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Saturday, September 17, 2011

How the cost-effectiveness of land remediation is measured.

Cabinet, at its meeting on the 15th of August, agreed to a new method of calculating whether it would be cost-effective to remediate particular areas of land. This decision was made in association with decisions on the Kaiapoi Orange Zone, and was used for those decisions.

The method determines that land is not cost effective to remediate if the cost of remediation would be greater than the value of the land as set out in para 8.1 of the Cabinet Minute. While not the only criteria for deciding whether land is to be zoned Red or Green, the method does tackle the financial part which is the primary reason for the designations.

What follows is extracted from para 8.1 of the Cabinet Minute of the 15th of August. A copy can be downloaded here.
Determining the cost of remediation
This cost is determined by adding the first three items in the list, then subtracting the fourth.
  1.  Cost of land reinstatement to pre-September condition  plus
  2. The betterment cost (i.e. perimeter treatment and/or additional raising of land) plus
  3. Infrastructure replacement (see note 1) minus
  4. Decommissioning costs (infrastructure decommissioning and greening)
Determining cost effectiveness
  1. If the cost of the above exceeds the improvement in the value of the damaged land (see note 2), remediation is not cost effective.
  2. If the cost of the above is less than the improvement in the value of the damaged land, remediation may be cost effective.
Note 1: Includes the infrastructure within the Orange Zones required to service the sub-zone area of interest (and excludes the cost to repair infrastructure required to service surrounding Green Zones)
Note 2: Despite the recent earthquake events, properties are likely to have some land value left. We assume there is 10% of the land value remaining in the properties, as indicated by the Valuer General.
You can see how this was applied in the assessment of the Kaiapoi Orange Zones by looking at Paragraphs 9 - 14 on page 3 of the Cabinet Minute (here). The background information upon which the decision was made is contained in the Cabinet Paper here.

Anyone hoping to appeal a Green Zone ruling will need to check out how their property stacks up against this criteria, once the information becomes available. What may not be made known is how the figures are reached, and what margin of error attaches to them.

Friday, September 16, 2011

Why an Avonside Orange Zone?

It looks like it will be some time before we find out how the Avonside Orange Zone will be redesignated. It might be possible for some to hazard an educated guess which way things will go, but it isn't worth the grief it would cause. What is worth looking at is why we have an Orange Zone here, and why everything is taking so long.

When Gerry was talking earlier about zones being blindingly obvious he was correct, in an obscure way (a touch of the Winston Peters malaise perhaps?). The bulk of the information was contained in the Tonkin & Taylor factual reports, and reasonably accurate conclusions could have been drawn from them by anyone with a bit of expertise.

Sadly, or maybe wisely, no one with the expertise to draw valid conclusions attempted to do so, and the media were not able to work it out for themselves. Those same reports will possibly explain, albeit indirectly, why some Orange Zones exist.

What follows is my very inexpert assessment of why our Orange zone was created - provided in the absence of anything from anyone else. Read at your own peril (NOTE: conspiracy theorists need not proceed further - there isn't one).

Why is there an Orange Zone here?

Thursday, September 15, 2011

Kaiapoi Orange Zones - Release of Cabinet papers on land damage decisions

From the CERA web site:
In late June and in mid-August 2011, Cabinet considered papers from the Minister for Canterbury Earthquake Recovery detailing the extensive geotechnical work that has been undertaken to assess the state of affected land.
The following is a list of the papers and minutes available on the CERA web site here.
  • Cabinet Paper: Land Decisions - June 2011
  • Cabinet Minute of Decision: Land Decisions - June 2011
  • Map showing affected areas - as at 23 June 2011
  • Cabinet Paper: Kaiapoi Orange Zones - August 2011
  • Cabinet Paper: Kaiapoi Orange Zones - Appendices A to E - August 2011
  • Cabinet Paper: Kaiapoi Orange Zones - Appendix F - August 2011
  • Cabinet Minute of Decision: Kaiapoi Orange Zones - August 2011
The last of these documents is a good place to start as it outlines in simple terms how the decision is to be made on whether land remediation is cost effective. It also shows with great simplicity how various areas in Kaiapoi were assessed.

For those unfamiliar with the Cabinet process, and the documents involved, it is quite simple and goes like this:
  • Officials prepare material for Cabinet (or Cabinet sub-committees) and these are the Cabinet Papers
  • Cabinet Papers invariably consist of two parts: a range of supporting material and a set of recommendations that officials invite Cabinet to approve.
  • Cabinet considers the material and either accepts the recommendations in the papers or amends or replaces them as appropriate.
  • Cabinet's decisions are released in a Cabinet Minute.
So, if you want to know what was decided - look for a Cabinet Minute. Want to know what information was available to Cabinet when considering an issue - read the Cabinet Papers.
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Wednesday, September 14, 2011

CERA - a fail mark for Communications 101

Yesterday CERA confirmed zoning delays for Orange-zoned Spencerville, Brooklands, Southshore and West Kaiapoi. The announcement is here. Fine so far - delays happen and those areas will get an update next month (and presumably harder news in a subsequent month). At least they know about the state of progress.

There are, however, other Orange zones. They have previously been told that the release of information on their zoning will not happen until after Spencerville, Brooklands, Southshore and West Kaiapoi are sorted. Does this progressive release of information still apply? Will all other releases be delayed by however long it takes to finish work in Spencerville, Brooklands, Southshore and West Kaiapoi? What about those living in a White Zone - will the delays have any impact on when they find out about their land?

Surely someone at CERA could have anticipated that these questions would arise, and provided the answers as part of the media release. Apparently not, and so a narrowly focussed media release handling one specific issue creates  more concern than it attempts to allay. Not acceptable.
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Tuesday, September 13, 2011

Temporary Accommodation Assistance package fixed

Some time ago CanCERN identified anomalies in the Temporary Accommodation Assistance package. Due to the wording used Red Zone residents lost eligibility for assistance part way through the land settlement process. Over a period of weeks this issue has been worked through and the anomaly fixed.

As a consequence the Ministry of Social Development has adjusted its policy in relation to Temporary Accommodation Assistance to ensure that it is upon 'full settlement' that home owners would no longer qualify for this assistance and not partial payment as was previously in place.

Full information on the assistance package is here.

Thanks to CanCERN for this.
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Monday, September 12, 2011

Canterbury insurance and repairs further delayed by insurers

In an article on the website insuranceNEWS.com.au today, insurance companies operating in Christchurch are described as needing more information before committing to insuring property, and remaining uncertain that green zone land is suitable for repairs (and presumably rebuilds?).

Much seems to hinge on aftershocks ceasing (whatever that means). For Lumley insurance it is: "once the company is confident the seismic activity has abated 'to acceptable levels for a reasonable period of time, we will revisit our risk appetite for the region' ”. Again there is no quantification of what 'acceptable levels' and 'reasonable time' mean.

Significant points in the article include:
  • insurers will do all they can to return to normal conditions when the aftershocks cease and there is a clearer understanding of the status of the land.
  • there seems little prospect of new insurance being written in the near future
  • green zone land in some areas may not yet be suitable for property repairs
  • in the view of insurers not all properties in the green zone can be repaired because of damage to the land underneath them
  • insurers are also concerned that aftershocks will cause further damage to properties on 'liquefacted' land.

The fourth point is an interesting area for speculation:
  • Will the "damaged land, repairable house" scenario arise in the Green Zone as well?
  • Will insurance companies take upon themselves the power to unilaterally declare little "Red Zones", perhaps as small as a single section, if they feel their financial exposure is at an uncomfortable level?
  • Will insurers, in effect, be the only group with a re-zoning opportunity available to them?
  • If this is permitted by the government then what integrity attaches to the initial geotechnical decisions? 
The insuranceNEWS.com.au article is here.
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Red Cross - Alternative Sewage System Grant update

This grant was originally advertised as closing on the 9th of September.

The Red Cross website now shows what appears to be the same grant with a slightly different name and a closing date of the 3rd of October (see here).
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CANLAW - legal information for those in the Red Zone

Community Law Canterbury has a lawyer based at the Earthquake Assistance Centre at the Avondale Golf Course, corner Breezes Road and Wainoni Road. This service is free.

The Centre is open Monday to Friday 10am to 6.30pm.  Call them on 0508 CANLAW (226 529) for more information.
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Sunday, September 11, 2011

Red Cross - Targeted Moving Assistance Grant

This grant is for those whose property (mainly in the hill suburbs) has been given a Section 124 Building Act Notice by the Christchurch City Council.

A Section 124 notice is:
A prohibited access notice may be issued under Section 124 of the Building Act to a dangerous property, primarily to ensure public safety. In the case of Port Hills properties, this has been done because the  property is dangerous due to hazards in the area such as potential rock falls or unstable land that threaten the property itself or the safety of its access routes. (see the Council website here for more information on Section 124 notices).
The grant is for $1,000 and:
The aim of the grant is to assist home owners whose properties have been issued with a Section 124 Building Act Notice by the Christchurch City Council and have not previously received an Emergency and Hardship Grant.
Full details, and an application form, are available from the Red Cross website here.
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