Wellington Water Committee



11 December 2019




Order Paper for the meeting to be held in the

Hutt City Council Chambers, Level 2, 30 Laings Road, Lower Hutt,





Monday 16 December 2019 commencing at 1.00pm





Cr J Brash

Greater Wellington Regional Council

Cr D Bassett

Hutt City Council

Mayor A Baker

Porirua City Council

Mayor A Beijen

South Wairarapa District Council

Mayor W Guppy

Upper Hutt City Council

Cr S Rush

Wellington City Council

Mr T Parai

Te Runanga o Toa Rangatira 

Ms K Skelton

Taranaki Whānui ki Te Upoko o Te Ika

Cr J van Lier

Greater Wellington Regional Council (Alternate)

Deputy Mayor Lewis

Hutt City Council (Alternate)

Cr R Leggett

Porirua City Council (Alternate)

Cr G Emms

South Wairarapa District Council (Alternate)

Cr H Swales

Upper Hutt City Council (Alternate)

Cr I Pannett

Wellington City Council (Alternate)

Ms N Solomon

Te Runanga o Toa Rangatira (Alternate)

Ms K Tamanui

Taranaki Whānui ki Te Upoko o Te Ika (Alternate)





For the dates and times of Council Meetings please visit www.huttcity.govt.nz


Wellington Water Committee


Meeting to be held in the Hutt City Council Chambers, 2nd Floor, 30 Laings Road, Lower Hutt on

 Monday 16 December 2019 commencing at 1.00pm.



Public Business


1.       APOLOGIES 


Generally up to 30 minutes is set aside for public comment (three minutes per speaker on items appearing on the agenda). Speakers may be asked questions on the matters they raise.       


4.       Procedure to Elect the Chair and Deputy Chair (19/1389)

Report No. WWC2019/1(2)/239 by the Divisional Manager, Democratic Services           4

5.       Shareholder Resolution in lieu of Annual General Meeting (19/1392)

Report No. WWC2019/1(2)/240 by Wellington Water Ltd                                 7

6.       Extension of the Wellington Water Ltd Board Chair's Term (19/1391)

Report No. WWC2019/1(2)/241 by Wellington Water Ltd                               10

7.       Meeting Schedule 2020 (19/1390)

Memorandum dated 6 December 2019 by the Divisional Manager, Democratic Services 11

8.       Letter of Expectation (19/1393)

Report No. WWC2019/1(2)/242 by the Chief Executive, Porirua City Council 13

9.       Company Update Report (19/1394)

Report No. WWC2019/1(2)/243 by Wellington Water Ltd                               18      

Kathryn Stannard

                                                                                       4                                                 16 December 2019


Wellington Water Committee


06 December 2019



File: (19/1389)




Report no: WWC2019/1(2)/239


Procedure to Elect the Chair and Deputy Chair


Purpose of Report

1.       To advise the Wellington Water Committee (the Committee) of the procedure to elect the Committee Chair and Deputy Chair.


It is recommended that the Committee:

(i)    receives and notes the contents of the report;

(ii)   chooses either:-

(a)   voting system A (election by the majority of members);


(b)   voting system B (election by the greatest number of votes) for the election of the Committee Chair and Deputy Chair;


(iii)    agrees that, in the event of a tie under voting system A, the candidate to be excluded from the next round of voting shall be resolved by lot as described in section 14 of this report; and

(iv)    agrees that, in the event of a tie under voting system B, the candidate to be elected shall be resolved by lot as described in section 14 of this report.



2.       Under Schedule 7 of the Local Government Act 2002 (the Act), the Committee may appoint its own Chair and Deputy Chair.  The Committee’s Terms of Reference provide for this to occur once all Committee members have been appointed.  As all Committee members have been appointed, it is appropriate for the Committee to appoint its Chair and Deputy Chair at its meeting to be held on 16 December 2019.


3.       The Committee must adopt the voting system for these elections, in case there is more than one nomination for the position of Chair or Deputy Chair. Standing Orders outline two options for the Committee’s consideration:

a)    Election by the majority of members present and voting, or

b)    Election by receiving a greater number of votes than any other candidate.

Characteristics of election by majority (voting system A)

4.       The person who is elected received the votes of a majority of the members of the Committee.

5.       There is a first round of voting for all candidates.

6.       If no candidate is elected in that round there is a second round of voting from which the candidate with the fewest votes in the first round is excluded.

7.       If no candidate is successful in the second round there is a third, and so on.  Each time the candidate with the fewest votes in the previous round is excluded.

8.       If, in any round, two or more candidates tie for the lowest number of votes, the person excluded from the next round is resolved by lot.

9.       Rounds of voting will only be required where there are more than two candidates.

Characteristics of election by majority (voting system B)

10.     A person is elected if they receive more votes than any other candidate.

11      There is only one round of voting.


12      If two or more candidates tie for the most votes, the tie is resolved by lot.


13.     The Committee can choose either of the two voting systems described above to elect the Chair and Deputy Chair.  The Committee is entitled to adopt different systems for the election of the Chair and Deputy Chair.  However, for reasons of ease and practicality, it is suggested that the Committee adopt the same procedure for the election of both the Chair and Deputy Chair.

Determining by ‘lot’ where there is a tie


14.     Both voting systems require a resolution by ‘lot’ if two candidates receive an equal number of votes and no one else is elected.  The most common procedure is for the names of the candidates with the same number of votes to be placed in a container and the name of the person drawn out by an independent person is deemed the winner ie elected or not excluded from the next round.  It is recommended that this process be used in the event that there is a tie between candidates.


Which voting system is best?


15.     If the Committee wants to guarantee that the Chair and Deputy Chair receive the votes of a majority of the members of the Committee it should adopt voting system A, ie election by majority.  This is because the alternative voting procedure, where a candidate is elected by receiving the greatest number of votes, does not ensure that the winning candidate has the support of more than half the members of the Committee in every instance.

Newly elected Chair to take the chair before Deputy Chair is elected


16.     Once the voting procedure has been decided the presiding officer will call for nominations for the office of Committee Chair.  Once elected, the newly elected Chair shall take the chair for the rest of the meeting.  Election of the Deputy Chair will proceed after the Chair takes the Chair. 


There are no appendices for this report.   






Author: Kathryn Stannard

Divisional Manager, Democratic Services







Approved By: Bruce Hodgins

Strategic Advisor, City and Community Services


                                                                                       8                                                 16 December 2019

Wellington Water Committee

09 December 2019




File: (19/1392)





Report no: WWC2019/1(2)/240


Shareholder Resolution in lieu of Annual General Meeting


Purpose of Report

1.    To seek approval from the representatives on the Wellington Water Committee as shareholders in Wellington Water Limited, not to hold an Annual General Meeting (AGM) for Wellington Water Limited.


It is recommended that the Committee:

(i)      notes the report;

(ii)     notes that the annual report was published on 30 September 2019 which fulfilled the relevant statutory requirements; and

(iii)    resolves not to have an Annual General Meeting of Wellington Water Limited for the 2018/19 financial year.



The Companies Act 1993


2.    Under section 120 of the Companies Act 1993, the board of a company must call an AGM of shareholders to be held no later than six months after the balance date of the company.   However, it is unnecessary for the company to hold a meeting if everything required to be done at that meeting is done by written resolution of the shareholders passed in accordance with section 122 of the Companies Act 1993. 



Purpose of an Annual General Meeting

3.    The main purpose of an AGM is for the directors to report on the performance of the company. It provides an opportunity for the shareholders to question the directors about the company and their conduct of its affairs, and for members to vote on resolutions that have to be put before the meeting. These matters are usually dealt with via the meetings of the Wellington Water Committee.

4.    The other purpose of holding an AGM would be for the shareholders to reappoint Audit New Zealand on behalf of the Auditor General as the Company’s auditors and to pass a resolution regarding the auditor’s fees and expenses. However, as a council controlled organisation, the Auditor General is the auditor for Wellington Water under section 70 of the Local Government Act 2002, so no appointment of the auditor is required.

Annual Financial Statements


5.    On 26 September 2019, the directors adopted the financial statements of the company for the year ended 30 June 2019.  The financial statements included an unmodified audit report.  On 30 September 2019 the annual report was published and this was received by the Wellington Water Committee. 


6.    The annual report contained the annual financial statements and all other information required to be reported to shareholders.


An Annual General Meeting is not required


7.    As there is no requirement to appoint an auditor and the annual report has been received by the Wellington Water Committee, no annual general meeting is necessary. The shareholders may, however, wish to meet for another reason.  







Appendix 1 Shareholders' Resolution in lieu of AGM








Author: Wellington Water Ltd





Attachment 1

Shareholders' Resolution in lieu of AGM


Wellington Water Limited


Shareholders’ Resolution in lieu of Annual General Meeting



In accordance with s 122 of the Companies Act 1993, the shareholders of Wellington Water Limited resolve that no annual general meeting is required for the 2018/19 financial year.





Signed:                                                                                                 Date:







David Bassett








Jenny Brash







Wayne Guppy







Hutt City Council

Greater Wellington Regional Council

Upper Hutt City Council









Sean Rush








Anita Baker







Mayor Alex Beijen







Wellington City Council

Porirua City Council

South Wairarapa District Council








Kim Skelton








Te Taku Parai








Taranaki Whānui ki Te Upoko o Te Ika

Te Runanga o Toa Rangatira



                                                                                      10                                                16 December 2019

Wellington Water Committee

09 December 2019


File: (19/1391)




Report no: WWC2019/1(2)/241


Extension of the Wellington Water Ltd Board Chair's Term


Purpose of Report

1.    To seek approval for the extension of the Wellington Water Board Chair’s term.


It is recommended that the Committee approves an extension of the Board Chair’s term until the next Committee meeting to be held in early March 2020.


Wellington Water Board Chair Term

2.    Wellington Water is governed by a Board of Directors. The Chair of the Board reports to the Wellington Water Committee.

3.    The current Board Chair (David Wright) is appointed until 31 January 2020.  This term expires before the next Wellington Water Committee meeting in late February 2020.  The exact date of the meeting is yet to be confirmed.

4.    Given this is the first meeting of a new committee, it is considered to be too early to make the Board Chair appointment decision at this meeting. It is proposed that the Board Chair appointment be postponed to early March 2020 meeting.

5.    Each director can serve a maximum of two terms, or six years, unless agreed otherwise by the Wellington Water Committee.

6.    The current Board of Directors consists of the Chair and three other members:

·      Geoff Dangerfield  (appointed to 30 September 2020)

·      Cynthia Brophy (appointed to 31 January 2021)

·      Philip Barry (appointed to 30 June 2021).


Author: Wellington Water Ltd



MEMORANDUM                                                  11                                                16 December 2019

Our Reference          19/1390

TO:                      Chair and Members

Wellington Water Committee

FROM:                Kathryn Stannard

DATE:                06 December 2019

SUBJECT:           Meeting Schedule 2020




That the Committee agrees to the meeting schedule for 2020 as follows:-


·     Thursday, 5 March 2020 commencing at 2pm followed by a workshop (Greater Wellington Regional Council);

·     Wednesday, 3 June 2020 commencing at 10am followed by a workshop (Upper City Council);

·     Wednesday, 30 September commencing at 10am followed by a workshop (Porirua City Council); and

·     Wednesday, 25 November 2020 commencing at 10am followed by a workshop (Wellington City Council)

Purpose of Memorandum

1.    For the Wellington Water Committee (the Committee) to adopt its meeting schedule for 2020.

Proposed meeting arrangements for 2020

2.    Officers have contacted members to arrange appropriate dates for the Committee to meet in 2020.


3.    It is envisaged that the Committee will usually meet on four occasions in each year, with additional meetings and workshops arranged as required.  It is intended that meetings will be held at Council locations across the cities. 




4.    In accordance with legislation, public notice of the each formal meeting will be given at the appropriate time.  A copy of the Order Paper for each meeting will be made available for public inspection at the principal office of each shareholding local authority.



There are no appendices for this Memorandum.    







Author: Kathryn Stannard

Divisional Manager, Democratic Services







Approved By: Bruce Hodgins

Strategic Advisor, City and Community Services



                                                                                      14                                                16 December 2019

Wellington Water Committee

09 December 2019




File: (19/1393)





Report no: WWC2019/1(2)/242


Letter of Expectation


Purpose of Report

1.    To seek your approval for the 2020-2023 shareholder Letter of Expectation to Wellington Water Limited (the company).


It is recommended that the Committee:

(i)    notes and receives the report;

(ii)   approves the 2020-2023 shareholder Letter of Expectation to Wellington Water Limited (attached as Appendix 1 to the report); and

(iii)  authorises the Wellington Water Committee Chair to sign the letter.


2.    The Committee members have the delegated authority from each of the six councils who make up the shareholding of the company to agree to the annual letter of expectation.  This is set out in the Committee's terms of reference.

3.    The objective of the Letter of Expectation is to provide shareholders with the opportunity to state their priorities to the Company which will then be included in the Company's statement of intent. The board of the company must deliver a draft statement of intent on or before 1 March 2020.

4.    The priorities included in the Letter of Expectation reflect those flowing from the councils' overall objectives as expressed in their long term plans in relation to the three waters, and also respond to short to medium priorities important to the shareholders.




5.    As the 2020/2021 financial year represents year three of the councils' Long Term Plans, the changes set out in the attached draft Letter of Expectation are a refinement on what was agreed last year.


6.    Once approved, the Chair of the Committee will circulate the agreed Letter of Expectation to the Chair of the Board, the Chief Executive and to all shareholders.

Legal considerations

7.    Officers recognise that the matters referenced in this report may have a high degree of importance to affected or interested parties.

8.    The matter requiring decision in this report has been considered by officers against the requirements of Part 6 of the Local Government Act 2002 (the Act). Part 6 sets out the obligations of local authorities in relation to the making of decisions.

Significance of the Decision

9.    Part 6 requires the Committee to consider the significance of the decision. The term 'significance' has a statutory definition set out in the Act.

10.  Officers have considered the significance of the matter and recommend that the matter be considered to have low significance. Officers do not consider that a formal record outlining consideration of the decision-making process is required in this instance.






Appendix 1 Draft Letter of Expectation 16 Dec 2019








Author: Wendy Walker

Chief Executive, Porirua City Council





Attachment 1

Draft Letter of Expectation 16 Dec 2019


Chair, Wellington Water Committee
C/- xxxx
Private Bag xxxx
Mobile: xxxxxx


xx December 2019





Wellington Water Limited

Private Bag 39804

Wellington Mail Centre


Dear xxxx

This letter of expectation sets out the six owner councils’ and mana whenua’s priorities and expectations to inform the development of Wellington Water’s draft Statement of Intent (SOI) for 2020-2023 and has been informed by discussions with my fellow councils and mana whenua.

Wellington Water has a crucial role in providing water services to customers within the Wellington metropolitan and South Wairarapa area and therefore its actions have a direct impact on the wellbeing of customers, as well as the health of the broader environment and resilience of the community.

Given Wellington Water’s next SOI aligns to the third year of the councils’ long term plans, we expect the SOI will largely reflect the company’s current direction and anticipate the planning required for each council’s next long term plan.

We expect Wellington Water to continue developing as an integrated water services provider, linking communities.

Wellington Water’s priorities for 2020-2023

We have a number of priorities for the upcoming year which we would like to see reflected in the SOI.

Te Mana o Te Wai - Promoting Maori values and outcomes in the management of the three waters

Mana whenua representation on the water committee was recently agreed by all participating councils.  This is an initial step for Wellington Water.  We expect Wellington Water to work with mana whenua representatives in this SOI to reflect the outcomes of Te Mana o Te Wai – Te Hauora o Te Wai (the health and wellbeing of water), Te Hauora o te Tangata (the health and well-being of people), and Te Hauora o te Taiao (the health and well-being of the environment).  This holistic world view will provide a coherent framework for community values in the provision of three waters services.

We expect Wellington Water to:

·    Support the Water Committee to optimise mana whenua participation

·    Develop a plan for implementing the partnership agreement you have in place with mana whenua.

Delivering core business

A top priority for the forthcoming year is to ensure our customers receive the agreed levels of service. Future community confidence is built on reliable services today. We expect Wellington Water to provide the basic operational services within the agreed timeframes and to a high quality.  Health and safety remains an important operational priority.  As well, we expect procurement, construction and cost estimation processes are applied to all capital works.

Support for Long Term Plan and Infrastructure Strategy development

The upcoming year will be an important year for advising councils’ on the development of planned water activities for their long term plans 2021-2031. We expect advice to support the development of councils’ infrastructure strategies and long term plans, and for you to assist in helping our communities understand the big issues around water services in preparation for community consultation.  Early socialisation of key issues, especially those with budget implications will be important.

We expect you to prepare to make step change improvements to your strategic framework in time for the 2021-2024 SOI to improve the linkages between programmes of work and long range outcomes.

In order to do this, we expect you to focus on capturing the total cost of providing water services to the community, and working with councils to capture the requisite data. We want to be able to demonstrate to our communities the choices they have and the direct impact of their choices on rates.

Responding to growth needs

The region faces significant challenges in meeting the demands of a growing population and Wellington Water plays a vital role in the planning process.

Wellington Water will need to continue to work with councils to support the process and ensure optimised investment.

We expect the company to ensure we have high level plans for key growth areas identified by the councils. We would also like the company to work with our planning teams to ensure the three waters are considered in an integrated way and district plans and policies reduce the impacts of growth e.g. by providing for green infrastructure.

Sustainability of water

The councils are keen to explore a ‘conserve’ rather than ‘construct’ approach to water supply.

We expect Wellington Water to advise us on options to ensure the supply of drinking water is sustainable now and into the future. Specifically, we wish to be advised on activities that will lead to reduced demand. Addressing leaks within the network will be an important component.

We would like Wellington Water to provide us with a proposal to reduce water demand by 40 litres per person per day for consideration in the 2021-31 Long Term Plans.

Climate change

Wellington Water should explore ways to mitigate the environmental impacts of climate change. As a first step, we intend setting a target for carbon emissions reduction in the 2021-31 long term plans and would like to explore with the company what this might be. These targets will need to be aligned with councils’ climate change plans and with their carbon emissions monitoring programmes.

We expect Wellington Water to continue investigating broader initiatives for responding to climate change issues to be discussed with the Water Committee.

Preparing the company for the impending regulatory change

The regulatory landscape is changing and we expect Wellington Water to prepare for the introduction of higher national standards for drinking water quality and discharges to the environment, including the associated system and reporting improvements that will be required.

We expect to be updated on the implications of any new legislation and for Wellington Water to assist the Water Committee prepare joint submissions on the proposals.

Value for money

We recognise that Wellington Water is continuing to mature as a company and there are a number of initiatives underway to improve the value that is being delivered to the councils and their communities.

We would like you to develop a framework that enables you to comprehensively capture the value-add and demonstrate improvements.


I look forward to receiving a draft of Wellington Water’s Statement of Intent by 1 March 2020.


Yours sincerely



Chair, Wellington Water Committee




                                                                                      23                                                16 December 2019

Wellington Water Committee

09 December 2019




File: (19/1394)





Report no: WWC2019/1(2)/243


Company Update Report


Purpose of Report

1.    To give the Wellington Water Committee an overview of the activities of the company.


It is recommended that the Committee notes and receives the information contained in the report. (


Wellington Water Quarterly Performance Report

2.    Wellington Water Ltd, like most infrastructure companies, manages its affairs on a monthly basis and reports formally on a quarterly basis, at the half year, and annually. The company’s quarterly performance report for Quarter 1 is attached as Appendix 1 to the report.

3.    Our quarterly report follows the story line of:

a)   Looking after what we have got – the section focuses on what has happened over the quarter and what we did about it. It also includes a section on risk;

b)   Getting ready for the 2021-31 Long Term Plan – Every three years we provide advice to councils on the activities and budgets we think should be included to meet the outcomes desired by owner councils;

c)   What have we done with your priorities – this section reports on activities over the quarter focused on your four priorities of:

i.     Responding to growth;

ii.    Sustainable drinking water supply;

iii.   Healthy urban waters: improving the water quality of our streams, rivers and harbours; and

iv.     Mitigating carbon emissions.

4.    The report is also designed to be used by Wellington Water Committee representatives to include in their individual council order papers so the whole of Council can be kept up to date with our progressed performance.

Environmental Scanning

5.    Wellington Water Ltd regularly scan our environment to strategically assess the impact on the company.

Water reform

6.    The Government continues to steer through major water reform proposals. In July 2019 the Government approved a suite of regulatory reforms focused on safe drinking water and improved environmental outcomes from wastewater and stormwater systems.

7.    More recently, the Government has announced the new drinking water regulator will be a standalone crown entity. An interim unit is already being established within the Department of Internal Affairs and legislation, standing up the entity, is expected to be enacted by mid-2020.

8.    Further decisions need to be made about the capacity and funding of the entity. Potentially, the proposed size of the entity could cause problems for Wellington Water Ltd in terms of increasing tension in an already tight labour market and duplicating technical expertise within the sector.

9.    In late 2019, Cabinet is expected to consider advice on the wider funding and capability issues associated with water service delivery and achieving compliance with the new drinking water and freshwater quality standards. These initiatives dovetail with the Productivity Commission’s inquiry into local government funding and financing, and wider financial challenges facing local government.

10.  The real impact on the sector will happen once the Water Services Bill is enacted which brings the enabling water regulation into force. The Water Services Bill is expected to be introduced into Parliament by the end of 2019 but enactment will not occur until April 2021 at the earliest – post general election.

11.  In the meantime, progress is being made on the Government’s Essential Freshwater Programme and a series of National Policy Statements and Environmental Standards are being released. These will inform policy setting at the regional level through Greater Wellington’s Regional Council’s (GWRC’s) Natural Resources Plan.

12.  Wellington Water Ltd is assessing the impact of the reform proposals on the business in line with the progress of the proposed legislation. It will be important to ensure the financial implications of the increased standards are included within the councils’ long term planning considerations. The company will be undertaking a business case assessment to inform this process.

Climate change

13.  The Government’s work around climate change is also progressing with the recent enactment of the Zero Carbon Act which will set targets for greenhouse gases. The Act commits New Zealand to zero carbon by 2050 or sooner. The Act sets up an independent Climate Commission that will provide independent expert advice to the Government and monitor and review progress towards emissions reduction and adaptation goals. The Commission is expected to be operating from mid-December 2019.

Natural Resources Plan

14.  The decisions version of GWRC’s Natural Resources Plan was released in July 2019 with immediate legal effect. The plan is the primary regulatory instrument controlling how the company can undertake its functions in relation to taking water, discharging contaminants (including stormwater and wastewater) and operating in the beds of rivers. The plan responds to existing national direction around improving fresh and coastal water management, and seeks to sustainably manage the natural resources of the region 

15.  The company has engaged with client Councils to appeal some of the provisions. The areas of contention include: 1) the requirement to progressively reduce the volume of treated wastewater from our treatment plants to the coast; 2) how the stormwater requirements interact with other parties’ activities such as developer’s obligations to manage stormwater run-off; and 3) level of protection for water sources.

16.  Having discussed the appeal with GWRC, the company is in the process of simplifying the appeals process. This is likely to include withdrawing points of appeal where all parties agree clarification or interpretation is satisfactory, or by agreeing changes by consent order. Formal mediation will follow in the New Year where agreement cannot be made, prior to Environment Court hearings.

Whaitua Committees

17.  GWRC’s Natural Resources Plan implements fresh and coastal water quality requirements within the existing National Policy Statement for Freshwater Management (2014 amended 2017). Those water quality limits and objectives are set at a local level by Whaitua committees.

 18. Te awarua-o-Porirua Whaitua (Porirua City and Wellington City Councils) and Ruamāhanga Whaitua (South Wairarapa District Council) have completed their recommendations, and we expect Whaitua te Whanganui-a-Tara (Upper Hutt, Hutt and Wellington City Councils) to deliver their recommendations by the start of 2021.


19.  Wellington Water Ltd is engaged in these processes, providing information and advice.

Global Stormwater Consent

20.  The company holds an interim resource consent on behalf of its owner councils to discharge stormwater and occasionally, stormwater contaminated with wastewater, to rivers and the coast.

21.  This consent will expire in 2023 and then we will seek another one. In order to re-gain consent, the company, in partnership with its owner councils, will develop strategies and funded programmes of work to achieve the water quality improvements required by GWRC’s Natural Resources Plan. The limits are set at a local level by Whaitua (catchment) committees. The implementation of these water quality improvement programmes is already a priority for councils and we will prepare proposals as part of our 2021-31 Long Term Plan advice.

Customer Survey Results

22.  Research shows trust is a key factor in social licence, and therefore in gaining the support of stakeholders in a desired course of action (Water Services Association of Australia, Understanding Trust In Water, July 2019).

23.  Wellington Water Ltd participates in Water Services Association of Australia’s (WSAA) biannual national customer perceptions study. Results from the 2019 survey showed Wellington Water Ltd ranked third equal for trust among 39 water supply authorities (all major Australian, Watercare and us). The agreement average (number of people agreeing with the statement “I trust my water provider”) was up slightly from 6.3 in 2017 to 6.5.

24.  We ranked second equal on value for money, though this is a bit tricky as the question asks people to agree with the statement “my water provider delivers value for money”, and we know our customers still have problems understanding what their water service costs them.


We ranked 4th equal (9th from the top) on overall satisfaction.

26.  Our own surveys show that people are interested in knowing more about what we do (70% of people surveyed either “don’t know enough and are interested in knowing more” or “know enough, but are interested in knowing more”). 

27.  To help build and maintain trust and satisfaction, and to encourage customers to support our work with their own actions, we are seeking to:

·   Develop our engagement activity to ensure it meets community needs

·   Place the work we do within a broader context of public concerns and interest in water and sustainability generally

·   Engage with key stakeholder groups, iwi and customers, at the front of our LTP planning and advisory cycle.

Annual Plan

28.  During the second quarter, we review all operating budgets, programmes of work and related projects to make sure there are no major variances, issues or emerging challenges that should be addressed.  We use this information to help develop the three waters component of councils’ 2020/21 Annual Plans.

29.  When we prepare our proposed annual plan budgets we consider any new challenges based on the knowledge at the time. Sometimes, as more information becomes available this changes the timing or value of investment required in the three waters. An example this year is the desire by us and councils to make a start on some of the sustainable water supply key activities, such as using small area meters to better understand water usage.

30.  All Annual Plan advice has been submitted to Councils.

Statement of Intent approaching

31.  Once we receive our owner councils’ letter of expectation, we will prepare our draft Statement of Intent (SOI) which sets out the company’s strategic intentions for the next three years. We try to align our SOI as closely as possible to councils’ three year long term planning cycles (and the budgeted funding envelope), although the Local Government Act requires a council controlled organisation to set out a three year forward projection on an annual basis.

32.  The SOI for 2020-2023 is year three of councils’ Long Term Plans so we aim to make little change in our strategic direction.  However, we will be reviewing our set of performance measures at this time in order to ensure that we have a robust performance framework in place for 2021. A bigger review of the company’s strategic direction will occur in 2021 to align with the 2021-2031 long term plans.

33.  There are new requirements for the SOI due to recent amendments to the Local Government Act, such as inclusion of the measures issued by the Secretary for Local Government (DIA measures). We are abreast of these changes and will ensure compliance.

34.  We will deliver a draft SOI to the water committee in February for our owner councils’ feedback. The company is available to present the SOI to councillors as required.

Local Body Elections Complete

35.  There has been substantial change in the makeup of our owner council’s elected members. We have participated in council induction sessions and met with the new Wellington Water Committee representatives and their alternates. We look forward to servicing the new councils and the Wellington Water Committee.

South Wairarapa District Council Update

36.  On 1 October 2019, Wellington Water Ltd began operating the three waters network of the South Wairarapa District Council (SWDC). The transition was seamless and things are going smoothly. The SWDC networks are less complex than the networks for the metropolitan area of Wellington.

37.  The SWDC received its annual assessment of its drinking water facilities and all were non-compliant. The reaction from the new Council has been swift. They have budgeted funds to immediately investigate upgrades for all plants to meet the required standard.






Appendix 1 Quarterly Report July-Oct 2019 (002)








Author: Wellington Water Ltd





Attachment 1

Quarterly Report July-Oct 2019 (002)


Wellington Water Comm ittee 16 December 2019


Quarterly Report July – October 2019





This is Wellington Water’s Quarterly Report for the period 1 July to 30 September 2019.


The structure of this report

The report contains the following sections:

Ø Looking after what we’ve got and our key risks

Ø Getting ready for the 2021-31 long term plan

Ø Progress on councils’ key long term priorities


Looking after what we’ve got

Ø Long Run Outcomes: safe and healthy water, respect for the environment, resilient networks that support the economy

We have provided 100% safe drinking water over the first three months of the 2019/20 financial year to the metropolitan area of Wellington. We see no change to this result going forward. Next quarter we will report on the SWDC results which are likely to be non-compliant.

There were no public health incidents from wastewater leakage or overflows. We conducted all our operations within our consenting framework.

There were no shocks or stresses experienced during the quarter which resulted in any emergency management.

We continue to be challenged by the number of service requests received across our networks. We have prioritised surface leaks and urgent requests above other issues. This means the backlog of work we couldn’t afford to clear last year remains at historic highs. We did not achieve our response time measures during Quarter 1.

Ø Customer at the heart of everything we do

Our new customer hub has been operating for five months.  The customer hub provides a seamless service pathway for customers from contact centres to people in the field.  The first quarter was a period of settling down as we started up our new field crews, commissioned new systems and built rapport with your contact centres.  Overall, we are happy with how it has gone.  Our biggest problem still remains recruiting competent service people who remain a very scarce resource.

Due to an increased volume of service requests, particularly over the past couple of years, we couldn’t complete all our work within budget in the 2018/2019 financial year.  We have calculated that we carried over about $1.1m worth of repairs across the region.  

This translated to unfixed leaks and delays, especially for more complicated repair work. Unfortunately this sometimes meant leaks in high traffic areas went unattended for long periods, leaving councils and customers unhappy. This is a critical aspect of our work because we can’t expect our customers to save water if they don’t think we are. We are sorry this occurred. Change is difficult and we are looking forward to getting past this so we can focus on excellent customer service going forward.

Right now we are attending to all urgent service requests as they occur but we are not meeting the response times for non-urgent work (the backlog remains similar to what we had at the beginning of the year). As we get on top of the urgent requests we are starting to work on the backlog and other issues such as system integration with councils, but we are finding ourselves up against our annual budgets.  Our priority is to operate within council opex budgets; however it is not possible to do everything, so again, we will have to prioritise.  We are taking a risk management approach to this problem as we are still making productivity gains through the Customer Operations Group, so it’s a matter of making adjustments as the year develops.

Operating in a highly reactive mode is inefficient, produces more carbon emissions and distracts our people from planning for the future.  Over the next six months we will be analysing the lift in service requests, as well as the implications of strategic priorities such as sustainable water supply, and recommending what we think the correct opex budgets should be from 1 July 2021. 

Our networks are ageing and new growth is increasing demand on the assets. We also know a significant portion of our networks are fragile under seismic forces and the impact of the Kaikoura earthquake is not understood. In addition, we don’t have all the data and information we need to make decisions across all our assets, although we know service requests are increasing compared to previous years.

Our approach therefore has to be a flexible one, which responds to the issues we get from customers, allows more time to evaluate what is going on, and allows the Alliance to make productivity improvements while staying within councils budgets. We will be working with council representatives to make a plan for the balance of 19/20 and 20/21 before the end of the year.

Ø Planned activities

All our planned studies are on track. We are looking forward to councils setting carbon emissions targets across our operations and capex so we can look into what we’ll need to do to meet these targets. Achieving significant reductions in operational emissions is going to require significant investment, particularly in relation to wastewater sludge management.

We are behind in our capex work. Current performance is 26% behind our planned programme. We are expecting that to recover because a lot of our work is timed in the second half of the financial year. This is particularly so for WCC with the Omāroro project.

We are proposing to substitute a programme of small area network meters into council’s capex programmes during 2019/20 and 2020/21. We are aiming to start in UHCC in the New Year and progressively work across the region. These meters will be crucial to understanding how our customers are using water and network performance. This will allow us to target opportunities to increase water efficiency and support the achievement of our sustainable water supply objectives.

As discussed earlier we have had no emergencies to deal with for over a year now.

Ø Company objectives

We commissioned all our supplier contracts on 1 July 2019. These are all collaborative models aimed at delivering long term value for councils. It will take some time to be able to measure the success of these models.

The new Veolia contract is projected to provide savings of $1M compared to previous costs to both the Wellington City Council, Upper Hutt City Council and Hutt City Council. Regrettably, we couldn’t achieve the same for the Porirua wastewater treatment plant.

Overall, our new service delivery arrangements means we now have some 400-plus people focused on delivering three waters services to you and our customers.

We are concerned about the establishment of the drinking water regulator in Wellington and its projected staffing of 155. This could result in some of our key staff being lost to the new regulator which would be disappointing.

We had an independent review of our operations undertaken at the beginning of the quarter. Deloittes concluded we were doing well but we needed to focus on demonstrating the value for money we are creating for councils. This is a difficult thing to do but we are turning our mind to it. See more on this below.

Ø Key risks

Our key risks are:

a)    That the Omāroro tender price exceeds current budgets. We have deployed an innovative procurement model to get the best out of the process and so far things are going well. The ultimate test will be when we open the tender prices early in the New Year;

b)    We will not be able to manage all service requests inside current budgets meaning we will not meet our response time and might need to carry a further backlog into 2020/21. While we know the volume of work has gone up, our alliance hasn’t reached full productivity yet and we need more time to understand what is going on; and

c)    The new water regulator entity impacts on our staffing.

Ø Demonstrating value for money

Over the period of the 2021-31 long term plan, you will invest approx. $2B in the three waters assets. It is important you can be assured of the advice we are giving you.

The Scottish Water Commission has been advising the Government on its three waters work. Alan Sutherland, the Chief Executive of the Water Industry Commission for Scotland, has approached us to offer their services to do a peer review of our work on a not-for-profit basis.

If we were to proceed with this offer, it would involve Alan reviewing our work and providing independent advice to individual councils.

Getting ready for the next long term plan

Ø Annual Plan

Every three years councils review the outcomes they seek and the level of investment they will make to meet these outcomes through their long term planning process. Water infrastructure is part of a portfolio of infrastructure councils manage on behalf of ratepayers and communities.

It is our job to work with your officers to provide an optimal investment proposition to your councils for consideration during long term plan discussions.

Once decisions are made by council, Wellington Water can rely on the level of funding for the next three years. This enables us to plan and execute on work as effectively and efficiently as possible.

In the previous long term plan round, Wellington Water had not had time to fully understand how all the water assets were performing so our proposal was limited. We suggested councils needed to invest more in wastewater because we knew the condition of that network was worse than drinking water and stormwater assets.

We have since had an additional three years to understand and monitor the network. We have a number of proposals to present to councils as follows:

1.    Looking after what we have:

We are well positioned to present a first principles proposal around operating and maintaining the networks. It is crucial that we have sufficient funding to meet the levels of service we say we can achieve. We also want to build on this work over the next three years by focussing on improving our data quality and what the data is telling us.


One approach for considering how well you look after what you have is through the asset valuation of the entire network. This valuation is used to determine the depreciation of that asset base which, in turn, is used to fund renewals. Historically, water companies have focused on pipe networks. Recent evidence suggests additional focus needs to go on pumps, valves and other critical assets.


We want to ensure we have a strong evidence base for renewals. This may mean a lift in the levels of renewals, especially for non-pipe assets, and a consequential reduction in funding for upgrades. We also want to ensure that renewals are targeted to help reduce our overall leakage and to focus on wastewater pipes where they are near streams, rivers and harbours.


2.    Prioritise the key focus areas councils have given us, as follows:

a)    Ensure long term plans for network upgrades and new assets keep pace with growth

b)    Reduce consumption of drinking water – all councils have agreed to a “conserve” versus “construct” approach to drinking water services

c)    Continue to invest in the wastewater network so it has fewer leaks and overflows. This includes a proposal to fund roving crews to work with customers on the private side of the network; and

d)    Present proposals to reduce our carbon emissions in line with any carbon reduction goals councils set.


3.    Promote a special focus on consumption

We would like to discuss an alternative way of working with councils to address long run priorities.


We propose setting a target reduction in drinking water consumption with councils based on a programme of activities over, say, a five-year period. If councils adopt such a model they would be buying an output (i.e. 10% reduction in per capita consumption) rather than the efficient delivery of activities and inputs.


This would incentivise Wellington Water to investigate and promote activities to achieve the output. We will monitor our progress and report it annually. If results suggest we are slipping behind our target we would review the impact of our activities and adjust our plans while working within the agreed total budget.


We think this will increase the value for money of what we do.


Ø Expressing cost in equivalent rates

Whatever we propose to you, we will sum it all up and express it in terms of equivalent rates so what we are proposing can be understood in terms of cost to the customer. This is a joint piece of work between Wellington Water and council officers. We are working with HCC to develop this idea fully as they separately rate for the three waters.

Progress on your key priorities

Below is our update on progress with the four areas we are prioritising for the long term plans. 

Ø Growth 

Our growth catchment work is now well established across the region. PCC was the first council to initiate such a study, with investigations requested across all three waters for seven potential growth areas. This study is now complete and is informing the councils long term plans. Interestingly, many of the infrastructure proposals included in the study will have a significant positive impact on service goal outcomes beyond their core function, such as wastewater upgrades that will improve the health of the waterways and harbour. 

A slightly different approach has been adopted in WCC, which takes a broad brush approach to investment needs across all the potential growth suburbs. This report is now complete and has provided WCC with cost ranges for three waters infrastructure throughout the city. It has identified significant differences in investment between the suburbs to accommodate growth. This information, along with other infrastructure investment needs can be used by WCC to inform efficient growth policy and variable development contributions across the suburbs. WCC has also initiated a study to identify medium to long term investment needs associated with growth and existing service goal deficiencies specifically for the CBD.

The growth catchment work will continue in Upper Hutt, Wainuiomata, and the Hutt Valley over the next 12 months. 

Ø Sustainable Drinking Water Supply 

We have made good progress during the past quarter on sustainable water supply with some key activities being completed that will help shape future long term plan activities.

One of these is establishing a delivery team to ensure that a number of capex activities are delivered starting from this financial year, including the installation of pressure management devices and a series of network meters. These two areas of investment represent ‘no regret’ investments. Another is a technology team to develop the platform that will enable network meters to be read remotely and to manage the collected data. This platform will also enable improved analytics to support leakage detection and planned maintenance activities.

An initial directional strategy has also been established, which will inform the 2021-31 long term plan. This is based on global best practice and an understanding of our own challenges in the region. This strategy will be presented to councils in quarter three.

We are re-running our models to determine an appropriate demand reduction target, based on the latest growth predictions. Based on previous information, we are anticipating that we will need to set a target of reducing gross per capita demand by about 10% within five years to be able to defer investment in a new water source and the associated infrastructure. This is aligned with councils’ choice to increase focus on conservation.

Ø Healthy Urban Waters 

During the past quarter, we have established a directional strategy that identifies the expected key activities that will contribute towards the healthy urban waters outcome, which includes a range of capex, opex and policy-based interventions.

Working with PCC, we have made significant progress in this area through the growth planning work described above. To accommodate growth, we have identified key trunk network upgrades that would need to be funded within the next 5-10 years. These include new wastewater storage, a wastewater treatment plant upgrade and targeted renewals to improve water quality outcomes.

We have also started a conversation with PCC on the importance of addressing private network issues. These contribute 50% of the inflow and infiltration into the wastewater network that cause wet weather overflows. PCC is positive about this proposal and can see the benefits of addressing root cause issues to improve the health of their harbour.

In terms of the Porirua Whaitua recommendations, we have completed some analysis to understand how our activities can positively influence water quality outcomes in PCC.

We have also worked with our client councils on a submission on the government’s proposed changes to freshwater regulation and the National Policy Statement on Freshwater Management; reviewed and lodged appeals on GWRC’s regional Natural Resources Plan; and supported GWRC’s Te Whanganui-a-Tara Whaitua process. All of these have the potential to influence our ability to contribute to healthy urban water outcomes. 

Ø Carbon Emissions 

In the previous financial year, we established the amount of carbon emissions arising from the three waters activities and the company’s operations. Following engagement with the Water Committee, our next steps include working with them to set emission reduction targets for the 2021/31 long term plan, including identifying the associated investment needs.

The project brief for the WCC wastewater sludge minimisation project has been developed. The brief identifies emissions reductions as one of the key investment drivers, reflecting that sludge going to landfill is one of our largest emission sources.

We continue to work closely with climate change and sustainability officers in our client councils, most recently in providing data for an update of the region-wide emissions inventory.

We have not prioritised this area in Quarter 1. In Quarter 2, we expect to develop an indicative emissions reduction plan that will support the setting of near and long term targets and identifying investment requirements. We will also start exploring opportunities to reduce the emissions from our capital infrastructure investment with our suppliers.