Agenda of Regional Council - Thursday, 3 September 2020

Council

Membership

Chairperson	Chairman Doug Leeder
Deputy Chairperson	Cr Jane Nees
Members	All Councillors
Quorum	Seven members, consisting of half the number of members
Meeting frequency	Six weekly or as required for Annual Plan, Long Term Plan and other relevant legislative requirements

Purpose

· Enable democratic local decision-making and action by, and on behalf of, Bay of Plenty communities.

· Meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost-effective for households and businesses.

· Set the overarching strategic direction for Bay of Plenty Regional Council as an organisation.

· Hold ultimate responsibility for allocating financial resources across the Council.

Role

· Address Local Electoral Act matters and Local Government Rating Act matters.

· Oversee all matters relating to identifying and contributing to community outcomes.

· Consider and agree on matters relating to significant new activities or areas of involvement such as infrastructure which are not the responsibility of a specific committee.

· Provide regional leadership on key issues that require a collaborative approach between a number of parties.

· Review and decide the Council’s electoral and representation arrangements.

· Consider issues of regional significance which are not the responsibility of any specific standing committee or that are of such regional significance/high public interest that the full Council needs to decide on them.

· Adopt Council’s Policy on Significance and Engagement Policy.

· Develop, adopt and implement the Triennial Agreement, Code of Conduct and Standing Orders.

· Consider and agree on matters relating to elected members’ remuneration.

· Appoint the Chief Executive, and review their contract, performance and remuneration at least annually.

· Approve all delegations to the Chief Executive, including the authority for further delegation to staff.

· Oversee the work of all committees and subcommittees.

· Receive and consider recommendations and matters referred to it by its committees, joint committees, subcommittees and working parties.

· Approve membership to external bodies and organisations, including Council Controlled Organisations.

· Develop, adopt and review policies for, and monitor the performance of, Council Controlled Organisations.

· Monitor and review the achievement of outcomes for the Bay of Plenty Community.

· Review and approve strategic matters relating to the sale, acquisition and development of property for the purposes of meeting Council’s organisational requirements and implement Regional Council policy.

· Address strategic corporate matters including property and accommodation.

· Consider and agree on the process to develop the Long Term Plan, Annual Plan and Annual Report.

· Adopt the Long Term Plan, Annual Plan and budgets variations, and Annual Report.

· Adopt Council policies as required by statute (for example Regional Policy Statement and Regional Land Transport Strategy) to be decided by Council or outside of committee delegations (for example infrastructure policy).

· Develop, review and approve Council’s Financial Strategy and funding and financial policies and frameworks.

· Institute any proceedings in the High Court that are not injunctive proceedings.

· Exercise the powers and duties conferred or imposed on Council by the Public Works Act 1981.

Delegations from Council to committees

· Council has a role to monitor the functioning of all committees.

· Council will consider matters not within the delegation of any one Council committee.

· Council may at any time, revoke or modify a delegation to a Council committee, either permanently, for a specified time or to address a specific matter, if it considers there is good reason to do so.

· The delegations provided to committees may be further delegated to subcommittees unless the power of further delegation is restricted by Council or by statute.

· It is accepted in making these delegations that:

· The committees, in performing their delegated functions, powers or duties, may, without confirmation by the Council, exercise or perform them in a like manner and with the same effect as the Council itself could have exercised or performed them.

· The delegated powers given shall at all times be subject to their current policies and principles or directions, as given by the Council from time to time.

· The chairperson of each committee shall have the authority to exercise their discretion, as to whether or not the delegated authority of the committee be used where, in the opinion of the chairperson, circumstances warrant it.

Powers that cannot be delegated

Under Clause 32 Schedule 7 of the Local Government Act 2002, Council must make the following decisions:

· Make a rate.

· Make a bylaw.

· Borrow money or purchase or dispose of assets, other than in accordance with the long-term plan.

· Adopt the long-term plan, annual plan, or annual report.

· Appoint a chief executive.

· Adopt policies required to be adopted and consulted on under the Local Government Act 2002 in association with the long-term plan or developed for the purpose of the local governance statement.

· Adopt a remuneration and employment policy.

Item No.	Subject of each matter to be considered	Reason for passing this resolution in relation to each matter	Grounds under Section 48(1) for the passing of this resolution	When the item can be released into the public
9.1	Chief Executive's Interim Performance Review - Distributed Seperately	Withholding the information is necessary to protect the privacy of natural persons, including that of deceased natural persons.	48(1)(a)(i) Section 7 (2)(a).	To remain in public excluded.



Report To:	Regional Council
Meeting Date:	3 September 2020
Report Writer:	Mark Townsend, Engineering Manager
Report Authoriser:	Chris Ingle, General Manager, Integrated Catchments
Purpose:	For Council to approve budget changes for projects approved for Crown Infrastructure Partners funding and Council approval for Rivers & Drainage, and Lakes - Procurement Plan 2020/21 Capital Works

Budget Amendments for Crown Infrastructure Projects, Rivers and Drainage, Lakes 2020/21 Capital Works Procurement

Executive Summary

As part of the 2020 Budget, central government announced a package of infrastructure funding supported by the Crown Infrastructure Partners (CIP) to help kick start the country’s recovery post COVID-19.

On 1 July 2020, it was announced that the funding package included $210 million for climate resilience and flood protection projects across New Zealand. Two Council CIP applications which included a total of six infrastructure projects have been approved and awarded 75% Crown contribution. Local share funding of 25% is required. Two of the projects were not provided for in the Annual Plan 2020/21 and therefore new capital expenditure budgets will be required along with financing to cover the local share component.

The new funding proposed by the Crown Infrastructure Partners requires Council approval of new additional capital expenditure budget of $13.0 million and additional capital revenue budget of $23.1 million which results in lower budgeted borrowings of $10.1 million over the life of the projects.

The approval of the Rivers and Drainage and Rotorua Lakes Capital Works Procurement Plan for 2020/21 which includes three of the CIP funded projects, provides for efficiencies in approaching the market, timely award and contract start, provided budget requirements are met (see attached procurement plan).

The Council’s procurement approach is based on good practice guidance for the public sector. The approach seeks approval for the proposed method of procurement before going to the market. A draft procurement plan is provided for Council’s consideration.

Recommendations

That the Regional Council:

1 Receives the report, Budget Amendments for Crown Infrastructure Projects, Rivers and Drainage, Lakes 2020/21 Capital Works Procurement;

2 Agrees to current capital expenditure of $12.3 million in 2020/21 and $2.8 million in 2021/22 and agrees to new Crown Infrastructure Partners funding of $10.3 million which results in lower budgeted borrowings of $10.3 million for the Rangitāiki Floodway Stage 6 and Spillway.

3 Agrees to fund additional capital expenditure of $0.6 million in 2020/21, $1.8 million in future years and agrees to new Crown Infrastructure Partners funding of $2.3 million which results in higher budgeted borrowings of $ 0.1 million for Rangitāiki River Floodwalls Resilience.

4 Agrees current capital expenditure of $1.9 million in 2020/21 and $0.6 million in 2021/22; and agrees to new Crown Infrastructure Partners funding of $1.9 million which results in lower budgeted borrowings of $1.9 million for the Kaituna Mole Upgrade.

5 Agrees to current capital expenditure of $1.0 million in 2020/21 and additional $3.0 million in future years and agrees to new Crown Infrastructure Partners funding of $3 million for Whakatane River Stopbank Raising.

6 Agrees to fund new capital expenditure of $1.6 million in 2020/21, $2.1 million in 2021/22; and agrees to new Crown Infrastructure Partners funding of $2.775 million which results in higher budgeted borrowings of $0.9 million for Ngongotahā Stream Flood Mitigation Works.

7 Agrees to fund new capital expenditure of $4.0 million in 2020/21; and agrees to new Crown Infrastructure Partners funding of $3.0 million which results in higher budgeted borrowings of $1.0 million for Waioeka Estuary restoration and floodway enhancement.

8 Notes the new funding proposed by the Crown Infrastructure Partners will require Council to approve new capital expenditure budget of $13.0 million and additional capital revenue budget of $23.1 million which results in lower budgeted borrowings of $10.1 million over the life of the projects.

9 Approves the attached Procurement Plan for Capital Works 2020/21; and

10 Approves going to market to invite tenders for the capital works projects as set out in the attached Procurement Plan.

11 Delegates to the Chief Executive the authority to award the contracts for each capital project, providing the tender price is within the approved capital project budgets as set out in revised Annual Plan Budgets 2020/21 and Long Term Plan 2018-2028 (see section 3.5);

12 Delegates to the Chief Executive the authority to execute the contracts with the successful tenderers.

1. Introduction

Budget 2020 allocated funding for infrastructure projects to assist New Zealand to rebuild and recover from the effects of COVID-19.

To implement this budget funding, regional councils were invited to submit projects for consideration to the Crown Infrastructure Partners (CIP) for Infrastructure improvements, required to be ‘shovel-ready’ projects. Council was successful in two applications. One of the two is the Rangitāiki Floodway and spillway while the other is a collection of five smaller flood resilience infrastructure projects across the region.

This report provides information on the six Council flood protection projects that have been approved for 75% contribution from this funding package and suggests how the 25% local share contribution requirement might be provided for.

This report also provides for the procurement of Rivers and Drainage and Rotorua Lakes programme of mature capital works. It is noted that some 2020/21 capital works still require significant consultation and design work and are therefore not included in this procurement plan.

It is recommended best practise in New Zealand for organisations to gain approval on their method of procurement before going to the market. The Council’s procurement framework is based on this good practice guidance for the public sector.

It is considered efficient to produce one procurement plan that covers the majority of the Rivers and Drainage and Rotorua Lakes programme of capital works for the coming year. This approach is adopted to support planning for the year ahead and avoid construction delays. The plan allows for approaches to market that provide for Rangitāiki Floodway Project Stage 6, Rangitāiki Floodwalls, Kaituna Mole and the Lake Ōkāreka Pipeline.

The Council has a significant total capital works programme planned for the current financial year 2020/21.

1.1 Alignment with Strategic Framework

Safe and Resilient Communities	We support community safety through flood protection and navigation safety.
A Vibrant Region	We invest appropriately in infrastructure to support sustainable development.

1.1.1 Community Well-beings Assessment

Dominant Well-Beings Affected

þ Environmental

Low - Positive

þ Cultural

Low - Positive

þ Social

High - Positive

þ Economic

High - Positive

This decisions recommended in this paper support the effectual delivery and procurement of capital projects and organisational efficiency

2. CIP Approved Projects - Budget Amendments

Six projects have been approved for CIP funding of 75% of the project value. For two projects this corresponds to a significant decrease in budgeted borrowings, for one project a minor increase in borrowings, for two projects new borrowings and for one project the impact is neutral.

The projects are detailed as follows;

Figure 1 – Crown Infrastructure Partners Funding approved projects
Project	Description	Funding and Timing
Rangitāiki River community resilience and flood protection	Rangitāiki Floodway – Stage 6 and spillway.	Decrease in budgeted borrowings. Total project cost estimate $13.7 million. This year’s Stage 6 works were approved in the Annual Plan 2020/21 and the spillway in 2021/22. CIP funding could contribute approximately $10.3 million, being the corresponding reduction in borrowings. The 25% local share component $3.4 would continue to be loan funded with repayments made by the Rangitāiki-Tarawera Rivers Scheme, starting in 2021/22.
Rangitāiki Floodwalls resilience	Replacement of existing floodwalls on the Rangitāiki River.	Minor increase in budgeted borrowings. Total project cost estimate $3 million. Works are provided for in the Annual Plan 2020/21 ($614,000). CIP funding could contribute approximately $2.25 million. The remaining 25% ($750,000) to be loan funded and repaid by the Rangitāiki-Tarawera Rivers Scheme. The additional local share budget requirement is $136,000. Capital budget of $1.2 million (an additional $600,000) is required in 2020/21 with the remainder allocated across future years.
Kaituna Mole upgrade	Refurbishment of the existing structure and the construction of community amenities.	Decrease in budgeted borrowings. Total project cost estimate $2.5 million. Works are provide for in the Annual Plan 2020/21. CIP funding could contribute approximately $1.86 million being the corresponding reduction in borrowings. The remaining 25% ($625,000) to be 50% funded to general funds and 50% to the Kaituna scheme as per earlier annual plan decisions.
Whakatāne River stopbank raising	Remediate seepage issues and the impacts of climate change by raising floodwalls as needed up to 850 mm.	No borrowings impact. Total project cost estimated at $4 million. Multi stage project. Design works commenced in 2019/20. Next stage provided for in Annual Plan 2020/21 ($1,010,000). The remainder would be allocated across future years. CIP funding could contribute approximately $3 million. Local share of 25% ($1,000,000) would be loan funded to the Whakatāne-Tauranga Rivers Scheme.
Ngongotahā Stream flood mitigation	Implementing the recommendations of the independent Ngongotahā Stream Review: civil works ($2M); upper catchment detention bunds ($700k); and removing at-risk trees ($1M).	New borrowings. Total project cost estimate $3.7 million. This project is not included in Annual Plan 2020/21. CIP funding could contribute up to $2.8 million towards the total project cost. The remaining 25% ($900,000) could be loan funded and recovered via Kaituna river scheme. New capital expenditure required over 2020/21 and 2021/22 of $3.7 million with higher budgeted borrowings of $0.9 million.
Waioeka Estuary restoration and floodway enhancement	Purchase the floodway land. Remove existing stopbanks, carry out earthworks and planting to revert back to estuary and wetland.	New borrowings. Preliminary project cost estimate $4.0 million. This project is not included in Annual Plan 2020/21. CIP funding could contribute approximately $3 million towards the total project cost. The remaining 25% ($1,000,000) could be loan funded.

For the Rangitāiki Floodwall resilience project the level of approved funding by CIP allows for project delivery to be broadened and therefore additional capital budget for the local share proportion is required.

3. Procurement Plan

3.1 Rivers and Drainage Schemes and Rotorua Lakes Activity

This report also seeks approval for the Procurement Plan relating to 2020/21 capital works projects in the Rivers and Drainage Schemes and Rotorua Lakes Activity areas. The plan includes provision for the procurement of 3 of the CIP funded works which are tender ready.

The projects have been grouped in one Procurement Plan (Attachment 1). The procurement plan establishes the method of engagement of suitably qualified and experienced contractors with the skills and resources necessary to carry out planned works. The plan outlines the projects to be covered, external funding sources, the contract type, method of procurement, the tendering process, an evaluation methodology, risks associated with procurement and the roles and responsibilities.

The proposed outcome of the procurement process is to engage the most appropriate contractors to undertake the physical works in keeping with the evaluation method.

The estimated value of the individual construction contracts contained in the procurement plan will exceed the Chief Executive’s delegation of $400,000 and for this reason, staff recommend to Council to sub-delegate to the Chief Executive the authority to approve the award of contract and to execute the contracts with the successful tenderers for each of the projects provided they are within the approved budget for 2020/21 and the Long Term Plan 2018-2028.

4. Considerations

4.1 Risks and Mitigations

Figure 2 – Rivers and Drainage Schemes and Rotorua Lakes Activity Capital Works 2020/21, Procurement Plan Risks and Mitigations
Risk	Mitigation
Tender prices exceed budget	Engineering Estimate Provisions of NZS 3910:2013 Conditions of contract for building and civil engineering construction
Limited capability in the market	Open Tender Evaluation method
Low number of suppliers	Open Tender GETS (Government Electronic Tender Service) used to advertise and manage the tender process
Time constraints to tender	GETS (Government Electronic Tender Service) used to advertise and manage the tender process BOPRC Procurement Team support
Reputation risk	GETS (Government Electronic Tender Service) used to advertise and manage the tender process BOPRC Procurement Team support

4.2 Climate Change

The aim of this section is to ensure your thinking and assumptions around climate change are explicit and to provide visibility as to how our work relates to climate change. Consider:

Use the building block below when considering Climate Change implications.

Crtl + click for guideline material.

The matters addressed in this report are of a procedural nature and there is no need to consider any climate change impacts of these decisions. The projects are designed to adapt our communities to the effects of climate change and engineering design elements all take into account the future impacts of climate change.

4.3 Implications for Māori

Council has responsibilities to Māori under the LGA and the RMA. We are required to meet those responsibilities and identify any potential implications for Māori. Please consider including this section for reports going to all committees. The following questions will aid your analysis:

Crtl + click for Guideline material.

The Council has a responsibility to manage the risks posed by our major rivers including the region’s major flood control schemes. Our Bay of Plenty Iwi have an inherent interest in the long term health and management of our rivers and waterways. The flood mitigation and environmental work encompassed by these projects are fundamentally of interest to Māori as kaitiaki and individual projects require specific engagement and consultation with Iwi partners.

4.4 Community Engagement

What level of engagement is council commited to? What actions will be taken

Consider identifying in the report:

• Council’s knowledge of community views on the subject.

• What aspect of the community is involved.

• How the views of the community were obtained.

• How the views were recorded and reported.

Engagement with the community is not required as the recommended procurement proposal / decision relates to internal Council matters only. The particular projects outlined here require individual and specific community engagement and consultation.

4.5 Financial Implications

If the recommendation is adopted by Council, will it result in:

If the answer is ‘no’ to both questions please select the dropdown option 1 and complete appropriately.

If the answer is ‘yes’ to either question please select “Budget Implications” in the building block below and liaise with your Management Accountant in order to complete the Financial Impact table.

Procurement Plan - There are no material unbudgeted financial implications for the works associated with the Ōkareka Pipeline Project as this work is being undertaken within the current budget for the Rotorua Lakes Activity in Year 3 of the Long Term Plan 2018-2028 and is not a CIP funded project.

Figure 3 - Budget for the capital works recommended for procurement in 2020/21
Capital Item	Estimated Procurement Cost
Rangitāiki Floodway Stage 6a (left Bank- McLean Road to Stage 1); Rangitāiki Floodway Stage 6b (left bank- By de Ley and Fonterra); Rangitāiki Floodway Stage 6c (right bank – SH2 to McLean Road);	$10,900,000
Rangitāiki Floodwalls	$1,200,000 ($614,00 in 2020/21 AP and $600,000 approved as part of this report)
Kaituna Mole	$1,900,000
Lake Okareka Pipeline	$692,000

4.6 Financial Implications – CIP Funding

Overall the new funding proposed by the Crown Infrastructure Partners will require Council to approve new capital expenditure budget of $13.0 million and additional capital revenue budget of $23.1 million which results in lower budgeted borrowings of $10.1 million over the life of the projects.

The financial implications of the total funding package is detailed below. The financial implications for each of the 6 individual projects are provided as Attachment 2.

5. Next Steps

Next Steps: What next? What resources are needed? Further analysis? Timeframes ahead. Any consultation planned. Remind Council of the process ahead. Next update to Council?

Conclusion: Short concluding remarks. Referring back to recommendations. No new content.

Discussions are underway with Provincial Development Unit staff on the CIP funding contract agreements. These include defined funding and delivery time frames and reporting requirements, as well as expected FTE benefits.

The approval of the attached Procurement Plan will allow for efficiencies in approaching the market, timely award and contract start, provided budget requirements are met. The tender process for the Greig Road floodwall is complete and the award is being finalised. Rangitāiki Floodway Stage 6a tender closed on 28 August and tender evaluation is underway.

Remaining procurement will be invited and awarded in keeping with the attached procurement plan. Remaining CIP projects will progress through design and consultation before any procurement process is implemented.

Capital works progress will be reported regularly through the Monitoring and Operations Committee.

Attachments

Attachment 1 - Procurement Plan for 2020-21 Capital Works (R&D and Lakes) ⇩

Attachment 2 - CIP Approved Projects Financial Implications ⇩