Replacing an old Sewage Treatment Plant

GILGANDRA’S ASSET MANAGEMENT AND FINANCIAL PLANNING JOURNEY

Rolly Lawford

Director of Works and

Technical Services

Gilgandra Shire Council

Jacqui Hansen

Principal Consultant

Brearley & Hansen

Introduction – Who are we?

• Rolly Lawford

• Director of Works and Technical Services at Gilgandra Shire Council

• Civil Engineer with 45 years practical experience

• Chairman of Orana IPWEA Group

• Chairman of Lower Macquarie Water Utilities Alliance (LMWUA) Asset Management Working Group

• Jacqui Hansen

• Consulting engineer specialising in Infrastructure Asset Management

• Civil Engineer with 25 years local government experience

• Member of the IPWEA NSW Asset Management Working Panel

• Facilitator of the Lower Macquarie Water Utilities Alliance (LMWUA) Asset Management Working Group

Objectives

• To explain Gilgandra’s Asset Management

and Financial Planning journey.

• In particular … • To outline how implementing sound

Asset Management has helped

Gilgandra Shire to better manage its

aging sewer asset portfolio • To discuss the issues Gilgandra Shire

have with their existing sewer treatment

plant (STP)

• And to show how Council is progressing towards the rehabilitation of their STP

Background on Gilgandra

• Where is Gilgandra?

• Town of Windmills

• Gilgandra district is an agricultural area: sheep, beef cattle and winter cereal cropping

• Key location on the Newell Highway

Gilgandra’s

Sewerage

Network

Green lines –

reticulation mains

Orange lines – rising

mains

Blue dots – sewage

pumping stations

SSTW – sewage

treatment plant

Sewage

Treatment

Plant

Gilgandra’s AM and Financial Planning Journey

Valuation of water and

sewer assets including condition

assessment

Asset Management

Plans for Water and

Sewer (version 1)

Strategic Assessment of

Sewer Treatment

Plan Rehabilitation

Financial Modelling

using FINMOD and

preparation of a Financial

Plan

Refinement of AM Plans

February

2016

April 2016 August 2016 December

2016

December

2016

Valuation of Sewer Assets

• Quantified the value of Council’s Sewer Assets. Satisfied accounting requirements.

• Produced an up-to-date “ground- truthed” Asset Register for Council, with asset condition information and current replacement cost.

• Identified problem areas warranting further investigation, such as the Gilgandra Sewer Treatment Plant.

Sewage Treatment Plant: blocked screen in

the grit channel. STP requires a high level of

labour input to remain operational

AM Plan for Sewer Assets – Key Outcomes

Sewer Asset Portfolio Overview

AM Plan for Sewer Assets – Key Outcomes

Annual Expenditure for next ten years

AM Plan for Sewer Assets – Key Outcomes

Projected Capital and

Operating Expenditure

Gilgandra’s Existing Sewage Treatment Plant

Existing Sewage Treatment Plant – Technical Obsolescence

• Major components are beyond their design life (50 years) however the majority of the STP is

in good condition.

• The STP is beyond design life due to technical obsolescence.

• Today there are more effective systems for treating sewage.

Existing Sewage Treatment Plant – Does it have adequate capacity?

• Average dry weather flow (ADWF) based on 2015-16 influent flow figures is 650kL/day. Correlates to equivalent person load of STP of 3000EP.

• Pump station supplying STP cannot handle wet weather flows. Capacity is 2000kL/ day

• Treatment capacity of inlet works and primary sedimentation tanks is 650kL/day.

• Treatment capacity of trickling filters and humus tank system is 650kL/day

• Maturation pond has a volume of 2ML and hydraulic detention time is only 3 days which is insufficient for disinfections hence UV is required.

• Based on analysis, the current load (ADWF) to the STP is 100% of treatment capacity

• The existing STP does not have adequate capacity to handle flows in excess of the average dry weather flows. Cannot cope in wet weather.

Existing Sewage Treatment Plant – Issues

• The STP needs a high labour input just to keep running.

• Problems with the STP include:

• Rag and solids carry-over from the primary sedimentation tank

• This leads to nozzle blockages in trickling filters

• There is a significant structural leak from primary sedimentation tank

• Sludge carry-over in to UV disinfection system

• Resulting in fouling of UV tubes and accumulation of biofilm in recycled water pipeline

• Overloading in wet weather

Sewage leaking

from primary

sedimentation

tank

Blocked

tricking filter

nozzles

Flooding

• The STP site is located beside the Castlereagh River.

• Council has undertaken extensive flood mapping.

• The old evaporation ponds are inundated in a 1 in 100 year ARI.

• The main STP site with inlet works, trickling filters, humus tanks and digesters as well as the effluent storage/ buffer pond are above the 1 in 100 year ARI

• There is sufficient area to the west of the existing main STP to locate new facilities.

Options Investigation for the Sewage Treatment Plant

Key findings

1. Recommends that Council upgrade pump station 1 and pump station 2 as a matter of urgency and constructs a new rising main from PS 1 to the new Treatment Ponds.

2. Recommends that Council construct a new facultative pond as an interim to capture and treat all wet weather flows.

3. Recommends that Council then construct aerated maturation ponds for irrigation quality effluent as part of the longer term upgrade solution.

4. Should agricultural irrigation become unviable in future, Council may need to upgrade to conventional sequencing batch reactor (SBR) treatment with nutrient removal, tertiary filtration and UV disinfection to produce effluent quality suitable for river discharge.

All options are based on a future projected ADWF of 760kL/day.

Report by Zlatco Tonkovic of Yabbie Pond Pty Ltd

How much will it cost?

STP Rehabilitation Options

1. New Pond Treatment System - $2,730,000

2. New High Rate SBR Treatment System - $3,560,000

3. New Conventional SBR and tertiary Treatment System for River Discharge - $5,860,000

Short Term Options

1. SPS No 1 $518,000

2. SPS No 2 $245,000

3. New wet weather detention ponds $664,000

At this time, the lowest capital and operating cost STP rehabilitation option may be the construction of a pond system for irrigation quality effluent.

Preliminary estimates indicate that this option is likely to cost $3M

Financial Planning

Existing

Asset

Data

Future Level

of Service

Objectives

Capital Works

Plan

Historical Financial

Data

Financial

Model

Customer Price

Path

Financial

Performance

“The principal criterion for developing a

sound financial plan is minimising the

Typical Residential Bill while maintaining

an acceptable level of cash and

investments.”

“Water and sewerage charges should

be sufficiently high to achieve full cost

recovery. All LWUs should aim to achieve a positive Economic Real Rate

of Return ERRR”

Complies with July 2014 checklist issued by DPI Water

Sewer Fund Financial Plan

• Sewer fund is challenged

• Capital reserves not high

• Heavy capital works program required over the next 10 years

• Scenario with 50% grant funding for STP works

• STP renewal strategy has been assessed by an expert

• Significant increases in TRB are forecast if Council is to be capable of funding asset replacement and providing an appropriate level of service

Sewer Fund Capital Works Planning

0

500

1000

1500

2000

2500

3000

3500

SPS1 Upgrade

SPS 2 Upgrade

New

Detention

pond

Renew STP

Option 1

Summary of Outcomes of Financial Modelling

• Works program recommended by specialist consultant, Yabbie Pond, recommends earlier expenditure.

• Typical residential bill (TRB) for sewer is $602. (15/16)

• Ongoing spending requires greater borrowing, with a TRB of up to $870 and loan balances up to $4.5M (Case 401).

• If a 50% grant is obtained for all STP work (including the pump stations), the impact is less, with a TRB of up to $780 and loan balances up to $2.7M (Case 402).

• The early expenditure has a big impact because there is no ability to accumulate funds – ongoing borrowing is required.

• How does Council feel about increasing the sewer rate?

Options to reduce the impact on sewer fund

• Do Nothing - RISK

• Increase sewer rates by 50% - UNAFFORDABLE

• Undertake early works, reduce loans and defer STP upgrade

• Defer the entire works program and accumulate more funds in the bank– How big is the risk?

• Pursue grant opportunities

• Community engagement

Conclusion

Gilgandra Shire Council is proactively planning for the rehabilitation of their sewer treatment plant.

Application of Asset Management and Financial Planning is the key.

Valuation of water and

sewer assets including condition

assessment

Asset Management

Plans for Water and

Sewer (version 1)

Strategic Assessment of

Sewer Treatment

Plan Rehabilitation

Financial Modelling

using FINMOD and

preparation of a Financial

Plan

Refinement of AM Plans