Annual Report 2010 - Christchurch City Council

Wastewater collection
and treatment
Council activities and
services
Annual Report
Christchurch Otautahi
2010
p109.
Council activities and services
Wastewater collection and treatment
What did it cost?
Statement of cost of services for the year ending 30 June 2010
Costs (after
internal
recoveries)
Income Net cost Plan net
cost
2010 2009
Net cost
$000s $000s $000s $000s $000s
Operational service result
Wastewater collection 20,973 40 20,933 22,810 19,966
Wastewater treatment and disposal 14,098 4,484 9,614 10,468 8,153
Capital revenues - 3,467 (3,467) (5,925) (3,910)
Cost of service 35,071 7,991 27,080 27,353 24,209
Capital expenditure
Renewals and replacements 13,047 6,684 16,967
Improved service levels 23,527 21,129 13,171
Increased demand 7,527 7,847 8,438
Total capital expenditure 44,101 35,660 38,576
Explanation of significant cost of service variances
Wastewater collection was $1.9 million less than plan due to lower
depreciation and reduced debt servicing costs. In 2010 there was
$1.1 million more depreciation and $0.5 million more in corporate
costs than in 2009, due partly to restructuring some customer
services activities as an internal service. This is partially offset
by reduced maintenance costs ($0.4 million), and lower planning
costs ($0.1 million).
Wastewater treatment was $0.9 million less than plan mainly due
to additional trade waste revenue as a result of higher volumes
($0.6 million), and efficiency savings at Christchurch Wastewater
Plant ($0.2 million). 2010 net cost of service was $1.4 million
above the 2009 costs due to increased depreciation ($0.5 million),
higher corporate costs ($0.3 million) as a result of a reallocation of
internal charges as part of the LTCCP review, and additional costs
associated with transport of biosolids to Burwood landfill ($0.3
million).
Capital revenues were $2.5 million less than plan due to a shortfall
in development contributions revenue. These decreased due to the
recession which has slowed development across the city.
Significant capital expenditure
$6 million was spent on the final stage of the Ocean Outfall project.
The project which was planned to cost $87.3 million came in $4
million under budget at $83.3 million. Construction was expected
to take two years but took three and a half years to complete, with
the delays due to bad weather. This project was completed in April
2010 and all disinfected and treated effluent is now discharged
three kilometres offshore in Pegasus Bay.
$19.1 million was spent on the biosolids drying facility at
Christchurch Wastewater Treatment Plant. This is a multi-year
project with a total budget of $33.6 million. As mentioned above
the drying facility will reduce the volume of the waste material
resulting in significant savings in transportation costs.
A total of $8.1 million was spent on the Western Interceptor
Upgrade (part of the major sewer upgrade project). This project
continues from previous years and is progressing well. The
remainder of the expenditure related to various renewals and
replacements across the wastewater network.
Explanation of significant capital expenditure variances
The Ocean Outfall was originally planned to be completed in
the prior year and was therefore not in the plan for this year.
The project was delayed due to bad weather and $6.2 million of
expenditure was carried forward to the current year.
Council approved $3.1 million of expenditure planned for future
years to be spent in the current year on the Western Interceptor
Upgrade to allow construction to commence earlier than originally
planned thereby saving $15 million across the life of the project.
The variance against last year’s expenditure is primarily due to the
additional $13.9 million spent on the Biosolids Treatment Plant.
This is offset by lower expenditure on the Ocean Outfall ($3.8
million) and on other projects at the Christchurch Wastewater
Treatment Plant ($5.0 million).