ecological sustainability.

It is recognised by Council that a responsible, region-wide approach to environmental protection and sustainable development is needed. Council’s programme will focus on identifying sensitive areas and undesirable outcomes. The driver is simply the need for the improvement of existing practices.

Council’s vision is to conserve and enhance the natural environment through sustainable management practices. It also intends to develop, review or expand its environmental plan. As part of its development, the following will need to be considered:

• People want effluent quality suitable for a diverse range of reuses;

• Achieving environmental objectives should strengthen, not threaten the local economy; and

• Local knowledge and enthusiasm for sustainability should be harnessed

Council has identified the following as priority environmental management issues:

• Ensuring adequate buffer zones around STPs through development planning controls to minimise odour complaints

• Emergency storages for the two Nambucca sewage pumping stations close to Nambucca River

• Effluent management strategy to improve the reuse schemes

• Odour problems (near sewage treatment plants and sewage pumping stations) due to seasonal and geographical factors

• Environmental impact due to discharge of on-site sewage management systems in unsewered areas

The current sewerage schemes have some impacts on the surrounding environment. Council intends to improve the practices to ensure the impacts are reduced to a minimum. Table below summarises the ‘state of the environment’ in regard to sewerage service operations.


Description Condition or “State” of the environment

Pressures the human activities have on the

environment

Response of the Council, Government,

community etc

Disposal of detritus, screenings from STPs

Disposal of biosolids

− Land burial

− Composting at a private facility near Coffs Harbour (approx. 200 m3/year)

Land Waste disposal sites

Effluent reuse on land − Stringent environmental impact monitoring protocols

− Community education

Air Pump stations

Sewage Treatment Plant

Odour pollution − Ongoing maintenance of pumping stations and STPs

− Monitoring and control of liquid trade waste contributors through trade waste policy

− Monitoring and control of septic tank wastes received at STP

Water Receiving water quality

Downstream pollution − Minimise discharge

Integrated Water Cycle Management (IWCM)

Integrated Water Cycle Management is a framework to help identify water management problems and to determine appropriate management responses so that social, environmental and economic objectives are met.

IWCM involves the integration of the Council’s three main water services – water supply, sewerage and stormwater within a whole catchment strategic framework so that water is used optimally.

It also involves the integration with other services for example roads and drainage, trade waste collection and with external requirements in particular the NSW Water Reforms.

The first phase of the strategy is the IWCM Evaluation. This defines the catchment, water resource and urban water issues faced by Council. Once the issues are broadly defined, the second phase namely the IWCM Strategy studies are undertaken to better define issues and look at cost-effective ways of managing them. Such a strategy involves integrating planning and management of all components of the Council’s use of the water cycle so that water is used optimally.

Unless the IWCM Evaluation demonstrates that preparation of an IWCM Strategy is not warranted, both the phases of IWCM are to be completed and implemented by the Council.

Council has already developed IWCM strategies in accordance with NOW Best Practice Guidelines in December 2010 and is in the process of adopting the same for implementation.


Objective 7: Environment

Manage the sewerage services in an environmentally responsible and ecologically sustainable manner and acceptable to the community

Performance Targets

Comply with all regulatory requirements and current best practice

Greenhouse gases (GHGs) reduction from scheme operation to year 2000 level by 2025 Strategies

Be proactive in environmental protection and practice due diligence to ensure compliance with regulatory requirements



Identify potential risks and areas of environmental improvement (Due diligence planning)

Ongoing MWS NAE

Develop and maintain an Environmental Management Plan and monitor plan implementation

July 2013 June 2014

MWS 60 10

Continue to meet EPA licence conditions

Ongoing MWS NAE

Monitor implementation of trade waste policy

MWS Refer to Objective 3 – Sewer Load Management

Implement IWCM strategies January 2011

Ongoing MWS Refer to Objective 10: Capital Works

Review and implement odour control measures at Valla Beach SPS 1

July 2011 Ongoing MWS 15 NAE

Energy Audit – review energy usage by sewerage services

Sept. 2011

Ongoing 5 5 every 4 years



This section details Council’s objectives relating to the operation, maintenance and development of the

physical assets that comprise the sewerage schemes

The Asset Management Plan contains information that Council will use in managing its sewerage assets throughout their whole life cycle. This includes asset creation, operation, maintenance, replacement and disposal.

Figure 8 - Best Practice Asset Management Approach

Levels of Service

Set Performance Requirements

Identify System Elements/Facilities

Assign & Monitor System Performance

- delivery- condition- operation

Analysis of Existing System

Develop Solutions- Improve utilisation

- Disposal

Disposal PlanCapital Works Plan

Resource Management- Funding

- Organisation / HR- Supplies

Statutory and other ObligationsForward Planning

Maintenance Plan

Satisfactory

Surplus CapacityUnsatisfactory

Regular reviewand update

Feedback

Develop Solutions- Structural

- Non Structural

Operations Plan

Refine Performance Requirements


Current Government policy is directed towards lifecycle asset management. Solutions in the past have often been capital intensive so there is potential generally to reduce capital works costs for councils over the long term. The ‘best practice’ flow chart describes a methodology for improving asset management planning. This model is not intended to reflect the structure of the Asset Management Plan but rather provides a guide for continuous improvement. Some of the benefits of implementing this type of model are:

• Appropriate asset solutions;

• Optimal balance of capital works and maintenance;

• Maximisation of asset life and utility; and

• Cost effective and sustainable asset management.

The type of asset portfolio involved in the sewerage services warrants significant investment of resources for its management. Council intends to adopt a Total Asset Management (TAM) approach for the scheme’s management to ensure that assets are managed as effectively as possible i.e. optimisation of the whole of the asset lifecycle rather than a focusing on asset creation alone. Following the TAM approach, this section of the business plan develops objectives and strategies for the management of:

• Operations;

• Maintenance; and

• Capital Works.

Each of these components of the Plan deals with separate issues relating to the Schemes, but since they are interlinked several combinations of structured and non-structured solutions could result in providing the same level of service.

The pending implementation of an asset management system will provide a vital repository for Council’s asset related information such as: asset location, aerial photographs, financial and asset costs, construction and acquisition details and other asset attributes such dimensions. Key functions of the system include:

• Maintenance history;

• Maintenance planning;

• Operations management;

• Asset condition rating and values;

• Capital works planning;

• Asset disposals; and

• Customised reporting.

Anticipating the need for asset replacement is vital given the significant investment of resources involved and the need to ensure funds are available. Under the Total Asset Management approach a schedule of expected capital works is estimated into the future. Both current and projected capital works to satisfy future demands in terms of growth, improved Levels of Service and replacement of existing assets are identified. Appropriate operation and maintenance activities also are identified, to suit the desired level of service delivery. This includes documentation of the rules and procedures at system and facility level. All these details are used in the financial plan to ensure that required funds are available when needed.


Asset Values

The following Table shows a break-up of asset values of sewerage schemes of the Nambucca Shire Council as at June 2010.

Asset No./ Length/ Capacity

Current Replacement

Cost (MEERA) ($’000)

Annual Depreciation ($’000)

Written Down Value ($’000)

Sewer mains (trunk and reticulation mains) including manholes

140.2 Km 55,962 205 42,638

Sewage pumping stations

55 Nos. 11,822 187 7,952

Rising mains 22.6 Km (included above)

Sewage treatment plants

4 Nos. 22,314 479 12,967

TOTAL - 90,098 871 63557


Operations Plan

Figure 9 - Operations Flowchart

This section of the Plan outlines Council's strategy for operation of the sewerage schemes in the future. The function of an operations plan is to ensure that the service objectives are achieved at the least cost, with minimal interruptions to services.

Provision of the agreed Levels of Service to customers is dependent on the efficient and effective running of sewerage operations. An operations analysis will interface the operations and capital works plans by identifying what level of service the existing assets can provide and what additional works are needed to bridge any gap between existing and desired services.

The operations plan is based on knowledge of the system assets and as such there are ongoing requirements for maintaining an appropriate asset register and for investigating the condition of key elements of the systems that affect the ability to deliver the desired Levels of Service. Contingency plans (emergency response plans) should be developed where the impact of failure is significant. The existing inspection and maintenance procedures are appropriate, however the utilisation of improved technology need to be investigated.

Asset condition surveys required include CCTV and spot check inspections of sewer lines in the reticulation system. The Asset Register should be updated as an integral part of this recording process.

There are various documentation requirements for sewerage operations. Operating rules and procedures for both normal condition and breakdown contingencies need to be established. These should include system performance requirements and constraints, and cross reference to specific plant operations manuals.

Council recognises that a monitoring telemetry/ SCADA system leads to best operating efficiency and improves resource utilisation. Further operations planning requirements for the Council are:

• Completion of documenting system operating rules and performance requirements for all subsystems and facilities;

• Developing an effective Assets Management System that will enable identification of conditions of assets from assets register and maintenance reports; and

• Compliance with OHS requirements

LEVELSOF SERVICE& SERVICEDELIVERY

PerformanceRequirements &constraints for

Sub-Systems & Facilities

MAINTENANCEPLAN

Facility OperatingProcedures

Operations Analysis

Asset Condition Survey

CAPITAL WORKSPLAN

AssetRegister

System Operating Rules


Existing operational systems, processes and procedures routinely deliver sewerage services that comply with levels of service and regulatory requirements.

Rapid changes in the operating environment in terms of customer expectations, improved environmental outcomes, resource conservation, higher regulatory standards etc will require commensurate improvements in operations.

As the sewerage infrastructure ages, the operational programs that would normally feature in system operations should be extensively pursued and implemented. Programs such as sewer main cleaning/ root cutting will need to expand and be rigorously sustained.

Main operational issues include the following:

• Asset condition audit and monitoring program

• Monitoring of operational performance

• Review and documenting of operating procedures

• Conducting a review of energy usage

• Sewer mains clearing/ root cutting

• Conducting and implementing recommendations of a Safety Audit and complying with OHS regulations

Council has developed an OH&S Policy outlining the roles and responsibilities of all employees within the Council. As part of Council’s ongoing commitment to Occupational Health and Safety requirements, all staff have been familiarised with the amendments to the OH&S Act, Local Government Act 1993 and the Protection of the Environment (Operations) Act 1997.

Occupational health and safety hazards in sewerage operations include:

• Bacterial contamination

• Falling into storages/ lagoons

• Falling off structures

• Moving heavy mechanical parts

• Chemical exposures and handling

• Injuries due to sharps

• Electrical injuries

• Confined spaces

Also, Council has recently instigated an OHS initiative, the ‘Safety Interaction’ program that involves randomly checking the operating crew and field staff for adopting correct operating rules and procedures. Following table summarises Council’s OH&S performance with regard to sewerage services during last 3 years.

OHS performance indicator 2007/08 2008/09 2009/10

Lost time due to injury (Hrs)

No. of workers compensation claims

0

0

42

2

0

1


Objective 8: Operations

Ensure safe operating practices of the system at optimal operating costs to provide desired levels of service Performance Targets

Prepare an Operations Plan by June 2012

Prepare emergency response plan by June 2013 Strategies

Maintain and implement an Operations Plan

Maintain a thorough and accessible knowledge of system assets



Review and update Operations Plan

− Operations analysis

− Updating procedures and practices manuals

− Operating Rules

July 2011 June 2012

(ongoing)


Annual review and implementation of recommended operational changes

Annually Ongoing MWS NAE

Review and manage operational procedures for quality assurance and OHS risks

July 2013 June 2014

(ongoing)

MWS 30 7

Prepare and maintain an emergency response plan (contingency plan)

Sep 2012 June 2013

MWS 40 5 and 10 (alternate 3

years)

Undertake mains cleaning/ root cutting/ foaming program

Ongoing MWS 50

Odour control measures implementation for Valla Beach SPS 1

July 2011 June 2012

MWS 15

Contd..)




Develop and maintain an integrated asset management system

− Updating asset register

− Asset valuation (Fair Value)

− Asset condition monitoring

July 2014

July 2011

July 2011

Ongoing

Ongoing

Ongoing

Ongoing

MWS 50

5

7 every 3 years

2

10 every 3 years

2

Develop, analyse and update sewer reticulation model

July 2011 June 2012

(ongoing)



Maintenance Plan

Figure 10 - Maintenance Flowchart

The Maintenance Plan is to ensure that the Operations Plan’s outputs, reliability and availability of the sub-systems, facilities and components are achieved in the most cost effective manner. The most important factor is identification of the risk to system performance from failure of each asset. This leads to a minimum performance standard for each asset.

Records should be kept of maintenance and operations requirements. The aim is to reduce delays or periods of reduced service. Determine the limit of acceptable substandard operation and determine the cost effective breakeven point.

The most cost effective strategy should be identified as either:

• Scheduled maintenance - fixed time or condition based;

• Reactive maintenance - failure based

The thrust of the Government’s total asset management guidelines is to make the best use of existing assets by implementing systematic maintenance and rehabilitation plans. It could therefore be that increased maintenance costs will result from a critical review of the maintenance area. This in turn would be expected to be more than compensated for by a reduction in the need for capital works.

A complete assessment of the system is needed for the development of sound strategies to ensure the Levels of Service are not jeopardised by failure to address maintenance problems. A maintenance plan is needed to incorporate appropriate maintenance schedules and procedures. This should include references to specific plant maintenance manuals.

Determine Maintenance Strategy for Each Component

Scheduled Maintenance

Breakdown Maintenance

Develop Breakdown Response Plan

Determine Resources & Costs to Implement

Prioritise

Implement

Review

Fixed Time Maintenance

(Identify: maintenance tasks and frequency)

Condition Based Maintenance

(Identify: what, how and when to inspect

criteria and/ or rehabilitation)

Fixed Time Maintenance

Program/Schedule

Develop Condition Monitoring

Program/Schedule

Develop Resources & Costs to Implement

Determine Resources & Costs to Implement

Criticality of Assets


Maintenance Plan needs to consider the following information and issues regarding the existing system:

• Need to update Operation and Maintenance (O&M) manuals and an O&M plan;

• Criticality analysis of systems to identify components of high risk

• Need for refresher training of key staff dealing with critical functions.

• No formal condition monitoring program exists for assets. Maintenance has largely been on a fail and fix regime with no computer based maintenance management system. Asset audits – power, fire, M&E, spares, general condition audits etc are necessary

The expansion of some maintenance programs will have to be resourced and it is possible that some current activities such as grounds maintenance and meter reading could be outsourced to accommodate this.


Objective 9: Maintenance

Maximise overall system reliability at minimum cost to meet agreed levels of service

Performance Targets

No failures due to lack of appropriate maintenance

Prepare a Maintenance Plan by June 2014

Strategies

Manage system risks



Maintenance strategy review (including asset criticality analysis)

July 2011

Dec 2012

MWS 20

Prepare a Maintenance Plan

− Predictive maintenance for critical assets

− Scheduled maintenance for less critical assets

− Breakdown maintenance strategy

January 2013

June 2014

MWS 40

Review and update maintenance manuals

July 2014

June 2015

(ongoing)

MWS 30 5

SPS wells cleaning and pump out program

July 2013

Ongoing MWS 28 every 10 years

Plan and prepare an inventory of spare parts and support equipment

July 2012

Dec 2012

(ongoing)

MWS 5 1 every year

Undertake maintenance cost analysis

Annually 2011

Ongoing MWS 1


Capital Works

Figure 11 - Capital Works Flowchart

The capital works plan should make an assessment of scheduled work for growth, non-growth, and rehabilitation works over a 30-year period.

The Capital Works Plan is of crucial importance because sewerage infrastructure is capital intensive and the construction and renewal of facilities can have a significant impact on Council’s overall finances.

In the process of preparing the Capital Works Plan, the following points have been considered:

• The development of sewerage schemes is a long-term investment, and must be integrated with Council planning policies.

• The capital works strategy needs to be regularly updated to take account of changing conditions.

• Consideration of the costs and benefits of alternative options.

• Acceptance by the community of the development proposals and costs.

A summary of the 30-year capital expenditure program is shown in Part C of this Plan. On the forward budget for Council’s sewerage schemes the following specific capital works needs have been addressed:

• Nambucca Heads STP upgrade

• Upgrading Nambucca Heads SPS 1,3,6 and 7

• Upgrading Valla Beach SPS 5 and 6

• New SPS for DCP17, Macksville (SPS 15 and 16)

• Chemical dosing facility for Scotts Head STP

• Emergency storage capacity augmentation at Macksville SPS 2

• New sewer mining plants for Valla UGA and South Scotts Head

• Investigation and remedial works to reduce inflow and infiltration

Social & Environmental

Analysis

Economic Analysis

CUSTOMER SERVICE

PLAN

OPERATIONS PLAN

FINANCIAL PLAN

MAINTENANCE PLAN

Demand Forecasts

Comparative Analysis

Select Preferred Option

Draft Capital Works Plan

Formulate Options

Technical Analysis


Objective 10: Capital Works

Provide capital works to meet levels of service for existing and future customers at optimal life cycle cost Performance Targets

Projects carried out on time and to budget to provide agreed levels of service for existing and new developments Strategy

Develop and implement a 30-year capital works plan



Develop a long-term (30-years) capital works plan

− For improved levels of service

− For growth

− For renewal/ replacement

Started April 2011 (as identified

in this Plan)

MWS

Implement capital works plan As identified in this Plan

MWS

Refer to Capital Works Plan in Part C –

Detailed Information

Concept planning for future developments and growth areas

− Valla UGA

− South Scotts Head

− Macksville

− Lower Nambucca

− Eungai

− Eungai Rail

− Kingsworth

− Gumma

− Other growth areas as identified

July 2012

June 2014

(ongoing)

MWS 80 (included in capital

works cost estimates)

10


Work Force

This section details Council’s objectives relating to the development of human resources required for

operating the sewerage service

The Human Resources Plan is to ensure that Council has the appropriate staff numbers with the necessary skills to meet current and future requirements. If these are in order, Council’s Levels of Service can be met.

At Nambucca Shire Council, the General Manager delegates authority to the Director of Engineering Services (DES) to manage all the water supply and sewerage, who in turn delegates the responsibility of the day to day operation of the schemes’ operation, maintenance and performance to the Water and Sewerage Manager (MWS).

Nambucca Shire Council’s water and sewer section has 19 staff, who together operate and maintain the water supply and sewerage schemes.

Important human resources issues being considered by the Council are as follows:

• There is the need to ensure operators are familiar with all current practices including OH&S requirements; and

• Need to ensure an up to date training program is in place for all staff (in particular training the treatment plant operators and tertiary training for engineering staff).

• Succession planning for senior technical staff

• Reviewing job appraisal and job award scheme

The organisational structure of the Engineering Services Division of the Council is shown next page.


Figure 12 – Organisation Structure of Engineering Services


Objective 11: Work Force

Provide appropriate level of skilled staff to meet the service delivery objectives

Performance Targets

No failure to meet levels of service due to human resources deficiencies

Strategy

Provide adequate training and resources to meet service delivery objectives



Carry out HR review

− Position analysis

− Needs analysis

Ongoing GM/ DES/ MWS

NAE

Recruit new staff

− Pressure sewer attendant

July 2017

Ongoing

MHR 55

Develop and implement succession training program

Ongoing MWS NAE

Staff performance assessment and review

Annually Ongoing DES/ MWS NAE

Develop and implement training and retraining plan

Annually Ongoing MWS 3

Review staff development program

Annual Ongoing MWS/ MHR NAE


Finance

This section details Nambucca Shire Council’s objectives relating to the business operation and financial

management of the sewerage funds

The purpose of the Financial Plan is to enable Council to determine the revenues needed to meet the Levels of Service over the long term and effectively manage the cash flow.

Legislation requires separate accounting for sewerage services and elimination of cross subsidisation with other of Council’s activities where possible. Any cross subsidy deemed necessary by Council should be explicitly noted.

Commitment by Council to provide the Levels of Service described in this document requires collection of revenues of the order shown in the detailed tables and graphs in Part C. Estimates of the cost of activities in the action plan have been modelled using the NSW Financial Model issued by the NSW Office of Water and represent the best projection of future costs possible at this time. Actual billings will depend on the levels of developer charges and pricing structure adopted.

Generally, recurrent operating costs should be covered by the annual sewerage charges. Capital funds are drawn from the following four sources:

• Developer charges;

• Government grants; and

• Cash and borrowings.

In accordance with the NOW Financial Planning Guidelines, Council will develop its long-term financial models and establish a steady price path. This will be used to set the pricing structure in accordance with the NOW August 2007 Best Practice Management Guidelines.

Council will update its financial model annually as part of its ongoing planning review process.


Objective 12: Finance

Provide full cost recovery for scheme operation and asset replacement at an affordable level of cost to customers

Performance Targets

Financial Plan in place for quarterly review and annual updating

Strategies

Maintain a 30-year financial plan that recognises all future asset management liabilities and funds identified works and services for maintaining affordable levels of service



Review cost projections for long term Financial Plan

Ongoing MWS NAE

Update Financial Plan annually Ongoing MWS NAE

Establish a price path for setting the price tariff in accordance with the NOW guidelines.

5 yearly MWS Refer to Objective 4 –Service Pricing

Nambucca Shire Council Part C - Detailed Information Page 77 Strategic Business Plan for Sewerage Service

PART C: DETAILED INFORMATION

Part C of the plan provides more detailed information about select elements of the plan. Included in this section is information on:

Financial Management

Projected Cost Schedules

Financial Model Outcomes


Part C - Detailed Information Nambucca Shire Council Strategic Business Plan for Sewerage Service


Financial Management Contains a summary of the financial modelling process and the model input data

Overview of Financial Planning

The objective of financial planning is to model the full life cycle costs for the preferred service planning option and to determine appropriate funding strategies and to ensure that the services remain affordable in the long term.

By taking a long-term view, financial peaks and troughs can be smoothed to provide the basis for a consistent charging policy and to highlight any current impact of future actions. The new NSW Financial Planning Model (FINMOD Version 4.0), issued by the NSW Office of Water (NOW) in November 2003, has been used for this modelling. A 30-year planning horizon has been adopted as recommended in the NOW Guidelines.

To establish a financial plan various scenarios are explored in order to determine the best funding strategy.

It is important to identify a logical progression of asset creation, rehabilitation, and replacement over at least 20 years in order to develop a working perspective for the management of these infrastructure assets which have expected lives of up to one hundred years.

The preferred model presented here assumes that no government grants are available to Council, as they will have already received the entitlement. Where funding from revenue would require an unrealistic level of charging in the short term then borrowing will be undertaken.

The overall goals of financial modelling are to optimise a long term funding strategy to meet the demands of the capital works programme and day to day operations, while ensuring a minimum level of cash liquidity and a stable level of average residential charges.

AAS27 reporting for the financial statements requires that all funds be declared as assets under cash and investments in the statement of financial position. Also, assets are valued on the basis of current replacement cost and depreciated according to their remaining lives compared with their expected lives.

All capital works estimates in the text are quoted in real (2010) dollars unless specified otherwise. The output data is quoted in real and inflated dollars.

When assessing affordability, note that a $1 charge now will be equivalent to $1.80 in 20 years time, assuming a 3% annual inflation rate.

A summary of the financial modelling results is included on the following pages and detailed input and output data are available in the Appendices.


Model Description

The financial model forecasts income streams to match projected expenditure. The diagram on the right illustrates the main elements, which affect the financial plan.

The financial modelling undertaken in this plan aims to:

• optimise the long term funding strategy,

• meet the demands of the capital works program and other life cycle costs of the system assets,

• ensure a minimum level of cash liquidity, and

• provide a forecast of the typical residential annual charges over the long term.

Modelling Methodology

Input data for the model is sourced from three main areas:

• AAS27 special schedules for past financial performance of the water and sewerage funds

• Estimates for uncontrollable variables e.g. interest rates, growth, inflation

• Projected capital works, and operations and management expenses

All other criteria being met, the financial plan seeks, after an initial adjustment, to model, in real dollars, the lowest steady level of charging possible. Actual bills will depend on Council’s pricing structure but this is indicative of the affordability of the services and shows the performance requirements for long-term stability.

A number of variables and assumptions have to be entered into the model and these are first agreed to by Council. They include:

Opening balances

Council’s special accounting schedules are used to establish opening balances and baseline costs for the model. Financial statements for the last two years are compared to try to eliminate ‘one off’ occurrences from being incorporated as part of a normal trend.

Developer Charges

Council has recently reviewed and revised the developer charges from 2011/12 onwards in accordance with NOW Best Practice Management Guidelines. For modelling purpose, a weighted average of the adopted Section 64 developer charge of $ 8,935/ET ($ 9,203/ET in 2011/12$) has been considered.

Growth Projections

The recently adopted Integrated Water Cycle Management Strategies consider a serviced population growth rate of 0.7% p.a. and has already planned to expand sewerage infrastructure capacity to service this growth. The same service population growth rate has been adopted in this Strategic Business Plan for the financial projections.

AnnualCharges

DeveloperCharges

Trade Waste

Subsidy

Interest

O&M

New Assets

AssetRenewal

Interest

Depreciation(non cash)

SewerFund

Income Expenditure

Elements of Financial Modelling


Inflation

Average long-term inflation has been assumed as 3.0% per annum.

Interest Rates

A borrowing rate of 9.0% and investment rate of 5.5% have been used in this analysis

Revenue from non-residential customers

The revenue split is the ratio of residential to non-residential revenues. This is determined from the special schedules. If a significant change is envisaged (e.g. increased income from trade waste charges) then the split can be adjusted to match. Residential charges currently account for 69% of sewerage revenues. The same level of revenue split has been used for all the forecast years.

Performance Measures

Council’s minimum service criteria will have an impact on the level of charges required e.g. Minimum cash level is generally assumed to be 10-20% of annual revenues (excluding restricted revenues). For the financial model, $ 500,000 (2010$) has been considered as minimum cash level.

Expected lives of assets

The default average life of system assets is based on the weighted average of long-lived structures and shorter-lived mechanical plant. The average life of sewerage assets is currently estimated to be approximately 50 years. The life of assets controls the depreciation, which is a non-cash expense. It directly affects the need for future asset renewal works planned, which is part of the capital works program.

Grants and Subsidy for Capital Works

The State Government provides financial assistance to local government water supply and sewerage schemes through the Country Towns Water, Sewerage and Drainage Program. Councils can apply for funding of up to 50% of Improved Level of Service (ILOS) capital works if their typical residential charge is more than $350 per annum. Council’s financial model assumes subsidy from both State and Federal Governments will be available as expected for some of the planned ILOS capital works.

Ongoing recurrent costs: Management, Operations and Maintenance

By default, the model increases historical operation and maintenance expenses on a pro rata basis with respect to growth. This has been overridden where Council provided revised estimates i.e. where the action plan requires new initiatives or where new works require additional operating resources.

The capital works plan and projected operations and management expenses also form a significant component of the inputs. These are shown in the section ‘Projected Cost Schedules’.

Assumptions and Limitations

The projections of the financial plans are based on past financial performance. Allowance is made for new initiatives, future rate forecasts, and maintenance of sustainable levels of service as identified in the strategic planning process.

The depreciation is shown in the operating statement but this is not a cash item. The financial planning model manages the cash flow but keeps a running tally of cumulative depreciation so that Council can appreciate the potential future liability for maintaining the


Assumptions

Strategy

Affordability

Phase2 BRIEF

Phase1 REVIEW

Review base data:Interest Rates

Developer Chargesetc

Funding options Debt ratio

Cash liquidityetc.

Delay capital works?Delete projects?Use structured

loans?

Base Case Scenario

value in the system and levels of service. By planning ahead and making optimum use of existing assets, a more cost-effective and efficient service should result.

Typical annual residential charge is used as the performance measure representing overall revenue requirements from residential customers. This should not be confused with pricing. Pricing, i.e. distribution of the charges according to consumption or special customer groups, is the subject of a separate revenue planning exercise.

The financial model is not a substitute for normal budgeting (that is, short-term financial planning). The model assumes that all expenses and income occur at the beginning of the year and is therefore not appropriate to track cash flow throughout the year. It is important, however, that the budgeting process is carried out within the framework of the long-term financial plan.

The Capital Works Plan provides a guide for estimation of long-term operation and maintenance costs. It is accepted that the level of confidence in these projections reduces with time but it is important to identify as many future commitments and liabilities as possible.

The Modelling Process

Phase 1 – Initial runs The objective of Phase 1 development is to present a first cut model of options for future service provision. Comparison of outcomes enables Council to make decisions as to the preferred model and the most beneficial and practical funding solution for the proposed asset management programs.

Funding

In considering funding for future options there are three basic options:

• Fund all capital works from revenues.

• Borrow to fund all capital works.

• Fund capital works from a mix of borrowing and revenue

Most Councils would prefer to avoid borrowing to fund their capital works programs if possible. This strategy obviously avoids incurring interest charges. Where capital works costs are low and cash levels are high this may be possible but it may also suggest that current levels of charging are too high.

On the other hand deferring expenditure is consistent with the goal of inter-generational equity when considering long-term asset management. Longer period loans spread the cost of works over a longer period, eliminating early peaks in annual charges. Often councils will have no choice except to borrow for major projects because collecting sufficient cash in advance is impracticable and would require an unacceptably high level of charges.


In general most councils use a mix of revenue and borrowings to meet Council’s financial performance policy criteria. Given that this is achieved, the latest NOW Guidelines recommend adoption of the lowest possible steady rate of long-term charges in real terms that is achievable. In the Phase 1 runs of the model the default loan period used was thirty years.

Phase 2 – Preferred model and sensitivity

After consideration of Phase1 issues a preferred option will be finally reviewed and updated to suit any last minute planning refinements and detailed cost estimating carried out.

While the preferred model reflects the expected performance of the systems, it does not give any indication of the sensitivity of the proposed solution should the basic assumptions used prove significantly different in practice.

It is recommended that a sensitivity analysis be carried out if it is perceived that a variable may change significantly in the future. The value of a sensitivity analysis is that it shows:

• the sensitivity of the results to assumptions (uncontrollable variables)

• the impact of changing controllable variables.

The guidelines suggest that a number of sensitivities be carried out to test the robustness of the plan. In regard to controllable variables such as type of loan structure, level of developer charges etc., the model enables Council to make decisions to establish the right management policies.

It is important to demonstrate the impact of the ‘no subsidy’ scenario, which shows the potential benefits of government assistance. Council’s expectations for receiving subsidy are included in the final preferred model as being the most realistic future scenario.

With uncontrollable variables, Council is at the mercy of change. The downside risk of an increase in interest rates, or declining growth rates, or rise in energy costs, may be considerable. Increasingly the impact of water demand management resulting in loss of water revenues, should be more than compensated for by deferment of capital works and lower operational costs of both water and sewerage operations.

On-going Review

Over time, changes in model variables can have a significant impact on the model’s accuracy and this has implications for Council’s forward planning. It is recommended that the models be revisited regularly to ensure that they retain their currency. Where Council has an active capital works program requiring subsidy then annual updates are recommended.


Projected Cost Schedules This section looks at the projected capital works and recurrent expenditure for the next 20 years.

CAPITAL WORKS

Growth works - Work required to increase the capacity of facilities, to service new subdivision.

Improved level of service works

(backlog works)

- Works to provide better public health and environmental standards, better service, higher reliability, or an extension of services to unserviced existing development.

Works in this category may be eligible for Government grants.

Asset renewal works - Renewal/replacement of existing assets, which have aged and reached the end of their useful life.

RECURRENT COSTS

Management - Reflects true overheads associated with providing this service. Any cross subsidies with General Fund should be eliminated or explicitly disclosed in the Annual Accounts.

Operations and Maintenance - It is assumed that the current level of costs shown in the Financial Statements reflects a realistic level of expenditure for the current schemes. The projections assume costs increased in proportion to the growth.

Model cost overrides - Additional costs are included where specific activities have been identified in future years. This includes new initiatives plus additional costs associated with new Capital Works.

The expected capital and recurrent cost expenditures are presented in the following spreadsheets and shown graphically. Projections are in real (2010/11) dollars.


Figure 13 - Detailed Capital Works Schedule for Sewerage


Figure 14 - Detailed Recurrent Cost Schedule for Sewerage


Figure 15 - Capital Works Plan for Sewerage

Figure 16 – Recurrent Cost Plan for Sewerage

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Figure 17 - Sewerage Capital Works Summary

2010/11 $ (000)

Growth and Minor Works

Improved Levels of Service

Asset Renewals

Total Capital Works

Expected Subsidy

Cost to Council

2010/11 3,308 12,228 219 15,755 2,342 13,413 2011/12 600 4,653 277 5,530 2,342 3,188 2012/13 0 1,007 281 1,288 0 1,288 2013/14 0 1,033 213 1,246 0 1,246 2014/15 0 673 1,008 1,681 0 1,681 2015/16 495 673 213 1,381 0 1,381 2016/17 9,435 7,723 229 17,387 0 17,387 2017/18 2,880 673 247 3,800 0 3,800 2018/19 115 673 229 1,017 0 1,017 2019/20 0 673 229 902 0 902 2020/21 5,945 673 229 6,847 0 6,847 2021/22 0 673 229 902 0 902 2022/23 0 673 229 902 0 902 2023/24 0 0 1,854 1,854 0 1,854 2024/25 0 0 4,277 4,277 0 4,277 2025/26 0 0 1,939 1,939 0 1,939 2026/27 450 0 229 679 0 679 2027/28 0 0 229 229 0 229 2028/29 0 0 229 229 0 229 2029/30 8,770 0 229 8,999 0 8,999 2030/31 6,700 0 2,319 9,019 0 9,019 2031/32 0 0 229 229 0 229 2032/33 0 0 499 499 0 499 2033/34 0 0 229 229 0 229 2034/35 0 0 369 369 0 369 2035/36 0 0 229 229 0 229 2036/37 0 0 229 229 0 229 2037/38 0 0 757 757 0 757 2038/39 0 0 470 470 0 470 2039/40 0 0 367 367 0 367

Total 38,698 32,028 18,515 89,241 4,684 84,557


Financial Modelling Outcomes Contains a summary of the financial modelling outcomes and their sensitivity

Results of Modelling Process

In line with current NOW guidelines, the financial plan identifies the lowest stable typical residential sewerage bill required with maximum utilisation of existing cash reserves. Financial projections include the government grant/subsidy of $ 4,684 K that has been secured for the upgrade of Nambucca Heads STP.

Financial modelling has demonstrated that the current typical residential sewerage bill, of $439 (in 2010/11 $), need to be increased by $90/year for three years starting 2012/13 to $ 709 p.a. in 2014/15 and thereafter to be maintained at that level of charge for the remaining forecast period (see Figure below). This level of charges is sufficient to maintain liquidity with a minimum of $ 500,000 of cash in hand over the period.

Figure 18 - Typical Residential Bill for Sewerage

The sewerage TRB forecast by the model in inflated $ for the next three years are shown below.

• TRB for 2012/13 - $561 p.a.

• TRB for 2013/14 - $676 p.a.

• TRB for 2014/15 - $798 p.a.

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Planned capital works for the next 30 years will be partially funded internally, with the maximum utilisation of existing cash reserves and revenues. New borrowing will be required from 2015/2016. The outstanding borrowing will reach a maximum of $19,146 K in year 2020/21. At the end of the forecast period (2039/40), the outstanding borrowing will be $10,205 K and the cash and investments will be $ 12,511 K.

The levels of cash and borrowing outstanding during the forecast period are depicted in the following Figure. A summary of projected financial results is presented in the Table next page.

Figure 19 - Cash and Borrowing Projection for Sewerage

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Figure 20 - Projected Financial Results for Sewerage

Sensitivity Analysis

In accordance with the NOW Financial Guidelines, the following sensitivities have been modelled to determine the impact on typical residential bill for sewerage.

Criteria Preferred Case Sensitivity

Capital Works Expenses As estimated by Council

Estimates to increase by 20%

Growth Rate 0.7% p.a. 0.5% p.a.

Sec. 64 Developer Charges $ 8,935/ET $ 7,500/ET

The results of modelling are presented in both graphic and tabular form. Note that the cash and borrowings are similar to facilitate comparability between cases.


Figure 21 - Sensitivity of Typical Residential Bill for Sewerage

Figure 22 - Sensitivity of Cash Levels for Sewerage

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Figure 23 – Sensitivity of Borrowing Levels for Sewerage

Figure 24 - Effect of Sensitivity on the Typical Residential Sewerage Bill

Sensitivity analysis indicates that the financial projections are moderately sensitive to lower assessment growth rates; however, are highly susceptible to any cost increase to planned capital works.

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Operating Environment Review The delivery of sewerage services to the scheme’s customers is subject to a large number of constraints, requirements, guidelines and other factors, which collectively are referred to as the operating environment. As part of the business planning process, a review was carried out to examine how the surrounding environment impacts on Council’s operation of its sewerage schemes. The six major elements of the operating environment are shown in the chart below. Progressive review of these elements provides increasing definition of the operating environment.

Legislative Framework

Sewerage Scheme

Institutional Framework

Future Development

Corporate Goals

Service Delivery

Stakeholders

Institutional Arrangements

There are several recognised options open to Council to structure its institutional arrangements. The purpose of this review is to anticipate change; to look ahead at possible future outcomes and ask what strengths Council should be developing so it can meet these challenges.

The Federal Industry Commission Report on the Australian Water Industry indicated that there should be an efficient use of resources in the water industry – natural, physical and financial. Their 1992 recommendations were wide-ranging and covered matters such as pricing and structural reforms. This has been followed-up by the NSW Government’s Competition Policy and the Independent Pricing and Regulatory Tribunal’s Pricing Principles for Local Water Authorities. In addition, the Local Government Association has issued a guideline of self-regulation, which suggests ways Council can improve its service delivery.


The following options were considered in the strategic planning workshop and their relevance to Nambucca Shire Council was rated on a scale of +1 (very possible) to –1 (highly unlikely) as follows:

• Amalgamation: where Council would amalgamate its operations with those of surrounding Councils to form a single large organisation that would serve a wider regional area. Nambucca Shire Council is surrounded by Bellingen and Kempsey Shire Councils. Council does not favour amalgamation with any of the surrounding Councils in the near future.

• County Council: where Council would amalgamate its water supply and/or sewerage services divisions with those of neighbouring Councils and set these divisions up as an independent organisation that would provide these services to a wider region. Participants could see no economies of scale and increased resource availability with this arrangement. However the view was that a county council would produce poor maintenance and be more expensive and less effective in the long term than the existing scheme. Amalgamating the water supply and/or sewerage operations of the Council with others in the region is not expected to provide any operational or management advantage to Nambucca Shire community. Hence, council does not favour this arrangement.

• “Not-for-profit” Commercialisation: where Council would operate on a commercial basis, i.e. each aspect of Council’s operations would be self-sustaining. This arrangement was believed to be able to reflect the true cost to customers, be more efficient and provide better service choices. However, there was some concern that this might lead to some valuable services, which may seem uneconomic on a commercial basis, being abandoned. Council favours this option as it is already running the water supply and sewerage services on a commercial basis in accordance with NOW Best Practice Management Guidelines. Council aims to achieve viability of water supply and sewerage services under a “not-for-profit business model”

• Strategic Alliance: where Council would join other participating Councils in the region/ catchment through a Memorandum of Understanding to pool-in available staff resources to provide the water supply and sewerage services. This arrangement aims to help provide crucial pooled professional and technical resources for efficient delivery of services. Major concern regarding this sort of alliance is that if not mandatory, it may risk falling apart in the face of difficulties, agreed scope of pooled activities or lack of interest. Council is already co-operating with neighbouring Councils in many areas of operations and is open to consider extension of such arrangements to water supply and sewerage services, as the need arises.

• Corporatisation: where Council would set up its operations and register as a corporate structure (company). Council considers this option to be a further progression from commercialisation; however feels this may not appropriate for the size of their operations.

• Regional Corporation: where Council would combine the water supply and sewerage operations with that of other Councils in the Region or Catchment and registering the operations as a new regional entity with a Board of Members nominated by constituent Councils. Such an arrangement will overcome issues in corporatisation of smaller scale individual operations. Council would consider if greater benefits to Council and the Shire residents can be realised through this option.


• Privatisation: where Council would sell off its complete structure (assets, interests, etc) to a private individual or company who would then operate as they saw fit. Considering the size of Council’s water supply and sewerage schemes, this arrangement is considered unviable and inappropriate (-1).

The various institutional arrangements were rated on a scale of +1 (very possible) to –1 (very unlikely) with the following ranks:

Option Ranking

Amalgamation -1

County Council -1

Strategic Alliance 0

Commercialisation +1

Corporatisation -1

Privatisation -1

Council would like to continue with the current commercialisation model and would plan to achieve viability of the sewerage services through the ‘not-for-profit’ business model. Other options are either not preferred or considered irrelevant under the prevailing operating environment.

Legislative Framework

Numerous Acts influence the way in which Council can provide sewerage services to the community. Appendix B provides a discussion of the relevant legislation and the specific implications it has for Council’s operations.

Stakeholder Analysis

The sewerage service must satisfy the needs of several stakeholder groups including customers, visitors, commerce and industry, and government. Appendix C examines these groups and evaluates Council’s current performance.

Service Provision

Council’s future growth projections indicate that currently available capacity need to be augmented to meet increasing demand for sewerage services due to the forecast growth and development in the Shire for the next 30-years

Also, the sewerage schemes need to be maintained to cope with ageing assets and increasing usage. Council plans to extend sewerage services to new subdivisions within and in the periphery of existing service areas and urban growth areas as included in the designated service areas.

Council’s response to the forecast of likely future demands and changes to service provision are summarised in the table next page.


Changes Council Actions

Customer Growth Rate

Current growth rate is expected to be sustained

− Available sewage transport and treatment capacity being expanded to meet future demand

− Reclaimed water supply capacity in new developments

Commercial Growth

Active promotion of development potential by Council will increase business growth.

− Identify and develop new commercial and industrial areas

Environmental Changes

Greater focus on climate change issues

− Maintain the focus on environmental issues in line with community expectations

Service Culture

Council obligations to customers

− Continuously improve services and meet increasing customer expectations

− Implementing a ‘Quality Management Plan’

Technology Changes

Technological advancements in water supply and sewerage operations and service management

− Take advantage of new technologies such as telemetry, low cost sewerage schemes, to achieve cost effective operations

Tourism Growth

Current tourism growth trend is expected to be sustained

− Tourism growth plans

− More amenities and facilities for tourists

Government Policy

Ongoing changes

− Keep abreast of changes in Government policies and Acts


Corporate Policies and Practices

Nambucca Shire Council currently has the following corporate policies that have an impact on the operation of Council’s sewerage schemes.

Corporate Policies and Practices Impacts

Provide services to cover infill and subdivision within designated service area

− Economic systems fully utilising available capacity

− Continued development

Support OH&S and EEO principles − Socially responsible

Code of conduct

Compliance, Enforcement and Protection Policy

Requests and Complaints Policy

− Ethical and professional services

− Fairness, integrity and accountability

− Implementation and regulation of legislations

− Customer care and satisfaction

Asset Management Policy − Provision of required service infrastructure in a sustainable manner

− Meeting legislative requirements

Building over sewers policy − Protection of assets

Easements (Sewer, Water and Stormwater) Policy

− Access to water and sewer infrastructure traversing private properties for maintenance purposes

Liquid Trade Wastes policy − Identification and monitoring of trade wastes according to NOW and EPA Guidelines

Section 64/94 contributions policy (Developers contribution for water, sewer and drainage)

− Equitable distribution of infrastructure costs among various types of current and future customers

Service Delivery

Institutional arrangements are being reviewed throughout the State and initiatives such as the National Competition Policy and Self Regulation are currently being reviewed. The National Competition Policy’s impact on Nambucca Shire Council’s future service delivery is minimal.

Classed as a Category 2 business, the operation of the water supply and sewerage section is not seen as a distortion of competition at a state or national level. The separation of Council’s sewerage business from other activities is at the discretion of Council. The requirement of full cost attribution for sewerage service is already in place.


Council has considered various methods of service delivery including the following:

Full Service Contract

Advantages

• There is the possibility that the operation of the sewerage system would be lower under a full service contract due to the competitive aspect of letting a contract.

• There would be a reduction in the staff required by Council to manage the sewerage operations.

• There could possibly be a productivity improvement resulting from the competitive aspect of letting the full service contract.

• There would be a transfer of the risk associated with operating the sewerage system.

• Attractive for high-end technology operations.

Disadvantages

• As a result of having all operations under a full service contract Council would lose some of the control and flexibility it currently has over the operations of the sewerage services.

• By having the operations of the sewerage system on a full service contract there is the possibility of having profits put ahead of customers.

• There would be a different set of problems associated with the management of the full service contract.

• Requires a complete culture change.

Council thinks that this could be an option of last resort if skilled and trained staff become unavailable and other service delivery options become unviable.

Part Service Contract

Advantages

• Some degree of control over the sewerage operations can be retained.

• The part service contract is carried out in a specialist area therefore providing the best service.

• Ability to segment and assess current practices/ performance

Disadvantages

• There would be a loss of expertise in specialist areas

• Council would become reliant on the availability of specialists for work in these areas.

• Possibility that profit would be put before customer service.


• A comprehensive maintenance management system and information would be required.

Council carries out the majority of operation and maintenance works using in-house, resources. It is expected that more outsourcing of services is expected in future as new infrastructure come in line.

B.O.O.T. (Build, Own, Operate and Transfer)

Advantages

• No large up front capital investment by the Council is required.

• The risk involved with the construction of new capital works is transferred.

• At the end of the B.O.O.T. period the Council is left with the asset.

• Has potential for cost effectiveness.

Disadvantages

• The political and operational implications may be severe if the operator fails to perform satisfactorily or fails completely.

• Ensuring appropriate processes and outcomes requires specialist expertise.

• Community acceptance of the BOOT scheme may be hard to achieve

• The developers profit and risk must be paid for as part of the overall project

Council considers that this option has very little to offer them given the unforeseeable need for any major assets/schemes that required to be delivered under this option.

Resource Sharing

Advantages

• There would be a reduction in the number of resources required by Council as these would be shared with the other organisations.

• By sharing the resources associated with the provision of the sewerage services with other organisations economies of scale would be achieved.

• May enables specialist expert team to be established and used on a regional basis.

Disadvantages

• The co-ordination and commitment of other organisations is hard to get.

This option is part of operationalising the Strategic Alliance discussed under the institutional arrangement options. Council is planning to identify areas of cooperation with neighbouring Councils and is open to consider extension of any such arrangement also to water supply and sewerage services, if need arises.


Conclusion

The various service delivery arrangements were rated on a scale of +1 (very possible) to –1 (very unlikely) with the following ranks:

Option Ranking

Full Service Contract 0

Part-Service Contract +1

BOOT -1

Resource/Service Share +1

As can be seen from the discussion, Council sees that under the current operating environment only the part service contract options will hold any real advantages to them.

Therefore the present strategy is to continue with its current service delivery arrangements, which is a combination of in-house delivery, part service contract.

Council will continually monitor and review the situation with a view to assess the need for considering other options to improve the efficiency and effectiveness of the service delivery.

Nambucca Shire Council Appendices Strategic Business Plan for Sewerage Service

APPENDICES


Appendix B Inputs for Reporting under IPR Framework

Appendix C Legislative Framework




Appendix G Detailed Projected Financial Statements

Appendices Nambucca Shire Council Strategic Business Plan for Sewerage Service



The following list of abbreviations may be used in the Strategic Plan.

BOD Biochemical oxygen demand, a measure of ‘strength’ of organic pollutants in wastewater/ sewage

CBD Central business district

CC Construction certificate

CRC Current replacement cost. The cost to replace existing assets with new assets that will provide the same service function.

CSO Community service obligation

CWP Capital works program

DA Development application

DCP Development control plan

DFS Department of Finance and Services (formerly Dept. of Services, Administration and Technology)

EEO Equal Employment Opportunity

EIS Environmental impact statement

EP Equivalent population

EPA Environment Protection Authority

ET Equivalent tenements

LEP Local environment plan

NFR Non-filterable residue (also refers to as suspended solids), a measure of fine particle pollutants in wastewater

NH&MRC/ AWRC

National Health and Medical Research Council / Australian Water Research Council

NOW NSW Office of Water

NSWPW NSW Public Works

NWI National Water Initiative

OEH Office of Environment and Heritage (formerly DECCW)

SEPP State Environmental Planning Policy

STP Sewage treatment plant (also referred to as STW)

WTP Water treatment plant (also referred to as WFP)

TCM Total catchment management

WDCC Written down current cost. The current replacement cost less the accumulated depreciation to date.


Appendix B Inputs for Reporting under

IPR Framework The main requirements of the Local Government Integrated Planning and Reporting Framework 2010 for the 10-year Community Strategic Plan, 4-year Delivery Program, Annual Operational Plan and Annual Report are summarised below. Inputs for sewerage supply services for inclusion in each of these reports are also presented alongside the summaries.

Community Strategic Plan

• Minimum 10 years.

• Identifies main priorities and aspirations for the future.

• Establishes strategic objectives and strategies to achieve those objectives that address social, environmental, economic and civic leadership issues identified by the community.

• Expected levels of service.

• Give due regard to the State Plan and other relevant state and regional plans.

• Include a community vision statement.

Input to Community Strategic Plan “For sustainable sewerage services the Strategic Business Plan (SBP) for Sewerage will be reviewed and implemented in accordance with the NSW Government’s Best Practice Management of Water Supply and Sewerage Guidelines, August 2007.

Major sewerage capital works identified in the current Strategic Business Plan for completion over the next 10 years are shown in the Table next page. The justifications for why these works have been planned also are presented in the Table.”


Proposed Capital Work Year Justification

Nambucca Heads STP upgrade 2010 - 2012

Capacity augmentation for improved levels of service and to cater for growth

Upgrading Nambucca Heads SPS 1,3,6 and 7

2010 - 2012

Asset renewal and capacity augmentation to cater for growth

Upgrading Valla Beach SPS 5 and SPS 7

2010 - 2012

Asset renewal and capacity augmentation to cater for growth

New SPS 15 and 16 (DCP17) for Macksville

2011 - 2012

Servicing new developments

Chemical dosing facility for Scotts Head STP

2012 - 2013

Capacity augmentation to cater for growth

Emergency storage capacity augmentation at Macksville SPS 2

2013 Improved levels of service and regulatory compliance

New sewer mining plants for Valla UGA and South Scotts Head

2016 - 2017

Improved levels of service and water conservation

Resourcing Strategy

Sets out what Council will do over the next 10 years to address the community’s main priorities in the Community Strategic Plan. Council determines its Resourcing strategy from the following:

• Total Asset Management Planning;

• Work Force Planning; and

• Long-term Financial Planning.

Input to Resourcing Strategy “The SBP for Sewerage is the Council’s resourcing strategy for the sewerage services in which the Asset Management Planning, Work Force Planning and the Long-term Financial Planning are presented in detail”.

Delivery Program

• Directly addresses the objectives and strategies of the Community Strategic Plan.

• Identifies principal activities council will undertake.

• Identifies principal activities be undertaken within available resources.

• Provides financial estimates for the 4 year period.

• Considers priorities and expected level of service in the Community Strategic Plan.

Input to Delivery Program “The SBP for Sewerage Service (Part B: Strategic Plan) is the Council’s delivery program for sewerage services wherein the objectives, strategies, activities planned for the next 4 - 5 years including the costs, start and end dates and responsible officer are presented in


detail. The financial estimates for the next 4 year period are presented as part of the 30-year financial projections of the Long-term Financial Plan”.

Operational Plan and Annual Report

• Operational Plan outlines the activities to be undertaken for the year as part of the Delivery Program and is prepared as a sub-plan of the Delivery Program

• Operational Plan includes Statement of Revenue Policy – fees and charges, pricing methodology, proposed borrowings, and detailed budget for activities to be undertaken in the year.

• Annual Report is a report to the community which outlines council’s achievements in implementing the Delivery Program as planned in the Operational Plan.

• Annual Report outlines the effectiveness of the principal activities undertaken in achieving the objectives in the Community Strategic Plan.

Input to Operational Plan “The SBP for Sewerage Service (Part B: Strategic Plan) is the Council’s operational plan for sewerage services in which all the planned activities for delivery program are presented in detail”.


Appendix C Legislation Affecting

Sewerage Services Legislative Framework

Nambucca Shire Council delivers sewerage services to Bowraville, Macksville, Nambucca Heads, Scotts Head and Valla Beach urban areas under the authority of the Local Government Act, 1993. Council has embraced the principles underlying this Act as being of benefit to the community it serves. Community consultation and involvement in decision-making has been increased in line with the Act in the last few years.

Several other acts also affect Council’s scheme. These generally fall into three main categories as follows:

Act General Implications for Council 1. Pricing

Local Government Act 1993

Esp. Sections 64 and 428

Determining developer charges:

− provide a source of funding for infrastructure required for new urban development

− provide signals regarding costs of urban development and encourage less costly forms

Need to be more accountable.

Need for better asset management.

Environmental Planning and Assessment Act 1979

Determining developer charges.

Requirement for LEP and DCPs.

Council control of service approvals.

Water Management Act 2000

Progressively replaces the previous Water Act 1912, Water Authorities Act 1987 and 10 others including irrigation, rivers and foreshores Acts)


Water rights, licences, allocations.

Local Government Regulation 1993 (Savings and Transitional)



Independent Pricing and Regulatory Tribunal Act 1992

Gives powers to the Independent Pricing and Regulatory Tribunal to inquire into and regulate prices.

IPART has developed a set of consistent pricing principles to be adopted by local government authorities.

Guidelines for ‘user pays’ charging system in the water and wastewater industry.

Water Industry Competition Act 2006

Establishment of third-party access regime for water and sewerage infrastructure to encourage competition

Authorisation of IPART to regulate licensed private network operators to ensure services are delivered in a safe and reliable manner

2. Environmental Protection

Protection of the Environment Operations Act 1997

Brings together:

- Clean Air Act 1961

- Clean Waters Act 1970

- Pollution Control Act 1970

- Noise Control Act 1975

- Environmental Offences and Penalties (EOP) Act 1989

Regulating pollution activities and issue of licenses as well as the monitoring of and reporting on waste output.

Council is required to be “duly diligent” in undertaking the scheme operations.

Soil Conservation Act 1938 Conserves soil resources and farm water resources and the mitigation of erosion and land degradation.

Preservation of watercourse environments.


Encourages the proper management of natural and man-made resources, the orderly use of land, the provision of services and protection of the environment.

Catchment Management Act 1989 Promotes the coordination of activities within catchment areas. Council believes this Act has implications for the management of river water quality and quantity.

Requirement for ongoing management plan.

Requirement of Capital Works Plan under Sydney Catchment Authority Regulations.


Water Management Act 2000 The act provides for sustainable and integrated management of NSW State’s water sources.

Water rights, licences, allocations.

3. Health and Safety

Public Health Act 2010 Prevention of the spread of disease.

Effluent disposal methods.

Delivery of quality water.

Occupational Health and Safety Act 2000 (and Regulations 2001)

Council’s responsibility to ensure health, safety and welfare of employees and others at places of work.

Likely be cost implications

Impacts all operations.

Note public safety – insurance.

Local Government Act 1993

The main purpose of the Local Government Act 1993 is to provide the legal framework for an effective, efficient, environmentally responsible, and open system of Local Government in NSW.

The Act is, in the main, administered by the Minister for Local Government, but the Minister for Water has significant powers under the Act for water, sewerage and drainage.

The Act confers service functions on Councils. These include the provision, management and operation of water supply and sewerage works and facilities. The Act provides Councils with broad power to carry out their functions, and a "Council may do all such things as are supplemented or incidental to, or consequential on, the exercise of its functions" (section 23 of the Act).

Some particular parts of the Act relating to water supply and sewerage are:

• Section 64 - developer charges (Under this section of the new Act, a Council may use the relevant provisions of the Water Management Act 2000 to obtain water supply and sewerage developer charges. The provisions of Section 94 of the Environmental Planning and Assessment Act are no longer available to Councils for obtaining water supply and sewerage developer contributions.);

• Section 68 - Council approval of plumbing works;

• Sections 634-651 - water supply, sewerage and drainage offences; and

• Water, Sewerage and Drainage Regulation which cover matters from the "old" ordinance 4.5 and 4.6.

The role of the Minister for Water in regard to water supply, sewerage and drainage is covered in Sections 56-66. The Minister's role is generally along the lines of Part XIV of the 1919 Act, and it includes matters such as construction of works, hand over and vesting of work, approval of dams and treatment works, directions to Councils concerning dams and treatment works, action during emergencies, and the appointment of an administrator.


The NSW Office of Water provides section 60 approvals to council proposals to construct a dam, water or sewage treatment works and for effluent and biosolids reuse.

The NSW Office of Water carries out section 61 inspections of LWU dams and water and sewage treatment works.

The NSW Office of Water provides concurrence to Council liquid trade waste approvals under section 90(2) of the Act.

Councils issue approval to applications to discharge trade waste to their sewerage system under section 68 of the Local Government Act. Conditions of approval are imposed under clause 32 of the Local Government Regulation 2005.


The Environmental Planning and Assessment (EP&A) Act was enacted in 1979, and amended by the Environmental Planning and Assessment (Amendment) Act (1985). The Act is the principal planning instrument in NSW, and it specifies the environmental considerations required in all development activities. It also governs the procedures of all proposals that have an effect on the environment. Its objectives are to encourage the proper management of natural and man-made resources, the orderly use of land, the provision of services, and the protection of the environment.

The Act is administered by the Minister for Planning.

The Act requires that all proposals, activities, and functions which are investigated, designed, planned, constructed, and operated by Councils should be studied during all stages for their environmental impact on the basis of scale, location, and performance.

Environmental studies are to be undertaken concurrently with the technical or planning investigations. The findings of environmental studies should be reported initially in Reviews of Environmental Factors (REF), which indicate the need for further studies, their extent and depth, and the degree of public or other involvement required. The REF can often be used for consents or approvals. A Council can give consents for a development as prescribed in Local Environmental Plans (LEP) when the Council are the consent authorities (Part IV of the EP&A Act).

An Environmental Impact Statement (EIS) is a comprehensive report compiled from extensive studies. An EIS is required for:

• designated developments (Part IV of the EP&A Act);

• projects which affect the environment significantly (Part V of the EP&A Act); and

• when designated by a State Environmental Planning Policy or in an LEP.

Catchment Management Act 1989

The objectives of this Act are:

• To coordinate policies, programs and activities as they relate to total catchment management;

• To achieve active community participation in natural resource management;

• To identify and rectify natural resource degradation;

• To promote the sustainable use of natural resources; and


• To provide stable and productive soil, high quality water and protective and productive soil and vegetation cover within each of the State's water catchments.

The Act is administered by the Minister for Land and Water Conservation.

Soil Conservation Act 1938

The objective of the Soil Conservation Act is the conservation of soil resources and farm water resources and the mitigation of erosion and land degradation.

The Act is administered by the Minister for Land and Water Conservation.

Under Section 21C of the Act, a Council is required to protect land along prescribed streams and to prevent any destruction of trees and soil erosion on protected land. The same section of the Act specifies the rules for any person or occupier or any protected land from ringbarking, cutting down, felling, poisoning of, or otherwise destroying, vegetation or trees.

Section 21D of the Act requires that the land owner or occupier must obtain an authority before damaging or destroying trees between the banks or within 20 metres of banks of a prescribed stream. Pubic Works is responsible for preparing inspection reports for sites downstream of the tidal limit.

Section 22 of the Act outlines requirements for preservation of proclaimed works and catchment areas.

Public Health Act 2010

The Public Health Act 2010 replaced the Public Health Act 1991. The main objectives of the Public Health Act 2010 are:

• to promote, protect and improve public health,

• to control the risks to public health,

• to promote the control of infectious diseases, and

• to prevent the spread of infectious diseases.

The Act recognises the role of local government in protecting public health. Under the Act, a local government authority has the responsibility to take appropriate measures to ensure compliance with the requirements of this Act in relation to public swimming pools and spa pools, regulated systems and premises on which skin penetration procedures are carried out. A local government authority has the responsibility of appointing authorised officers to enable it to exercise its functions under this Act and ensuring that its authorised officers duly exercise their functions under this Act.

Part 3 Division 1 of the Act includes the provisions in respect to safety measures for drinking water.

The Minister for Health has the power to take actions and to issue directions, as the Minister considers necessary:

• to restrict or prevent the use of unsafe water that is likely to be a risk to public health, and

• to bring unsafe water to such a condition that it is no longer unsafe water.

The Director General has the power to direct a supplier of drinking water to carry out testing and produce information in relation to the treatment and quality of drinking water.


The Chief Health Officer has the responsibility for determining the necessity for a boil water advice and additional information or correction or re-traction of such advice, by a supplier of drinking water for the drinking water it supplies. The Chief Health Officer may also prepare advice concerning public health risks or boil water advice, and provide the advice to the drinking water supplier.

According to the Clause 25 of the Act a supplier of drinking water must establish and adhere to a quality assurance program that complies with the requirements prescribe by the regulations. The regulations are yet to be enacted.

Water Act 1912

This Act is being progressively phased out and replaced by the Water Management Act 2000, but some provisions are still in force.

The Water Act covers matters such as water rights, licences and water allocations.

It is necessary under this Act for the Council to obtain a licence for a work for the purpose of:

• Water conservation, irrigation, water supply or drainage;

• Prevention of inundation of land and overflow of water thereon; and

• Changing the course of the river.

Water Management Act 2000

The Water Management Act 2000 is the key NSW water legislation for the sustainable management of water. The Act promotes the sharing of responsibility for the sustainable and efficient use of water between the NSW Government and water users.

The Act provides a legal basis for water planning, the allocation of water resources and water access entitlements.

The main tool the Act provides for managing the NSW water resources are water sharing plans. The plans for each catchment set out the rules for the sharing of water between water users and the environment and rules for the trading of water.

Chapter 6 of the Act provides for the constitution, construction, operation and charging regimes for major water utilities and local water utilities.

Section 305 of the Act provides water utilities with a mechanism to control development in relation to water services through the provision of a “certificate of compliance”.

Section 306 of the Act enables water supply authorities and local water utilities, through a cross reference to section 64 of the Local Government Act 1993, to levy developer charges towards the cost of water infrastructure required for serving development.

The Act is administered by the Minister for Primary Industries and the Minister for Finance and Services.

Independent Pricing and Regulatory Tribunal Act 1992

The Independent Pricing and Regulatory Tribunal Act establishes the Independent Pricing and Regulatory Tribunal and enables the Tribunal to determine and advise on prices and pricing policy for government monopoly services. A government monopoly service is a service supplied by a government agency (which may include a local government council) and declared by the regulations, or the Minister, to be a government monopoly service.

The Tribunal conducts investigations and makes reports to the Minister on the determination of the maximum price and on a periodic review of pricing policies for


services applied by these agencies specified in Schedule 1 to the Act. Schedule 1 presently includes Sydney Water Corporation, Hunter Water Corporation, Water Supply Authorities, including Gosford City Council, Wyong Shire Council, State Water (Fish River Water Supply) and Essential Energy (Broken Hill).

The Tribunal may also conduct investigations and make reports for any government monopoly service, at the request of the Minister, whether or not it is supplied by a government agency specified in Schedule 1.

Occupational Health and Safety Act 2000

This revised Act details Council's responsibilities to ensure health, safety and welfare of employees and others at places of work. All of the scheme's operational activities are impacted on by this Act. This act is administered by the Work Cover Authority.

Protection of the Environment (Operations) Act 1997

This Act came into effect in July 1998 and consolidated existing legislation to eradicate the duplication of powers and overlapping use of resources. The Act brought together what used to be five separate pieces of legislation:

• Clean Air Act 1961;

• Clean Waters Act 1970;

• Pollution Control Act 1970;

• Noise Control Act 1975; and

• Environmental Offences and Penalties Act 1989.

The POEO Act introduces a holistic approach to protecting the environment, changing from pollution control legislation to environment protection legislation.

The Act enables the NSW Government to set out explicit protection of the environment policies (PEPs) involving environmental standards, goals, protocols and guidelines.

Key features of the Act are as follows:

• Single licensing arrangement relating to air pollution, water pollution, noise pollution and waste management;

• EPA issues licences and is the regulatory authority for scheduled activities specified in Schedule 1 of the Act;

• Local councils are the regulatory authorities for non-scheduled activities except activities undertaken by a public authorities;

• EPA can issue licences to regulate water pollution from a non-scheduled activity therefore becomes the regulating authority;

• Environment protection notices that can be issued by appropriate regulatory authorities;

• The Act includes an offence regime and may involve heavy penalties and or gaol.

• The Act includes civil enforcement provisions for third parties.

The Act is administered by Department of Environment, Climate Change and Water.

The POEO Act is a powerful tool for regulation of sewerage and trade waste by local water utilities and facilitating compliance with the utility’s conditions of approval for liquid trade waste discharges to the sewerage system.


Councils may issue a penalty notice under section 222 of the Act to a discharger who fails to obtain an approval to discharge trade waste to the council’s sewerage system or who fails to comply with the conditions of the council’s approval. In addition, section 123 of the Act may be used to sue a discharger causing major damage to the council’s sewerage system or to the environment

The legislation also incorporates major regulatory provisions of the Waste Minimisation and Management Act.

Water Industry Competition Act 2006

The objectives of the Act and supporting regulations are to encourage competition in the water industry and to foster innovative recycling projects and dynamic efficiency in the provision of water and wastewater services.

Increasing competition in the metropolitan water market and water recycling are key actions in the NSW Government’s Metropolitan Water Plan and State Plan.

The Act provides for the matters such as:

• the establishment of a new licensing regime for private sector providers of reticulated drinking water, recycled water and sewerage services;

• the establishment of a third-party access regime for water and sewerage infrastructure;

• provisions for a licensed network operator to construct or remove water industry infrastructure;

• provisions to authorise IPART to undertake regulatory functions in certain parts of the Act.

Key aspects of General Regulation include:

• ensuring new entrants and the public water utilities face similar obligations, where like services are provided

• strict licensing rules to ensure that drinking water meets Australian standards, that recycled water is ‘fit for purpose’ and that all services are delivered in a safe, reliable manner with minimal environmental impacts

• provisions to prevent retailers from disconnecting small customers for non-payment of debt and to require the implementation of NSW Government social policies, such as pensioner rebates.


Other Government Initiatives

Efficient Operation The Division of Local Government is concerned that councils generally are well managed.

Federal Government

The Federal Industry Commission Report on the Australian Water Industry is concerned to ensure efficient use of resources - natural, physical and financial. Its 1992 Report's recommendations were wide-ranging and covered matters such as pricing reforms and structural reforms (e.g. amalgamation of authorities).

Competition Policy In 1995 the Council of Australian Governments (COAG) ratified the National Competition Policy. Of particular significance to the water and sewerage functions of Council is the application of competitive neutrality to operations. The purpose of this is to have councils “operate under similar competitive pressures to those experienced by the private sector”.

The NSW Government has embraced these principles and set in motion a number of policies to increase the efficiency and the competitiveness of this type of business area. (Refer to the NSW Government Policy Statement on the Application of National Competition Policy to Local Government.)

Asset Management The NSW Government, which has ultimate responsibility for water and sewerage in the State, is concerned to ensure that the $7 billion asset base in country towns’ water supply and sewerage schemes under the care of Local Government is well managed.

Financial Assistance

The NSW Government has been providing grants for the development and improvement of water supply and sewerage schemes in country areas, under the Country Towns Water, Sewerage and Drainage Program which is now administered by the Department of Water and Energy.

The Minister for Water and Energy has made changes to the subsidy provisions. The main changes are the requirement to implement best industry management practices and the withdrawal of subsidies for growth related capital works. These changes are outlined in the publication Country Towns Water Supply and Sewerage Program: Technical and Financial Assistance available to Councils.

Best Practice Management

The NSW Government encourages best practice for all LWUs. The purpose of best practice management is:

To encourage the effective and efficient delivery of water supply and sewerage services; and

To promote sustainable water conservation practices and water demand management throughout NSW.

From 1 July 2004, compliance with the six best practice criteria is mandatory for payment of a dividend from the surplus of an LWU’s water supply and sewerage businesses and future financial assistance under the Country Towns Water Supply & Sewerage (CTWS&S) program.



Stakeholders are individuals and organisations with an interest and/or equity in the sewerage services provided by Council. Stakeholders have different expectations, and the extent to which Council meets these expectations varies.

Institutional Stakeholders

A large number of government departments and agencies have interest in, and impact on, the management of the sewerage scheme, as shown in the chart below.

EfficiencySt at e

Government

Federal Government

Regulators

Resource M anagers

Assistance

Council

S ew erage S chem e

Local Government

The sewerage undertakings are an integral part of Council’s operation. Council has the ultimate responsibility for the development, operations, maintenance and performance of the sewerage scheme. As the owner of the undertaking, Council is also responsible for any liability of the sewerage scheme.

State Government

The State Government has a significant impact on the sewerage scheme. Various government agencies fill a role in one or more of the following areas.

Regulators

These are the agencies that are largely responsible for administering the various acts listed in the preceding section. Of particular significance to the sewerage scheme are the Independent Pricing and Regulatory Tribunal (IPART), which is urging councils to adopt the pricing principles outlined in Pricing Principles for Local Water Authorities, and the Environment Protection Authority (EPA) who regulates environmental protection, issues licences to discharge effluent and administers the various pollution control acts. Council discharges effluent from sewage treatment plants under licence from the EPA.

The NSW Office of Water (NOW), while nominally a resource manager has a special role in the development of water supply and sewerage schemes, setting standards and guidelines and administering the Government grants program (refer below).

Resource Managers

These are the agencies responsible for managing the State’s resources, such as water resources, forestry and land.


Assistance

The State Government has been providing financial and administrative assistance for improvements of water supply and sewerage schemes through the Country Towns Water, Sewerage and Drainage Program. Under the newly introduced guidelines, assistance is generally available for servicing backlog areas and improving standards, but not for augmentation works required to accommodate growth. This program is administered by the NSW Office of Water.

Other assistance is in the form of services, such as the professional services provided by the NSW Public Works.

Federal Government

The Federal Government has no direct bearing on the sewerage schemes. Indirectly, the Federal Government is taking the initiative on reforming the way services are delivered to the community by Government agencies in order to improve efficiency.

Stakeholder Expectations

Stakeholders have different expectations, and the extent to which Council meets these expectations varies. The Table next page lists the major stakeholders and their general expectations of sewerage operations.

Stakeholder Issues/ Aspects of interest

Customers

Property Owners/ Ratepayers/ Residents (including pensioners

− Rates/ value for money

− Levels of Service

− Quality services

− Public health standards met and maintained

− Guaranteed service

Commercial and Industrial customers

− Quality

− Sufficient supply

− Guaranteed service

− Reasonable cost

Other Users

Environmental groups − Environmental responsibility

− Maximum resource reuse

− Environmental sustainability

Tourists − Quality of service

− Aesthetics Contd…/


Stakeholder Issues/ Aspects of interest

Council

Councillors − No complaints

− Good public profile

− Minimisation of wastage

− Security of supply

− Environmental sustainability

− Compliance

− Continued availability

− Price

Council employees including Water and wastewater section employees

− Recognition for work

− Safe workplace

− Competency/training

− Support and security

− Pride in workplace/ schemes

− Efficient service

− Innovation and technology

− Informed advice

Government

DLG − Accountability

− Financial stability

NOW (previously DWE) − Efficient operations

− Performance

− Best practice management

DECCW /EPA − Environmental requirements

− Effluent disposal

− Biosolids disposal

Others

(Department of Health, State Water, Work Cover, Catchment Management Authority etc.)

− OHS

− Septic tanks

− Catchment management



Nambucca Shire Council has been submitting performance information about its sewerage scheme to the NSW Office of Water for inclusion in its annual State-wide performance reports. This will allow Council to compare its system against equivalent councils and then undertake benchmarking to identify items and methods for future improvement. A Triple Bottom Line (TBL) approach has been adopted to collate the information.

Performance Indicators

Based on the performance data compiled and reported by NOW for 2009/10 (see next page), following comments/ observations can be made when comparing performance of Council’s sewerage schemes to the rest in the State:

− Reported number of employees per 1000 properties operating the sewerage supply schemes is at par or slightly above the State median. This is due to the higher number of sewerage schemes being operated by the Council for comparatively smaller size of customer base.

− Reported typical residential sewerage bill has been at par with the average of Top 20% Councils’ level for the last more than 6 years (e. Typical residential bill should be consistent with projections in the financial plan.

− Council’s developer charge for sewerage has remained at par with the State median level. New developments need to be charged on an equitable basis in comparison to the current replacement costs.

☺ − Number of odour complaints Council has been receiving in the past was well above the State median level. This has decreased to below State median level during the last 3 reporting years.

− Council’s is compliance with OEH licence conditions with respect to BOD and SS limits is less than 100%. The performance of STPs needs review to achieve full compliance.

☺ − Reported number of sewer main chokes and collapses is well below the average for Top 20% Councils.

− Council has reported high number of sewer overflows to the environment, which is well above the State median level. This does not correspond to the reported number of chokes. Council need to review the data reported for this indicator and make sure the overflows as defined in NPR Indicators Handbook are correctly reported

☺ − Costs of Management, Operation, pumping and treatment for Council’s sewerage operations are maintained at par or below the State median level.



Details of input data for Council’s 30-year financial model for sewer fund are presented in the following pages.

: Preferred CaseFINMOD

2008/09* 2009/10*

Historical Operating Statement

DEPARTMENT OF

COMMERCE

EXPENSES

Management Expenses 624 666

Administration 450 530

Engineering and Supervision 174 136

Operation and Maintenance Expenses 1295 1422

Operation Expenses 344 389

Maintenance Expenses 755 799

Energy Costs 196 234

Chemical Costs 0

Depreciation 860 914

System Assets 823 884

Plant & Equipment 37 30

Interest Expenses 234 501

Other Expenses 14 15

TOTAL EXPENSES3027 3518

REVENUES

Rates & Service Availability Charges 2431 2572

Residential 1740 1613

Non-Residential 691 959

Trade Waste Charges 109

Other Sales and Charges

Extra Charges

Interest Income -25 3780

Other Revenues 105 80

Grants 67 66

Grants for Acquisition of Assets 0

Pensioner Rebate Subsidy 67 66

Other Grants

Contributions 733 1521

Developer Charges 311 135

Developer Provided Assets 414

Other Contributions 8 1386

TOTAL REVENUES3311 8128

OPERATING RESULT284 4610

OPERATING RESULT (less Grants for Acq of

Assets)

284 4610

Printed 1/11/2011Page 1

Values in $'000


2008/09* 2009/10*

Historical Statement of Financial Position

DEPARTMENT OF

COMMERCE

Cash and Investments 9594 18691

Receivables 742 770

Inventories

Property, Plant & Equipment 59499 66006

System Assets (1) 59354 66006

Plant & Equipment 145

Other Assets

TOTAL ASSETS 69835 85467

LIABILITIES

Bank Overdraft

Creditors 72 70

Borrowings 5316 14609

Provisions

TOTAL LIABILITIES 5388 14679

NET ASSETS COMMITTED 64447 70788

EQUITY

Accumulated Operating Result 40721 45571

Asset Revaluation Reserve 23726 25217

TOTAL EQUITY 64447 70788

(1) Notes to System Assets

Current Replacement Cost 83959 92219

Less: Accumulated Depreciation 24605 26213

Written Down Current Cost 59354 66006


Values in $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Base Forecast Data

DEPARTMENT OF

COMMERCE

Financial Data

3.00Inflation Rate - General (%) 3.00 3.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.00 3.00 3.00

3.00Inflation Rate - Capital Works (%) 3.00 3.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.003.00 3.00 3.00

9.00Borrowing Interest Rate for New Loans (%) 9.00 9.009.009.009.009.009.009.009.009.009.009.009.009.009.009.009.009.009.009.009.009.00 9.00 9.00

5.50Investment Interest Rate (%) 5.50 5.505.505.505.505.505.505.505.505.505.505.505.505.505.505.505.505.505.505.505.505.50 5.50 5.50

Number of Assessments

Growth Rate (%)

0.99 Residential Assessments 0.50 0.490.490.500.530.530.620.770.970.980.981.171.181.201.211.230.610.610.620.620.620.61 0.63 1.00

0.64 Non-Residential Assessments 0.00 0.000.000.000.000.000.000.000.000.000.000.650.650.661.671.701.731.761.792.572.642.79 2.91 0.65

0.96 Total Assessments 0.45 0.450.450.450.480.490.560.700.880.880.891.121.131.151.261.270.710.720.720.800.800.80 0.83 0.97

Number of New Assessments

60 Residential 32 323232343439486060606969696969343434343433 34 60

4 Non-Residential 0 00000000004441010101010141414 15 4

64 Total New Assessments 32 323232343439486060607373737979444444484847 49 64

Projected Number of Assessments

6092 Residential 6491 655565236459642763936359632062726212615259725903583457655696562755935559552554915423 5457 6032

628 Non-Residential 628 628628628628628628628628628628620616612608598588578568558544515 530 624

6720 Total Projected Assessments 7119 718371517087705570216987694869006840678065926519644663736294621561716127608360355938 5987 6656

Backlog Assessments

0 Residential 0 000000000000000000000 0 0

0 Non-Residential 0 000000000000000000000 0 0

0 Total Backlog Assessments 0 000000000000000000000 0 0

Developer Charges / Vacant Assessments (Values in 2010/11 $)

Developer Charges $/Assessment

8935 Residential 8935 893589358935893589358935893589358935893589358935893589358935893589358935893589354163 4612 8935

8935 Non-Residential 8935 893589358935893589358935893589358935893589358935893589358935893589358935893589354163 4612 8935

260Number of Vacant Residential Assessments 161 139150172183194205216227238249282293304315326337348359370381403 392 271

100Average Charge of Vacant Assessments 100 10010010010010010010010010010010010010010010010010010010010060 100 100

0 % of Occupied Assessments 0 000000000000000000000 0 0

Depreciation of Existing Plant and Equipment (Values in 2010/11 $'000)

Current Replacement Cost of System Assets 94986

Override

Written Down Current Cost of System Assets 67986

Override

Annual Depreciation of Existing System Assets 911

Override

Written Down Value of Plant and Equipment 0

Override

0Annual Depreciation of Existing Plant and

Equipment

0 000000000000000000000 0 0


Values in $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Base Forecast Data

DEPARTMENT OF

COMMERCE

Existing Loan Payments (Values in Inflated $'000)

85Existing Loan Payments : Principal

(Total:14609)

0 00007161791110102979176707008361220124911311168120612461342 1292 81

142Existing Loan Payments : Interest (Total:3807) 0 000060111118125131136151157161172205241235259283305343 325 147

Capital Works Program (Values in 2010/11 $'000)

0Subsidised Scheme (Total:32028) 0 000000000067367367367367377236736731033100712228 4653 673

0Other New System Assets (Total:38698) 0 000670087700045000059450115288094354950003308 600 0

1854Renewals (Total:18515) 499 3692292292319229229229229193942772292292292292472292131008213281219 277 229

1854Total Capital Works (Total:89241) 499 369229229901989992292296791939427790268479021017380017387138116811246128815755 5530 902

0.00Grant For Acquisition of Assets (% of

Subsidised Scheme)

0.00 0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.0019.15 50.33 0.00

0Grant For Acquisition of Assets ($) (Total:4684) 0 000000000000000000002342 2342 0

0Developer Provided Assets (Total:0) 0 000000000000000000000 0 0

Plant and Equipment Expenditure / Asset Disposal (Values in 2010/11 $'000)

0Plant and Equipment Expenditure 0 000000000000000000000 0 0

0Proceeds from Disposal of Plant and Equipment 0 000000000000000000000 0 0

0Written Down Value of Plant and Equipment

Disposed

0 000000000000000000000 0 0

0Gain/Loss on Disposal of Plant and Equipment 0 000000000000000000000 0 0

0 Proceeds from Disposal of Assets 0 000000000000000000000 0 0

0 Written Down Value of Assets Disposed 0 000000000000000000000 0 0

0 Gain/Loss on Disposal of System Assets 0 000000000000000000000 0 0


Values in $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Revised/Additional Forecast Data

DEPARTMENT OF

COMMERCE

OMA / Revenue Overrides (Values in 2010/11 $'000)

622Administration 660 666663657654651648644640634628610603596589582575571567563559550 555 616

641Override 701 707692679802672687670676750664625727606618596602668598653680595 588 647

161Engineering and Supervision 170 172171169168167166165164163162157155153151149147146145144143141 142 159

Override

455Operating Expenses 481 485483479477475473470467463459447442437432427422419416413410404 407 451

1035Override 1319 1334130613011280238114610961094107210439919931143893892840649775687671480 747 1017

939Maintenance Expenses 993 1001997989985980975970963955947921911901891880869863857851844830 837 930

958Override 993 10101031988983986972965957947945906894889872863853848874866833824 889 916

276Energy Costs 290 292291289288287286284282280278270267264261258255253251249247243 245 273

560Override 709 740724693678662647630613595578525507490474458442430417399371261 329 543

0Chemical Costs 0 000000000000000000000 0 0

Override

16Other Expenses 16 161616161616161616161616161616161616161616 16 16

Override

96Other Revenue 101 1011011011011011011009998979493929190898887868583 84 95

Override

0Other Grants 0 000000000000000000000 0 0

Override

1632Other Contributions 1729 174517371721171317051697168816761661164716001582156415461527150814971486147514631439 1451 1616

0Override 0 000000000000000000000 0 0

Developer Charges Overrides (Values in 2010/11 $'000)

572Calculated from Scheme Data 286 286286286304304348429536536536652652652706706393393393429429196 226 572

999Override 404 040700044058517217217223423423412481253373375373424420105 232 990

Pensioner Rebate (Values in Inflated $)

87.50Pensioner Rebate per Pensioner ($) 87.50 87.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.5087.50 87.50 87.50

Override

55.00Pensioner Rebate Subsidy (%) 55.00 55.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.0055.00 55.00 55.00

Override

1550Number of Pensioner Assessments 1651 166816591643163516261618160815961580156515191502148414671449143214231414140613971380 1388 1535

Override

25.44Percentage of Pensioners (%) 25.44 25.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.4425.44 25.44 25.44

Override

136Pensioner Rebate 144 146145144143142142141140138137133131130128127125125124123122121 121 134

75Pensioner Rebate Subsidy 79 808079797878787776757372727070696968686767 67 74

Revenue Split (%)

63.36Residential Rates 64.75 64.9564.8464.6464.5364.4264.3064.1664.0063.7963.5763.2263.1062.9862.8762.9663.0763.3163.5563.8164.2265.13 64.66 63.28

Override

34.58Non-Residential Rates 33.15 32.9433.0533.2633.3733.4933.6133.7533.9234.1434.3634.7334.8534.9735.0934.9934.8834.6334.3834.1233.6932.75 33.24 34.66

Override

2.06Trade Waste Charges 2.10 2.112.112.102.102.092.092.092.082.072.072.052.052.052.042.052.052.062.072.072.092.12 2.10 2.06

Override

0.00Other Sales and charges 0.00 0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00 0.00 0.00

Override

0.00Extra Charges 0.00 0.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.000.00 0.00 0.00

Override

36.64Total Non-Residential Revenue (%) 35.25 35.0535.1635.3635.4735.5835.7035.8436.0036.2136.4336.7836.9037.0237.1337.0436.9336.6936.4536.1935.7834.87 35.34 36.72

100.00Total 100.00 100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00100.00 100.00 100.00

63.36Total Residential Revenue (%) 64.75 64.9564.8464.6464.5364.4264.3064.1664.0063.7963.5763.2263.1062.9862.8762.9663.0763.3163.5563.8164.2265.13 64.66 63.28


Values in $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Revised/Additional Forecast Data

DEPARTMENT OF

COMMERCE

New Loan Payment Overrides (Values in Inflated $'000)

281Standard Loan Payments: Principal 748 89381568462852743740036733630723621716415013711000000 0 258

1981Standard Loan Payments: Interest 2895 275328272959301624171826186418971927195620272047157915931606139500000 0 2004

0Structured Loan Payments: Principal 0 000000000000000000000 0 0

0Structured Loan Payments: Interest 0 000000000000000000000 0 0

0Capitalised Interest 0 000000000000000000000 0 0

281Total New Loan Payments: Principal 748 89381568462852743740036733630723621716415013711000000 0 258

Override

1981Total New Loan Payments: Interest 2895 275328272959301624171826186418971927195620272047157915931606139500000 0 2004

Override

0Capitalised Interest 0 000000000000000000000 0 0

Override


Values in $'000


Appendix G Detailed Projected

Financial Statements Details of projected financial results of Council’s 30-year financial model for sewer fund are presented in the following pages.

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Operating Statement

DEPARTMENT OF

COMMERCE

EXPENSES

801Management Expenses 736 730 823 797 743 813 750 745 769 760 782 826 913 840 835 853 839 970 848 871 863 879882 806

641 Administration 701 707692679802672687670676750664625727606618596602668598653680595 588 647

161 Engineering and Supervision 170 172171169168167166165164163162157155153151149147146145144143141 142 159

2553Operation and Maintenance Expenses 1565 1965 1876 1952 2066 1926 2136 2212 2239 2522 2422 2566 2614 2665 2691 2765 1886 2941 2982 3021 3061 30842394 2476

1035 Operation Expenses 1319 1334130613011280238114610961094107210439919931143893892840649775687671480 747 1017

958 Maintenance Expenses 993 10101031988983986972965957947945906894889872863853848874866833824 889 916

560 Energy Costs 709 740724693678662647630613595578525507490474458442430417399371261 329 543

0 Chemical Costs 0 000000000000000000000 0 0

1694Depreciation 1133 1208 1222 1236 1247 1263 1508 1559 1570 1580 1685 1694 1693 1700 1700 1700 1825 1921 1921 1921 1921 19211675 1695

1694 System Assets 1921 192119211921192118251700170017001693169416851675158015701559150812631247123612221133 1208 1695

0 Plant & Equipment 0 000000000000000000000 0 0

1446Interest Expenses 1511 1354143215911670141311381199126013211383157316401334139314731370203230259287343 316 1509

16Other Expenses 16 161616161616161616161616161616161616161616 16 16

6510TOTAL EXPENSES

3793 4234 4224 4260 4301 4222 5779 6005 5987 6211 6607 6478 6484 6557 6481 6441 6472 5979 7518 7357 7340 7294 72556501

REVENUES

6532Rates & Service Availability Charges 3101 3448 4251 5074 5904 5968 6036 6122 6210 6278 6409 6577 6628 6672 6708 6739 6764 6796 6819 6847 6870 68956346 6474

4226 Residential 4529 457545514503447944514425439643614317426941374089403739863935388738583831330527882063 2277 4183

2306 Non-Residential 2318 232023202317231723142313231223112311230822722258224222252187214921112073176814631038 1171 2291

138Trade Waste Charges 147 1491481461461441441431411401391341321311291281261261241079067 74 136

0Other Sales and Charges 0 000000000000000000000 0 0

0Extra Charges 0 000000000000000000000 0 0

202Interest Income 103 170144695618126022015111714210192118793486149997075643 185 161

96Other Revenues 101 1011011011011011011009998979493929190898887868583 84 95

51Grants 2409 2407 63 62 60 60 58 57 55 55 53 50 49 48 47 46 44 44 42 41 41 3954 52

0 Grants for Acquisition of Assets 0 000000000000000000002342 2342 0

51 Pensioner Rebate Subsidy 41 394142444446474849505354555557586060626367 65 52

0 Other Grants 0 000000000000000000000 0 0

999Contributions 105 232 420 424 373 375 373 1253 1248 234 234 172 172 172 585 440 0 0 0 404 407 0234 990

999 Developer Charges 404 040700044058517217217223423423412481253373375373424420105 232 990

0 Developer Provided Assets 0 000000000000000000000 0 0

0 Other Contributions 0 000000000000000000000 0 0

8018TOTAL REVENUES

6408 6430 4985 5823 6648 6766 6768 7685 7813 6908 6951 7025 7177 7204 7284 7804 7729 7235 7142 7178 7644 7711 73547908

1508OPERATING RESULT

2615 2196 762 1563 2346 2545 988 1680 1826 697 345 547 693 647 803 1362 1257 1256 -376 -179 303 417 991407

1508OPERATING RESULT (less Grants for Acq of

Assets)

273 -146 762 1563 2346 2545 988 1680 1826 697 345 547 693 647 803 1362 1257 1256 -376 -179 303 417 991407


Values in 2010/11 $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Cashflow Statement

DEPARTMENT OF

COMMERCE

Cashflow From Operating Activities

Receipts

6670Rates and Charges 6994 704470186966694169086883685268146768671665436479641063406250616260946028518143423168 3521 6611

202Interest Income 103 170144695618126022015111714210192118793486149997075643 185 161

96Other Revenues 101 1011011011011011011009998979493929190898887868583 84 95

51Grants 41 39414244444647484950535455555758606062632409 2407 52

999Contributions 404 040700044058517217217223423423412481253373375373424420105 232 990

8018Total Receipts from Operations 6408 6430 4985 5823 6648 6766 6768 7685 7813 6908 6951 7025 7177 7204 7284 7804 7729 7235 7142 7178 7644 7711 73547908

Payments

801Management 871 879863848970839853835840913826782882760769745750813743797823736 730 806

2584Operations (plus WC Inc) 3050 311330913011297019152794272126962645259724552426255322712244216319542092197919031591 1992 2507

1446Interest Expenses 1511 1354143215911670141311381199126013211383157316401334139314731370203230259287343 316 1509

16Other Expenses 16 161616161616161616161616161616161616161616 16 16

4847Total Payments from Operations 2686 3053 3030 3051 3081 2986 4299 4478 4449 4662 4964 4826 4822 4895 4813 4771 4801 4182 5626 5465 5448 5402 53634838

3171Net Cash from Operations 3722 3377 1956 2772 3566 3780 2469 3207 3364 2246 1987 2199 2356 2309 2471 3032 2928 3053 1515 1713 2196 2308 19913070

Cashflow from Capital Activities

Receipts

0Proceeds from Disposal of Assets 0 000000000000000000000 0 0

Payments

1854Acquisition of Assets 499 369229229901989992292296791939427790268479021018380017387138116811246128815755 5530 902

-1854Net Cash from Capital Activities -15755 -5530 -1288 -1246 -1681 -1381 -17387 -3800 -1018 -902 -6847 -902 -4277 -1939 -679 -229 -229 -8999 -9019 -229 -499 -229 -369-902

CashFlow from Financing Activities

Receipts

0New Loans Required 0 0004000400000000040000120001300000000 0 0

Payments

249Principal Loan Payments 390 4394133683487091309309292278263225214662778110311389761038110411741342 1254 238

-249Net Cash from Financing Activities -1342 -1254 -1174 -1104 -1038 -976 11862 897 -778 -662 3787 -225 -263 -278 -292 -309 -1309 3291 3652 -368 -390 -413 -439-238

1067TOTAL NET CASH -13375 -3408 -506 422 848 1423 -3056 303 1569 682 -1073 1071 -2184 92 1500 2494 1390 -2655 -3851 1116 1306 1667 11831930

1067Current Year Cash 1306 118316671116-3851-265513902494150092-21841071-10736821569303-30561423848422-506-13375 -3408 1930

4581Cash & Investments @Year Start 2346 50613546130051908001685145623199320454841801292823348355573630231515371161170218691 5161 2789

5648Cash & Investments @Year End 5316 1753 1196 1583 2385 3739 574 860 2404 3016 1855 2872 3300 3295 4699 7057 8241 5346 1339 2416 3652 5212 62434719

Capital Works Funding:

0nternal Funding for New Works ($'000) 0 00027004770004500067326186737881553415811686731033100713194 2912 673

1854Internal Funding for Renewals 499 3692292292319229229229229193942772292292292292472292131008213281219 277 229

0New Loans 0 0004000400000000040000120001300000000 0 0

0Grants 0 000000000000000000002342 2342 0

1854Total Capital Works 15755 5530 1288 1246 1681 1381 17387 3800 1018 902 6847 902 4277 1939 679 229 229 8999 9019 229 499 229 369902


Values in 2010/11 $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Statement of Financial Position

DEPARTMENT OF

COMMERCE

5648Cash and Investments 3652 6243521224161339534682417057469932953300287218553016240486057437392385158311965316 1753 4719

904Receivables 957 966962953949944940935929920912887877868858847837831825819813799 806 896

0Inventories 0 000000000000000000000 0 0

108207Property, Plant & Equipment 82608 86931 86997 87007 87441 87560 103439 105680 105127 104449 108839 110789 111035 110013 108542 107071 114245 121342 119650 118228 116536 114984109621 108047

108207System Assets (1) 118228 1149841165361196501213421142451070711085421100131110351107891088391096211044491051271056801034398756087441870078699782608 86931 108047

0Plant & Equipment 0 000000000000000000000 0 0

0Other Assets 0 000000000000000000000 0 0

114759TOTAL ASSETS 88723 89490 89006 89409 90651 92129 104849 107387 108389 108332 112354 112599 115001 115251 115641 116534 116252 120535 123630 123020 122837 122710 122193113661

LIABILITIES

0Bank Overdraft 0 000000000000000000000 0 0

82Creditors 87 888786868685858483838080797877767676757473 74 81

16829Borrowings 16498 147101560417395182951508212145138571459115330160761836319146158201697718287179126231742387151011313267 11626 17591

0Provisions 0 000000000000000000000 0 0

16911TOTAL LIABILITIES 13340 11700 10188 8790 7499 6307 17988 18364 17055 15899 19226 18443 16158 15413 14675 13942 12230 15168 18381 17481 16584 15691 1479817671

97849NET ASSETS COMMITTED 75383 77790 78818 80619 83152 85822 86861 89023 91334 92433 93128 94155 98843 99838 100966 102592 104022 105367 105249 105539 106253 107019 10739595990

EQUITY

47983Accumulated Operating Result 41736 398454093842676441414585345934460184599546548472784785648728498355061250250500275051049404484704831448186 48979 47869

49866Asset Revaluation Reserve 64517 675506608162863611095951458088565745497153290515654629944399425974072238773368333531233747321503050427197 28812 48121

97849TOTAL EQUITY 75383 77790 78818 80619 83152 85822 86861 89023 91334 92433 93128 94155 98843 99838 100966 102592 104022 105367 105249 105539 106253 107019 10739595990

(1) Notes to System Assets

149794 Current Replacement Cost 165713 165713165713165713165713159013150243150243150243149793149793149120148447141828141156140367136814119656118488117815116782110522 115776 149794

41587 Less: Accumulated Depreciation 47485 507294917746063443704476843172417014023038758390044028138825373803602934687333753209631046308082978527914 28845 41747

108207 Written Down Current Cost 118228 1149841165361196501213421142451070711085421100131110351107891088391096211044491051271056801034398756087441870078699782608 86931 108047


Values in 2010/11 $'000

2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23

Performance Indicators

DEPARTMENT OF

COMMERCE

709Typical Residential Bills 709 709709709709709709709709709709709709709709709709709709619529415 439 709

694Average Residential Bills (2010/11$) 698 698698697697696696696695695694693693692692691691690689599508380 417 694

119Mgmnt Cost / Assessment (2010/11$) 122 122121120137120122120122134122118135118121119121132121131137124 122 121

499OMA Cost per Assessment (2010/11$) 547 552549540554388518508508515500486502509472470464444458452447388 450 493

35.21Operating Sales Margin (%) 22.69 17.8722.5318.8817.4635.2728.5930.8826.8026.1227.4929.1627.5928.1740.6040.7634.0139.2637.8430.4519.83-0.79 -0.40 35.56

2.54Economic Real Rate of Return (%) 1.45 1.121.461.121.022.181.992.161.741.671.751.861.731.832.992.952.202.972.832.011.12-0.03 -0.02 2.55

0.21Debt Service Ratio 0.25 0.240.240.270.280.290.320.190.210.220.230.260.270.290.280.340.370.170.190.230.290.41 0.38 0.22

0.17Debt/Equity Ratio 0.16 0.140.150.160.170.140.120.140.140.150.160.200.210.170.190.210.210.070.090.110.130.18 0.15 0.18

2.04Interest Cover 1.20 1.071.290.890.771.892.102.141.641.491.501.351.211.522.312.141.7213.5511.207.043.651.80 0.54 1.93

2.57Return on capital (%) 1.48 1.191.511.151.052.212.062.201.781.711.811.881.771.872.972.942.252.982.842.041.180.69 0.27 2.57

5648Cash and Investments (2010/11$'000) 3652 6243521224161339534682417057469932953300287218553016240486057437392385158311965316 1753 4719

16829Debt outstanding (2010/11$'000) 16498 147101560417395182951508212145138571459115330160761836319146158201697718287179126231742387151011313267 11626 17591

11181Net Debt (2010/11$'000) 12846 84671039214979169569736390468009892120351277615491172911280414573174271733824925038713289177951 9873 12872


2023/24


2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32 2032/33 2033/34 2034/352022/23Drawdown

STANDARD LOAN PAYMENT SCHEDULE

DEPARTMENT OF

COMMERCE

2032016/17 Principal 15523 448 535489411376344315289264242221170156143131120110 186

1301 Interest 1056 970101510931128116011891216124012621283133413481361137313851395 1318

292017/18 Principal 2460 65 787159555045413935322523211917 27

209 Interest 173 161167179184189193197200203206214216218220221 211

02018/19 Principal 1 0 00000000000000 0

0 Interest 0 00000000000000 0

492020/21 Principal 5376 109 131119100928477706459544138 45

471 Interest 412 391402421430437444451457462467479483 475

2029/30 Principal 7014 65 7770595449

Interest 615 603609621625631

2030/31 Principal 7224 61 72665551

Interest 639 628634645649

281Total Principal 37598 748 89381568462852743740036733630723621716415013711000000 0 258

1981Total Interest 2895 275328272959301624171826186418971927195620272047157915931606139500000 0 2004


Values in $'000


2010/11 2014/15 2019/20 2024/25 2029/30 2034/35 2039/40

Summary Report of Assumptions and Results

DEPARTMENT OF

COMMERCE

Inflation Rates - General (%) 3.003.003.003.003.003.00 3.00

Inflation Rates - Capital Works (%) 3.003.003.003.003.003.00 3.00

Borrowing Interest Rate (%) 9.009.009.009.009.009.00 9.00

Term of New Loans (years) 303030303030 30

Investment Interest Rate (%) 5.505.505.505.505.505.50 5.50

Growth Rate - Residential (%) 0.490.530.981.200.620.61 0.48

Developer Charges per Assessment -

Residential (2010/11 $)

893589358935893589354163 8935

Subsidised Scheme Capital Works ($m) 0.000.000.000.670.6712.23 0.00

Grants on Acquisition of Assets ($m) 0.000.000.000.000.002.34 0.00

Renewals ($m) 0.370.234.280.231.010.22 0.37

Renewals (%) 0.220.142.860.160.850.20 0.22

Cash and Investments ($m) 6.245.353.303.022.385.32 12.51

Borrowing Outstanding ($m) 14.7115.0816.0815.827.4213.27 10.21

Mgmnt Cost / Assessment 122120122118121124 121

Debt Equity Ratio 0.070.080.110.130.080.18 0.04

OMA Cost Per Assessment 552388500509458388 561

Economic Real Rate of Return (%) 1.122.181.751.832.83-0.03 1.17

Return on Capital (%) 1.192.211.811.872.840.69 1.29

Net Debt ($m) 8.479.7412.7812.805.047.95 0.00

Debt Service Ratio 0.240.290.230.290.190.41 0.20

Average Residential Bills 698696694692689380 700

Typical Residential Bills 709709709709709415 709


Values in 2010/11 $

strategic business plan for sewerage services · 2011-11-15 · page ii summary nambucca shire...

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