Allowing some infrastructure to fail by not replacing it before its use-by date is part of the city’s approach to managing Three Waters assets, the Dunedin City Council says.
Key themes of the council’s initial strategy include focusing capital expenditure on the most critical assets, targeting areas with the highest risk of failure, looking to extend the life of some assets and taking 30 years to clear a $1 billion backlog of work.
Repairs and maintenance would be stepped up, although it is conceded this would buy limited time before replacement had to be pursued.
The council’s philosophy is presented in its 30-year infrastructure strategy, which was part of supporting documentation for the 2025-34 draft long-term plan consultation document approved last week.
"It is important to note that the funding allocated to Dunedin’s nine-year plan 2025-34 does not aim to renew all assets before they fail," the strategy said.
"Such an approach would be neither feasible nor practical.
"Instead, renewals are prioritised based on asset criticality, and failure rates.
"Allowing non-critical assets to fail before replacement is an approach that can improve affordability while adequately managing risk."
The timeframe for dealing with a significant backlog in renewal of Three Waters assets drew a comment from auditor Rudie Tomlinson.
"The council has adopted a phased approach that, whilst prioritising critical renewals, aims to eliminate this backlog over a 30-year period," he said.
"Planning on this basis increases the risk of disruption in services."
The draft long-term plan anticipated a reduction in the backlog of just 4% over its nine years.
The infrastructure strategy noted Dunedin was one of New Zealand’s earliest metropolitan centres and some of its Three Waters assets were more than 150 years old and still operated as essential pieces of the network.
"As Dunedin has grown, so have Three Waters networks, resulting in widely distributed networks with a broad range of pipe materials, diameters and construction methods.
"Some assets are in poor condition and, in certain cases, we lack sufficient information about their status."
The council’s basic approach was to "renew assets as they reach the end of their useful lives or are shown to be in poor condition".
It aimed to increase the level of renewal delivery year on year.
"Where feasible, pipes will be rehabilitated rather than completely renewed, using techniques such as relining," the strategy said.
"This extends the useful life of existing assets at a lower overall cost to ratepayers."
The strategy included a segment about "managing within our means".
"Monitoring and maintenance of older and poor-performing assets will be increased to keep them in serviceable condition for longer, and renewal capital will be targeted towards assets at highest risk of failure," it said.
"While this approach will reduce the amount of capital expenditure required in the short term, it will lead to increasing operational expenses as repairs are undertaken on assets that would otherwise have been replaced.
"Additionally, if this approach is retained longer term, asset failures will increasingly begin to impact on service levels."
The focus for the first nine years would be to prioritise renewal where the risk was highest, such as at treatment plants.
"Beyond the nine-year period, a reprioritisation in capital expenditure will be required to address the remaining backlog by the end of the 30-year horizon of this strategy."
The auditor concluded the council’s consultation document fairly represented matters proposed for inclusion in the nine-year plan.
Mr Tomlinson said the draft plan identified and explained the main issues and choices facing the council and city, and the consequences of those choices.
The consultation period starts today and runs through next month.
