Annual Report 2011 - Watercare

Watercare Services Limited
2011 ANNUAL REPORT
2011 STATEMENT OF SERVICE PERFORMANCE (continued)
(b) To ensure that the regime for the pricing of water and wastewater services is enduring, transparent and reliable.
(i) The pricing methodology enables the revenue to be set to recover all costs and provide for an adequate level of debt servicing.
Achieved. For the purposes of this performance measure, costs excludes revaluation of derivative financial instruments and deferred tax.
The revenue achieved in 2010/11 was $5.7 million higher than costs. Pricing methodology for water and wastewater utilised by Watercare
from 1 November 2010 was exactly as per the existing pricing methodologies that the previous Councils/ Local Network Operators had
established effective from 1 July 2010.
(ii) The pricing methodology established cannot be changed without Watercare providing the LNOs with three-year advance notification
of a change.
Not applicable to the integrated company because the LNOs were integrated into Watercare, except for the Papakura district which is
managed under a franchise agreement with United Water.
(c) To promote continuous improvement in sustainable business performance.
(i) To continue to use the Project Improve initiative as the vehicle to deliver continuous improvement in business performance.
Project Improve was developed in 2002 as a framework for the identification, capture and sharing of improvement ideas. It continues
to be used by the company.
(d) To ensure efficiency in operational expenditure is maintained.
(i) To meet operational efficiency targets (excluding depreciation and interest) established in the December 2009 AMP as follows:
2011 – $94.09 million.
Not applicable to the integrated company because the 2009 AMP was prepared for the wholesale company.
(ii) To report operational and capital expenditure relative to budget for water and wastewater.
Achieved. This information is reported to the executive and the board on a monthly basis and has previously been reported to the
shareholder on a quarterly basis.
Operational expenditure for the year end was 6.1% under budget while capital expenditure was 1.6% under budget. The budget
represented expected expenditures for the organisation for the four months prior to integration and the eight months after integration and
was set at a time when there was considerable uncertainty as to the full financial effects of the integration on the organisation. There was,
therefore, an expectation that variances to budget could be at a higher level than is normally the case.
Customer services performance (for the eight-month period from 1 November 2010 to 30 June 2011
(a) To maintain delivery of cost-effective services.
(i) To maintain the average household bill at less than 1.5% of the average household income.
The average monthly household water and wastewater bill from Watercare was $57.03 for the eight months from 1 November 2010.
Based on Statistics NZ average monthly household income in Auckland of $6,366, the bill represents 0.9% of the average household income.
(b) To maintain delivery of high quality water and wastewater services.
(i) To achieve less than five water quality complaints per 1,000 customer connections.
Water quality complaints for the year were 5.6 per 1,000 customers.
A disproportionate number of complaints originated in the Franklin area where Watercare is commencing a $13 million water supply project.
(c) To maintain good customer relationships.
(i) To ensure 95% of all enquiries are responded to in a meaningful way within 10 working days.
Result was 88.9% of all enquiries for eight months from 1 November 2010. The enquiries responded to within 10 working days steadily
increased from 49.3% in November 2010 to 98.8% in June 2011. The increase was the result of improvements in the quality and
effectiveness of correspondence processes. These included coordinating more direct responses from subject matter experts. The result for
all enquiries and complaints closed within 10 working days over the same period was 85.8%.
(ii) To ensure greater than 95% of customers receive three days’ notice of planned shut-downs.
The result was 99% of customers for the integrated business.
2011 Financial Report
PAGE 110
(iii) To achieve an average call centre operator connect time of