Purpose of the Let’s Talk CBA Session:

    The purpose of this session was to provide:

    1. A quick recap on background to the Local Adaptation Plan and what’s happened so far, including why we conducted the cost benefit analysis
    2. An opportunity to hear from Nigel Rajaratnam and Joseph Caruana from the Centre for International Economics (CIE) on the approach taken and the outcomes of the recently completed Cost Benefit and Analysis (CBA) conducted for a subset of local adaptation planning options in Pelican, Blacksmiths, Swansea and Surrounds
    3. A chance to answer any questions that participants may have about the CBA or upcoming exhibition draft LAP
    4. An outline the next steps involved in drafting and exhibiting the co-designed local adaptation plan for Pelican, Blacksmith

    Background to Local Adaptation Planning and Cost Benefit Analysis Presentation

    • Council has been collaborating with members of the Pelican and Blacksmiths community since 2016 to co-design a local adaptation plan for the area.  The background to this collaboration is available at:  https://shape.lakemac.com.au/futurepelicanblacksmiths which includes a number of previous presentations and community engagement feedback along with a library of newsletters and related documents prepared to date.
    • In 2018, Council started engaging with members of the Swansea, Swansea Heads and Caves Beach communities to develop a separate Local Adaptation Plan for this area.  The background information and relevant studies, newsletters and reports are available at: https://shape.lakemac.com.au/adapting-swansea 
    • In 2018 the NSW Government released the Coastal Management Framework including the Coastal Management Act 2016, the State Environmental Planning Policy (Coastal Management) 2018 and the Coastal Management Manual.   The Coastal Management Manual included a number of requirements for Councils and communities preparing Coastal Management Programs, and indirectly, Local Adaptation Plans; these included a more scientific (probabilistic) approach to hazards assessment (eg. a probabilistic hazard assessment) underpinning an options assessment that included consideration of economic assessment (such as a cost benefit analysis (CBA)).
    • The Probabilistic Hazard Assessment (PHA) for inundation in and around the channel and lake at Pelican, Blacksmiths and Swansea was undertaken by Salients in 2018/19.  The slide-pack from the presentation on the PHA by Dr David Wainwright of Salients is available on the Shape Lake Mac site here.
    • In 2018, Council engaged Umwelt Consulting (in collaboration with Salients and CIE) to undertake a feasibility assessment and cost benefit and distribution analysis of the community sourced local adaptation options.  Over 150 options adaptation options were identified by the community for consideration. The following documents contain the background and findings of the feasibility assessment
    • In late 2019 the two community working groups started to combine their meetings because of overlapping options around the channel, and information coming from the PHA, feasibility assessment and CBA which covered their combined areas of Pelican, Blacksmiths, Swansea, Swansea Heads and Caves Beach.  Council and members of the combined LAP working group are collaborating to prepare a draft Local Adaptation Plan planned for exhibition in early 2021.

    Introducing Nigel and Joseph from The CIE with their presentation on the Cost Benefit Analysis

    Nigel Rajaratnam is Director at The CIE.  Nigel is an economist specialising in the water, natural resources and transport sectors. He has 20 years’ experience in economic and financial analysis and policy advice in this area. He has worked on a diverse range of projects, encompassing policy advice, formation and analysis, program evaluations, statistical analysis, economic and financial modelling and quantitative evaluation of policies/programs.

    Joseph Caruana is Senior Economist with The CIE.  Joseph has over 10 years’ experience in economic and financial analysis and policy advice across the water and energy sectors. This includes: project evaluations for large scale infrastructure projects, cost-benefit analysis, regulatory price determinations, demand forecasting and legislative development. Joseph worked for WaterNSW, Endeavour Energy and the Commonwealth Treasury prior to joining the CIE.

    Watch their presentation below or view the presentation slides as a PDF file.

    Questions related to the presentation on the Cost Benefit Analysis

    Q:  How will Council use the information from the CBA (along with other factors from the community) to determine what actions will be triggered in the LAP.

    A:  The CBA report is not the only source of actions to be included in the draft LAP.   Rather, it is one of a number of studies, surveys, tools and other inputs that will assist the joint Council and community volunteer working group prepare the draft LAP for exhibition in early 2021.  The CBA only assessed a small subset of longer-term actions identified during the feasibility assessment. The CBA results will be used alongside the community assessment and the extensive community feedback over that last four years has helped identify, develop and assess these options.

    One of the things about having a CBA of this scope and scale is that we generally only undertake this level of analysis for the more expensive or complex options with higher risks or uncertainties. Some of the options that have come through the options feasibility process fall into a couple of other categories:

    • options you would normally expect to see in an adaption plan such as monitoring and reporting and emergency response, ie: things that you would expect to see everywhere and not just specific to this location.  These are generally management process actions – for transparency, maintaining community involvement/collaboration and sharing of information,
    • a group of options that are a little bit beyond what we are doing at the moment that are clear, obvious and practical things to do over the next decade.  These are generally relatively inexpensive, and can be implemented by Council and the community.  They manage the risks for the coming decade, while more detailed science, analysis and design are completed for longer-term options.

    The options assessed using the CBA could be described as the “big ticket items” that could potentially cause significant disruption to the community. The are high cost, require detailed planning and design and will eventually need to be implemented in a carefully scheduled and coordinated way.  

    Our community engagement activities have shown us that the community has said that they want to stay in place, however, to make this happen there are a range of options from relatively simple things we can do to more complex and expensive options, and that’s what this subset of CBA actions is largely about. 


    The Adaptation Options Feasibility Assessment FAQ sheet shows the process that was undertaken and outcomes of the assessment.  Essentially, options were assessed and categorised as:  not feasible/unable to be achieved; feasible in the short to medium term, or requiring further economic assessment (ie: the subset of options included in the CBA).  Many of the CBA options are raise and fill options that require further investigation.  What the Council and Community Working Group and Steering Committee were attempting to do was investigate these options economically with a view to looking at how they can be sequenced or staged in the LAP ie: how they may be implemented in the future.  As outlined above; CBA is one of a suite of many tools and inputs designed to consider and assess potential actions.


    Q:  I noticed that the CBA contributes to the LAP. Is the CBA going to be a stand-alone report or will the contract with the consultants (The CIE) be extended to include a contribution from them to the LAP or further analysis?

    A:  The CBA report and this presentation were part of a single contract of works with Umwelt (and their subconsultants Salients and The CIE) to carry out a feasibility assessment, CBA and distribution analysis (see background information above).   This contract is nearing completion and an extension is not planned.  The CBA report is not the sole determinant of the LAP actions.  Rather, it is one of a number of studies, surveys, tools and other inputs that will assist the joint Council and community volunteer working group draft LAP to exhibit in early 2021. 

    Q: The last slide in the presentation mentions wetlands and reference to collecting extra data for the evaluation. Could you please explain what you think you might get from more information or what activities might come from this? Could you please expand on that a bit more?

    A:  Please see video response below.

    A: We also recognise the need for more detailed scientific study on how wetlands respond to sea level rise and rate of ground level accretion (build up) that is needed for wetlands to adapt in place.  Our advice is that mangrove and saltmarsh will adapt in place while the rate of sea level rise is slow, but as it speeds up, they can’t accrete fast enough and the ecological community will be transformed to subtidal species.  In this case, if we wish to maintain wetland area and function in some locations, we will need space for retreat.  We started to consider options of raising wetlands in situ and allowing for retreat in the MCA and CBA.  However quickly realised that there isn’t enough detailed design information at the moment to adequately assess them by means of a CBA; there are too many assumptions involved.  Therefore, the CBA wetlands option evaluation recommends that the LAP should include an action to conduct further studies of wetland dynamics and effective design/management processes so that wetland management can be further evaluated when the LAP is reviewed and updated – in about a decade.

    Q: Can the consultants please expand on what the sensitivity analyses were and their impacts on the benefit cost ratios and overall recommendations?

    A:  Please see video response below.


    Q: Could you please explain if the CBA model taken at year 0 or an estimated trigger point? ie: is the cashflow of the construction work in this year or at the trigger year?

    A:  Please see video response below.


    Q: What criteria was used to come up with 1.7m AHD as the height of the retaining wall along the west side of Black Neds Bay?

    A:  Please see video response below.


    Q:  What would happen to all of the drains that are along Black Ned’s Bay if you put wall along there? And who would pay for the costs? Would that be a Hunter Water cost or would that have to be rectified?

    A:  Please see video response below.

    Q: Doesn’t how we manage wetlands – in terms of whether they should expand or be filled - depend on your point of view?   Are you considering the implications to the environment, the economy and the community?

    A: Valuing wetlands and other environmentally significant areas was identified by the community as being important in the Pelican/Blacksmiths and Swansea and Surrounds Community engagement activities eg. https://shapelakemac.mysocialpinpoint.com/future-pelican-blacksmiths#/  and https://shapelakemac.mysocialpinpoint.com/adapting-swansea#/marker/97786 

    Protection of the economy, environment and community was a key focus of the LAP objectives for both LAP working groups when operating separately – and is equally important now they’ve combined.  Of the over 150 options identified by Council and the community (through survey’s, community drop-ins and other engagement activities) a total of eight (8) related to how we might manage the impacts of flooding and tidal inundation on wetlands and natural systems.  We know that mangroves, saltmarsh and floodplain forests are very vulnerable to sea level rise as their habitat distribution is closely aligned with surface and groundwater levels.

    There is also a legal imperative to protect and manage wetlands under the NSW Coastal SEPP. As outlined above, the LAP is being prepared in accordance with the NSW Coastal Management Framework - including the Coastal Management (CM) Act and Coastal Management SEPP.  The purpose of the CM Act is to manage the use and development of the coastal environment in an ecologically sustainable way, for the social, cultural and economic well-being of the people of New South Wales. The CM Act defines the coastal zone, comprising 4 coastal management areas: coastal wetlands and littoral rainforests area; coastal vulnerability area; coastal environment area; and coastal use area.

    The SEPP (Coastal Management) includes Statewide mapping for coastal wetlands and littoral rainforests areas; coastal environment areas; and coastal use areas.  For further information – including mapping of coastal wetlands and littoral rainforests, see the NSW Planning Coastal Management website here.


    Q: How are you engaging with the community and ensuring that they understand what’s being proposed?  Is there a risk that some members of the community look at what’s being proposed in the plan and consider it’s ridiculous for example protecting wetlands or moving the holiday park?

    A: Ensuring there is ongoing communication and engagement with the community has been a major focus of the LAP’s development.  Council and the community volunteer working groups have attempted to maintain a connection with the communities in these suburbs by a variety of means as outlined on the two Shape Lake Mac Sites:

    A variety of communications and engagement strategies have been used to ensure we reach as many people in the community as possible.  There have been over six community newsletters, 12 community drop-ins, four surveys and four town hall style meetings.

    As outlined above, the community has been actively involved in identifying and assessing hazards and identifying and assessing options.  These collaborative activities have been informed by and undertaken in accordance with the NSW Coastal Management Framework which supports use and development of the coastal environment in an ecologically sustainable way, for the social, cultural and economic well-being of the people of New South Wales.  

    It’s acknowledged that not all members of the community will agree with all of the hazards and options assessed. However, exploring commercial and social opportunities for Swansea and the surrounding suburbs and protecting state significant wetlands and environmental areas has been a consistent feature of Council and community input into the LAP’s development. This is giving us an insight as to how we might actively adapt in the future – reinforcing the approach of plan for the worst and act if and when necessary.

    Questions related to next steps including drafting and exhibiting the Local Adaptation Plan for Pelican, Blacksmiths, Swansea and Surrounds

    Q:  Is Council looking at a timeframe as the trigger for implementing options ie:  a particular year or date for determining when they have to go into the actions?

    A: The Joint Council and Volunteer Community Working Group has discussed this at length. They discussed triggers linked to a specific date and triggers linked to events (such as an inundation level) to trigger a change in response.  This is part of the reason that the Council and the community Steering Group sought specific advice from Salients, Umwelt and The CIE about risks and sensitivity testing. 

    Setting a time-based trigger date for short term options (1-10 years) is realistic when our knowledge of risks and impacts is reasonably sound in the short term.  The LAP will contain many short-term actions to assist Council and the community to better prepare for projected sea level rise.

    Setting a specific trigger date for longer term adaptation options is much more difficult when there is less certainty about the frequency and severity of the hazard in the future.  At the extreme level; if we planned and implemented a major adaptation strategy in the short term based on the unusually high-water levels over the last 6-8 years there’s a danger that we might invest in something that is not required yet – this is referred to as “maladaptation”.  That is why trigger points and careful monitoring of water levels and community wellbeing are very important - so we don’t venture into the area of maladaptation. For example, if we planned a seawall based on water level trends in the last 6-8 years and the reality is that the sea level rise doesn’t reach those levels then we may have invested say $5M to $10M in something that wasn’t warranted. 

    Therefore, our approach has been to consider trigger-based adaptation and sequencing, ie: when the water level reaches a certain height (and/or when new information comes to hand) that is the time we need to do a more detailed design, feasibility and business case with more detail.  The current CBA could be considered a first pass investigation ie: it’s the first time that an economic feasibility assessment like this has been attempted on such a diverse range of options on this scale.   The community assessment and the work by Umwelt, Salients and The CIE show that we have time to work up these options more comprehensively over the next few decades. 

    Q: There are community concerns about flooding and insurance.   We know that flooding has happened in the past and it will happen again. Insurance premiums are high and if flooding is happening now, why are some of these triggers and actions so far down the track? Are you talking with the community about this to better inform them of the risks and responses? 

    Council and the community are genuinely concerned about the current and future impacts of inundation, be it from catchment flooding or tidal inundation.   The issue of insurance is often raised by the community who are concerned that Council’s activities in this area have a direct impact on insurance premiums.  The flood insurance and property values information sheet explains that insurance is provided for the period of the premium (typically one year) and for a specified event or hazard, not for a gradual process such as sea level rise. Therefore, the level of a lake, river or the sea in 20 or 50 years’ time should have no effect on the premium calculated for the current year. 

    As outlined above the LAP will contain a range of actions for the short, medium and long term that will enable Council and the community to adapt public and private assets in a timely manner if and when required.   For example, setting floor levels to keep people safe and set them high and dry to protect those assets; strengthening emergency planning and response measures and undertaking more detailed design and planning that’s required.  There are many actions in the LAP that can address those sorts of short-term issues in the short term to maintain economic prosperity and community and environmental wellbeing.  Council and the volunteer community working group have been actively engaging with the wider community by means of ongoing meetings, newsletters and other communications and engagement strategies outlined on the Shape Lake Mac webpage. 

    Q:  After the LAP is finished, where do we go from there? The CBA is finished because it is a report that informed the LAP. How will these reports be revised in the future?

    The NSW Coastal Framework, along with Council’s 10-year Community Plan and 4 year delivery program provide a clear direction for ongoing revisiting and review of coastal management and flooding risks.  The LAP and related programs will include regular monitoring, reporting and review.  As such, the plan represents an ongoing relationship between Council and the community rather than “sunset project”.  Plans will be reviewed when new scientific and/or community information comes to light and if necessary a new contract will be initiated to revisit the probabilistic hazard assessment or the CBA on specific measures outlined in the LAP. 

    To reiterate: most of the Coastal Management Planning processes are run on a maximum of a decade review process. So, we continue to monitor then revisit the questions again ie: where we are now and are we still on the right track or what we need to tweak etc…, that’s the process.

    Q: I see 2050 as a real issue. Everyone seems to agree there is no trigger point.

    A: The analysis does seem to highlight a change in risk after 2050 which is why we have placed such importance on monitoring, reporting, review and preparatory planning between now and then. There is a trigger point; however, it is based on water levels/inundation heights and new information coming to hand, rather than being time based - this reflects the inherent uncertainty around some of these hazards in the future.  When we talk about trigger points there are kind of two trigger points that we are discussing. There’s inundation hazard trigger points of when you do the actions due to increasing inundation heights. Then there is also a trigger of when new information comes in and when you begin to review the previous documents with this new information.

    Q: I have a property in Swansea St, Swansea. At the moment I don’t think it floods or has ever flooded. But the road out the front has heavy inundation when there is a high tide and the water has difficulty getting away. My thinking is that people have trouble controlling water in their bathrooms (coming up the sewer). If you then raise the level of parts of Swansea such as parts of the northern side of Swansea, then you could inadvertently flood other parts of Swansea. I’m worried that if you raise the land, the school and the CBD, where is the water going to go?  We should look at the Lake historically because it has already been altered a lot. What effect will filling have surrounding neighbourhoods and on the Lake itself? Such as the ability of the lake to clean itself and what else is it doing to all the things that make Swansea the lovely place that it is.


    Q: Are you also thinking about how these adaptation options might impact flooding elsewhere in and around the lake and its catchment and other aspects such as infiltration, groundwater and water quality?  Would you be able to direct me to public reports related to other Lake Macquarie projects which include any discussion of this aspect of inundation management?


    A: These are very important points and reflects the complexity of how our natural and built assets are managed to protect the community, our economy and the environment. The CBA report stresses that even though the options have been examined individually for this study, their eventual implementation will need to consider the interactions and careful sequencing of options to avoid what’s called maladaptation ie: potentially causing more harm than good.

    As you’ve pointed out, how we manage land use and our private and public assets can greatly influence our waterways in terms of quantity and quality.   The situation in Swansea is exacerbated by the behaviour of the channel which is still evolving from when the breakwaters were constructed in the late 1800’s. Our understanding of the lake, the channel and the open coast has been developing over the years. This is the first time we’ve looked closely at a probabilistic hazard assessment of the inundation in and around the entrance channel and we’re reasonably sure it won’t be the last.  It’s also our first pass at CBA of Pelican, Blacksmiths and Swansea adaptation options. 

    As we find out more about the various hazards and as we start doing the more detailed design and feasibility work to implement adaptation actions in the future; we will also need to carefully consider the social, economic and environmental impacts of implementing actions.  We are required to do this as part of the NSW Coastal Management Framework mentioned above and also by the NSW Environmental Planning and Assessment Act.

    We are also continuing to build our knowledge of the lake, the channel and the open coast as part of our integrated flooding and coastal management program.  The following documents provide further detail of what’s been undertaken to date and where Council and the community plan to head with these initiatives:


    Please also refer to the document libraries in the two Shape Lake Mac sites related to the LAP ie:


    Other information sheets or documents that may be of interest:

    Let's Talk Community Forum Presentations: