THE COST AGGREGATION MODEL RESULTS PORIRUA WHAITUA Synopsis. - PowerPoint PPT Presentation

THE COST AGGREGATION MODEL RESULTS PORIRUA WHAITUA

Synopsis…. Synopsis…. Synopsis…. Synopsis…. • What is life cycle costing and how can we use it? • Life cycle costing results: • Whaitua-wide cost implications • Urban stormwater intervention costs • Wastewater costs • Rural costs • Take home messages

What is life cycle costing (LCC)? What is life cycle costing (LCC)? What is life cycle costing (LCC)? What is life cycle costing (LCC)? Definition: “ …..the process of assessing the cost of a product over its life cycle or a portion thereof…..” Ref: Australian/New Zealand Standard 4536:1999 Treasury New Zealand What have we produced: Indicative cost estimates of the total amount of money required to plan and build interventions (total acquisition costs) and maintain interventions (maintenance costs) over a 50 year life cycle.

$ Cost Phases in the life cycle of a stormwater practice and potentially associated costs (Taylor, 2003)

Understanding how to use LCCs Understanding how to use LCCs Understanding how to use LCCs Understanding how to use LCCs • Allows “like for like” comparison of additional costs between scenarios, over and above BAU • Costs are assigned to particular property types depending on where they are incurred • We use ranges to express uncertainty • Data gaps or large variation in costs for devices • Assumptions about the extent and placement of interventions into particular catchments • Don’t dwell on absolute amounts or comparisons between particular places • Look for patterns and relative differences between scenarios in each place/activity type

How the Cost Aggregation How the Cost Aggregation How the Cost Aggregation How the Cost Aggregation Model works Model works Model works Model works • Builds on existing LCC Work • Relates to costs: • best practice design of the mitigations • impervious area treated • desired level of treatment

Urban Urban Urban stormwater Urban stormwater stormwater costs: stormwater costs: costs: costs: Whaitua Whaitua Whaitua Whaitua- -wide costs - - wide costs wide costs wide costs • Improved scenario: range from approximately $6.5 - $21 million per year • Water sensitive scenario: range from approx. $10.5 - $28 million per year • Wetland costs are a large driver of the wide range of costs in the improved scenario • Costs associate with greenfield development are expected to be at the lower end of the cost range • Costs associated with infill/ redevelopment are expected to be at the higher end of the cost range

WHAITUA-WIDE COSTS: PROPORTION OF ANNUAL LIFE CYCLE COSTS FOR THE IMPROVED AND WATER SENSITIVE SCENARIOS 12% 5% URBAN STORMWATER RURAL STORMWATER WASTEWATER WHAITUA-WIDE ANNUAL LCC PER DWELLING 83% $2,500 $2,000 $1,500 $1,000 $500 $- LOW HIGH LOW HIGH IMPROVED WATER SENSITIVE URBAN STORMWATER RURAL WASTEWATER

Cost estimates per dwelling… Cost estimates per dwelling… Cost estimates per dwelling… Cost estimates per dwelling… PORIRUA AT KENEPURU DR. - TOTAL INDICATIVE ESTIMATE LCC $/ LOWER DUCK CREEK (MOUTH) - TOTAL INDICATIVE ESTIMATE LCC $/ DWELLING/ YEAR (Urban Stormwater Costs) DWELLING/ YEAR (Urban Stormwater Costs) $1,600 $1,600 $1,400 $1,343 $1,400 $1,341 $1,173 $1,200 $1,200 $1,088 $1,079 $1,074 $1,045 $1,046 $1,050 $1,039 $1,000 $1,000 $800 $800 $714 $704 $581 $600 $600 $526 $427 $423 $399 $397 $354 $400 $351 $400 $345 $312 $283 $285 $200 $200 $38 $33 $27 $10 $12 $11 $4 $9 $- $- Low High Low High Low High Low High Low High Low High Low High Low High Existing Business Existing Residential Greenfield Development Infill Development ExistingBusiness Existing Residential Greenfield Development Infill Development IMPROVED WATER SENSITIVE IMPROVED WATER SENSITIVE

CAMBOURNE GREENFIELD CASE STUDY - CAMBOURNE GREENFIELD CASE STUDY - WATER SENSITIVE SCENARIO IMPROVED SCENARIO Proportion of Urban Stormwater LCC by Proportion of Urban Stormwater LCC by Value Chain Occurrence Value Chain Occurrence Where does Where does Where does Where does 2% 4% the cost fall in the cost fall in the cost fall in the cost fall in 24% 28% Public Utility Cost Public Utility Cost On-site Private Residential Cost On-site Private Residential Cost 40% Developer Cost Developer Cost the the the the 58% On-site Private Business Cost On-site Private Business Cost 12% 32% development development development development process (value process (value process (value process (value LOWER DUCK CREEK (MOUTH) - WATER LOWER DUCK CREEK (MOUTH) - IMPROVED SCENARIO SENSITIVE SCENARIO Proportion of Urban Stormwater LCC by Proportion of Urban Stormwater LCC by chain)? chain)? chain)? chain)? Value Chain Occurrence Value Chain Occurrence 1% 2% 31% Public Utility Cost Public Utility Cost 38% 40% On-site Private Residential Cost On-site Private Residential Cost 51% Developer Cost Developer Cost On-site Private Business Cost On-site Private Business Cost 8% 29%

Which scenario is more cost efficient? Which scenario is more cost efficient? Which scenario is more cost efficient? Which scenario is more cost efficient? PORIRUA AT KENEPURU DR. - LCC $/YR CONTAMINANT COST EFFICIENCY WHAITUA-WIDE - LCC $/YR CONTAMINANT COST EFFICIENCY (Urban and Rural $6,000,000.0 Stormwater Costs) $4,888,993.8 $5,000,000.0 $900,000 $810,463 $4,000,000.0 $800,000 $3,000,000.0 $700,000 $1,756,041.3 $2,000,000.0 $1,669,677.7 $827,758.3 $600,000 $1,000,000.0 $176,244.8 $60,190.7 $38,630.8 $13,193.1 $76,072.6 $35,858.9 $8,621.6 $18,290.2 $- $500,000 Low High Low High Low High LCC $/yr/ kg of zinc removed LCC $/yr/ kg of copper removed LCC $/yr/ kg of sediment removed IMPROVED WATER SENSITIVE $400,000 $356,498 PAUATAHANUI MIDDLE REACHES - LCC $/YR CONTAMINANT COST EFFICIENCY (Urban and Rural Stormwater Costs) $300,000 $265,240 $2,000,000 $1,869,693 $1,800,000 $200,000 $142,305 $1,600,000 $1,400,000 $100,000 $1,200,000 $19,319 $13,268 $6,323 $5,296 $1,000,000 $- Low High Low High $800,000 $669,013 LCC $/yr/ kg of zinc removed LCC $/yr/ kg of copper removed $600,000 IMPROVED WATER SENSITIVE $400,000 $302,621 $268,606 $200,000 $147,448 $108,284 $43,593 $23,930 $0.8 $0.9 $2.2 $1.6 $- Low High Low High Low High LCC $/yr/ kg of zinc removed LCC $/yr/ kg of copper removed LCC $/yr/ kg of sediment removed IMPROVED WATER SENSITIVE

Potential effect on property costs… Potential effect on property costs… Potential effect on property costs… Potential effect on property costs… • Both the improved and water sensitive scenarios will lead to increased costs • Property prices: “green” stormwater interventions may also lead to increases in property prices, particularly for properties bordering or in close proximity to larger scale interventions like wetlands. • Highly variable but potential range of average increase is 3% and 8%. • A lack of on-going maintenance can cause property values to decrease in the longer- term. • Not directly comparable to LCC, but property holding costs are approximately $22k - $39k per year. Increased LCC per dwelling per year are around 1 – 6% of these holding costs.

Urban wastewater intervention costs Urban wastewater intervention costs Urban wastewater intervention costs Urban wastewater intervention costs • Wastewater improvements estimated to be between $2.1 and $2.7 million Annual LCC for Wastewater Upgrade Options - Porirua Whaitua (based on per year, or around $50 - $60 per a 50 year life cycle) $3,500,000 dwelling per year $3,000,000 • Over and above existing wastewater $2,500,000 costs: ave $385 per year per residential dwelling for Porirua City) $2,000,000 $1,500,000 • Uncertainty as to whether these interventions get us to the level $1,000,000 represented in the scenarios – $500,000 continuing to refine these. $- LOW HIGH LOW HIGH LOW HIGH LOW HIGH • Costs of improvements to wastewater 3 Month ARI - IMPROVED 6 Month ARI - WSUD 1 Year ARI 2 Year ARI Upgrade: Full Conveyance Option WWTW Upgrade network to improve leaking pipes, cross, connections – not included as these are uncertain at this time.

Rural Costs Rural Costs - - Approach Approach Rural Costs Rural Costs - - Approach Approach • Accessed statistical information from Beef and Lamb NZ, Statistics NZ, GWRC, other sources • Sourced costings from projects elsewhere, national modelling, rating database, GWRC. • Worked with stakeholder group to refine information and identify issues. • Defined sectors • Developed unit costings for catchment economic modelling

Catchment rural land use Native and scrub, 26% Pastoral farming, Lifestyle/rural 54% residential, 3% Forestry, 17% Horticulture, 0%

Main sectors Main sectors Main sectors Main sectors • Sheep and beef • 54% of rural area • Predominantly sheep but some mixed and one beef only • Property size: 55ha up to ~800 ha • Primarily rolling to steep, with limited flat land • Limited cultivation and winter cropping. • Most properties have off farm income • Range of activities on small blocks, most non commercial • Horticulture ~13 ha • Forestry • 17% of rural area • Large land use, in significant sized blocks.