Komiti Ngā Wai Hangarua  | Wellington Water Committee

 

 

21 September 2021

 

 

 

Order Paper for the meeting to be held via Zoom

on:

 

 

 

Friday 24 September 2021 commencing at 10.00am

 

 

Membership

Mayor C Barry (Chair)

Hutt City Council

Mayor W Guppy (Deputy Chair)

Upper Hutt City Council

Mayor A Baker

Porirua City Council

Mayor A Beijen

South Wairarapa District Council

Ms M Pomare

Te Runanga o Toa Rangatira

Ms L Rauhina-August

Taranaki Whānui ki Te Upoko o Te Ika

Cr S Rush

Wellington City Council

Cr J van Lier

Greater Wellington Regional Council

Deputy Mayor G Emms

South Wairarapa District Council (Alternate)

Cr C Kirk-Burnnand

Greater Wellington Regional Council (Alternate)

Cr R Leggett

Porirua City Council (Alternate)

Deputy Mayor T Lewis

Hutt City Council (Alternate)

Cr I Pannett

Wellington City Council (Alternate)

Ms N Solomon

Te Runanga o Toa Rangatira (Alternate)

Deputy Mayor H Swales

Upper Hutt City Council (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

Terms of Reference

 

Purpose

The Wellington Water Committee ("the Committee") is established to:

§   Provide governance and leadership across issues which are related to the planning, delivery and management of water services to communities serviced by Wellington Water Limited;

§   Provide governance oversight of Wellington Water Limited, including by exhibiting good governance practice;

§   Provide a forum for the representatives of Wellington Water Limited's shareholders and mana whenua to meet, discuss and co-ordinate on relevant issues and, through their representatives, to exercise their powers; and

§   Strive for consistency across all client councils so all customers receive a similar level of service.

Status

The Committee is, for the purposes of the Local Government Act 2002, a joint committee of the Lower Hutt City Council, Porirua City Council, Upper Hutt City Council, Wellington City Council, South Wairarapa District Council and the Wellington Regional Council.

Specific responsibilities

The Committee's responsibilities are:

Governance oversight responsibilities

Shareholder and mana whenua governance oversight of Wellington Water Limited and of the network infrastructure for the delivery of bulk water, water reticulation, wastewater and stormwater services in the geographical areas of Wellington Water Limited's operations, including by:

§   Receiving and considering the half-yearly and annual reports of Wellington Water Limited;

§   Receiving and considering such other information from Wellington Water Limited as the Committee may request on behalf of the parties to the Shareholders and Partnership Agreement and/or receive from time to time;

§   Undertaking performance and other monitoring of Wellington Water Limited;

§   Considering and providing recommendations to the parties to the Shareholders and Partnership Agreement on proposals from Wellington Water Limited;

§   Providing co-ordinated feedback, and recommendations as needed, on any matters requested by Wellington Water Limited or any of the parties to the Shareholders and Partnership Agreement;

§   Providing recommendations to the parties to the Shareholders and Partnership Agreement regarding regional studies which the Shareholders need to be cognisant of;

§   Providing recommendations to the parties to the Shareholders and Partnership Agreement regarding water conservation;

§   Agreeing the annual Letter of Expectation to Wellington Water Limited;

§   Receiving, considering and providing agreed feedback and recommendations to Wellington Water Limited on its draft statement of intent;

§   Receiving, considering and providing recommendations to the parties to the Shareholders and Partnership Agreement regarding Wellington Water Limited's final statement of intent.

§   Agreeing when Shareholder meetings, or resolutions in lieu of Shareholder meetings, are required, without prejudice to Shareholder and Board rights to call meetings under Wellington Water Limited's constitution and;

§   Seeking and interviewing candidates for Wellington Water Limited's Board as needed and recommending to the holders of Class A Shares appointments and/or removals of directors of Wellington Water Limited;

§   Recommending the remuneration of directors of Wellington Water Limited;

§    Monitoring the performance of the Board of Wellington Water Limited; and

§   Providing recommendations to the parties to the Shareholders and Partnership Agreement regarding changes to these terms of reference, the Shareholders and Partnership Agreement and the constitution of Wellington Water Limited.

Membership

The membership of the Committee will be as specified in the Shareholders and Partnership Agreement.   With the exception of the Committee Members nominated by the Mana Whenua Partners Entities, each appointee must be an elected member of the appointing Shareholder.

Chairperson

The Chairperson and Deputy Chairperson will be elected by the Committee once all Committee members have been appointed.

Quorum

Subject to the below for Committee meetings to appoint directors of Wellington Water Limited, for a meeting of the Committee to have a quorum, a majority of Committee Members, or their appointed Alternates, must be present, and the number making up the majority must include at least an equal number of Shareholder appointed Committee Members as MWPE nominated Committee Members.

Where the Committee is providing a forum for the Shareholders to meet and exercise their powers in relation to Wellington Water Limited, the requirements of Wellington Water Limited's constitution will prevail.

Clause 11.3 of the company’s constitution provides that Directors shall be appointed and removed by the unanimous resolution of the Shareholders holding Class A Shares. For this matter the quorum for the Committee meeting is therefore attendance by all Committee Members (or their Alternates) for the holders of the Class A Shares.

Alternates

Each Committee Member appointed to the Committee must have an Alternate.

 

 

 

Other Shareholder attendee

Each Shareholder-appointed elected member Committee member will be entitled to invite an officer attendee to Committee meetings, provided however that the additional attendee will not have any voting rights on the Committee.

 

Decision-making

The Committee will strive to make all decisions by consensus.

In the event that a consensus on a particular matter before the Committee is not able to be reached, each Committee Member has a deliberative vote. In the situation where there is an equality of votes cast on a matter, the Chairperson does not have a casting vote and therefore the matter subject to the vote is defeated and the status quo is preserved.

Other than for those matters for which the Committee has effective decision-making capacity through these Terms of Reference, each Shareholder retains its powers to make its own decisions on matters referred to it by the Committee and on matters specified in Part 1 of Schedule 2 to the Shareholders and Partnership Agreement (for clarity, this means that only Shareholders have voting rights in relation to the matters specified in Part 1 of Schedule 2).

 

Secretariat services

Unless otherwise agreed from time to time by all of the elected member Committee Members, the Council for which the Chairperson is an elected member will provide secretariat services to the Committee.   The Chairperson will be responsible for managing the agenda at Committee meetings.

 

Standing Orders

The Standing Orders of the Council providing secretariat services to the Committee will apply to Committee meetings, subject to the provisions for meeting quorum and decision making as set out in these terms of reference taking precedence.

 

Remuneration

Each Shareholder will be responsible for remunerating the elected member Committee Member appointed by it to the Committee, and their Alternate, for any costs associated with those persons' membership on the Committee.

 

The Shareholders will also be responsible for remunerating (in equal shares) the Committee Members nominated by Mana Whenua Partner Entities, and their Alternates, and appointed to the Committee by the Shareholders, for any costs associated with those persons' membership on the Committee.

 

Administration

Reports to be considered by the Committee may be submitted by any of the Shareholders, any of the Mana Whenua Partner Entities, or Wellington Water Limited.

 

Duration of the Committee

In accordance with clause 30(7) of Schedule 7 to the Local Government Act 2002, the Committee is not deemed to be discharged following each triennial election.

Appendix

Common delegations by Shareholders

 

Governance oversight responsibilities

 

·       Each Shareholder will delegate to the Committee the responsibilities and powers necessary to participate in and carry out the Committee's governance oversight responsibilities.

 

Shareholders' responsibilities

 

·       Each Shareholder will delegate to its appointed elected member Committee Member and, in accordance with these terms of reference, that person's Alternate, all responsibilities and powers in relation to the agreement of:

 

O   when Shareholder meetings, or resolutions in lieu of Shareholder meetings, are required (without prejudice to Shareholder and Board rights to call meetings under Wellington Water Limited's constitution); and

 

o the appointment, removal and remuneration of Wellington Water Limited's directors.

 

 

    


                                                                       8                                                   

HUTT CITY COUNCIL

 

Komiti Ngā Wai Hangarua  | Wellington Water Committee

 

Meeting to be held via Zoom

on Friday 24 September 2021 commencing at 10.00am.

 

ORDER PAPER

 

Public Business

 

1.       OPENING FORMALITIES - KARAKIA TĪMATANGA (21/1481)

Kia hora te marino

Kia whakapapa pounamu te moana

He huarahi mā tātou i te rangi nei

Aroha atu, aroha mai

Tātou i a tātou katoa

Hui e Tāiki e!

May peace be wide spread

May the sea be like greenstone

A pathway for us all this day

Let us show respect for each other

For one another

Bind us together!

 

2.       APOLOGIES 

3.       PUBLIC COMMENT

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.       CONFLICT OF INTEREST DECLARATIONS

Members are reminded of the need to be vigilant to stand aside from decision making when a conflict arises between their role as a member and any private or other external interest they might have.     

5.       Chair's Statement (21/1367)

          Verbal update by the Chair.

6.       Minutes

19 July 2021                                                                                            10    

7.       Water Reforms - Preliminary Regional View (21/1368)

A verbal update will be provided.

8.       Update on Taumata Arowai and Water Services Regulation Disclosures (21/1459)

Report No. WWC2021/4/19 (3) by Wellington Water Limited  35

Chair’s Recommendation:

“That the recommendations contained in the report be endorsed.”

 

9.       Company Update (21/1448)

Report No. WWC2021/4/20 (3) by Wellington Water Limited  46                                                                                                             

 Chair’s Recommendation:

“That the recommendation contained in the report be endorsed.”

 

10.     Update on Capital Works Programme (21/1450)

Report No. WWC2021/4/225 (3) by Wellington Water Limited                                                                                                    104

Chair’s Recommendation:

“That the recommendations contained in the report be endorsed.”

 

11.     Update on Market Conditions (21/1453)

Report No. WWC2021/4/226 (3) by Wellington Water Limited                                                                                                    111

Chair’s Recommendation:

“That the recommendations contained in the report be endorsed.”

 

12.     Performance Report on Value for Money (21/1456)

Report No. WWC2021/4/227 (3) by Wellington Water Limited                                                                                                    118

Chair’s Recommendation:

“That the recommendations contained in the report be endorsed.”

 

 

 

 

13.     Information Item - Wellington Water Committee Work Programme 2021 (21/1366)

Report No. WWC2021/4/122 (3) by the Democracy Advisor  152

Chair’s Recommendation:

“That the recommendation contained in the report be endorsed.”

 

14.     CLOSING FORMALITIES - KARAKIA WHAKAMUTUNGA (21/1482)

Whakataka te hau ki te uru

Whakataka te hau ki te tonga

Kia mākinakina ki uta

Kia mātaratara ki tai

E hī ake ana te atakura

He tio, he huka, he hau hū

Tīhei mauri ora.

Cease the winds from the west
Cease the winds from the south
Let the breeze blow over the land
Let the breeze blow over the ocean
Let the red-tipped dawn come with a sharpened air. 
A touch of frost, a promise of a glorious day.

 

    

 

 

 

 

 

Annie Doornebosch

Democracy Advisor

DEMOCRATIC SERVICES

HUTT CITY COUNCIL

 

 

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Komiti Ngā Wai Hangarua | Wellington Water Committee

 

Minutes of a meeting held in the Council Chambers,

2nd Floor, 30 Laings Road, Lower Hutt on

 Monday 19 July 2021 commencing at 1.00pm

 

 

 

PRESENT:

Mayor C Barry (Chair) (HCC)

 

Mayor W Guppy (Deputy Chair) (UHCC)

 

Mayor A Baker (PCC)

 

Mayor A Beijen (SWDC)

 

Ms L Rauhina-August (Taranaki Whānui ki Te Upoko o Te Ika)

 

Cr S Rush (WCC)

 

Cr J van Lier (GWRC)

 

APOLOGIES:                   There were no apologies.

 

IN ATTENDANCE:         Ms N Hooper, Observer, SWDC

Deputy Mayor H Swales (UHCC Alternate)

Deputy Mayor G Emms (SWDC Alternate)

Cr C Kirk-Burnnand (GWRC Alternate)

Cr R Leggett (PCC Alternate)

Deputy Mayor T Lewis (HCC Alternate)

Mr B Bayfield Chief Executive Officer, Taumata Arowai

Mr C Crampton, Chief Executive, Wellington Water Limited

Mr G Dangerfield, Board Chair, Wellington Water Limited

Mr M Underhill, Board Member, Wellington Water Limited

Ms L Carroll, Board Member, Wellington Water Limited

Ms J Alexander, Group Manager, Network Strategy and Planning, Wellington Water Limited

Mr M Ford, Group Manager, Business Services/Chief Financial Officer, Wellington Water Limited

Ms S Cuthbert, Company Secretary, Wellington Water Limited

Mr D de Boer, Director of Regulatory Services, Wellington Water Limited

Other representatives from Wellington Water Limited

Ms S Gainsborough, General Manager, Corporate Services, GWRC

                                           Ms B McKerrow, Chief Executive, WCC (part meeting)

Ms W Walker, Chief Executive, PCC

Mr D List, Project Director, PCC

Mr B Hodgins, Strategic Advisor, HCC (part meeting)

Ms K Stannard, Head of Democratic Services, HCC

Mrs A Doornebosch, Democracy Advisor, HCC

 

PUBLIC BUSINESS

 

1.       APOLOGIES 

There were no apologies.

2.       PUBLIC COMMENT

There was no public comment.

3.       CONFLICT OF INTEREST DECLARATIONS  

          There were no conflict of interest declarations.

4.       Minutes

Resolved:   (Mayor Barry/Mayor Beijen)                                Minute No. WWC 21301

“That the minutes of the meeting of the Komiti Ngā Wai Hangarua|Wellington Water Committee  held on Monday, 17 May 2021, be confirmed as a true and correct record subject to an amendment to Ms L Rauhina-August’s name which had been spelt incorrectly.”

    

5.

Wellington Water Limited - Approach to Regulation (21/1096)

Report No. WWC2021/3/173 by Wellington Water Limited

 

Mr Geoff Dangerfield, Chair, Wellington Water Limited Board elaborated on the report.  He noted the report outlined how Wellington Water Limited (the Company) was preparing for the new environment. He highlighted issues for future investment and the various councils’ work around their Long Term Plans.  

Mr Bill Bayfield, Chief Executive Officer of Taumata Arowai provided an update presentation on the establishment and work to date of Taumata Arowai, attached as pages 12 to 21 to the minutes.

In response to questions from members, the Chief Executive Officer of Taumata Arowai noted many smaller district councils were performing very well in regard to new regulation requirements. He highlighted the new Water Services Bill would require all water suppliers to provide safe drinking water.  He said further discussions would be conducted in regard to the new risk management approach whilst considering Te Mana o te Wai.  He said Taumata Arowai would not be involved in the supply of bottled water.  He noted new management systems would be considered over the transition, reporting a national picture for New Zealand. He advised any levies would be determined in conjunction with the Department of Internal Affairs.  He noted the Water Services Bill had drawn information from a variety of agencies from World Health Organisation standards, whilst considering ownership, legal requirements and a consenting regime.

The Director of Regulatory Services, Wellington Water Limited elaborated on the Approach to Regulation presentation.

In response to questions from members, the Director of Regulatory Services advised feedback from both the Company and other Councils would be gathered and reported to the Committee going forward.

Mayor Barry acknowledged the work completed to date to prepare for the new Water Services Bill.  He thanked Wellington Water Limited representatives for working collaboratively to develop future work plans to date.

 

Resolved:   (Mayor Barry/Mayor Baker)                                   Minute No. WWC 21302

“That the Committee:

(1)   notes that Wellington Water Limited has been proactive in preparation for regulation;

(2)   notes that Wellington Water Limited is building its regulatory maturity ahead of full compliance from 1 April 2022; and

(3)   notes that the Water Services Bill will carry risks for Wellington Water Limited and for Council asset owners who make decisions on investments in drinking water assets.”

 

6.

Verbal Update on Water Reform

The Project Director, Porirua City Council provided a water reform update presentation attached as pages 22 to 25 to the minutes.

In response to questions from members, the Chief Executive of Porirua City Council outlined the engagement that would be conducted over the next eight weeks with all Councils.  She said Councils were expected to provide a preliminary position to prepare for future consultation.  She noted that central government required a clear picture before developing further processes. 

In response to a question from a member, the Project Director, Porirua City Council could not confirm if any of the expected costs would be derived from ratepayers. 

Members agreed to work collaboratively to provide a preliminary regional view for future consultation on water reform, and report back to the Committee.

 

Resolved:    (Mayor Barry/Cr Rush)                                            Minute No. WWC 21303

 “That the Committee notes the update on water reform.”

 

 

7.

Wellington Water Limited - Final Statement of Intent (21/1093)

Report No. WWC2021/3/170 by Wellington Water Limited

 

The Chair of the Wellington Water Limited (the Company) Board elaborated on the report.  He noted the Statement of Intent was a critical document between the Company and the Committee as it prioritised its intentions and identified where investment would be made for the next three years.  He highlighted amended Department of Internal Affairs service measure targets based on investment levels were recommended but not all Councils adopted these amendments.  He said as a result not all measures would be met.  He noted there remained a number of risks to service levels, asset development, investment in infrastructure and reactive maintenance.  He highlighted once the Tranche 1 funding from central government ended in March 2022 there would be a funding gap.

In response to questions from members, the Chair of the Company’s Board noted there were some capacity restraints as a result of the current labour shortage.  He highlighted plans were in place to mitigate this issue as much as possible.  He said that water metering in the Company’s view, would need to be addressed.

In response to a question from a member, the Chief Executive of the Company said investment had been made in some small area water meters to obtain an indication of usage.  The results indicated usage was less than thought, which meant there was more leakage.   He noted that some investment had been made to mitigate this. 

 

Resolved:   (Mayor Barry/Mayor Beijen)                                   Minute No. WWC 21304

“That the Committee receives Wellington Water Limited’s final Statement of Intent 2021-2024 attached as Appendix 1 to the report.”

 

8.

Water Services Investment 2021-2024 (21/1104)

Report No. WWC2021/3/176 by Wellington Water Limited

 

The Group Manager, Network Strategy and Planning, Wellington Water Limited (the Company) elaborated on the report.  She highlighted the insights provided from a regulatory perspective from all Councils.  She said every Council had made a lift in investment and the report set out key insights on the risk to investment from a regional perspective.  She noted the intent to work with each Council and manage future challenges over the next three years. 

In response to questions from members, the Group Manager, Network Strategy and Planning, Wellington Water Limited said the Company would be focussing more investment on service challenges.  She advised that there could be some disruption to customers as issues were worked through.  She noted it would be long period of time before all issues were rectified. 

Members asked the Company to provide a traffic light system for reporting theses issues to the Committee going forward.  They acknowledged the assistance the Company had provided to the community over the recent weekend of unsettled weather. 

 

Resolved:   (Mayor Barry/Mayor Baker)                                   Minute No. WWC 21305

“That the Committee:

(1)   notes the $300M operational and $585M capital investments Wellington Water Limited will make over the 2021-24 period, which represents a significant increase compared with the 2018-2021 period;

(2)   notes even with the increased investment it will take years to address the backlog of renewals in the ageing pipe network, so bursts and leaks will continue, placing pressure on operational budgets and increased risk to delivery of water services;

(3)   notes the output range for the region’s capital programme is forecast to be $145M-$189M in year one and will progressively ramp over during years two and three to deliver the full capital programme;

(4)   notes there are additional emerging pressures that compound the budget risks, including meeting the new requirements of Taumata Arowai and increasing water use as a region; and

(5)   notes that Wellington Water Limited will continue to work closely with councils, be clear on the specific risks for their communities and how best to manage the impacts.”

 

9.

Wellington Water Limited Update June 2021 (21/1105)

Report No. WWC2021/3/177 by Wellington Water Limited

 

The Chief Executive, Wellington Water Limited (the Company) elaborated on the report.  He noted once agreed, the Company Promise document would be available on the Company’s website.  He said the Company was concerned about the current chronic skills shortage, and advised they were employing contractors at present to mitigate this.  He highlighted the proposed Fulton Hogan training programme for 40 young people to be trained and then employed by the Company.

In response to questions from members, the Chief Executive of the Company advised the Company was working with Wellington City Council to deliver a possible sludge facility.  He said as part of the Service Delivery Strategy, initiatives would be put in place to ensure the retention of local clients.

 

Resolved:    (Mayor Barry/Mayor Beijen)                                  Minute No. WWC 21306

“That the Committee receives and notes the report.”

 

10.

Wellington Water Limited - Service Delivery Strategy Review - Findings and Recommendations (21/1107)

Report No. WWC2021/3/178 by Wellington Water Limited

 

The Chief Executive Officer, Wellington Water Limited (the Company) elaborated on the report.

In response to questions from members, the Chief Executive Officer of the Company advised as the Company completed the Service Delivery Strategy (SDS), they would share experiences with South Wairarapa District Council on ways to manage wastewater over the next five years.  He said the priority for the next two months would be around skills and capability development in the SDS.  He advised at present there was no requirement for contracted staff to meet certain skill levels, and that this would be a way to uplift capability in three years time.  He noted an independent review on water treatment highlighted the Company did not have a good value for money framework and plans were in place to address this.  He highlighted work required with wastewater treatment providers. He said the Company was requesting an improvement plan and monthly reporting and the requirement to report back to the Board of the Company.  He advised the Company would complete an asset condition report from all plants and report back results to future Committee meetings.

 

Resolved:     (Mayor Barry/Mayor Guppy)                               Minute No. WWC 21307

“That the Committee:

(1)   notes that this reporting is provided as part of the Value for Money reporting to the Committee;

(2)   notes the overall performance of the Service Delivery Strategy attached as Appendix 1 to the report;

(3)   notes the multiple changes in the operating environment since the Service Delivery was implemented and that if Wellington Water Limited had not implemented these changes, it could not have provided the level of service and value for money it currently does; and

(4)   endorses the recommendations contained in the Service Delivery Strategy review as Appendix 1 attached to the report for inclusion into the next version of the Service Delivery Strategy.”

Mayor Beijen abstained from voting on the matter.

 

11.

Wellington Water Limited - Annual General Meeting and Audit Update (21/1095)

Report No. WWC2021/3/172 by Wellington Water Limited

 

The Chair of the Wellington Water Limited Board noted that an update on audit issues would be provided at the upcoming Annual General Meeting (AGM).  He highlighted delays the Audit office were experiencing and that legislation would be passed to allow  more time to report in future. 

The Chief Financial Officer and General Manager Business Services, Wellington Water Limited elaborated on the report.  He noted improvement plans had been incorporated into the Asset Management Plans.  He said a question and answer programme had been added to ensure management of faults, and a customer satisfaction measure had also been added.  He highlighted the Company was reliant on council’s reporting in order to analyse results.

 

Resolved:   (Mayor Guppy/Mayor Beijen)                                 Minute No. WWC 21308

“That the Committee;

(1)     notes and receives the report;

(2)     notes an audit improvement plan has been implemented;

(3)     notes that the draft interim audit report to the Wellington Water Limited Board for the 2020/2021 year has not been received to date;

(4)     notes that the 2020/2021 audit opinion will likely be non-standard; and

(5)     notes an Annual General Meeting will be held later in 2021.”

 

12.

Meeting Schedule for the remainder of 2021 (21/1082)

Memorandum dated 6 July 2021 by the Head of Democratic Services, Hutt City Council

 

The Divisional Manager, Democratic Services elaborated on the memorandum.

Members agreed to conduct a workshop early in 2022 in South Wairarapa and invite other South Wairarapa District Council representatives to attend as observers.

 

Resolved:   (Mayor Barry/Mayor Baker)                                   Minute No. WWC 21309

“That the Committee:

 

(1)   agrees to adopt the following meetings dates for the remainder of 2021 as follows:

 

(a)     Friday, 24 September 2021; and

(b)     Monday, 29 November 2021;

 

(2)   confirms the venue for its meetings will be the Council Chambers, Hutt City Council, 30 Laings Road, Lower Hutt; and

 

(3)   agrees to live cast the public part of its meetings.”

13.     EXCLUSION OF THE PUBLIC

Resolved:    (Mayor Barry/Mayor Baker)                                 Minute No. WWC 21310

 

“That the public be excluded from the following parts of the proceedings of this meeting, namely:

14.     Minutes 17 May 2021

The general subject of each matter to be considered while the public is excluded, the reason for passing this resolution in relation to each matter, and the specific grounds under section 48(1) of the Local Government Official Information and Meetings Act 1987 for the passing of this resolution are as follows:

 

(A)

(B)

(C)

 

 

 

General subject of the matter to be considered.

Reason for passing this resolution in relation to each matter.

Ground under section 48(1) for the passing of this resolution.

 

 

 

 

 

 

Minutes of the Komiti Ngā Wai Hangarua |Wellington Water Committee held on 17 May 2021.

The withholding of the information is necessary to protect the privacy of natural persons. (s7(2)(a)).

That the public conduct of the relevant part of the proceedings of the meeting would be likely to result in the disclosure of information for which good reason for withholding exist.

 

This resolution is made in reliance on section 48(1) of the Local Government Official Information and Meetings Act 1987 and the particular interest or interests protected by section 6 or 7 of that Act which would be prejudiced by the holding of the whole or the relevant part of the proceedings of the meeting in public are as specified in Column (B) above.”

 

 

 

There being no further business the Chair declared the public portion of the meeting closed at 3.04 pm.  The non-public portion of the meeting closed at 3.07pm.

 

 

 

 

 

Mayor C Barry

CHAIR

 

 

 

 

 

 

CONFIRMED as a true and correct record

Dated this 24th day of September 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  


                                                                             38                                  24 September 2021

Komiti Ngā Wai Hangarua  | Wellington Water Committee

10 September 2021

 

 

 

File: (21/1459)

 

 

 

 

Report no: WWC2021/4/19 (3)

 

Update on Taumata Arowai and Water Services Regulation Disclosures

 

 

 

 

Purpose of Report

1.       To present the early version of the draft regulatory assurance disclosure of Wellington Water Limited (WWL) drinking water system in South Wairarapa.

 

Recommendations

That the Committee:

(1)        notes that the regulation of drinking water under Taumata Arowai is likely to begin on 1 April 2022;

(2)        receives Wellington Water Limited’s draft assurance disclosure for the South Wairarapa drinking water treatment plant; and

(3)        notes that the ongoing impacts on councils and Wellington Water Limited (the Company) as a result of the Water Services Bill and regulations will be monitored and reported to the Committee as the legislation progresses.

 

 

 

 

 

Context

2.       Following a camplyobacter outbreak in the Havelock North drinking water system, a Government Inquiry recommended that a drinking water regulator be established to regulate the provision of drinking water to all New Zealanders.

3.       Taumata Arowai, the water services regulator, was established in March 2021 and the Water Services Bill is likely to be passed into law in November 2021. The Bill sets out the minimum standards for the provision of drinking water to New Zealanders as well as the requirements for providing assurance about drinking water systems. Taumata Arowai will also regulate and monitor the performance of wastetwater and stormwater systems under a Supplementary Order Paper that was added to the Bill early in September.

4.       Up until this point the Ministry of Health has been the drinking water regulator. It is expected that on 1 April 2022 Taumata Arowai will take over from the Ministry of Health as the regulator of drinking water, though this date may slip due to the need to enact a considerable number of regulations. Taumata Arowai will oversee a significant lift in the regulation of drinking water.

5.       In late 2020, Wellington Water Limited (the Company) established a Regulatory Services Directorate to help the Company’s owners and the Company upgrade the drinking water system and to provide assurance that water services meet all the requirements of the regulator.

Key Messages

6.       We suggest the key messages as follows:

(a) The Commission of Inquiry into the Havelock North Drinking Water failure recommended that a stand-alone drinking water regulator be established for New Zealand which would establish minimum standards for all drinking water operators, require them to be transparent about their performance and require them to assure the public their drinking water systems have integrity.

(b) Taumata Arowai has been established as a Crown Entity.  It is likely to begin operations form 1 April 2022; and

(c) The Company has been working on upgrading its drinking water systems to ensure these systems meet all the requirements of Taumata Arowai from 1 April 2022, or detail the plans to meet the requirements if this is to occur after 1 April 2022.

Draft Disclosure Statements

7.       Drinking water regulations set the minimum performance standards and the legal requirements on water services entities providing the minimum standards.  They also require water services entitites to assure the public and the regulator that safe drinking water is being provided.

 

8.       The Company wants to be an ethical water services operator by being fully open and transparent about the performance of its drinking water system. In doing so, the Company should be able to achieve a solid working relationship withn Taumata Arowai.

9.       Taumata Arowai require that Assurance Disclosures are prepared for specific aspects of the Company’s drinking water systems – water sources, treatment plants, bulk water systems and distribution systems. Similar requirements apply to wastewater systems, so it is likely that the Company will need to prepare 20 to 30 evidence based disclosures either quarterly or annually.

10.     Periodic performance reporting sets out the overall compliance with specific minimum standards set by Taumata Arowai. These reports provide detailed information to the regulator.

11.     Assurance reporting, on the other hand, assures the public and Taumata Arowai of the integrity of the drinking water system by setting out how the water service entity provides safe drinking water. This report focuses on risk, data integrity, personnel qualifications and audit, as well as water source and water safety plans and their implementation.

12.     Appendix 1 attached to the report provides an example of the 2021/22 draft assurance report for the Martinborough water treatment plant. This report is a practice example, being the Company’s forecast of what will be necessary by 1 April 2022. The Wellington Water Committee will see that not everything is in place to meet all requirements. The Company is working to close these gaps, some by 1 April 2022 and others over the following 12 months.

13.     Appendix 2 attached to the report provides a sample of the specific evidence that sits behind the assurance disclosure statement.

14.     Appendices 3 and 4 attached to the report are for Committee information.  Appendix 3 provides an illustration of the current monitoring requirements under the Ministry of Health and those that result from the new Water Services Bill, while appendix 4 provides an overview of confidence with the integrity of Wellington Water Limited data. This was prepared in response to an earlier Board question.

 

Appendices

No.

Title

Page

1

Assurance Disclosure Martinborough WTP

41

2

Briefing Note on Evidence for Disclosure

43

3

Briefing Note on Water Services Bill

44

4

Briefing Note on Data Confidence

46

    

 

 

 

 

 

 

 

Author: External Author (Wellington Water Ltd)

WW

 

 

 

 

 


Attachment 1

Assurance Disclosure Martinborough WTP

 


 


Attachment 2

Briefing Note on Water Treatment Plant Evidence

 

 

Martinborough Water Treatment Plant Evidence

 

Under the new standards and rules that Taumata Arowai has drafted there are a total of 79 that apply to the Martinborough Treatment Plant and system. Some are existing standards, but the majority are new. Only a limited amount of performance data can be collected for the new standards right now because new equipment needs to be installed. This will be completed between now and April 2022 and in the meantime the compliance rating will be low (red in the Attachment A disclosure statement). These will change to green as our capability improves from the installation programme.

 

The table below lists a sample of the 29 new standards that apply to the ‘Distribution’ part of the Martinborough system (overall orange in Attachment A).

 

DW Rule

Rating

Remedial action

D3.23

red

* New systems, data capture, equipment, processes.

D3.24

red

* New systems, data capture, equipment, processes.

D3.25

red

* New systems, data capture, equipment, processes.

D3.26

green

* This is embedded in ID (Infrastructure Data) rather than written. An assurance statement will be required to meet this requirement.

D3.27

green

* This is embedded in ID (Infrastructure Data) rather than written. An assurance statement will be required to meet this requirement.

D3.28

green

* This is embedded in ID (Infrastructure Data) rather than written. An assurance statement will be required to meet this requirement.

D3.29

orange

* This is embedded in ID (Infrastructure Data) rather than written. An assurance statement will be required to meet this requirement.

D3.3

red

* New systems, data capture, equipment, processes.

D3.4

red

* New systems, data capture, equipment, processes.

D3.5

red

* New systems, data capture, equipment, processes.

D3.6

red

* New systems, data capture, equipment, processes.

 

The remedial action column sets out what will be required to bring this part of the system into compliance. These actions are being sized, prioritised as must do, or should do, and grouped for funding and implementation.

 

 

 


Attachment 3

Briefing Note on Water Services Bill

 


 


Attachment 4

Briefing Note on Data Confidence

 

 


Attachment 4

Briefing Note on Data Confidence

 

 


53

 

Komiti Ngā Wai Hangarua | Wellington Water Committee

09 September 2021

 

 

 

File: (21/1448)

 

 

 

 

Report no: WWC2021/4/20 (3)

 

Company Update

 

 

 

 

Purpose of Report

1.       To provide a general update on the activities of Wellington Water Limited (the Company).

 

Recommendations

That the Committee receives and notes the report.

 

2021/22 Statement of Intent (SOI)

2.       The Committee received the final 2021/22 SOI at its last meeting. The 2021/22 SOI has now been published and becomes the blue print for the Company going forward.

3.       Around the third week in October (2021) you will receive the 2021/22 Quarter 1 Company Performance Report.  Rather than wait for a formal meeting of the Wellington Water Committee, this report will be provided in real time and then placed on the subsequent agenda of the next Wellington Water Committee meeting for everybody’s records. It is hoped this will enable Committee members to consider the performance of the Company as close as possible to the completion of the quarter, rather than some weeks later.

 

 

Key Messages

4.       Another Covid-19 outbreak has affected the three waters business for about three weeks. Once again the Company redirected all efforts to the front line to ensure ongoing provision of essential services. The biggest impact of the outbreak will be on the capex programme which will have slowed by about $10M (gross estimate) across the region.

5.       The first of 20 young people to be trained in water services will be selected over the coming months. These individuals will then undertake a six week training programme before being employed into the three waters sector. Another 20 will be trained by 30 June 2022.

6.       The electrical sector experienced a rare set of conditions which resulted in 34,000 homes being disconnected from the power supply. This helps focus the Wellington metropolitan region on the steadily increasing risk it carries providing residents with drinking water during a very dry summer due to population growth. The Company will define minimum drought levels of service for customers to assess any additional investment needed to meet customers expectations during drought.

7.       Approximately $30M of the first $39M promised by the Government through water reform, should councils agree to proceed, will be needed to meet a deficit in year 2 and 3 of the 2021/24 Long Term Plan.

2020/21 SOI

8.       The Company received the interim audit from Audit New Zealand for the non financial and financial performance, attached as Appendix 2 to the report.  It forecasts a standard audit opinion except for the five Department of Internal Affairs (DIA) measures qualified last year, of which two are controlled by councils and three are controlled by the Company.

9.       The Wellington Water Board does not agree with the interim audit opinion on the five DIA measures and has provided a rebuttal to Audit New Zealand contained in Board paper 057-03 (attached as appendix 1 to the report) which was circulated to the Wellington Water Committee Chair.

10.     The next step is the Audit Report which is due by the end of September 2021. It is very unlikely the Audit Report will be received by this date due to resourcing issues within Audit New Zealand caused by the latest Covid-19 Delta variant outbreak lasting for three weeks in Level 3 and 4. The Company will post its Annual Report on the website by the end of September without an audit opinion if this is not received. Once the audit opinion is received the Company will hold an Annual General Meeting to coincide with the November 2021 Wellington Water Committee meeting. After this meeting the Annual Report on the website will be updated.

Covid-19 Delta Variant

11.     Following the discovery of the Covid-19 Delta variant in Aotearoa, the country went into level 4 lockdown for two weeks and level 3 for one week. Operating under level 4 has been well practiced by the company and its suppliers so the transition to working under lockdown was seamless.

12.     There was also less complexity to deal with this time round as only one capex project was deemed “critical and urgent” whereas last time there were eight.

13.     Following the drop down to level 3 on 31 August 2021 most capex projects resumed using the safety protocols prescribed by the Construction Accord. Even though the lockdown only occurred for three weeks there will be an impact on the 2021/22 capex programme of around $10M (very gross estimate).

14.     The lockdown has impacted on our output over the last three weeks. We were due to report on our overall condition assessment system and the final service delivery strategy for the future so these will now be delivered at the November Committee meeting.

Service Delivery Strategy

15.     We are working on updating our Wellington Water Service Delivery Strategy in order to address the gaps identified in our review of the last five years, respond to our changing environment and address the growing work programme the Company needs to deliver. This includes introducing a new set of strategic foundations to frame our procurement approach going forward in the areas of: Social Procurement; Value for Money; Best Fit; and Growth.

16.     We will be taking a collaborative approach to the development of the new strategy, which will include a series of facilitated workshops with both internal and external stakeholders over September / October.   External stakeholders will include: the consultancy and contractor panels, the Alliance, Veolia, and Fulton Hogan. This level of engagement will help ensure our new service delivery is in the best position to generate long-lasting benefits for our community.

17.     The refreshed Service Delivery Strategy is planned for presentation to the Wellington Water Committee meeting in November.

Very High Criticality Assets

18.     During the 2020/21 financial year we completed all the preliminary health assessments for very high criticality assets.  At about 7% of the network very high criticality assets are those assets that play an integral part in the full functioning of the networks.  If a high criticality asset failed then we would expect significant customers to be without service or widespread environmental pollution.  The health assessments were based on existing data and about 20% of the assets surveyed.  As you know there were no emergency situations found during the 20% asset inspection.  During the 2021/22 year we will be completing all the field surveys.  To the end of August we have completed 32% of the assets surveyed and again found no emergency situations.

 

 

Wellington Water Committee Focus Areas

19.     The Wellington Water Committee has provided three focus areas for the Company, as follows:

a.   Capex Delivery (covered in a separate paper)

b.   Increasing the capability of the three waters workforce; and

c.   Water reform (as it affects the Company).

Workforce Capability

20.     There are three separate activities regarding our workforce, as follows:

a.   Setting minimum pay rates for specific positions;

b.   Attracting 40 keen school leavers into three waters; and

c.   Establishing a skills training facility.

21.     Our workforce suffers from an unstructured approach to frontline jobs. We will soon have finished a structured approach - from school leaver/trainee, through to service person, team leader, to the manager - and set appropriate pay rates for each position where the holder has met all the minimum training requirements for the job. Setting the actual pay rate has been difficult because we also have to factor in our local market conditions and the ongoing labour shortage forecast for New Zealand as well as the market input we get from strategic pay.

22.     It is proposed to raise the average rate of nominal positions over the next two years. For example, the current average hourly rate for a serviceperson might be currently paid $25/hour. Over the next two years we would aim for this rate to be lifted. For comparison purposes, a truck driver with a class 4 licence may earn between $25-28/hour; with a class 5 licence between $28-32/hour; a plumber between $25-32/hour; an electrician up to $42/hour; a painter up to $27/hour; and a builder up to $40/hour.  In general, rates have been steadily increasing over the past few years – now with the new immigration policy, you cannot employ anyone from abroad under $27.50/hour.  The Wellington Water Board will consider the proposal at its meeting on 23 September 2021 so the Company will be able to provide an update to the Committee on the day of this meeting.

23.     The Company is about to start recruiting our first 40 school leavers to be admitted into an entry level infrastructure training course. At six weeks long it provides individuals with the basics before being employed into our service delivery offerings and from there enrol in specific water and wastewater qualifications to begin working toward the minimum qualifications and experience to be a Three Waters Technician. We expect the first intake to proceed through a six week course directly after Christmas 2021 with the second to proceed through in 2021/22.

 

24.     All councils have been asked to review their land holdings for land that could be re-purposed into a skills training facility for practice learning as staff progress through their water and wastewater qualifications and generally continue to lift the capability of our staff. Funding has still to be raised for the facility so not a lot of progress to report on. The Company still see the Silverstream site as the most promising.

Water Reform

25.     The Company believes our staff are reasonably settled at the moment regarding water reform. We have set up multiple forums to ensure all our staff have the infomation they need and someone to answer their questions. Amelia East, the DIA transition lead, has agreed to talk to staff every four weeks which helps. It is believed that the large council work programme to be delivered over the next three years helps to keep everyone focused.

Taumata Arowai a step closer

26.     The Water Services Bill has passed through the Health Select Committee and is back in the House. It is on schedule for becoming law by November 2021. Following this, Taumata Arowai will spend a couple of months consulting on its detailed rules before all the regulations are formalised. It is still anticipated Taumata Arowai will take over as the regulator from the Ministry of Health on 1 April 2022.

30 Year Investment Plan

27.     On 13 of September 2021 the Water Committee held a workshop with the Wellington Water Board and īnvited iwi representatives to discuss the investment needed to address the challenges and issues facing the provision of water services over the next 30 years. This followed on from the publication of the councils' 2021/31 Long Term Plans and consistent feedback from customers that they are interested in councils' long term planning for the water services. 

28.     The Workshop went well, with good alignment on the issues and the proposed investment pathway between iwi, councils and the Board.  A key theme that emerged from the discussion was the need to act collectively as a region, especially on key opportunities such as universal water meters and the adoption of water sensitive design practices. There was also a strong interest in pursuing distributed technology approaches ahead of major capital infrastructure investment; pursuing the required transformation faster than what had been outlined in the discussion document; and an increased focus on customer education.

29.     The public discussion document on the regional 30 year investment pathway will be provided to the Committee in November 2021 for approval, with publishing to follow in early 2022.

30.     The presentation from the Workshop is included in Appendix 3 attached to the report.

 

Fiscal Stimulus

31.     All owner councils agreed to participate in the first stage of water reform and as a result qualified for $47.3M of funding to be spent by 31 March 2022.  As of 30 June 2021 $14.4M of these funds were expended.  This low spend rate reflects the unplanned state of these works being items pulled forward in Council’s Long Term Plans. Planning is now largely complete so we should see a building of expenditure over the latter part of 2021.  As of August 2021 expenditure was $21.4M.  Appendix 4 attached to the report shows the details of the fiscal stimulus package.  The Company has suggested a claim could be made for deferral of delivery to 31 April 2022 due to Covid-19 and we have always suggested 30 June 2022 was much more appropriate considering the short time to spend the funds given.

Operational Matters

32.     An update on key operational risks is as follows:

a.  Water Security

The ability to provide unrestricted drinking water services in a normal summer is trending negative due to a steadily increasing population and high demand. More frequent, lengthy and severe restrictions are expected in a summer drought. Two activities will help: Te Marua Plant update (some 2-3 years away) and finding and fixing leaks. Overnight flows are a key indicator performance here. The latest results show we continue to lose ground (night flows have increased by around 60L/s compared to this time last year) so renewed efforts are being planned.

The recent power blackouts to 34,000 homes across New Zealand due to rare supply conditions reminds us of the very high risk we carry providing drinking water to all customers in severe drought. We propose to complete a review of a low likelihood/high consequence event in Wellington and specific minimum levels of service to provide to communitites. This might require additional investment if we cannot meet this stated level of service.

Thinking about setting minimum drought levels of service is not that easy to understand but we have a fantastic example in the above ground emergency water supply system in case of an earthquake. A minimum level of service of 20 litres per person per day within 500 metres of homes was decided and the infrastructure was built to achieve this – a first for New Zealand as we understand.

 

b.  Wastewater Treatment Plants

Over the last six months a number of the region’s wastewater treatment plants have been out of performance specifications due to various issues with the plants. The service delivery model used split accountability is as follows:

a)       Veolia are responsible for operating the plants; and

b)       Councils are responsible for renewing the assets.

 

     Part of the performance problems lie with Veolia and part lies with the condition of assets. The Company has increased the level of asset condition assessment and renewal to reduce the chance of asset failure contributing to performance outside consenting range. As at the end of August the performance of the plants has improved so there is more confidence, however generally plants perform better over winter than summer.

 

c.  Cyber security

     Good mitigation plans are in place, however the key bit of work is how to respond should a full cyber security attack be successful on the control systems which automatically control the delivery of drinking water and treat and discharge wastewater. A project team is to be set up to evaluate how a rebuild of the system would occur in the event of a damaging full cyber attack.

 

33.     Other matters worth mentioning are:

a.  Opex deficit

All council Long Term Plan (LTP) opex budgets carry a deficit in the 2022/23 and 2023/24 financial years. This was a concious choice of councils as they assumed additional fiscal stimulus would be available during these years. Of the “Better off funding” proposed by Government for the owners some $30M of the $39M assigned to the region would be needed or councils would need to lift LTP Opex or reduce levels of service. Ongoing discussions with councils are occurring.

 

b.  Capex delivery

     As the Company has presented its capex plans to councils the total capacity of the sector has come up as the constraint to delivery. In 2019/20 the Company delivered $96M of capex and in 2020/21 $131M. The total of all council capex for 2021/22 is nearly $200M which is beyond the capacity of the system to deliver. The Company has submitted that it will complete all capex over the three years however it will do this by steadily increasing capacity over three years. Therefore councils capex programme, in some cases, will be less than budgeted in year one.

 

c.  Sludge minimisation facility

     Wellington City Council have confirmed to the Company they will deliver the sludge project. This means the risk of this project affecting delivery on the three year capex programme from a Wellington Water resources point of view has gone.

 

 

 

Appendices

No.

Title

Page

1

Interim Audit Report

56

2

Audit New Zealand Report to the Board - Interim Audit of Wellington Water Limited

65

3

Developing a Regional 30 Year Pathway for 3 Waters Investment - Presentation to Wellington Water Committee Workshop 13 September 2021

80

4

Stimulus Funding Programme Overview

101

    

 

 

 

 

 

 

 

Author: External Author (Wellington Water Ltd)

WW

 

 

 

 


Attachment 1

Interim Audit Report

 


 


 


 


 


 


 


 


 


Attachment 2

Audit New Zealand Report to the Board - Interim Audit of Wellington Water Limited

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Attachment 3

Developing a Regional 30 Year Pathway for 3 Waters Investment - Presentation to Wellington Water Committee Workshop 13 September 2021

 



















Attachment 4

Stimulus Funding Programme Overview

 


 


 


 


 

  


                                                                            104                                 24 September 2021

Komiti Ngā Wai Hangarua  | Wellington Water Committee

09 September 2021

 

 

 

File: (21/1450)

 

 

 

 

Report no: WWC2021/4/225 (3)

 

Update on Capital Works Programme

 

Purpose of Report

1.        The purpose of this report is to provide visibility to the Wellington Water Committee of the progress of the 2021/22 capital programme for the region and the current risks to delivery and how we intend to mitigate those risks.

Recommendations

That the Committee:

(1)    notes the progress of the programme to date; and

(2)    notes the delivery risks.

 

Background

2.       The Wellington region is emerging from a long period of static funding on water assets.  The advice provided by Wellington Water Limited (the Company) and a series of high-profile failures has resulted in our client councils providing a significant increase in funding over the next Long-Term Plan (LTP) cycle.

3.       The capacity and capability of the local market is currently sized for the current level of funding or about $130M in capacity.  This means that the Company will need to gradually increase our resources and change how we deliver to meet the challenge for delivering $200M of capex consistently (as required by the sum of all our owners’ investment).

 

 

4.       The 2021/22 capital programme for the region is around $200M.  The 2020/21 capital programme was $160M, of which the Company delivered $131M.  In order to meet the additional funding in next year’s budget and taking into account projects that will be carried forward, we potentially will need to produce around $70M worth of work over and above last year’s delivery.

Key Messages

5.   Our strategy to deliver the programme over the three years of the LTP is to (refer in detail in Appendix 1 attached to the report):

a)   Separate and report major projects from the balance of the programme, to ensure major projects get their own specific focus,

b)   Screen the 2021/22 renewals programme to identify projects with a high delivery risk and low network risk and replace these projects with fast-track catchment renewals that have a high delivery confidence,

c)   Work with our panels to increase the number of resources available to deliver the programme,

d)   Stagger the capex expenditure over three years so in total the entire capex programme is delivered and for each year there is a steady lift in capital expenditure so the market can grow to meet the increase in delivery required; and

e)   Implement a number of continuous improvement activities.

6.   In addition, the New Zealand market faces risks brought about by Covid-19.  We have already felt the impact of level 3 and 4 lockdowns this year, the cost of materials is steadily increasing, and the supply of materials is slow.

7.   Based on the risk of the programme and applying the mitigation measure, we have assessed the delivery range for the year as $145M to $189M with a mid-point of $167M

Programme Update

8.       We are now two months into the 2021 financial year, and report the following activity on the programme:

a)       In July and August, the capital programme spend was $16.7M which is on track to the mid-point of the forecast range.  This is an uplift of $3.1M on the same time in the 2019/21 financial year;

b)      Each council’s programme was baselined based on the year one budget and has been shared with the councils.  This means that at a regional level, we are over-programmed for the mid-point of the range ($169.5M), but not the total year one aggregated council budgets of $200M;

c)       We have been working with the panels to bundle work to make the project management more efficient as well as identify fast-track renewals that can be brought into the programme as a delivery risk mitigation strategy;

d)      All construction work this year has a project brief and so is therefore in at least design or optioneering phase, and

e)       All known construction work in the programme office has been allocated to the contractor panel.

9.       The Covid 19 Delta lockdown has had an impact to the programme of between two and four week’s delay at an estimated cost of between $6.5M and $10M.  All but one of the projects in construction was shut down over the Level 4 period.  Most of the projects restarted in Level 3, except for those projects that may have had an adverse impact on water supply or a treatment plant, or where a safe distance from the public could not be maintained.  While we will endeavour to recoup the lost time over the course of the year, we have adjusted our level of confidence in the programme to below the mid-point of the range.

10.     The key risks to the programme are:

a)       The slow start to the year.  We tried hard to ensure the programme continued the pace of the last few months from the previous financial year, however the spend dropped by 2/3rd’s.  This means we need to work hard to ensure there is no further slippage, and

b)      Further delays caused by any additional lockdowns caused by Covid 19.

11.     The Company has run an exercise to prioritise the work that is in the programme.  The two critical projects that emerged at the top of the list are:

a)       The Kaitoki Main on the Silverstream bridge.  The existing Silverstream bridge that crosses the Hutt River is not seismically resilient and the water main that is attached to the bridge is due for renewal.  The bulk main carries the water from Te Marua to Porirua and Western Wellington City.  The project will create a specific bridge to take the main across the river, with renewals of pipelines on either side of the river.  This is a critical piece of work to maintain a resilient water supply for the region.  The project is in the final stages of procurement, and

b)      The upgrade to the Te Marua Water Treatment Plant.  The Te Marua Water Treatment Plant supplies 45% of the region’s drinking water demand. It was designed for a maximum instantaneous plant flow of 140 MLD, but it is currently limited to 80MLD when fed from the lakes.  With the increase in forecast population growth and per capita demand there is an increasing likelihood of more frequent and severe water restrictions required.  The project is in the procurement phase, and we are looking at ways to bring the current completion timeline of 2025 forward to alleviate the water supply risk.

12.     We will report to the Committee each month on the programme progress.  We have created a template report for the Committee.  At this stage of the month we are still gathering information, the template is attached in Appendix 2 attached to the report.  Once the report is available, we will share it with the Committee.

 

 

 

13.     As well as programme commentary and risks, we report each month on the following lead and lag indicators:

a)       Progress of the total capital spend against range and budget,

b)      Progress of the spend on renewals projects against the target,

c)       Lead indicators for delivery this financial year:

i.    Percentage of construction contracts awarded against a target to be agreed with our panel whanau (likely to be 80%) by the end of Q2 FY 2021/22.

d)      Lead indicators for delivery next financial year that we are working through with our panels:

i.    Percentage of designs complete – target for designs for FY 2022/23 to be complete by end of Q3 of FY 2021/22, and

ii.   Percentage of construction contracts awarded - target for FY 2022/23 construction contracts awarded by the start of the 2022 financial year.

Cashflow adjustments for individual councils

14.     Each council has a target range for delivery based on the risk to their programmes.  In our financial reporting we have set the mid-point of the range as the forecast.  We will review our progress against the forecast each quarter, and make adjustments to the programme and update the forecast as required.

15.      By this method, we are aiming to ensure that councils don’t draw down more capital that is required.  Our finance team will work with each of the councils’ teams to ensure there is understanding of this approach.

Appendices

No.

Title

Page

1

Capital Programme Delivery Initatives

110

2

Capital Works Delivery Dashboard

113

    

 

 

 

 

 

Author: External Author (Wellington Water Ltd)

WW

 

 

 

 


Attachment 1

Capital Programme Delivery Initatives

 


 


Attachment 2

Capital Works Delivery Dashboard

 


                                                                            113                                 24 September 2021

Komiti Ngā Wai Hangarua  | Wellington Water Committee

09 September 2021

 

 

 

File: (21/1453)

 

 

 

 

Report no: WWC2021/4/226 (3)

 

Update on Market Conditions

 

Purpose of Report

1.       To provide the Committee with a market report to show how the cost of materials and services has changed over the last 12 months.

Recommendations

That the Committee:

(1)        receives the report;

(2)        notes that there are ongoing indications that costs will continue to be unpredictable due to the current pandemic; and

(3)        notes that Wellington Water Limited is working with its suppliers and contractors to minimise the impact of existing and future cost increases.   

 

Background

2.       Wellington Water Limited (the Company) commissioned a market report on costs due to concerns around the effect the current pandemic is having on market prices and the supply chain.

3.       The Company requested that the report review three projects completed last year to compare what effect current pricing would have had on the cost of the projects had they been undertaken this year.

 

4.       The consultant undertook modelling work comparing unit costs for the three projects which indicated that there would have been a 7% increase in costs if the work was carried out this year.

5.       The report also reviewed the change in prices over the last 12 months on key materials and services.

6.       This information is to be used to assist the Company in preparing more accurate estimates for current and proposed projects and services.

7.       There is significant variation in the prices increase for key materials and services.

8.       Standard concrete pipes have increased by 8% compared to concrete lined steel pipes which have increased by over 35%.

Wellington Waters Response

9.       The Company has initiated several actions to mitigate and minimise the risk presented by the current market volatility.

10.     High value components and materials or those with long lead in times are being ordered where possible in advance of physical works being undertaken. This is to ensure the cost for these is fixed and that they will be delivered in time for physical works to commence.

11.     Contracts are being negotiated with suppliers that remove unknown risk around future pricing. Contractors price for uncertainty if they are tied to fixed price contracts, especially if they are to be undertaken in the medium to longer term. By adding fair escalation clauses the Company will only be paying for price increases in materials and services if price increases actually eventuate.

12.     Overall, the impact on the programme will be an uplift in costs – with the result that we will be less likely to deliver the outcomes for the current forecast and budgets.  However, the impact by project will vary depending on their exposure to the key risks and we will manage these accordingly. 

Key Messages

13.     The total cost to complete the three projects this year would have increased by approximately 7% compared to last year.

14.     The cost increase in materials is quite variable with increases between 5% and 40%.

15.     Anecdotally suppliers have indicated that there is considerable volatility in their ability to supply as well as indicating there will be continued cost increases for goods and materials not manufactured in New Zealand.

 

16.     The Company is mitigating the risk that price uncertainty creates by working with its suppliers and contractors to ensure that the Company are receiving the best rates and being charged fair and reasonable costs for services provided.

Appendices

No.

Title

Page

1

Market Survey Bond

118

    

 

 

 

 

 

Author: External Author (Wellington Water Ltd)

WW

 

 

 

 


Attachment 1

Market Survey Bond

 


 


 


 


                                                                            119                                 24 September 2021

Komiti Ngā Wai Hangarua  | Wellington Water Committee

09 September 2021

 

 

 

File: (21/1456)

 

 

 

 

Report no: WWC2021/4/227 (3)

 

Performance Report on Value for Money

 

Purpose of Report

1.       To provide the Committee with the first Value for Money quarterly report.

Recommendations

That the Committee receives the September 2021 quarterly Value for Money report attached as Appendix 1 to the report.

 

Background

2.       Previous reports to the Wellington Water Committee have outlined the need for a Value for Money (VfM) report and identified that this would be developed and presented back to the Committee.

3.       A VfM Framework has now been developed as an internal process tool to provide structure and process for VfM reporting to the Committee.

Key Messages

4.       The VfM Framework and reporting is about reporting on Wellington Water Limited as an organisation and the value it brings to its client councils.  

The Value for Money (VfM) Framework

5.       The criteria used in the VfM Framework are:

a.   Efficiency – the extent to which an outcome/output can be delivered or achieved related to the resources to produce it (spending less); and

 

b.   Effectiveness - the capability of producing a desired result or the ability to produce the desired output. The relationship between the intended outcome or result and the actual result (spending wisely).

6.       The Wellington Water VfM Framework includes five parts as follows:

a.   Benchmarking

b.   Long Term Plan (LTP) and Annual Plan (AP) Advice

c.   Value for Money reviews

d.   Metrics

e.   Value for Money stories

7.       The Covid-19 Delta variant has impacted on our ability to report on all aspects, in particular, the section on metrics. This will be fully reported on at the next Committee meeting.

Value for Money September report

8.       The attached is the first VfM report to the Committee. 

9.       All five parts of the VfM Framework are included in this September quarterly report. We propose to provide a report each quarter although not all parts of the Framework as outlined in point 7 above, will be reported each quarter.

10.     The Committee may want to discuss the findings in the report and provide feedback on the strucutre of the report and the content.

Appendices

No.

Title

Page

1

Value for Money Report September 2021

124

    

 

 

 

 

 

Author: External Author (Wellington Water Ltd)

WW

 

 

 

 


Attachment 1

Value for Money Report September 2021

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 

 


                                                                            152                                 24 September 2021

Komiti Ngā Wai Hangarua  | Wellington Water Committee

26 August 2021

 

 

 

File: (21/1366)

 

 

 

 

Report no: WWC2021/4/122 (3)

 

Wellington Water Committee Work Programme 2021

 

 

 

 

 

Recommendation

That the work programme be noted and received.

 

 

 

 

Appendices

No.

Title

Page

1

Wellington Water Committee Work Programme 2021

157

    

 

 

 

Author: Annie Doornebosch

Democracy Advisor

 

 

Reviewed By: Kate Glanville

Senior Democracy Advisor

 

 

Approved By: Kathryn Stannard

Head of Democratic Services


Attachment 1

Wellington Water Committee Work Programme 2021

 

Wellington Water Committee – Work Programme – 2021

 

Description

Source/Purpose

Author

Cycle 5

29 November

Pending

Wellington Water Committee Chairperson Statement

 

Mayor Barry

x

Every meeting

Water Reforms – Preliminary Regional View

19 July Committee meeting

Wendy Walker/Dougal List

x

Every meeting

Update on Taumata Arowai and Water Services Regulation Disclosures

19 July Committee meeting

David de Boer

x

Every meeting

The 30 Year Investment Story for Wellington’s Water

To engage Water Committee members and Directors in a conversation about the region’s investment needs beyond the 10 year horizon

Julie Alexander/Fraser Clark

x

 

Service Delivery Strategy Update

To update the Committee on the development of a revised service delivery strategy

Kim Kelly/Tonia Haskell

x

 

Update on Asset Condition Assessment Programme

To provide a progress report on the asset condition assessments programme including high criticality assets

Julie Alexander

x

 

Letter of Expectations

 

 

x

 

Annual Report

 

 

x

 

Annual General Meeting

 

 

x tbc

 

Meetings for 2022

 

Annie Doornebosch

x

 

Regional Perspective – 3 Waters

19 July Committee Draft Agenda Meeting

Colin Crampton

 

x quarterly

Statement of Intent

March 2022

 

 

x