Agenda of Community Plan Committee

COMMUNITY PLAN COMMITTEE (Committee of Council as a whole)
Membership:	13
Quorum:	Half of the members
Meeting Cycle:	Meets as required during LTP and Annual Plan processes
Reports to:	Council

11 20 February 2018

Community Plan Committee

01 February 2018

File: (18/93)

Report no: CPC2018/1/45

Draft Budget 2018/2019

Purpose of Report

1. This report provides a draft budget summary for the Committee’s consideration and adoption.

Recommendations

The Committee recommends that Council:

(i) adopts the draft summary budget and capital project plan attached as appendices 1 and 2;

(ii) agrees to increase rates by an average of 1.5% in 2018/19; and

(iii) considers the additional items not currently included in the draft budget.

Background

2. The Local Government Act 2002 (LGA) requires the Council to prepare a new Long Term Plan (LTP) every three years. The current 2015-2025 LTP was approved in June 2015 so a new LTP for the 10 year period 2018-2028 is required to be approved by Council prior to 30 June 2018.

3. The LGA also requires Council to prepare an Annual Plan in between updates to the LTP. The current 2017/18 Annual Plan was approved by Council in June 2017.

4. The Activity Statements, Funding Impact Statements, and the various Operating and Capital Projects lists attached as appendices to this report, have been prepared to align with the revised list of activities that Officers recommend Council will report against from 1 July 2018 and to which the draft 2018-2028 LTP is structured.

5. The long term financial model has been updated and as in previous years, a spreadsheet will be displayed at the meeting showing the impact on rates and debt of any changes to the draft 2018-2028 LTP proposed by the Committee.

Discussion

Financial Strategy

6. Changes to Councils Financial Strategy were considered by the public via the 2017/18 Annual Plan consultation process, and were subsequently adopted by Council in June 2017.

7. The Financial Strategy places limits on future rates increases and the level of Net Debt. The current limits are;

· Rates revenue - any increase is limited to the Local Government Cost Index (LGCI), and a further 1% to allow for growth in the rates base.

· Limits on Borrowing – For planning purposes, Net Debt must be below 150% of Total Revenue in years 1-3 of the plan, below 130% in years 4-6, below 110% in years 7-9, and below 90% in year 10 and beyond. In addition, Net Interest is to be below 10% of Total Revenue. Further, the Financial Strategy will allow for Net Debt to increase to 170% of Total Revenue should the need arise following a significant natural disaster.

8. It is recommended that no changes be made to the current Financial Strategy.

Proposed Rates Increase

9. The Financial Strategy states that average general rates will increase by no more than LGCI.

10. The draft budget assumes an average rates increase of 1.5% in 2018/19. This is based on actual LGCI of 1.5% for the year ending 30 June 2017 - the most recent actual measure of LGCI.

11. By comparison, CPI for the 12 months ending 31 December 2017 was 1.6%.

12. The average rates increase of 1.5% is marginally more than the 1.4% increase included for 2018/19 in the 2017/18 Annual Plan approved in June 2017. However the LGCI rates forecast by BERL for 2019/20 through to 2027/28 are lower than the forecasted rates for these years that were assumed and included in the 2017/18 Annual Plan.

13. In addition to the increase in general rates from existing properties, the draft budget assumes that rates revenue will increase by a further 1% per annum as a result of new builds and property investment. This will increase the rates revenue earned without impacting on existing ratepayers. This 1% growth target is currently on track to being achieved. The actual percentage will be reviewed and adjusted if necessary immediately prior to the final 2018/19 budget being approved in June 2018.

Draft Budget

14. Overall the draft budget, attached as appendices 1 and 2, remains within the limits contained in the current Financial Strategy. However the draft budget does contain several changes over the 10 year period of the plan, to the budgets in the current Annual Plan.

15. Complete schedules for the significant operating and capital changes are attached as appendices 6 and 7. The major changes are described in the following sections.

Operating Budget Changes

16. LGCI Rate Forecasts

Council uses LGCI forecasts to adjust future year revenue and cost forecasts to provide for cost and price inflation. As mentioned above, the LGCI rates forecast by BERL for 2019/20 through to 2027/28 are lower than the forecasted rates for these years that were assumed and included in the 2017/18 Annual Plan. The lower forecasted rates will result in $20.7 million less revenue ($14 million in rates), over the 10 year LTP period, partially offset by $14.7 million in lower operating and capital costs. The LGCI forecasts are updated each year meaning future Annual and Long Term Plans could be impacted positively or negatively depending on the movement in LGCI forecasts.

17. Employee Costs

The 2017/18 Annual Plan assumed a 1.4% increase in base employee costs for 2018/19. Council’s remuneration advisors forecast an expected overall median increase of 2% for all employee categories which equates to an additional $200,000 per annum budget requirement to be competitive and maintain relativity in the market.

Last year Council resolved to support the Living Wage in principle and instructed the Chief Executive to implement it where possible without breaching the Local Government Act, particularly as relates to the purpose of local government and delivering services in the most cost-effective manner. A review was conducted in recent months and this is resulting in remuneration increases for many of Council’s lower paid staff, albeit not fully to the level of the Living Wage in most cases. These increases will be processed early in 2018 and backdated to 1 January 2018. The rationale for the remuneration increases included things like attraction and retention of appropriately skilled staff, staff morale, and employees who have been in their role for several years without progressing to salary range midpoints as quickly as seems fair.

A provision of $150,000 was included in the 2017/18 budget to provide for anticipated remuneration increases for Council’s lowest paid employees for a six month period. This aligns fairly closely with the extra costs that have subsequently arisen from the review described above. An additional $150,000 per annum has been included in the draft budget from 2018/19 being the full year impact of these remuneration adjustments.

The new coalition Government has advised it is committed to substantially increase the minimum wage, with the minimum wage intended to rise to $20 per hour by April 2021. To provide for the anticipated rise, the draft budget includes an additional $150,000 provision per annum from 2019/20 ($450,000 per annum in total), and a further $150,000 provision per annum from 2020/21 ($600,000 per annum in total), to ensure employees are paid at least the minimum wage.

Council may have the option of accelerating these increases to the level of the Living Wage if government changes the purpose of local government, as they have indicated. However, there is currently no budget provision for this.

18. Additional Resources

In 2017, an organisational review highlighted the need for additional resources in some critical areas to support the changing nature of how Council services are delivered to the community and how the community and Council engage with each other.

As a result of the review, additional resources were allocated to several divisions such as environmental consents and information services. This has led to an increase in the budget for employee expenditure. However, the extra cost of these changes will be mostly offset by additional revenue generation, closure of the i-Site, and savings in areas such as general management and consultancy expenditure.

19. Fraser Park Sportsville Naming Rights & Sponsorship Funding

The Hutt City Community Facilities Trust (CFT) was required to fundraise $3.5 million towards the $13.1 million cost of the Fraser Park Sportsville sports and community facility it is currently building. As part of the fundraising requirement, the CFT has secured various sponsorships. Several sponsorships, including naming rights, are multi-year with the pledged sponsorship amounts being paid annually by the sponsors over the period of their sponsorship.

While this sponsorship income will be received in future years, the CFT needs these funds in early 2018/19 to pay construction and fit-out costs. Officers have included in the draft budget, an operating grant of $950,000 to be paid to the CFT in 2018/19 for the value of pledged sponsorships, which will be repaid by the CFT to Council over the period of the underlying sponsorships when the pledged annual sponsor payments are received.

20. Software Licences

Annual software maintenance licenses will increase by $75,000 per annum in 2018/19 due to software licences acquired in the last year, (recruitment, rates modelling), and pending software licence purchases (events centre management, live streaming council meetings).

A further $230,000 per annum from 2019/20 has been included in the draft budget being the estimated annual software licence requirements of moving Council’s core IT applications to the cloud. Officers are preparing a report on the later to be considered by Council in May, prior to approval of the final budget in June 2018.

21. Urban Growth Strategy

A total of $2.95 million has been brought forward by one year from existing Urban Growth Strategy budgets for three water infrastructure projects in Wainuiomata to accommodate increasing housing supply. This is to align with the projected growth over the next 2 years.

22. Stokes Valley Community Hub – additional staff

$95,000 per annum has been included in the draft budget from 2018/19 for additional resources for the Koraunui Stokes Valley Community Hub to cater for greater than expected usage and to maintain the (extended) hours of operation.

23. Hutt Valley Emergency Response Team

A $150,000 operating grant provision has been included in 2018/19 as a possible Council contribution towards the cost of building a permanent storage and training facility and possible back-up emergency command centre at the Hutt Valley Emergency Response Teams new location next to the Dowse Drive interchange on SH1.

24. WREMO Funding

Emergency events in 2016 led to a major increase in focus on civil defence, emergency management (CDEM), and resilience. This has occurred at national, regional and local levels. A lot has been invested in identifying and implementing improvements to safeguard our communities. More change is yet to come as the government’s Technical Advisory Group recommendations are considered over coming months.

Our own Wellington Region Emergency Management Office (WREMO), has been a success and independent reports by the Ministry of CDEM demonstrated substantial improvements in our region’s capabilities since its establishment some six years ago. Nevertheless, our CDEM Group (the Joint Committee), initiated a review of WREMO during 2017. This recognised that despite the progress, there were opportunities to do better and the environment had changed significantly over the last few years.

The review has now been completed and a series of recommended actions proposed after consideration by the region’s chief executives. These will be reported through the Joint Committee and individual councils in the near future. Some of the actions come at a financial cost as WREMO expands its capabilities particularly in terms of:

• Recovery planning

• Community engagement

• Communications

• Training

If these changes are approved the additional contribution required from Hutt City Council would be approximately $59,000 (11%).

25. A complete list of operational projects that have been included in the draft 2017/18 budget is attached as appendix 5 and a list of all of the operational project budget changes from the 2017/18 Annual Plan is attached as appendix 6.

Capital Budget Changes

26. Shared Paths

In November 2017, Council formally approved an additional $9.3 million of capital expenditure for Urban Cycleways/Active Transport. Of this amount $4.7 million is subsidised by Government (NZTA). The net cost to HCC is $4.6 million. These amounts are included in the Draft LTP. The Urban Cycle Fund has approved Council to spend the Government allocation to our three cycleway projects, on the Wainuiomata Hill project by 30 June 2018. This was to ensure Council gained the full benefit of the fund and on the basis Council plans to deliver all three projects over an extended timeframe.

At the same November 2017 meeting, Council also requested further information on options to complete the southern section of the Beltway. While information has been gathered regarding this, Officers would like more time to complete further analysis, including looking at the future opportunities for the on-going development of a connected network. The only essential decision re Cycleways, over and above what is already approved, is the commitment of further feasibility work (consultancy) on an extended network. Officers have estimated $100k is required for this and have included this in the draft plan accordingly.

27. IT Cloud

Capital Expenditure has increased by $1.4 million in 2018/19 due to a proposed change to move the Councils core IT applications to the Cloud. The move to the cloud will increase system resilience through cloud managed backup and replication and enable efficiencies for officers though the ability to access and use information anytime anywhere. Officers are preparing a report on the later to be considered by Council in May, prior to approval of the final budget in June 2018.

28. Petone Sportsville and Gym Sports

In 2017 Council approved a budget provision of $7.2 million in its long term plan for Petone Sportsville. This was approved as contribution to a Sport and Community Hub on North Park and remained subject to key council conditions being met, including a business case. Following the withdrawal of Petone Rugby and Bowls clubs, the on-going operational business case for a development of the proposed scale didn’t stack up. An alternative (Plan B) has since been worked on and agreed by Petone Sportsville and other key stakeholders including Petone Rugby and Bowls and Fraser Park Sportsville.

Plan B (concept only) is for a development of a significantly smaller community facility on the Petone Recreation Ground to replace the existing Cricket Clubrooms, and the development of a regional gym sports facility at Fraser Park. Officers have reduced the $7.2 million budget provision to $3m. Both proposals will require business cases to be approved through the relevant council committee process before any funding is actually committed.

29. Landfill Building

$250,000 has been included in 2018/19 to upgrade the standard of accommodation for the working staff at the landfill. The upgrade includes major renovations to locker room and toilet/bathroom facilities; improvements to kitchen/staff break areas, plumbing and wiring, fire and security; replacement of various broken or substandard fittings, and painting.

30. Huia Pool Moveable Floor

An additional $300,000 has been included in 20120/21 as more up to date estimates for the scheduled replacement of Huia Pools moveable floor have been received. The required budget for this project is now $1 million.

31. Wastewater : Silverstream to Taita connection

This capital project is to provide a new pumped wastewater connection from Silverstream to Taita as contingency against loss of the Silverstream River crossing or the Western Hills main sewer. In the period 2018/19 to 2025/26, there is $54 million of other Trunk Wastewater projects budgeted for. The Silverstream to Taita project is deemed to be of lesser priority and can be deferred.

32. Naenae and Wainuiomata Community Hubs

Councillors have also asked if the $8.0 million of funding currently provided for the Naenae Community Hub in 2019/20 ($250,000) and 2020/21 ($7.75 million), can be brought forward. This can be done while remaining within the borrowing (net debt) limits of the Financial Strategy.

Should Council agree, Officers can begin high-level community consultation during 2018/19 regarding a community hub for Wainuiomata. This doesn't require budget and would be focused on community needs and aspirations before thinking about bricks and mortar.

33. A complete list of capital items that have been included in the draft 2017/18 capital budget is attached as appendix 6 and a list of all of the capital budget changes from the 2017/18 Annual Plan is attached as appendix 7.

Asset Revaluations

34. Council is required to revalue each asset class every three years or when it is suspected there has been a material change in value of the assets held by Council. Councils infrastructure assets include; roads, bridges & footpaths; stormwater, wastewater & water supply pipes and processing facilities; and buildings, community & recreational facilities.

35. Councils infrastructure assets, last revalued in 2014/15, are currently being revalued. The effects of the revaluation are not yet known but will be incorporated into the final budget. As such, the revaluation assumptions contained in the 2015-2025 LTP for the current revaluation are included in the draft budget.

36. While the immediate impacts of asset revaluations are non-cash, depreciation forecasts could be impacted from changes in asset values and/or their estimated remaining useful lives, resulting in changes to the amount of funding required to replace the assets at the end of their useful lives.

Net Debt

37. The draft budget ensures that the net debt forecast remains within the Financial Strategy limits. Appendix 8 contains a graph showing the debt forecast relative to the Financial Strategy limits.

Projects not included in Draft Budget

38. Science and Technology

Council has focused on the Science, Technology, Engineering, Mathematics and Manufacturing (STEMM) sectors since 2015 following a Council led business delegation to Tempe, Arizona where it was identified that a similar focus has been instrumental in transforming their economy.

Funding allocations for some of the STEMM initiatives and staff resources will end at the 30 June 2018. The Community Plan Committee will consider a separate report on continuing STEMM funding for three more years. Officers are requesting $100,000 per annum for three years to build on the success of STEMM initiatives to date and to continue to engage with education, industry and research organization in the city to grow the STEMM sector, plus $160,000 per annum for three years to build the “Technology Valley” brand for Lower Hutt.

39. Funding for STEMM, including Technology Valley, can be accommodated in the draft budget within the limits of the Financial Strategy. Councillors may however prefer inclusion in the draft budget of other projects.

40. Officers are aware of other items that have not been included in the draft budget. Officers do not consider these to be urgent at this point in time and/or further information is required before they can be considered for inclusion. Reports for non-included items will in time go before the appropriate Council committee to be considered for inclusion or not by Council in future Annual / Long Term Plans.

Consultation

41. Consultation is a statutory requirement of the LTP process and has been included in the planning timetable.

42. As well as consulting on the which projects to include in the budget the following policies will also be consulted on;

· Revenue and Financing Policy

· Infrastructure Strategy

43. The Financial Strategy will not be consulted on this year as it was extensively reviewed only last year and the changes consulted on during the 2017/18 Annual Plan process. It is recommended that no changes be made to the current Financial Strategy. Some of the narrative and the graphs in the Financial Strategy will be updated but these will not need to be consulted on. However the marked up changes will be available to be reviewed on the Council website and the consultation document will include a sentence to this effect.

44. Similarly, the Significance and Engagement Policy is not being consulted on this year, but will be available to the public on the Council website along with several other relevant LTP documents. While not being consulted on, the community can and will be invited to provide comments on the policy. The policy was reviewed and adopted by Council in December 2017. There were no major changes to the policy.

Legal Considerations

45. The Local Government Act states in section 10 that the purpose of local government, among other things, is to 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. Good-quality is defined as infrastructure, services and performance that are efficient, and effective, and appropriate to present and anticipated future circumstances.

46. The draft 2018-2028 LTP budget takes cognisance of this purpose statement.

Financial Considerations

47. Financial considerations are contained in the body of this report.

48. Carry-overs of current year budgets into 2018/19 have not been considered at this stage. These will be reviewed and considered by the Community Plan Committee and Council during the final 2018-2028 LTP budget approval process in June 2018.

Other Considerations

49. In making this recommendation, officers have given careful consideration to the purpose of local government in section 10 of the Local Government Act 2002. Officers believe that this recommendation falls within the purpose of the local government in that producing a draft budget and Long Term Plan provides the opportunity for members of the public to comment on the manner in which Council proposes to meet the current and future needs of the community.

Appendices

No.	Title	Page
1 ⇩	2018 LTP - Financial Statements as at 14Feb2018	21
2 ⇩	2018 LTP - CAPEX List (uninflated) as at 14Feb2018	27
3 ⇩	2018 LTP - Activity Statements as at 14Feb2018	33
4 ⇩	2018 LTP - Funding Impact Statements as at 14Feb2018	47
5 ⇩	2018 LTP - Operating Projects List (uninflated) as at 14Feb2018	57
6 ⇩	2018 LTP - Operating Project Differences (uninflated) to 2017 Annual Plan as at 14Feb2018	60
7 ⇩	2018 LTP - CAPEX Differences (uninflated) to 2017 Annual Plan as at 14Feb2018	62
8 ⇩	2018 LTP - Debt Forcast Graph as at 14Feb2018	65

Author: Brent Kibblewhite

GM Corporate Services and Chief Financial Officer

Approved By: Tony Stallinger

Chief Executive

Attachment 2

Draft Infrastructure Strategy 2018-48 (for CPC 20 Feb)

DRAFT

INFRASTRUCTURE STRATEGY 2018-2048

Contents

Foreword. 3

1. Context. 4

Introduction. 4

Infrastructure Vision and Principles. 5

Infrastructure Goals. 6

This Strategy. 8

About Hutt City. 10

Hutt City Infrastructure Networks. 12

Key Infrastructure Networks. 14

2. Significant infrastructure issues and opportunities. 17

1. Natural hazards and the effects of climate change. 17

2. Growth and Demand variations. 25

3. Technological advancements. 30

3. Management practices. 33

Levels of service. 33

Sustainability and Public Health. 33

Spatial planning. 36

Communication and engagement. 37

Risk Management. 37

4. Implementing the Strategy. 38

Significant projects incorporated into the existing plans. 38

Significant Decisions about Capital Expenditure Hutt City Expects to Make. 39

5. Projections and Assumptions. 41

Indicative Estimates of Expenditure. 41

Assumptions. 42

Appendix 1: Local Government Act Requirements. 45

Foreword

I am pleased to present Hutt City Council’s ‘Infrastructure Strategy 2018-2048’.

Infrastructure underpins the quality of life we value. It helps to support a safe, healthy, liveable and vibrant city for all. Essential services that are often taken for granted such as drinking water, wastewater, stormwater, flood protection, roads and footpaths ensure that the daily lives of our residents, visitors, businesses and communities are supported and protected, and provide the foundation for a multitude of activities to occur – from housing to manufacturing, recreation to public transport.

The future presents both challenges and opportunities. This ‘Infrastructure Strategy’ takes into account three key issues: natural hazards and the effects of climate change, demand variations as our population grows and changes, and technological advancements.

Strengthening at risk infrastructure to mitigate the impact of natural hazards is crucial. Ensuring robust emergency preparedness and continual monitoring of our infrastructure is central to responding to the challenges we face from natural hazards and climate change.

As our population grows and ages, our infrastructure will need to meet different community needs, desires and preferences. It needs to be adaptable and flexible to take into account this changing demand and it needs to be developed with the future in mind, to make the most of the opportunities presented as technology advances.

By properly managing and maintaining our infrastructure we will ensure it reflects the needs of the community now and into the future. This strategy plots a pathway for achieving this outcome.

Ray Wallace Mayor – Lower Hutt, June 2018

Infrastructure underpins the quality of life we value.
It helps to support a safe, healthy, liveable and vibrant city for all.

1. Context

Introduction

Infrastructure plays a crucial role in people’s lives and provides an important base for many of the activities we pursue. Infrastructure provides the foundation for our economy to prosper, our people to be healthy and our city to be safe. Due to the physical size, long life and financial cost, infrastructure plays a leading role in how our city looks, functions and operates. This Infrastructure Strategy presents an excellent opportunity for Council to assess where it has excelled and where improvements can be made, how it wishes to develop moving forward and what it wishes to prioritise.

A key theme of this ‘Infrastructure Strategy’ is to identify significant infrastructure challenges and opportunities for Lower Hutt over the next 30 years. The principal options for managing or responding to these challenges and opportunities are explained in the significant infrastructure issues and opportunities section. Decisions made in regard to the most likely option for responding to these issues are reflected in budgets incorporated into the ‘2018-28 Long Term Plan’ (LTP).

The capital investment needed for infrastructure assets often requires substantial expenditure when they need replacing or require significant maintenance. However, the long life of most infrastructures means that significant peaks in expenditure are typically followed by long periods where relatively low expenditure is required. This Strategy reflects on what has already been done and considers the best way to move forward to ensure efficient and effective management of these assets to achieve the recognised goals, given the community’s values and principles

At a national level while there is broadly a good infrastructure base despite historic underinvestment, there are significant future challenges, particularly pertaining to ageing infrastructure networks that will require renewing^{^[1]}. However, for Hutt City the situation is less pressing – our core infrastructure has been well managed and we therefore do not anticipate the occurrence of significant unplanned investment over the next thirty years.

Infrastructure Vision and Principles

Council has an important stewardship role for city infrastructure over the long term. The infrastructure vision incorporated within this strategy is:

“Infrastructure that meets the needs of today and tomorrow.”

The underpinning principles for guiding the strategic management of infrastructure are to:

• Protect people, property and the environment.

• Ensure infrastructure is resilient in the long-term and adaptable to changing circumstances.

• Maintain an overarching community understanding and awareness of infrastructure services and issues facing them.

• Ensure robust information underpins long-term infrastructure decisions.

• Maintain strong collaboration with stakeholders and partners.

• Ensure infrastructure complies with all appropriate regulations and standards.

This Infrastructure Strategy covers a period of thirty years; it is likely that during this time substantial changes in the operating environment will occur. The impacts of climate change, the effects of which are predicted to worsen with time, present as a significant issue. Due to these effects Council will need to prioritise ensuring the resiliency of infrastructure, and where possible pursue sustainability focused options. Changes in the overall population size and the demography of the residents living in Hutt City may affect demand and service delivery. Technology in particular is an area that is likely to experience radical change over the next thirty years, some of this change will be anticipated and some will not. Technology and particularly technological innovations are likely to have an increasingly significant effect on infrastructure. While robust predictions can be made for much of the short to medium term factors and expected impacts, this inherently becomes increasingly uncertain over time, therefore infrastructure decisions need to be flexible to changing circumstances and ensure that they are robust over a range of possible future scenarios.

Infrastructure Goals

Building on the infrastructure vision, Council has developed the following long-term goals in order to realise the vision of this strategy:

• To ensure infrastructure supports the growth of our safe, healthy, liveable and vibrant city.

• To increase the resilience, sustainability and long term adaptability of the infrastructure.

• To improve the design, development and management of infrastructure to serve the community needs, desires and aspirations.

• To upgrade the infrastructure to reinforce the growth of our strong, diverse and innovative economy.

• To strengthen the reliability, efficiency and effectiveness of the infrastructure networks.

The goals are explored in the following table.

Goals

What does success look like?

To ensure infrastructure supports the growth of our safe, healthy, liveable and vibrant city.

Infrastructure plays a significant role in accommodating the growth of the city while making the city attractive and vibrant.

Core infrastructure is in place to protect people, property and the environment from natural hazards, public health and other risks.

Appropriate infrastructure is developed and managed to protect and improve the health of members of our community by effectively providing essential services such as reliable quality water supply which meets New Zealand drinking water standards, wastewater and stormwater treatment that prevents exposure to untreated water and safe multimodal transport facilities that encourage health enhancing modes of transportation.

Infrastructure improves our quality of life by ensuring that the city is accessible and connected through an extended multi-modal transport network and by ensuring the effectiveness of waste and storm water networks.

Goals	What does success look like?
To increase the resilience, sustainability and long term adaptability of the infrastructure.	Core infrastructure networks are able to withstand social, economic, and environmental shocks. The infrastructure is improved to meet sustainability standards and have minimal negative impacts on the environment, following the recommendations and guidelines provided in the Environmental Sustainability Strategy. The management of the infrastructure strives to create a positive environmental impact wherever possible. Infrastructure solutions promote environmentally sustainable practices such as minimising water wastage through both regular maintenance and demand management, and actively supporting and encouraging alternative means of travel to private vehicle such as walking or cycling. Long term adaptability requires a future focused approach to planning coupled with flexibility to changing circumstances or context. Technological advancements, such as the use of hydraulic models to enhance the understanding of the performance of the three water networks, are considered for potential improvement opportunities they offer.
To improve the design, development and management of infrastructure to serve the community needs, desires and aspirations.	The design and management of infrastructure aligns with the values of the community in which it is situated. Sound management of these assets is ensured and supported through comprehensive activity/asset management plans which follow best practice guidelines.
To upgrade the infrastructure to reinforce the growth of our strong, diverse and innovative economy.	Infrastructure is improved and upgraded to meet the demands of various industrial and commercial businesses, in particular in fast-growing high-tech areas, and supports them to achieve economic growth.
To strengthen the reliability, efficiency and effectiveness of the infrastructure networks.	Fit for purpose transport infrastructure ensures that people are able to travel to their destinations as efficiently as possible and minimises the delays created through poor design or failure of the assets. Reliable, efficient and effective water networks and management systems are developed so residents and businesses are provided with clean and safe water supply, with minimal service disruptions. Limited overflows of wastewater are assured and adequate stormwater network capacity is in place to respond to increased rainfall events effectively and prevent flood related damage.

This Strategy

Our long-term approach is to ensure that our infrastructure is maintained to perform at a high standard, to ensure we are meeting all our legislative requirements and the needs and the expectations of our community, now and into the future. This Strategy takes a ‘multi-asset’ approach – looking across different types of infrastructure, rather than within a single category – to ensure that Hutt City is managing and building the right long-term infrastructure in the right place, at the right price.

The purpose of this strategy is to inform decision making regarding building and management of infrastructure in the most efficient and effective way possible taking into account the timing, costing and placement of these investment decisions.

This is particularly important given the growth planned in the Council’s Urban Growth Strategy. This Infrastructure Strategy aims to achieve this purpose by providing a strategic view of the Council’s infrastructure enabling and informing long term asset management planning. This is achieved through setting vision, principles and goals, and maintaining consistency across asset groups while being transparent and accountable. This Strategy also provides an assessment of a range of infrastructure issues and opportunities and the principal and alternative options Council will consider to address these issues, including:

· Natural hazards and the effects of climate change

· Changing demand for services stemming from population growth, an ageing population and shifts in preferences

· Technological advancements

· Sustainability and public health, and

· Management practices

The direction provided through this Strategy – alongside other key Council strategies – will have significant implications for the city’s future and affect decision-making within Council and across the city. The following strategies and plans may be impacted by this strategy:

· Long Term Plans and Annual Plans.

· Asset and activity management plans

· Financial Strategy, and

· District Plan

This Strategy has been designed to be useful to a wide range of interested parties and is enhanced by our commitment to work closely and collaboratively with appropriate organisations and stakeholders. Operational issues related to each category of infrastructure are addressed in the Council Activity Management Plans or Service Plans – collectively called Asset Management Plans (AMPs).

Scope of this Strategy

This Strategy includes all of the mandatory categories required under the Local Government Act (LGA):

· Water supply, · Wastewater (sewage treatment and disposal), · Stormwater drainage and flood protection, · Roads and footpaths

Infrastructure networks in Hutt City are not isolated from activity occurring at a regional and national level, and some of our infrastructure is shared or co-managed with other councils in the region, in particular with Wellington Water and New Zealand Transport Agency (NZTA). Hutt City Council works in collaboration with these organisations to ensure consistency, efficiency and effectiveness in our respective work. Council has elected to only include the mandatory categories of infrastructure in this Strategy. Council has plans and policies in place to ensure other assets owned or managed by Council are properly managed.

Categories of infrastructure that are not included within this Strategy include:

· Council owned/managed: Parks and gardens, playgrounds, swimming pools, community facilities such as libraries, halls and integrated hubs, and assets and properties owned by Council-controlled organisations other than Wellington Water Ltd.

· Regionally owned/managed: ‘Bulk’ water supply infrastructure, flood protection, public transport, coastal management, emergency management services.

· Government owned/managed: Rail corridors, state highways and bridges, schools, hospitals, conservation land, social services and emergency services.

· Privately owned/managed: Utilities – electricity, gas and telecommunications.

About Hutt City

Geography

Hutt City encompasses a total area of 38,000 hectares, stretching from Haywards Hill and Stokes Valley in the north to Turakirae Head in the south. It is bounded to the west by Belmont Regional Park and to the east by the Rimutaka Forest Park.

The Hutt River (Te Awa Kairangi) is a defining element of the city, rising in the southern Tararua Range it flows south-west along the Wellington Fault until it reaches Lower Hutt, where it turns south to Wellington Harbour. The river’s headwaters are a major catchment for the region’s water supply. Tributaries to the Hutt River within Lower Hutt include Stokes Valley Stream and Awamutu Stream. Other important rivers and streams in the district include the Wainuiomata River, Korokoro Stream, Waiwhetu Stream, and the Orongorongo River.

Hutt City’s coastline stretches around Wellington Harbour from Petone Beach to Pencarrow Head, and continues outside the harbour to Baring Head and on past Turakirae Head to Windy Point (south of Mt Mathews). The Wellington Fault runs through the city and numerous other faults are also present in the area and across the wider region.

Population

The city’s population started a new growth trend with the introduction of Council’s Urban Growth Strategy (2012-2032). The estimated population is increased by 3,500 people since 2013. This is a 3.5% growth in four years, while the population has been largely static since the early 1980s. For instance, the national census statistics shows that the city’s growth was limited to 0.5% during the seven years from 2006 to 2013.

The 2013 population was estimated at 101,200 people, and Statistics New Zealand projections indicate that this population will increase over the next 30 years. The Urban Growth Strategy sets a target population of at least 110,000 people living in the city by 2032 and Council has done every required step to achieve this target. This growth, however, is expected to slow down after this period mainly due to limitations in the availability of greenfields and areas appropriate for intensification.

In addition to the expected change in the population of Lower Hutt, the demographic makeup up of the city is also changing, particularly in response to the national trends of an ageing population. These changes could impact infrastructure through both the effect on demand and funding. Furthermore, Lower Hutt has a diverse community with relatively high levels of inequality and areas of deprivation compared to the Wellington Region – particularly in the north-east of the city. Increasing ethnic diversity is anticipated with a continuing increase in the proportion of Māori, Asian and Pacific populations. Whilst the population overall continues to age, both Māori and Pacific populations will retain a considerably younger profile.

Settlement and city development

Within months of the first European immigrants settling at Petone in 1840 it was flooded by the Hutt River. Ongoing flooding, together with the 1855 earthquake and tsunami prompted many early settlers to shift to Wellington. To manage the risk of flooding, stop-banks were developed on both banks of the Hutt River, extending through the city.

The Lower Hutt area was mainly developed for agriculture and horticulture until the 1920s, when the New Zealand Government bought large tracts of land for housing. In the mid-1940s state housing for 20,000 people was built in the north-eastern suburbs of the city (Epuni, Naenae, Taitā), and a new suburban rail line connected people to workplaces further down the valley and in Wellington City. Subsequent development radiated out from the Hutt Valley flood plain.

From the 1960s, middle-income home buyers headed for the western hill suburbs – necessitating supporting infrastructure development in those areas. Maungaraki was developed by the then city council for private housing, and was the largest local government subdivision in New Zealand, involving significant earthmoving to cut hilltops and fill valleys. Today, the main commercial centres are Lower Hutt and Petone, while residential suburbs are located on the western hills, eastern bays, Wainuiomata, the valley floor, and Stokes Valley.

Hutt City Infrastructure Networks

Hutt City has a series of well-developed and modern infrastructure networks and the overall condition of these networks is good. The total capital replacement value for Council owned infrastructure included in this Strategy is over $1.9 billion, while each year Council spends, on average, $27.2 million in capital replacements and $19.9M to improve and upgrade this infrastructure. The extent of Council infrastructure networks in this Strategy is as follows:

Infrastructure Category	Total Length	Estimated Value^{^[2]}	Key components	Levels of service	Condition and lifespan^{^[3]}
Water supply	681 km (pipes)	$245m	· Reservoirs · Water mains · Pump stations	· Compliance with NZ Drinking Water Standards · Reliability of service · Prompt issue response · Maintain consumption levels, and · Percentage of real water loss from networked reticulation system	Over 80% of the water supply pipes are rated as being in good or very good condition, and almost 8% is in moderate condition. The average life of our pipe network is 70-75 years. The current age of the pipes on average is 48.5 years. We monitor the condition and performance of the network to optimise renewals. This ensures we replace the pipes when the condition dictates not based on theoretical life.
Wastewater	671km (pipes)	$518m	· Treatment plant · Sewage trunk mains · Pump stations · Storage tanks, and · Outfall pipeline	· Number of resource consent infringements · Reliability of service · Prompt issue response · Number of dry weather wastewater overflows from the Councils wastewater system · Number of complaints	Over 47% of the wastewater pipes are rated as being in good or very good condition, and nearly 23% is in moderate condition. The average life of our pipe network is 80 years. The current age of the pipes on average is 49.2 years. We monitor the condition and performance of the network to optimise renewals. This ensures we replace the pipes when the condition dictates not based on theoretical life.
Stormwater	526km	$300m	· Stormwater mains · Pump stations	· Reliability of service · Achieve water quality at main recreational beaches · Prompt issue response · Number of flooding events · Number of habitable floors flooded · Compliance with resource consents for discharges	Over 70% of the stormwater pipes are rated as being in good or very good condition, and almost 17% is in moderate condition. The lifespan of stormwater assets varies between types of asset. For example, minor culverts have an estimated average life of 100 years, while major culverts generally last 80 years. The current average age of the pipes on average is 50.3 years. Replacement of stormwater pipeline is mostly to address flooding issues rather than condition.
Local roads and footpaths	728 km (roads) 686km (footpaths)	$835m	· Roadways and bridges · Footpaths and walkways · Cycleways · Retaining walls and seawalls · Traffic services, and · Street lighting	· Residents’ satisfaction · ‘Quality of ride’ measured by the percentage of the road network meeting roughness standards. · Accident trend (measured by NZTA). · Prompt issue response · Percentage of sealed local road network that is resurfaced · Percentage of footpaths that fall within the service standard for footpath condition	NZTA’s ‘Surface Condition Index’, which measures the condition of the road surface in relation to surface defect, is rated in a range of 0 to 100, where a lower number indicates better condition. HCC’s current rating is 1.6 which shows that our road surfaces are in a very good condition. Lifespans vary between various roading assets: for streetlights it is 25 years, while a bridge may last five times as long, chipseal has an average lifetime of 12 years, and asphaltic concrete lasts for about 15 years. Age Index is one of the components of the Surface Condition Index. We monitor a number of condition and performance indexes to optimise pavement renewals of the local roads.

Current and planned investment in our infrastructure means that the rating of our pipes is expected to improve markedly in the coming decades. Most of our infrastructure was built in the 1930’s and 1950’s. The average age is over 30 years while average life expectancy varies from 10-80 years, depending on the infrastructure type. The lifespan of an individual infrastructure asset can be estimated and programmes are put in place to renew or replace the asset when the asset condition and performance dictates this. However, for some assets their long life and extremely high replacement values means maintenance approaches are often prioritised over replacement. The result of this is that expected lifespan of some assets are continued far beyond their initial expected life.

Key Infrastructure Networks

The following section provides further information on each of the key infrastructure categories included in this Strategy.

Wastewater

The main functions of the wastewater system are to collect, treat and dispose of wastewater from residential and business properties, and industrial liquid wastes (or trade waste). The wastewater system consists of a network of pipes connecting to each property, which in turn discharge into a system of larger-diameter trunk sewer pipes.

There are two main trunk sewer pipelines for the Hutt Valley – one follows the western Hutt River stopbank, and the second passes through the eastern suburbs of Taita and Naenae, before following the rail corridor through to Moera. The trunk sewers convey wastewater from Lower Hutt and Upper Hutt to the treatment plant at Seaview. Treated effluent from the Seaview plant is then conveyed to an outfall at Pencarrow Head.

During wet weather, there is the possibility of stormwater entering the wastewater system (inflow), or groundwater entering the wastewater system (infiltration), leading to possible overloading of the system and consequent overflows which present health, water recreation and water quality issues. Existing infiltration/inflow reduction strategies, including pipeline inspection and renewal programmes, are designed to minimise the entry of stormwater or groundwater to the wastewater system. It is estimated that these strategies will achieve a reduction in average storm water volumes in the wastewater system from 20 per cent down to 15 per cent over the next 20 years. Critical assets are identified in Wellington Waters Regional Service Plan and include large diameter pipes, trunk pipes, the Seaview Wastewater Treatment Plant, and the Silverstream Storage Tank. Seven out of the 22 pumping stations in the Hutt City wastewater network are identified as critical. It is assumed that critical assets will be replaced close to or at first failure and that non-critical assets will be repaired at first failure. A further 10-20 years of life is expected from these non-critical repaired assets before replacement.

Water supply

Bulk water is purchased from the Greater Wellington Regional Council (GWRC) and comes from several sources including the Hutt River, Wainuiomata and Orongorongo Rivers, and the Waiwhetu Aquifer. GWRC estimates that an additional water supply source for the region will be required by about 2035. A demand management strategy will be developed with a view to identify actions that will defer the need for investment.

Hutt City’s water supply system consists of a network of water mains, pumping stations, and reservoirs. All of this water meets the required public health standards. Most areas of the city meet expected standards for water storage (in reservoirs or storage lakes) and water pressure, while some areas for improvement have been identified in Asset Management Plans. Critical assets are identified in the AMP and include large diameter pipes, together with all reservoirs and pumping stations. Good health outcomes are achieved through careful management of the water supply and distribution infrastructure.

Stormwater

The stormwater system manages surface water run-off to minimise flooding, damage from flooding, and adverse effects on the quality of receiving water.

The primary stormwater system consists of pipes, open drains, retention dams and pumping stations. Stormwater is directed through streams, rivers, channels and pipes to the harbour. ‘Secondary flow-paths’ are provided in some areas to accommodate floodwaters when the primary system is overloaded. Flood protection is important for city planning and development based on management of risk. Components of a robust flood protection system include stopbanks to prevent the occurrence of flooding, stormwater management to drain water away effectively and efficiently, and land use controls to minimise exposure of property or infrastructure to flood risk.

The majority of the existing stormwater infrastructure was originally designed to accommodate a five-year “average recurrence interval” rainfall event. As such, some of the infrastructure may be overloaded when more severe rainfall is experienced. Service level expectations are now higher than when the system was designed, and general replacement or renewals are now built to a 10-year average recurrence interval standard. We are also now experiencing more intense rainfall events that put pressure on our stormwater networks. The effects of the change in intensity and other climate change effects are incorporated in the design standards and the eventual stormwater mitigation solutions. Often it is not practical to build our way out of stormwater flooding issues, in these instances non-asset solutions such as plan changes, changes in maintenance regimes or overland flow path options are considered.

Under the proposed Greater Wellington Draft Natural Resources Plan, councils will be required to hold resource consents for stormwater discharges. This may require upgrades to the network to meet environmental standards, and could increase the need to consider alternate stormwater management approaches (e.g., raingardens, swales) when developing new areas of the city. Critical assets are identified in the AMP and include large diameter pipes, pipelines that operate under pressure, pipes located beneath buildings, stormwater intakes and flap gates on stormwater pipelines. Two of the fourteen pumping stations have been identified as critical.

A key planning requirement is to understand the likelihood and consequence of a flood that goes beyond agreed levels of flood protection. Avoiding building in high hazard areas is one way of managing flood risk in the long-term. Flood protection in urban areas takes place via stormwater management (the responsibility of Hutt City Council) and through management of flood risk for significant waterways (primarily the responsibility of the GWRC). Hutt City Council works in collaboration with GWRC to develop and implement “catchment environmental strategies” (currently in place for the Hutt River) and Floodplain Management Plans (currently in place for the Hutt River and under development for the Waiwhetu Stream). The two Councils are also currently working on a major project to upgrade the CBD stopbank and enhance the river promenade.

Roading and footpaths

The purpose of the roading network is to provide for safe, convenient and efficient transportation through the city. Appropriately designed road and footpath networks can enhance living environments enabling Hutt City residents to interact and achieve social, economic, educational and other goals. The needs of all road users are recognised, including pedestrians and cyclists. As part of the Councils process for designing the Urban Growth Strategy, roading analysis was undertaken in order to determine the capacity potential of targeted intensification areas. This analysis was used to ensure that intensification is undertaken in areas that have the capacity to accommodate growth.

As well as roads and footpaths, roading assets include carparks, walkways, bridges, subways, street lighting, seawalls, and items such as parking meters. Of our total infrastructure value in this category, about 50 percent is pavements (roads and footpaths), 20 percent is bridges, and the remainder consists of streetlights, parking meters, signage, and so on.

Hutt City Council is taking a leading and progressive approach nationally in managing its roads and footpaths, including our advanced pavement deterioration modelling and our assessments of bridges for seismic strengthening. Critical assets include key strategic or arterial routes and bridges within Lower Hutt. Hutt City Council works in close partnership with NZTA, who provides subsidies for some of our roading and footpath projects. The policies and priorities of NZTA and the way in which this impacts their funding decisions has influence on the decisions made in regard to this infrastructure.

2. Significant infrastructure issues and opportunities

The significant infrastructure issues and opportunities identified for Hutt City, together with the options for managing those issues and the implications of those options are outlined in this section. The issues include:

§ Natural hazards and the effects of climate change

§ Growth and Demand variations

§ Technological advancements

1. Natural hazards and the effects of climate change

Lower Hutt is located on a floodplain and large parts of the city are vulnerable to natural hazards. Natural hazard risks in Lower Hutt can be categorised based on the source of the hazard as follows:

· Earthquake: Fault rupture could cause catastrophic subsidence in Petone, liquefaction in low elevation floodplain areas, landslide and slope failure in Western Hills, Eastern Bays and Wainuiomata Hill Road, and Tsunami in Petone and Eastern Bays.

It is important to ensure that infrastructure is able to withstand a significant earthquake both in regard to structural integrity and that the provision of services is maintained or the functioning of service provision is resumed with minimised disruption to the public.

· Intense storms and severe dry periods: Intense storms and heavy rainfall may lead to increased risk of flooding and conversely more frequent dry periods may result in drought as the effects of climate change become more intense. The CBD, Alicetown, Petone, Waiwhetu and Wainuiomata are areas of the city most vulnerable to these effects.

Infrastructure should be able to protect and support people, property and the environment in case of a major storm or drought.

· Sea Level Rise: The Ministry for the Environment recommends that councils plan for sea level rise of between 50cm and 80cm by the 2090’s, and continued rise beyond that^{^[4]}. Recent NIWA regional report suggests that sea level is expected to rise by 12cm to 24cm by 2040^{^[5]}. This poses threats to core coastal infrastructure as well as property and infrastructure in suburbs close to the sea. Sea level rise additionally poses risks of salination, which could threaten the viability of the continued use of aquifer water.

Long-term plans should be in place to ensure the resilience of property and infrastructure against the projected sea level rise. Extracting water from the aquifer must be actively managed to mitigate the salination risk.^{^[6]}

While the risk of a seismic event is not expected to change, the exposure of property and infrastructure increases as investment grows in areas vulnerable to these events.

Infrastructure effects

a) Earthquake and its consequences

Earthquake and its potential consequences, such as liquefaction, landslide and tsunami, are a major risk to roads predominantly in terms of structural damage to roads and footpaths. A lower magnitude earthquake which damages roads will disrupt transport and is likely to have a negative impact on business and wellbeing; however, a significant seismic event could cause serious destruction of single access routes, particularly those connecting Hutt Valley to Wellington CBD and Wainuiomata. This loss of access may affect the transport of vital supplies. Therefore, resilience of arterial or single access routes is a key roading issue.

A major earthquake will likely also cause disruptions in water supply and wastewater networks, both in terms of structural damage, such as to pipes, and ability to ensure continuation of supply. Water supply and waste water are essential to people’s lives as we need to ensure people have access to fundamental services, such as clean drinking water and sanitation. This requires both water storage and water treatment capacity. Such an event can also cause significant damage to the stormwater network, leading to significant problems, particularly in the event of heavy rainfall following an earthquake.

Additionally, the connection between these infrastructure networks should be recognised. For instance, if roads sustain significant damage this could damage underground pipes, and in turn, if stormwater networks are damaged the subsequent overflowing could affect the ability of roads to continue functioning.

b) Intense storms and heavy rainfall

The second natural hazard, intense storms and heavy rainfall, can lead to surface flooding. Heavy rainfall could result in overloading of the stormwater system, followed by overflow or inundation. A major event could lead to stopbank failure or overtopping with increased damage to property and infrastructure. It also has the potential to lead to road closures and require increasingly frequent clearing of debris. These effects could create hazardous conditions for both road and footpath use.

The anticipated climate change will intensify the pressure on both wastewater and stormwater networks. The predicted increasing levels of rainfall may exceed the capacity of the stormwater network resulting in flooding or infiltration of the waste water system, both of which pose health risks to the public, through human contact with potentially contaminated water, as well as damage to both property and infrastructure. Climate change, together with the expected growth in Lower Hutt urban centres will exacerbate identified consequences. Climate change is also likely to increase the likelihood of prolonged dry periods, presenting a further issue for water supply and wastewater. It has the potential to negatively impact the ability of both networks to adequately meet demand which could pose health risks.

c) Sea level rise

Sea level is expected to rise between 50 cm to 80 cm by 2090, a level which is above some of the current roads and properties in a number of suburbs close to the sea. This means primarily that coastal properties and infrastructure could be swamped and submerged by water in the future, or face an increased likelihood of storms and tsunamis entering inland, and damaging seawalls, roads, wharves and public and private properties. The extent of the impact in Lower Hutt could be larger than global average, given local factors including projected erosion, liquefaction and subsidence. This predicted rise in sea level may also compromise the ability of the stormwater network to drain effectively -further exacerbating the impacts of flooding. This can also affect the functioning of water supply in regard to the possibility of the salination of ground water, which is particularly relevant given the use of and dependence of the city and region on the Waiwhetu aquifer. Additionally some of the key infrastructures, in particular the Seaview waste water treatment plant, are likely to face inundation with this predicted sea level rise, which poses a risk to the functioning of the wastewater system.

Principal Management Options

This section considers the options for responding to the significant infrastructure issues and opportunities in regard to natural hazards and the effects of climate change. Outlining the principal options as well as alternative options -which are not currently under consideration, including the pros and cons of each enhances policy making and ensures optimal decisions are being made.

Issue 1: Natural hazards and the effects of climate change

Response options	Explanation (clarify what does this option mean / what is included)	Benefits, advantages and positive implications	Costs, disadvantages and negative implications	Timing
Principal option 1: Strengthening at risk infrastructure	Bridges seismic strengthening – much of this work has already been undertaken; completion is expected in 2020-21, however this timing will depend on the outcome of the East West Connection investigations.	Public safety Improved resilience - Minimised disruption in case of an event Minimise risk of infrastructure damage	Traffic disruption during work Potential conflicts for the case of Cuba Street bridge if Council and NZTA decide to develop the East West Connection	Short term
	Road network seismic strengthening - increasing resilience both to seismic activities and capacity to withstand the impacts of flooding and liquefaction	Public safety Improved resilience - Minimised disruption in case of an event Minimise risk of property and infrastructure damage	Traffic disruption during the works Environmental impacts	Short term
	Main and critical water supply pipeline seismic upgrades and water main renewals	Public health and safety Protection of property Minimised disruption Improved resilience	Service disruption (including traffic) during works	Ongoing
	Water reservoir seismic upgrades	Public health and safety Minimised disruption Improved resilience	Service disruption (including traffic) during works.	Ongoing
	Wastewater trunk and treatment plant seismic upgrades	Public health and safety Improved resilience Environmental benefits Minimised disruption	Service disruption (including traffic) during works Environmental impact during works	Short term
	Making allowance for infrastructure in vulnerable areas - Taking into account the possible vulnerabilities by using resilient materials or building techniques	Public health and safety Reduced risk to property Minimisation of damage Value for money Precautionary approach	May involve using more expensive materials	Ongoing
Principal option 2: Robust emergency preparedness	Agreement with contractors for the provision of initial response and recovery following an emergency including priority access to necessary equipment and utilisation of the road network prioritisation map.	Improved resilience Minimised disruption Ability to evacuate/ bring in necessary supplies to support human life, health and wellbeing in case of a major event	Risk of reliance upon external resources.	Ongoing
	Public emergency preparedness- encouraging and supporting residents and local organisations to be prepared for an emergency by having an emergency supply of water or etc.	Public health and safety Improved resilience Value for money Cultural benefits – through greater respect of water as an important natural resource Positive flow on effects such as prompting further emergency preparedness measures e.g. earthquake securing and broader uptake of sustainable practices	Minimal cost Risk of contamination of improperly stored water	Ongoing
	Access to emergency water through existing bores and reservoirs as well as water extraction capacity from streams as planned in the Community Infrastructure Resilience Programme	Public health and safety Environmental benefits	Risk of contamination of improperly stored water	Ongoing
Principal option 3: Providing back up networks	The stormwater secondary network	Future proofing in regard to effects of climate change Public health and safety Continuation of supply	Constraint on land use	Medium term
	Building redundancy and secondary Wastewater network	Improved resilience Public health and safety Continuation of service		Medium term
	Alternative transport routes – this is limited to certain situations as often grid road networks naturally provide alternative routes.	Improved resilience and public safety – ability to both evacuate and bring in supplies in an emergency event Increased efficiency by reducing Vehicle Kilometres Travelled (VKT), congestion and so emissions Drive social change and growth through better access and land value uplift	Limited to certain situations Property acquisition and land degradation Disruption during the construction (including noise and vibration) Environmental impacts Likelihood that a major event destroys both main and alternative route	Long term
Principal option 4: Developing protective infrastructure	Upgrading (raising/extending) stopbank and/or seawall, where practical, to provide protection against either sea level rise or flooding.	Protection of people, their property and infrastructure Opportunity to develop waterfront / shared path Positive flow on effects e.g. improved wellbeing, facilities for active modes of travel, more green open space and beautification	Significant financial restrictions - requires support from NZTA Social concerns – loss of water view from neighbouring properties Environmental concerns – Habitat destruction and behaviour disruption of native wildlife e.g. penguins unable to access their nesting area Property acquisition	Medium term
Principal option 5: Regulation and monitoring	Ensuring hydraulic neutrality so new public and private developments do not pose a negative effect on the flow of stormwater or increase the risk of overflow Minimising damage to aquifer caused by construction of new buildings e.g. through pilling Less parking requirements for new dwellings through the proposed district plan change 39 and parking policy	Public health and safety Value for money High efficiency and effectiveness Environmental benefits – reduced emissions and climate change mitigation	Risk of technology features used for monitoring not being maintained Cost of carrying out this monitoring	Ongoing
Alternative option 1: Borehole water	Construction of boreholes as an alternative water supply source	Improved resilience Public health Minimal adverse environmental impact	Uncertain viability	Long term
Alternative option 2: Desalinated water	Desalination to provide drinking water using seawater	Public health Source of water not reliant on rainfall (considering the anticipated impacts of climate change)	Comparatively expensive Comparatively high energy consumption Intake structures can pose a threat to marine life Limited relevance to the resource context of Lower Hutt	Long term

The provision of insurance is considered as a mitigation measure rather than a response option. There are different insurance options that the Council consider where applicable, for instance, market cover, or self-insurance (setting aside funds for covering foreseeable events). Council aims to maintain appropriate levels of insurance to safeguard against significant losses.

2. Growth and Demand variations

The infrastructure demand is likely to experience changes driven by

· Population growth,

· Ageing population, and

· Shifts in preferences.

Demand-side management practices are expected to offset a fraction of this change. Climate change will also affect the demand, particularly in case of the stormwater and wastewater network, as explored with natural hazards issues. There is no marked change in the number of industrial businesses expected in the next 30 years and desired service levels are likely to be stable.

Infrastructure effects

a) Population growth

In 2017, the total population of Lower Hutt was estimated to be 104,700 people. This indicates an increase of3,500 people compared to 2013, when it was estimated to be 101,200 people. The recent growth started with the inception of Council’s Urban Growth Strategy (2012-2032) that sets strategic targets to increase the population of the city to 110,000 people by 2032, with an additional 6,000 homes. It is expected that this population growth will be consistently concentrated in some areas of the central valley, Western Hills and Wainuiomata. The ageing population of the city, together with the limited greenfield and intensification opportunities for residential development are expected to slow down the growth to an average annual growth of 0.2% after this period. The internal population projection indicates that Lower Hutt population is likely to increase to about 114,000 people by 2048.

Research indicates that growth can bring with it many positive effects for the city and its residents. The National Policy Statement on Urban Development Capacity also directs local authorities to provide sufficient development capacity in their plans for housing and business growth to meet demand. It is important that core infrastructure can support the expected growth. Analysis must be undertaken as part of any District Plan changes to ensure that the benefits of growth outweigh the costs related to it, particularly the costs of providing adequate infrastructure to meet increased demand.

While significant population growth could place pressure on infrastructure in certain areas, it should be recognised that this growth is needed to achieve the vision outlined in the Urban Growth Strategy that ‘Hutt City is the home of choice for families and innovative enterprise’ which is viewed as a key component of making the Hutt City a better place to live, work and play.

b) Ageing population

Statistics New Zealand is projecting an extended ageing population in Lower Hutt. The population of residents aged ‘65 years or over’ is expected to increase by over 12,000 people (i.e. over 80%), while the population of the city is projected to increase by 10,000 people. This suggests that almost one in four Lower Hutt residents will be 65 years old or over and indicates a fall of around 5000 working-age people across the city, mainly between 2023 and 2038. The following table and figure illustrate the extent of the ageing population.

Year	0-14 years	15-39 years	40-64 years	65 years and over
2018	20%	33%	32%	14%
2023	19%	33%	31%	17%
2028	19%	33%	29%	19%
2033	18%	31%	30%	21%
2038	17%	30%	30%	23%
2043	17%	29%	30%	24%
2048	17%	29%	30%	24%

This demographic change is likely to increase the number of one and two person households. This in turn intensifies the trend of fewer people per household and the fall in the average household size from around 2.7 people today to below 2.6 in 2043 and as a result the demand for different types of housing stock to accommodate the change.

The ageing population requires consideration of the type and quality of infrastructure required by this growing demographic, such as ensuring footpaths are well maintained, smooth and widely accessible. Affordability of infrastructure provision is another issue for this community, based on the assumption that older residents are more likely to be on fixed and lower incomes during their retirement which constrains the council’s rate paying base, particularly through limiting the capacity for council to raise rates in order to fund major investments. This could result in delays in the maintenance or replacement of infrastructure assets.

c) Shifts in preferences

Changes in preferences could present a particular challenge for roads, although there may be impacts on other core infrastructure. Changes in peoples transportation preferences along with technological change requires the need for roading and footpaths to accommodate multimodal transport both in regard to active transport such as cycling but also increasingly towards vehicle innovations such as electric vehicles. Additionally an increase in demand for public transport, while not provided directly by the Council, will need to be accommodated by appropriate infrastructure, such as the provision of space for bus stops.

The recent changes in where and how people want to live are also likely to continue, posing a possible challenge for infrastructure. For instance the increasing demand for ‘inner city living’ may put pressure on areas such as the CBD and Petone, this in turn could lead to changing requirements for road alignment and car parking. The predicted increase in growth of certain areas will also increase the demands on other core infrastructure; requiring a greater capacity of water supply and waste water systems to match the demand.

Principal Management Options

This section considers the options for responding to the significant infrastructure issues and opportunities resulting from growth and other demand variations. Outlining the principal options as well as alternative options -which are not currently under consideration, including the pros and cons of each enhances policy making and ensures optimal decisions are being made.

Issue 2: Growth and Demand variations

Response options	Explanation (clarify what does this option mean / what is included)	Benefits, advantages and positive implications	Costs, disadvantages and negative implications	Timing
Principal option 1: Promotion of alternative travel options	Through development of cycleway, increasing walkability and enabling / facilitating public transport Reducing unnecessary transport by making Council services available online Encouraging public to use active modes of transport Information and awareness provision both in regard to routes and safety	Environmental impact –reduced emissions Future proofing by reducing reliance on fossil fuels Public health and safety Efficiency/ reduce traffic congestion Drive social change Enhance urban economic growth	Cost of providing facilities Safety concerns –during transition when cycling network is poor	Ongoing
Principal option 2: Demand management	Introduction of additional demand management initiatives such as water conservation, hydraulic neutrality, traffic management, and inflow / infiltration reduction This may be necessary in response to either population growth, changes in regulations or public expectations and changes driven by the effects of climate change. Strategic decisions such as limited parking can be used to guide traffic and transportation choices while simultaneously promoting the uptake of alternative means of transportation.	Environmental impacts- conservation Sustainable approach Reduced cost Reduced congestion Efficiency Value for money	Short term costs Social concerns Equity implications Potential costs to individual property owners	Ongoing
Principal option 3: Enhance accessibility for the ageing population	Smoother foot paths, ramps walk offs and mobility parking.	Urban growth Social inclusiveness/ cohesion		Short term
Principle option 4: Adapting and developing infrastructure for and in high demand areas	Providing footpaths and three waters in intensification and Greenfields areas. Understanding trends and increase in demand and use modelling to predict effects. Using this information to encourage growth in areas where there is infrastructure capacity to meet the associated increase in demand. Incorporating both access routes and bypass routes so as to ensure ease of accessibility while minimising unnecessary congestion	Urban growth Efficiency Safety Economic growth (for instance by making shopping distract more attractive places to be) Enhanced amenity value Environmental effects Public health and wellbeing- through encouraging high foot traffic areas to be pedestrian and cycling friendly	High cost Environmental impact Social concerns –particularly from retailors	Ongoing
Alternative option 1 Altering funding mechanism	Altering funding mechanisms could occur through increasing outside financial sources, or changes to internal means of funding such as increasing user pays fees, targeted rates or applicability. This is to consider the impact of ageing population on the affordability of infrastructure maintenance and development.	Could have equity implications Could help to address the financial implications of an ageing population	Potential equity implications Uncertainty e.g. surrounding the economic implications of ageing population Much funding is provided by outside sources e.g. NZTA and as such the capacity for the Council to alter funding mechanisms is restricted.	Ongoing

3. Technological advancements

Technology is a focus area which infrastructure planning must increasingly consider, principally because of the opportunities this can bring to the city. The expected issues and imminent opportunities in terms of technology can be categorised as follow:

· Monitoring and information generation

· Changing requirements, and

· Innovative technology.

’Being open to the opportunities of technology’ should be considered a guiding principle for decision making in the future.

Infrastructure effects

a) Monitoring and information generation

Technological advancements present an opportunity for significant improvements in monitoring and data gathering. Wellington Water already utilises technology for real-time monitoring and control to increase their understanding of the system and how it responds to different situations and mitigate potential risks. In addition to information generation, this technology also presents an increased opportunity for demand management options which are likely to become increasingly necessary as the effects of climate change begin to have greater impact. Monitoring and analysis technology also enhance the capacity to make long term predictions on the costs of different investment options, this increases the capacity to strike a balance between cost (including asset replacement or renewal), level of service and risk exposure.

b) Changing requirements

Technological changes present a two part consideration. First, there are technological innovations that can make infrastructure more effective, efficient and improve the level of service provided to Lower Hutt, helping to make it a better place to live, work and play. However, increasingly different forms of technology will be viewed as a necessity that infrastructure should provide, and therefore it will likely become a requirement rather than an opportunity. As such infrastructure opportunities should be pursued so as to both accommodate and exploit technological opportunities as they arise.

c) Innovative technology

While there is potential for new and innovative technologies to improve infrastructure outcomes, there will likely be the difficulty of and during transition. The inherent nature of technological advances is that they are constantly evolving and this presents significant issues of uncertainty in planning for the long term as is required for infrastructure. For instance, in regards to roading, driverless cars are expected to become a key form of transportation in the future. This is likely to require significant infrastructure changes to the way roads operate such as the installation of communication networks between the cars themselves, the roads and traffic lights. However, there are difficulties in predicting when and how this change will happen, or exactly what technology will be required in the future in order to encourage and accommodate this. As such, flexibility is needed when considering technology as a focus area for infrastructure.

Principal Management Options

This section considers the options for responding to the significant infrastructure issues and opportunities resulting from technological advancements. Outlining the principal options as well as alternative options -which are not currently under consideration, including the pros and cons of each enhances policy making and ensures optimal decisions are being made.

Issue 3: Technological advancements

Response options	Explanation (clarify what does this option mean / what is included)	Benefits, advantages and positive implications	Costs, disadvantages and negative implications	Timing
Principal option 1: Development of modelling and monitoring	Using technology as a tool to provide important information to enhance effectiveness and efficiency. Use of tools such as DTIMS software to model best approach and use of materials. Modelling gives the capacity to test different scenarios to see how the system will respond.	Information generation Demand management Enhanced planning capacity e.g. simulation for extensions or new developments	Short term cost in requiring the technology and training the staff Ongoing cost to ensure these are up to date	Ongoing
Principal option 2: Effective optimisation and renewal	Using the most effective and efficient materials and techniques to renew infrastructure and ensure that its functioning is optimised by using best available technology where possible.	Value for money Service improvements Increased efficiency/ better use of resources- sustainability	Local industry limitations and availability	Ongoing
Principal option 3: Openness to the opportunities of technology	Technology and the advancement of technology present a huge number of diverse opportunities and challenges to infrastructure such as new materials, equipment and most likely driverless vehicles. There will likely also be technological innovations that we cannot predict; therefore, this option entails openness to the opportunities of technology so that they can be used to the Councils and the City’s benefit when appropriate.	Flexible and adaptable approach as changes occur Positioned so as to take advantage of technology that may positive environmental or financial benefits Efficiency Value for money	Uncertainty of direction- planning implications, particularly in the long term	Ongoing
Alternative option 1	Status quo	Certainty/ predictability Short run cost savings	Failure to take advantage of possible savings High inefficiency Environmental effects Failure to meet public expectations Missed opportunities	Ongoing

3. Management practices

Levels of service

Based on the findings of community consultation and in conjunction with asset management plans, Hutt City Council requires levels of service to be of a high standard in terms of quality, responsiveness and timeliness. The following indicators are used to monitor the performance and service provided by city infrastructure:

LTP performance measures: Performance measures published in the LTP and reported on in the ‘Hutt City Council Annual Report’ allow the community to judge the standard of the infrastructure service.

Customer standards: Quality and service availability, target response times for addressing problems with service provision, and courtesy, e.g. keeping property owners informed of system maintenance or other works.

Activity standards: Activity standards cover aspects of activity likely to be of concern to the community, such as service quality, customer focus, cost-effectiveness, environmental performance and compliance with legal and industry standards.

Management indicators: Indicators relating to the performance of particular assets (e.g. pump stations), and the performance of service contracts.

Hutt City Council consistently achieves satisfactory service levels for stormwater, wastewater, water supply and roading. Council looks to improve levels of service in response to community expectations, and it is always important to take a consistent and robust approach to considering changes.

Sustainability and Public Health

Achieving a balance between sound public health and environmental management and the provision of affordable infrastructure can be challenging. Council has a responsibility to look after our people and our environment, to comply with all appropriate legislation and standards and to ensure that wherever possible we create a positive impact rather than following a do no harm approach. We strive to meet the needs of today without compromising the needs of the future, and this is particularly important in core infrastructure given the significant life span of these assets and the crucial services they facilitate. Pressures on the environment and public health can be due to the construction or operation of infrastructure systems and may include:

· Water: improved usage and quality

· Roads: Network optimisation

· Land use: accessibility and efficient use of space

· Protection and enhancement of the natural environment

Water

“Water is one of our most precious resources- it is essential to life on earth. Our rivers, lakes and wetlands support our unique native animals and plants. Water is also vital to our health and wellbeing, our livelihoods, and our way of life- New Zealanders love getting out on our water ways- swimming, kayaking, fishing and gathering food. For Maori, freshwater is a taonga” (Ministry for the Environment, 2017)^{^[7]}.

Water is one of our most important natural resources; however, its quality can be damaged through mismanagement, neglect or overuse. Stormwater and waste water infrastructure networks can carry contaminants out to our bodies of water such as rivers, streams or the sea. This contamination can be caused by a variety of factors ranging from unpredicted or accidental occurrence, for instance through cross-contamination of sewerage and stormwater, typically as the result of system overflow. Alternatively contamination can occur effectively through mismanaged processes, for instance urban run off or other industrial activity. Water quality is also at risk due to sea level rise causing salination (the increased salt content) of ground water. Ensuring water quality has a major effect on public health, and minimising potential contamination of the water supply is a key component of providing Hutt City residents with the capacity to live healthy lives. Council intends to continue its focus on ensuring that public health and environmental standards are met or exceeded and to continue to work collaboratively with Regional Public Health and other health authorities to achieve this. In order to ensure that we are managing and protecting our water in accordance with current standards, as of 2018 the Council will be meeting with the Whaitua committee.

Water usage is also affected by demand and supply. For instance uncontrollable events such as droughts can result in water shortage, which can require use restrictions. Alternatively increases in demand for water can also place pressures on the quality of water, for instance population growth could place pressures on our water networks. Ensuring an adequate supply of water and balancing this against the environmental impact of water sourcing, both through supply and demand management is an important component of ensuring public health and sustainability. This occurs both in regard to the supply of drinking water, enabling all residents to have quality and consistent access to this important resource and ensuring safe and reliable water supply for sanitation and wastewater.

Roads

Road use by motor vehicles of all sizes has an environmental impact, and greenhouse gases emitted by transport account for a significant proportion of Hutt City’s total emissions. This has a negative effect on both our natural environment and public health. Cities with poor air quality due to pollution, particularly those resulting from motor vehicles create unpleasant conditions to live in and importantly pose significant health risks to those living or working in the area. As such, strategies such as network optimisation should be pursued to ensure motor vehicles are able to travel as efficiently as possible and avoidable emissions are minimised. Additionally encouraging and supporting alternative means of travel, such as walking or biking and use of public transport, is an important component of both reducing the negative effects of these emissions and for making the Hutt City an attractive place to live work and play both now and into the future. This focus on supporting and encouraging alternative transport also positively enhances public health by enabling regular exercise to be part of people’s everyday routines, for instance cycling to work or school, and therefore has the potential to positively influence people’s lives by encouraging more active lifestyles. The need to provide facilities for motor vehicles, such as parking, must be balanced against providing for and encouraging non-motorised means of transportation.

Land use

Land is a finite resource and infrastructure often takes the form of large physical assets, such as roads and bridges, as such infrastructure needs to make careful and considered use of land. Improved integration of infrastructure with the natural environment provides the opportunity for both improved environmental outcomes and improved amenity of the infrastructure. This includes ensuring that infrastructure is in place to best serve the community in which it is located, and must be balanced against other important considerations such as the need for open space. It is an important component of community health that residents have accessible outdoor areas for recreation, for instance playgrounds and sports field, to ensure regardless of income everyone can enjoy time outdoors. As urban growth is pursued this will become an increasingly important consideration. Given the large practical and visual effect infrastructure has on communities, it plays an important role in determining both the ‘look’ and ‘liveability’ of a community, and therefore both of these can be improved through careful planning.

Protection and enhancement of the natural environment

The placement and functioning of infrastructure must also consider the effect it may have on natural habitats and ecosystems. Poor land use practices and water network designs can have negative impacts on species for instance fish spawning and other large physical infrastructure such as roads and bridges, can negatively impact on native species and natural habitats for instance through disrupting the passage of species which can have devastating effects on local population. Infrastructure planning aims to minimise these negative effects and avoid them, wherever feasible, along with pursuing opportunities to create a positive impact.

Our approaches

Expectations within the community are that higher standards of environmental protection will be achieved over time, particularly for stormwater and wastewater. The use of approaches such as Low Impact Urban Design (LIUD) and technological advances, offer exciting opportunities for the Council to pursue approaches that are not only more beneficial to the natural environment and public health but also achieve their objectives at a lower cost, this increases both the environmental and financial sustainability of infrastructure over the long term

Managing the impact infrastructure has on the environment and public health requires capacity to measure these issues or potential issues in order to accurately understand whether a positive, neutral or negative impact is occurring. River and sea water quality are currently measured for levels of contamination, which reflect how well the city has been keeping stormwater free of these substances. For instance, the water quality at main recreational beaches in Lower Hutt was measured at 83% in 2013-14. This score is increased to 91% in 2015-16 and further improved to 100% (each monitored beach open 100% of days during the bathing season) in 2016-17.

Council also considers alternative service delivery methods with improved environmental outcomes. In the future, technological improvements are likely to provide the opportunity and capacity to improve our environmental outcomes.

Our plans for the future

Stormwater and wastewater requirements already exist to contain and minimise adverse environmental effects. Health and quality are core elements of water supply. Wellington Water’s strategic approach is built around the performance of 12 service goals which result from their three service outcomes, which are: Safe and Healthy Water; Respect for the Environment; Resilient Networks and Economy. All Wellington Water activities are prioritised and funded based on the achievement of these goals and the likely positive impact of them. For roads and footpaths, minimising greenhouse gas emissions through both the promotion of alternative means of transportation and enhancing network efficiency is a key element of project efficiency and effectiveness which will have positive impacts on public health and towards sustainability.

While we are doing our best to meet our objectives, there are always things that can be done to improve what we deliver. Council’s ‘Environmental Sustainability Strategy’ outlines goals for leadership, protection and enhancement of the environment. Council is determined to achieve the goals and aspirations in regards to both environmental sustainability and public health.

Spatial planning

Many aspects of our infrastructure vary due to geographical/spatial factors. For example, natural hazard risks are greater in close proximity to faultlines and sea level rise risk is greatest close to the coast. Both the Government’s Infrastructure Efficiency Expert Advisory Group (IEEAG) and the National Infrastructure Unit of Treasury support a spatial planning approach. Spatial planning is considered to have the potential to assist in producing optimum outcomes.

A regional spatial planning approach is currently being investigated with participation from Hutt City Council. The regional approach will encompass factors such as risk and resilience, growth and demand, and economic and demographic factors. Infrastructure would form one of the key elements of such a spatial plan, partly by identifying the proximity of infrastructure assets to high risk areas such as faultlines, steep banks, flooding, vulnerability to liquefaction or other areas affected by sea level rise.

Communication and engagement

The importance of engaging with the community in planning, funding and delivering infrastructure is nationally recognised. Improved consultation and engagement with the public and key stakeholders ensure that key projects and decisions reflect community values. The Council works in close collaboration with a number of key stakeholders such as New Zealand Transport Agency (NZTA) and Wellington Water, it is therefore important to ensure our goals are aligned with these organisations so as to ensure a smooth working relationship. Council’s Corporate Asset Management Policy outlines the need to engage with residents and work in partnership with others, become an environmental sustainability leader, and respond to a changing social and economic climate.

Council carries out in-depth community consultation on major infrastructure projects, issues or proposed changes to levels of services. Council also has in place a ‘Community Engagement Strategy’, which outlines the philosophy and commitment to the community held by the Council. The Council has prioritised creating an ongoing dialogue between stakeholders on key strategic, planning and policy matters. We believe this has created more effective community engagement across all Council activities and will continue to do so in the future.

Risk Management

Council is both responsive and proactive in the way that its infrastructure is managed, depending on the criticality of the infrastructure and the level of risk it faces. The significant long term issues that our infrastructure may face are addressed in this strategy. At the asset level, Activity Risk Management Plans outline the risks associated with providing infrastructure services, and the risk management activities associated with their operation, maintenance and management. Resilience is increasingly being incorporated into AMPs, including via contingency and emergency planning. For the roading network, Council has commissioned a resilience study to examine parts of the network at risk from earthquake and other hazards, as well as possible mitigation measures.

4. Implementing the Strategy

Significant work has already being carried out towards the issues and opportunities identified in this Strategy. A number of projects are investigated and incorporated into the long term plans, while there are also decisions that Council expects to make in due course.

Significant projects incorporated into the existing plans

A number of the projects are to ensure asset preservation as natural hazards are identified as a significant issue in Lower Hutt. Many bridges and reservoirs in the district have been seismically strengthened, or are identified for such work. Some other projects, such as the East West Connection, will also help us to achieve increased resilience. Council is also continuing to carry out a range of projects to ensure that we reflect demand variation as our population grows and changes. Key projects that will occur during the course of this Strategy include:

· Bridge seismic strengthening: $0.8 million allocated for Cuba St. Overbridge (the work for other bridges is completed) (2020-21). This an important project to minimise the risk of bridge collapse or damage in the event of a significant earthquake, which has significant benefits both in terms of protection of life/ prevention of injury along with minimising property damage and reducing disruption.

· Road network resilience: $2.9 million allocated to increasing the ability of the roading network to withstand shocks (2020-21). This minimises potential damage and disruption in the event of an emergency or other significant shock.

· Critical water supply pipeline seismic upgrades: $21.3 million allocated for ensuring security of supply through upgrading of outdated or critical pipes (ongoing)

· Water reservoir seismic upgrades: $4.4 million allocated for seismic strengthening works to be carried out to five reservoirs (2015-32). This project minimises the damage and disruption of services in the event of an earthquake, thereby improving the resiliency of the network and minimising the risk of health and safety issues.

· Water main renewals: $3.1 million for earthquake resilience upgrades to connect two water systems (2015-16, 2022-23, 2023-24 and 2029-30). This project minimises the risk of damage and disruption of service in the event of a significant earthquake.

· Eastern Bays Shared Path: $14.1 million allocated for increasing the accessibility of alternative means of transport in Eastern Bays by providing a safe shared path for pedestrians and cyclists (2018-24). This project is considered to be responding to changes in demand and the increased uptake of alternative modes of transportation.

· Wainuiomata Hill Shared Path: $11.1 million (expected to be completed in 2019) for responding to changes in demand and uptake of alternative modes of transport.

· Cycleway Network Development: $1.6 million allocated for the Northern and Central sections of the Beltway cycleway across the city (2018-20). Options for the Southern section of the Beltway and critical connections between the cycleways, to the CBD, schools, community hubs, sports facilities and other key recreational centres are still under consideration. This development is planned to continue with a $400k per annum budget (ongoing). This project will increase the cycling opportunities in Lower Hutt and thereby respond to changes in demand, in particular the increasing uptake of alternative means of transport.

· Road Network Improvements: $80.4 million (mainly in 2024-27 -provision for the East West Connection- and after 2030). The timeframe of this allows for considering technological advancements, for instance in using techniques or materials that maximises the effectiveness and efficiency of the road networks.

· Supervisory Control and Data Acquisition (SCADA) Renewals: $2.7 million for water networks (ongoing). It is a monitoring system which allows for real time data gathering. Using SCADA demonstrates successful uptake of technology to improve the effectiveness and efficiency of networks.

Significant Decisions about Capital Expenditure Hutt City Expects to Make

We have a good understanding of our infrastructure’s current condition, the levels of service it is required to provide, and what needs to be done to properly manage and maintain infrastructure out to the end of the century. Decisions have already been made on a wide range of key projects for infrastructure investment, and funding allocated within the LTP. There are only a handful of identified projects where significant decisions are still to be made as shown in the following table:

Infrastructure	Project	Scale of costs	Decision / Description	Timing	Principal options to consider
Transport	East West Connection	$1.0m for project feasibility study. The total cost is estimated to be around $65m.	The project feasibility investigation will inform full cost estimates and options for development. The project improves roads resiliency and ease the traffic congestion in Petone. The budget is allocated in LTP but needs to be revisited after the completion of the feasibility study.	Investigation and design study in 2017/18 Decision in 2018/19	Feasibility study in 2018. We would seek to work with NZTA to deliver this in conjunction with other major projects such as the Petone to Grenada route.
Transport	Additional funding for city walkways and cycleways	$25m to $30m (estimated)	Development of Hutt Valley Beltway, Eastern Bays, and Wainuiomata Hill shared walkways and cycleways provide improved service. The work has already undertaken on some sections; the extension of these needs additional funding. This also includes a potential contribution to Petone/Ngauranga cycleway.	Construction of Eastern Bay and Wainuiomata Cycleways (2018/24)	Seek additional funding from the urban cycleway fund to accelerate the programme of works.
Transport	Riverlink: CBD promenade development	$39.8m is allocated for the promenade development. About two thirds of this budget is anticipated to be relevant to modes of transport.	The project includes promenade development, a pedestrian bridge over the river, and upgrading Andrews Ave, Margaret St and Dudley St, in addition to the required property acquisition and riverbank parking replacement (to compensate the lost carparks due to stopbank relocation work.) Decision required on the need for any replacement carparking in the CBD and its configuration.	Decision to be made in partnership with Hutt Valley Flood Management Subcommittee (HVFMSC) by April 2018. Construction is expected to be started in 2021-22.	Decision includes approving the scale of the work, share of costs to be funded by each organisation, and timing of the construction.
Transport	Melling Bridge Replacement	$20-80m (estimated)	$6.5m is allocated for a new bridge that aims to alleviate congestion and reduce flooding risk a replacement bridge is being considered. The bridge is expected to be funded jointly in line with the Riverlink project. Decisions will need to be made on the timing, funding provision, location and design elements for the proposed bridge.	Decision to be made by 2018 Replacement commenced by 2024	Discussions are under way between HCC, GWRC and NZTA to investigate the project in conjunction with the Riverlink’s preferred options for Hutt River stopbank realignment and upgrades in the CBD.
Stormwater	Awamutu Stream	$5.7m	Channel improvements and pump station installation to reduce the risk of flooding to improve levels of service. Includes preparing for likely consenting requirement for stormwater discharges. Decisions to be made on final configuration.	Construction to take place 2015 -23	Continue to carry the current flooding risk; delay the programme of works.
Stormwater	Climate change project	$10.2m	To identify and address the impacts of climate change on stormwater activity and flood risk. Further work is needed to scope out the detailed work required and its priority.	Decision on detailed programme of works by 2022. Work to take place 2026-45	No principal alternatives are apparent.

5. Projections and Assumptions

Indicative Estimates of Expenditure

Costs to maintain current levels of service for the existing infrastructure configuration are shown in the following charts (adjusted for inflation using BERL local government cost index figures). The first twenty years are in line with Long Term Plan figures; however, the last 10 years are estimated and should be considered as an unapproved indicative estimate of expenditures that are subject to change.

The total projected capital expenditure over the next 30 years for the three waters (water supply, wastewater and stormwater) and transport are approximately $1.4 billion. Over 40% of this is for capital improvements. The Road Network Improvements (Subsidy 51%) and the Trunk Design, Build and Operate (DBO) Network Development are the two major improvements, each cost over $100M. Operating expenditure over the same period is estimated at $1 billion.

Assumptions

This strategy is consistent with assumptions made in Council’s other key strategies: the ‘Urban Growth Strategy’, the ‘Leisure and Wellbeing Strategy’ and the ‘Environmental Sustainability Strategy’, as well as the ‘Long Term Plan’ and the ‘Financial Strategy’. The assumptions on which the projections are based and the inherent uncertainties in the long time forecasts include:

Governance

There will be no significant change in the governance or management structure and practices of the local government and the existing shared services in the Wellington region over the period of this strategy.

Asset lives and conditions

The overall condition of the network is not expected to change significantly over the period of this strategy. Assumptions have been made regarding the average useful lives and remaining lives of the asset groups, based on the current local knowledge and experience and historical trends. These need to be reviewed and the accuracy improved based on real time assessments of deterioration.

Demand projection

The demand variations are likely to be driven by population and demographic changes, location preferences and climate change. There is no marked change in the industrial businesses and desired service levels are likely to be stable. Demand-side management practices are able to offset some of the effects of population growth and reduce the need for new investments.

Levels of service

Service levels are generally assumed to remain the same for the period covered by this strategy. Resilience enhancement strategies are assumed to support the reliability of service. Minor service level improvements are planned in relation to certain areas of Council activity as a result of capital projects. There is no category of infrastructure in this Strategy that is underutilised or in which the Council intends to curtail activity.

National and regional regulations and policies

This strategy has been made on the assumptions of the continuation of current regulations and policies. However, it is recognised that over the period of this strategy there are likely to be changes in a number of relevant legislation or standards. In particular, Council monitors the progress of the proposed changes regarding the water quality standards, Natural Resources Plan, and NZTA’s maintenance criteria in the One Network Road Classification (ONRC).

The changes to national or regional regulations and standards are likely to affect Council services; however, the impact on infrastructure in Lower Hutt is expected to be limited due to the fact that Council has recently undertaken some improvements to address these concerns.

The council currently receives funding for its roading projects from NZTA. It is assumed that this relationship will continue and that there will not be any significant change to the way in which NZTA provides funding for projects.

Population growth

In 2017, the total population of Lower Hutt was estimated to be 104,700 people. This indicates an increase of 3,500 people compared to 2013, when it was estimated to be 101,200 people. The recent growth, started with the inception of Council’s Urban Growth Strategy (2012-32), is expected to be consistent, reaching 110,000 people by 2032. The ageing population of the city, together with the limited greenfield and intensification opportunities for residential development are expected to slow down the growth to an average of 0.2% per annum after this period. The internal population projection indicates that Lower Hutt population will increase to about 114,000 by 2048.

Rates of growth that vary significantly from this assumed level may result in unbudgeted financial pressures. However, if lower levels of growth or population decline occur then council funding will not be used for development projects. There is a moderate level of uncertainty regarding population growth, although the risk to Council funding if growth targets are not achieved is relatively minor.

Level of Debt

In 2017 Council reviewed its Financial Strategy in order for the programme of rejuvenation and revitalisation of the City to continue and to provide greater budgetary flexibility. A more sustainable debt strategy linked to affordability is developed. Debt levels are set as a percentage of total revenue. The limits on debt that Council has agreed to are:

· Years 1 to 3: less than 150% of total revenue (in year 1 this represents a limit of $242m0

· Years 4 to 6: less than 130% of total revenue

· Years 7 to 12: less than 110% of total revenue

· Years 13+: Less than 90% of total revenue.

There is little uncertainty in the level of debt that Council will take on, which is calculated in detail during the preparation of the LTP.

Borrowing

The long-term cost of borrowing is assumed to be an average of 5% over the first 10 years, and continue at 5.5% beyond that time. There is a high level of uncertainty in this interest rate over the thirty-year period covered by this strategy.

Inflation

Price levels are assumed to be stable over the next ten years. Inflation rate is forecasted to gradually increase from 1.4% to 2.6%, with an average of 2.37%. The inflation rate is expected to continue at 2.6% beyond that time, based on the BERL Local Government Cost Index forecast issued by BERL in October 2016. There is a high level of uncertainty in this rate over the thirty-year period covered by this Strategy.

Council rating

Rates increases are limited to no more than the BERL Local Government Cost Index shift per annum with an additional average 1.1% per year allowance for growth in the rating base over the next ten years and continuing at 1.0% beyond that time. Uncertainty is low for this category over the short-term and based on the budgeted expenditure in the LTP. Beyond this period, uncertainty about the growth rate would increase to a high level.

Confidence and reliability of data and forecasts

Asset management plans assess the level of confidence and reliability of asset data and long-term financial forecasts (both capital and operating costs), based on sound records, procedures, investigations and analysis that are documented properly, with minor shortcomings and gaps. We have highly reliable / reliable data for asset quantity, type, material, condition, location, performance, deterioration rate and unit costs, and uncertain data on piping network depth and asset development capital costs. All operating costs (excluding emergency works) are assessed as either accurate or containing minor inaccuracies (+ 5%), while capital costs have a 10% to 22% margin of error.

Appendix 1: Local Government Act Requirements

The requirement for councils to complete an Infrastructure Strategy was incorporated into changes to the Local Government Act in 2014. The key components of the strategy are outlined in section 101B shown below.

(1) A local authority must, as part of its long-term plan, prepare and adopt an infrastructure strategy for a period of at least 30 consecutive financial years.

(2) The purpose of the infrastructure strategy is to—

· (a) identify significant infrastructure issues for the local authority over the period covered by the strategy; and

· (b) identify the principal options for managing those issues and the implications of those options.

(3) The infrastructure strategy must outline how the local authority intends to manage its infrastructure assets, taking into account the need to—

· (a) renew or replace existing assets; and

· (b) respond to growth or decline in the demand for services reliant on those assets; and

· (c) allow for planned increases or decreases in levels of service provided through those assets; and

· (d) maintain or improve public health and environmental outcomes or mitigate adverse effects on them; and

· (e) provide for the resilience of infrastructure assets by identifying and managing risks relating to natural hazards and by making appropriate financial provision for those risks.

(4) The infrastructure strategy must outline the most likely scenario for the management of the local authority’s infrastructure assets over the period of the strategy and, in that context, must—

· (a) show indicative estimates of the projected capital and operating expenditure associated with the management of those assets—

· (i) in each of the first 10 years covered by the strategy; and

· (ii) in each subsequent period of 5 years covered by the strategy; and

· (b) identify—

· (i) the significant decisions about capital expenditure the local authority expects it will be required to make; and

· (ii) when the local authority expects those decisions will be required; and

· (iii) for each decision, the principal options the local authority expects to have to consider; and

· (iv) the approximate scale or extent of the costs associated with each decision; and

· (c) include the following assumptions on which the scenario is based:

· (i) the assumptions of the local authority about the life cycle of significant infrastructure assets:

· (ii) the assumptions of the local authority about growth or decline in the demand for relevant services:

· (iii) the assumptions of the local authority about increases or decreases in relevant levels of service; and

· (d) if assumptions referred to in paragraph (c) involve a high level of uncertainty,—

· (i) identify the nature of that uncertainty; and

· (ii) include an outline of the potential effects of that uncertainty.

(5) A local authority may meet the requirements of section 101A and this section by adopting a single financial and infrastructure strategy document as part of its long-term plan.

(6) In this section, infrastructure assets includes—

· (a) existing or proposed assets to be used to provide services by or on behalf of the local authority in relation to the following groups of activities:

· (i) water supply:

· (ii) sewerage and the treatment and disposal of sewage:

· (iii) stormwater drainage:

· (iv) flood protection and control works:

· (v) the provision of roads and footpaths; and

· (b) any other assets that the local authority, in its discretion, wishes to include in the strategy.

Section 101B: inserted, on 8 August 2014, by section 36 of the Local Government Act 2002 Amendment Act 2014 (2014 No 55).

[1] National Infrastructure Unit (2015). The Thirty Year New Zealand Infrastructure Plan 2015.

[2] Estimated value is the optimised replacement cost for all assets in category valued at 31 Dec 2014 for three waters (to be updated with the new valuation figures in December) and 10 March 2011 for roads and footpath, excluding land value. Wastewater includes approximately $44m owned by Upper Hutt City Council.

[3] Details of assets’ condition and lifespan is provided in AMPs.

[4] The Ministry for the Environment (2008). Climate Change Effects and Impacts Assessment – A Guidance Manual for Local Government in New Zealand.

[5] NIWA (2017). Regional climate change report for the Wellington Region. Detailed projections can be found at www.gw.govt.nz/climate-change

[6] For further information see Parliamentary Commissioner for the Environment (2015). Preparing New Zealand for Rising Seas: Certainty and Uncertainty, and Gyopari, M. (2015). Conjunctive Water Management recommendations for the Hutt Valley , published by Greater Wellington Regional Council.

Mayor W R Wallace (Chair)
Deputy Mayor D Bassett
Cr G Barratt	Cr C Barry
Cr L Bridson	Cr J Briggs
Cr M Cousins	Cr S Edwards
Cr T Lewis	Cr M Lulich
Cr G McDonald	Cr C Milne
Cr L Sutton

(A)	(B)	(C)

General subject of the matter to be considered.	Reason for passing this resolution in relation to each matter.	Ground under section 48(1) for the passing of this resolution.

Development Incentive Options.	The withholding of the information is necessary to enable the local authority to carry out, without prejudice or disadvantage, commercial activities (s7(2)(h)).	That the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exist.

Activity	Date
Community Plan Committee/Council meet to approve text for CD	15 March 2018
Public consultation	27 March – 27 April 2018
Hearing of submissions	16-17 May 2018
Community Plan Committee/Council agree final changes to LTP	6 June 2018
Council meet to adopt LTP and set the rates	28 June 2018
LTP printed and published	By 27 July 2018