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

Attachment 1

Infrastructure Strategy 2018-48 - final CPC 260318

INFRASTRUCTURE STRATEGY

2018-2048

Contents

Foreword. 3

1. Context. 5

Introduction. 5

Infrastructure Vision and Principles. 6

Infrastructure Goals. 7

This Strategy. 9

About Hutt City. 11

Hutt City Infrastructure Networks. 13

Key Infrastructure Networks. 15

2. Significant Infrastructure Issues and Opportunities. 18

1. Natural Hazards and the Effects of Climate Change. 18

2. Growth and Demand Variations. 26

3. Technological Advancements. 31

3. Management Practices. 35

Communication and Engagement. 35

Levels of Service. 35

Service Delivery. 36

Asset Management Planning. 36

Spatial Planning. 37

Sustainability and Public Health. 37

Risk Management. 40

4. Implementing the Strategy. 41

Significant Projects Incorporated into the Existing Plans. 41

Decisions about Capital Expenditure Hutt City Expects to Make. 43

5. Projections and Assumptions. 46

Indicative Estimates of Expenditure. 46

Funding. 50

Assumptions. 51

Appendix: Local Government Act Requirements. 54

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. It is accepted that Natural hazards, the effects of which are predicted to worsen with climate change, present as a significant issue. Hence, Council will need to prioritise ensuring the resilience of infrastructure, and where possible pursue sustainability focused options. Moreover, changes in the overall population size and the demography of the residents living in Hutt City may affect demand and service delivery. Technology is also an area that is likely to experience radical change over the next thirty years. Some technological changes will be anticipated and some -particularly technological innovations- will not. While robust predictions can be made for much of the short to medium term factors and expected impacts, it 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 stormwater 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 or service 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 Plan and Annual Plans.

· Activity Management and Service 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’s Transport Activity Management Plan or the Wellington Water’s Regional Service Plan – 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.

· 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, Taita), 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 $2 billion, while each year Council spends, on average, $18m in capital replacements and $14m to improve and upgrade this infrastructure^{^[2]}. The extent of Council infrastructure networks in this Strategy is as follows:

Infrastructure Category

Total Length

Estimated Value^{^[3]}

Key components

Levels of service

Condition and lifespan^{^[4]}

Water supply

681 km (pipes)

Depreciated Replacement Cost: $114m

Replacement Cost: $280m

· 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% are 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)

Depreciated Replacement Cost: $236m

Replacement Cost: $536m

· 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% are 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

(pipes)

Depreciated Replacement Cost: $184m

Replacement Cost: $341m

· 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% are 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

484km (roads)

and 728km (footpaths)

Depreciated Replacement Cost: $430m

Replacement Cost: $904m

· 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 more than 100 years. The average life of a chipseal surface in Lower Hutt is about 12 years, and asphaltic concrete has an average life of 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. Appropriate maintenance approaches are also in place to extend the life of assets, particularly assets with longer lifespans and extremely high replacement cost.

Key Infrastructure Networks

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

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. In 2017, the water quality from the aquifer started to show signed of deterioration. As a response to this to ensure public safety, UV treatment and chlorination were installed at the Waterloo Treatment Plant. Recent contamination of water sources in Havelock North have resulted in changes to how water will be managed in future throughout the country.

An emerging issue is the volume of water available in the future, climate change, water allocation rules and growth in the Wellington region all lead to estimates that an additional water supply source for the region will be required by about 2035. A Sustainable Water Source study will be undertaken 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 drinking water 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. Critical assets 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.

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. Resource consents are in place for the discharge of treated water and also for overflows in the case of high flows. Ongoing environmental scanning is in place to be aware of and comply with potential legislation changes that may affect resource consents renewals.

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 stormwater 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 Water’s 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. The condition of critical assets is closely monitored to ensure timely maintenance and renewals are undertaken when an unacceptable risk of failure is observed or predicted. The non-critical assets, however, will not be proactively repaired and will be run to fail. A further 10-20 years of life is expected from these non-critical repaired assets before replacement.

Stormwater and flood protection

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 stopbank 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., rain gardens, 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 Riverlink, a major project to raise and widen the stopbank on both banks of Hutt River along the city centre, widen the river channel 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.

Hutt City Council is taking a leading and progressive approach nationally to managing its roads and footpaths, including being one of New Zealand’s earliest adopters of pavement deterioration modelling and our assessments of bridges for seismic strengthening. Critical assets include key strategic or arterial routes and bridges within Lower Hutt. As part of the process for designing the Council’s 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. Previous investigations identified the need for major improvements in roads connecting the CBD and Seaview/Petone to State Highway 2. This is required not only to address current capacity constraints but also to accommodate the expected growth and improve the resilience of the major strategic roads. The Melling Bridge renewal and East Access Route (to access or bypass the CBD via Knights Road, Cornwall Street and Pretoria Street) improvements are planned to address these concerns for the CBD. The work is programmed to coincide with stopbank upgrade work through the Riverlink project that may have an impact on the existing West Access Route (through Daly St.). The East Access Route will be improved to ensure better alignment with the potentially relocated bridge, along with improvements in intersections and signalisation. The capacity issues during peak hours in Petone, however, occur mainly on The Esplanade and Jackson St. The proposed East West Connection is expected to remove the through traffic from these two roads and ease the current issues. This is also an important project to accommodate the increased traffic volumes generated by growth in Petone, Eastern Bays and Wainuiomata and has significant resilience benefits.

Promoting alternative modes of transport is also being considered by extending the existing cycleways and improving their connections with other roads and cycleways, moving the Melling train station southwards and developing a pedestrian bridge connecting that to the CBD, and improving the walkability in central paths. Council regularly assessed the forthcoming developments and revisits capacities that will be influenced in order to plan any intervention that may become necessary.

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 roads and footpaths, 20 percent is bridges, and the remainder consists of streetlights, parking meters, signage, and so on.

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 extensive 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^{^[5]}. Recent NIWA regional report suggests that sea level is expected to rise by 12cm to 24cm by 2040^{^[6]}. 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.^{^[7]}

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 to ensure the continuation of this service in case of a primary network failure	Continuation of service Improved resilience Public health and safety Future proofing in regard to effects of climate change and by accommodating growth	Constraint on land use	Medium term
	Building redundancy and secondary Wastewater network to ensure the continuation of this service in case of a primary network failure	Continuation of service Improved resilience Public health and safety Future proofing in regard to effects of climate change and by accommodating growth		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 Including climate change in the code of practice and all work streams Less parking requirements for new dwellings through the proposed district plan change 39 and parking policy	Public health and safety Increased awareness 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 Council considers where applicable, for instance, market cover, or self-insurance (setting aside funds for covering foreseeable events). Council maintains appropriate levels of insurance to safeguard core assets against significant losses^{^[8]}.

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 and commercial 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 figure illustrates the extent of the ageing population.

Figure 2 Projected age distribution of Lower Hutt residents, 2018 - 2048

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 new technology	Technology and the advancement of technology present a huge number of diverse opportunities and challenges to infrastructure such as new materials, equipment as well as best practices. 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 Council’s and the City’s benefit when appropriate. Council is developing a Smart City plan to address the major changes, such as the introduction of driverless cars. Wellington Water is also beginning a programme of innovation starting regionally in 2018/19. Depending on the results, further improvements in or new capital projects or operational investment may be required.	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

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. Council’s Corporate Asset Management Policy outlines the need to engage with residents and work in partnership with others, and respond to a changing social and economic climate.

Council also has in place a ‘Community Engagement Strategy’, which outlines the philosophy and commitment to the community held by the Council. Council has prioritised creating an ongoing dialogue between stakeholders on key strategic, planning and policy matters, in the spirit of partnership. The Strategy summarises the community engagement goals, the main types of engagement Council undertakes, and how community engagement relates to the decision-making process. Council carries out in-depth community consultation on major infrastructure projects, issues or proposed changes to levels of services. This Strategy has created more effective community engagement across all Council activities and will continue to do so by empowering the community to participate meaningfully in shaping Hutt City’s services, facilities and policies, helping to make Hutt City a great place to live, work and play.

Close collaboration with key stakeholders such as New Zealand Transport Agency (NZTA) and Wellington Water is also essential in enabling Council to perform its functions. It is, therefore, important to ensure our goals are aligned with the objectives of these organisations in order to maintain a smooth and progressive working relationship. The arrangements between Council and its partner organisations are explained in Service Delivery section.

Levels of Service

Based on the findings of community consultation and in conjunction with AMPs, 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 water supply, wastewater, stormwater and transport. Council considers improvements in levels of service in response to changes in community expectations.

Service Delivery

Wellington region is defined by water catchments, rivers and streams, groundwater, harbours and coastline that form major parts of the water cycle. Councils of the region, therefore, established Wellington Water in September 2014 to take a regional focus to the delivery of the three waters services, water supply, wastewater and stormwater, as the natural structure of the region dictates.

Wellington Water is a council-controlled organisation jointly owned by the Hutt, Porirua, Upper Hutt and Wellington City councils and Greater Wellington Regional Council; each council is an equal shareholder. A representative from each council sits on the regional Wellington Water Committee that provides overall leadership and direction for the company. They do this by considering the company’s half yearly and annual reports, monitoring performance of the company, appointing directors to the Board and providing recommendations to shareholders on proposals from the company. The Committee writes an annual Letter of Expectations to the Chair of the Board of Wellington Water which outlines key priorities and areas of focus for the company. This Letter further guides the development of Wellington Water’s Statement of Intent^{^[9]}. Wellington Water also meets regularly with Client Council Representatives, generally Council’s infrastructure managers, to ensure the more operational issues and directions are also aligned to councils’ intentions. Services are provided using the assets that are owned by the councils.

Wellington Water oversees the maintenance, upgrade, renewal and development of the three waters infrastructure through their life cycle, and supports Council by managing data, modelling and providing strategic asset management planning. The organisation also provides value to customers and client councils by acting regionally in reducing duplication and delivering economies of scale.

Hutt City Council also works closely with NZTA as a co-investor in our transport network to ensure an appropriate level of service is delivered. NZTA provides subsidies for some of our roading and shared path (cycles and pedestrians) projects; therefore, 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. Recently, the One Network Road Classification (ONRC) concept was introduced by NZTA to provide more consistency in service delivery across the country. Assurance in this area is gained via evidence from audits, inspections and performance records.

Asset Management Planning

Sound management of the assets is essential to improve the design, development and management of infrastructure. This is ensured and supported through comprehensive activity management or regional service plans.

Wellington Water developed a Regional Service Plan that sets out the approach to deliver the three waters services for the region in a cost effective and sustainable manner. This is the foundation for integrated three waters planning and ensures a consistent approach is applied across the Wellington metropolitan region. The term ‘service plan’ is used to reflect the focus on delivering the services to meet customers’ expectations. The Regional Service Plan also provides an output specific to each client council, including Hutt City Council, and shows how planned activities are aligned with the expected customer outcomes set in Council’s Infrastructure Strategy and other plans and policies. Council supports Wellington Water and provides feedback in development of Regional Service Plan and further decides and funds the work programmes produced using this Plan.

A Business Case Approach was taken in developing the Transport Activity Management Plan where the identified problems and how these will be addressed through our transport activities are explored. The work programmes developed directly respond to the strategic problems identified and considers how we manage levels of service for all road users, provide a safe and high quality network, deliver resilient connections, and provide value for money of our Road Asset investment. This plan follows best practice guidelines set in International Infrastructure Management Manual (IIMM) and is in line with NZTA’s One Network Road Classification (ONRC).

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.

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)^{^[10]}.

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 wastewater 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.

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.

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 LTP, while there are also decisions that Council expects to make in due course^{^[11]}.

Significant Projects Incorporated into the Existing Plans

Several projects are considered 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 proposed East West Connection, the Melling Bridge renewal and some water main renewals, will not only help us to achieve increased resilience but also increase the network capacity to accommodate the expected population growth. Council is also continuing to carry out a range of projects to ensure that we reflect other demand variations as our population grows and changes and as more information about the new and innovative technologies becomes available.

Key projects that will occur during the course of this Strategy are listed below.

Water Supply

· Critical water supply network seismic upgrades: $3.8m budgeted in the first five years (2018-23) for ensuring security of supply through upgrading of at risk or critical pipes. This includes upgrading Waterloo Wellfield Collector Main (2018-19). The upgrades will be continued with a $500k per annum budget for 5 years after that (2023-28) and a $600k per annum budget thereafter.

· Water reservoir upgrades: $14.5m budgeted for seismic strengthening works to be carried out to water supply reservoirs (2018-29). This project minimises the damage and disruption of services in the event of an earthquake, thereby improving the resilience of the network and reducing the risk of health and safety issues. The upgrades will be continued with a $115k per annum budget for 10 years after that out to 2039.

· Water main renewals: $57m for renewing and upgrading the network that supports providing a reliable service as well as greater resilience and accommodating expected population growth. Priority is given to higher criticality pipelines while condition criteria are also considered.

Wastewater

· Seaview Wastewater Treatment Plant seismic strengthening: $4m for ground remediation and seismic strengthening of the Milliscreen and Main Pump Station buildings (2018-19) to minimise the risk of damage in a significant earthquake and the follow on public health issues.

· Upper Hutt to Hutt Valley Main Sewer Connection: $12.4m to construct a new pumped connection from Silverstream to Taita as contingency against loss of Silverstream River Crossing or Western Hills Main Sewer. (2022-23 and 2027-29)

· Silverstream wastewater storage tank upgrades: $5.7m for additional storage and UV treatment at Silverstream (2023-25) to improve the network resilience and meet likely consent requirements from the overflow consent renewal in June 2019.

· Petone Collecting Sewer Upgrade: $13m is budgeted to replace or duplicate the sewer between the Esplanade West Pump Station and the Main Collecting Sewer (2020-22). Petone Collecting Sewer is the pumped main sewer that runs along the foreshore, collecting all the wastewater from the Petone area, and pumping it to the Treatment Plant. The Main Collecting Sewer is the Sewer Line from Barber Grove in Randwick Rd to the Treatment Plant. It carries approx. 70% of all the wastewater for the whole of the Hutt Valley. Timing of this project is subject to confirmation of the condition of the existing pipe. This project further improves the resilience of the sewer and increases the capacity to address population growth in Petone.

· Barber Grove to Seaview Treatment Plant trunk duplication: $6.2M (2019-21), Pump Station upgrades $5.7M (2025-26), the Treatment Plant upgrades $14.2M (2028-31), and Pumped Harbour Overflow $12.76M, (2029-32) are projects designed to improve environmental performance in the face of a more stringent consenting regime and improve resilience. The projects also provide capacity for growth in local areas such as the CBD.

· Main Outfall Pipeline Overflow Mitigation: $15.1m for duplicating the main collecting sewer and mitigation of effects from treated effluent overflows from the Treatment Plant to the Waiwhetu Stream through an extended overflow location and/or additional storage at the plant (2019-22).

· Trunk Main Outfall Pipeline Renewal: $44.7m for placing internal seals in the 10km northern section of the pipeline to prolong its life, then replacing the southern 8km of pipeline (2028-33). Improved resilience and addressing expected changes in demand are considered in this project.

Stormwater

· Stormwater network upgrades: $55.9 is budgeted over the 30 years of this strategy to improve the stormwater network and reduce the risk of flooding across the city, thereby minimising the risk of property damage or health and safety issues. Additional $4.7m is also budgeted for pump station upgrades to compliment this programme.

· Awamutu Stream: $3.6m is budgeted to complete the channel improvements and pump station installation to reduce the risk of flooding. (2018-22)

All water networks

· Supervisory Control and Data Acquisition (SCADA) renewals: $2.1m for water networks (ongoing). It is a monitoring system which allows for real time data gathering in all three water networks. Using SCADA demonstrates successful uptake of technology to improve the effectiveness and efficiency of networks. Over a third of this budget is included in the first five years of this strategy (2018-23) aiming to upgrade the existing system and improve its compatibility with regional SCADA network.

Transport

· Significant Bridge seismic strengthening: $820k budgeted for Cuba St. Overbridge (the work for other bridges is completed) (2020-21). This is 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 and prevention of injury along with minimising property damage and reducing disruption.

· Road network resilience: $2.9m budgeted 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.

· East Access Route: $3.5m (2020-21) for improving intersections and signalisation to ensure better alignment with the potentially relocated Melling Bridge and other outcomes of Riverlink, along with responding to the expected growth in CBD.

· Eastern Bays shared path: $11.5m budgeted 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: $5.9m is budgeted to complete the project (2019) for responding to changes in demand and uptake of alternative modes of transport.

· Cycleway network development: $1.5m budgeted 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 from 2019 to 2048). 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: $81.4m (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 or in making improvements in preparation for accommodating driverless cars. The improvements are expected to be continued with a $330k per annum budget from 2038 to 2048.

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 2048. 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
Wastewater and Stormwater	Water quality	$300k pa is budgeted for 5 years. Total cost is currently uncertain.	There are early signals that more may need to be done to address contaminants in receiving waters; however, responsibilities, solutions and costs are currently uncertain. It is expected that more clarity will eventuate through the Whaitua process for the Wellington Harbour and Hutt Valley.	Whaitua process is set to commence in 2018 and a possible 4-5 year timeframe before an implementation plan is delivered.	Decisions will be expected to be made to implement the implementation plan in due course.
Stormwater	Flooding planning controls	Decision will have more operational requirements, rather than a major impact on CAPEX.	Potential changes to District Plan rules and educating residents in order to protect new and existing dwellings from flooding by mitigating the impact of new developments on such.	Decisions expected by 2021/22.	Catchment modelling is currently underway to develop an evidence base. Once completed, it is envisaged to prepare a plan change proposal.
All assets categories	Supporting growth	$20.8 budgeted for growth related projects across all infrastructures. The total cost to be determined.	Development in parts of the city may require more investment in infrastructure, particularly wastewater. Modelling of the networks and of urban development is currently underway to develop a better understanding of network capability and the impacts of growth.	This work is expected to be completed in 2021/22. Decisions to follow in stages, as urban development evolve throughout the city.	Once more is known about the potential impact of development areas, Council may be required to decide how to invest in enabling works to support them.
Transport	East West Connection	$1.0m is budgeted for project investigation relating to business case process. 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 resilience and eases the traffic congestion in Petone. The budget is allocated in LTP but needs to be revisited after the completion of the feasibility study.	Investigation through the business case process started in 2016. Decision to be made in 2018/19.	Decisions to be made based on the findings of business case 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	Riverlink: CBD promenade development	$39.8m is budgeted 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 parking replacement and its configuration.	Decision to be made in partnership with Hutt Valley Flood Management Subcommittee (HVFMSC) by 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	$6.5m is budgeted. The total cost is estimated to be around $30-40m.	The new bridge is considered to alleviate congestion and reduce flooding risk. The bridge is expected to be funded jointly in line with the Riverlink project. 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.	Options to be considered by 2018 Replacement is expected to commence in 2024	Decisions will need to be made on the timing, funding provision, location and design elements for the proposed bridge.
Transport	Walkways and cycleways improvements	Additional funding ($5m-$10m) is required. Total cost (including the budgeted projects) is estimated to be around $35m.	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)	Decisions to be made about the southern section of Beltway and connections between cycleways and to key destinations (2018/19). Seek additional funding from the urban cycleway fund to accelerate the programme of works.
Transport	Network resilience improvements	The total cost is estimated to be around $30m.	Provision for projects responding to climate change and sea level rise, and projects to exploit technological advancements.	Investigation and design study in 2018/20 Decision to be made by 2021	Decisions to include the required funding for network resilience in LTP. We would seek to work with NZTA to accelerate this in conjunction with their possible resilience programmes and plans to prepare roads for driverless cars.

5. Projections and Assumptions

Indicative Estimates of Expenditure

Costs to maintain current levels of service for the existing infrastructure configuration and address the issues identified in this Strategy are shown in the following graphs. The first twenty years are in line with Long Term Plan figures; however, the last 10 years, which is presented as five year average, should be considered as an indicative estimate of expenditures that are subject to change.

All the costs are adjusted for inflation using BERL’s Local Government Cost Index (LGCI) forecasts.

Figure 3 Actual, budgeted and projected capital and operating expenditures for three waters and roading infrastructure

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. Operating expenditure over the same period is estimated at $2 billion. Figure 4 compares the capital expenditures for asset replacements with planned improvements. The expenditures on different asset categories are presented in Figure 5 while Figures 6 to 10 illustrate the capital replacements vs improvements in each asset category.

Figure 4 Actual, budgeted and projected for replacements and improvements

Figure 5 Actual, budgeted and projected capital expenditures based on asset category

Figure 6 Capital expenditures on water supply network

Figure 8 Capital expenditures on wastewater network

Figure 9 Capital expenditures on stormwater network

Figure 10 Capital expenditures on roading network

Funding

The projects and programmes outlined in this Strategy are mainly funded through a mixture of general and targeted rates, collected in the year of expenditure or to repay loans raised for capital projects, as well as user subsidies and grants, fees and charges and development contributions. Council’s Revenue and Financing Policy indicates the approaches undertaken to fund the operating and capital expenditures.

General rates and targeted rates are the largest source of funding operating expenditures. General rates help fund activities that exhibit strong or dominant public good characteristics. Targeted rates are used where Council has decided that the cost of a service or function should be met by a particular group of ratepayers or where greater transparency about the use of the funding is essential. The targeted rates currently charged by Hutt City Council include water supply (per property) and wastewater services (per pan). Setting user fees and charges is another method used where the activity also provides private benefits. Rates are used to fund the balance of costs after the potential for user charges has been exhausted. Council can also fine people and businesses for certain rule infringements which creates another source of income. The other funding sources for operating expenditure are grants and subsidies. NZTA funding assistance for road maintenance makes up the majority of this funding. Council does not use borrowing, proceeds from asset sales or development or reserve contributions to help fund operating expenditure.

Council funds capital expenditure mainly from borrowing and then spreads the repayment of that borrowing over several years. This enables Council to better match funding with the period over which benefits will be derived from assets and helps ensure intergenerational equity. Some projects may also attract funding from other sources such as capital subsidies and grants from central government agencies, such as NZTA (in relation to certain roading projects), and contributions from Upper Hutt City Council (in relation to joint wastewater activities). Projects to accommodate growth may be partly funded by developers. Development Contributions Policy (2018-21) indicates that developers are required to provide the local infrastructure that is needed to service their development. The costs associated with providing local infrastructure, including local roads and pipes, for new developments should be recovered through development contributions charges. Other funds to support capital projects include annual revenue collected through rates to cover depreciation charges, proceeds from the sale of assets (not otherwise used for debt reduction), and operating surpluses.

Borrowing and repayments are managed within the framework specified in the Liability Management section of the Treasury Risk Management Policy. Council’s Financial Strategy further sets a number of limitations including debt to revenue limits and constraints on increasing rates to ensure the expenditures are affordable in long term^{^[12]}. To overcome these financial constraints, Council has given priority funding to maintaining and renewing the existing assets (where the annual cost of repairs exceeds the annualised cost of its renewal and so it is no longer economical to continue repairing the asset), and will review the timing and scope of large projects to ensure expenditure on assets is done at the most cost effective time and according to the set goals and priorities as more information becomes available. Improved asset management systems and processes will assist in developing accurate programmes of maintenance, asset renewals and new capital expenditure, based on real time asset condition assessment.

Council also engages with the community by offering opportunities through the LTP and Annual Plan consultation processes to ensure that communities can express their views about infrastructure, the upgrades and new developments. Planning and delivering infrastructure is a balance between providing the levels of service the community desires and affordability for ratepayers. The LTP balances the forecasted spending needs with Council and ratepayer affordability.

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 (NRP), 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 4.6% over the first 10 years, and continue at about 5% beyond that time. There is a high level of uncertainty in this interest rate over the thirty-year period covered by this strategy. A number of intentional directives (such as political short-term gain and tax regime amendments) and unintentional variables (such as economic growth, inflationary expectations, banks’ performance, and other perceived risks) affect this rate. The cost of our borrowing, mainly for major capital projects, is directly related to changes in interest rate.

Inflation

Price levels are assumed to be stable over the course of this Strategy. BERL’s Local Government Cost Index (LGCI) will be used to adjust the financial projections. According to the forecast, issued by BERL in September 2017, the LGCI is projected to gradually increase from 1.8% to 2.6% from 2018 to 2028, with an average of 2.3%. The longer term rises of LGCI is expected to be well anchored at 2.7%, as forecasted for the last year.

There is a high level of uncertainty in inflation rate as price levels may change by any adjustment in local and global factors such as economic growth, equity markets’ condition, government’s fiscal and monetary policies, exchange rate and terms of trade. However, Council adjusts both revenue and costs with inflation forecasts, so actual inflation has limited impact on our financial stability and performance.

Council rating

Rates increases are limited to no more than the BERL Local Government Cost Index shift per annum with an additional average 1% per year allowance for growth in the rating base over the course of this Strategy. 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

AMPs provide assessments of 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. Capital projects and the associated costs will be reviewed in progressive project stages to improve the accuracy of capital costs projections as more certain information about the scale of the projects, its components and qualities is available. All operating costs (excluding emergency works) are assessed as either accurate or containing minor inaccuracies.

Appendix: Local Government Act Requirements

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

[2] The average figures are based on current dollars, with no adjustment for inflation.

[3] Estimated value include Depreciated Replacement Cost (which is the estimate of the current market value of assets as at December 2017, defined as the current cost of reproduction or replacement of an asset less deductions for physical deterioration and all relevant forms of obsolescence and optimization) and Replacement Cost (which is the insured value of the assets, except for roads and footpath, obtained in October 2017.) Wastewater includes approximately $44m owned by Upper Hutt City Council. The figures exclude value of land under roads.

[4] Details of assets’ condition and lifespan are provided in AMPs.

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

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

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

[8] Details of the insurance policies Council maintains for various asset types are provided in Annual Reports.

[9] More information about the arrangements between Wellington Water and Hutt City Council can be found in the current Statement of Intent (2017 – 2020) at www.wellingtonwater.co.nz/about-us/vision/

[11] The estimated cost of projects reported in this section is based on current dollars, with no adjustment for inflation.

[12] Read more about the Financial Strategy in the ‘Level of debt’ and ‘Council rating’ assumptions of this Strategy.

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

No.	Title	Page
1 ⇩	Draft Rates Postponement Policy for Residential Ratepayers Aged 65 and Over	15

No.	Title	Page
1 ⇩	Part 1 Remission for Community, Sporting and Other Organisations	25

No.	Title	Page
1 ⇩	Draft 2018 Financial Strategy (changes tracked)	30
2 ⇩	Draft 2018 Financial Strategy (clean version)	51

No.	Title	Page
1 ⇩	2018 Forecasting Assumptions	66