HISTORY IN BRIEF:
Up until 2007, all our domestic and industrial wastewater was pumped out to sea.
A wastewater treatment plant was built in 2007 but due to serious design faults, was finally closed in 2012. You can read two excellent reports on Council’s website which explain why an upgrade will not make it work, and how serious mistakes were made by Council and the designers. www.whanganui.govt.nz
The Report from Humphrey Archer of CH2M Beca, an independent and highly respected Wastewater specialist demonstrates why this plant would never have worked. The design did not have precedents, was based on incorrect estimates of sludge-storage volume and aeration disturbed the sludge layer, making it ineffective. More aeration would have made the situation worse. The original designers MWH presented a rectification design to Council but this was examined by Humphrey Archer and found to have significant problems. It was not logical or sensible for Council to pay MWH even more money to fix their flawed design, with no guarantee it would work. To keep spending money trying to rectify a fundamentally flawed design would be throwing good money after bad. If we could resurrect it we would.
The independent review document by Australian Robert Domm explains the decision-making process around the old plant design and shows council staff tried to save money by trying an experimental design and relied on advice that was not robust and ignored concerns raised by the peer reviewers. Councillors were not informed of crucial decisions and were assured the plant would work. All staff involved are no longer working at Council.
Council commenced litigation proceedings against the designers MWH, and an out-of-court settlement has been reached. Unfortunately, MWH would not settle unless details of the final settlement were kept confidential. If we disclose the settlement details we can be sued.
THE NEW DESIGN PROCESS:
Following 4 years of exhaustive enquiry by reputable specialists in wastewater into various treatment plant designs and gathering correct data from industry on their load requirements, a design has been agreed that is tried, tested, works and will mean sludge is dried and turned into pellets for easy and affordable disposal. This has been peer reviewed by two separate well-qualified waste water specialists. This plant is similar to the one in Seaview, Wellington.
Section 10 of The Local Government Act clearly mandates that local government is to meet the current and future needs of communities for good quality infrastructure for households and businesses.
Council’s legal advice confirms that Council must make provision of core wastewater services for trade waste users, unless Council is formally advised by these users that they will irrevocably opt-out of using the municipal scheme.
Whilst Affco has expressed they will not be part of the scheme, when requested to formalise their position by way of a legal agreement stating they were irrevocably opting out of using or seeking to use the new waste water scheme, they declined to sign the document. Our CEO has had extensive meetings with Affco and offered very reasonable terms to manage their treated waste through our outfall, but they still won’t sign. Therefore, Council must proceed on the basis that Affco and its related companies remain in the municipal scheme.
It should be noted that whether you have a signed agreement or not to use the municipal plant, trade waste users can build their own scheme and obtain their own resource consent to treat and discharge their own waste at any time. Council cannot get any guarantees industries won’t do that so is always vulnerable to changing commercial circumstances of our industries.
That new plant will cost circa $41.5m. The contract to build has been let at a guaranteed maximum price and will be constructed and commissioned within the timeframe of the first few months in 2019. The new design will utilise the existing plant site and much of the existing pipework and infrastructure will be used where possible.
Whanganui has a high number of wet industries including Tasman Tanning and Affco. Tasman Tanning has told the Chief Executive that they are in the scheme, however the charges need to be realistic and affordable. The Chief Executive and his officers are working hard on refining costs.
COST TO RATEPAYERS & INDUSTRY:
Ultimately big projects are paid for over a long period of time – much like buying a house on a 20-year mortgage. Therefore Council will borrow the money to build the plant and will repay this over the life of the plant. You’ll be charged a component of interest and capital repayment plus operating costs in your annual rates and industries who put bulk effluent into it will pay an additional trade waste fee.
Interest rates are rapidly falling and the designers are refining their cost modelling for the annual running costs. Remember the plant hasn’t been built yet and it will take two years before its finally commissioned, so reaching actual final costs is not quick, nor easy with such a complex process. As at 5 October 2016 the Chief Executive has confirmed they’re confident the additional Pan Tax cost to each household will be lower than earlier indicated and is likely to be an additional $2.38 per week. He is also confident that with efficiencies in the Council organisation every effort will be made to keep rates to a minimum. It will be up to the Mayor and Councillors to ensure any expenditure is prudent, and that rates increases are kept to a minimum.
For our vital industries, the estimates for their charges is also reducing due to refined financial modelling and lower interest rates and within an affordable range of what they previously paid of $2.25 million to $2.8 million as at 5 October 2016.
Based on these revised figures therefore, this plant is not only affordable, it’s practical.
WHAT ABOUT BUILDING A SMALLER PLANT?
If we build a smaller plant, in breach of section 10 of the Local Government Act, which excludes the Affco group, but could still cater for our other businesses such as Tasman Tanning, it would only save us $3.6 million in capital costs and some annual running costs. BUT:
- It would limit Affco’s flexibility should they find an independent design was unfeasible and this would effectively force them out of town.
- A smaller plant would severely limit our capacity to attract another industry that might locate here therefore we limit our ability to attract new business.
- There is the possibility we can earn revenue through drying sludge from other territorial authorities.
- A smaller plant could actually cost our domestic ratepayers even more in pan tax – another estimated $26pa per home. That’s because of economies of scale.
- One Councillor has suggested we build the smaller plant and make it bigger if Affco finally decide stay in – but that’s just not practical as the cost would be considerably more than $3.6 million. It’s not just about adding another pond, it would mean upscaling many of the big items.
With the larger plant, we provide our community with the most cost effective treatment option and industry with the flexibility to continue their operations and expand.
Therefore whether Affco are in or out, our best and only permissible option is to proceed with the bigger plant.
ALTERNATIVE DESIGNS:
Some people have suggested AFFCO know of a cheaper municipal/industrial plant option to treat all our waste – but they’ve not presented this and we have no belief this actually exists. In fact we are 100% confident it doesn’t. After years of investigation and 4 years of planning, information gathering and design work, do we throw all that away based on an unsubstantiated suggestion? Further investigation into alternative designs would cause significant delays and costs in excess of $1m.
We have already asked Humphrey Archer from CH2M Beca if it was probable there was an alternative plant design that could treat our waste to the same requirements as our Resource Consent and his words were: Its possible there is an alternative design, but the likelihood it is materially cheaper to build or run is low and that difference would be minor, especially in relation to the added cost of a new design.
MINISTRY OF HEALTH:
There has been some reports the Ministry of Health (MoH) aren’t happy with our design. This is totally incorrect. One MoH employee (a former MWH employee) has had private conversations with a businessman in Whanganui which indicates he’s not happy with our design. Not only must we question their motives for this conversation, but also the level of information they each have access to and how this private correspondence is being released to us. The MoH will re-issue their official stance reconfirming their all clear once they’ve double-checked all the current information. We’re totally comfortable with that and if there are any concerns, they will be dealt with to the satisfaction of Council and MoH.
WHATS HAPPENING NOW:
In the meantime, raw sewerage and chemicals have been pumped to sea for over 3 years and it will take at least two more years to build and commission the approved plant. The ramifications of going back to the design board are:
- Fines of $10,000 per day from Horizons once we break our short-term consent expiry date
- The likely potential for a Commissioner to be appointed to run Council
- Significant breach of contract costs to current plant builders
- Initial additional design costs of at least $1m with further millions to follow
- A potential risk of health issues from swimming or eating shell fish
- Loss of use of our beaches
- No realistic expectation that another plant will be cheaper or will actually work.
- Loss of Whanganui’s reputation all over again – heaven help us if we experience a health scare similar to Hawkes Bay.
For some industries, the longer there is no plant in operation, the cheaper their wastewater fees are – they are very very happy to see ongoing delay.
WHY COUNCILLORS VOTED TO BUILD THE PLANT SO CLOSE TO A TRIENNIAL ELECTION:
We have spent 3 years and hundreds of hours and millions of dollars on the design and reports from specialists in their fields. We had looked at every issue from every side and investigated this issue to death. There was nothing else we could consider or look at and there would be nothing gained with more delay except increasing risks as outlined above.
We had actually made the decision in March 2016 and it was publicly consulted on in our Annual Plan. A few Councillors weren’t 100% happy with the decision so we delayed further whilst we got them the answers they wanted and they finally agreed bar one. Some of them have reversed their decisions again. This isn’t an easy decision because of the cost, but decisions are needed and commitments must be made no matter how scary.
A new Council has hundreds of issues to learn about and make decisions on when they get elected, and many of those are about moving Whanganui forward and growing. To leave them this decision would be to delay it for possibly another 6 months and more money spent on specialists so Councillors felt they were getting the “true” facts. Staff would be sidetracked from other important issues with more money wasted and delay on other important projects and issues that affect you. It would have been irresponsible to leave this decision till after the election.
Its time to move on and concentrate on getting this District growing!
This summary has been drafted by Cr Helen Craig from 3 years of professional and independent reports and hundreds of hours of council meetings. If you have any questions, or require clarity, please feel free to ask.
