Wellington Water has had another excellent year. We’ve focused on our strategic priorities to provide regional service planning, reviewed how we deliver services, strengthened resilience, and delivered value for money to our customers.
Our Wellington Water Board of Directors Chair David Wright and Chief Executive Colin Crampton talk about our year in review in the video below.
Every day we provide on average 140 million litres of water to Wellingtonians. That’s around 400,000 people consuming 56 Olympic-sized swimming pools full of water every day.
We then take wastewater from homes and businesses, treat it at one of our four wastewater treatment plants, and discharge it safely into the ocean. To make sure that we enhance the health of our waterways and ocean, we’ve been working to reduce wastewater overflows following heavy rain events, and stormwater run-off from the urban stormwater network.
Most importantly has been our work in the past year to shift the way we think about our customers. This work kicked off in August 2017 when we hosted customer experience experts from Scottish Water.
Their approach helped us to focus on putting customers at the heart of everything we do. One of Scottish Water’s key recommendations was to build a customer culture within the company. We’ve started to do this through the introduction of a customer plan, which includes a number of areas that will help us to better understand what our customers value from the services we provide and how we might be able to learn from those insights.Read more
Because the majority of customer interactions are through our client council contact centres and interactions with our contractors, we only have a limited view of our customers. We still have a lot of work to do to create a common customer experience across the region, and we will continue to work with our client councils in this space.
2017 saw the third driest November on record. Demand for water soared and we had to start using reserves from the Stuart Macaskill storage lakes at Te Marua to supplement supply. To curb water demand we introduced a total sprinkler ban and provided customers with advice and information on the importance of water conservation. The result of this activity was a significant decrease in demand. It was great to see the public share their water conservation tips and hints and we saw positive engagement and growth through our social media channels.
We’re reminded on a regular basis that we live in a seismically active region. Our drinking-water supply and wastewater networks are vulnerable. Underground pipes, pumps, and reservoirs could be badly damaged in a significant earthquake, and as a result some suburbs could be without drinking water for more than 100 days, and without wastewater services for more than 120 days.
In the past 12 months we’ve been working with central and local government to develop an emergency water network that will supply communities across the metropolitan Wellington region with water from day eight following a disaster. The first of 22 emergency water stations was opened on 25 June at a special event attended by Civil Defence Minister Kris Faafoi and senior representatives of our five client councils.
This emergency water network, together with our investigations into an alternative water source for Wellington’s southern and eastern suburbs and the construction of water reservoirs, will help our communities to become more resilient. At a household level, we’ve continued to raise awareness of the need to store 20 litres per person per day for at least seven days.
We’ve had a busy year making sure that our customers remain confident that the drinking water we provide is safe and wholesome. Following the discovery of E. coli in the water exiting the Waterloo Water Treatment Plant, our client councils agreed to add ultraviolet (UV) light and chlorine to the treatment process. This is part of a multi-barrier system that provides assurance to our client councils that water supplied to everyone who lives and works in the metropolitan Wellington region is safe.
Introducing UV treatment to Waterloo wasn’t a smooth process, and we appreciated the patience of residents and the community as we disrupted traffic to dig up roads to install the new pipes needed to cope with the UV treatment process. A safe and reliable water supply is essential to public health and the social and economic progress of our region.
The findings from stage two of the government’s Havelock North Drinking Water Inquiry have reinforced this importance. The inquiry proposed six fundamental principles of drinking-water safety and we have worked to understand how we can integrate these into the services we provide.
As a result of Local Government Minister Nanaia Mahuta’s announcement to reform drinking water, stormwater, and wastewater, we have agreed to facilitate the development of a proposal on behalf of our five client councils that suggests improvements to the water sector in New Zealand.
Our region is experiencing steady urban growth, with the population expected to increase by 21% in the next 30 years. Because the infrastructure and assets we use to deliver our services have lifespans of 30-100 years, we have to take a sophisticated approach to planning. We’ve continued to develop key planning documents such as the Regional Service Plan, which outlines all the activities in the next three, 10 and 30 years that we need to undertake to make sure we provide services now and into the future. Our Three Waters Strategy takes a long-term (50-year) view of our drinking-water, stormwater, and wastewater networks. We’ve used this strategy to identify a number of issues that could disrupt the services we provide. In the next three years we’ll investigate these issues by carrying out Future Service Studies using the ‘Better Business Case’ approach.
We’ve made great progress on our Service Delivery Strategy. This strategy articulates how we propose to deliver services through our suppliers and contractors in the next 10-20 years across our three waters services, and outlines how we can create value for money by selecting the optimal way of delivering services through options ranging from self-performing to full outsourcing.
We’re on track to deliver an alliance approach to network maintenance and operations by June 2019; select a collaborative capex contractor panel to start work in 2019/20; and consolidate our wastewater treatment plant management contract by July 2019.
We’ve completed the review of our health and safety vision, and launched ‘people first, every time’ with our staff, contractors, and suppliers. It’s been well received and we’ll continue to work with these groups as we embed this vision in our way of working.
From a financial perspective, the company ended the year with a $29k deficit (pre-tax). In March 2018 we were forecasting a $300k loss, so the fact that we finished as close to break-even as we did is a reflection of the effort made throughout the organisation to reduce costs where possible.
Two key areas that helped were our continued focus on annual leave, resulting in a $20k year-end credit, and the high level of effort on cost savings throughout the organisation.
Our capital expenditure (capex) was underspent by $0.2m. This was to be used for the fit-out of the alternative office (replacing IBM House, Level 6, Petone). However, the updated engineering assessment of the IBM building concluded the building’s NBS rating was between 70-80%, so this has remained unspent.
The final council operational expenditure (opex) result was $2.1m over budget. This was primarily due to a $3.3m planned overrun for Greater Wellington Regional Council (GWRC) from the harbour bores work and an overspend of $0.8m for Porirua City Council. Both of these overruns were signalled to the councils well in advance and were fully funded by the councils through year-end wash-ups. The other three councils finished with a combined $2m below budget.
The final council capex was $3.7m below budget. This result is due to some work being delayed until next year and savings made. It’s great to see that the changes we’re making internally, to both our mindset and processes, are yielding positive results and making capex forecasting more certain.
The results show that we’ve made significant improvements across the organisation. However, we need to continue building on this success. The focus for this year will continue to be on accurate and timely forecasting and sustainable cost savings.
Chair of the Board