Supplementary Agenda of Council

Council 3 December 2014

Item 11.3

11.3. Sewer project upgrade North Bega

Council has been working cooperatively with Bega Cheese regarding effluent management issues in North Bega which present a growth challenge for local businesses. A potential subsidy funding source was identified for Council to assist in addressing this issue. This report outlines the subsidy application.

General Manager

Background

North Bega residential and industrial area is currently provided with water but no reticulated sewer. The area includes the major processing centre for Bega Cheese that employs approximately 750 people, and the heritage/ visitor centre with a peak attendance of 300 visitors per day. The rest of the North Bega area, including the North Bega Industrial area, has 130 properties that are not connected to reticulated sewer.

The Bega Cheese treat their process wastewater and domestic sewage utilising on-site management systems. There have been ongoing issues with high faecal coliform counts in the effluent. Council and Bega Cheese have been working together for a number of months to identify options to address this problem. The NSW Environmental Protection Agency (EPA) has raised concerns with Bega Cheese regarding a number of effluent management matters.

The first round of the Federal Government’s National Stronger Regions Fund (NSRF) was announced in late October and it provided an avenue for subsidy funding for Council. Applications closed on 28 November and an application was lodged. This report details the project and the subsidy application.

Provision of reticulated Sewer for North Bega is not currently identified in Council’s adopted forward estimates or capital works program.

Discussions were held with Bega Cheese to establish project parameters. Bega Cheese and Council jointly funded NSW Public Works to design and cost a solution that would see Bega Cheese sewage (black water and truck wash down water) managed using Council’s existing sewage system.

The Stage 1 project, which is the focus of the application, involves the construction of a sewer transfer pump station located on Bega Cheese property and transport mains that will cater for the current domestic load from the Bega Cheese facilities. The pump station and transfer main will be installed with the capacity to be upgraded to cater for the remaining North Bega area so that other businesses can take advantage of the system in future. Sewage will be transferred via a 4km rising main to the existing Bega Sewage treatment plant.

Issues

Legal

The application has been lodged with all supporting documentation as required by the Federal Government.

Environmental

The subsidy application if successful will enable construction of a new pump station and rising main to service Bega Cheese (Stage 1) and other businesses (Stage 2) in North Bega. The works will have broad environmental benefits and eliminate some of the risks currently posed by the Bega Cheese effluent on town drinking water supplies.

Sustainability

The project will contribute to environmental, economic and social sustainability.

Asset

NSW Public Works - Water Solutions Division were engaged to complete a priced concept design. A copy of the design proposal is attached to this report. Once construction has been completed Bega Cheese and ultimately other businesses will be able to connect to reticulated sewerage.

Social / Cultural

The North Bega Industrial area is the main industrial area for the Bega Region. The area services around 130 separate businesses. It is estimated that over 1,300 people are employed in the industrial area. The industrial area services businesses mostly focused on trade services and in the case of Bega Cheese factory production.

The Bega Valley Shire Council has an unemployment rate similar to the greater NSW rate of 5%. However where the Shire differs to the rest of NSW is in our age demographic unemployment figures. For our younger residents who do not attain tertiary qualifications, the unemployment rate for under 35 years of age with no tertiary qualifications peaks at 16%.

Sites such as the North Bega industrial site provide employment to residents with non-tertiary qualifications (such as trades) or secondary level education only. It is critical for regional communities like ours that we have avenues for providing meaningful employment to youth as they leave school.

Having a robust and sustainable industrial precinct provides that opportunity for youth and jobseekers.

Economic

The construction of a Sewer Pump Station in the North Bega Industrial area will allow up to 130 businesses to connect to the town sewer system. North Bega industrial area is the main industrial area for Bega which is the regional centre for South East NSW. Presently businesses in the area have to operate on-site sewage treatment systems.

There are a number of development regulations around the area in terms of protecting the River and the surrounding lands from effluent run-off. By constructing a reticulated sewer network in this area, we would be providing significant opportunities for the businesses in the industrial area to consider further developing their land and businesses knowing that the regulatory factors around effluent management could be handled through Councils system.

The largest site in North Bega is Bega Cheese. Bega Cheese is a local public company that is a world class manufacturer of Cheese and Dairy products. Bega Cheese's two main local factories are located in the North Bega Industrial area. Over the last five years Bega Cheese has made significant investment to manage the increased requirements for Sewage Treatment facilities at both of their sites at Lagoon Street and Ridge Street as the production and staff numbers on each site have increased. With approximately 750 staff across the two sites sewage management has become a significant challenge and will continue to be a risk/barrier to further growth. Bega Cheese must consider further capital investment to ensure their systems are able to accommodate future needs. The installation of a pump station in north Bega to transfer sewage to the BVSC Treatment works will allow the site to focus on core dairy manufacturing activities and rely on the better skilled team at the BVSC treatment works to manage sewage from the site.

Installation of the pump station removes another constraint to continued growth of the business and helps to maintain the strong economic activities associated with the Bega Cheese group and its contribution to the Bega Valley. Outside of Bega Cheese it is estimated that over 500 residents are employed in the industrial area. By initiating further development opportunities Council expects that the number of people employed would increase to meet those development opportunities.

Strategic

Whilst this project is not currently listed in the sewer Asset Management Plan as a capital works project, it is a project that has been considered by Council in the past and ruled out purely on cost. The opportunity of subsidy funding is a strategically proactive opportunity for Council.

Consultation

Consultation has been on-going through the process with Bega Cheese, Far South Coast Regional Development Australia, local members The Hon Dr Peter Hendy and The Hon Andrew Constance and NSW Public Works.

Financial

Bega Cheese have been a key partner in the development of this project and contributed 50% of the funding for the design. Bega Cheese will also contribute to the project through provision of the land on which the pump station will be constructed.

The grant amount applied for is $1,150,000 to be matched by Council’s Sewer reserves. Section 64 charges will be payable by Bega Cheese. As other businesses take advantage of the available access to the system additional Section 64 charges will be paid.

Funding source

Amount

Sewer fund reserves

NSRF funding source

1,150,000

Resources (including staff)

Council staff, Bega Cheese staff and consultants were involved in preparing the project proposal and the funding application.

If this application is successful then there will be a review of adopted priorities and timelines for other sewer capital works projects.

Conclusion

The announcement of this subsidy funding program has provided Council with an opportunity to support economic, social and environmental outcomes for Bega.

Attachments

1 . North Bega Sewage Pumping Station and Rising Main Conceptual Design

Recommendation

1. That Council note the submission of a subsidy funding application to the National Stronger Regions Fund for $1,150,000 to support the development of a sewer pump station and transport mains for North Bega.

2. That a report be presented to Council following announcement of the outcomes of the subsidy funding program noting any impacts on the operational plan.