Agenda of Wellington Water Committee

17 29 November 2018

Wellington Water Committee

Minutes of a meeting held in the Hutt City Council Chambers, Level 2, 30 Laings Road, Lower Hutt on Thursday 29 November 2018 commencing at 1.00pm

PRESENT:	Deputy Mayor D Bassett (Chair) (HCC)
	Cr I Pannett (WCC)
	Cr J Brash (GWRC)
	Cr R Leggett (PCC)
	Cr G McArthur (UHCC)

APOLOGIES: Apologies were received from Mayor Guppy and Mayor Tana.

IN ATTENDANCE: Mr D Wright, Chair, Wellington Water Ltd
Mr T Stallinger, Chief Executive, HCC

Mr C Crampton, Chief Executive, Wellington Water Ltd

Ms S Cuthbert, Principle Advisor to Chief Executive, Wellington Water Ltd

Mr M Kinvig, Group Manager, Network Strategy and Planning, Wellington Water Ltd
Mr K Dentice, Senior Advisor Whaitua Relationships, Wellington Water Ltd
Mr D Baxter, City Engineer, WCC

Mr C Laidlaw, Chair, GWRC (part meeting)

Ms K Stannard, Divisional Manager Democratic Services, HCC

Ms H Clegg, Minute Taker

PUBLIC BUSINESS

1. APOLOGIES

ReSOLVED: Minute No. WWC 18501

“That the apologies received from Mayor W Guppy and Mayor M Tana be accepted and a leave of absence be granted.”

2. PUBLIC COMMENT

There was no public comment.

3. CONFLICT OF INTEREST DECLARATIONS

There were no conflict of interest declarations.

4. Minutes

Resolved: Minute No. WWC 18502

“That the minutes of the meeting of the Wellington Water Committee held on Monday, 10 September 2018, be confirmed as a true and correct record.”

5.	Three Waters Review Update (18/1835) Report No. WWC2018/5/338 by Wellington Water Ltd
	The Chief Executive, Wellington Water Ltd (WWL) gave a presentation comparing the recent Three Water Review central government’s announcement with WWL’s submission. He concluded that central government’s proposed service delivery model and the oversight and stewardship proposal was similar to those suggested in WWL’s submission. Members expressed concern with the proposed structural reform, stressing retention of public ownership of assets was important. Mr Wright, Chair of WWL, advised that WWL was comfortable with the current company structure.
	Resolved: Minute No. WWC 18503 “That the Committee: (i) receives and notes the information, together with the Three Waters timetable; and (ii) acknowledges the additional work to be done on this.”
	Precedence of Business
	That, in terms of Standing Order 10.4, precedence be accorded to item 7 dealing with the update on discussions with other Councils. The item is recorded in the order in which it is listed on the order paper.
6.	Update on Discussions with Iwi (18/1877) Mr Wayne Mulligan, Chair, Taranaki Whanui ki Te Upoko o Te Ika explained that a Memorandum of Understanding (MoU) had been signed with Wellington Water Ltd (WWL) one year ago. He highlighted that Iwi wished to be part of the public service relating to water, adding an inclusive model built on behaviour and attitudes was preferable. He added having iwi as a member of WWL would be beneficial to making the best decisions. In response to questions from members, Mr Mulligan explained he would welcome other iwi sitting around the table. He acknowledged iwi resources were not extensive, but that they were committed to sitting at the table. He further acknowledged that the current Constitution provided for asset owners holding voting rights, which iwi were not part of. He expressed preference for a small focus group. Members discussed the merits or otherwise of the constitutional requirement that if a member Council withdrew from WWL, the associated mana whenua member was also required to withdraw. Members also discussed the issue of balancing voting rights between all members.

Update on Discussions with Other Councils (18/1834)

The Chair elaborated on discussions with South Wairarapa District Council (SWDC) and had received a response moments before the meeting commencing. He further advised SWDC expressed strong interest in joining Wellington Water Ltd (WWL) and asked for the Committee to approve this in principle.

The Chair explained that to enable another entity to join WWL, the Constitution required alteration and full approval of all shareholders was required. He added he had spoken to all Mayors and Chief Executives of each member Council and they had all voiced approval in principle for this to occur.

In response to a question from a member, the Chair advised SWDC already contracted its work to City Care Water. However that contract expired in six months time.

In response to a question from a member, the Chief Executive, Hutt City Council (HCC) elaborated on the costs involved to be a shareholder of WWL. He added that Wellington City Council had the most Class B shares and he anticipated SWDC would hold the least, should it become a member.

Members agreed due diligence would be required to ensure WWL did not inherit any unforeseen liabilities and that the capacity of WWL needed to be taken into account. The Chief Executive, HCC advised WWL had already held preliminary talks with SWDC to understand its assets and any issues. He added that if large investments were required by any one member, that member was responsible for financing those.

The Chief Executive, WWL advised initial discussions with SWDC had concluded. He noted there would be a future consent required for a Discharge to Land for the current SWDC Wastewater Treatment operation, the whole Wairarapa region had long term water sustainability issues and that a reservoir had been mooted for future water storage. He acknowledged SWDC may have medium to long term water issues.

The Chief Executive, HCC tabled draft recommendations, explaining the intention was to provide SWDC with assurance it could consult with the community on the proposal.

Members discussed the recommendations.

In response to questions from members, the Chief Executive, WWL advised due diligence investigations should be completed in two weeks, that a report back to the WWL Board would be followed by a report back to the Committee and then to each member Council.

Resolved: (UNANIMOUS) Minute No. WWC 18504

“That the Committee:

(i) notes the letter from the Mayor of South Wairarapa District Council dated 22 November 2018;

(ii) recommends acceptance of South Wairarapa District Council as a new shareholder in Wellington Water Limited subject to:

a. South Wairarapa District Council formally requesting to become a shareholder after considering the results of their intended consultation process;

b. a summary report being prepared for shareholders on South Wairarapa District Council becoming a shareholder, including the high level implications on the Wellington Water Limited from a financial and operational perspective, and this report being approved by the company’s Board of Directors; and

c. all shareholding councils formally resolving to accept South Wairarapa District Council as a new shareholder and approving any necessary associated resolutions; and

(iii) agrees that once conditions (ii)a and (ii)b above are satisfied, the Committee Chair will circulate confirmation and then circulate the documentation for shareholding council approval to Wellington Water Committee members with a copy to the respective council chief executives.”

Letter of Expectation 2019/2020 (18/1813)

Memorandum dated 15 Novemeber 2018 by the Chief Executive, Hutt City Council

The Chief Executive, Hutt City Council elaborated on the memorandum. He reiterated that the Letter of Expectation needed to remain a high level document and should signal any changes in direction.

Members discussed the Letter of Expectation noting that all priorities needed to be listed including environmental and that the order of priorities may need to be altered.

The Chief Executive, Wellington Water Ltd (WWL) reminded members that WWL was approaching its second year of a three year Statement of Intent. He explained each Council sets its expected level of service for water, sets their rates accordingly and makes policy decisions. He further explained WWL gave each Council a number of options which would assist them to determine their level of rates.

The Chair undertook to review the Letter of Expectation and to distribute it to members as soon as possible. He acknowlegded the Letter of Expectation needed to reflect the delivery of programmes as contained in Councils’ Long Term Plans, show support for Councils growth rates and include financial considerations.

Resolved: Minute No. WWC 18505

“That the Committee:

(i) receives the report; and

(ii) approves the 2019/2020 shareholder Letter of Expectation to Wellington Water Limited attached as Appendix 1 to the memorandum and authorises the Committee Chair to sign the letter subject to the Chief Executive of Hutt City Council reviewing feedback from the members regarding delivering on programmes under Councils’ Long Term Plans and including amendments as discussed, with final changes to be circulated to members prior to the Committee Chair signing.”

The meeting adjourned at 2.33pm and resumed at 2.49pm.

Shareholder Resolution in lieu of Annual General Meeting (18/1833)

Report No. WWC2018/5/337 by Wellington Water Ltd

Resolved: Minute No. WWC 18506

“That the Committee:

(i) receives the report;

(ii) notes that the annual report was published on 30 September 2017 and 28 September 2018 which fulfilled the relevant statutory requirements;

(iii) agrees not to have an annual general meeting of Wellington Water for the 2016/17 and 2017/18 financial years; and

(iv) notes that the Auditor General has appointed Audit New Zealand as auditor on their behalf for the 2016/17, 2017/18 and 2018/19 financial years.”

10.	Shareholders Agreement and Constitution (18/1875) Report No. WWC2018/5/341 by the Chief Executive, Hutt City Council
	The Principle Advisor to the Chief Executive, Wellington Water Ltd (WWL) elaborated on the report. She had received advice from Russell McVeigh throughout the process and that the proposed changes were in line with the submission made to central government. She added the proposed changes were designed to future proof the document and would allow for any future Councils to join without having to reword the Constitution. In response to a question from a member regarding voting rights, the Principle Advisor to the Chief Executive, WWL advised the Partnership section contained in the Constitution was changed to provide for a greater sense of true partnership, differentiating between shareholders and those decisions which involve mana whenua. She added that in most situations, mana whenua would have a vote, except for decisions involving Annual General Meeting resolutions and the daily operations of WWL. The Chair explained there were three matters needing to be addressed by the Constitution - ability to accept a new authority; involvement of iwi; and consequential matters. He added that all Mayors of the region and the Chair of Greater Wellington Regional Council had noted their support to update the Constitution. The Chief Executive, Hutt City Council (HCC) explained that any proposed changes required the signature of each member Council. Members discussed the merits of including the words “in the Wellington region” in the Operative Provisions section of the Constitution. It was agreed any requests from other Councils to join WWL would be dealt with on a case by case basis, and that the words “in the Wellington region” be added. In response to requests from a member, the Principle Advisor to the Chief Executive, WWL agreed to investigate changing the first bullet point under Purpose of WWL to read: “Provide governance and leadership across all issues…”; and to update the corresponding references. In response to a question regarding iwi representation numbers on the Wellington Water Committee (‘the Committee’), the Chief Executive, HCC advised that the Committee needed to work with the Iwi to achieve effective Iwi representation without large numbers of personnel. The Principle Advisor to the Chief Executive, WWL added that under the Constitution, the Committee must accept an iwi representative from the geographical area WWL operated within. In response to requests from members, the Principle Advisor to the Chief Executive, WWL agreed to investigate the requirement of the mana whenua representative resigning from the Committee if the corresponding Council did, as this did not reflect true partnership intent. In response to a request from a member, the Chair, WWL agreed to investigate Committee member training concerning cultural issues.
	Resolved: Minute No. WWC 18507 “That the Committee: (i) receives the report, (ii) endorses the proposed changes for the Shareholders’ Agreement attached as Appendix 1 to the report including the changes made at the meeting; (iii) endorses the proposed changes to the Constitution attached as Appendix 2 to the report including the changes made at the meeting; and (iv) forwards the Shareholders’ Agreement and Constitution to the Shareholder Councils for approval.”
11.	Company Update Report (18/1812) Report No. WWC2018/5/334 by Wellington Water Ltd
	In response to a query from a member regarding the Three Waters Dashboard, the Group Manager, Network Strategy and Planning, Wellington Water Ltd (WWL) advised analysis of data and studies over the next 12 months would provide clearer answers for reasons for the increase in per capita demand for water figures. In response to a question from a member regarding Greater Wellington Regional Council (GWRC) and WWL’s work on the flood protection, the Chief Executive, WWL confirmed officers from both GWRC and WWL worked togther on the matter. The Group Manager, Network Strategy and Planning, WWL advised the Stormwater Project would commence in 2019 with the engagement of members due to occur shortly.
	Resolved: Minute No. WWC 18508 “That the Committee receives the Company Update Report.”

12.	Planning for the 2021/31 Long Term Plans (18/1814) Report No. WWC2018/5/335 by Wellington Water Ltd
	The Group Manager, Network Strategy and Planning, Wellington Water Ltd (WWL) elaborated on the planning for the Long Term Plans. Members discussed the need for adequate information Councillor attendance at water and levels of service workshops. Members agreed that a post-election Councillor workshop should occur for the benefit of potentially new members appointed to the Committee.
	Resolved: Minute No. WWC 18509 “That the Committee receives the report.”
13.	Planning for Growth (18/1815) Report No. WWC2018/5/336 by Wellington Water Ltd
	The Group Manager, Network Strategy and Planning, Wellington Water Ltd (WWL) explained the modelling work should be completed by Christmas and that so far, it had shown significant capacity issues in water and wastewater networks. He added that planning for future growth would be assisted by identification of areas for upsizing the network to deal with capacity issues. He acknowledged the true costs of options to deal with water issues were not only financial and that stormwater issues were also important.
	Resolved: Minute No. WWC 18510 “That the Committee receives the report.”
14.	Alliance Implication Plan and Water Quality (18/1876) The Chief Executive, Wellington Water Ltd (WWL) introduced Mr Kevin Locke, Alliance Manager from Fulton Hogan. Mr Locke elaborated on the partnership agreement between Fulton Hogan and WWL.

15.

Meeting Schedule 2019 (18/1698)

Memorandum dated 13 November 2018 by the Divisional Manager, Democratic Services, Hutt City Council

The Chair recommended members meet regularly with the Wellington Water Ltd (WWL) Board and also with the Minister of Local Government. He advised that the Minister of Local Government was keen to meet as soon as possible which may result in the scheduled February 2019 meeting venue being changed to Lower Hutt.

Members noted that if Minister of Local Government was unable to attend the February meeting of the Wellington Water Committee then an additional Committee meeting would be organised.

Resolved: Minute No. WWC 18511

“That the Committee agrees to the meeting schedule for 2019 as follows:-

Thursday, 28 February 2019 commencing at 1 pm with the Minister of Local Government followed by a workshop (Hutt City Council);

Wednesday, 29 May 2019 commencing at 1 pm followed by a workshop (Greater Wellington Regional Council);

Thursday, 26 September 2019 commencing at 1 pm followed by a workshop (Hutt City Council)

Tuesday, 3 December 2019 (pending the results of the local body elections) commencing at 1 pm followed by a workshop (Upper Hutt City Council).”

The Chair thanked members, staff and board members for their work throughout the year.

Members thanked the Chair for his leadership.

There being no further business the Chair declared the meeting closed at 4.20pm.

Deputy Mayor D Bassett

CHAIR

CONFIRMED as a true and correct record

Dated this 28 day of February 2019

Attachment 1

Wellington Water Draft 2019-22 Statement of Intent

Our water, our future

2019-22 Statement of Intent

[DRAFT]

Contents

Helping communities prosper ............................................................xx

Getting water to and from communities ...........................................xx

Keeping the water running ................................................................xx

How we work......................................................................................xx

Appendices

Appendix 1: What influences us ...........................................xx

Appendix 2: About us ...........................................................xx

Appendix 3: Governance and shareholder information .......xx

Appendix 4: Customer outcomes and service goals .............xx

Appendix 5: Three-year projections......................................xx

Taki

He wai, he wai

He wai herenga tāngata

He wai herenga whenua

He wairua

He waiora

Tis water, tis water

Water that joins us

Water that necessitates the land

Soul of life

Life forever

Helping communities prosper

Looking after our water now and for the future

The Wellington region is the perfect balance of urban culture and the great outdoors, and when people say ‘you can’t beat Wellington on a good day’ they’re not wrong! We’re also a growing region. About 415,000 people (10 per cent of New Zealand’s population) live, work and play here, and our cities are forecasting significant growth in population over the next 30 years.

As our communities grow, the need for infrastructure (such as roads, power, and water services) to keep up with change will be vital to our region’s economic success.

Our vision is to create excellence in regional water services so communities prosper. Our customers, the residents of the Wellington region, use the services we provide: drinking-water; wastewater; and stormwater in their homes, businesses, and communities every day. Reliable and affordable access to these services supports the social fabric of our communities.

We deliver our services by focusing on three customer outcomes, which are the driving force behind our day-to-day work, and encompass everything we want to achieve for our customers: safe and healthy water; respectful of the environment; and resilient networks that support our economy.

We also acknowledge and value our mana whenua and their kaitiaki (guardianship) role with the water bodies within the rohe (region). The concept of te mana, o te mauri, o te wai is the recognition of fresh water as a natural resource whose health is integral to the social, cultural, economic and environmental well-being of communities. Understanding and incorporating this concept into the delivery of our services and customer outcomes is fundamental to making sure we take care of our water now and for the future.

We are mindful of ki uta ki tai (from the mountains to the sea), which is the recognition that water moves through the landscape and has numerous interactions on its journey. Much of this journey is impacted by the services we provide. Ki uta ki tai acknowledges the connections between the atmosphere, surface water, groundwater, land use, water quality, water quantity, and the coast. It also acknowledges the connections between people and communities, people and the land, and people and water.

The services our three water networks provide are vital to a modern and successful economy, but they are also important to the interactions our customers have with the natural environment, and we want our customers to be able to enjoy our beaches, rivers, and streams with the confidence that these waterways are healthy.

What brings all this breadth of activity together is a commitment from our people to support the region as it grows and changes to meet the aspirations of our various communities. We want to be a high-performing team and will lift our capabilities in a number of areas to help our customers get the most out of the services we provide, so they can live, work, and play in this beautiful region of ours with confidence.

In developing Our water, our future we’ve created an enduring Statement of Intent with clear targets and measures over a rolling three-year period. We’ve aligned our Statement of Intent with our client councils’ 2018 Long-term Plans.

Getting water to and from communities

Our promise to our customers

Our promise to our customers is that we will get water to and from communities in a way they can rely on and trust.

We want our customers to be confident the services we provide will help their communities prosper, and we will do this by focusing on our three customer outcomes:

· Safe and healthy water - we provide water services to ensure safe drinking water and work to eliminate the harmful effects of wastewater and stormwater over time.

· Respectful of the environment - when we provide water services we seek to, avoid harm to the natural; and built environment, and over time, enhance it for the benefit of future generations.

· Resilient networks that support our economy - we provide reliable day-to-day water services that are able to withstand shock and stresses, and future-proof the network to enable a strong regional economy and enhanced natural environment.

Safe and healthy water that can be relied on

A safe and reliable water supply is essential to public health and the social and economic progress of our region.

Our focus on safe and healthy water means we embrace a high standard of care, and aligns with the United Nations Sustainable Development Goal 6: Clean Water and Sanitation, which is about the availability and sustainable management of water and sanitation. We will maintain 100 per cent compliance with the Drinking-Water Standards New Zealand, and we will monitor treated water to make sure there have been no transgressions.

Water supplied to our customers’ homes and businesses is ultimately removed by our wastewater network, treated at one of our four wastewater treatment plants, and then safely discharged into the environment. Along the way, we want to prevent wastewater from overflowing into private properties and public spaces during dry weather (dry weather overflow), which can pose a health risk to our communities.

We aim to achieve a high level of reliability and availability of our three waters networks. If our services are disrupted, we want them to be fixed as soon as possible, and we will keep our customers informed, fix the problem, and then let them know when it’s back up and running again.

Being respectful of the environment

For us to provide safe drinking water, we must protect our water sources and catchments where the rain falls. We are lucky our Kaitoke and Wainuiomata/Orongorongo catchments have all been protected from deforestation and are nearly pristine. We consider the Waiwhetu Aquifer a regional taonga (treasure). Water from the Hutt River/Te Awa Kairangi flows into the aquifer at Taita, and the aquifer travels down the Hutt Valley and out towards the harbour entrance.

Every day we take water from our catchments to supply our residents with drinking-water. Our residential customers use about 226 litres per day (L/p/d). The regional gross usage is 358 L/p/d, which includes commercial and unaccounted water loss. This is a lot of water, and is well in excess of other communities in New Zealand and worldwide.

This water would have otherwise flowed down our rivers and streams into the sea, so this means we need to be mindful of how much water we take, as this can have environmental impacts. Being mindful of how we use water is also why we built the Stuart Macaskill Lakes to store water during winter when it’s plentiful.

It’s important our customers know the value and cost of water, and have the information they need to be able to reduce their water usage at home. We will also proactively monitor and manage leakage from the network to reduce wastage.

The water quality of our streams, rivers, harbours, and ocean is deteriorating. In urban areas, leaky pipes can allow wastewater to enter the stormwater system, or stormwater can enter the wastewater network from illegal cross-connections and low gully traps in such quantities our network and treatment plants can’t cope. We will focus on tackling these problems and reduce the likelihood of cross-connections occurring, so the water quality of our waterways can improve.

With the introduction of the National Policy Statement for Freshwater Management (NPS-FM), new national water quality limits have been set by central Government, which need to be achieved by 2040. We will continue to work with Whaitua Committees to set water quality limits that consider community aspirations and are appropriate for our catchments. As a part of this work, we will identify high-priority areas in the network to trial solutions that will improve water quality in the environment.

Resilient networks that support our economy

We are facing a number of significant global challenges such as climate change and sea level rise. Climate change will result in increasing rainfall intensity, which will put pressure on our stormwater network. Our piped stormwater network is generally able to cope with a one in 10-year storm. However, one in fifty year and one in one hundred year storms (which are expected to become more frequent over the next thirty years) will have a significant flooding impact on our public spaces and homes. We will work with other infrastructure providers to minimise the impact of flooding on customer homes. We will also improve our operational response by using our predictive rainfall technology to provide a better customer response.

We are working to improve the resilience of our services. We have made good progress on the region’s emergency water supply with the development of our Community Infrastructure Resilience programme (CIR), which will deliver drinking-water across the region after a major event such as an earthquake.

We will encourage our customers to be resilient at home by storing enough water for their household to last at least seven days following a large earthquake, and make sure that they have a plan for the disposal of their wastewater (wees and poos), like a two-bucket system or a long-drop.

Our wastewater network is fragile and is likely to be affected significantly by a large earthquake. We have identified all critical wastewater infrastructure, which is vulnerable to ground shaking, and we will use this information to improve our infrastructure planning over the next ten years and beyond.

Day-to-day operational resilience is also important to our customers; we will always have unexpected failures in our network, which will affect the services we provide. However, to minimise the impact on our customers we will continuously improve our planning approach and the effectiveness of our response in these situations.

Putting our customers at the heart of everything we do

We will make a step change in the way we think about our customers. It’s important that our customers have positive interactions with the services we provide, and we will work with our client councils and contractors to build a shared understanding of what a positive customer experience should look and feel like.

We will make changes to the way we work, so we are focused on putting our customers at the heart of everything we do, and we will improve customer experience satisfaction to make sure we are kept on track. To help us improve satisfaction, we will keep our customers informed about the work we are doing at their front gate and in their community. We will also provide practical advice, information, and education to help customers change their behaviours regarding water conservation, protecting the environment, and resilience.

When our customers contact us, we will work with them to make sure we are able to answer their questions, or resolve any complaints they might have.

While doing all of this, we will make sure our customers are kept safe as they go about their day-to-day business. This means customers will not be endangered by any of our services, or the way in which they are provided, and we’ll be proactive in anticipating potential risks or hazards.

Understanding the cost of water

We will keep our three waters networks in good shape and make sure what customers pay for water services is used in the best possible way.

There’s no charge in New Zealand for taking the water from our catchments. Though taking this important resource does involve a number of environmental and resource consents that must be managed carefully to make sure there are no adverse impacts on our waterways.

Getting water to and from customers’ homes, on the other hand, is very costly. We operate assets (valued at $5.8 billion) to do this job and we spend $140-$210 million annually on keeping them well-maintained and operating.

Residential customers pay for their water, wastewater, and stormwater services through their rates, while our business customers pay a volumetric rate according to how much water they use.

The cost to deliver water services is not transparent and many customers want more information about how their money is being spent and what value they are receiving. We have agreed with our client councils to calculate the cost of water as a cost per connection.

By understanding the cost of water we want our customers to be more aware of their own water use, understand how their behaviours can affect the environment, and to be aware of how much it costs to improve services as our communities grow and change.

Customers expect these assets to be kept in good condition, so they can rely on the services we deliver. Operating and renewing assets (when they get old) is how we do this, and the way we tell our customers this is being maintained for future generations is by the value of our assets. We aim to keep the asset value constant, not reducing (otherwise we are putting additional costs onto future generations), and not spending money on improving beyond what is needed.

Statement of Intent Measure		Trend	2019/20	2020/21	2021/22
1	Our customers will feel confident the drinking-water we provide is safe because we will maintain compliance with the Drinking-Water Standards New Zealand	Maintain	Compliant	Compliant	Compliant
2	Our customers will not be exposed to any public health risks because we will reduce the number of wastewater overflows	Reduce	<100 dry weather overflows and <300 wet weather overflows	<95 dry weather overflows and <285 wet weather overflows	<90 dry weather overflows and <270 wet weather overflows
3	Our customers will feel confident our drinking water service is reliable because we will maintain the number of hours drinking water supply is available	Maintain	Estimated average <2 hours unavailable per customer per year	Estimated average <2 hours unavailable per customer per year	Estimated average <2 hours unavailable per customer per year
4	Our customers will feel confident our wastewater service is reliable because we will improve the availability of the wastewater service	Improve	*Until we can accurately measure length of wastewater outages and number of houses affected, we will target: 20 wastewater complaints per 1000 connections 90 per cent of wastewater complaints (about loss of service) resolved within 1 day	*Until we can accurately measure length of wastewater outages and number of houses affected, we will target: 19.5 wastewater complaints per 1000 connections 91 per cent of wastewater complaints (about loss of service) resolved within 1 day	*Until we can accurately measure length of wastewater outages and number of houses affected, we will target: 19 wastewater complaints per 1000 connections 92 per cent of wastewater complaints (about loss of service) resolved within 1 day
5	Our customers will reduce the amount of water they are using at home because they have the information they need to be able to make informed decisions and change their behaviours	Reduce water usage Improve access to information	Gross production of water supplied to customers <355 litres per resident per day Percentage of people surveyed who had seen and understood nominated education messages within same financial year: >27 per cent	Gross production of water supplied to customers <350 litres per resident per day Percentage of people surveyed who had seen and understood nominated education messages within same financial year: >30 per cent	Gross production of water supplied to customers <345 litres per resident per day Percentage of people surveyed who had seen and understood nominated education messages within same financial year: >33 per cent
6	Our customers will be able to enjoy our region's beaches because we will improve the number of days monitored beaches (between 1 November – 31 March) are available for swimming	Improve	Total number of days monitored beaches are closed is at most 5	Total number of days monitored beaches are closed is at most 4	Total number of days monitored beaches are closed is at most 3
7	Our customers will feel confident our region’s waterways are not adversely affected by our services because we will monitor and apply effective methods to manage and improve water quality	Improve	Identify potential intervention strategies Select a receiving water quality improvement project (i.e. an urban stream) and assess it against intervention strategies Monitor urban stream water quality to set baseline	Relevant design standards developed or updated to capture applications and effectiveness of water quality improvement methods (including results of pilot projects) Baseline monitoring of urban stream water quality continues	Water quality baseline, and available water quality targets and methods are integrated into the prioritisation of work programmes
8	Our customers’ homes and businesses will be protected from flooding because we will reduce the number of habitable floors predicted to be flooded by a 1:100 year flood event	Reduce	1 per cent reduction year on year (in the area modelled at the start of year)	1 per cent reduction year on year (in the area modelled at the start of year)	1 per cent reduction year on year (in the area modelled at the start of year)
9	Our customers will be resilient in the event of a natural disaster because we will improve the number of households that have drinking water stored and have a plan for the safe disposal of their wastewater	Improve	5 per cent of households with 140+ litres of potable water stored per person Set a baseline for the percentage of households that have an appropriate wastewater solution	7.5 per cent of households with 140+ litres of potable water stored per person Target an increase in the percentage of households that have an appropriate wastewater solution	10 per cent of households with 140+ litres of potable water stored per person Target an increase in the percentage of households that have an appropriate wastewater solution
10	Our customers will have positive interactions with us because we will measure and improve their customer experience satisfaction	Improve	>80 per cent of surveyed customers rate us good, very good, or excellent	>85 per cent of surveyed customers rate us good, very good, or excellent	>90 per cent of surveyed customers rate us good, very good, or excellent
11	Our customers will feel valued because we will improve their customer experience satisfaction by acknowledging problems with level of service and working to resolve them within acceptable timeframes	Improve	50 per cent of complaints resolved within 10 days	52 per cent of complaints resolved within 10 days	54 per cent of complaints resolved within 10 days
11		Improve	80 per cent of complaints resolved within 30 days	85 per cent of complaints resolved within 30 days	85 per cent of complaints resolved within 30 days
12	Our customers will be kept safe because our work sites will not result in any member of the public suffering a serious injury or hospitalisation	Maintain	Zero incidents reported to us, our supply chain or client councils	Zero incidents reported to us, our supply chain or client councils	Zero incidents reported to us, our supply chain or client councils
13	Our customers will get a better understanding of where their water rates money is being spent because we will improve transparency of the cost per connection of our services	Improve	Analyse results and explore implications	Increased transparency to rate payers	Increased transparency to rate payers
14	Our customers will feel confident we are creating value for money because we will maintain our assets at a sustainable level now and in the future	Maintain	Normalise results across councils and look for a regional proxy	Increased transparency to rate-payers	Increased transparency to rate-payers
15	Our customer will feel confident we are working to understand and reduce our carbon emissions because we will use a system/methodology to track and develop a carbon emissions profile (including priority areas to reduce emissions)	Improve	System/methodology developed and agreed Baseline carbon emissions inventory complete	Performance reassessed and target set Carbon emission profile developed and recommendations made	Start implementing recommendations made in carbon emissions reduction plan

Keeping the water running

Delivering our promise to customers

The infrastructure and assets we use to deliver our services to customers generally have a life expectancy of thirty to one hundred years. This means we must take a sophisticated approach to planning to make sure we get the best value from these assets.

A regional perspective

Our Regional Service Plan outlines all the activities we need to do to provide services now and into the future and includes:

· Thirty year infrastructure plans – these outline the large infrastructure improvements necessary to meet future levels of service.

· Ten year service plans – these lay out the priorities for investment to meet current and future levels of service, and aligns with our client councils’ Long-term Plans.

· Three-year rolling programmes – these contain the activities which are fully planned to be delivered over the next three years.

Planning for the future and its challenges

The broader regulatory environment for the three waters is complex and ever-changing. The Government’s Three Waters Review is ongoing and is likely to result in greater regulatory oversight and the need to meet higher standards. We remain abreast of these changes to ensure we are in a position to proactively respond to unfolding developments.

Our own Three Waters Strategy helps us to plan for the long term by looking at each of our three waters services (drinking-water, wastewater, and stormwater) and considering how we expect them to evolve, and the challenges we expect them to face, over the next fifty plus years. The Strategy sets out how we expect to achieve our customer outcomes: safe and healthy water; respectful of the environment; and resilient networks that support our economy.

In developing this Strategy we have identified a number of issues that could significantly impact on our service delivery, where we need to increase our understanding and ensure we have plans to respond. These issues include:

· planning for growth

· minimising our carbon emissions

· the sustainability of our drinking water supply

· management of sludge from wastewater treatment

· receiving environment water quality

· flooding and flood management

· ensuring our services are resilient to major events.

These issues all impact on the delivery of water services across the region as a whole, and they require a regional response. For each issue, we will complete a Future Services Study that will follow the Treasury’s ‘Better Business Case’ methodology. This approach is recognised as ‘best practice’ for government infrastructure investment – it makes sure the core issues are fully understood, that a clear ‘case for change’ or ‘strategic need’ has been defined, and that the expected benefits have been identified and can be measured and monitored to make sure the investment is successful. The approach also makes sure we have good buy-in from all of our stakeholders.

Not all of these issues will require the use of the Better Business Case approach. For example, carbon emissions reduction and growth relate more to our strategic approach across all of our activities, rather than requiring specific interventions.

Statement of Intent Measure

2019/20

2020/21

2021/22

We will better understand future services needs by completing future services studies

Minimising carbon emissions study will be completed, through setting an initial reduction target and action plan

Complete flood and flood management study (subject to funding)

Resilience study will be completed, through undertaking a gap analysis to identify actions necessary to achieve resilience service levels across the three waters for all customers, and an associated action plan

Recommended approaches for sustainable drinking-water supply, wastewater sludge management and receiving environment water quality are submitted into the smart investment process for prioritisation, alongside other initiatives (together with relevant actions from the carbon emissions reduction and service resilience action plans)

Recommended approaches for flood and flood management are submitted into the Smart Investment process for prioritisation alongside other initiatives

[No actions – studies are complete and we will be in implementation]

Responding to growth

One of our most significant challenges in the region is the growth rate across all cities, which is placing increased pressure on the three waters networks. Every additional home results in more water consumption, more wastewater, and potentially more stormwater run-off.

The National Policy Statement for Urban Development Capacity (NPS-UDC) has introduced requirements to make sure infrastructure providers plan for growth, and that necessary infrastructure is included in councils’ Long-term Plans. As we model the impact of growth on current networks, we have identified significant capacity issues in the drinking-water and wastewater networks across the region. We will provide input into the region’s development capacity assessments, supporting the proposed changes, and we will provide advice on infrastructure changes to meet growth strategies.

Without good models we can’t understand how current networks perform, and in turn what will happen when growth occurs. These models are important tools for us to be able to provide our client councils with advice on infrastructure needs to support growth and over the next two years we will have all models 100 per cent completed.

We are working closely with our client councils to identify potential growth catchments and planning for three waters infrastructure that will be fit for future challenges. There are around twenty potential growth areas across the region that we will be planning for over the next two years. This will result in more clarity about the necessary infrastructure funding needs. We will also need to budget for the operation costs for maintaining and operating these new assets.

We support quality development of properties, which will work today and into the future. For us to achieve this we need developers to provide quality infrastructure that will last. We know developers want clear and easy to understand advice, which means they can progress their developments at their pace. We want developers to feel their needs are being met and are satisfied by the services we offer.

Statement of Intent Measure		2019/20	2020/21	2021/22
17	We will make sure future growth is supported by having well thought out networks plans	Network delivery plans developed for identified growth cells (at least 5)	Network delivery plans developed for identified growth cells (at least 5)	Network delivery plans developed for identified growth cells (at least 5)
18	We will understand how our current networks perform and plan for growth by completing our three waters network modelling programme	66 per cent complete	100 per cent complete	[Models complete]
19	We will build our relationships with developers by improving their satisfaction with the advice and services we offer	65 per cent satisfaction	65 per cent satisfaction	65 per cent satisfaction

Operating, maintaining, and renewing three waters assets

Every year we operate our networks so that drinking-water is supplied to homes, wastewater is removed and treated, and stormwater is diverted safely into waterways. Keeping these three water networks maintained and in good day-to-day working order is a big job, as is renewing infrastructure which is worn out.

The majority of our annual expenditure goes into operating our treatment plants; delivering services to customers by maintaining the networks; and renewing infrastructure which needs replacing. When we do this work we will make sure we meet all of our consent conditions on maintenance and operations activities and capital expenditure projects.

Pipes that break too often, or are predicted to, need to be replaced. By replacing them we avoid breakdowns in the future. We do this through projects which replace a long length of pipe at a time. We want to do this work in a way that reduces inconvenience to traffic and residents. It has to be done, but we will do the work with a minimal level of fuss and impact to our customers.

A by-product of treating water to make it safe for drinking is sludge. We will make sure we keep the water content of sludge to a minimum to reduce odour and manage disposal to landfills.

We will use our updated regional Water Safety Plan to record our risk management approach including the systematic assessment of risks from source to tap; identification of ways these risks can be managed; and control measures implemented to ensure that management is occurring properly. We want our customers to have confidence the drinking-water we supply is safe, but also that it is wholesome in terms of clarity, taste, and odour.

We established the Consultant and Contractor Panels to generate improved outcomes for customers by creating cost efficiencies and effectiveness through the delivery of capital expenditure (capex) programmes.

Our people will be honest, caring and authentic when dealing with customers, and we will embed these customer behaviours throughout our business. When customers contact us, we will make sure we respond to their queries as quickly as possible and we will partner with our client councils call centres’ to make sure calls are owned end-to-end.

Statement of Intent Measure		2019/20	2020/21	2021/22
20	We will meet all environmental consent requirements by being fully compliant with consent requirements in the delivery of our services	Fully compliant	Fully compliant	Fully compliant
21	We will safeguard our drinking water by completing our regional Water Safety Plan	Service delivery improvements arising from the regional Water Safety Plan prioritised and implemented	Service delivery improvements arising from the regional Water Safety Plan prioritised and implemented	Service delivery improvements arising from the regional Water Safety Plan prioritised and implemented
22	We will supply wholesome drinking water at an acceptable standard (taste, clarity, and odour) by maintaining satisfaction	99.5 per cent customer satisfaction	99.5 per cent customer satisfaction	99.5 per cent customer satisfaction
23	We will minimise the impact of sludge odour and landfill disposal by maintaining minimum water content	Landfill bins have a dry-solids content >15 per cent	Landfill bins have a dry-solids content >15 per cent	Landfill bins have a dry-solids content >15 per cent
24	We will own customer calls end-to-end (by partnering up with our client council call centres) and manage customers’ expectations by embedding our customer behaviours throughout our business	All customer enquiries are tracked and responded to within 60 minutes 95 per cent of customer enquiries raised have been resolved within the level of service (P1-3) timeframes	All customer enquiries are tracked and responded to within 60 minutes 95 per cent of customer enquiries raised have been resolved within the level of service (P1-3) timeframes	All customer enquiries are tracked and responded to within 60 minutes 95 per cent of customer enquiries raised have been resolved within the level of service (P1-3) timeframes
25	We will be reliable in the delivery of our renewals and capital works programmes by completing planned work within timeframes	95-105 per cent of planned work completed	95-105 per cent of planned work completed	95-105 per cent of planned work completed
26	We will work with our Contractor Panel to be cost-effective by decreasing cost per kilometre of laying pipes in real terms (adjusted for inflation)	5 per cent reduction year-on-year	5 per cent reduction year-on-year	5 per cent reduction year-on-year

Improving our services

The services our three water networks provide are vital to a modern and successful economy, so it’s important we look after them now and for the future. It costs an estimated $50 million each year to improve our services, which is over and above maintaining, operating, and renewing three waters assets to deliver current services.

Safe and healthy water

Following the Havelock North drinking-water contamination inquiry, the Government has indicated that changes will be made to the Drinking-Water Standards for New Zealand in 2019. Through the work we’ve completed at the Waterloo Treatment Plant we think we’re in a good position to respond to potential changes.

Respectful of the environment

Through the Whaitua Committee process and Proposed Natural Resources Plan (PNRP) adoption process, we will understand water quality objectives and limits across the region, and implement long-term measures and policies to meet these with communities.

The PNRP requires all stormwater discharges be consented, and a Global Consent has been approved. Following an initial monitoring period, we will develop stormwater management strategies, which will include measures to meet the water quality objectives of the Whaitua chapters of the PNRP.

We will work with councils to introduce planning controls to mitigate the effects of stormwater run-off, including water-sensitive urban design guidance for councils to adopt in their district plans, and we will complete major stormwater improvement projects at Pinehaven Stream, Porirua Central Business District, and Kilbirnie.

We will complete major wastewater projects including Porirua and Karori network improvements and seismic strengthening of our Seaview Wastewater Treatment Plant.

Resilient networks that support our economy

We will deliver major drinking-water projects, including the Omāroro Reservoir towards the end of the Long-term Planning period, with the ultimate goal being a resilient supply of drinking-water to central and eastern Wellington City. We will also complete major drinking-water projects, including Moe-i-te-Rā, Aotea, and Silverstream.

We will progress the Cross-Harbour Pipeline, which is needed to make sure the communities of Wellington City are more resilient in the event of an earthquake disrupting the water main that comes from the Hutt Valley.

Improving value for money

Every day, we try to be more efficient and effective. We introduced a Consultancy Panel two years ago to streamline our processes and the efficiency of our designs. We now want to show how this is preforming by reducing the percentage per capital cost.

Statement of Intent Measure		2019/20	2020/21	2021/22
27	We will work with our Consultancy Panel to improve efficiency by reducing costs (from the current 15 per cent of average fees per total construction costs) and lifting our internal capability	Reduce (simple projects) to 14 per cent	Reduce (simple projects) to 13.5 per cent Trend emerging in reduction of whole-of-life costs for complex projects	Re-benchmark across industry to assess any further reductions
28	We will complete major stormwater projects: Pinehaven Stream, Porirua stage 1; Kilbirnie stage 2	Pinehaven Stream (complete detailed design, consenting, commence construction) Porirua Stage 1 (complete detailed design, commence construction) Kilbirnie Stage 2 (complete construction)	Pinehaven Stream (complete construction) Porirua Stage 1 (complete construction)
29	We will complete major wastewater projects: Seaview (seismic strengthening); Porirua and Karori network improvements	Porirua network improvements (complete concept design) Karori network improvements (complete concept design) Seaview seismic strengthening (complete construction)	Porirua network improvements (complete detailed design and consenting) Karori network improvements (complete detailed design and consenting)	Porirua network improvements (commence construction) Karori network improvements (commence construction)
30	We will complete major drinking-water projects: Omāroro; Moe-i-te-Rā; Aotea; Silverstream	Omāroro (complete detailed design and consenting, commence construction) Moe-i-te-Rā (commence consenting) Aotea (complete consenting) Silverstream (complete detailed design and consenting) Cross-Harbour Pipeline (commence consenting)	Omāroro (build underway) Moe-i-te-Rā (complete consenting and commence detailed design) Aotea (on hold) Silverstream (commence construction) Cross-Harbour Pipeline (complete consenting, commence detailed design)	Omāroro (build underway) Moe-i-te-Rā (complete detailed design and commence construction) Aotea (commence detailed design) Silverstream (complete construction) Cross-Harbour Pipeline (complete detailed design, commence construction)

Ready to respond in emergencies

We live in a region which experiences a number of natural hazard events. In recent times, these have been more frequent, particularly short-burst rainfall events.

We know sudden or extreme changes in water quality, flow, or environmental conditions (heavy rainfall, flooding, and earthquakes) can cause drinking-water to become contaminated, and we will diligently monitor and respond to any changes.

No matter what the event, customers can rely on us to be out there dealing with issues and working hard to get our services back up as quickly as possible.

Each emergency will result in customer queries and issues. We will maintain an accurate record of all issues that occur and work through them with our customers until they are resolved.

We will make sure we are ready to respond during emergency events. This includes making sure we are able to utilise strategically-placed depots (located in Wellington City, Hutt Valley, Grenada and Porirua) and not solely rely on our Head Office to coordinate our response.

Statement of Intent Measure		2019/20	2020/21	2021/22
31	We will respond to customer issues following a significant event (flooding, earthquake, landslip, major service failure) by keeping an accurate record of all issues that occur and working through them with our customers within agreed timeframes	>90 per cent customer experience satisfaction (measured through call backs)	>90 per cent customer experience satisfaction (measured through call backs)	>90 per cent customer experience satisfaction (measured through call backs)

How we work

Putting our customers at the heart of everything we do

To help us create excellence in regional water services so communities prosper, we have three company values:

· People come first: What we do makes a big difference to other people’s lives and we strive for excellence in serving our communities and each other.

· We share our knowledge: We’re a diverse team of skilled professionals, soaking up new knowledge to share innovative solutions that meet our customers’ and clients’ needs.

· Together we’re stronger: We look out for each other, we trust and respect each other, and we’re proud of our achievements.

These values influence the way we work and interact with each other and our suppliers on a day-to-day basis. Over the coming three years we will make sure these values are fit for purpose and are shared by our wider Wellington Water family.

We also have three company result areas where we focus our efforts as an organisation to make sure we are successful we will:

· grow our capability;

· work collaboratively with iwi and customers; and

· create the highest value for money.

These result areas help us to assure our customers, that we are committed to providing the best services and outcomes for our customers, by putting our customers at the heart of everything we do.

We’ll grow our capability

We want our people to be passionate and dedicated to providing our customers with safe water. We need to promote our region as a great place to work so we attract the best people and grow our sector.

The three waters industry has struggled to attract the attention it deserves as a key infrastructure supporting New Zealand’s economy, and as such we are always struggling to find and retain good staff. Now with the tight labour market, the prospect of having a complete and capable workforce is challenging.

We want to be an organisation where people can do their best, and will develop our capability and organisational culture through embedding our health and safety vision and behaviours, increasing engagement, growing and developing our leadership and customer capabilities, and recruiting a diverse workforce.

Lift sector capability

Sector capability has generally been under-invested in over the past decade. We’ve made great strides to reverse this trend, but we can’t do it alone and we need the sector to collaborate to make sure we are attracting the best people.

We will form a Regional Capability Leadership Group, which will include our Consultant and Contractor Panels, Alliance with Fulton Hogan, and consolidated Wastewater Treatment Plant contract. This group will promote the region as a great place to work and look at the appointment of people with a ‘best for the sector’ mentality.

Leadership and the customer

We want to have the capability to do our jobs well, and we want dedicated and knowledgeable people to help us to provide customers with safe water. We also want to grow our capability and offer a higher duty of care in the way we deliver water services.

Our Workforce Plan describes the people capability development required to help us to meet the challenges of the future. As we develop strategic cases for our Future Service Studies, we’ll ensure that we have the capability to support implementation.

We will focus on developing our capability in the areas of leadership and the customer. All staff (within six months of joining) will participate in a one-day Adaptive Leadership course. Our people leaders and high-potential staff will continue to progress and refine their skills in Adaptive Leadership through peer learning groups.

The key to placing the customer at the heart of everything we do is to develop a strong customer culture. This will take time, but we’ll start doing it by developing behaviours we want to convey in a consistent way when engaging with customers. These customer behaviours will be shared with our client councils’ contact centres, contractors, and wider Wellington Water family.

We will make customer capability a mandatory core competency for recruitment. To increase ownership of the customer throughout the business, we will further embed ‘customer champions’, and define roles and responsibilities for owning customer issues end-to-end as they progress along their customer journey with us.

We will also continue to develop our technical capability to ensure we can provide robust technical advice and respond to issues as they arise.

Health and safety is about people first, every time

Our Health and Safety Vision ‘People first, every time’ and behaviours have been shared with our contractors and partners. We will make sure our people, contractors and partners are committed to living and breathing this vision and behaviours, and we will measure this engagement by running a Wellness Survey each quarter.

We’ll continue to increase health and safety engagement, participation, and accountability at all levels across the company and with our contractors, and we will work with our client councils to ensure critical risks are controlled and managed.

We will work collaboratively to provide a safe and healthy environment and a culture people believe in and uphold. Our approach to health and safety puts equal emphasis on both safety and wellbeing. We will continue to promote personal resilience, physical health, and mental health through our ‘WellBe’ programme. We will report our progress regularly to our client councils, the Board, and the Wellington Water Committee.

Recruiting a diverse workforce

As we recruit for a capable and diverse workforce, we will maintain pay equity and provide opportunities for personal and professional growth. We will focus on gender equality by making sure we can have women better represented across the business, which aligns with our commitment to United Nations Sustainable Development Goal 5: Gender equality.

Statement of Intent Measure		2019/20	2020/21	2021/22
32	We will grow the water sector’s capability by increasing technical capability in our region	Meet set targets	Meet set targets	Meet set targets
33	We will build a customer culture by developing consistent customer behaviours and embedding these behaviours in our company and Alliance	86 per cent of all staff know how their work affects customers	87 per cent of all staff know how their work affects customers	87 per cent of all staff know how their work affects customers
34	We will understand people’s engagement with our Health and Safety vision and behaviours by developing and running a Wellness Survey for staff and our supply chain each quarter	Quarterly survey results indicate 80 per cent wellness on average this year	Quarterly survey results indicate 85 per cent wellness on average this year	Quarterly survey results indicate 85 per cent wellness on average this year
35	We will improve the health and safety of our people by reviewing our Health and Safety critical risks and applying controls to manage risks to an acceptable level	All critical risks reviewed within a year (2 selected per year) and improved controls progress reported to the Senior Leadership Team and the Board	All critical risks reviewed within a year (2 per year) and improved controls progress reported to the Senior Leadership Team and the Board	All critical risks reviewed within a year (2 per year) and improved controls progress reported to the Senior Leadership Team and the Board
36	We will focus on gender equality by removing barriers to workforce participation to enable more gender equity across all functions in the organisation	>35 per cent gender balance in functional roles	>35 per cent gender balance in functional roles (excluding Alliance)	>35 per cent gender balance in functional roles (excluding Alliance)

We’ll work collaboratively with customers and iwi

We will work as a trusted advisor to our client councils, and will work collaboratively with our customers, mana whenua partners, and stakeholders to make sure their feedback and aspirations are incorporated into our service planning.

Trusted advisor to our client councils

As a trusted advisor to our client councils, it is essential we are transparent and responsive to their needs and expectations. We will treat each client council as an individual, with specific conditions and needs we must meet, and where it makes sense, provide a regional perspective. We’ll also aim for seamless interfaces with council contact centres and our contractors.

Partnering with mana whenua

Local iwi are Taranaki Whānui (the legal entity representing their interests is ‘Taranaki Whānui ki te Upoko o te Ika a Maui’), and Ngāti Toa Rangatira (the legal entity representing their interests is ‘Te Runanga O Toa Rangatira’).

We will use the Memorandum of Partnership (MoP) we have with local iwi to guide our relationship with our mana whenua partners. The MoP recognises the unique relationship of Māori to the environment and takes a partnership approach in terms of how we collectively interact with wai (water) which to iwi is a taonga (treasure).

We will work with our mana whenua partners and make sure where possible they form part of our project teams. This means consulting and involving them in regulatory changes and all publically- notified resource consents.

We will also look to our mana whenua partners to input into the advice we provide to our client councils around the development of their next Long-term Plans. This will enable the perspective of Te Ao Māori to inform the planning and operations of our three waters work.

The Wellington Water Committee are also keen to bring mana whenua representation onto the Committee which will enable the role of iwi as partners, as envisaged under the Treaty of Waitangi, to be brought alive at the governance level. We look forward to supporting the mana whenua representatives in their role.

Making sure our work is meaningful to customers

We will invite our Customer Panel to have a view on service levels, and make sure our network service goals and performance targets are meaningful to our communities.

We will build our Customer Hub capability and supporting information technology systems and processes to capture valuable customer data.

As we improve our knowledge about customers and their expectations, this will enhance our ability to deliver improved services, as well as providing valuable input into investment decisions.

Working with our suppliers and stakeholders

We will take a whole-of-catchment approach through integrated catchment management plans and the Whaitua Committees. This means collaborating with multiple parties to establish shared objectives and ensure we are working towards the same goals.

Through the Collaborative Working Group for Drinking Water Quality, we will build our relationships with Regional Public Health, Greater Wellington Regional Council, and eight territorial authorities to safeguard the quality of our region’s water.

We will continue to build relationships with our suppliers, contractors, partners, and with other key stakeholders (Water New Zealand, Wellington Region Emergency Management Office, Lifelines, Ministry for the Environment, Treasury’s National Infrastructure Unit, Ministry of Business Innovation and Employment, WorkSafe New Zealand, and various special interest and guardian groups).

Through our resilience work, we’ll keep building our relationships with other utilities, for example Wellington Electricity, New Zealand Transport Agency, and other organisations such as Fire and Emergency New Zealand, and Regional Public Health.

Statement of Intent Measure		2019/20	2020/21	2021/22
37	We will maintain our rating as trusted advisor by working with our five client councils to build strong relationships	Maintain trusted advisor rating	Maintain trusted advisor rating	Maintain trusted advisor rating
38	We will improve our relationship with our mana whenua partners by improving their satisfaction with their ability to influence our decisions on future services	65 per cent satisfaction	70 per cent satisfaction	75 per cent satisfaction
39	We will improve our relationship with our Customer Panel by improving their satisfaction with their ability to influence our future services	65 per cent satisfaction	70 per cent satisfaction	75 per cent satisfaction
40	We will build our relationship with our suppliers by improving their satisfaction with how easy we are to work with	65 per cent satisfaction	70 per cent satisfaction	75 per cent satisfaction

We’ll create highest value-for-money services

Value for money is a complicated concept, but for us it means delivering services with more and more effectiveness and efficiency.

This starts with the effectiveness of our planning and our alignment with our client councils’ Long-term Plans. We want our thirty year infrastructure plans, our ten year activity plans, and our three-year rolling capital programmes to be effective in bringing about the change our client councils and customers require.

We will deliver on what we set out to do by completing capital expenditure (capex) projects that meet the requirements of the project design brief.

The way we organise how our work is done, through our consultants and our contractors, is a key factor in value. Our Service Delivery Strategy (SDS) outlines the changes in the way we will work with our contractors. At the heart of this strategy is the desire to take the same approach to common work across the region. We have laid out plans for our Alliance, Contractor Panel, and consolidated Wastewater Treatment Plant contract, which we are going to deliver over the next two years. Keeping this programme to time is an important ‘value for money’ initiative.

We want ‘value for money’ to be part of everyday life. We want our people, our consultants and contractors to keep reducing waste and be innovative in their work. The success of this programme is measured by the number of ‘value for money’ initiatives we come up with each year, and the estimated costs of their implementation over the old way of doing things. We have made a special category within this work called ‘Smart Services’. Smart Services are defined as the importation of new ideas from around the world which deliver improved services to customers for less cost. We will deliver at least two new Smart Services a year from now on.

Digital technologies are having a growing impact on water utilities. They enable efficiencies and the development of new services. They also allow us to be responsive to changes in the sector and co-invest with partners and client councils.

We operate in an environment where we have to operate multiple systems and interface with multiple council systems. Simplifying this arrangement has enormous potential. We will prepare a business case for our client councils promoting the value of adopting an ‘enterprise way of working’, which we would then like funded. This would require additional capital from our councils (roughly valued at $6m), which will be difficult to obtain.

Statement of Intent Measure		2019/20	2020/21	2021/22
41	We will make sure our services support and align with our client councils’ Long-term Plans by delivering on agreed three waters outcomes	>90 per cent alignment and achievement of agreed outcomes	>90 per cent alignment and achievement of agreed outcomes	>90 per cent alignment and achievement of agreed outcomes
42	We will deliver on what we set out to do by completing capital projects that meet the requirements of the project design brief	10 per cent sample demonstrates >95 per cent achievement	10 per cent sample demonstrates >95 per cent achievement	10 per cent sample demonstrates >95 per cent achievement
43	We will deliver our service delivery strategy by implementing the Alliance, implementing the Contractor Panel, and introducing a consolidated Wastewater Treatment Plant (WTP) contract	Implementation of Alliance delivering agreed outcomes from 31 July 2019 Implementation of Contractor Panel delivering agreed outcomes from 31 July 2019 Start phased implementation of new WTP contract	Phased WTP implementation continues	Phased WTP implementation continues
44	We will create value for money by delivering two Smart Services ideas each year	Two Smart Service ideas delivered	Two Smart Service ideas delivered	Two Smart Service ideas delivered
45	We will better support the delivery of three waters services by identifying where we can streamline and simplify our systems (subject to funding)	Simplification programme plan in place, with delivery in line with plan	Simplification programme plan in place, with delivery in line with plan	Simplification programme plan in place, with delivery in line with plan

Keeping an eye on critical operating frameworks

To do our job well, we rely on critical operating frameworks. These frameworks support our people so they can do their best work. We’ll make sure these are maintained and regularly audited. The most important frameworks are: our Financial System; our Risk Management and Internal Audit System; our Health and Safety System; and our Performance Management System.

We have incorporated Our water, our future (2019-22 Statement of Intent) into our Performance Management Framework. For more information on how we measure our performance, please visit our website: https://wellingtonwater.co.nz/ publication-library/dia-mandatory-non-financialperformance-measures.

Appendices

Appendix 1: What influences us

Appendix 2: About us

Wellington Water Committee

The Wellington Water Committee’s five client council shareholders are:

· Hutt City Council (represented by Deputy Mayor David Bassett);

· Porirua City Council (represented by Mayor Mike Tana);

· Upper Hutt City Council (represented by Mayor Wayne Guppy);

· Wellington City Council (represented by Councillor Iona Pannett); and

· Greater Wellington Regional Council (represented by Councillor Jenny Brash).

Each shareholder holds twenty per cent of the voting shares (‘A’ shares) of Wellington Water.

The Committee provides governance oversight of Wellington Water. They do this by considering our Half-Year and Annual Reports, monitoring our performance, appointing directors to our Board of Directors, and providing recommendations to shareholders on our proposals.

The Committee writes an annual Letter of Expectations to the Board, which outlines our key priorities and areas of focus. This is used to guide the development of our Statement of Intent.

Board of Directors

We are governed by a Board of independent directors. The Chair of the Board reports to the Wellington Water Committee. The Board approves our strategy, ensures legal compliance, and monitors our performance, risks, and viability.

The Board’s approach to governance is to establish with management (and in consultation with shareholders), clear strategic outcomes that drive our performance. The Board is also mindful of its relationship with the Committee and how both the Board and Committee influence us in different ways.

Our Board supports and empowers our management team to deliver and report performance using a ‘no surprises’ approach, by creating an environment of trust where information is freely available, decision-making is transparent, and strategic conversations provide insights and guidance for the company.

Consistent with a high-performance organisation, Board members challenge management (and other Board members) to keep a healthy culture of inquiry and openness.

Wellington Water Limited

We’re a council-controlled organisation (CCO) jointly owned by the Hutt, Porirua, Upper Hutt and Wellington City Councils, and Greater Wellington Regional Council.

We employ 205 staff and provide drinking-water, stormwater, and wastewater services to our customers on behalf of our shareholders.

To do this we, manage annual expenditure of approximately $140 million (based on 2018/19 budget) to maintain and develop water assets with a replacement value of approximately $5.8 billion. We also provide investment advice about the future development of three water assets and services.

Each shareholding council owns its own water services assets (pipes, pump stations, reservoirs, and treatment plants), and decides the level of service it will purchase from us, the policies it will adopt, and investments it will make (after considering our advice) in consultation with respective communities.

We operate under the Companies Act 1993 and the Local Government Act 2002 and comply with the Health (Drinking Water) Amendment Act 2007, the Drinking-Water Standards for New Zealand 2005 (revised 2008) and other legislation such as the Resource Management Act 1991 (and proposed amendments), the Wellington Regional Water Board Act 1972 and the Health and Safety at Work Act 2015.

• Each client council owns its own three water assets
• Client councils jointly own Wellington Water Limited
• The Wellington Water Committee represents client councils
,Porirua City Council,Upper Hutt City Council,Greater Wellington Regional Council,Hutt City Council

Wellington City Council

Service level agreements, pricing, and policies

Wellington Water Limited
• Strategy and planning: asset planning, policy advice, information management, education
• Development and delivery: network monitoring, project design and work programme management
• Operations and customer service: water treatment, network improvement, fault management and customer service Service level agreements, pricing, and policies

Appendix 3: Governance and shareholder information

Wellington Water is a council-controlled organisation as defined by Section 6 of the Local Government Act 2002. Wellington Water is also covered by the Companies Act 1993, and governed by law and best practice. The Shareholders’ Agreement relating to Wellington Water Limited outlines the way they manage their shareholdings in Wellington Water and their respective relationships with each other.

The Board of Directors

The Board of Directors consists of five members. All directors must be independent directors selected by the Wellington Water Committee, in accordance with the Board’s skill matrix. Each director can serve a maximum of two terms, or six years, unless agreed by the Wellington Water Committee.

• Geoff Dangerfield is appointed to 30 September 2020.

• Cynthia Brophy is appointed to 31 January 2021.

• David Benham is appointed to 30 June 2019.

• Philip Barry is appointed to 30 June 2021.

• David Wright (Chair) is appointed to 31 January 2020.

Board performance reviews are undertaken regularly and are provided to the Wellington Water Committee and shareholders on completion. The Board is responsible for the direction and control of Wellington Water Limited.

Ratio of consolidated shareholders’ funds to total assets

Ownership of infrastructural assets is retained by the shareholders (or other clients). As a business that returns all benefits to shareholders, the ratio of shareholders’ funds to assets is provided in Appendix 5.

Information to be provided to shareholders

In each year, Wellington Water shall comply with the reporting requirements under the Local Government Act 2002 and the Companies Act 1993 and regulations. In particular, Wellington Water will provide:

• A Statement of Intent, detailing all matters required under the Local Government Act 2002, including financial information for the next three years;

• Within two months after the end of the first half of each financial year, the Company shall provide a report on the operations of Wellington Water to enable an informed assessment of its performance, including financial statements (in accordance with section 66 of the Local Government Act 2002); and

• Within three months after the end of each financial year, Wellington Water will provide an Annual Report, which provides a comparison of its performance with the Statement of Intent, with an explanation of any material variances, audited Consolidated Financial Statements for that financial year, and an Auditor’s Report (in accordance with sections 67, 68 and 69 of the Local Government Act 2002).

Due to the extensive reporting requirements undertaken in accordance with the service level agreements with client councils, the reliance on six-monthly reports fully meets the Local Government Act’s requirements and is considered appropriate.

Share acquisition

There is no intention to subscribe for shares in any other company or invest in any other organisation.

Compensation from local authority

It is not anticipated that the company will seek compensation from any local authority other than in the context of management services agreements, and the shareholders agreements with client councils.

Equity value of the shareholders’ investment

Total shareholders’ equity is estimated to be valued at $6.7 million as at 31 December 2018. This value will be assessed by the directors on completion of the annual accounts or at any other time determined by the directors. The method of assessment will use the value of shareholders’ funds as determined in the Annual Accounts as a guide.

Appendix 4: Customer outcomes and service goals

Appendix 5: Three-year projections

We receive an annual management fee from our five client councils. This covers our operating expenses such as employee costs, vehicle costs, directors’ fees, and depreciation.

Funding is also received for the council work programme. This work programme (capex and opex) is managed by Wellington Water employees. The planned spend over the next three years is $389 million on three waters capital projects, and $145 million on three waters infrastructure operation and maintenance.

Wellington Water adopts a ‘no surprises’ approach. Regular forecasting and ongoing communication with our client and shareholder representatives helps us to achieve this. Through robust financial management and a close working relationship with our client councils, we can achieve what we set out to do.

We have implemented our Service Delivery Strategy which we will deliver over the next two years. The implementation of the Alliance, Contractor Panel, and consolidated Wastewater Treatment Plant contract will result in long-term operational and financial efficiencies across our client councils’ work programmes.

The Summary Financials (following pages) support the delivery of our three customer outcomes: safe and healthy water; respectful of the environment; and resilient networks that support our economy.

Statement of comprehensive revenue and expenses


	Projection	Projection	Projection
	19/20	20/21	21/22
	$000	$000	$000
Council work programme	139,600	185,122	209,052
Management fee	30,666	31,586	32,534
Other revenue	200	200	200
Total revenue	170,466	216,909	241,786
Council capex expenditure	(91,534)	(136,851)	(160,675)
Council opex expenditure	(48,065)	(48,271)	(48,377)
Salaries and wages	(20,634)	(21,212)	(21,806)
Superannuation	(595)	(612)	(629)
Directors fees	(135)	(135)	(135)
Audit - financial statements	(105)	(105)	(105)
Operating leases	(968)	(988)	(1,009)
Other personnel costs	(824)	(847)	(870)
Other expenditure	(6,338)	(6,609)	(7,011)
Depreciation and amortisation	(1,131)	(1,278)	(1,170)
Interest expense	(18)	(1)	-
	(170,346)	(216,909)	(241,786)

Surplus/(deficit) before tax	120	-	-
Tax (expense)/credit	-	-	-
Total comprehensive revenue and expenses	120	-	-

Attributable to:
Wellington City Council	50	-	-
Hutt City Council	25	-	-
Upper Hutt City Council	10	-	-
Porirua City Council	15	-	-
Greater Wellington Regional Council	19	-	-
Total comprehensive revenue and expenses	120	-	-


Shareholder equity ratio	11%	11%	11%

The financials in this SOI are draft and include a number of assumptions which have yet to be evaluated fully.

Other financial information

Current value of assets	The current value of assets at 31 December 2018 was $2.8m based on the net asset value of Wellington Water as disclosed in the unaudited interim financial statements.
Accounting policies	Accounting policies are as per 2018 Annual Report.
Financial reporting	Wellington Water's financial reporting is prepared in accordance with generally accepted accounting policies.

Council capex programme

			19/20	20/21	21/22
Hutt City Council (HCC)			$000	$000	$000
	Potable Water
	1.1	Safe drinking water	550	550	550
	3.2	Resilience	1,462	160	1,536
	3.3	Growth	50	50	50
	3.4	Reliability	1,640	736	3,465
			3,702	1,496	5,601
	Stormwater
	1.2	Safety of assets	660	10	1,925
	2.2	Waterway health	100	100	100
	2.4	Natural and built environment			25
	3.1	Flooding	1,067	4,077	3,520
	3.2	Resilience
	3.4	Reliability	42
			1,869	4,187	5,570
	Wastewater
	1.4	Public health	4,972	19,655	23,991
	2.4	Natural and built environment
	3.2	Resilience	100	100	100
	3.3	Growth	900	300	50
	3.4	Reliability	63	10	10
			6,035	20,065	24,151

		HCC TOTAL	11,606	25,748	35,322
Porirua City Council (PCC)
	Potable Water
	1.1	Safe drinking water	100	100	100
	2.1	Resource usage	250	-	-
	3.2	Resilience	50	1,000	1,000
	3.3	Growth	170	1,770	820
	3.4	Reliability	587	670	670
			1,157	3,540	2,590
	Stormwater
	2.4	Natural and built environment			15
	3.1	Flooding	5,255	2,993	1,413
			5,255	2,993	1,428
	Wastewater
	1.2	Safety of assets	20	20	20
	1.4	Public health	3,396	4,200	4,428
	2.2	Waterway health	740	600	1,310
	2.4	Natural and built environment	200	50
	3.3	Growth	2,031	31	31
	3.4	Reliability	65	65	65
			6,452	4,966	5,854

		PCC TOTAL	12,864	11,499	9,872
Upper Hutt City Council (UHCC)
	Potable Water
	1.1	Safe drinking water	50	50	50
	2.1	Resource usage	67	86	59
	3.2	Resilience	202	245	455
	3.3	Growth	20	20	20
	3.4	Reliability	649	986	1,373
			988	1,387	1,957
	Stormwater
	2.4	Natural and built environment			10
	3.1	Flooding	7,013	7,147	6,028
			7,013	7,147	6,038
	Wastewater
	1.4	Public health	2,665	6,953	7,780
	3.3	Growth	20	20	20
	3.4	Reliability	26	18	7
			2,711	6,991	7,807

		UHCC TOTAL	10,712	15,525	15,802
Greater Wellington Regional Council (GWRC)
	Potable Water
	1.1	Safe drinking water	2,080	2,100	4,130
	2.1	Resource usage	60	60	60
	3.2	Resilience	7,300	15,450	44,400
	3.3	Growth	1,500	100	-
	3.4	Reliability	3,420	16,520	630
			14,360	34,230	49,220

		GW TOTAL	14,360	34,230	49,220
Wellington City Council (WCC)
	Potable Water
	1.1	1.1 Safe drinking water	1,567	1,566	1,566
	1.2	1.2 Safety of assets	50	50	50
	1.3	1.3 Firefighting	26	1,672	1,672
	2.1	2.1 Resource usage	25	486	486
	3.2	3.2 Resilience	13,050	22,946	14,760
	3.3	3.3 Growth	3,850	3,550	1,750
	3.4	3.4 Reliability	4,768	2,690	2,382
			23,335	32,961	22,666
	Stormwater
	1.2	1.2 Safety of assets	8,127	3,432	3,226
	2.4	2.4 Natural and Built Environment			50
	3.1	3.1 Flooding	875	525	525
	3.3	3.3 Growth	70	70	370
			9,073	4,028	4,172
	Wastewater
	1.4	Public Health	8,046	5,318	6,028
	2.1	Resource usage	9	1,009	14,009
	2.2	Waterway health	495	5,000	-
	3.3	Growth	994	1,494	3,544
	3.4	Reliability	40	40	40
			9,584	12,860	23,621

		WCC TOTAL	41,992	49,849	50,459

		GRAND TOTAL	91,534	136,851	160,675

Council opex programme

		2019/20	2020/21	2021/22
		$000	$000	$000
Wellington City Council		23,065	23,065	23,065
	Potable Water	4,839	4,839	4,839
	Stormwater	2,089	2,089	2,089
	Wastewater	16,137	16,137	16,137
Hutt City Council		11,617	11,617	11,617
	Potable Water	2,173	2,173	2,173
	Stormwater	1,272	1,272	1,272
	Wastewater	8,172	8,172	8,172
Upper Hutt City Council		5,457	5,457	5,457
	Potable Water	1,160	1,160	1,160
	Stormwater	650	650	650
	Wastewater	3,647	3,647	3,647
Porirua City Council		3,320	3,526	3,632
	Potable Water	839	916	943
	Stormwater	330	408	420
	Wastewater	2,151	2,202	2,269
Greater Wellington Regional Council		4,606	4,606	4,606
	Potable Water	4,606	4,606	4,606

	GRAND TOTAL	48,065	48,271	48,377

Attachment 1

Wellington Water Half year report 2018_19

Our water, our future

Half-year Report to 31 December 2018

[DRAFT]

Contents

Helping communities prosper ............................................................xx

Getting water to and from communities ...........................................xx

Keeping the water running ................................................................xx

How we work......................................................................................xx

Appendices

Appendix 1: What influences us ...........................................xx

Appendix 2: About us ...........................................................xx

Appendix 3: Governance and shareholder information .......xx

Appendix 4: Customer outcomes and service goals .............xx

Appendix 5: Three-year forecasts .........................................xx

Taki

He wai, he wai

He wai herenga tāngata

He wai herenga whenua

He wairua

He waiora

Tis water, tis water

Water that joins us

Water that necessitates the land

Soul of life

Life forever

About this document

This half-year report highlights our progress against the goals we set ourselves in Our water, our future (2018-21 Statement of Intent). The measures we’ve used will help us to reach our goals over a three-year period.

On the following pages we’ll take you through getting water to and from communities, keeping the water running, and how we work as an organisation to help communities to prosper.

This Half-year Report covers the period 1 July 2018 – 31 December 2018.

Helping communities prosper

The development of Our water, our future (2018-21 Statement of Intent) has helped us to focus on areas where we can make the biggest difference to our customers: the interactions they have with us, and the way we deliver our services.

The first half of the year (up to 31 December 2018) has been dedicated to improving the overall customer experience through focussing on creating and embedding customer behaviours and implementing our service delivery strategy.

As we work with our client councils and suppliers, we have been fine-tuning a set of customer behaviours that will help us improve our interaction with customers and their overall customer experience. These behaviours (honest, caring and authentic) have been developed with our customers and their experiences interacting with the services we provide in mind.

The biggest change is the way we deliver our services to our customers. The implementation of our service delivery strategy has helped us to really focus on putting the customer at the heart of everything we do. We’re on track to deliver an Alliance approach to network maintenance and operations by June 2019; selecting a collaborative capex Contractor Panel to start work in 2019/20; and consolidating our wastewater treatment plant management contract by July 2019. This approach will help improve customer service delivery and customer experience, create efficiency around the delivery of our work, and deliver better value for money for our client councils.

Over a year ago we started to actively engage possible Alliance partners and other stakeholders to design an Alliance model that will help us achieve all this, and also continue to incentivise our partner to deliver ongoing benefits and value for our customers and client councils over the longer term. We landed on a model that sees a contractor embedding themselves within Wellington Water and providing resources, systems and expert know-how to supplement our existing network maintenance capabilities and strengths.

We were pleased to announce in September 2018 that Fulton Hogan was selected as our preferred partner, and we signed an Interim Alliance Agreement in late November, cementing this relationship. This Alliance is a new way of working and is something of a game changer in the industry, and one we’re really excited about.

Following Local Government Minister Nanaia Mahuta’s announcement to reform drinking water, we were pleased with our ability to bring together the views of our wider region in our proposal suggesting improvements to the water sector in New Zealand. As the Government progresses with these reforms, we will work with our client councils and neighbouring councils to identify opportunities to deliver better water services for customers.

Our Half-year Report shows some great progress made against the goals we’ve set ourselves in Our water, our future, and we’re looking forward to rolling up our sleeves and getting stuck into the remainder of the 2018/19 year.

[Photo] David Wright, Board Chair

[Photo] Colin Crampton, Chief Executive

Getting water to and from communities

Our promise to our customers

Our promise to our customers is that we will get water to and from communities in a way they can rely on and trust.

Safe and healthy water

We are 100 per cent compliant with the Drinking Water Standards New Zealand, and over the coming six months proposed changes to these standards will be incorporated into our compliance monitoring.

Our regional Water Safety Plan (WSP), that prioritises improvements to mitigate drinking water quality risks, was submitted to the regulator (Ministry of Health) for review.

The Government’s inquiry of the Havelock North drinking-water contamination proposed six fundamental principles of drinking water safety. These include:

1. A high standard of care must be embraced.

2. Protection of source water is of paramount importance.

3. Maintain multiple barriers against contamination.

4. Change precedes contamination.

5. Suppliers must own the safety of drinking water.

6. Apply a preventative risk management approach.

We’ve established an internal Safe Drinking-Water Committee that has been tasked with reporting on how we are integrating these six principles into our day-to-day operations and the services we deliver.

This Committee is also progressing the development of a Safe Drinking Water Policy through engagement with our staff and suppliers. Once the policy has been approved, we’ll work to keep this policy front of mind with everyone responsible for managing our networks, similar to the importance given to Health and Safety.

Much of the region’s water is sourced from protected catchments, though we will always face challenges that threaten the safety of service to our customers. Some challenges are emerging, such as new contaminants. Others will occur, but we have yet to understand their full impact – e.g. climate change. We are constantly monitoring change and its impacts on our operations.

Respectful of the environment

On average, we supply 145 million litres of treated drinking water per day to the residents of the metropolitan Wellington region. This can soar to over 180 million litres on hot days. High demand is not sustainable as we are limited as a region to the amount of water we are able to take from our three catchments, and deliver through our pipes. We’re also a growing region. It’s predicted by 2040 that if we don’t reduce our demand, and our population continues to grow, we will need to find an alternative water source or build more storage facilities (either of which will come at a significant cost to ratepayers).

Preferred alternative approaches to managing water demand are being looked at as part of the sustainable water supply future services study.

To help manage supply and demand during the year and provide our customers with the information they need to be able to reduce water use in their homes, we have promoted a series of water conservation tips and hints through our ‘Love Every Drop’ marketing campaign, and raised awareness of our client councils’ garden watering restrictions through print, radio, and digital advertising.

To help prevent wastewater blockages and help improve the water quality of our waterways, we’ve promoted ‘Where does it go?’ a marketing campaign aimed at raising awareness about what should and shouldn’t go down the drain. We’ve also partnered with Plunket to provide information directly to new parents about the correct way to dispose of wet-wipes.

The Hutt/Wellington Harbour Whaitua Committee is still being set up. Once this is done, we will work with the committee to inform the process that will be used to set acceptable water quality limits. We assisted with the development of Porirua’s Whaitua Committee’s implementation programme (WIP), which will drive investment decisions to improve water quality.

Resilient networks that support our economy

We want our networks to be resilient so they can recover and remain functioning after a significant natural event such as an earthquake, landslide, or flooding. We also want our networks to be adaptive to ongoing stresses such as the impacts of climate change, sea level rises, and uncertainties such as social and political change.

A key aspect of our approach to building resilience is the concept of people and businesses being self-sufficient for at least the first seven days following a significant earthquake. We’ve been working with Wellington Regional Emergency Management Office (WREMO) and Regional Public Health (RPH) to make sure our messages are consistent and, where possible, create shared resources.

We have used our marketing campaign ‘Water Hero’ to promote household resilience. This includes promoting the need for our customers to store 20 litres of water per person per day for at least seven days and to have a plan for the safe disposal of their wastewater (ones and twos).

Our Community Infrastructure Resilience programme means that from day eight onwards we will be able to provide water through our community water stations – an above-ground emergency water network of bores and surface water treatment stations and desalination plants, supported by a mobile distribution network out to communities. We are also building new reservoirs to increase the amount of water that is stored, and replacing or strengthening existing reservoirs that are aging.

We’ve also been progressing our work on the cross-harbour pipeline, with Greater Wellington Regional Council formally endorsing the pipeline as a preferred option (over potential harbour bores). We are scoping out this work programme at the moment to better understand the requirements.

Customer experience

We’ve developed a set of customer behaviours (honest, caring, and authentic) and have been embedding them throughout our business. To focus on putting our customers at the heart of everything we do, we’ve been tracking our progress (against a number of targets) in a quarterly customer report.

Statement of intent measure		Trend	Year one (goal)	Commentary 1 July - 31 December 2018
1.	Our customers will feel confident the drinking water we provide is safe because we will maintain 100 per cent compliance with the Drinking-Water Standards New Zealand and we will monitor the treated water to make sure there have been no transgressions	Maintain	100 per cent compliance and no transgressions	For the period (1 July – 31 December) we have maintained 100 per cent compliance with the Drinking-Water Standards New Zealand and we have had no transgressions
2.	Our customers will not be exposed to any public health risks because we will reduce the number of wastewater overflows that happen in public places	Reduce	Baseline set	We’re in the process of setting a baseline by measuring and monitoring all wastewater overflows that happen in public places
3.	Our customers will feel confident our drinking water service is reliable because we will maintain the number of hours drinking-water supply is available	Maintain	99.6 per cent	For the period (1 July – 31 December) the number of hours of drinking-water supply is available is tracking at 99.9 per cent
4.	Our customers will feel confident our wastewater service is reliable because we will improve the number of days the wastewater service is available	Improve	Baseline set	We’re in the process of setting a baseline by measuring the number of properties and the period of time that affected properties were without service
5.	Our customers will reduce the amount of water they are using at home because they have the information they need to be able to make informed decisions and change their behaviours	Reduce	0.5 per cent reduction per year in gross per capita usage	This is an annual measure. For the period to 31 December, mild and wet weather has kept consumption well below last year’s. Regional usage is tracking at 347 litres per day compared with 358 litres per day for 2017/18 A customer perceptions survey will be carried out in quarter three and will measure customer behaviours as a result of our marketing campaigns. Our Love Every Drop campaign went live in November and has been well received
6.	Our customers will be able to enjoy our region's beaches because we will improve the number of days monitored beaches (between 1 November – 31 March) are not adversely affected by our services and are available for swimming	Improve	95 per cent	For the period (1 July – 31 December) the number of days monitored beaches are not adversely affected by our services and are available for swimming is tracking at 99.8 per cent Note: for the 2018/19 water quality monitoring programme, Greater Wellington Regional Council and Regional Public Health agreed this would commence 3 December 2018 (not 1 November)
7.	Our customers will feel confident the water quality of our waterways are not adversely affected by our services because we will work with whaitua committees to meet acceptable limits	Improve	Hutt/Wellington Harbour (baseline set) Porirua (complete investment plan to meet minimum requirements)	The Hutt/Wellington Harbour Whaitua Committee is still being set up We assisted with the development of Porirua’s Whaitua Committee’s implementation programme (WIP) which will drive investment decisions to improve water quality
8.	Our customers’ homes and businesses will be protected from flooding because we will reduce the number of habitable floors impacted adversely by our stormwater service during a 1:100 year flood event	Reduce	1 per cent reduction in modelled areas	We are progressing a number of projects throughout the region that will reduce the number of habitable floors impacted adversely by our stormwater service during a 1:100 year flood event such as stormwater improvements for Porirua Central Business District, and Kilbirnie
9.	Our customers will be resilient in the event of a natural disaster because we will improve the number of households that have drinking water stored and have a plan for the safe disposal of their wastewater	Improve	5 per cent increase in stored water and awareness for wastewater plan	This will be measured through our customer perceptions survey in quarter three
10.	Our customers will have positive interactions with us because we will measure and improve their customer experience satisfaction	Improve	Establish methodology 70 per cent satisfaction	Survey methodology to measure satisfaction has been established for capital expenditure projects (capex) and operational expenditure projects (opex) customers For the period (1 July – 31 December) customer experience satisfaction (call-backs) scored 80.6 per cent satisfaction
11.	Our customers will feel valued because we will improve their customer experience satisfaction by acknowledging complaints and working to resolve them within acceptable timeframes	Maintain	50 per cent of complaints resolved within 10 days 95 per cent of complaints resolved within 30 days	Not achieved. For the period (1 July – 31 December) 46 per cent of complaints were resolved within 10 days 81 per cent of complaints were resolved within 30 days
12.	Our customers will be kept safe because our work sites will not result in any member of the public suffering a serious injury or hospitalisation	Maintain	Zero incidents reported to us, our supply chain, or client councils	For the period (1 July – 31 December) zero incidents were reported to us, our supply chain, or client councils
13.	Our customers will get a better understanding of where their water rates money is being spent because we will improve transparency of the cost per connection of our services	Improve	Model developed and tested	We have completed the model; the next step is to work with our client councils to agree the methodology
14.	Our customers will feel confident we are creating value for money because we will maintain our assets at a sustainable level now and in the future	Maintain	Information-gathering	We are still working on a consistent valuation mythology with our client councils

Keeping the water running

Delivering our promise to customers

Taking a sophisticated approach to planning makes sure we are able to get the best value from the infrastructure and assets we use to deliver our services.

We use our Regional Service Plan to tell us where we need to investigate issues on the horizon; respond to growth; maintain, operate and renew assets; improve our services; and plan for and respond to emergencies.

For a longer-term (fifty-years +) view of our networks, we use our Three Waters Strategy. We’ve used this strategy to identify a number of issues which could disrupt the three water services we provide. Over the next three years we’ll investigate these issues by carrying out future service studies using the Treasury’s Better Business Case approach.

As we’ve progressed our future service studies work programme, we’ve worked with our consultant team and stakeholders to refine the project scope. We’ve refocussed our work around resilient networks and have agreed to progress a wastewater gap analysis and develop an action plan. We’ve been progressing the following strategic cases: receiving water quality; sludge management; sustainable water supply; and supporting growth.

Statement of Intent Measure

Year one (goal)

Commentary

1 July - 31 December 2018

15.

We will understand future services needs by completing the following three studies: carbon reduction; smart services; and resilient networks, and progressing the following strategic cases and business cases: sustainable water supply; receiving water quality; stormwater – flooding; sludge management; and supporting growth (subject to funding)

1 study complete (resilient networks)

3 strategic cases complete

The resilient networks study has been replaced with a gap analysis and the development of an action plan

We have progressed the following three strategic cases:

· Receiving water quality: strategic case work started

· Sludge management: strategic case being drafted

· Sustainable water supply: strategic case completed. Next steps being planned

Responding to growth

Our region is experiencing steady urban growth with the population expected to increase by 21 per cent over the next thirty-years. At the same time, many of our water bodies have reached capacity in terms of acceptable water quantity limits (the amount of water we are able to take from water sources).

We’re on track to meet our goal of having our three waters network models completed by 2021. These models are critical to providing advice to our client councils on infrastructure needs to support growth.

We’ve developed a programme of work to better support land developers. In the first half of the year, we hosted a Land Developers Forum to make sure that developers feel their needs are being met and are satisfied by the services we offer. We have also agreed to review and develop specific information for land developers on our website.

The National Policy Statement (NPS) for Urban Development Capacity (UDC) requires our client councils to provide enough development capacity in their Long-term Plans to make sure demand for land development can be met. We’ve worked with our client councils to make sure they have sufficient information for their submission to the Ministry for the Environment (December 2018).

We’ve identified twenty areas where we know there will be significant growth and land development. Over the coming two years we are developing three waters service plans to support these areas of growth.

Statement of Intent Measure		Year one (goal)	Commentary 1 July - 31 December 2018
16.	We will understand how our current networks perform and plan for growth by completing our three waters network modelling programme	33 per cent complete	For the period (1 July – 31 December) we’re 28 per cent complete. We’re on track to achieve 33 per cent complete by the end of the 2018/19 year
17.	We will build our relationships with developers by improving their satisfaction with the advice and services we offer	60 per cent of developers are satisfied	This will be measured through our stakeholder engagement survey in quarter four
18.	We will make sure future growth is supported by having well thought-out service plans	All capacity assessments provided to respective councils by 31 December 2018	Draft capacity assessments reports have been submitted as agreed with client councils

Operate, maintain, and renew

The majority of our annual expenditure goes into operating our treatment plants; delivering services to customers by maintaining the networks; and renewing infrastructure which is worn out.

We aim to meet all of our consent conditions on maintenance and operations activities and capital expenditure projects. Unfortunately, there was a non-consented overflow at Porirua Wastewater Treatment Plant in October 2018. As a result of this, we conducted an internal investigation and made changes to our processes to prevent this happening again. Greater Wellington Regional Council are also conducting their own investigation, of which we are still awaiting the outcome.

We submitted a draft of our updated Regional Water Safety Plan to the regulator (Ministry of Health) in December 2018. This plan is used to record our risk management approach and includes the systematic assessment of risks from source to tap; identification of ways these risks can be managed; and control measures implemented to ensure that good management is occurring.

We want our customers to have confidence the drinking water we supply is safe, but also that it’s wholesome and of an acceptable quality to customers in terms of clarity, taste, and odour. Customer satisfaction of taste clarity and odour is tracking at 99.9 per cent or 0.74 complaints per 1000 connections (1 July – 31 December).

A by-product of treating water is sludge. We’ve kept the water content of sludge heading to landfill to a minimum to reduce odour. All of the sludge bins heading to land-fill met our target of having a dry-solids content greater than 15 per cent.

Pipes that break too often, or are predicted to, need to be replaced. By replacing them we avoid breakdowns in the future. We do this through projects which replace a long length of pipe at a time. We are working in a way which reduces inconvenience to traffic and residents. It has to be done, but we’ll do the work with a minimal level of fuss and impact to our customers.

Our goal is to complete 95-105 per cent of our planned work programme. However, we are forecasting an overall completion rate of 82 percent of our baseline (programme agreed at 01 July 2018) programme. Project delays have resulted from extra design effort, consenting delays, and reprioritisation of some projects due to cost escalations. We are in the process of rescheduling the majority of the work not completed this year for completion in 2019/20 and 2021/21, subject to a review of annual plan budgets with our client councils.

Statement of Intent Measure		Year one (goal)	Commentary 1 July - 31 December 2018
19.	We will meet all environmental consent requirements by being fully compliant with consent requirements in the delivery of our services	Fully compliant	Not achieved. In October 2018 there was a non-consented overflow at the Porirua Wastewater Treatment Plant. We’ve conducted an internal investigation and are awaiting the outcome of Greater Wellington Regional Council’s investigation. All other consents are fully compliant
20.	We will safeguard our drinking water by completing our regional Water Safety Plan	Regional Water Safety Plan complete and approved by 1 July 2019. Service delivery improvement plan established	Our draft regional Water Safety Plan (which includes the service delivery improvement plan) was completed and submitted to the regulator (Ministry of Health) December 2018
21.	We will supply wholesome drinking water at an acceptable standard (taste, clarity, and odour) by maintaining satisfaction	99.5 per cent customer satisfaction	For the period (1 July – 31 December) customer satisfaction is tracking at 99.9 per cent or 0.74 complaints per 1000 connections
22.	We will minimise the impact of sludge odour and landfill disposal by maintaining minimum water content	Landfill bins have a dry-solids content greater than 15 per cent	For the period (1 July – 31 December) all sludge landfill bins had a dry-solids content greater than 15 per cent
23.	We will own customer calls end-to-end (including council call centres) and manage customers’ expectations by embedding our customer behaviours throughout our business	All customer enquiries are tracked and responded to within 60 minutes 95 per cent of customer enquiries raised have been resolved	For the period (1 July – 31 December) all customer enquiries were responded to within 60 minutes We are currently reviewing the measure ’95 per cent of customer enquiries raised have been resolved’
24	We will be reliable in the delivery of our renewals and capital works programmes by completing planned work within timeframes	95-105 per cent of planned work completed	For the period (1 July – 31 December) we have completed 70 per cent of planned capital work. We are tracking towards year-end at 82 per cent completion rate for baseline projects
25.	We will work with our Contractor Panel to be cost-effective by decreasing cost per kilometre of laying pipes in real terms (adjusted for inflation)	Benchmark costs	The benchmarking of costs has started and is on track to be completed by the end of the 2018/19 year

Improving our services

The service our three waters networks provide are vital to a modern and successful economy, so it’s important we look after them now and for the future. Improving our services, which is over and above maintaining, operating, and renewing is critical to achieving our three customer outcomes.

Safe and healthy water

The draft regional water safety plan was submitted to the regulator (Ministry of Health) in December 2018. This included the improvement plan, which outlines all critical risks within our system and what we are doing to address these risks.

Respectful of the environment

One of the reasons we established the Consultant Panel (and are in the process of establishing the Contractor Panel) is to generate improved outcomes for customers by creating cost efficiencies and effectiveness through the delivery of capital programmes. We will have completed the benchmarking of these costs by the end of the year.

Over the coming three years we will complete major stormwater projects in Tawa, Porirua and Kilbirnie. These projects will help make sure we are enhancing the health of our waterways.

We are also working to complete major wastewater projects such as Dixon Street, Seaview and Porirua and are making good progress against project milestones.

Resilient networks that support our economy

To make sure we provide three waters networks that are resilient to shocks and stresses, we are progressing major drinking-water projects including: Omāroro, Bell Road/Moe-i-te-Rā, Aotea and Silverstream.

We’ve also been progressing our work on the Cross-Harbour Pipeline, with Greater Wellington Regional Council formally endorsing the pipeline as a preferred option (over potential harbour bores). We are scoping out this work programme at the moment to better understand the requirements.

Statement of Intent Measure		Year one (goal)	Commentary 1 July - 31 December 2018
26.	We will work with our Consultancy Panel to improve efficiency by reducing costs (from the current 15 per cent of average fees per total construction costs) and lifting our internal capability	Reduce (simple projects) to 14.5 per cent. Identify areas to lower whole-of-life costs for complex projects	For the period (1 July – 31 December) we are tracking at 13.9 per cent. We are working with our Consultant Panel to identify areas to lower whole-of-life costs
27.	We will complete major stormwater projects by 2021: Tawa (commence construction); Porirua (commence construction); Kilbirnie (stage 3 - subject to funding)	Tawa (feasibility, preliminary design complete) Porirua (commence consenting, preliminary design) Kilbirnie (stage 1 complete)	Tawa (in catchment investigation phase). Porirua (commenced consent and detailed design). Kilbirnie (stage 1 complete, stage 2 delayed due to further work to establish best option)
28.	We will complete major wastewater projects by 2021: Dixon Street (complete); Seaview (treatment plant seismic strengthening); Porirua (treatment plant consent renewal); and Hutt (main collecting sewer complete)	Dixon Street (complete) Seaview (seismic strengthening) Porirua (options to reduce overflows at Wastewater Treatment Plant)	Dixon Street (pumping station is 85 per cent complete) Seaview (to commence in January 2019) Porirua (options to reduce overflows at Wastewater Treatment Plant is underway)
29.	We will complete major drinking water projects by 2021: Omāroro (complete detailed design - subject to funding); Bell Road (commence detailed design); Aotea (complete preliminary design); and Silverstream (commence detailed design)	Omāroro (consent obtained) Bell Road (easement obtained, consents lodged) Aotea (commence consents) Silverstream (complete consent and preliminary design)	Omāroro (commenced detailed design) Bell Road/ Moe-i-te-Rā (pipeline design 90 complete, awaiting consent conditions before tie-in design can be complete) Aotea (completed consents) Silverstream (completed preliminary design. Once the preferred option is agreed then commence consenting and detail design phases)
30.	We will look for alternative water sources by completing the Harbour Bore investigation project	Complete drilling, results analysed and recommendation on preferred option put forward and agreed with Greater Wellington Regional Council	The Harbour Bores investigation revealed freshwater but not the quantity or quality to make this a viable option. Greater Wellington Regional Council have endorsed the Cross-Harbour Pipeline as the alternative water source for supply to Wellington

Ready to respond in emergencies

We live in a region which experiences a number of natural hazard events. In recent times these have been more frequent, particularly short-burst rainfall events.

No matter what the event, customers can rely on us to be out there dealing with issues and working hard to get our services back up as quickly as possible. We know sudden or extreme changes in water quality, flow, or environmental conditions (heavy rainfall, flooding, and earthquakes) can cause drinking water to become contaminated, and we will diligently monitor and respond to any changes.

There were no emergency events resulting in customer issues for the period (1 July – 31 December).

We will make sure we are ready to respond during emergency events. This includes making sure we are able to utilise strategically-placed depots and not solely rely on our Head Office to coordinate our response.

Statement of Intent Measure

Year one (goal)

Commentary

1 July - 31 December 2018

31.

We will respond to customer issues following a significant event (flooding, earthquake, landslip, major service failure) by keeping an accurate record of all issues that occur and working through them with our customers within agreed timeframes

85 per cent customer satisfaction with interactions measured through call backs

For the period (1 July – 31 December) no significant events occurred.

How we work

Putting our customers at the heart of everything we do

We have three company result areas where we focus our efforts as an organisation to make sure we are successful: we’ll grow our capability; we’ll work collaboratively with iwi and customers; and we’ll create the highest value for money.

These result areas help us to assure our customers that we are committed to providing the best services and outcomes for our customers, by putting our customers at the heart of everything we do.

Our vision is to create excellence in regional water services so communities prosper.

· People come first: What we do makes a big difference to other people’s lives and we strive for excellence in serving our communities and each other.

· We share our knowledge: We’re a diverse team of skilled professionals, soaking up new knowledge to share innovative solutions that meet our customers’ and clients’ needs.

· Together we’re stronger: We look out for each other, we trust and respect each other, and we’re proud of our achievements.

We’ll grow our capability

We want our people to be passionate and dedicated to providing our customers with safe water. We need to promote our region as a great place to work so we attract the best people and grow our sector.

Lift sector capability

Over the past decade, water sector capability in New Zealand has generally been under-invested in. We’ve made great strides to reverse this trend, but we can’t do this alone and we need the sector to collaborate to make sure we are attracting the best people.

We have worked with our Consultancy Panel (GHD, Stantec, WSP Opus, Beca, Mott MacDonald and Calibre) to promote the Wellington region as a great place to work. In October 2018, we attended recruitment expos in the United Kingdom and Ireland to meet capable people keen to support our fast growing teams. Over the two expos we met with a diverse range of people, with all sorts of qualifications and aspirations, and interviewed a number of people with the right water or construction expertise. Overall, the recruitment push resulted in over ten résumés of potential candidates, most of whom we have referred to our suppliers.

Leadership and the customer

The key to placing the customer at the heart of everything we do is to develop a strong customer culture. This will take time, but we’ve started doing it in the first half of the year by developing customer behaviours (honest, caring, and authentic) that we want to convey in a consistent way when engaging with customers. These customer behaviours have been shared with all of our people and have been promoted through the use of posters, video and discussions at team meetings.

Health and safety

Our new health and safety vision ‘people first, every time’ and behaviours has been shared with our contractors and partners.

We’ve continued to increase health and safety engagement, participation, and accountability at all levels across the company and with our contractors; and have worked with our client councils to make sure critical risks are controlled and managed. To do this, we have reviewed all of our critical risks and have selected two which we will focus on for the 2018/19 year. This year we have selected Traffic Management and Mobile Plant and Equipment.

We are working collaboratively to provide a safe and healthy environment and a culture people believe in and uphold. Our approach to health and safety ensures equal emphasis on both safety and wellbeing. Our WellBe programme offers a comprehensive range of initiatives in the first half of the year and will continue to promote personal resilience, physical health, and mental health.

Recruiting a diverse workforce

We are focussing on recruiting for a capable and diverse workforce. We have monitored five of our functional teams. Of these five teams, two have achieved a minimum of 30 per cent gender balance. Over the coming six months, we will continue to strengthen our recruitment processes to encourage a gender balance across our functional teams.

Statement of Intent Measure		Year one (goal)	Commentary 1 July - 31 December 2018
32.	We will grow the water sector’s capability by increasing technical capability in our region	Benchmark current capability by qualification, experience and role. Identify areas of risk and opportunity and set targets	We’ve been developing our benchmarking, and have implemented the following initiatives to meet our targets: UK recruitment trip completed, second workshop completed, graduate programme progressing, exploring Wellington Regional Economic Development Agency (WREDA) support, engagement with Contractor Panel started
33.	We will build a customer culture by developing consistent customer behaviours and embedding these behaviours in our company and Alliance	Meet set targets	Targets include embedding customer behaviours and customer competency. These behaviours (honest, caring, and authentic) have been finalised and presented to all staff. Our People and Capability Team are working on how to include customer competency in recruitment processes
34.	We will understand people’s engagement with our Health and Safety vision and behaviours by developing and running a wellness survey for staff and our supply chain each quarter	Meet set targets	For the period (1 July – 31 December) we completed one Wellness Survey in September. Of the 457 staff/suppliers invited to participate, 210 responded (45.9 per cent response rate). We did not complete the Wellness Survey in Q2
35.	We will improve the health and safety of our people by reviewing our Health and Safety critical risks and applying controls to manage risks to an acceptable level	All critical risks reviewed within a year (2 per year) and improved controls progress reported the senior leadership team and the Board	Two critical risks have been selected: Traffic Management and Mobile Plant and Equipment. Traffic Management phase 1 has been completed and actions approved by the Health and Safety Leadership Forum. Work is progressing for Mobile Plant and Equipment
36.	We will focus on gender equality by removing barriers to workforce participation to enable more gender equity across all functions in the organisation	Min of 30 per cent of gender balance in functional roles	Not achieved. For the period (1 July – 31 December) we have monitored five functional teams. Of these five teams, two have achieved a minimum of 30 per cent gender balance

We’ll work collaboratively with customers and iwi

We want to be known as trusted advisors to our client councils. We’ve been working on how we can work more collaboratively with our customers, mana whenua partners, and stakeholders to makes sure their feedback and aspirations are incorporated into our service planning.

In Quarter Four (Q4) we will measure our client councils, mana whenua partners, our Customer Panel, and a selection of stakeholders satisfaction through our annual Stakeholder Engagement Survey.

Statement of Intent Measure		Year one (goal)	Commentary 1 July - 31 December 2018
37.	We will maintain our rating as trusted advisor by working with our five client councils to build strong relationships.	Satisfied	This will be measured through our Stakeholder Engagement Survey in Q4
38.	We will improve our relationship with our mana whenua partners by improving their satisfaction with their ability to influence our decisions on future services	Satisfied	This will be measured through our Stakeholder Engagement Survey in Q4
39.	We will improve our relationship with our Customer Panel by improving their satisfaction with their ability to influence our future services	Satisfied	This will be measured through our Stakeholder Engagement Survey in Q4
40.	We will build our relationship with our suppliers by improving their satisfaction with how easy we are to work with	Satisfied	This will be measured through our Stakeholder Engagement Survey in Q4

We’ll create highest value-for-money services

Value-for-money is a complicated concept, but to us it’s just about delivering services with more and more effectiveness and efficiency.

We presented quarterly outcomes reports to our client councils’ relationship managers in October 2018, and following some refinements, presented these again in December 2018. We are working to show outcome links to specific projects. These outcome reports make sure our services support and align with our client councils’ Long-term Plans by delivering on our three waters outcomes.

We want to deliver the most efficient water services we can for our customers. To make sure we’re doing this, we’ve developed our service delivery strategy, which brings together all the different service delivery approaches we currently use across our five client councils.

This has helped us apply a regional approach to our procurement, resulting in greater value for money across our supply chain, and improve the water services that ratepayers in the region receive.

The strategy focuses on delivering three main work streams:

· Network maintenance and operations Alliance (the day-to-day maintenance and operations we carry out on the network, such as assessing leaks, fixing mains bursts, flooding, etc.).

· Network upgrades and renewals Contractor Panel (capital expenditure, or ‘capex’ programme of works and the big projects around the region, such as upgrading pump stations and replacing pipes which improve network performance).

· Consolidated wastewater treatment plant contract (across the region there are four treatment plants, and each one is operated by a different contractor in a different way).

We want value for money to be part of our everyday life, and we want our people, consultants and contractors to keep reducing waste and being innovative. We have selected two smart services to implement during the year and are progressing: SCADA integration of reservoir seismic sensors; and an Internet of Things trial for wastewater manhole levels.

Making sure our own systems are efficient is a big challenge. Our operating environment means we are using multiple systems as we interface with our client councils. Our simplification programme has identified a number of options that will create an integrated suite of systems to support standardised business processes. As a part of this work, it’s been agreed that the Alliance Implementation Plan will make sure data can be passed seamlessly across the organisation.

Statement of Intent Measure		Year one (goal)	Commentary 1 July - 31 December 2018
41.	We will make sure our services support and align with our client councils’ Long-term Plans by delivering on agreed three water outcomes	>90 per cent alignment and achievement of agreed outcomes	Quarterly Outcomes Report presented to our Client Council Relationship Managers in October. Refinements were made and presented again in December. Links to specific projects yet to be established
42.	We will deliver on what we set out to do by completing capital projects that meet the requirements of the project design brief	10 per cent sample demonstrates >95 per cent achievement	We have audited three completed projects. Our audit showed that all three achieved their outcome
43.	We will deliver our service delivery strategy by implementing the Alliance, implementing the Contractor Panel, and introducing a regional approach across all Wastewater Treatment Plants	Alliance contract and approach agreed 31 December 2018. Contractor Panel established 31 December 2018 Start the procurement process and finalise Wastewater Treatment Plant contract	Interim Alliance Agreement signed with Fulton Hogan in November 2018 Contractor Panel framework agreements with three contractor leads (Fulton Hogan, E. Carson & Sons, and Construction Contracts Limited) signed 14 December 2018 Recommendation of preferred Wastewater Treatment Plant suppliers will be presented to Senior Leadership Team and Board in March 2019
44.	We will create value for money by delivering two smart services ideas each year	Two smart service ideas delivered each year	The two Smart Services are: SCADA integration of reservoir seismic sensors; and an Internet of Things trial for wastewater manhole levels, were presented to the Senior Leadership Team and subsequently endorsed by the Technology Governance Group and Three Waters Decision-Making Committee
45.	We will better support the delivery of three waters services by identifying where we can streamline and simplify our systems (subject to funding)	The business case is endorsed by our client councils, simplification programme plan is in place, with delivery in line with the plan	We are progressing to plan and we are no longer looking for capital injection from our client councils; we are now progressing options with our Alliance partner

The world is changing around us

External factors and our customers’ expectations can change over time, and there is a lot going on in the water sector, so it’s important we remain well informed and ready to react.

Carbon neutral work

We are working with our client councils to understand their approach and develop a region-wide system or methodology to track and develop a carbon emissions profile.

Statement of Intent Measure

Year one (goal)

Commentary

1 July - 31 December 2018

46.

We will understand what our current carbon emissions are by using a system/methodology to track and develop a carbon emissions profile (which includes priority areas to reduce emissions)

System or methodology developed and agreed

Baseline carbon emissions inventory complete

We are working with our client councils to understand their approach and develop a region-wide system or methodology to track and develop a carbon emissions profile

Appendix 1: About us

Wellington Water

We are a council-controlled organisation jointly owned by the Hutt, Porirua, Upper Hutt and Wellington City Councils, and Greater Wellington Regional Council.

We employ 205 staff and provide drinking-water, stormwater, and wastewater services to our customers on behalf of our shareholders.

Each shareholding council owns its own water services assets (pipes, pump stations, reservoirs and treatment plants), and decides the level of service it will purchase from us, the policies it will adopt and investments it will make (after considering our advice) in consultation with respective communities.

Our Board of Directors

We are governed by a Board of Directors. The Chair of the Board reports to the Wellington Water Committee.

The Board of Directors consists of six members. Each director can serve a maximum of two terms, or six years, unless agreed by the Wellington Water Committee.

· Geoff Dangerfield is appointed to 30 September 2020.

· Nicola Crauford is appointed to 31 December 2018.

· Cynthia Brophy is appointed to 31 January 2021.

· David Benham is appointed to 30 June 2019.

· Philip Barry is appointed to 30 June 2021.

· David Wright (chair) is appointed to 31 January 2020.

The Board approves our strategy, ensures legal compliance, and monitors our performance, risks, and viability. The Board’s approach to governance is to establish with management (and in consultation with shareholders) clear strategic outcomes that drive our performance. The Board is also mindful of its relationship with the Committee and how both the Board and Committee influence us in different ways.

Wellington Water Committee

The Wellington Water Committee’s five client council shareholders are:

· Hutt City Council (represented by Deputy Mayor David Bassett);

· Porirua City Council (represented by Mayor Mike Tana);

· Upper Hutt City Council (represented by Mayor Wayne Guppy);

· Wellington City Council (represented by Councillor Iona Pannett); and

· Greater Wellington Regional Council (represented by Councillor Jenny Brash).

The Committee provides governance oversight of Wellington Water. They do this by considering our half-year and annual reports, monitoring our performance, appointing directors to our Board of Directors, and providing recommendations to shareholders on our proposals.

The Committee writes an annual Letter of Expectations to the Board, which outlines our key priorities and areas of focus. This is used to guide the development of our Statement of Intent.

• Each client council owns its own three water assets
• Client councils jointly own Wellington Water Limited
• The Wellington Water Committee represents the client councils
,Greater Wellington Regional Council,Hutt City Council,Porirua City Council,Upper Hutt City Council

Wellington City Council

Strategy and planning: asset planning, policy advice, information management, education
Development and delivery: network monitoring, project design and work programme management
Operations and customer service: water treatment, network improvement, fault management and customer service Service level agreements, pricing, and policies

Service level agreements, pricing, and policies

Appendix 2: Customer outcomes and goals

We deliver our services by focussing on three customer outcomes: safe and healthy water, respectful of the environment, and resilient networks that support our economy. These outcomes are supported by twelve customer service goals, which help us assure our client councils and customers that all of our activities are directed to providing the right services today and into the future.

The following performance assessment is across the metropolitan Wellington region as a whole.

Customer outcome one: Safe and healthy water

Much of the region’s water is sourced from protected catchments, though we will always face challenges that threaten the safety of service to our customers. Some challenges are emerging, such as new contaminants. Others will occur, but we have yet to understand their full impact – e.g. climate change. We are constantly monitoring change and its impacts on our operations. We face a rapidly changing regulatory environment. Safe and healthy water is also affected by wastewater and stormwater entering land and waterways – particularly during heavy rain events. This is likely to get worse, with aging infrastructure, urban growth and more extreme weather events. Until we have reduced these occurrences, we continue to rate this outcome as amber.	[Amber]
We provide safe and healthy drinking-water We are compliant with the New Zealand Drinking-Water Standards. Changes to the Drinking Water Standards will be incorporated into our compliance monitoring. The Regional Water Safety Plan (WSP) that prioritises improvements to mitigate drinking water quality risks has been submitted to the regulator for review. All drinking water quality issues continue to have overview by the Drinking Water Safety Committee. A policy setting out the objectives for the Committee is being developed.	[Green]
We operate and manage assets that are safe for our suppliers, people and customers We experienced two Lost Time Injuries in the second quarter of 2018/19. The critical risk projects have continued to progress, with Traffic Management and Mobile Plant and Equipment being the two critical risks under review. The project teams are developing industry-designed solutions to mitigate the risks; they will be presented to the Health and Leadership Forum in February for endorsement. In partnership with the Alliance, future work will focus on developing a sound understanding the health and safety risks from the assets that we manage.	[Red]
We provide an appropriate region-wide firefighting water supply to maintain public safety The hydrant performance testing work programme is on track across the region. Where non-compliant hydrants are found they are prioritised for upgrade works. A study has been carried out to identify and prioritise fire-flow availability, with a region-wide plan scheduled for completion this financial year. We are leading the way in how water supply companies approach the Fire Code, and our methodology is currently being reviewed by Fire and Emergency New Zealand (FENZ).	[Green]
We minimise public health risks associated with wastewater and stormwater There are network capacity and condition issues that cause wastewater overflows and result in contamination of urban stormwater catchments, which can result in public health concerns. Work is ongoing throughout the region to minimise the number of wet-weather overflows. Eliminating dry-weather overflows continues to be a challenge. Our ability to now identify smaller contained overflows, which may not reach a watercourse, has led to an increase in the reported number of overflows. A recent overflow event from the Porirua Wastewater Treatment Plant has highlighted areas where we can improve our operational processes. Our openness around this event ensured that the public were informed, minimising the risk to their health.	[Amber]

Customer outcome two: Respectful of the environment

Freshwater quality in the Wellington metropolitan region is variable. Some of our larger rivers flowing out of forested catchments are in excellent health. In contrast, some of our streams, rivers and coastal areas are degraded. In some places, urbanisation is contributing to the degradation of water quality through increased stormwater volumes flowing directly into water bodies. Our wastewater network can also result in increased pollution in waterways from leaks in aging pipes and overflows during heavy rain events. We are improving long-term environmental outcomes through both asset and non-asset solutions. The impact of these initiatives is either unknown or variable, so we continue to rate this outcome amber.	[Amber]
We manage the use of resources in a sustainable way Increasing trend in per capita demand for water is slowing, potentially due to a milder start to the summer. If the overall trend continues, it is likely that the regional limit of 374 l/p/d will be exceeded within the next few years. If this occurs we will need to consider accelerating supply/demand initiatives to achieve a sustainable water supply. Preferred alternative approaches to managing water demand are being looked at as part of the Future Services Study.	[Amber]
We will enhance the health of our waterways and the ocean We monitor freshwater sites and beaches, and some of these sites exceed current pollution target levels. Community expectations are rising and Central Government policy has been updated to reflect this. There is a long-term ongoing initiative to identify and remove sources of pollution. We are mapping a pathway for the enhancement of our networks to achieve the new standards. We recently received global stormwater consents that will lift our level of monitoring and understanding, and inform the development of detailed stormwater management strategies.	[Red]
We influence people’s behaviour so they are respectful of the environment We developed stormwater and drinking water campaigns at the end of 2017/18 which were out in market at the start of 2018/19. Our ‘Where does it go?’ stormwater campaign nudged people to stop and think before they undertake activities using the stormwater network, showing connections between their actions, our networks, and the environment. Our ‘Love Every Drop’ campaign showed customers where their water comes from, educated them on how to look after our water, and provided them with alternatives/solutions to their actions.	[Green]
We ensure the impact of water services is for the good of the natural and built environment There is significant work underway with consenting activities under the Proposed Natural Resources Plan (PNRP), including continuing engagement in the PNRP plan making process itself. We’re developing a comprehensive consents database to ensure that we can accurately track our consenting and regulatory performance in one place. We continue to engage with Whaitua Committees which will develop freshwater quality objectives that will be addressed and implemented through our Global Stormwater Consent framework and conditions. We continue to monitor and participate where appropriate national water policies and work-streams such as the National Planning Standards – Network Utilities, and Ministry for the Environment’s Urban Water Principles.	[Green]

Customer outcome three: Resilient networks that support our economy

The overall reliability of our three waters service will be compromised during significant natural events; these include flooding from high-intensity wet weather events. We want our networks to be adaptive to ongoing stresses such as the impacts of sea level rise, and flexible so that they can recover quickly from the shocks and stresses of natural events. We are both investigating and investing to improve our performance. However, a green rating is a long-term aspirational goal. Understanding the limitations of our networks so that improvements can be made is vital to supporting growth in the region and minimising the impacts of events such as flooding. Due to the extent of the regional issues, we currently rate this outcome red.	[Red]
We minimise the impact of flooding on people’s lives and proactively plan for the impacts of climate change Completion of our hydraulic models by 2021 will allow us to better understand the likely impact of flooding on communities. There are known flood risk areas that will need improved flood mitigations. Programmes are being developed and prioritised to understand the scale and urgency of an appropriate response. Areas of known high risk are having upgrades implemented. Examples include construction work underway for Kilbirnie and design being progressed for Porirua.	[Red]
We provide three waters networks that are resilient to shocks and stresses Progress continues on our Community Infrastructure Resilience project with the commissioning of all water stations, with the exception of desalination options, which are with Wellington City Council for funding approval. We are continuing to prioritise work on projects identified in the Towards 80-30-80 strategy with planning for delivery of the Cross-Harbour Pipeline in progress and commencement of work on the Omāroro Reservoir inlet and outlet pipelines. A wastewater resilience study has been completed, resulting in improved operational resilience planning and understanding of our vulnerable assets.	[Red]
We plan to meet future growth and manage demand The assessments from the National Policy Statement (NPS) – Urban Development Capacity (UDC) show a shortfall in infrastructure-enabled capacity for many areas of the city. This doesn’t mean that growth should stop, but mitigation will be required so that further development can proceed. We are starting a programme of catchment assessments where growth is anticipated that will recommend future upgrades to the infrastructure, allowing councils to plan for and fund those works through future Long-term Plans. These studies will use the Three Waters Strategy as a guideline, meaning that the designs are forward looking in terms of resilience, environmental outcomes and the use of alternative solutions to traditional infrastructure.	[Red]
We provide reliable services to customers Response to non-urgent repairs has been slowing. There is room for improvement with the implementation of the Alliance. Increased awareness around health and safety requirements has meant that more planning is now being carried out prior to the works on site.	[Amber]

Results to 31 December 2018 (Q1 and Q2 2018/19)

Key

· [Green] on track

· [Amber] intervention required

· [Red] Significant intervention required

Appendix 3: Financial statements

At the end of December 2018 Wellington Water had a surplus of $0.8m against a year-to-date (YTD) budget deficit of $0.3m; a favourable variance of $1.2m. This reflects the conservative budget management approach taken to ensure prior year deficits are partially recovered within the 2018/19 year.

In the second half of the year some unbudgeted activities will be initiated to utilise any additional surplus over and above the $0.1m that is budgeted for.

Wellington Water’s Capex expenditure is $0.6m YTD. The year-end forecast is to fully spend the $1m budget, including building fit-out to accommodate the new network maintenance Alliance.

The council work programme is $0.3m (1 per cent) and $2.5m (8 per cent) under budget YTD for Opex and Capex respectively.

Statement of comprehensive revenue and expenses

	Unaudited	Unaudited	Audited
	31 Dec 2018	31 Dec 2017	30 June 2018
	$000	$000	$000
One Budget Opex programme funding	22,981	26,199	50,249
One Budget Capex programme funding	23,806	32,566	72,521
Management fee	14,947	13,040	25,535
Other revenue	1,732	91	5,921
Total revenue	63,466	71,896	154,226
One Budget Opex programme	(22,708)	(24,231)	(50,331)
One Budget Capex programme	(23,848)	(32,542)	(71,864)
Other Capex programme	(1,373)	-	(4,531)
Salaries and wages	(9,800)	(8,952)	(18,045)
Employer contributions to superannuation	(293)	(282)	(575)
Directors fees	(78)	(73)	(141)
Audit fees to Audit NZ - financial statements	(51)	(35)	(101)
Audit fees to Audit NZ - other services	-	(7)	-
Operating leases	(457)	(546)	(987)
Other personnel costs	(623)	(486)	(1,332)
Other operating expenditure	(2,689)	(2,561)	(5,221)
Depreciation and amortisation	(456)	(554)	(1,094)
Interest expense	(14)	(17)	(33)
	(62,390)	(70,287)	(154,255)

Surplus/(deficit) before tax	1,076	1,609	(29)
Tax expense/(credit)	-	-	3
Total comprehensive revenue and expenses	1,076	1,609	(26)

Attributable to:
Wellington City Council	453	677	(11)
Hutt City Council	227	339	(6)
Upper Hutt City Council	91	135	(2)
Porirua City Council	136	203	(3)
Greater Wellington Regional Council	170	254	(4)
Total comprehensive revenue and expenses	1,076	1,609	(26)

Statement of changes in equity

	Unaudited	Unaudited	Audited
	31 Dec 2018	31 Dec 2017	30 June 2018
	$000	$000	$000

Surplus/(deficit) for the period	1,076	1,609	(26)
Equity at the beginning of the period	1,688	1,714	1,714
Total equity	2,764	3,323	1,688

Attributable to:
Wellington City Council	1,164	1,399	711
Hutt City Council	582	700	355
Upper Hutt City Council	233	280	142
Porirua City Council	349	420	213
Greater Wellington Regional Council	436	525	267
Total comprehensive revenue and expenses	2,764	3,323	1,688

Ratio of shareholders’ funds to total assets	20%	19%	14%

Statement of financial position

		Unaudited	Unaudited	Audited
		31 Dec 2018	31 Dec 2017	30 June 2018
		$000	$000	$000

	Cash and cash equivalents	8,978	13,487	3,563
	Receivables and prepayments	2,340	1,435	15,572
	Tax receivable	117	127	177
Total current assets		11,436	15,049	19,312
	Intangible assets	452	456	536
	Property, plant and equipment, vehicles	1,865	1,829	1,789
	Deferred tax	120	113	120
Total non-current assets		2,437	2,398	2,445
Total assets		13,873	17,447	21,757
	Payables and provisions	10,269	13,554	19,169
	Bank loan	120	120	120
Total current liabilities		10,389	13,674	19,289
	Bank loan	330	450	390
	Capital grant in advance	390	-	390
Total non-current liabilities		720	450	780
Total liabilities		11,109	14,124	20,069
Net assets		2,764	3,323	1,688
	Issued capital	950	950	950
	Accumulated comprehensive revenue and expenses	1,814	2,373	738
Total equity		2,764	3,323	1,688

Statement of cash flows

		Unaudited	Unaudited	Audited
		31 Dec 2018	31 Dec 2017	30 June 2018
		$000	$000	$000
	Receipts from councils	79,215	77,725	146,259
	Interest received	138	91	281
	Employees and suppliers	(73,486)	(66,038)	(144,340)
	Tax (paid)/received	60	-	(79)
	Interest paid	(14)	(17)	(33)
Net cash flow from operating activities		5,913	11,761	2,088
	Purchase of property, plant and equipment, vehicles	(375)	(113)	(419)
	Purchase of intangibles	(73)	(31)	(305)
	Proceeds of sales from vehicles	10	-	-
Net cash flow from investing activities		(438)	(144)	(724)
	Repayment of borrowings	(60)	(60)	(120)
	Capital grant in advance	-	-	390
Net cash flow from financing activities		(60)	(60)	270

Net cash flow		5,415	11,557	1,633
Add: cash at the beginning of the period		3,563	1,930	1,930
Cash at the end of the year		8,978	13,487	3,563
Comprised of:
Cash at bank and on hand		8,978	13,487	3,563

No.	Title	Page
1 ⇩	Wellington Water Draft 2019-22 Statement of Intent	21
2 ⇩	Final Letter of expectation WWL 2019-2020	52
3 ⇩	Table showing how the Letter of Expectations has been met in the SOI	55

Letter of Expectation	How we’ve addressed it	Ref. in SOI
Priority area 1: Proactively respond to the Government’s Three Waters Review	We have stated that we will remain abreast of the changes and ensure the business is in a position to proactively respond to unfolding developments.	Pg 9
Priority area 2: Deliver core responsibilities	We will deliver core responsibilities by making sure our services support and align with our client councils long term plans by delivering on agreed three waters outcomes. We will be aiming for greater than 90% alignment and achievement of agreed outcomes. We will be reliable in the delivery of our renewals and capital works programmes by completing planned work within timeframes. We will maintain our rating as a trusted advisor by working with our five client councils to build strong relationships.	Measures 40, 24, 36
Priority area 3: Continue to strengthen a customer centered approach	The SOI sets out how we will put our customer at the heart of everything we do. This includes growing the water sector’s capability and building a customer culture. We will build a customer culture by developing consistent customer behaviours and embedding these behaviours in our company and alliance. We will partner up with our client councils to own customer calls end-to-end (including council call centres) and manage customers’ expectation by embedding our customer behaviours throughout our business.	Pg 6, measures 32, 23
Priority area 4: Support councils’ response to growth	We are working closely with the region’s councils to identify potential growth catchments and planning for three waters infrastructure that will be fit for future challenges. There are around 20 potential growth areas across the region that we will be planning for over the next two years. We will complete our three waters network modelling programme to understand how our current networks perform and plan for growth. We will make sure future growth is supported by developing well thought out service plans that will inform the next LTPs. We will also build our relationships with developers by improving their satisfaction with the advice and services we offer.	Pg 10, measures 16, 17, 18
Priority area 5: Support councils’ response to environmental challenges	We will continue to work with Whaitua committees to set water quality limits, and also identify high priority areas in the network to trial solutions that will improve water quality and in 2019/20 we will pilot projects. We will complete a carbon emissions study and reduction plan. We will meeting all environmental consent requirements by being fully compliant with consent requirements in the delivery of our services. We will minimize the impact of sludge odour and landfill disposal by maintaining minimum water content.	Pg 5, measures 7, 15, 19, 22
Priority area 6: Enhanced planning and financial modelling	We will work with our client councils to calculate the cost of water as a cost per connection. Our customers will get a better understanding of where their water rates money is being spent because we will improve transparency of the cost per connection of our services. We will continue to gain a better understanding of the emerging issues that impact on our planning by continuing to complete future services studies.	Pg 6, measures 13, pg 9
Espouse robust technical views across emerging issues	We will continue our work undertaking future service studies. In 2019/20 we will complete a minimising carbon emissions study, a flood management study (subject to funding), a resilience study and recommended approaches to sustainable drinking-water supply, wastewater sludge management and receiving environment water quality. We will also respond to issues as they arise.	Pg 16, measure 15

No.	Title	Page
1 ⇩	Wellington Water Half year report 2018_19	60

No.	Title	Page
1 ⇩	Delivering on our Three Water Outcomes	91

Deputy Mayor D Bassett (Chair)	Hutt City Council
Mayor W Guppy	Upper Hutt City Council
Mayor M Tana	Porirua City Council
Cr C I Pannett	Wellington City Council
Cr J Brash	Greater Wellington Regional Council
Cr D Ogden	Greater Wellington Regional Council (Alternate)
Mayor WR Wallace	Hutt City Council (Alternate)
Cr R Leggett	Porirua City Council (Alternate)
Cr G McArthur	Upper Hutt City Council (Alternate)
Cr P Gilberd	Wellington City Council (Alternate)