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"^""'^""^"'^ Council 3 February 2014

Coastal Structures

DC No: 30

Purpose To provide direction on the work programme for coastal structures for incorporation into the 2015-25 Long Term Plan.

Executive Summary 2. Council has coastal permit resource consents for coastal structures in the coastal

marine area.

3. The failure of the previous programme, to keep up with the declining condition of the structures, has now created significant pressure on assets. The current capital funding is not adequate to stay ahead of the decline in condition. Since the consent was issued in 2010 there has been an increase in the amount of structures with a remaining life of zero and subject to failure.

4. This impacts on the potential loss of Council land, the ability to use the land -particularly for walkway purposes - and has a corresponding increase in operational expenditure for repair rather than maintenance.

5. The report recommends increasing the capex budget to $583,000 per year. This would effectively complete all required reconstructions within the next eight years with an associated reduction in the operational maintenance budget.

Recommendation That the Council:

(a) Approve a revised programme to complete coastal structure reconstruction in the next eight years with a capital budget of $583,000 per year from 2015/16 to 2022/23 (option b).

Discussion 6. In August 2010 Tauranga City Council was granted coastal permit resource consents

by the Bay of Plenty Regional Council for coastal structures in the coastal marine area. The resource consents are required under the Resource Management Act 1991 and the Bay of Plenty Regional Coastal Environment Plan.

7. The consents are for occupation, upgrading and where necessary, reconstruction, as well as ongoing maintenance and repair. Clause 7.1 of the consent states: "The consent holder shall ensure that the structures authorised by this consent are maintained in a safe and structurally sound condition."

Objective ID: A6063124 Coastal Structures - 1 -

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8. There are essentially two functions of coastal structures:

• Protection of coastal land, including for recreational purposes; and

• Protection of the city's Transportation assets.

9. The key focus of this paper is the work programme for coastal structures protecting open space land.

Work Programme 10. The consents cover all the Open Space coastal structures. Council has taken

responsibility for coastal structures that provide a public benefit. For the remaining structures these either come under private ownership or they revert to BOPRC responsibility. There are a total of 283 structures that Council has responsibility for. Of these:

• 178 are required to be maintained utilising operational budget (separate budget of $60k and $24k per annum required regardless).

• 33 are required to be removed utilising operational budget.

• 72 require upgrade or reconstruction (subject of this paper).

11. The majority of these structures are erosion protection structures such as sea walls and groynes.

12. The cost to reconstruct most of the coastal structures ranges between $175,000 and $500,000. Each completed reconstruction is expected to last 30 years plus.

13. In 2008 the 72 seawalls requiring upgrade or reconstruction were assessed and given a remaining useful life in terms of years. At the time nine structures were given a remaining life of zero, making these structures more susceptible to failure in a storm event.

14. Upgrades were included in the 2009-19 LTP and construction works began in 2010.

15. To date five of the structures have been completed. This is due to the limitations of the allocated budget and impact of storm events. The storm events meant that other areas requiring emergency repair (for example Beach Rd walkway, Daisy Hardwick walkway, Fergusson Park seawall) have taken priority over scheduled upgrades (Vine Ave and Harbour Drive).

16. Along with deferrals in the work programme the number of structures with a remaining life of zero is also continuing to increase. Due to the number of failures, mainly due to storm damage on already compromised structures, staff are having to reprioritise which structures are re-constructed.

17. The table below shows the number of structures with a remaining life of zero if no more reconstructions were to occur.

Number of structures with a remaining life of zero

2015 2016 2017 2018 2019 2020 2021-2023 2024-2025

14 22 45 48 51 57 66 67

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18. An issues and options paper was presented and adopted during the last 2012-22 LTP to reinstate the original coastal structures budget. This recognised that the risk of failure due to storm events is significant, and it is more than likely that the budget will need to be spent on emergency repairs rather than planned upgrades.

19. The impact of not upgrading Council's coastal structures is:

• Potential erosion/loss of Council land as structures cannot fully carry out their role of protecting Council land.

• Potential impact on how the land is used, particularly where walkway connections are in place.

• Operational budget continually being used to repair rather than reconstruct.

• Health and Safety implications with holes forming behind sea walls and causing trip hazards.

Operational Budget Allocation 20. Currently there is an operational budget of $83,471 per annum allocated for the

maintenance and removal of seawalls, as per the conditions of the consents. The budget was primarily to maintain the 178 seawalls identified within the consents. However the entire maintenance budget is currently being spent on patching the sea walls identified for reconstruction. The failure repair costs are between $3,000 and $20,000 per repair.

21. At present this budget is continually being re-allocated to the repair of failures after storm events, rather than preventative maintenance. A number of the City's most popular walkways are along the esplanade strip and protected by seawalls. Failure of these seawalls and damage to the walkways has a major impact on a large number of residents.

22. Repairs to seawall failures are still subject to failure in the future as they are a temporary solution and not an upgrade. The repairs are carried out to prevent further deterioration of the seawall and loss of land until they can be upgraded through the prioritisation schedule.

23. It is important to note that some sea walls are beyond repair and are essentially being left until reconstruction is programmed. The sea wall at Fergusson Park is an example of this where the cost to patch the storm damage would have exceeded the operational budget, therefore Fergusson has been reprioritised for reconstruction this current year.

24. Up until this year, the sea wall along the front of Memorial Park has cost an average of $8,000 per annum to repair various failures and holes that have formed after storm events. These repairs are only temporary fixes and not long term solutions. During the last six months $50,000 has been spent on Memorial Park alone due to the deteriorating condition of the wall. At this stage the Memorial Park sea wall is scheduled to be reconstructed in 2023 at an estimated cost of $225,000 (plus inflation). If the current level of repairs required at this site continues. Council may end up spending (+/-) $400,000 on repairs by the time the reconstruction is due under the current programme.

25. Allocation of increased opex relates to the zero life structures (figures provided in para.20). Maintenance of the other 178 structures required within the consent is

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3 February 2014

provided for in a separate budget. This is to complete required repairs of the structures with a remaining life of zero until they are scheduled for reconstruction.

Capital Budget Allocation

26. The total estimated cost to upgrade or reconstruct all of the remaining 67 coastal structures as required by the consents is $4,664,405. The current LTP programme totals $3,039,103 for the next ten years. The annual budget ranges from $172,203 in 15/16, to $342,900 in 18/19.

27. It is important to note that this figure only relates to structures with a remaining life of two years or less. In 2015 there are now 14 structures that have a remaining life of 0 years, compared to 9 structures in 2008. The approach that Council takes in the LTP will impact either positively or negatively on the number of structures with a remaining life of zero.

28. If we are in a position where all coastal structures are upgraded or reconstructed, this has a corresponding positive impact on how we allocate our operational budget, and we can move from the current reactive maintenance approach to a more appropriate asset management approach where we are maintaining a quality asset. The Beach Rd walkway is an excellent example of where this has been achieved.

29. In order to spread the financial burden on Council an option has been included which provides for completion of the programme over a twenty year, rather than eight year, period (Option C).

30. Because of the failure of the previous programme to keep up with the declining condition of the structures, a significant pressure on the asset has been created. In order to deal with the number of structures currently with a remaining life of zero, a capex budget (in today's dollars) of $400,000 for the first five years of the LTP will be required, dropping down to $177,627 for the subsequent fifteen years. The implication of Option C is that the annual operational maintenance budget will still be required to be spent on repairs to structures that actually need to be reconstructed. With the maintenance of structures (required to be maintained under the Regional consent) only occurring when failures are identified.

Options

Options Implications Financial Implications

Status quo.

Continue with current capex budget.

Note annual budget ranges from $172,203 to $343,000.

Allows for the reconstruction of one structure per year. Coastal structures will continue to decline. The number of structures with remaining life of zero will increase from M i n 2015 to 72 in 2025. Operational budget will continue to be used reactively. Reconstruction of all structures will take at least fifteen years.

Total capex of $3,039,103 over next ten years with a further $1,625,300 required over the following ten years (2026-35)

Plus operational budget of $880,000 on repairs over the next ten years.

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Options Implications Financial Implications

Implement programme to complete coastal structure reconstruction in next eight years.

Increase the capex budget to $583,000 per year from 2015/16 to 2022/23.

(recommended option)

Allows staff to better prioritise structures to be reconstructed. Structures able to cope with total failures due to storm damage. Implement a programme to complete reconstruction of all coastal structures within eight years. Ability to adopt preventative maintenance approach within allocated operational budget. The number of structures with a remaining life of zero will decrease from M i n 2015 too in 2025.

Total capex of $4,664,000 over next eight years.

Plus operational budget of $270,000 on repairs over the next eight years.

Implement programme to complete coastal structure reconstruction over next twenty years.

Increase the capex budget to $400,000 for the first five years then $177,627 for the subsequent fifteen years.

Will allow for some prioritisation of structures to be reconstructed. Implements a programme to complete reconstruction of all coastal structures within twenty years. The number of structures with a remaining life of zero will decrease to zero by 2035. Maintenance budget of $83,471 per year will still be spent on repairs to structures requiring reconstruction, rather than on preventative maintenance of sound structures.

Total capex of $4,664,405 over next twenty years.

Plus operational budget of $860,000 on repairs over the next twenty years.

Summary

Option Summary Total Capex first ten years

Total Rates Est No. of structures with remaining life of zero at 2025

Budget reflects slow reconstruction of zero life structures. This means low Capex, but high R&M Opex over twenty years. Risk of major failures.

$3.0m First ten years $2.1m Subsequent ten years $4.2m

25

Reconstruction of all structures completed over eight years. Lower R&M Opex implications. Better than drip feeding reconstructions over twenty

$4.6m First ten years $2.6m Subsequent ten years

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years. Provides a non-financial benefit of improved amenity and lower risk of major failures

$3.3m

Early higher Capex for first five years, ongoing Capex and R&M Opex for the next twenty years. Risk of major failures in the future. Will allow to reconstruct the most at risk structures in the first five years

$2.9m First ten years $2.0m Subsequent ten years $3.1m

27

Consideration strategic Context 31. The maintenance and reconstruction of coastal structures links to the community

outcome of "a city of great spaces, places and environments".

32. The extent to which the maintenance and reconstruction of coastal structures links to the community outcome of "a city of great spaces, places and environments" is high.

33. Many of the coastal structures are critical to the walkway and cycleway network throughout the City, and the ability to access many of the city's special ecological areas as well as protecting significant areas of open space.

Community 34. A number of the City's most popular walkways and open space areas are along the

esplanade strip and protected by seawalls. Failure of these seawalls and damage to walkways and open space areas has a major impact on a large number of residents and the wider community.

Significance 35. The decisions in this report are of medium significance in accordance with the policy,

due to the value of the associated works, the potential impact on a subgroup of the community and the likely level of public interest.

Implementation 36. A prioritisation of the reconstruction of coastal structures will be incorporated into a

programme schedule and will be implemented as per the council decision.

Attachments A project impact summary is attached to this report.

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Signatories

Author

if-

Warren Aitken, Team Leader: Parks Environment

Authorisers Rebecca Perrett, General Manager: Environmental Services

Coastal Structures - 7 -Objective ID: A6063124

TCC Project Impacts lofl

Activity

Project:

Option 1

Spend Impacts:

Repairs and Maintenance Depreciation Debt Servicing TOTAL OPERATING COST Debt impact

59

I Coastal Structures renewaP

I Option 1 Current rate of renewal of coastal structures Start 2016

172,000

Vb.OUU 0

5,375 80,375 172,000

Loan % Useful Life Debt Ret. Loan Life

2017 318,000 277,000

2019 343,000

2020 343,000

2021 343,000

2022 343,000

2023 300,000

2024 300,000

2025 300,000

75, OUU 5,733

20,258

80,000 16,333 37,626

80,000 25,567 55,084

85,000 37,UUU 73,746

85,000 48,433 91,551

95,000 59,867

108,499

95,000 71,300

123,245

105,000 81,300

135,898

105,000 91,300

147,800 100,991 133,960 160,650 224,985 263,365 289,545 322,198 344,100 483,120 740,520 1,052,840 1,351,440 1,636,320 1,907,480 2,121,920 2,324,360 2,514,800

100.00% 30

4.00% 25

TOTAL 3,039,oun

88n,000 436,833 799,081

2,115,915

162,530 Average Cost each of subsequent ten

years

138,000 115,680

173,683 _ 427 ,362 '

2,514,800

1,625,3UU Total Cost of next

ten years

1,38U,000 1,156,795 1,736,827

4,664,300 total cash not

discounted 20 years

4,273,622_ 6,389,536 2,944,778

Option 2

Spend Impacts:

Repairs and Maintenance Depreciation Debt Servicing TOTAL OPERATING COST Debt impact

Option 3

I Option 2: Faster Renewal Start 2016 Loan % Useful Life Debt Ret. Loan Life

2016 583,uno

2017 2018 583,nun 583,000

2020 583,000

2021 583,000

2022 583,000

2023 583,OUU

2024 2025

/u,ooo 0

18,219

70,000 19,433 53,199

65,000 38,867 86,721

30,000 58,3UU

118,786

2U,000 77,733

149,394

10,000 97,167

178,544

5,000 116,600 206,236

U 136,U33 232,471

U 155,467 239,U3n

U 155,467 227,37U

88,219 142,632 190,588 207,086 247,127 285,710 327,836 368,505 394,497 382,837 583,000 1,142,680 1,679,040 2,192,U8U 2,681,8UU 3,148,2nn 3,591,28U 4,011,040 3,824,480 3,637,920

Option 3; Spread over twenty years Start 2016 Loan %

Useful Life

Debt Ret.

Loan Life

Spend

lliipacls.

Repairs and Maintenance

Depreciation

Debt Servicing

TOTAL OPERATING COST

Debt impact

400,000 400,000

2018

400,unn 2019

400,uun 2020

400,000

2021

177,627

2022

177,627

2023

177,627 177,627

2025

177,627

7b,UUU

U

12,5UU

70,000

13,333

36,500

70,000

26,667

59,500

65,000

40,000

81,500

60,000

53,333

102,500

50,UUU

66,667

115,551

45,000

72,588

121,208

45,000

78,508

126,422

40,000

84,429

131,192

40,UU0

90,350

135,517

87,500 119,833 156,167 186,500 215,833 232,218 238,796 249,930 255,621 265,867

400,000 784,000 1,152,000 1,504,000 1,840,0UU 1,937,627

J:\objlive.tauranga.govt.nz-B00e-w3ll\ObJeclsWltachmentA Final Copy of Coastal Structuras Project Impact Reportfor 2015-25 LTP (A6051890j edited (Ae061896)

2,028,149 2,111,566 2,187,878 2,257,084

IUU.00% 30

4.00% 25

TOTAL 4,664,000

270,000 855,067

1,509,970 2,635,037

Average Cost each of subsequent ten

years

0 155,467

175,890 331 ,357 '

3,637,920

100.00%

30

4.00%

25

TOTAL

2,888,135

560,000

525,876

922,390

2,008,265

2,257,084

Total Cost of next ten years

0 1,554,667 1,758,900

3,313,567 2,196,480

177,627 Average Cost each of subsequent ten

years

30,000

116,994

164,412

311,406 '

Ol Cl

4,664,000 total cash not

discounted 20 years

1,776,270 Total Cost of next

ten years

300,000

1,169,943

1,644,120

Q ) 5,948,603

o 3" 3 (D 3

4,664,405 total cash not

discounted 20 years

3,114,063 5,122,328

2,901,075