Further information on the Annual Report 2003-04

Contact Yarra Valley Water Telephone: 131 721 Web: www.yvw.com.au Email: [email protected]

For language assistance call TIS 131 450. Y arra ValleyReport2003 Water Annual - 04

ANNUAL REPORT Yarra Valley Water Ltd ABN 93 066 902 501 Lucknow Street Mitcham Victoria 3132 DX 13204 Telephone: (03) 9874 2122 Facsimile: (03) 9872 1353 03-04

Printed on Australian made 100% recycled paper sourced from sustainable forest regions. 2 3 Yarra Valley Water Annual Report 2003-04 Our journey If sustainability is a goal to be attained after a long and perhaps arduous journey, how do we prepare ourselves and where do we start?

Our business at a glance Yarra Valley Water assets Melbourne’s water supply structure 8,643 km water pipes has one water wholesaler, 8,207 km sewer pipes Melbourne Water Corporation, and 10 elevated water supply tanks three water retailers, of which we 40 ground-level water supply tanks are one. The retail water businesses 62 water pumping stations commenced operation in 1995 and, 72 sewer pumping stations although owned by the Victorian 43 water pressure reducing stations Government, each is a commercial 9 sewage treatment plants. concern with a Board of Directors appointed by the Government. Total water purchased and Yarra Valley Water is Melbourne’s supplied largest retail water business. 169,027 megalitres bulk water purchased*

Yarra Valley Water provides water 149,994 megalitres water supplied and sewerage services to customers to customers*. within our licensed area. The area * The difference in water purchased and water covered by our Operating Licence is supplied to customers is referred to as ‘non- over 4,000 square kilometres in the revenue water’ and includes water used for fire-fighting, water lost in bursts, metering northern and eastern suburbs of inaccuracies, water theft, pipe leakage and our Melbourne and we provide water own usage for cleaning pipes (see p27). and sewerage services to more than 1.5 million customers. Total sewage collected, transported and treated Yarra Valley Water owns and 122,785 ML sewage is collected from manages assets valued at more than customers and transported to Melbourne $1.3 billion and has annual revenue Water Corporation’s Western Treatment in the vicinity of $350 million. Plant at Werribee and Eastern Treatment Plant at Bangholme (formerly Carrum).

8,269 ML sewage treated by Yarra Valley Water’s sewage treatment plants. OUR JOURNEY 01 4 5 Yarra Valley Water Annual Report 2003-04 ‘Sustainable development meets the needs of the present without compromising the ability of future generations to meet their own needs.’

Our fresh approach Sustainability and Yarra Reporting on our business The intended audiences for this report Yarra Valley Water exists to provide water Valley Water Driving service excellence and sustainability include: our shareholder the State and sewerage services that contribute to the Sustainability — to be able to continue through collaboration. This is more than a Government, auditors and regulators, the health and wellbeing of customers and indefinitely — is an idea most frequently token statement. It is our business Yarra Valley Water Board and Committees, the environment. applied to the physical and biological commitment in the changing and challenging customers, current and prospective environment, but it also includes the social environment we find ourselves in. By employees, our contractors and suppliers, In this regard, we strive to lead the global and ethical dimensions. The most widely maintaining our customer focus and the water industry and government and water industry in serving the Customer and used definition is derived from the innovation, working smarter and partnering non-government organisations. the Environment supported by a high Brundtland Commission of 1987. more, we can achieve this. We would like to performing business Culture and We appreciate your comments and feedback It effectively incorporates the concepts tell you how we are getting there and our continuously improving our Efficiency. on our business performance and how we of justice and fair play as follows: progress so far. report it. Feedback from last year’s report is incorporated in this report and includes ‘Sustainable development meets the Yarra Valley Water’s 2003-04 Annual Report continues the focus on sustainability, based summary pages for each chapter, a glossary needs of the present without of terms and other improvements. Please compromising the ability of future on triple bottom line reporting principles. We have addressed social, financial and complete the feedback page at the back of generations to meet their own needs.’ this report and provide it to us, so we can Customer Environment environmental reporting within our own Sustainability is a concept to which many strategic framework of culture, efficiency, continue to improve our reporting. pay lip service but few find easy to translate customers and the environment. The report into a program of practical action. covers the financial year from 1 July 2003 We cannot claim to have become to 30 June 2004. Culture Efficiency sustainable simply by changing a few of our more wasteful practices. It must We have referred to VicWater’s Triple Bottom encompass all that we do and our entire Line Reporting Guidelines and have included way of life. This will happen not through the results of the regular independent auditing Yarra Valley Water carries out during To inspire and encourage us to be innovative a magic transformation but by progressive the year. During the development of this we accept the following challenges: steps, rather like a journey. But if sustainability is a goal to be attained after report we consulted a number of To improve environmental outcomes and a long and perhaps arduous journey, how stakeholders including Yarra Valley Water’s increase efficiency do we prepare ourselves and where do Customer Consultative Committee, To improve customer satisfaction and we start? The report outlines the beginning Environmental Consultative Committee and increase efficiency of our journey. employees to develop an easy to read and To achieve responsible financial outcomes informative account of our progress. We have and reduce water consumption Our MD’s report describes our approach to described our disappointments and sustainability and our Chairman’s report To attain higher levels of staff satisfaction challenges, as well as our achievements. OUR JOURNEY describes our actions in support of our and embrace change. sustainability strategy. 01 This is our Statement of Strategic Intent. 6 7 Yarra Valley Water Annual Report 2003-04

Chairman’s Report

a water smart gardening accreditation emissions, water consumption and sewerage Improving water quality Figure 1: Return on Average Assets % program for nurseries. This gardening system impacts and waste to landfill. Our The number of water quality complaints was 12 program has been adopted as part of the revised environmental policy highlights the 10.7 higher than anticipated this year, with the 9.9 9.6 8.7 8.1 Our Water Our Future behavioural change new direction we are taking in this regard. business receiving 390 more complaints than 9 program being led by the State 7.9 Although we still have a long way to go, Yarra last year. 6 Government and industry, and is being Valley Water’s Green Office strategy, launched introduced later this year. We have a number of projects that hope to 3 in 2003-04, contributes to the achievement address water quality issues, including: 0 As well as these joint initiatives to reduce the of greenhouse gas and waste to landfill 99-00 00-01 01-02 02-03 03-04 Investigating ways to clean mains without public’s water consumption, Yarra Valley reduction targets for the head office. The first Previous Actual Target Water undertook active leak detection month after the launch our waste had wasting water. programs and commenced works to reduce reduced by 45% - an excellent start towards The development of a device to insert into water pressure in our supply system. These the 2007 target of 90% reduction in waste. mains to prevent sediment build up in Figure 2: Net Profit After Tax $M 120 Alan Cornell, Chairman programs will reduce the number of burst problem areas, and The Aurora project, an innovative housing 100 99.9 water mains and water lost through leaks. A research program to develop a It has been an exciting year for the development in Epping North, moved ahead 80 We repaired 74% of leaks within 24 hours, computer model to predict where 68.9 64.4 Melbourne water industry. The community’s with the signing of the sustainability covenant 60 58.9 52.5 missing our 83% target, but are confident sediment accumulates. by the major partners involved in the project. 40 51.1 increased awareness of water issues brought we will do better next year. about by ongoing drought conditions and Work on the site commenced with the lilac- Focus on customers 20 Yarra Valley Water’s savewater!™ initiative coloured recycled water pipes being laid in 0 stage one and two water restrictions has Providing a sustainable environment for 99-00 00-01 01-02 02-03 03-04 flourished this year gaining commitment from early 2004. brought water issues to the fore. the future is part of our commitment to other water utilities that allowed the Previous Actual Target To further improve our sustainability customers but it is also important to provide Long-term water savings savewater!™ alliance to become a separate approach, we need to look at our sewage a high standard of service. This includes With the average person using 36 litres less entity, effective from 1 July 2004. This Figure 3: Dividends Paid, Payable or management. We had one disappointment responding to enquiries promptly, billing water per day in 2003-04 compared to last initiative has gone from strength to strength Estimated $M at our Brushy Creek sewage treatment plant, customers accurately and providing safe, year, our water use reduction target of 20% and now has a proven awards program, where one test did not fully comply with reliable water. 70 62.7 less than 1990s averages by 2010, is more water conservation website and special 60 56.0 58.2 EPA standards. Although the volume of 49.2 46.1 than halfway there. The challenge is to ensure displays and events to promote water saving Our commitment to customer service has 50 sewage spilled this year was about four times 40 42.5 we all continue to save water in the future devices at home and in the garden. been rewarded this year by the Customer last year’s, we contained 100% of spills 30 without the benefit of water restrictions. Service Institute of Australia, who awarded us 20 Redefining our environmental within five hours. Information on our two Victorian and National Awards for Australia 10 The business’ water conservation activities biggest spills in Glenroy and Reservoir can approach Service Excellence in the Government 0 included the development of the Water be found on page 37. 99-00 00-01 01-02 02-03 03-04 A major focus of the business this year has category. This achievement is a credit to Conservation Plan and joint industry Previous Actual Target been to develop a common understanding of Yarra Valley Water and indicates that initiatives such as: what sustainability is and provide a process vigilance in understanding and meeting our OUR JOURNEY the savewater!™ Efficiency Service for for integrating sustainability objectives into customers’ needs, through consultation and business and industry day-to-day activities. market research, is important. the Water – Learn it! Live it! schools This means analysing current operations and education program, and the extent to which they impact on the 01 environment. The business’ environmental impacts are greatest in greenhouse gas 8 9 Yarra Valley Water Annual Report 2003-04

Managing Director’s Report

Our customer service strategy focuses on Development Manager commenced a review Another major State Government initiative Providing water and sewerage services that fixing the root causes of problems to reduce of staff learning needs, and we conducted a has been the establishment of the Essential enhance rather than detract from the the need for customers to contact us, thereby company-wide customer service training Services Commission as the independent environment is our major challenge. We know improving customer service by getting it right program, which also included our contracting price regulator of water, sewerage and trade that if everyone in the world used as many the first time and as a result, reducing costs. partners AbiGroup, Skilltech, Schultz waste services. The State Government resources as Australians then we would need Our award winning call handling system and Plumbing and Logica for the first time. deserves great credit for this. It will inevitably three or four Earths – so we must learn to do revised account are examples of how we produce a more efficient water industry and more with less. How we do this when we are Yarra Valley Water’s achievements are a have responded to the challenge of searching provide greater assurance to customers and planning to accommodate another million result of the hard work of all Yarra Valley for solutions that provide win-wins for both other stakeholders that service levels will be people in Melbourne over the next 25 years Water staff, contractors and Board and business efficiency and our customers. Our maintained or improved and that they are we don’t yet know, but we know this must be committee members and I would like to next challenge is to further reduce call volumes receiving value for money. our objective. To help us rise to this challenge extend my sincere thanks to them for a year associated with our bills, as we did not meet and steer the company towards the provision they can be truly proud of. Our commitment to the our target of a 10% reduction this year. of truly sustainable water and sewerage Tony Kelly, Managing Director environment The coming year will be focused on further services, we have a two-pronged approach. Financial outlook improving performance to help us achieve Underpinning much of the above reforms has Firstly, we have used The Natural Step Our before tax profit this year decreased by our strategic intent, build on the successful Looking forward been the recognition that the security of our sustainability model that provides us with a $19.1 million from the previous year. The programs and initiatives already in place, and The continuation of the drought, including the water and sewerage services is dependent framework for decision making (see inset box introduction of stage two restrictions, and the improve our performance in those areas introduction of stage two water restrictions, on a healthy environment. Yarra Valley Water on page 11). Secondly, we have enhanced resulting water saving by customers was the where we haven’t met expectations. has been one of the dominant themes for the fully supports this premise. Over the last year our approach to stakeholder engagement. major contributing factor. Drought conditions last year. In Victoria and nationally, the we have strived to increase our Working on our own produces one- also increased the number of water system drought has maintained great community understanding of environmental sustainability dimensional solutions. To broaden our breaks, and therefore the amount of interest in water issues and generated much and share our understanding by contributing thinking and to produce holistic solutions we maintenance needed. Our financial debate about the long-term management of to national and state-wide debates on the need to work more closely with our business statements are located from page 106. Alan Cornell future of water. While we believe we have Chairman Australia’s water resources. partners and stakeholder groups, many of been influential, we acknowledge we have Improving business culture whom are mentioned in this report. At the national level, the Coalition of much to learn about environmental Yarra Valley Water achieved excellent results Australian Governments (COAG) has sustainability. So, while we are proud of our Sustainability learnings for exhibiting constructive behaviours in the established a review of water industry policy environmental performance we recognise So what have we learnt as we continue our workplace this year, according to the and objectives. This work will be completed in that complying with environmental journey towards environmental sustainability? Organisational Culture Inventory. Those areas the second half of 2004. At the state level, regulations is not enough to help us achieve The Natural Step has described the of the business that experienced a decline in the Victorian Minister for Water and Deputy a truly sustainable future. destination but we need to work out the constructive behaviours have developed Premier, the Hon John Thwaites, published an route. Along the way we have made the action plans for the coming year to address options paper for water industry policy and following observations: this result. followed up with a White Paper, Securing Our Surprisingly for a water utility, our worst OUR JOURNEY The commitment to learning in the business Water Future Together. This Paper will be environmental impact is greenhouse gas was enhanced this year, with an increased instrumental in maintaining Victoria’s global production, so we have set significant focus on training. Our new Learning and leadership position in water resource reduction targets over the next three years. management and delivery of water and 01 sewerage services. 10 11 Yarra Valley Water Annual Report 2003-04 We must never take a ‘water only’ view. Taking a holistic system view is a prerequisite for effective long-term management of our water and sewerage system, and our environment.

Water conservation makes sense Water saving options The business case for the environment is economically and environmentally and So in the short term we, and our customers, compelling because ultimately sustainable the community’s acceptance of water need to save as much water as we can solutions cost less. If, for example, we restrictions suggests that there is great and make contingency plans for new exhaust our rivers, the economic cost of community support for water conservation supplies. In the longer term desalination of alternative supplies will always be higher. – at least during times of drought. We seawater will play a role as will many other Furthermore, skills in the development and need to help urban water consumers non-traditional options. application of sustainable solutions will be in understand the link between their water extremely high demand as the world use and the quality of the environment We also think that the future needs to include demands a better way. It is encouraging to and work with them to reduce their sharing water between the city and the note that many of the best new graduates consumption without compromising their country. One day the city will fund efficiencies want to work for a company with a standards of living. Maintaining in rural irrigation water for a share of the commitment to sustainability. community interest in water conservation, water savings. This will prove to be a relatively if the drought breaks, will be another cheap supply option for the city that will lower major challenge. farming costs and reduce the amount of water extracted from rural rivers. In simple We must continuously improve the quality terms this is a win for the environment, a win of sewage treatment to reduce adverse for farmers and a win for urban water users. effects on the environment. We must reduce the waste produced by our business – which in turn will reduce The Natural Step’s Four System Conditions our consumption of resources. 1. Avoid ‘systematically increasing concentrations of substances extracted from We must develop contingency plans for the earth’s crust.’ additional water supplies in case adverse This condition relates to what we take from the earth: mining and fossil fuels – simply, climate change and/or population growth we need to use renewable energy and non-toxic, reusable materials to avoid the spread is greater than we currently anticipate. of hazardous mined metals and pollutants. In terms of future water supply options 2. Nature must ‘not be subject to systematically increasing concentrations of ‘one size will not fit all’. For example substances produced by society.’ rainwater tanks are much more viable in This relates to what we make: chemicals, plastics and other substances – simply, we the wetter eastern suburbs than they are need to use safe, biodegradable substances that do not cause the spread of toxins in in the drier western suburbs. the environment. We must never take a ‘water only’ view. 3. Nature must ‘not be subject to degradation by physical means.’ It is easy to save water, but if we do so in This relates to what we do to the earth: biodiversity and ecosystems – simply, we a way that consumes more resources and need to protect our soils, water and air, or the quality of our food, water and air will OUR JOURNEY energy then we are adding to the problem be compromised. rather than solving it. Taking a holistic systems view is a prerequisite for effective 4. ‘Human needs are met worldwide.’ long-term management of our water and The last condition relates to equity and a fairer distribution of resources across the 01 sewerage systems, and our environment. globe. If everyone on the earth used as many resources as Australians we would need three or four Earths. To be sustainable we must learn to consume less of everything. Reducing our water consumption ensures our rivers will not be exhausted 12 13 Yarra Valley Water Annual Report 2003-04

Meeting service expectations Building a constructive culture During the year we introduced the Six Sigma While the environment is critical to our You will also read in this report about the program, a methodology to assist in long-term success we are also committed improvements we have made in attaining our improving our efficiency. Six Sigma has to operational excellence to deliver cultural objectives. I am particularly proud of already paid significant dividends. During the ever-improving levels of customer service. the results achieved by our managers and coming year more staff will be trained and we We are proud of our reputation within the staff. We have made significant gains in are excited about the potential service and industry for delivery of high standards of moving Yarra Valley Water from a efficiency gains that Six Sigma offers. customer service. This commitment is passive/aggressive culture to a more While we have experienced some highlighted in the many long and short-term constructive culture built on support, disappointments, we are proud of what we targets throughout this report. cooperation, self development, and setting have achieved in 2003-04. We run a and achieving challenging but realistic goals. We are particularly proud of our history of dynamic business providing strong Business cultures built on these protecting public health through the provision commercial returns to our shareholder, the characteristics service their customers more of high quality drinking water and State Government of Victoria, and high levels effectively, are safer and more satisfying management of sewerage systems, both of of environmental and customer service. With places to work and are more profitable. We which have given us a special perspective on the capacity and passion that exists in our are very proud of our progress to date and our broader social responsibilities. staff, and the ongoing involvement and our challenge is to maintain the rate of support of our stakeholders, there is every The expectations of our customers are improvement over the next two years to help reason to be confident that 2004-05 will be continually increasing. To help us we have a us move from a good culture to a great one. an even better year. very effective customer service strategy that Increasing our efficiency focuses on the root cause of customer While my main responsibility is to lead Yarra concerns and is designed to help us ‘get it Another major challenge is doing all of the Valley Water my major source of satisfaction right the first time’. This produces better above while maintaining a commercially comes from watching the staff initiate, service for our customers and lower costs for strong business. We are already one of the develop and deliver corporate objectives. us – proving our belief that good customer most efficient water utilities in Australia and I would like to sincerely thank our staff for service costs less. With respect to this we will we are determined to maintain this standing everything we have achieved this year. need to promote the value of water and the to ensure our customers get value for money. belief that water is a vital and precious Part of our efficiency stems from a high resource we must all help protect. degree of contracted services. We are very reliant on a number of partners and suppliers Tony Kelly Another challenge in the coming year is to Managing Director improve levels of customer satisfaction while and recognise that our relationship with some water restrictions continue and the new price of these organisations needs to improve. increases announced by the State We acknowledge that our contractors and OUR JOURNEY Government’s White Paper are introduced. suppliers need to be profitable but this means more than simply paying more. It means we need to work more closely in 01 partnership with them for mutual benefit. 14 15 Yarra Valley Water Annual Report 2003-04 Environment ‘As it has been 20 years since Melbourne’s last drought, the education process has been a great success in reaching a new generation.’

David Jenkins, Water Restrictions Team

Human beings possess an unparalleled change our usage habits and purchase capacity to change the natural world. We renewable energy. have extracted measureless quantities of We have set a target to reduce water minerals from the earth’s crust, replaced the consumption in Melbourne by 20%, majority of native forests and grasslands with compared to the average of the 1990s. farms and cities, and generated ever-increasing This will be achieved with the aid of amounts of waste products. While this ability government regulations and by wide-ranging to reshape nature lies at the roots of our educational, behaviour change, gardening, extraordinary success as a species, a misuse appliance retrofit, industrial and local of the gifts of our human minds can lead to government programs, as well as improving consequences so dire that they affect not our own use of water. just ourselves, but every species on earth. Currently, discharges from our sewage Yarra Valley Water recognises that the treatment plants and any overflows from our wellbeing of our community and the strength sewers to the environment are regulated by of our economy are dependent on the health the Environment Protection Authority (EPA). of our environment. Our business relies on We have agreed programs in place to ensure the natural environment to both provide that these discharges do not have any water for extraction, and to absorb treated detrimental impact on the receiving waterways. water. We therefore strive to provide water and sewerage services to our customers that A major project this year has been exist within the carrying capacity of nature, contributing to our 90% reduction in waste to so that nature does not become overloaded, landfill target. We are starting with waste sick and stressed. from our head office and so far have introduced recycling for paper, cans, glass, Our approach to sustainability plastics, cardboard, paper towel, printer We are committed to understanding how we cartridges and mobile phones. We have also can become more sustainable – a long-term removed all rubbish bins from offices to process. This means reducing our ecological encourage recycling and issued all staff with footprint, or ensuring that our operations are a plate and mug to eliminate the need for not drawing on our natural resources faster disposable crockery. than they can regenerate. To do this we have developed targets based on our four key areas of environmental impact. ENVIRONMENT We have estimated that greenhouse gases contribute to approximately 60% of our overall environmental impact. Our target is to 02 reduce our discharge of greenhouse gases to 50% of our 1990s discharges. To achieve this, we will audit areas of high energy use, 16 17 Yarra Valley Water Annual Report 2003-04

Our Environmental Policy

We review our Environmental Policy every move from being a compliant company, Many of our customers may suggest that Achievements and Recycled 255 ML of treated wastewater. two years. Our most recent refinements to one that is striving to be sustainable. our job is to save water and it is other disappointments in 2003-04 See page 31. incorporate our learning and commitment to people’s job to save energy. We believe Developed a sustainability strategy, Experienced a major sewer collapse in that is it our responsibility to be which was approved by the Board in Glenroy in May 2004. Sewage flowed Environmental Policy sustainable, which means looking at both. November 2003. through the Northern Golf Course and Yarra Valley Water recognises that the wellbeing of our community and the strength of our into Moonee Ponds Creek. Significant Of course, any new methods of managing Established key environmental targets economy are dependent on the health of our environment. to assist us in becoming sustainable. clean-up works were required. We had water and wastewater must not impact on started works in December 2003 to We strive to provide water and sewerage services within the carrying capacity of nature and will Renewed our Environmental Policy. public health. Many people have forgotten replace this sewer; however these works that the water utilities were originally achieve this by avoiding activities that systematically increase: Signed a Sustainability Covenant with the were not complete. We apologise to established to protect the population from Concentrations of substances that have been extracted from the earth. EPA, VicUrban and the City of Whittlesea customers who were inconvenienced the risk of water-borne disease such as Concentrations of substances produced by society and that commits all parties to sustainable and believe there was no long-term typhoid and cholera. Some greywater Degradation of nature by physical means. objectives and outcomes for VicUrban’s environmental damage caused. See Case recycling systems have the potential to Aurora development. See page 32. To assist us achieve our objectives we commit to utilise processes that: Study page 37. increase health risks if not done properly. Comply with all environmental regulations. Reduced water consumption by 21% Our challenge is to ensure that health risks Strive to continually improve our environmental performance and prevent pollution. compared with the average of the 1990s. Challenges we face are managed within new systems that While this is a very positive result we are Ensuring that our operations are deliver greater environmental outcomes. Seek the advice of stakeholders and involve them in setting goals. aware that this included savings from environmentally sustainable presents us with Annually review our objectives and targets to incorporate the best available information. stage one and stage two restrictions. many challenges and we accept that we have Summary of our long-term Publish our policy, goals and progress towards attainment of our objectives. Commenced our pressure management a lot to learn. We need to take a holistic view. targets Encourage our staff to strive for excellence in environmental management. program to reduce water consumption in For example, while some water saving Reducing water consumption by 20% We have identified that our major environmental impacts arise from greenhouse gas emissions, six areas. See page 27. methods are simple and effective, they often by 2010 from 1990s averages. water extraction and waste production. To provide our services within the carrying capacity of require an increase in energy use, which in Undertook leak detection in 538 km Reducing greenhouse gas emissions to nature we will: turn increases greenhouse gas discharges. of mains and eliminated 689 ML of 10,500 CO2-e tonnes/year by 2007-08. Reduce greenhouse gas emissions to below 10,500 tonnes CO -e by 2008, which is 50% Many water recycling projects require 2 leaked water. See page 27. Implementing reuse projects to ensure of our 1990s total. additional treatment and pumping, at times Finalist in Premier’s Awards for Business Melbourne achieves 20% effluent reuse an appropriate option. Our responsibility is to Reduce average water consumption to below 306 litres per person per day by 2010, Sustainability for our savewater!™ from sewage treatment plants. produce solutions with the least overall which is 80% of our 1990s total. Efficiency Service. See Case Study page 26. environmental impact. Reducing sewage spills by 30% when Reduce waste to landfill to 10% of our 2002-03 total by 2010. Achieved 99.73% compliance with our compared to 2003-04 long-term Conduct a study to establish quantifiable targets for nutrients discharged from our sewage EPA licences at our sewage treatment Educating people about the importance of average, by June 2008. treatment plants by 2006. greenhouse gas discharges is a challenge. plants compared to 100% last year. We Achieving a 25% reduction from We are delighted with the level of enthusiasm ‘Treat the earth well. It was not given to you by your parents. were disappointed not to achieve 100%. 2001-02 levels of non-revenue water for saving water in the community and we It is lent to you by your children.’ ENVIRONMENT One test sample at our Brushy Creek per household by June 2008. Treatment plant exceeded the licence need to make sure that the enthusiasm for Kenyan Proverb Supporting the Aurora project as a limit as a result of mechanical failure saving energy is just as great. That is, we showcase of water sensitive design by of equipment. See page 29. need to ensure that the community does not meeting VicUrban’s deadlines. 02 Discharged an estimated 23,421 tonnes increase its energy consumption when saving of greenhouse gas to the environment. water. We recognise that this may sound See page 42. strange coming from a water company. 18 19 Yarra Valley Water Annual Report 2003-04 ‘Yarra Valley Water’s customers should be congratulated on their acceptance and diligence with regard to Melbourne’s imposed water restrictions. As it has been 20 years since Melbourne’s last drought, the education process has been a great success in reaching a new generation. We hope permanent water saving measures will be equally well received.’

David Jenkins, Team Leader, Water Restrictions Team

The water supply system

Impact of drought While the increased water restrictions have We communicated information about the The Drought Response Plan, developed presented challenges, particularly for the restrictions through media advertising and collaboratively by Melbourne’s four water gardening, nursery and turf industries, the publicity campaigns, account inserts, businesses, continues to provide the overall community response to the restrictions brochures sent to every customer and details framework for the water industry’s actions. has been positive. Market research conducted on our website. Our Water Ambassadors Based on 90 years of historical data, the plan in December 2003 across metropolitan Program involved more than 80 presentations includes an analysis of rainfall and water Melbourne (1,500 people) showed that on water restrictions by our staff to consumption patterns and sets out a series of awareness of specific stage two restrictions community groups including Rotary, Apex, monthly water saving targets to be achieved was very high. Nearly three quarters of those sporting clubs and Probus groups. surveyed claimed they were doing more than under each stage of restrictions. The Drought Once again, we thank the community for their required under stage two restrictions to save Response Plan is a public, statutory support and efforts. We strongly believe that water and 83% believed that permanent document and can be found on all efforts to conserve water are about water restrictions should be introduced. www.yvw.com.au. working in partnership and that it is only by See our website www.yvw.com.au for stage everyone working together that we can On 23 July 2003, the State Government two restrictions guidelines. announced that stage two water restrictions ensure water supply for future generations would be introduced from 1 August 2003, Our water restrictions hotline received over and reduce impacts on the environment. when storage levels crossed below the 8,500 calls in July and August following the trigger level for July of 40.3%. Storage levels announcement of stage two restrictions. This have improved since this time, however the represented an average increase of around government has chosen to keep restrictions 83% in call volumes. Most of the calls related in place. Our water storages were still less to exemptions from restrictions and than half full at the end of June 2004. It clarification of what was permitted. Many of will require five years of average rainfall to the exemption requests were from customers return storages to 95% full. On average, wishing to fill swimming pools. These it will take the Thomson Dam 10 years to customers were required to provide a water reach full capacity. conservation plan identifying water saving initiatives around the home and garden, to offset water used for the swimming pool. We conducted random audits of these water conservation activities and found that approximately 90% of customers were fulfilling their obligations under their plan. We work with those who have not, providing ENVIRONMENT further advice until they are compliant.

02 Yarra Valley Water works closely with the other water businesses for a consistent approach to water conservation education across Melbourne. At the water saving display at the St Kilda Festival in January the Hon John Thwaites, Minister for Water, demonstrated how to wash a car using a high pressure hose. 20 21 Yarra Valley Water Annual Report 2003-04

System impacts customers trying to save water. Two quite Water conservation In short, we have already achieved half the Drought conditions create a range of different customer responses appeared in the In October 2002, a State Government 20% target. We are not taking this good start operational difficulties for a water business media during the year: appointed committee completed the Water for granted as we recognise that it was and once again we had to remain flexible Resources Strategy for Melbourne for the next achieved during restrictions, and we will need ‘We were told they would take three with some of our operations, strategies and 50 years. In essence, the strategy provides for to keep up our efforts to ensure the 2010 weeks to come because it was a targets. The most notable consequence of only a small increase in supply by 2050 despite targets are met. Permanent water saving difficult part to find…It’s terrible… prolonged dry weather is a significant an estimated 32% increase in population. It is measures are being introduced in the next here we are all trying to do the right increase in burst water mains caused by estimated that if Melbourne keeps using water financial year. These should support our contraction of clay soils, which in turn causes thing during water restrictions and at the same rate as during the 1990s, we will savings efforts. Yarra Valley Water is just letting the pipes to move and crack. exceed the present supply by 2015. To cope Use of the ecological footprint technique water gush away,’ with the demand, the strategy recommended Based on our experience in the summer of shows that 60% of our environmental impact Mrs Kolekowski, Lilydale Yarra Valley Leader, a range of other water conservation initiatives. the previous year, we were better prepared to is from energy use causing greenhouse gas 26 January 2004 Based on the recommendations from the deal with a sudden increase in the number of emissions, 20% is due to water extraction, and strategy, the government has introduced a water main bursts in March and April 2004. 10% for both discharge to the environment ‘Re yesterday’s burst water main, target of 15% reduction in water consumption All bursts and leaks were prioritised to ensure and operational activities. Hence, we do not I’d just like to express my sincere by 2010. We fully embrace water conservation the most urgent were done first. It was favour water conservation measures that thanks from myself and all others as offering the best sustainability outcome critically important that we improved our involve an increase in energy use, either as an affected to all the staff at Yarra Valley and the conservation approach has response rates to what we consider lower operational requirement or embedded in Water, from the receptionist on the widespread community support. On 30 June priority leaks, given the enormous effort made products. We prefer measures that are cost phone to the guys that got down 2003, we submitted to the Minister for Water by the public to reduce their water usage. effective in reducing water use while not and dirty in the extreme weather our Water Conservation Plan, incorporating degrading customer service or adversely Customer perceptions of our response to to fix the problem,’ the 23 recommendations of the Water affecting other environmental outcomes, such burst leaks, particularly during a time of Rob Diggins, with Glen Bartholomew, Resources Strategy. as increasing greenhouse gases. (See our restrictions, are varied and can upset ABC radio, Victoria, 8 January 2004 The Yarra Valley Water aim is to reduce per rainwater tank analysis page 24) capita water consumption by 20%, compared Figure 4: Water system and main breaks Water savings are not easy to quantify for to the 1990s, by 2010. This translates to 306 some types of activities, in particular 7000 6329 6401 litres per person per day, from a 1990s education and behaviour change activities. 6000 5761 average of 382. This requires a total saving of 5345 Also, some measures that replace drinkable 5000 4759 4855 44,000 megalitres per year (ML/yr). Of this, it 4605 4470 water with other water incur ongoing 4000 is estimated that 22,900 ML/yr has already operating costs, making it difficult to directly 3561 3487 been saved (based on water use during 3000 compare with those that do not. Our ongoing 2003-04). water conservation activities will undergo a 2000 more sophisticated analysis to determine 1000 ENVIRONMENT what approach is best for our customer and 0 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 the environment.

Number of water system breaks Number of water main breaks

02 * Water main breaks are counted in total water system breaks, which also includes hydrants and valves. Source: An annual audit has been conducted by independent auditors, CH2MHill Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. 22 23 Yarra Valley Water Annual Report 2003-04

This progress provides a good basis for Water consumption Table 1: Recent actual and forecast per capita water consumption The elements of water consumption for an implementing our plan into the future. There were some areas for improvement suggested KPI 2001-02 2002-03 2003-04 3 Year 2004-05 2005-06 2006-07 2007-08 average climatic year are as shown in Figure Actual Actual Actual Historical Forecast Forecast Forecast Forecast 5 for a total bulk water purchase of 194.5 GL by the audit that will be addressed in the Avg latest plan. These include completing the (gigalitre = one billion litres). Water conservation: 327 337 301 322 319 318 320 315 cost/benefit assessment of water Per capita water In May 2004, our progress towards the conservation projects and initiatives and consumption (litres targets stated in our Water Conservation Plan setting due dates for all activities. per person per day) was audited by Maunsell Australia Pty Ltd. Non revenue water* 14.1% 12.4% 11.3% 12.6% 11.9% 11.3% 10.8% 10.5% Some of our initiatives and achievements for ‘Yarra Valley Water is to be the Water Conservation Plan included: A rainwater tank, donated by Yarra Valley Water, Forecast figures are based on moving out of stage two restrictions in October 2004 and moving into permanent water saving measures is installed at Eltham High. * The difference between the total bulk water purchased and the total of customer-billed consumption commended on the improvements to Forming an alliance with the gardening the Water Conservation Plan process industry to jointly promote water efficient implemented over the past year.’ gardening practices. This included a ‘Being a school, educating our students Changing water use in the garden – working with the nursery industry display garden combined with information is our primary goal. …the tank has been Auditor’s Report from Maunsell Australia Pty Ltd, In December 2003 we undertook a pilot gardening program at Chadstone Shopping Centre. The June 2004 and customer surveys at the Chadstone incorporated into a number of curriculum pilot featured a garden display, with three different styles of garden for shoppers to experience. Shopping Centre over three months. activities. This makes your tank a real The aim was to test accessibility to information and the level of advice needed on sensible water Key improvements in this process included: winner. It helps make our school grounds Providing and installing 1,341 rainwater use in the garden. Appointment of a specific manager to tanks as an alternative source for garden an enjoyable place for our staff, our We conducted research with shoppers to understand the needs and preferences of the oversee ongoing water saving initiatives. irrigation, toilet flushing and laundry in our children and parents, as well as an community in obtaining and using water-related information for the garden. This knowledge was Clear allocation of responsibility for tasks licensed area. educational resource and an example used by Yarra Valley Water and the gardening industry to develop a joint water conservation listed in the plan. of our concern for the environment.’ program for gardening. Quarterly progress reports in relation to Geoff Grisold, St James School Education Board The resulting program, to be further explored and implemented in the coming year, will use the Water Conservation Plan implementation. We continued to provide financial garden and nursery industry to distribute information and advice. The community will be encouraged sponsorship of the Centre for Education to visit ‘Our Water Our Future’ Accredited Garden Centres to receive water conservation advice and Figure 5: Water consumption in an average year and Research in Environmental Strategies information. A training and accreditation program for the nursery and garden industry is under (CERES) Water Project and assistance with development. This is an exciting step forward in changing people’s behaviour. *Non-Revenue Residential rainwater tank and greywater system trials 27.2 GL 130.3 GL (see page 24). This will help us develop a policy for these systems for new developments in our licensed area. Business We have committed to a Memorandum of 37.0 GL Garden 40.8 GL Understanding with the International ENVIRONMENT Bathroom 44.7 GL Council for Local Environment Initiatives Toilet 17.5 GL Laundry 17.5 GL (ICLEI) to help them promote and deliver Kitchen 7.8 GL their Water Campaign to all councils in our Other 1.9 GL licensed area. As at June 2004, 12 of the 02 15 councils in our supply area had * The difference between the total bulk water purchased and the total of customer-billed consumption. committed to the program. Please note: Residential breakdown is estimated averages in an average year. 24 25 Yarra Valley Water Annual Report 2003-04

The Melbourne retail water companies, Again, Yarra Valley Water’s customers have Rainwater tanks. Our life cycle analysis VicWater, savewater!™ and the responded positively to the government’s Many people who purchase a rainwater tank do so with the belief that such a decision provides Sustainable Energy Authority of Victoria initiatives. This is demonstrated by the the best environmental outcome. Rainwater tanks reduce the use of potable water, so from that (SEAV) formed an alliance to assist consistently high uptake for most products perspective, have a positive environmental benefit. However, additional materials and energy are customers in realising combined energy (see Table 2). used in their construction, and commonly, additional energy is used when a pump is attached. and water savings. A Memorandum of savewater!™ Not knowing how these additional impacts compared with the benefit of saving water, we engaged Understanding setting out the basis of the Centre for Design at RMIT to determine if a rainwater tank was a sustainable solution. cooperation was signed in March 2004. Yarra Valley Water developed the savewater!™ concept to provide a consistent source of water A Life Cycle Analysis was used to evaluate the potential effect that a rainwater tank has on the Joint activities for the future include conservation information and economies of scale environment over its life cycle. Two rainwater tanks were tested at CERES – a 600-litre plastic collating energy and water saving tips, tank for garden watering only using gravity and a 2,250 litre plastic tank for garden watering and cross-referencing relevant brochures, for water utilities that promote water conservation. toilet flushing, with a pump installed and an automatic pressure switch. They were evaluated promoting a flagship product and The concept was designed to grow into a using indicators such as water use, energy demand and heavy metals use. modelling water and energy savings for separate entity, and we have now donated all the start-up assets, including the website and The research concluded that: shower roses. all our intellectual property to help it grow. Installing either tank led to significant reductions in water use by the owner. In addition, the Company supports the Tanks reduce the amount of undesirable nutrients going to streams and rivers because they government’s policies and actions: Water efficient appliances qualified for State From 1 July 2004, the savewater!™ alliance Government rebates was incorporated as a not-for-profit association. capture the nitrogen in rainwater. The State Government’s Water Resources The energy and material impacts of water tank manufacture and operation are substantially Strategy recommended that retail water higher than the energy used by the reticulated water supply, especially when a pump is used businesses work with Melbourne’s top Table 2: Number of rebates approved (1 October 2003 to 30 June 2004) with the water tank. The overall impacts are roughly equivalent to 20km of car driving and 200 industrial users to develop water Products Rebate amount State-wide number Number of rebates claimed by 60km of car driving for the 600L and 2,250L tanks respectively. management plans. ($) of rebates approved Yarra Valley Water customers Neither the 600L nor the 2,250L tank provides a financial payback in water savings within 2 month limited offer (1 Oct – 1 Dec 2003) Forty two customers represent our share of 30 years under current water prices and the assumed life of the tank and its components. If AAA Dishwashers 100 5,822 1,885 Melbourne’s top 200. In 2003-04, we AAAA Washing Machines 150 13,786 4,970 water prices were approximately 25% higher, the 2,250L tank would pay for itself in 30 years. developed a Water Management Plan kit However, the more the tank is used the better the financial payback. Core offer and template, which was used by the other AAA Shower Rose 10 2,366 906 There are a range of improvements and optimisation, which can reduce the overall impacts of two metropolitan retail water companies Dual-flush Toilet 50 2,234 754 the water tank and bring it closer, in energy and greenhouse terms, to the impacts of Greywater Permanent Tank System 500 134 44 and distributed to industrial customers. High Pressure Cleaning Device 30 21,485 9,201 reticulated water supply. Rainwater Tank to Toilet System 150 160 77 When people buy a tank they become more aware of how much water they use and this may State Government Water Smart Rainwater Tank; 600 - 1000 litres 150 1,306 418 encourage them to explore other water saving options. Gardens & Homes Rebate Rainwater Tank; 1001 – 1700 litres 150 757 244 Rainwater Tank; 1701 – 2250 litres 150 772 271 So while installing a rainwater tank has benefits in reducing water use, the overall environmental The State Government is committed to Rainwater Tank; 2251 - 3600 litres 150 482 126 impacts of producing and using rainwater tanks needs to be considered. At the end of 2003-04 water conservation. The government sees Rainwater Tank; 3601 - 4500 litres 150 616 156 empowering all Victorians to participate in Rainwater Tank; > 4500 litres 150 664 103 Yarra Valley Water ceased supplying rainwater tanks to our customers, preferring instead to Water Conservation Audit 30 51 29 ENVIRONMENT focus on other ways to save water. This includes promoting AAA showerheads, making sure water conservation as a key way to save water. Basket offer dishwashers and washing machines are full before use and taking shorter showers. On 1 October 2003, the government launched Rebate when purchasing $100 30 12,736 5,455 the second phase of the Water Smart Gardens worth of approved products & Homes Rebate Scheme, by expanding the list Total rainwater tanks 4,757 1,318 02 of water saving products that qualify for Overall total 69,995 24,639 rebates to both outside and inside the home. Source: Department of Sustainability and Environment 26 27 Yarra Valley Water Annual Report 2003-04 savewater!™ participated in two home shows and the Royal Melbourne Show, demonstrating the application of water saving technologies and providing information on how people can save water.

The alliance now includes: Yarra Valley Water, water companies and a range of product Non-revenue water Over the next five years we aim to reduce Active leakage control City West Water, South East Water, Barwon manufacturers demonstrating the application *Non-revenue water is the difference pressure in 64 areas, affecting 34% of our It is critical that we continue to reduce leakage of water saving technologies Water, South Gippsland Water, Glenelg Water, and providing between the total bulk water purchased and water mains and 46% of our customers. from our system. Active leakage control Westernport Water, North East Water and information on how people can save water. the total of customer-billed consumption. It Pressure management conserves water by involves identifying leaks in the field using Western Water. Competitions, with a prize pool that has grown comprises leakage, water lost from bursts, decreasing the number of burst water mains, sophisticated listening devices and repairing as well as reducing background losses through Some of the savewater!™ program improve- to over $400,000 from an initial $2,000. metering inaccuracies, theft, provisions for them while they are still small and therefore joints and fittings, while still providing adequate ments and activities in 2003-04 included: savewater!™ awards, which attracted a fire-fighting and water used for flushing not yet visible at the surface. We also have a 30% increase in entries from last year. mains during cleaning. In 2003-04, non- flows to customers. The other benefits of toll free hotline number for the reporting of Expansion of the savewater!™ website, pressure management include better customer Online market research to assess revenue water represented 11.2% of bulk leaks (1800 003 097). which attracts more than 170,000 hits service from reduced interruptions due to consumer attitudes across a range of water purchased. each week. bursts, and financial savings from the The data from zone meters enables us to water conservation initiatives. Benchmarking of the savewater!™ We undertake two key strategies to deal with deferment of water mains renewals and lower prioritise the most leaky zones for detailed website against similar sites worldwide. Continuation and expansion of the water lost in the system – pressure maintenance costs from fewer bursts. leak detection and repair. Our zone metering savewater!™ Efficiency Service Participation in two home shows and the Royal management and active leakage control. program uses a range of technology to detect (see below). By June 2005, pressure management will be and pinpoint leaks. In 2003-04, work in four Melbourne Show, incorporating a numberof Pressure management introduced in eight areas. We implemented a zones found a total of 689ML/yr in leaks after We have some of the highest average water comprehensive consultation program with surveying 538km of water mains, which exceeded Reducing water usage at Monash University – the savewater!™ supply pressures in the world due to the nature key stakeholders and undertook advertising our target of 500km. We also finished our Efficiency Service audit of our gravity water supply system and the activities prior to the commencement of program of metering 173 water supply zones. In January 2004 we completed an audit at Monash University, Clayton campus, involving four difference in elevation from the eastern to the these projects. major building complexes and installing over 2,000 water efficient devices. western suburbs. High pressure can be Our target for 2003-04 was to repair 83% of leaks within 24 hours. Our performance was The savewater!™ Efficiency Service audits how water is used and the plumbing infrastructure managed in new water supply systems, 74%. This was largely due to a sudden on the site. We offer a guaranteed water saving of more than 5% and there is a ‘payment by however as pipes age they lose the ability to increase in the number of water main bursts savings’ option. As part of the service, we submit a detailed report with a financial focus, building carry these high pressures. a business case for undertaking the water conservation initiatives. in March and April 2004. As a result, Monash University achieved substantial water and cost savings on all four building complexes. In two areas in particular, the Campus Centre and the Halls of Residence, the results Figure 6: Total amount of non-revenue water were quite spectacular with water consumption reduced by over 30%. 60 The project delivered an average saving of 20% of water used, representing 22,000 kilolitres 55.4 per year and around $50,000 (including energy costs). The cost of changes to infrastructure as a 50 43.5 result of the audit will be recouped in water savings within 12 months. 40.9 40 Based on these achievements and the manner in which the service was completed, from 32.6 30 27.3 auditing and reporting through to installation, Monash University intends to use the service 25.4 25.3 22.0 23.6 21.0 19.8 19.4 19.0 18.5 further at Clayton and at other campuses. 20 19.0

ENVIRONMENT *NRW (Gigalitres) Yarra Valley Water was commended by the university for the efforts of our staff, ‘Thank you for 10 providing a service that offers such great benefits to both the business and the environment.’ 0 This service gives us an opportunity to provide water saving advice to business, saving business 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 money and water – a win for both business and the environment! Following success such as 02 this, a licensing agreement has been established with South East Water, City West Water and Previous Actual Target Barwon Water to enable them to offer the savewater!™ Efficiency Service to their customers. Source: An annual audit is conducted by independent auditors,CH2MHill Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. 28 29 Yarra Valley Water Annual Report 2003-04 We installed sand filters at the Brushy Creek (Chirnside Park) and Lilydale sewage treatment plants to reduce phosphorus discharges into the creek.

The sewerage system

Sewage treatment plants We operate nine small sewage treatment unrelated minor plant mechanical problems Improved sewage treatment has been plants in the outer suburban fringes, located that occurred at the same time to upset the identified through our sustainability strategy in Avonsleigh, Emerald, Brushy Creek plant processes. The mechanical problems as one of the four ways we can reduce our (Chirnside Park), Craigieburn, Healesville, were repaired and the ammonia level on environmental impact. Therefore, one of our Lilydale, Monbulk, Whittlesea and Upper Yarra 13 October was 5.9mg/L and on 22 October key roles is the management and operation (Launching Place). it was 4.1mg/L, confirming the plant was back to normal. of the sewerage network, particularly our Each of these sewage treatment plants has a sewage treatment plants. licence from the EPA that defines the quality We have monitored the biological health and The community within Yarra Valley Water’s of treated water that we can return to the water quality of the waterways to which our licensed area generates around 123,000 environment. During 2003-04 we achieved treatment plants discharge treated water over million litres of sewage every year. Of this, full compliance with our licence requirements many years. During the year we completed a about 7% is treated by our treatment plants for all our treatment plants, with the exception number of projects to improve the quality of with the remainder transported to Melbourne of one occasion at the Brushy Creek plant. this water. We installed sand filters at the Brushy Creek (Chirnside Park) and Lilydale Water Corporation’s treatment plants. On 7 October 2003, the Brushy Creek sewage treatment plants to reduce Sewage comprises approximately 99% water sewage treatment plant recorded an phosphorus discharges into the creek. and a range of other materials including ammonia level of 13mg/L, which was above organic material, nutrients, viruses and a the new EPA limit of 10mg/L. The high variety of other inorganic materials. ammonia level was due to a series of

Table 3: Sewage treatment plant compliance

Treatment Treatment Volume % Overall BOD Suspended E.Coli plant method treated compliance solids kL All Samples Samples % Samples Samples % Samples Samples % parameters taken complying taken complying taken complying

Brushy Creek TERTIARY 3,969,292 99.73 52 52 100.00 52 52 100.00 52 52 100.00 Craigieburn TERTIARY 869,980 100.00 52 52 100.00 52 52 100.00 52 52 100.00 Healesville TERTIARY 380,229 100.00 12 12 100.00 12 12 100.00 12 12 100.00 Upper Yarra TERTIARY 692,290 100.00 52 52 100.00 52 52 100.00 52 52 100.00 Lilydale TERTIARY 2,404,480 100.00 52 52 100.00 52 52 100.00 52 52 100.00 Emerald: Ferres Rd TERTIARY 62,299 100.00 12 12 100.00 12 12 100.00 12 12 100.00 Avonsleigh: Symons Rd TERTIARY 97,022 100.00 12 12 100.00 12 12 100.00 12 12 100.00 Monbulk TERTIARY 11,430 100.00 12 12 100.00 12 12 100.00 12 12 100.00 Whittlesea TERTIARY 176,566 100.00 12 12 100.00 12 12 100.00 12 12 100.00

ENVIRONMENT Summary totals 2003-04 8,663,588 99.95 268 268 100.00 268 268 100.00 268 268 100.00

2002-03 8,268,579 100.00 242 242 100.00 242 242 100.00 242 242 100.00 02 2001-02 8,845,972 99.88 242 241 99.59 242 242 100.00 242 241 99.59 Source: An annual audit has been conducted by independent auditors,CH2MHill Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. 30 31 Yarra Valley Water Annual Report 2003-04

The existing chlorine disinfection system at Our operational strategy changed for the Craigieburn sewage treatment plant was Whittlesea sewage treatment plant this

replaced by an environmentally safe year to 100% reuse of treated effluent. Torourrong Reservoir ultraviolet disinfection system. This ceased discharge from the plant to the Plenty River. From 1 July 2004 all of the We also conducted environmental studies to treated water produced at the plant will be Yan Yean determine the future of the Craigieburn sewage Reservoir recycled as part of the Whittlesea Recycling treatment plant following the discovery that Greenvale Scheme. Construction of a new sewage Reservoir the endangered Southern Bell Frog may be Maroondah treatment plant at Whittlesea commenced Reservoir harmed by the reduction in flows to Merri Creek to increase capacity from 500,000 litres/day Sugarloaf Upper Yarra from closing the plant. We are currently Reservoir Reservoir to 1.5 million litres/day to accommodate finalising investigations into appropriate population growth. environmental flows and negotiating with the EPA regarding the quantity and location of We had planned to cease discharges from our Ferres Road (Emerald) and Symons Road future environmental flows. MELBOURNE YVW HEAD OFFICE (Avonsleigh) sewage treatment plants. We further improved our treatment plant Silvan However significant construction delays with Reservoir monitoring by developing a five-year stream the Emerald-Cockatoo relieving sewer meant monitoring program at Lilydale and Brushy Yarra Valley Irrigation Strategy. Market assessment completed for postponing the ceasing of flows to Menzies Creek sewage treatment plants. a mix of agricultural and horticultural customers. Creek and Wattle Creeks. Decommissioning Craigieburn Recycled Water Study. Market assessment completed of the treatment plants will proceed following for a mix of industrial, recreational and residential customers. Reuse Areas Table 4: Sewage treatment plant compliance YVW Business Area PORT PHILLIP BAY Treatment plant Total Nitrogen Total Phosphorous Treatment Plant Samples Samples % Samples Samples % taken complying taken complying Brushy Creek 52 52 100.00 52 52 100.00 the successful commissioning of the system. led the business to start the development of strategy to evaluate these servicing options Craigieburn 52 52 100.00 52 52 100.00 This is currently expected by March 2005. a framework to provide a consistent for Monbulk and the results will determine Healesville 12 12 100.00 12 12 100.00 approach to community involvement (see whether treated effluent continues to be A review of the Monbulk sewage treatment Upper Yarra 52 52 100.00 52 52 100.00 page 39). We have committed to further discharged to Sassafras Creek. plant in 2002 concluded that the best Lilydale 52 52 100.00 52 52 100.00 evaluate alternative options to the Monbulk Emerald: Ferres Rd 12 12 100.00 12 12 100.00 solution for managing sewage from Monbulk Recycling opportunities Transfer System to provide additional Avonsleigh: Symons Rd 12 12 100.00 12 12 100.00 was to decommission the plant by December confidence in the final adopted strategy by Recycling of treated wastewater is of growing Monbulk 12 N/A N/A 12 N/A N/A 2004 and bring forward construction of the the business and our customers. importance for both water conservation and ENVIRONMENT Whittlesea 12 12 100.00 12 12 100.00 Monbulk Transfer System. Consultation environmental reasons. The State Government Summary totals activities revealed that the community had One of the options we are evaluating is has set a recycling target of 20% of 2003-04 256 256 100.00 256 256 100.00 concerns with the transfer system proposal. continued discharge to Sassafras Creek Melbourne’s wastewater. Yarra Valley Water’s 2002-03 230 230 100.00 230 230 100.00 Through this consultation process, we following an upgrade to the sewage contribution is illustrated in the above map. 02 2001-02 212 212 100.00 230 230 100.00 recognised that our process for involving the treatment plant to meet tighter discharge public in such issues could be improved. This licence conditions. We are preparing a N/A (not applicable) means either no EPA licence limits for this parameter at the plant or the number of samples taken were insufficient for valid statistical results. 32 33 Yarra Valley Water Annual Report 2003-04

Aurora – Creating a sustainable community Table 5: Volumes of water produced at our sewage treatment plants

Located north of Epping, Aurora is a new replace potable (drinkable) water with A sewage and recycled water treatment Treatment plant Treated water VicUrban housing development comprising recycled water for garden irrigation requires facility, located on a 160-hectare site to the Total volume produced kL Total volume recycled kL % reused some 8,500 lots. The whole project, due for energy to pump the recycled water. It also west of the Aurora Estate, will comprise: Brushy Creek 2003-04 3,969,292 45,137 1.14% completion in 2020, will help us learn about presents a water surplus management issue A sewage treatment plant. 2002-03 3,885,049 69,203 1.78% Craigieburn 2003-04 869,980 110,859 12.74% sustainable development – water savings, in winter when irrigation water is not required A water treatment plant to produce Class A 2002-03 818,407 150,139 18.35% energy savings, using sustainable building to the same extent. Recycled Water (defined by EPA Guidelines Healesville 2003-04 380,229 0 0.00% materials and even increasing social Some of the impacts on our business in as being suitable for non-potable uses with 2002-03 340,022 0 0.00% interaction opportunities are all part of the supplying recycled water to Aurora include: unrestricted public access). Upper Yarra 2003-04 692,290 300 0.04% project. The aim is to develop a community Development of engineering design Storage dams. 2002-03 602,496 300 0.05% that experiences the same level of utility standards for recycled water. An irrigation system to use excess Lilydale 2003-04 2,404,480 0 0.00% services we all expect, but with much lower 2002-03 2,295,180 0 0.00% Development of plumbing standards for treated water to grow crops. impacts on the environment. Emerald: Ferres Rd third pipe systems and rainwater tanks. One of the most innovative proposals to 2003-04 62,299 0 0.00% Yarra Valley Water’s involvement is focused Changes to our meter reading, billing and reduce usage of potable water is to supply 2002-03 50,091 0 0.00% around developing a system for an revenue collection to accommodate the hot water system from a rainwater tank, Avonsleigh: Symons Rd additional (third) pipe to properties that 2003-04 97,022 0 0.00% recycled water. with a backup system using mains water provides recycled water for toilet flushing 2002-03 92,538 0 0.00% Installation of two meters – one for during periods of no rainfall. Two pilot and watering of gardens (defined as Class A Monbulk 2003-04 11,430 0 0.00% programs have been established at the recycled water). What we learn at Aurora recycled water and one for drinking water. 2002-03 10,653 0 0.00% Centre for Education and Research in can be applied to achieve more sustainable Development of maintenance and Whittlesea 2003-04 176,566 123,269 69.81% Environmental Strategies (CERES) 2002-03 174,143 35,661 20.48% water management for our customers in ownership strategies for rainwater tanks. Community Environment Park in Brunswick. Summary totals other developments. Subdivisional work commenced at Aurora in 2003-2004 totals 8,663,588 279,565 3.23% Aurora is simultaneously addressing social, February 2004, creating roads and housing To indicate their commitment to this project, all partners signed a Sustainability 2002-2003 totals 8,268,579 255,303 3.09% transport, habitat, water, energy and materials lots and the laying of water, sewerage and 2001-2002 totals 8,845,972 135,885 1.54% issues in a truly integrated way. The challenge recycled water pipes. Housing construction Covenant in June 2004. This includes Yarra for us is not to trade off water saving gains by is scheduled to begin in September 2004, Valley Water, VicUrban, Environment Source: An annual audit conducted by independent auditors, CH2MHill Pty Ltd, on behalf of the Essential Services Commission, increasing energy usage or waste production. with the display village completed and Protection Authority (EPA) and City of to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. For example, using a third pipe system to residents living at the estate by mid 2005. Whittlesea. This covenant brings together stakeholders who are working as a team to reduce the environmental impact at Aurora. As well as Aurora, Yarra Valley Water initiated was completed to determine the quantity of the Craigieburn Recycled Water Strategy, water currently used, the potential to use This is an innovative learning project that another significant project in Victoria involving recycled water, water quality requirements, will help us to assess the benefits versus the costs of recycling. While we are recycled water. This project aims to assess seasonality of demand, and willingness to excited to be involved in this project, we the demand for recycled water in the pay. This information will be used to assess northern suburbs of Melbourne, focusing on and where appropriate, determine the most ENVIRONMENT realise the solutions being proposed will not provide clear answers for some time. industry, agriculture, municipal use (sports suitable way to implement water recycling in Our next step is to develop a research fields, parks and gardens) and new the area. strategy in conjunction with the Aurora developments. A market research exercise partners to gauge the outcomes of the 02 sustainability initiatives at Aurora. 34 35 Yarra Valley Water Annual Report 2003-04

The main recycling opportunities for Yarra water during winter for irrigation during Healesville – We identified a potential biosolids was tested, jointly by us and We contained 100% of spills within five Valley Water include: summer and a chlorine dosing facility on opportunity to provide recycled water to Eastern Waste Management, with a view to hours, exceeding our Operating Licence the outlet of the winter storage dam to the RACV Golf Course and Healesville establishing a green organic and biosolids target of 90%. Our objective was to achieve Whittlesea – Our goal of 100% recycling ensure the water meets Class B water Racing Club from our Healesville sewage recycling project at our Lilydale sewage fewer than 120 spills from Emergency Relief for our Whittlesea sewage treatment plant quality standards. Class B water is defined treatment plant. Both organisations are treatment plant. At this stage the strategy is Structures, and we had 102. We aim to remains achievable. The project includes a as suitable for agricultural and some currently assessing their available options not commercially viable. As an alternative we reduce the amount of sewage spilled by 30% six kilometre pipeline from the treatment industrial use. The project also involves for future water resources and we will are now exploring, with Collex and the from 2002-03 levels by June 2008. plant to the City of Whittlesea Golf Course, acquiring land for the storage dam and finalise the scheme when they have Natural Resources Recovery Centre in a pump station to supply recycled water to To do this we have an extensive program negotiating with potential customers. determined their preferred supply Dandenong, which composts industrial the golf course, a dam to store recycled for upgrading the sewerage system to methods. Our scheme aims to achieve waste, an opportunity for recycling our reduce the number of spills when sewage 100% reuse during the irrigation season. biosolids. A trial is being conducted to look at flows increase during wet weather. Table 6: Sewage biosolids volumes and storage any issues with composting our biosolids and Aurora (see case study page 32) Emergency relief structures are installed potential consumer attitudes. Treatment plant Biosolids (1) Biosolids on the sewer network to provide relief to Mass produced Mass reused Mass stored % reused the sewerage system during times of high Biosolids refers to the processed solid Sewage spills (dry tonnes) (tonnes) (dry tonnes) flow, in particular during high rainfall. material left behind after sewage is treated. A key role in protecting the environment and Brushy Creek 2003-04 1,155 0 0 0% These structures prevent uncontrolled Biosolids are rich in nutrients and organic public health is to prevent spills from the 2002-03 1,471 0 0 0% spills at manholes or customer properties material, which makes them a potentially sewers into the environment. Spills can occur: Craigieburn 2003-04 351 0 3,747 0% by means of a controlled overflow that good soil additive. Only two of our treatment During periods of high rainfall as water 2002-03 288 0 3,396 0% minimises impact on customers’ properties. plants, Lilydale and Craigieburn, currently leaks into the sewers. Healesville 2003-04 92 0 0 0% These sites are monitored and the spill 2002-03 77 0 0 0% store the solid material that can be processed If the sewers are not large enough to cope history is used to prioritise the upgrade Upper Yarra 2003-04 137 0 0 0% into biosolids. The remaining plants have the with the flow of the system. 2002-03 138 0 0 0% raw product transferred to Melbourne Water’s When the sewer becomes blocked, or Lilydale 2003-04 840 0 13,359 0% treatment plants. The market for recycled 2002-03 851 0 12,519 0% When a sewer collapses. Emerald: Ferres Rd 2003-04 27 0 0 0% 2002-03 24 0 0 0% Table 7: Volume of sewage spilled

Avonsleigh: Symons Rd Target Actual Forecast Forecast Forecast Forecast 2003-04 35 0 0 0% 1999-00 2000-01 2001-02 2002-03 2003-04 2003-04 2004-05 2005-06 2006-07 2007-08 2002-03 23 0 0 0% Volume of sewage spilled from all Emergency 22.3 3 0 0.9 0 72 0000 Monbulk 2003-04 4 0 0 0% Relief Structures (ERS) due to high rainfall (ML) 2002-03 4 0 0 0% Whittlesea 2003-04 56 0 0 0% Volume of sewage spilled from all ERSs due to 24 59 1 0.3 41 20 41 35 32 32 2002-03 51 0 0 0% hydraulic deficiency (ML) Summary totals Total spill volume from ERSs (ML) 46 62 1 3.0 41 177 41 35 32 32 ENVIRONMENT 2003-2004 totals 2,697 0 17,106 0% Volume of sewage spilled from ERSs as a total 0.04 0.05 0.0007 0.0026 0.0303 0.1477 0.0328 0.0275 0.0251 0.0251 2002-2003 totals 2,927 0 15,915 0% of sewage collected (%)

2001-2002 totals 2,551 0 15,000 0% Annual rainfall (mm) 697 701 628 428 659 620 659 659 659 659

Source: An annual audit has been conducted by independent auditors,CH2MHill Pty Ltd, on behalf of the Essential Services Sewer spills contained within five hours (%)* 100 99.8 99.9 100 100 100 100 100 100 100 02 Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. Source: An annual audit has been conducted by independent auditors, CH2MHill Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. This process has been audited by Gutteridge Haskins and Davey Pty Ltd as part of our environmental audit program to ensure the accuracy of the data. *The Operating Licence target for sewer spills contained within five hours is 90%. 36 37 Yarra Valley Water Annual Report 2003-04

Our target is to upgrade all emergency relief spills. During the year 20 kilometres of Sewer collapse - Daley and Glen Street, Glenroy structures to meet the EPA standard by sewers were cleaned. 2011-12. This standard means that sewers On 1 May 2004, a 525mm diameter Spills were initially controlled by emergency complete and flows can be moderated to We continued planning and design for the should not spill except in extreme storms, concrete sewer built in 1958 collapsed. The pumping. We repaired the sewer by installing allow for inspection. Merri Creek Diversion Sewer to cater for which are defined as those that occur, on sewer is a key pipe for carrying discharges 106m of structural sewer lining by 8 May. growth in the northern suburbs and reduce the The works associated with the original average, once every five years. from nearby industrial sites. We knew the incidence of sewer spills. Consultation with the We inspected the sewer for a further 1,020 sewer collapse affected about 50 homes. sewer was approaching the end of its Our target for 2003-04 was for 64 of our community about this program is due to start metres downstream while bypass pumping The cleanup of the waterways continued serviceable life and in December 2003 106 emergency relief structures to be in the latter half of 2004. During the year we was in place. The sewer was found to be in for a further two weeks. In conjunction started building a relieving sewer parallel to compliant with the ‘one-in-five-year’ design also upgraded seven pumping stations to have poor condition so we also relined that with Theiss Environmental and Golf the old one at a cost of $8 million. This section of sewer as a precaution against Course management, we produced an standard set by the EPA. By 30 June, 61 three hour’s emergency storage at an sewer was due for completion in May 2005. were compliant. Construction issues delayed approximate cost of $800,000. This upgrading another collapse. We will undertake the environmental cleanup plan, agreed to The collapsed sewer blocked the pipe, same inspection and rehabilitation process by all parties. This allowed us to return the completion of works to ensure means that if our pumps fail to operate as a causing sewage to overflow from an upstream of the collapse when the the waterways within the golf course back compliance of a further three emergency result of power failure or breakdown, spills will upstream manhole into the stormwater construction of the relieving sewer is to near original condition. relief structures. Those delayed in 2003-04 be minimised as we have time to respond with system. The sewage flowed through will be completed in 2004-05. The remainder emergency activities. underground drains to the Northern Golf are expected to be compliant by 2011. We experienced two significant sewer spills Course and through an above ground natural A further $2.5 million was spent on relining in May 2004, one in Glenroy and the other in drain/water course to Moonee Ponds Creek. and renewing 16 kilometres of old or Reservoir. Both incidents presented the The sewage deposited fats, grease and deteriorating sewers. We schedule sections business with major challenges, however the greywater along the waterway and in a small of the sewerage network for investigation and impact on the environment and our golfcourse dam. upgrade according to their condition. Our customers was minimal. We responded by immediately notifying sewer cleaning programs also help to prevent the local community, the Environment Protection Authority (EPA), Melbourne Water, Department of Sustainability and Figure 7: Sewers relined or replaced Environment and the local council.

20 17.1 15.2 15 13.4 13 12.6 Sewer blockage quickly contained - Central Creek, Reservoir 10 6.6 While workers from AbiGroup, our Merri Creek 150m downstream. We advised To fix the problem, we had to remove by 5 maintenance contractor, were cleaning a Melbourne Water Corporation and the EPA. hand several cubic metres of bricks and 525mm diameter section of sewer in The EPA took water samples to confirm bluestone pitchers that had been illegally ENVIRONMENT 0 Radford Road, Reservoir, the sewer blocked sewage had not discharged into Merri Creek. dumped into the manhole, causing the 1999-00 2000-01 2001-02 2002-03 2003-04 Sewers relined or replaced (kilometres) and spilled over from an upstream manhole, Although the impact of the spill on blockage. Because of the difficult working also in May 2004. conditions, it took over a week for the Previous Actual Target customers was minimal, we conducted a As AbiGroup were on site, they were able to letter drop to the local residents advising manhole to be cleared and the blockage Source: An annual audit conducted by independent auditors, CH2MHill Pty Ltd, to ensure that robust systems, processes contain the spill to Central Creek using hay them of the spill and the action we took to removed. Emergency pumping was in place 02 and plans are in place to manage our assets. bales, and prevented sewage from entering contain it. during that period. 38 39 Yarra Valley Water Annual Report 2003-04

Unsewered areas We have had difficulty in some cases Pty Ltd, we will look at all of the environmental Providing sewerage services to properties quantifying all the environmental benefits of impacts of supplying water and sewerage currently using septic tanks is referred to as the program. Currently the program is ranked services to new developments including: ‘backlog sewerage’. Unsewered properties by the business on the basis of highest public Cumulative energy use health and environmental benefit combined have the potential to cause environmental and Global warming impacts with a consistent financial analysis of the health risks, as well as odour problems. The Nutrient emissions program is an important issue for us because areas identified for sewering. We are Materials consumption of the high cost and difficulty in defining continuing to work with councils to more environmental benefits and property owners’ accurately prioritise and rank the schemes. Water and contaminant balance of water supply, wastewater and stormwater. reluctance to incur the cost of connection. The majority of the money we spent on In 2003-04, the rules for identifying backlog backlog in 2003-04 has been directed to the The research aims to examine the impacts properties changed. We are working with Emerald Cockatoo Sewerage Scheme. This of normal practice for servicing new councils to determine appropriate lot sizes system will improve current sewage development and possibly identify alternative and land capability for on-site sewage treatment and disposal methods in Cockatoo, service options, including rainwater tanks treatment. The backlog program poses a Avonsleigh, Emerald, Clematis and Menzies for toilet and garden and third pipe dilemma for our business as it involves a Creek and provide capacity to service wastewater recycling. backlog properties in these areas. The number of difficult issues. The project began in June 2004 and results Servicing growth areas such as Melbourne’s northern suburbs in a sustainable way is a challenge for system comprises six sewage pumping Yarra Valley Water. are expected within a year. The primary obstacle with this 38-year stations and 15.8 km of pipelines, extending program is that it needs significant from Cockatoo to the existing Monbulk Creek expenditure on infrastructure for relatively Main Sewer within South East Water’s Decommissioning the Monbulk sewage treatment plant – a case study in community engagement few properties. It will require around $250 licensed area. The Monbulk sewage treatment plant (STP) 2. Implementing a 100% treated effluent reuse consultation activities revealed that the million dollars to sewer approximately 16,000 currently services 163 properties and scheme and cease discharge to the creek. committee members had concerns with the properties. Our average annual expenditure Servicing new developments discharges treated effluent to Sassafras recommended proposal and its impact on A significant population growth is expected in 3. Decommissioning the STP and bringing on this program is currently $5.5 million. Creek. The STP is planned to operate until the local community. the coming years in Melbourne. This includes forward construction of the Monbulk Customers have been reluctant to connect to 2021, when the Monbulk Transfer System the expansion of suburbs and new housing Transfer System. In order to address these concerns and to the newly provided infrastructure, largely is to be constructed to pump flows to within existing suburbs, such as units in The results of this review recommended a investigate alternatives in more detail, we because they are required to pay a Melbourne Water’s Eastern Treatment Plant backyards. In Yarra Valley Water’s licensed strategy of decommissioning the STP by the placed the planning permit application for the connection cost of $500, plus the cost of the at Bangholme. system on hold. Additional studies were area, sites around the northern suburbs end of 2004 and bringing forward plumbing services to connect the household Yarra Valley Water undertook a review of the undertaken to assess the three original including Hume, Epping and Mernda are construction of the Monbulk Transfer System. plumbing to the sewerage system, which STP in 2002 to ensure existing and future options in more detail and to evaluate other expected to be developed. The strategy was presented to Monbulk usually exceeds $2,500. During the year, we sewage flows could be managed and EPA’s alternatives. The results of this additional residents, EPA, council, local environment conducted research with customers and we This posed a question for Yarra Valley Water requirements for improved water quality work will help in determining the best solution groups and other stakeholders via group are now working on a strategy to improve – how do we service this growth in the most discharges to Sassafras Creek could be met. for managing sewage flows from Monbulk. ENVIRONMENT meetings, presentations, public meetings, connection rates. sustainable way? Options that were assessed to meet these newsletters and information sessions. A The Monbulk project has shown the By collaborating with the Centre for Design at objectives included: Community Reference Group was also contribution that the community can make by adding local knowledge and appreciation RMIT, the CSIRO Division of Manufacturing 1. Upgrading the STP to allow continued established to meet monthly and provide of localised issues, to Yarra Valley Water’s 02 and Infrastructure and Sustainable Solutions discharge to Sassafras Creek until 2021. input and feedback on the strategy. These technical expertise. 40 41 Yarra Valley Water Annual Report 2003-04

Trade waste The impact of key pollutants on the reuse of Figure 8: Compliance to trade waste standards Trade waste is wastewater produced from the effluent and biosolids was identified as a key operation of industry and commercial action item. In response to this we increased the monitoring for a number of heavy metals, 94.3 92.8 94.1 94 94 businesses. We are required to accept trade 100 90 90 90 90 90 waste discharges to our sewerage system which are known to accumulate in and make 80 providing that it complies with the Trade use of recycled biosolids difficult. The data Waste Standards contained in our Operating collected from this monitoring will be used to 60 target industries in order to reduce the heavy Licence. These standards are set by the State 40 Government after taking into consideration metal loads being discharged to sewer.

rade waste compliance (%) 20 the sewage treatment plant capabilities, the The audit also identified colour in the effluent T need to maximise the life of our assets, the as an issue in terms of the aesthetics of 0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 need to protect the health and safety of recycled water. We have been working with sewerage workers and the need to protect our large trade waste customers to identify Previous Actual Target the environment. residual colour discharges in their trade waste stream and look at options to improve Source: An annual audit is conducted by independent auditors, CH2MHill Pty Ltd, on behalf of the Essential Services Commission, We currently have over 6,000 customers to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. who are licensed to discharge trade waste the colour quality. This work has lead to one into our sewers. The vast majority are low trade waste customer in our area committing risk discharges, such as fast food outlets significant capital investment in a new During 2003-04 there has been an emphasis Developing a grease trap management and small businesses. The remainder are treatment plant to remove colour from its on a longer term strategy for trade waste plan to improve the monitoring and ranked by the risks they present and are trade waste discharge. management. Initiatives currently under maintenance of customer grease traps. audited and monitored in accordance with In addition to our auditing and inspections, development include: Undertaking a process to implement a their risk ranking. The frequency of inspection Risk Profiles and Waste Management Plans In cooperation with the other metropolitan new IT system to improve the is determined by the content of the are produced by the higher risk customers. water retailers we are developing Water management of trade waste customers. discharge, with high risk discharges audited Risk Profiles help us identify and manage the Management Plans (WMPs) with the top Contributing to a study with Melbourne more frequently. risks associated with customer discharges. 200 water users in Melbourne. The Water Corporation and the other retailers have produced a Water During 2003-04 Melbourne Water Waste Management Plans are used to metropolitan retail water companies to Management Plan Information Kit that lists Corporation undertook an audit of the Eastern promote waste minimisation and cleaner gain a better understanding of the four elements that need to be considered Treatment Plant with the cooperation of the production at our customers’ sites. We met our composition of domestic sewage in in developing a plan. Wastewater three metropolitan water retailers. This audit target to have all high risk customers submit Melbourne today. management is one of these elements. assessed the impact of trade waste on the Waste Management Plans in 2003-04. WMP for trade waste customers in the top treatment process and identified recycling 200 will need to consider the impact of opportunities from the plant. water efficiencies/conservation on trade ENVIRONMENT waste containments and opportunities for 02 improvement of trade waste quality. 42 43 Yarra Valley Water Annual Report 2003-04 ‘The success of our Green Office exemplifies the staff’s environmental awareness to want to do the right thing. It has been very rewarding to be part of such a positive initiative and see the changes within the business.’

Barbara Best, Yarra Valley Water's Green Office Project Manager

Greenhouse gas emissions Waste to landfill

Greenhouse gases and energy use Yarra Valley Water has adopted the 50% Other initiatives to reduce greenhouse gas Green Office Strategy unsustainable items, such as paper cups and We are fortunate to have one of the lowest reduction target based on the emissions and energy use in 2003-04 included: The Green Office Team was formed in February plastic/wood cutlery, which were previously energy consuming infrastructure systems of recommendation of the IPCC. We will achieve Reviewing high energy consumption 2004 as part of our Green Office strategy. The used on a daily basis to help reduce the any water company in the world. Harvesting this by first focusing on efficiency gains and equipment at the Brushy Creek sewage strategy was developed using the principles of amount of waste going to landfill. then purchasing Green Energy to make up water from our protected catchments means treatment plant to determine the viability the Waste Management Hierarchy, being (from The provision of an all-in-one recycling box, the shortfall. very little energy is consumed in treatment of replacing it with energy efficiency most favourable option to least favourable which allows paper, aluminium, plastic and and our water flows by gravity to most Since June 2003 we have included equipment. option): avoidance, minimisation, reuse, glass in the same box, replaced the rubbish houses in Melbourne. Much of the sewerage greenhouse information in our internal Introducing dissolved oxygen control at recycling, recovery and disposal. Fourteen bin at desks in the office. This resulted in very system also operates by gravity. The energy communications to raise staff awareness of Whittlesea sewage treatment plant, which waste strategies were identified such as paper high awareness of the Green Office program we consume in supplying water and treating our greenhouse programs. The major objective is currently being constructed. use, electricity use and waste going to landfill objectives by our staff. Feedback from staff wastewater translates to less than 6% and is to continue and improve the commitment by Investigating the feasibility of alternative from the head office. showed that it had an immediate impact, 18% respectively, of the Australian average. the whole business to the Greenhouse biosolids disposal options. We achieved a 45% reduction in waste going forcing people to think about what they were However, our greenhouse gas emissions Challenge program. This program is a joint Implementing power factor correction to landfill in the first month of the strategy. throwing away and what could be recycled. voluntary initiative between the Federal totalled 23,421 tonnes. Under our sustainability equipment at Brushy Creek treatment plant. Our ultimate goal is a 90% waste reduction Infoxchange, Green PC strategy, we have set a target of reducing our Government and industry organisations, where by 2007. To achieve this we will need to Car usage Our agreement with Infoxchange, a Green PC emissions to 10,500 CO -e by 2007. participants sign agreements to provide a divert nearly six tonnes of waste going to 2 group, provides a sustainable solution to framework for undertaking and reporting on We continue to offset the greenhouse gas landfill by recycling things such as the 1.5 This target is based on scientific rationale, disposing of obsolete computers and actions to abate greenhouse gas emissions. production of our company car fleet via the tonnes of paper towel that we use each year, grounded in the work done by the associated accessories. In 2003-04 we Greenfleet program and the use of our hybrid recycling fluorotubes, mobile phones, toner Intergovernmental Panel on Climate Change donated 40 personal computers to the petrol/electric car. Bicycle racks have been cartridges, plastics, hardware equipment, (IPCC), which was established in 1988. program. We send any of our faulty hardware installed for staff use and the company cardboard and office paper. We removed all to companies that can recycle the useable participated in the annual ‘Ride to Work Day’ employees’ rubbish bins from their desks to parts, such as plastic and metal, rather than Table 8: Our energy consumption organised by Bicycle Victoria. We recognise prevent recyclable items being sent to that these actions are inadequate and that send it to landfill. 2001-02 2002-03 Actual 2003-04 landfill. In recognition of our waste reduction we will need to be much more innovative to Infoxchange is a government-funded not-for- Total electricity used for Mitcham office 1,576 MWh 1,388 MWh 1,883 MWh efforts we were presented with a Waste Wise reduce our dependence on cars. certificate from EcoRecycle Victoria and Least profit organisation, which recycles computers Total electricity used for operational sites 13,286 MWh 13,139 MWh 13,389 MWh Our key activity moving forward is to measure Waste Management Group in June 2004. and accessories and makes them available at Total diesel used for operations and Mitcham office 10,500 litres 7,536 litres 3956 litres a nominal cost to families, students and and quantify CO2-e and then set targets for Total unleaded fuel used 330,000 litres 363,410 litres 357,645 litres ‘They have achieved a great deal over each area of use. community groups on limited incomes. a short period of time,’ The Infoxchange group employs long-term Source: Based on 2003-04 accounts Bernie Millane, Whitehorse councillor on behalf of Least unemployed and trains them in the basic Waste on Yarra Valley Water’s efforts to become waste wise. skills of refurbishing and operating the donated computers. The Green Office Launch was held at our ENVIRONMENT head office on Earth Day in April 2004. Each Environment Improvement Plan staff member received a Green Office gift For a summary of our environmental progress pack of a plate, mug, fork, spoon and an all- this year and plans for next year, see the in-one recycling box. These items replace the 02 Appendix, pages 138-154. 44 45 Yarra Valley Water Annual Report 2003-04 Customers ‘Members of the Customer Consultative Committee debate and challenge many of Yarra Valley Water’s proposals.’

Netta Griffin, Chair of Yarra Valley Water’s Customer Consultative Committee

Monopoly service providers are often Most of our customers experience few accused of a lack of customer focus and problems and receive a reliable service from complacency in meeting service obligations. us. However, we do have some customers At Yarra Valley Water we are determined to who receive chronically poor service. stay focused on meeting our customers’ For example: needs and expectations. We believe good Customers who experience repeat sewer customer service equals better business blockages. because it costs less. Customers who experience dirty water on a regular basis. Our approach to customers We have in place a number of strategies Constant tracking of customer satisfaction is to alleviate impacts on these customers. critical to ensure we continue to provide a high quality of customer service. We survey customers regularly, whether they had a need to contact us or not. We use this survey data as a tool to identify where we can improve and recognise staff performance. Our Customer Service Strategy, adopted in 2001, sets strategic goals of achieving higher levels of customer satisfaction at reduced costs. The strategy recognises that in order to achieve high levels of customer satisfaction in the most efficient way, we need to: Reduce the volume of service failures or problems experienced by customers (for example, water quality complaints, water main bursts, calls to clarify our charges. Provide an efficient service when customers do contact us with an issue. Have satisfied employees, because we believe satisfied employees deliver better service and are more productive. CUSTOMERS Maintaining the momentum of our Customer Service Strategy across the business is 03 essential if we are to improve service. 46 47 Yarra Valley Water Annual Report 2003-04

Achievements and Achieved recognition from the Essential development of the campaign messages, Summary of our long-term disappointments in 2003–04 Services Commission (ESC) for our while also providing our own materials to targets our customers. Won the Customer Service Institute of programs to assist customers in financial Our long-term targets in relation to customer hardship. The ESC identified our program Australia (CSIA) Victorian and National Managing water quality during drought is also service build on our achievements and as consistent with best practice. The Awards for Australian Service Excellence a key challenge for us. In order to reduce learnings to date. They focus on continuing program also won a Prime Minister’s in the Government category. complaints about ‘dirty’ water caused by to reduce problems experienced by Award for Community Partnerships – our Achieved overall customer satisfaction sediment settling in the water pipes, we need customers and on achieving higher levels partners being Kildonan Child and Family of 54.5% for very good and excellent to flush water mains with water from the of customer satisfaction. Services. See page 61. system. During restrictions, when we are categories. This is an increase from Achieve 97.5% first contact resolution by Won Victorian Call Centre of the Year and asking people to save water, our customers 51.5% in 1999 when we first started June 2007. tracking customer satisfaction. However, Victorian Teleprofessional of the Year. do not want to see water being ‘wasted’. As a Reduce avoidable customer billing contact Yarra Valley Water General Manager, Customer we were disappointed this had fallen result, we have temporarily deferred our Challenges we face volumes by 20% over 2003-04 volumes Operations, Pat McCafferty, receives the Customer slightly from last year. See page 48. expenditure on water mains cleaning until we Service Institute of Australia Award. Customers’ expectations are constantly by June 2007. Answered 92% of account calls in 15 are out of restrictions. We are currently changing. We need to respond quickly Reduce volumes of water quality seconds and 94.2% of emergency calls investigating technologies that allow us to and effectively to keep up with expectations if complaints to 4.0 per 1,000 customers by in 15 seconds compared to the previous clean mains using less water. we are to maintain our high levels of June 2008. year’s result of 90.4% account and Melbourne enjoys a good reputation for its customer satisfaction. Customers compare Reduce the number of customers 92.4% for emergency. See page 57. drinking water, which is sourced mostly from our service to that of other utilities and other experiencing greater than three unplanned Achieved our best ever result for protected catchments so it can be delivered companies. We pride ourselves on how our water supply interruptions per year to customer satisfaction with our emergency with minimal treatment to our customers. The service measures up, but we know we must 3,200 customers by June 2007. telephone line, with 76% of customers keep improving to keep meeting our result of minimal treatment is that naturally who called rating the service as very good Reduce the number of customers customers’ expectations. occurring sediment finds its way into the pipe or excellent. network. While this sediment (minute experiencing greater than five unplanned water supply interruptions per year to Resolved 96% of customer inquiries on Our customers now expect quality information particles of clay and minerals) is completely 480 customers. their first contact. from us regarding water restrictions and safe to drink, we get higher numbers of how to save water. Several years ago they did customers complaining of ‘dirty’ water than Ensure no more than 365 customers Received more complaints than anticipated not have these requirements. Our research in cities where the water is treated. The experience five sewer blockages in – 5.65 water quality complaints per 1000 and daily experiences with customers help installation of fuller water treatment in five years. customers compared to a target of 5.2 us to monitor these expectations and Melbourne is possible, but it is expensive and water quality complaints per 1000 Increase customer satisfaction from the respond appropriately. would increase energy used and the customers. See page 51. current 56% for Excellent and Very Good chemical content of water. We do not support categories to 60% by June 2006. Restored 94.8% of unplanned water supply The provision of water conservation the introduction of further treatment of interruptions within three hours compared information has caused some customer Melbourne’s water supply. Sediment is not CUSTOMERS to 93.4% last year. See page 52. confusion. The State Government has been harmful and our challenge is to remove the coordinating a joint water conservation Designed a new customer account that is sediment without full filtration and without advertising campaign, called ‘Our Water Our clearer and more easily understood by our wasting water. Future’. We were actively involved in the 03 customers. See page 59. 48 49 Yarra Valley Water Annual Report 2003-04

Customer research Water quality

Customer satisfaction Customer satisfaction research from January Treatment and testing Water mains cleaning versus water Water quality monitoring program Tracking customer satisfaction is critical as to June 2004 indicated a satisfaction rating Our market research consistently identifies conservation The process of ensuring safety of the water our customers cannot show their of 54.4% for residential customers. Our the quality of the water that we provide as Water mains have traditionally been cleaned supply includes disinfection of all sources of dissatisfaction by taking their business score for residential customer satisfaction the highest priority for our customers. We by flushing mains with water. In drought, supply and routine monitoring to confirm elsewhere. We use a range of options to has remained relatively stable, although there measure water quality using two main mains flushing could be seen to be wasting compliance with guidelines set by health independently track our performance and was a decrease of 1.0% in 2003-04. These indicators – laboratory testing for safety and water. Trying to save the water for reuse is regulations and the National Health and assess customer views. Methods we use vary results may be due to increased service aesthetic compliance to standards, and water costly. Although less than 0.2% of total Medical Research Council (NHMRC). This from large-scale telephone surveys, which expectations from our customers. The quality complaints from customers for annual consumption would be needed for the involves collecting samples on an ongoing broadly indicate customer perceptions, to introduction and continuation of water aesthetic quality at the customer’s tap. cleaning program, we are seeking ways to basis along the supply system at customer specific case analysis to determine root restrictions has increased our customers’ reduce the water needed to keep the mains taps, reservoirs and storage tanks. The Melbourne is one of the few places in the causes of individual complaints. knowledge and interest in water conservation cleaned. We conducted research in 2003-04 samples are analysed by an independent world where water catchments are protected and the way we manage it. We need to do a to measure how dirty the water mains are laboratory, which is licensed by the An independent research company surveys from the pressures of urban and rural much better job helping customers reduce and to establish how fast the sediment builds Department of Human Services (DHS) and customers to determine satisfaction with our development. Most of our water is drawn their water usage to improve overall up. This research program will continue for accredited by the National Association of service. The results are tabulated into a from catchments in pristine, natural mountain customer satisfaction. the next two years. Our routine cleaning Testing Authorities (NATA). ‘Customer Satisfaction Index’ score. We have areas, which means the risk of contamination program was stopped in November 2002 due adopted a continuous tracking method for Throughout the year we also conduct is low. Melbourne’s water requires very little Under these regulations, we are required to to water restrictions but we have planned to our residential customers, interviewing independent research to monitor the treatment because our water is stored in supply drinking water that is clear and free recommence in July 2005. Best practice 48 weeks of the year, to improve the perceptions of customers who have called our large reservoirs over a long period of time, from objectionable odour and taste and at a mains flushing will need to be developed by statistical validity of our results. Results from Customer Contact Centre, to identify allowing for natural purification by sunlight quality that complies with the health-related then to ensure we are operating sustainably. these surveys can be affected by many important service issues and areas where we and time for sediment to settle. parameters of the Guidelines for Drinking external factors that are outside our control. can improve the service experience. The most Water Quality in Australia. Therefore, where appropriate we respond recent results from this research showed Water quality test results through long-term programs. improved and strong performance on all key Figure 10: Water mains cleaned measures. Our customers rated the efficiency In 2003-04, a total of 5,301 samples were and promptness of our staff as excellent. taken for microbiological tests from customer 4000 3700 taps. All 34 water quality zones complied Figure 9: Customer satisfaction index results (rating of excellent and very good) 3500 with the microbiological compliance 3000 requirements of our operating licence and 56.4 56.9 60 56.0 54.1 55.9 55.5 54.5 51.5 52.3 52.5 52.5 51.9 52.4 the reporting requirements of DHS. Over 50 47.7 48.0 48.7 2500 44.9 26,100 physical and chemical tests at 40 2000 30 1482 customer taps were undertaken for 47 1500 1303 20 different parameters, including colour, odour

ter mains cleaned (km) 827* 10 1000 and taste. The Total Coliforms compliance n/a* Wa 353* 0 500 230* was 99.6%, our best ever result. CUSTOMERS Dec 99 - Jun 00 - Dec 00 - Jun 01 - Dec 01 - Jun 02 - Dec 02 - Jun 03 - Dec 03 - 230* 4.8* May 00 Nov 00 May 01 Nov 01 May 02 Nov 02 May 03 Nov 03 May 04 0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 Residential customers (%) Business customers (%)

03 *We are no longer conducting business customer interviews through the year. We are now doing an annual study for cost and Water mains cleaned (km) Previous Actual Target efficiency reasons. Source: Millward Brown Australia, 2004. * Mains cleaning program reduced because of drought. 50 51 Yarra Valley Water Annual Report 2003-04 There were 390 more complaints than last year, mostly relating to the colour of the water.

New water quality regulations Comply with an accreditation system Water quality complaints and Figure 11: Water quality complaints per 1000 customers from July 2004 for water quality samplers and feedback 6 5.6 testing methodology. 5.4 5.5 5.4 The Safe Drinking Water Act 2003 was Water quality complaints were significantly 5.2 5.1 5.2 4.9 5 4.5 4.4 enacted by the Victorian Parliament and Disclose public health risks associated higher in 2003-04, with 390 more complaints 4.2 4.0 4 became operational from 1 July 2004. A new with regulated water. than last year. Water quality issues can be regulatory unit will be established in the DHS attributed to a number of factors – higher 3 Our Hazard Analysis and Critical Control and a set of water quality regulations customer expectations, Yarra Valley Water’s 2 Points (HACCP), ISO 9000 and ISO 14000 implemented to establish relevant standards. close proximity to the water source, 1 accreditation systems are audited regularly increasing the likelihood of sediment, and 0 The new water quality standards will be (see page 100) and will form the basis of our 1997-98 1998-991999-00 2000-01 2001-022002-03 2003-04 2004-05 2005-06 2006-07 2007-08

reduced mains cleaning during restrictions. ter quality complaints per 1000 customers based on the requirements of the Draft 2002 compliance with the new drinking water Wa Australian Drinking Water Guidelines (ADWG standards. Our Risk Management Plan Most complaints relate to the colour of the Previous Actual Target 2002). The key requirements of these describes how we meet the requirements water. The appearance of water as ‘dirty’ is regulations are to: under the new regulations. the result of naturally occurring sediments in An annual audit was conducted by independent auditors, Beca Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. the water supply system. Two major incidents Develop and implement risk management We have a number of water recycling during the year caused 202 and 204 plans by 1 July 2005. projects under consideration, including the complaints respectively (see case studies). Audit risk management plans. Aurora development (see page 32). The draft Water quality complaints – taste and odour These sediments comprise of minute Comply with a stated set of water quality regulations state that regulated water may Preston, Northcote, Fairfield and Thornbury area particles of clay and minerals. standards. include water reuse schemes, which would Between 14 and 19 March 2004, we received 204 complaints about the taste and odour of the require a risk management plan to be Report known or suspected contamination Water Quality complaints water in the Preston, Northcote, Fairfield and Thornbury areas. A significant shutdown of the developed disclosing any public health risks. of drinking water. An annual audit was conducted by independent water main from Bulleen to Preston was required to repair a corroded fitting on a critical The new drinking water quality regulator will Melbourne Water Transfer Main. The shutdown and recharge caused film to be stripped from the Disclose water quality information to auditors, Beca Pty Ltd, on behalf of the have a role in monitoring recycled water. inside of the pipe, which reacted with the available chlorine in the water, resulting in customers the public. Essential Services Commission, to verify that robust systems are in place and are used to complaining of a chlorine or metallic taste. ensure the accuracy of the data being reported Table 9: Water quality test results It is critical to the integrity of our water quality Water quality complaints – white water 2000-01 2001-02 2002-03 Target Actual Forecast Forecast Forecast Forecast results that our customers provide feedback. 2003-04 2003-04 2004-05 2005-06 2006-07 2007-08 We are concerned that recording water Kew, Balwyn, Bulleen and Lower Templestowe area % of samples 99.90 99.98 99.94 99.5 99.91 99.5 99.5 99.5 99.5 quality complaints is a poor measure of how with zero On 25 September 2003, 202 customers called to complain about the cloudy appearance of their E.coli/100mL* our water quality is perceived by our water. Known as ‘white water’, this occurs when air becomes trapped in the water supply system.

% of samples 96.00 98.30 99.29 95.0 99.60 NA # NA # NA # NA # customers. Market research conducted by It has a milky appearance and will disappear when it is left to stand in a jug or a glass. The water with no more Yarra Valley Water recently showed that while is safe to drink. than 20 total 27% of customers believe they have coliforms/100mL* The white water was caused when we trapped air in a large water main while installing a large CUSTOMERS experienced poor water quality, only 7% meter. After releasing as much air as possible through minimal flushing, a decision was made to let An annual audit was conducted by independent auditors, CH2MHill Pty Ltd, on behalf of the Essential Services Commission, to lodged a complaint with Yarra Valley Water. the remaining air in the Kew to Lower Templestowe areas dissipate through customer taps rather verify that robust systems are in place and are used to ensure the accuracy of the data being reported. Samples are analysed and Details about the quality of the water across reported by WSL Consultants Pty Ltd, an external laboratory with NATA certification. Results are reported to the Department of than with more flushing and more wasted water. Unfortunately, this decision led to complaints from Human Services. our licensed area is available on our website our customers about the cloudy appearance of their water. 03 *The Operating Licence target is 95% for E.coli and 90% for Total Coliforms. at www.yvw.com.au. # This parameter will be removed from the water quality standards from 1 July 2004 under the new regulations. 52 53 Yarra Valley Water Annual Report 2003-04

Service reliability and responsiveness

We are always looking for ways to reduce Interruptions to water supply Figure11000 12: Customers experiencing water supply interruptions complaints in an effective manner. Research A reliable water supply is fundamental to 10000 indicated our customers as a whole are providing good customer service. The number 9000 prepared to pay for a water mains cleaning of unplanned water supply interruptions was 8000 program to reduce complaints (Customer lower than in 2002-03, but once again 7000 Willingness To Pay For Service Improvements higher than expected and relatively high 6000 Survey prepared by The NTF Group, March compared to other water businesses. The 5000 2004). We have been developing a ‘sediment continued dry conditions caused soil to shrink 4000 reduction device’ that is inserted into the and pipes to crack and we experienced a 3000 water main at problematic sites to prevent higher than predicted number of bursts in 2000 accumulation of sediment. The device is March and April 2004. 1000 currently undergoing endurance testing and 0 will soon be ready for insertion into water Despite the higher than average number of Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Jun-00 Jun-01 Jun-02 Jun-03 Jun-04 Feb-00 Feb-01 Feb-02 Feb-03 Feb-04 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Aug-00 Aug-01 Aug-02 mains in dead-end streets (courts), where water main bursts, 99.9% of customers Aug-03 we have a relatively high number of dirty experienced no more than five combined Number of Customers Affected Greater than 5 interruptions per year Greater than 3 interruptions per year water complaints. water and sewer interruptions during the year, exceeding our target of 99.5%. The Source: Yarra Valley Water Plan We have also been working with the main cause of unplanned water supply interruptions. Another solution involved In 2003-04 we managed to restore 99.9% of bursts and leakage. These planned water Cooperative Research Centre (CRC) for Water interruptions are burst water mains often inserting valves in pipes in priority areas to unplanned interruptions within five hours, which supply interruptions are conducted with as Quality and Treatment for several years to caused by weather conditions. reduce the number of customers affected by a exceeded our self-imposed target of 99.8%. little inconvenience to customers as possible. develop a computer model to predict where shutdown during repair of burst water mains. The Operating Licence target is 95%. However, Irrespective of weather conditions and The average time customers are without water sediment accumulates. A first version of the We also fast-tracked the program of renewing we focus on restoring unplanned interruptions associated burst water mains, we can improve supply in these cases is 160 minutes. We model has been produced and is currently 21 km of water mains where customers had faster than this in accordance with customer our customer service by focusing on those manage our planned works to balance both being checked and calibrated for accuracy by experienced interruptions due to four or more expectations identified in market research. customers who are affected by multiple water the duration of an interruption as well as the various water companies across Australia. bursts. During the year, we renewed a total of supply interruptions. We have set key We maintain high levels of expenditure on number of interruptions. For the year we Improvements are still required, but it is 53.5 km of water mains that had reached the performance indicators for customers water main renewals and we also upgrade restored 99.7% of planned interruptions envisioned that once operational, it will be end of their service life, at an approximate cost experiencing more than three and five water pumping stations and pressure reducing within five hours. very useful in developing an optimal mains of $10 million. cleaning program. unplanned water supply interruptions, to further valves to reduce the number of water main improve our reliability performance. The number of customers experiencing multiple unplanned Table 10: Restoring water supply water supply interruptions has been decreasing 1999-00 2000-01 2001-02 2002-03 Target Actual Forecast Forecast Forecast Forecast since 1999. Performance during the 2003-04 2003-04 2003-04 2004-05 2005-06 2006-07 2007-08 financial year was affected by the drought. Unplanned water supply interruptions 99.6 99.8 99.9 99.9 99.8 99.9 99.5 99.5 99.5 99.5 CUSTOMERS In 2003-04, 556 customers experienced more restored within 5 hours (%)* than five water interruptions over the previous Unplanned water supply interruptions 98.4 99.5 99.9 99.7 98.5 99.9 98.5 98.5 98.5 98.5 restored within 4 hours (%) 12 month period. This represents a reduction of 45% compared to the previous year. This Unplanned water supply interruptions 91.5 93.9 95.2 93.4 N/A 94.8 95.0 95 95 95 restored within 3 hours (%) 03 reduction is mainly due to case management of customers experiencing multiple Source: An annual audit is conducted by independent auditors, Beca Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. *The Operating Licence target is 95%. 54 55 Yarra Valley Water Annual Report 2003-04

Figure 13: Average frequency of water supply customer interruption (per customer per year) Service issues with sewers FLASH is designed to mirror the natural flow impacts. The system then assigns a priority Sewer blockages were higher than our of conversation with a customer during an on the work order. Typical work orders relate 0.7 0.62 targets during the year. Our system emergency/fault-related call, with plain to sewer blockages, burst water mains and 0.6 experienced 43.8 blockages per 100km of language (non-technical) drop-down options, water quality complaints. 0.47 0.5 0.45 0.44 sewer, against our target of 34. The number which the Customer Contact Centre 0.38 0.38 The FLASH system has provided significant 0.34 0.4 0.35 0.32 consultant uses to record the specific 0.31 0.30 of blockages was higher due to tree roots cost savings to the business and generated problem. Consultants can view historical 0.3 seeking water from sewer pipes in the dry tremendous interest from other organisations service requests for a property, allowing 0.2 conditions. The sewer blockage rates are with call centres.

Per Customer Per Year Per Customer Per consultants to immediately identify whether 0.1 particularly high in areas with a dense the problem has already been reported or The annual Australian Teleservices 0.0 population of trees. 1997-98 1998-991999-00 2000-01 2001-022002-03 2003-04 2004-05 2005-06 2006-07 2007-08 whether a critical customer, such as a Association (ATA) Awards recognise and We recognise that sewer blockages are dialysis patient, is impacted. acknowledge excellence in the customer Previous Actual Forecast extremely distressing to our customers. service industry with state and national The system provides scripts to assist the Source: ESC Performance Report 2002-03 and YVW Projection We have changed our target from customers award winners. In July 2003, Yarra Valley consultant, including such information as experiencing no more than three sewer Water was awarded Victorian Call Centre of when to expect a crew on site and actions Maroondah Aqueduct shutdown makes the news blockages in one year, to also include no the Year and our staff member Anne Mills the customer can take to minimise any more than five blockages in five years. won Victorian Teleprofessional of the Year. Approximately 100 customers in the Yarra Glen/Healesville area receive their water supply We felt that the old target failed to directly from the Maroondah Aqueduct, which is owned by Melbourne Water Corporation. satisfactorily reflect a service improvement. Customers are supplied water from the aqueduct on agreement that they: Do not drink the water without filtering or boiling it. To improve the reliability of our sewer Understand that the continuity of the water supply is not guaranteed. system, we invested over $10 million in In April 2004, Melbourne Water scheduled regular maintenance on this aqueduct and we responded renewing sewer pipes, and $11 million in by sending a letter to the affected customers, stating they would have to organise their own supply maintaining the sewer system. during this maintenance. This shutdown was different from those in previous years because Call handling Melbourne Water undertook weed spraying and it was necessary to shut down the entire aqueduct. Normally, there are customers supplied from syphons along the aqueduct who can retain their water Our integrated Customer Contact Centre supply. These customers were unhappy with the notice they were given, which led to a media story handles both service faults and account stating Yarra Valley Water planned to cut all water supply to the entire town of Yarra Glen. enquiries, reducing double handling of calls. The system that allowed this integration is It was never our intention to cut supply to Yarra Glen. The level of outcry showed us how careful a sophisticated intranet application, which we need to be when communicating to customers, particularly when circumstances change. We moved quickly to clarify the misinformation in the Yarra Glen local papers and worked with enables staff without field experience to affected customers to ensure all had their back-up supply in time. report, record and enquire about water and sewerage service information. Based on We can always learn something new in customer service. Since this shutdown, Yarra Valley the successful implementation of this Water has been reviewing its procedures for handling the customers supplied directly from CUSTOMERS system, called Faults Logging and Service Melbourne Water aqueducts and pipelines. Proposed improvements include: Help (FLASH), Yarra Valley Water was the Providing more notice to the customers. Reducing the duration of future shutdowns. 2003 winner of the Geospatial Information Maintaining up to date information about the customers supplied directly from Melbourne Technology Association (GITA) Award 03 Water aqueducts or pipelines. for Excellence. Ensuring customers install and maintain their own temporary storage. 56 57 Yarra Valley Water Annual Report 2003-04 We faced several challenges during the year in reaching our First Contact Resolution target of 96%.

Eliminating avoidable contacts represents a the customer at the first contact what to body to review complaints if they are not EasyDevelop – responding to our changing environment win-win outcome for our business and the expect and so avoid a second contact in the satisfied with our processes. The Melbourne’s landscape is changing. This is not accidental but a conscious drive by our State customer. We intend to continue pursuing our meantime. Therefore, we need to understand Ombudsman facilitates ongoing discussion, Government to develop infill areas, optimise the use of existing infrastructure and subdivide elimination strategy into the long term. how long our processes consistently take to rather than making a judgement on each areas previously difficult to subdivide, as part of its strategy to further contain urban sprawl. enable staff to confidently make promises to case, to reach a conclusion on issues. First Contact Resolution (FCR) is achieved EasyDevelop is our response to provide a better service for people subdividing land. Our staff customers that will be fulfilled. when a customer’s service request is We are required to provide a notice on our and suppliers, Abigroup and National Metering, will be delivering the service, due to be satisfied without need for further contact with launched before the end of the year. To develop the service, we conducted research with both Customer complaints accounts once each year to make customers large and small developers to determine the type of service they wanted from us. that customer. We faced several challenges We believe that analysing complaints and aware of EWOV and highlight that they have during the year in reaching our FCR target of the opportunity to take matters to the Feedback from customers was consistent. They want timely, comprehensive information that is identifying causes is critical to overcoming 96%. Going forward, we will focus on independent arbiter if that they cannot readily available. They do not want different information when calling different staff. Hence the problem areas in the business. A key improvements that directly impact the rate of resolve an issue with Yarra Valley Water. need for one collective database of case information. measure of our success or failure is how FCR and ensure that our system accurately many complaints we receive and how we In 2003-04, our EWOV Complaints Analysis This new system streamlines our processes and services for developers and plumbers wishing measures FCR and provides the vital to connect to the water and sewerage system. It is a more sophisticated and proactive service handle them, as well as what action we take Committee continued to analyse and review information necessary to identify for both inexperienced and experienced developers that focuses on providing more timely and to ensure similar complaints do not arise in complaints received through the EWOV. The opportunities for further improvement. upfront assistance, reducing the need for further contacts throughout the development process. the future. committee’s role is to identify root causes of The key benefits of EasyDevelop to customers are: Our long-term goal is to satisfy all customer To ensure complaints are recorded and complaints and potential long-term solutions a free upfront appointment service. service requests without need for further handled in a fair and reasonable manner, to reduce complaints. This process has been timely, comprehensive and consistent servicing advice. contact by that customer. One of the ways we we report regularly to our Board and the very positive and we continue to learn more no servicing surprises or hidden fees, asset information. can increase our rate of FCR is to proactively Essential Services Commission. about customers’ priorities. A typical example case tracking on the internet. create an expectation of resolution and of changes resulting from the Committee’s We are a member of the Energy and Water For our staff it will provide: quality at the time the customer makes the deliberations was a refinement made to our greatly improved systems and processes with shared information across all teams and request. For example, if a particular request Ombudsman Victoria (EWOV) Scheme, which water leakage allowance policy, making it reduced contacts and better jobs. takes two days to complete, staff will inform provides customers with an independent fairer and easier to understand for customers. EasyDevelop’s case tracking also means the status of a development application can be easily checked by our customers online. Table 11: Responding to customer contact

1999-00 2000-01 2001-02 2002-03 Target Actual Forecast Forecast Forecast Forecast 2003-04 2003-04 2004-05 20O5-06 2006-07 2007-08 Customer contact We work towards identifying the root causes of service failures and avoidable contacts and Response to Correspondence 95.6 96.0 98.1 97.3 96.0 96.0 96.0 96.0 96.0 96.0 Our Customer Service Strategy’s two key – within 4 Days (%) providing long-term solutions. While we have measures of improved customer service are Telephone Response time to reduce the volume of service failures and successfully reduced volumes since 2001 and ‘picked the low hanging fruit’, our challenge Emergency Service 92.0 90.0 93.4 92.4 90 94.2 90.0 90.0 90.0 90.0 to resolve customers’ requests in the first Phone Enquiries – instance. From a customer perspective, now is to identify the next range of within 15 Sec (%) improvements that will reduce avoidable CUSTOMERS having to contact us more than once about Emergency Service 96.0 94.0 96.3 95.8 97 97.0 97.0 97.0 97.0 97.0 the same issue means that we have failed to contact volumes. While we did not meet our Phone Enquiries – within 30 Sec (%) address a service issue the first time around. stretch target of 10% per annum reduction in From our perspective, these contacts are avoidable billing contact volumes in 2003-04, Account Phone 90.0 89.0 90.9 90.4 90 91.6 90.0 90.0 90.0 90.0 Enquiries – within 15 Sec (%) 03 unnecessary, and create extra costs and achieving a 8.4% reduction, we still believe customer dissatisfaction. our thinking regarding this measure is right. Source: An annual audit is conducted by independent auditors, Beca Pty Ltd, on behalf of the Essential Services Commission, to verify that robust systems are in place and are used to ensure the accuracy of the data being reported. 58 59 Yarra Valley Water Annual Report 2003-04

Billing

positive, with account call volumes reducing by estimated meter readings by addressing the Table 12: Energy and Water Ombudsman Contacts 1 July 2003 to 30 June 2004 The new account During the year we revised the layout and approximately seven per cent when compared root causes of being unable to read a meter. Yarra Valley Water All Vic Water Businesses Yarra Valley Water % of total presentation of our customer account. This was to the same time the previous year. This may include it being buried or Level 1 Complaints 39 146 26% obstructed on a property. identified as one of the ways we can reduce Estimated accounts Level 2 Complaints 0 4 0% avoidable billing contacts. We conducted Our Customer Charter requires that each Our Estimated Account Rate has decreased Level 3 Complaints 2 3 67% extensive market research to establish what customer’s meter must be read at least once from over 3.5% of all accounts in 1999-00 our customers’ needs were and how to Source: Energy and Water Ombudsman of Victoria, 2004 per year. Market research indicates that 78% to 0.7% in 2003-04. The target for 2003-04 improve the presentation of their account. of customers want to have their water meter was 1.0%. While this is best practice for Case numbers for EWOV were lower in In 2003-04, we updated our Customer The new account is a clean, clear design read quarterly, which is our standard practice. manual meter reading we continue to work 2003-04 compared to the previous year. Contract and increased the rebate amounts. that uses colour to more effectively highlight hard to reduce the rate of estimated When we are unable to access a water In 2003-04, we had 41 complaint cases Rebates for customers, where we fail to important information. The front of the account accounts as we recognise its importance to meter, we produce an estimated account. Our compared to 51 in 2002-03. The number of contain any spill within a customer’s house has been simplified with additional information customer satisfaction. (See our Team of the customer research indicates that 20% of enquiries to EWOV increased during the year. within one hour, or on a customer’s property and payment options moved to the reverse year, page 76). customers would not be satisfied with an We see this as positive, as these matters are within four hours, rose from $100 to $500. side. Feedback from customers has been very estimate. We aim to continually reduce referred back to us by EWOV, which enables We are still the only Melbourne retail water us to make direct contact with the customer company to offer such rebates. They are to resolve the issue. generally paid automatically when we do not Yarra Valley Water Ltd ABN 93 066 902 501 Quarterly Account Customer rebates (Guaranteed achieve the service commitments in areas Enquiries 131 721 (24 hrs) Emergency 132 762 (24 hrs)

Service Levels) such as planned and unplanned water supply Customer Number a590 718 We are committed to exceeding the minimum interruptions, flow rate and response to Invoice Number 824 1355 6585 123456-012345 (123) customers. A full list of our rebates is shown Mr AB Sample & Ms CD Sampler Total Due $97.83 service standards in our Operating Licence. The Meadows 1 Main Street Our Customer Contract outlines a range of on our website www.yvw.com.au. WARBURTON VIC 3799 Due Date 20 September 2003 If eligible for a concession rebates we provide to customers when we Tax Invoice Issued 03 Mar 03 the amount due is: $64.54 In 2003-04, we granted a total of 2,310 Account Summary P ayment Summary

fail to perform to our self-imposed standards. 26 Long Road, Warburton Last Account $46.65 cr rebates to customers, worth $54,080. Property Number 2253 9146, Lot 1 Plan 118 537, 15.01 HA Paid/Adjusted - $46.65 Balance $0.00 Product/Service Description Amount Total This Account $97.83 Water Service 1 Jan 2003 to 31 Mar 2003 $14.34 Amount Due $97.83 Sewerage Service 1 Jan 2003 to 31 Mar 2003 $30.69 Water Usage 25 Nov 2002 to 27 Feb 2003 $25.58 Sewage Disposal 25 Nov 2002 to 27 Feb 2003 $15.26 Table 13: The total number and value of rebates paid to our customers Drainage Charged on behalf of Melbourne Water $11.96 W ater Usage Less Pension Rebate -$33.29 Average Daily Consumption (litres) TOTAL $97.83 1000 800 Same time Rebates paid to customers Number Value GST (*indicates taxable supply) $0.00 last year 600 882 400 This account 1999–2000 12,116 $246,800 200 879

Sep Dec Jan Feb Mar 02 02 03 03 03 2000–2001 4,835 $98,960 Payment Slip

2001–2002 3,098 $64,510 12 12345 12 3 Customer Number a590 718 Invoice Number 824 1355 6585 2002–2003 3,730 $70,100 26 Long Road, Warburton

CUSTOMERS For information on how to create a water wise Total Due $97.83

2003–2004 2,310 $54,080 garden, go to www.savewater.com.au Due Date 20 September 2003

To claim concession, show your card when paying in person, If eligible for a concession 03 insert card number here, or photocopy and post with payment. the amount due is: $64.54 The new improved bill (left) next to the old one 60 61 Yarra Valley Water Annual Report 2003-04 ‘[We] acknowledge the excellent leadership and innovation Yarra Valley Water has taken in the field of collections and customer hardship support. The team here at EACH has no hesitation in contacting and working alongside your hardship team.’ Jackie Bramwell, Team Leader, Financial Counselling, Eastern Access Community Health (EACH)

System improvements Other system improvements in 2003-04 In October 2003, we received the Large We also met with other utilities, including The program aims to reduce the size of A key element of our Customer Service included: Business Encouragement Award for Victoria Origin Energy and AGL, to provide insights on customers’ water accounts, while also Strategy is our belief that employee Improvements to our Interactive Voice at the Prime Minister’s Awards for Excellence our approach in this area. promoting water conservation. Eligible in Community Business Partnerships. These customers receive a free water audit and, satisfaction is fundamental to achieving Response account enquiry service to One of the major challenges we face is to awards focus on businesses collaborating where appropriate, free installation of water higher levels of productivity and service. provide automated account balance effectively and proactively identify customers with community groups. Our success was efficient appliances. Analysis of the program One of the major tactics we pursue to information to customers. in financial difficulty. We have a Customer based on our relationship with Kildonan Child showed a water consumption reduction improve employee satisfaction is to simplify Development of a system to automate the Support Team to manage all our programs and Family Services and the benefits it has of around 22% following a Smart Homes our policies, processes and systems. process for replacing old meters. and individually support and address the delivered our customers. water audit. Not only does this contribute to employee Installation of a new system to improve needs of any customer identified to be in satisfaction, it makes it easier for customers our ability to forecast call volumes and Feedback from customers from focus financial difficulty. Customers have access to The number of customers undertaking to do business with us as well. During the staffing requirements. groups included: our trained and experienced team members Smart Homes water audits continues to year, a number of enhancements to our Trial and implementation of new on our free call number (1800 637 316). Our grow, largely due to the work done by our systems were implemented. ‘I don’t feel ashamed any more technology to enable remote reading of Customer Support Team conducted 353 site Customer Support Team to identify potential because they know it wasn’t my fault For the past few years we have been working water meters. visits during the year, to explain our programs customers. A total of 359 customers booked that I couldn’t pay. I have a new to improve our billing system, a legacy from and give customers the opportunity to in for an audit in 2003-04, representing Customers experiencing financial arrangement now though and I am the inception of the business nine years ago. complete pension/concession forms. a 317% increase from last year. Over 99% difficulty keeping up.’ of Victoria’s Smart Homes water audits This system will ultimately be replaced as Our focus into the future includes continued Our commitment to programs supporting have been conducted within Yarra Valley part of our 10 year IT strategy. In 2003-04, promotion of our support services to all our customers in financial difficulty was recently ‘I rang them and said I could pay $40 Water’s area. the existing system was streamlined to customers and agencies who deal with our recognised in the Essential Services every two weeks. But the person I enhance its useability for our staff. This customers. We produced a Customer Support Arrange & Save Program Commission’s (ESC) review of the Electricity spoke to said that it sounded like a lot means we will also reduce ongoing operating Team brochure in 2003-04, which will be and Gas Retail Code, where Yarra Valley and could I really afford to pay that This is a loyalty program aimed at costs and increase our capability to provide available in various languages to ensure Water’s program is recommended. One of the much? I said yes at first, but I think encouraging and supporting customers to customer service. we reach as many audiences as possible. first utilities to develop a comprehensive she knows I really couldn’t. In the end pay their water account. Arrange & Save We also continue to build and foster our A new bill view process was introduced financial hardship policy, we continue to I agreed that I would pay $20 and if I rewards customers who meet their agreed relationship with a wide range of during the year, providing benefits to both develop our strategy and implement ongoing had extra I would pay that. I have payment plan, by waiving a payment after stakeholders through financial counselling customers and staff in our Customer Contact improvements in this important area of paid extra a couple of times, and that five consecutive payments have been made. workshops and presentations of our policy, Centre. The Electronic Bill Payment and customer service. now means I have money for milk and This program includes the write-off of programs and approach. Presentment system means customers who bread, especially the last few days long-term debt if the customer continues to We have established a strong relationship use internet banking can view a summary of before my next payment.’ Our range of initiatives to support customers meet their repayment amounts over an with Kildonan Child and Family Services to their billing data. It also allows our consultants in financial difficulty include: additional period of approximately six months. to view a customer’s account details support customers in financial difficulty. We continue to share information with key In 2003-04, under the Arrange & Save electronically rather than printing it out. This Customers are given advice and information stakeholders, including responding to Smart Homes Program Program, we granted 4,480 credits to provides a faster and more efficient service, for self-referral to either Kildonan or back to requests to discuss our practices and A key element of our approach to help low customers for a total value of $72,922 CUSTOMERS and is in line with our Green Office policy of their existing financial counsellor. We also experiences. In 2003-04, we presented our income and disadvantaged customers, our and wrote off $237,775 from 1,592 responsible environmental management. work with Kildonan to provide advice and practices to a number of organisations Smart Homes program is a joint initiative with customer accounts. facilitate customer focus groups, which including EWOV, Australian Communication the Department of Human Services. provide valuable feedback to our business. Authority, ESC, the financial counselling 03 This helps us to assess the effectiveness of sector and a number of welfare agencies. our programs and practices. 62 63 Yarra Valley Water Annual Report 2003-04 ‘Members of the committee debate and challenge many of Yarra Valley Water’s proposals. The CCC is committed to assisting Yarra Valley Water to improve its interactions with customers,’

Netta Griffin, Committee Chair.

Consultation with stakeholders

Financial counselling support Consultative committees Table 14: We conduct an annual financial counselling The principal way the company consults on Environmental Consultative Committee workshop with all the financial counselling broad environmental issues is through our Name Representing agencies in our licensed area and other Environmental Consultative Committee, Allen Martin (Chair) Domestic Customers key stakeholders, including DHS. The aim established in 1996. The high level of of the workshop, held in March 2004, was expertise and the dedication of the Fraser Brindley Friends of the Earth to strengthen our relationship with the committee provides us with ongoing positive Glenda Salter Domestic Customers financial counselling sector, gather direct input and suggestions to help improve our Ron Hodges River Basin Management Society feedback on our programs and raise environmental performance. Anne Hingston Environment Victoria awareness of our approach. The committee met five times during the year Wes Douglass Environment Protection Authority As part of our commitment to support the and focused on issues including the Diana Haby Australian Conservation Foundation community, we also provide financial Sustainability Covenant for the Aurora project Ted Whitfield Yarra Catchment Committee counsellors operating in our area, as well as and the Water Plan submission to the the Financial and Consumer Rights Council, Essential Services Commission (ESC). The with an unconditional $2,000 donation. committee also made valuable contributions Environmental Consultative Committee members to the review of our Environmental Policy and Committee for Melbourne Debt Spiral the development of our Environmental Prevention Project Table 15: Sustainability Strategy. We are actively participating in the Debt Customer Consultative Committee Spiral Prevention Project to further support Our enthusiastic and experienced Customer Name Representing customers facing financial hardship. This Consultative Committee (CCC) represents the Netta Griffin (Chair) Domestic Customers interests of a variety of customer segments. project aims to document key issues around Glenda Salter Domestic Customers financial hardship including existing social The diverse range of membership often Judy McDougall Migrant Information Centre services offered, current regulatory brings different perspectives which act as the (Eastern Melbourne) framework, inequality of opportunity to catalyst for a more complete interchange of Natalie Haraida Shire of Yarra Ranges access services for some segments of the ideas and better outcomes. The attitude of (Youth Services) members and management in accepting community and existing hardship practices Anne Hingston Environment Victoria and approaches used by utilities. diverging views has contributed to the Gavin Dufty St Vincent de Paul success and effectiveness of the committee. Susan Fraser Financial and Consumer The committee met five times during the year Rights Council of Victoria and made valuable contributions to a range of Denise Budge Consumer and Tenant issues including the redesign of our customer Customer Consultative Committee members Resource Centre Outer East account, pricing discussions and the Robert Barron Council on the Ageing proposals. The CCC is committed to assisting Committee following a review conducted in CUSTOMERS submission of our Water Plan to the ESC. The Robert Lorenzon Australian Industry Group committee continually contributes to more Yarra Valley Water to improve its interactions 2003. We wish to take the opportunity to effective communication with our customers. with customers,’ Netta Griffin, Committee Chair. thank all Committee members for their efforts and welcome Natalie Haraida, Robert Barron During the year we welcomed several new ‘Members of the committee debate and and Judy McDougall. 03 members to our Customer Consultative challenge many of Yarra Valley Water’s 64 65 Yarra Valley Water Annual Report 2003-04

Community Involvement

Yarra Valley Water and of Sustainability and Environment (DSE), proved helpful in identifying appropriate Sponsorship and community Community sponsorship activities in 2003-04 government Department of Treasury and Finance, recommendations and strategies around water support included: Yarra Valley Water works closely with all levels Treasury Corporation of Victoria, Department conservation and water recycling initiatives. Our sponsorship policy was refocused this Sponsorship of Healesville Sanctuary. of Human Services and Department of government. This allows us to provide In addition, we have a close working year to reflect our commitment to the VICSWIM Water Safety Fun Days, where of Justice. advice and feedback on customer needs, relationships with the 15 local councils in environment. As a result, we discontinued we sponsor safety instruction at local and the opportunity to identify where we can In the first half of 2004, we had the our licensed area, South East Water and sponsorships with some community swimming pools to children during school support the water policies and initiatives opportunity to work closely with DSE during City West Water and the Melbourne organisations that no longer met our holidays. of the State Government, our shareholder. the White Paper preparations. As we have Water Corporation. sponsorship guidelines, such as Swimming Monash University World Environment direct responsibility for the provision of Victoria and the Heide Museum of Modern Art. Day Awards where we sponsored The key State Government departments we Councils in Yarra Valley Water’s licensed area: water and sewerage services, our experience awards encouraging innovation and have dealings with include the Department 1. Banyule Yarra Valley Water’s partnership with the accomplishment in water conservation. 2. Boroondara Centre for Education and Research in 3. Cardinia (Shared) Environmental Strategies (CERES) Community Tournament of Minds, where we Environment Park in Brunswick continued in supported local school competitions in Case study – Listening to the plumbing industry 4. Darebin 5. Hume (Shared) 2003-04. This partnership focuses on a maths and sciences, to encourage our The relationship between Yarra Valley Water and the plumbing industry has not been without 6. Manningham range of water conservation projects and future engineers. problems in the past. Given the historical issues and the importance of plumbers to our 7. Maroondah demonstrations in an interactive environment. University Student Awards at Monash business, the plumbing industry was identified as the first stakeholder group to be addressed 8. Monash (Shared) We piloted some of our water conservation University and University of Melbourne, under our new strategy for engaging with stakeholder groups. 9. Moreland solutions at their site. We are proud of our which acknowledged outstanding research Our business deals directly or indirectly with about 15,000 individual plumbers across a range of 10. Nillumbik relationship with this proactive environmental projects on water quality and sustainability. services such as drain clearing, backflow prevention and new connections for water and 11. Stonnington (Shared) sustainability organisation. For further sewage. We liaise with all parts of the industry including key stakeholders such as the Plumbing 12. Whitehorse information visit www.ceres.org.au and click Industry Commission, the Master Plumbers Association of Victoria and EasyAccess franchises. 13. Whittlesea on CERES Water Project. We conducted research and analysis to better understand the issues and attitudes across the 14. Yarra (Shared) plumbing industry and to gain insight into areas of common ground and areas for further 15. Yarra Ranges (Shared) negotiation. This research included internal workshops, focus groups with individual plumbers, interviews with key industry groups and feedback from external workshops. See Licensed area map inside back cover. *Shared indicates we share responsibility for water and The feedback and discussions showed that our relationship with plumbers was in bad shape, sewerage services in this area with another water utility. and that to improve that relationship, we needed to demonstrate to plumbers, by our words and our actions, that we value the relationship. Plumbers said they didn’t feel Yarra Valley Water In April 2003, we undertook benchmark listened when they told us what they need. ‘Yarra Valley Water staff are pen pushers behind interviews with members of these key desks. They’ve never been in business themselves. They have no idea what we’re up against.’ stakeholder groups to gain feedback on our Plumber from our focus group discussion, September 2003. interaction with them. We will undertake The research showed common areas of concern between our business and the plumbers, which additional research when we develop action CUSTOMERS formed the basis for defining our stakeholder action plan with this group. plans in the next financial year. This research To address these concerns we will be undertaking a number of activities focusing on clarifying will tell us what we are doing well and what water industry roles and responsibilities, technical issues and water conservation education. This we can do to improve our relationships. will include regular newsletters, networking events, trade nights and upgrading our information. 03 The action plan will be refined in 2004 as we continue to engage with the industry to adopt an open approach that results in a better understanding of the needs of both parties. We provided mulch to assist in Arbor Week planting at Healesville Primary School. 66 67 Yarra Valley Water Annual Report 2003-04 ‘As a result of the program, my school will benefit from a good grounding to start implementing a water conservation plan.’

Teacher response at the Water – Learn it! Live it! Professional Development Day.

Industry sponsorship activities included The program sets out four milestone levels to Feedback from the Inityative team was very Master Plumbers Association of Victoria and achieve long-term sustainable water use. positive, including an acknowledgement of a Box Hill Institute Plumbing Scholarship. Rewards, such as rainwater tanks, were our staff’s support and encouragement in These sponsorships are undertaken by the offered to one school per retail water their Annual Report. Inityative indicated we business to support our service partners and business. Feedback from teachers suggested exceeded their expectation of a sponsor ensure ongoing best practice in the industry. that schools at this level would probably company in terms of time and resources already have a tank and offering only one dedicated to their project. For other local community activities, we sets up competition. As one teacher provided bottled water or our mobile water The 2004 team comprises 27 students, with commented, ‘The incentive scheme needs to fountain for local community events. Our staff six mentors from Yarra Valley Water. The team be urgently addressed before the wrong also participated in the Corporate Canoe plans to produce an Annual Report, message is sent!’ The Steering Committee Challenge for the Red Cross. Environmental Performance Report and a will now be reviewing the incentive program, Business Plan. Yarra Valley Water continues to evaluate in consultation with teachers to better reflect its sponsorship program to ensure the the collaborative environment teachers want. Work experience and Teen community is happy with the support we Teachers discuss the implementation of the new Water – Learn it! Live it! program at the professional Innovation The new approach means we no longer provide. We also ensure our sponsorships development day April 2004. provide free performances of the primary We provided work experience to a number support our strategic intent while we develop school theatre show, Cloudia Raindrop and of students during the year and we also relationships with organisations that reflect The program offers a teacher resource Young Achievement Australia Friends, as the funds we used for these shows continued to support the E Team program. our ‘business personality’. manual with a comprehensive curriculum are now invested in the Water – Learn it! Live Over a number of years, we have supported This program, now known as Teen Innovation, guide including information on how to get Schools education program it! program. However, schools completing Level the Young Achievement Australia (YAA) involves a selection of Year 10 and Year 11 started, planning and monitoring templates Business Skills Program. YAA is a national, students from local schools who spend a A review of our schools education program in 2 of the four milestones can still enjoy Cloudia and water activities across the key learning not-for-profit organisation that facilitates week at various organisations. 2002-03 recommended that a joint approach Raindrop at no cost. Our free presentations areas and Curriculum Standards Framework business-mentoring programs between be adopted by Melbourne’s water businesses on water conservation are also available to In 2003-04, our participation in developing levels. A new Water – Learn it! Live it! industry and students at tertiary and to ensure consistency of information, reduce participating schools through CERES. students through this program included website with activities, water conservation secondary levels. The program allows a duplication of costs and resources and hosting three teams, one each from We acknowledge that our decision to information and details of the rewards group of students from all disciplines and encourage information sharing. In 2003-04, Blackburn High,Templestowe College and discontinue free access to Cloudia has program has also been developed, accessible circumstances to operate their own business we initiated discussions with the other Whitefriars College. The objective is for the disappointed many of the schools in our area. through the www.yvw.com.au Water School. under the guidance of a group of mentors metropolitan water businesses to develop However, we feel the new program is much students to investigate a business process The ongoing nature of this program means from sponsoring companies. a new education program focusing on more comprehensive and provides better and recommend improvements. They focused we will monitor schools to ensure they are water conservation. The program, called long-term water conservation outcomes for In 2003, the group sponsored by Yarra Valley on our Compliance Calendar (see page 99), moving through the milestones to achieving ‘Water – Learn it! Live it!’, provides a children, teachers, parents and the schools. Water formed a company called Inityative, Reception and management of change to our sustainability targets. Schools are asked to comprehensive and proactive approach to Cloudia can still play an important role in which produced and sold jewellery. In an intranet site. report their progress annually so we can water conservation in schools. It helps them water conservation and schools can access informative Annual Report that was presented assess the level achieved and define further CUSTOMERS to reduce their own water use, and provides the program directly for a fee that is to our Executive Team, the Inityative team support requirements. curriculum guides for teachers and classroom competitive with other school theatre shows indicated that during their operation they resources to teach children the importance of on conservation. Our target was to involve 10% of schools in were able to reduce fixed costs, produce a saving water. our licensed area in the program, representing revised budget and deliver a dividend of 63 03 around 66 schools. In 2003-04, we responded cents per share to the 100 investors. to 96 requests for the Program kit. 68 69 Yarra Valley Water Annual Report 2003-04 Culture ‘The knowledge, skills and confidence gained are of great personal value, have broadened my horizons and enabled me to fill other positions within the business.’

Steve Bumpstead, Study assistance program recipient

A high performing business requires a high Achievements and performance culture within the organisation. disappointments for 2003-04 Such a culture will allow us to achieve our Significant improvement in OCI results service standards to our customers and the from 2001 to 2003. See page 71. environment and to do so with high levels Conducted customer service training of efficiency. for all our staff and many of our key Our approach to our culture partners that focused on attitude and mindset when serving internal and We are committed to developing a external customers. constructive culture characterised by achievement orientation, encouraging staff Achieved OH&S accreditation to AS4801 to achieve their potential with a strong and implemented a comprehensive emphasis on teamwork and cooperation. web-based OH&S management system. Supported 16 staff in obtaining tertiary Yarra Valley Water measures organisational qualifications relevant to their current role culture using a tool called the Organisational or future career. See page 80. Culture Inventory (OCI), developed by Human Synergistics. This tool measures the extent Undertook 360-degree leadership style to which staff members believe various surveys for all people managers and behaviours are expected or required. senior staff to assist them in developing Behaviours are broken down into 12 personal improvement plans. segments, which are in turn sorted into three Engaged a Learning and Development groups: constructive, aggressive/defensive Manager to ensure that we invest wisely and passive/defensive. in our peoples’ development by appropriately targeting activities that meet individual needs in line with organisational values and objectives. Established the Yarra Valley Water Staff Fundraising Committee to raise funds for WaterAid Australia, who work in the world’s poorest communities to deliver improved water and sanitation projects. We were saddened by the death of a CULTURE contractor during testing of a water main in March 2004. See page 78. Experienced two lost time injuries. 04 See page 79. 70 71 Yarra Valley Water Annual Report 2003-04 ‘Generally, only about a third of organisations can achieve that sort of shift in a small amount of time. It shows great commitment… and the challenge now is to maintain the momentum,’

Quentin Jones, Director, Human Synergistics.

High performing business culture

Organisational Culture Inventory high levels of constructive behaviours and increased up to 24% and negative behaviours Challenges we face Summary of our long-term targets We believe that a constructive organisational much lower levels of the other behaviours. had reduced by 32% from the October One of our main challenges is to maintain To be in the top 10% of Australian and 2001 survey. culture with defined roles, clear vision and Blue Zone behaviours include: the momentum of improving our culture to New Zealand companies measured for leadership creates an environment for take our organisation from good to great. positive culture, as determined by the pursuing high standards ‘This was an exciting result, employees to be motivated, innovative, This requires all staff, and in particular Human Synergistics benchmarking survey planning well particularly for a public utility. work well in teams and exhibit excellent senior management, to continually develop by end of 2007. maintaining personal integrity Generally, only about a third of customer service. a greater understanding of themselves and Retain OH&S certification for AS4801 thinking creatively organisations can achieve that sort their impact on others, to aid the and improve our safety performance. The Organisational Culture Inventory (OCI) enjoying work of shift in a small amount of time. development of a constructive culture. provides a point-in-time picture of the Continue to fill 50% of vacancies of above supporting each other and It shows great commitment by senior culture of an organisation in terms of management and the challenge now As a highly outsourced business, one of our base level positions through internal cooperating with others. 12 specific types of behavioural norms challenges is to encourage similar promotion/rotation. is to maintain the momentum,’ which can be grouped into three general Red and Green behaviours that are less development of a constructive, customer Quentin Jones, Director, Human Synergistics. Maintain healthy turnover of 10%, of clusters: constructive (blue zone), desirable include struggling for power, being focused culture within our key contractors, which 90% is of minimal impact to passive/defensive (green zone) and perfectionistic, seeking constant approval and We introduced another tool, the Organisational who provide much of the direct interaction the business. aggressive/defensive (red zone). avoiding responsibility. Effectiveness Inventory (OEI), which provides with our customers. With this in mind, we 90% of advertised positions filled within information about the causes of particular endeavour to include our key contractors in Successful service organisations, organisations In October 2003, over 90% of staff participated six weeks maintaining quality and cultural behaviour. Information from this tool has been many of our cultural development activities, committed to quality improvement and in our second OCI survey, which showed a fit of successful candidates. used by work teams to develop more focused such as our customer service training and organisations where there is a high level of marked improvement in constructive Achieve a positive overall staff satisfaction plans for positive cultural change. our 360-degree surveys. motivation and job satisfaction generally display behaviours. These positive behaviours had rate of 70% by the end of 2006, measured Continued on page 74 Our recent certification to OH&S AS 4801, by our Employee Opinion Survey. Figure 14: OCI results has enabled us to establish an OH&S Achieve employer of choice validation framework across our business. Staff have through a recognised benchmarking tool 2001SATISFACTION NEEDS 2003 SATISFACTION NEEDS CONS CONS TRUCTI TRUCTI undertaken extensive OH&S awareness 12 VE S 12 VE S by the end of 2006. TYL TYL ES ES 11 ELF-ACTUALIZING 11 ELF-ACTUALIZING S HUM 1 S HUM 1 training, however we recognise that it can T ANI T ANI EN STIC EN STIC EM EN EM EN EV CO EV CO HI UR HI UR C AG C AG take some time for a focus on safety to be A IN A IN G G

IC A IC A T F T F fully embedded into the organisation. IS F IS F 10 IL 2 10 IL 2 N I N I O A O A I T I T T I T I C V C V E E E E Our commitment as a company to achieve F F R R E E P P

P P

E E

this change in culture is evident through O O N S N S

P P O E O E I I

E A L E A L T L T L V E V E P P A I A I

Y Y

P P T T T T O O

I I

T T R R

N N

R R

our ongoing training, industry OH&S T T

O O

E E

S S

E E

I I

I I E

9 3 E 9 3

V V

P P

R R

N N

A A

E E

O O

M M T T

L L

V V

A A

O O

I I

K K

T T

C C

S

benchmarking and our continuous S

S S I I

O O

A A

N N

N N T T

E E

F F

E

improvement process. E

D D L L

A A / / P P

O N O N

E

E W IO W IO

V

V T T

I I S S

E N E N

S

S R E E R E E

V 4 L V 4 L

S S 8 8

N N E E Y Y

O T O T R R C C

G

CULTURE G S S

G G E E

A A O IV O IV P S P S PO NT N PO NT N SIT DE E SIT DE E ION PEN F ION PEN F AL DE DE AL DE DE 7 A E 5 / 7 A E 5 / VOIDANC IVE VOIDANC IVE SS SS 6 PA 6 PA

04 SECURITY NEEDS SECURITY NEEDS

2003 OCI results (right) show a significant reduction in red and green behaviours and increase in blue. The thick line represents the norm. © Copyright Human synergistics 72 73 Yarra Valley Water Annual Report 2003-04

Our People Our Executive Team

Tony Kelly CPEng, SFCDA, MAICD Sam Austin BE (Civil) Terry Swingler, Dip Bus (Acc), FCPA, FCIS, FAICD, CFTP Anne Farquhar, Cert Bus Mgt Jenny Bailey BE (Agr), Grad Dip (Env Sc), MBA Pat McCafferty BBus, Exec. MBA, MCSIA Managing Director General Manager, Asset Services General Manager, Finance and Company Secretary General Manager, Human Resources General Manager, Strategy and Communications General Manager, Customer Operations

‘Water conservation ‘Asset Services ‘Our challenge is to ‘One of our key ‘The external ‘Service is long term. Greater undertakes the manage the finances challenges is to environment for improvement is population growth design and of the Company to move from being a water businesses is a never-ending and climate change, construction of increase shareholder good company to a constantly changing journey. Our key leading to lower new assets as value. We continue great company. We in response to challenge is to rainfalls, means well as the ongoing to seek increased can accomplish this drought and the improve service reducing water consumption is maintenance by contractors. Our efficiency through improved business by achieving and embedding a high government’s focus on sustainable while reducing costs, consistent with essential. The challenge for us is challenge is to work with these processes and the utilisation of performing business culture across the water supplies. The challenge for our Customer Service Strategy. To getting the community to understand partner organisations to improve information technology to enable business. It will require a long-term, the Strategy and Communications address this, we’ll focus on realising the links between their usage and the efficiency, customer service levels and the achievement of business consistent approach and the challenge group is to respond to these changes operational innovation in all aspects environmental impacts.’ sustainability outcomes while we performance objectives.’ for us in the next year will be to and convert them into plans that can of service delivery, with an emphasis manage our risks and meet the goals maintain the current pace of be understood and undertaken by on meeting customer needs and utilising Tony has extensive experience in the Terry is responsible for funding, accounting, of our partner organisations.’ improvement. It will require a rigorous the business.’ the Six Sigma business improvement water industry and, following roles as planning and reporting of all business approach to recruiting and developing methodology to underpin delivery of General Manager across most areas of Sam is responsible for optimising commercial activities. His role includes property Jenny is responsible for developing strategic our staff and we will focus on further efficiencies.’ the Company during the past nine years, returns from our investments in water and management, supply, legal services, internal communications and business development, communication to build a positive and Tony was appointed Managing Director in sewerage assets and the service levels and environmental audits, insurance, records while also participating in water industry Pat oversees the Company’s customer supportive environment in which staff January 2003. delivered through these assets. He manages management and statutory compliance. policy and reform activities. Jenny is our service function, which covers billing, our environmental and operational risks and Terry is also accountable for risk management, can pursue and achieve their goals.’ primary liaison with the Essential Services metering, collection and credit management. plays a key role in servicing new urban IT systems development, infrastructure, Anne is responsible for developing and Commission and government departments Pat is also responsible for our Customer growth areas. Sam is ultimately responsible integration and support services. implementing the human resources strategy and is responsible for the corporate business Contact Centre operations, new connections for ensuring our water and sewerage for the business, including organisational plan. Jenny’s role also incorporates and retail services, and our programs for systems meet daily and future needs of our change, employee relations, recruitment, responsibility for marketing. customers in financial difficulty. customers. Sam also manages the primary learning and development and Occupational regulatory interface with the Environment Health & Safety. Protection Authority and the Department of Human Services.

CULTURE 04 74 75 Yarra Valley Water Annual Report 2003-04

Managing Director TONY KELLY

Strategy & Asset Services Customer Finance & Human Resources Communications General Manager Operations Corporate Services General Manager General Manager General Manager General Manager JENNY BAILEY SAM AUSTIN PAT McCAFFERTY TERRY SWINGLER ANNE FARQUHAR

Regulation & Network Connections Financial Learning and Planning Operations Customer Contact Accounting Development Business Service Centre Property & Supply Industrial Relations/ Strategy Enhancement Financial Services Financial Planning Employee Relations Water Marketing Metering & Treasury Recruitment Service Communication Customer Business Enterprise Services Enhancement Business Systems Sewer Systems Corporate Services Asset Creation Retail Services Risk Management Field Maintenance

Yarra Valley Water senior management

An improvement opportunity was identified 57%, well above the average of 47% for up to date and improves the effectiveness of accounting and financial management, Customer Contact Centre this year was when our OCI result showed that some teams public companies and above the average of communication processes and tools, as well information technology, customer service, 11.5%, which compares favourably to within the company had not progressed in 52% for all other organisations. However, it as the relevance of communication content. administration, human resources, strategy, industry benchmarks. achievement oriented behaviours. We have was a long way from the best practice result marketing and management. been seeking to understand the reasons why, of 77%. The data from the survey will be Employee facts and figures During the year, internal applicants filled so that we can put strategies and actions in used to initiate further improvements. We currently have 357 employees and six Total staff turnover was 9.1% in 2003-04, 50% of vacancies. We feel that our target of place to address this. The causal factors non-executive Directors. Our employees have compared to the target of 10%. Turnover has 50% represents a healthy balance between Communicating to our staff identified in the OEI indicated that the job a wide range of skills including engineering, reduced significantly over the past three developing our own staff and bringing new design and structure for those teams may be As part of ensuring our staff have the years, from 26%. Staff turnover in our talent and ideas into the organisation. resulting in a lack of autonomy and variety in information they need to perform at their best, the business conducted an internal work for individuals. This is a challenge we Table 15: Employee breakdown – gender (Full Time Equivalent) will tackle over the next year, with plans communications survey in January 2004. 45% of staff responded to the online survey, with Gender Customer Asset Finance & Strategy & Human Board of Directors and Total already being implemented. Operations Services Corporate Services Communications Resources Office of the Managing Director 65% of those indicating they were satisfied Employer of Choice with current internal communications. Male 60 93 21 19 2 4 199 We participated in the Australia/New Zealand Female 89 25 25 16 5 4 164 Areas identified for improvement included Hewitt ‘Employer of Choice’ survey in March Total 149 118 46 35 7 8 363 CULTURE communication across groups, 2004 as a benchmarking exercise. The communication about projects, involvement survey provided further insight into staff and consultation, and change communication. Table 16: Employee breakdown – status (Actual staff nos excluding 6 Non Executive Directors) satisfaction, as well as valuable feedback on Full time Part time Turnover Casual 04 staff perceptions of the business and why As part of this review, we will be preparing an staff choose to remain with Yarra Valley internal communications strategy in the Total 325 52* 9.1% 7 Water. Our overall ‘engagement’ score was coming year that looks at keeping staff more *31.567 Full time equivalent 76 77 Yarra Valley Water Annual Report 2003-04

Leaders and their teams. He chose to remain and implemented strategies to reduce the Equal Opportunity and Harassment Policy calm and to keep his sense of humour. volume of bills based on estimated meter He communicated well and remained readings. Their work has a flow-on effect of: We are committed to providing fair and equitable treatment in the workplace for all employees. Our supportive and flexible even when under Increased billing accuracy policy covers all workplace participants, including contractors, work experience students, suppliers pressure from last minute changes and and agents of Yarra Valley Water, both within and outside work hours, and both on and off site. Reduced volume of customer calls deadlines. It requires lots of patience and We aim to reflect and demonstrate this commitment in our behaviour towards each other and Reduced bill disputes and requests for bill excellent relationship skills to manage such towards our customers, contractors and suppliers. All employees are required to comply with adjustments. a process across all levels and functions of relevant federal and state legislation that establish grounds on which discrimination is illegal, the Company and in the end, Chris delivered The annual reduction of 25% equates to a including the Acts relating to Equal Employment Opportunity; Disability Discrimination; Sex a high quality business plan with a degree volume of 130,000 accounts that are now Discrimination; Racial Discrimination and Workplace Relations. of ownership across the business. calculated on actual meter readings. These results are a fantastic team effort that reflect Employee of the year, Chris Heath Team of the Year While the overall gender ratio remains women progress through both the academic the strong partnership between the Metering balanced at Board, Executive Team and system and through our own process of Metering and Property Services Team – team and Skilltech. Skilltech has been given operational level, female representation at internal promotion. Employee of the year Josie Ackerman, Gaye Angus, Michelle a two-year extension to its contract that will divisional manager level remains relatively low. Chris Heath, Business Planner, Campton, Anthony McEntee, Sue Mollica, Service providers and contractors deliver further cost reduction and increased We believe part of the reason for this is the Strategy and Communications Soula Papagelakis, Leah Prosser, Ray service levels. engineering-based nature of our business, We require our suppliers and contractors to Chris was given the responsibility of managing Schultz, Margaret Shiels, Jodie Vaccarino, which means we are somewhat limited by the share the same standards that we set for the business planning process leading to the Paul Booth and Julian Hill. Equal opportunity graduates of tertiary and technical engineering ourselves in areas such as Occupational production of our Corporate Business Plan. During 2003-04 Equal Opportunity and Since July 2000, the team has undergone courses, where the majority of enrolled Health & Safety, Environmental Management, Each year, a lot of effort is required by a Diversity refresher sessions were conducted considerable change including a restructure students are male. We are confident that this Customer Service and Privacy obligations. number of people across the business to for 326 employees. These sessions reiterate from 24 to 12 staff, while managing to deliver situation will become balanced as more complete the plan on time and it can be a exceptional results that improves billing our commitment to the elimination of daunting and sometimes stressful task. accuracy through the meter reading process. discrimination in general and support our policy Table 17: Major service providers that no individual is subject to bias, harassment Knowing this, Chris set out to make it as In partnership with our meter reading or discrimination on the grounds of issues such Contractor Services provided Years of service pleasant as possible for the Service Plan contractor, Skilltech, the team has developed as gender, age, marital status, national or Abigroup Asset Services – Water Pty Ltd Maintenance of the water supply and sewerage infrastructure 4

ethnic origin, religious or political belief or Melbourne Water Corporation Supply of water and collection, treatment, 9 activity, disability or impairment, physical transfer and disposal of wastewater

features, parental status, family or carer Skilltech Consulting Services Pty Ltd Meter reading 4

responsibilities, sexual preference, pregnancy LogicaCMG Pty Ltd Information technology 9 or potential pregnancy and breastfeeding. Schultz Holdings Australia Pty Ltd. Meter installation 8 Diversity in the workforce Trading as National Metering Service: Plumbing referral service Trading as Schultz Plumbing: Meter replacement During the year, we continued to improve CULTURE Westpac Banking Corporation Banking 6 our recruitment and selection processes Australian Postal Corporation Bill payment processing 9 to optimise the benefits of a diverse workforce and ensure cultural fit. Recruitment is managed Leigh-Mardon Bill printing 1 in-house with a rigorous process and this has WSL Consultants Pty Ltd Water quality testing 7 04 Team of the year from left to right: Anthony McEntee, Michelle Campton, Josie Ackerman, David Walkley, resulted in ongoing savings of over 60% of Baycorp Advantage Pty Ltd Debt collection 3 Leah Prosser, Soula Papagelakis, Paul Booth, Sue Mollica, Julian Hill and Greg Purser. Absent: Ray Schultz, annual recruitment costs. Margaret Shiels, Jodie Vaccarino and Gaye Angus. 78 79 Yarra Valley Water Annual Report 2003-04

Employee Programs

Our worksite contractors must complete an On 5 December 2003, we achieved OH&S Occupational Health & Safety Occupational Health & Safety Policy Environmental Management Plan as part of certification to AS4801in recognition of our their contract, which satisfies a broad range It was with great sadness that we reported new OH&S program. Our challenge is to At Yarra Valley Water we value our people and place the highest priority on the preservation of their health the death of an employee of one of our of criteria including regular formal meetings, continue to develop a culture that supports our and safety. The commitment to the health and safety of employees, contractors and customers is critical. contractors in March 2004. The contractor collection and disposal of wastes, protection OH&S objectives and ensures that our system While we will ensure compliance with the Occupational Health and Safety Act 1985 and all failed to regain consciousness following of vegetation and root zones, control of noise is effective and not overly bureaucratic. associated regulations and codes, the Occupational Health & Safety policy goes beyond meeting an accident during pressure testing of a and atmospheric pollution, prevention of legal obligations and is a shared and fundamental commitment by managers and all employees: water main at a construction site in Our target for lost time injuries will always be erosion, site restoration, a contractors’ work •To prevent disease and injury in the workplace. Bundoora. A full investigation was conducted zero and we were disappointed to experience compound and many more. They must also •To continuously improve systems and practices aimed at preserving health and preventing injury. and there will also be a coronial inquiry two lost time injuries in 2003-04. Both were satisfy our Occupational Health and Safety into the incident. Yarra Valley Water minor injuries with a total of six days lost time. •To provide the essential involvement, education and training of employees in the processes of requirements. We see contractors as organised a memorial service and we occupational health and safety. partners; as such the responsibility for good extend our sympathy to the contractor’s Training in OH&S was extensive in 2003-04 OH&S practice is a responsibility which we with a range of programs addressing a variety family and friends. Figure 15: Lost time injuries share with our contractors. of health and safety issues. We will continue to build on and improve these programs. 5 5

We also ran a number of programs to support 4 4

the health and wellbeing of employees. Our 3 3 activities in 2003-04 included: 2 2 Annual flu shots (154)

Health assessments (48) Number of injuries 1 0 0 Employee Assistance Program 0 Financial Counselling Services. 1999-00 2000-01 2001-02 2002-03 2003-04

Work/life balance Previous Actual Target Yarra Valley Water recognises that finding the appropriate work/life balance may be difficult Counselling for employees and their families A new flexible roster was introduced in the for many people, particularly those with children. Customer Contact Centre in December 2003, We believe that the best way to support staff Home computers to enable staff to work to ensure that staff with a preference for to achieve an appropriate balance is by ensuring at home non-standard working hours are scheduled for that wherever possible, managers seek to Company-sponsored childcare places at a evenings, weekends and public holidays. This provide flexibility and consider customised work childcare centre next door to our site ensured both a flexible working environment arrangements to suit individual employees. Job sharing and an increased range of service hours. Leave without pay. To provide flexibility and support, the CULTURE following initiatives are in place: Part-time work 48/52 program, enabling staff to take 04 additional breaks in a year Parental leave, Family leave, Paid Maternity leave 80 81 Yarra Valley Water Annual Report 2003-04 All staff attended experiental customer service training in the first half of 2004, as well as over 60 staff from partner organisations.

The program was significantly different to In addition, Craig Lindley, a senior manager, and set objectives, review individual Developing staff – the study assistance program traditional, basic ‘service with a smile’ successfully completed further specialised development plans and discuss career Steve Bumpstead, Senior Analyst customer service training programs. It training in the USA to become the ‘Master development options. In future this process Yarra Valley Water actively encourages the development of all employees who wish to undertake focused on building a ‘service attitude’, with Black Belt’ at Yarra Valley Water. The role of the will be streamlined through the introduction work-related tertiary education. Assistance is available through reimbursement of course fees, an emphasis on developing service coaching Master Black Belt is to train, coach and mentor of a Performance Module in our new Human prescribed course textbooks and other support through study leave provisions. skills in team leaders and managers. We the Black Belts, be an expert in the use of the Resources Information System. This will allow Steve Bumpstead, a Senior Analyst in our Regulation and Planning division is one example of believe that managers leading by example is tools and to lead the deployment of Six Sigma. us to record performance, professional company and personal needs being met through this program. Steve last completed tertiary the best way to lock in a service attitude, not Craig and the ‘Black Belt’ team will also provide development plans and career progress, as studies in 1976. In 2001, after working for 19 years predominantly in the engineering field for only when dealing with our customers, but ‘Green Belt’ training to a number of people well as produce the necessary work-flows to the Melbourne Metropolitan Board of Works, Melbourne Water Corporation and Yarra Valley when dealing with each other as well. across the business, to support Six Sigma at a maximise efficiency of training and Water, Steve moved to our Regulation and Planning Division. local level. development opportunities. All staff attended this training in the first The long break since he last studied meant he was reluctant to take it up again. But, having half of 2004, as well as over 60 staff Other training programs Industrial relations recognised there were gaps between his skills and the skills required to excel in his new position, from partner organisations, such as and with constant encouragement from his manager, he enrolled in a Graduate Diploma in A significant number of training programs During 2002-03, we completed the AbiGroup (our maintenance contractor), Economics at Latrobe University at Bundoora in 2002. Steve completed the course in June 2004. were delivered to support OH&S and negotiation of a new Enterprise Agreement as LogicaCMG (our IT service provider), ‘The support I received during the past two and a half years has been fantastic and helped make functional work requirements as well as the existing agreement expired on 30 June Skilltech, (our meter reading contractor) the learning experience enjoyable. My family was very understanding, particularly during 2003 leadership skills. Induction programs, Equal 2003. Our new agreement was certified by and Schultz Plumbing (our plumbing referral when everybody in the house was studying – my wife commenced a diploma in childcare, my Employment Opportunity and OH&S the Australian Industrial Relations son was doing Year 12 and my daughter was in Year 8,’ Steve explains. service). As part of the program, all teams awareness sessions were provided to over Commission on 12 November 2003. This within the business developed plans on Steve said that Yarra Valley Water provided the encouragement, financial assistance and study 300 staff. Agreement builds on the previous one with how they will improve service to external leave to attend lectures, while Latrobe University was very flexible and allowed him to tailor the increased support for staff, and staff support customers and internal colleagues. New conference centre course to suit his learning needs. for changes to improve our efficiency and By renovating an old building at our head Six Sigma training customer service. ‘The knowledge, skills and confidence gained are of great personal value, have broadened my office site, we now have a new Conference horizons and will enable me to fill positions within the business that are not just in engineering. Another major training initiative was Centre, opened on 18 May 2004. This has We recognise the importance of consultation Yarra Valley Water will benefit from having an employee that has a wider knowledge base, is the Six Sigma program. Six Sigma is a proved to be a tremendous on-site asset for with employees, particularly during times of more flexible and can be utilised in various areas within the business.’ disciplined, data-driven approach to process conducting training sessions and meetings. change and staff restructure. Our Enterprise improvement aimed at the near-elimination It has been extremely well utilised in the short Agreement provides for ongoing consultation Developing our people system we will need to coordinate the new of defects from every product, process and time it has been open, both in its open space between management and staff and Our training and development budget program. By centralising the learning and transaction (see page 93). Six Sigma is an format for large groups, as well as the three specifically provides that ‘Employees will be represents approximately 3.7% of our development budget we can ensure that important tool in helping us achieve our smaller room configurations. Each area has consulted on changes to policies, practices payroll, excluding seminars, conferences and courses are both effective and efficient. efficiency strategies. touch screen access to PC, video and DVD and procedures which may impact significantly on their employment, in study assistance. Customer service training Training was initially provided to senior technologies, as well as copying and printing particular, the effects the change is likely to management to support the Six Sigma equipment in an adjacent room. During the year, we appointed a Learning Superior customer service has been a have on employees and the measures to deployment. Four weeks of ‘Black Belt’ training CULTURE and Development Manager to optimise our differentiator for our business since its Performance management avert or mitigate any adverse effects of such was then delivered to seven Yarra Valley Water training investment. He is currently completing a inception in 1995. In 2003-04 we introduced Professional development and career a change on employees.’ It also sets out employees and one Abigroup employee. company wide Training Needs Analysis and has an experiential customer service training management is managed through our a process to be followed should a role ‘Black Belts’ are project leaders who are begun the task of defining the administrative program for all employees. Performance Management process. become redundant. required to deliver specific projects linked to 04 Managers and staff participate in discussions our strategic objectives that are identified three to four times during the year to review through our business planning process. 82 83 Yarra Valley Water Annual Report 2003-04 Operational Efficiency ‘The procedures appear more focused and considerable training has been undertaken.’

SAI Global, Auditors

It is essential that we continue to improve our are significant to customers. The cost efficiency, so our customers receive essential savings made in the very early stages of services at the quality they expect. implementation have already exceeded the cost of the training, and we will continue Our approach to efficiency to see the benefits of this process for years One of the ways that we ensure the efficient to come. operation of our business is by contracting out Another major project involved reviewing our a significant proportion of work on the basis of business risks and developing a formal Risk competitive tenders. By doing this, we know we Profile. By determining the consequence and are receiving competitive market rates for the likelihood of each risk, we can determine provision of service. Our key contractors where our resources are best directed. include AbiGroup to provide maintenance services for our assets, Skilltech to undertake meter reading and LogicaCMG to provide IT services. Leigh-Mardon is our billing provider and Baycorp Advantage provides debt management services. These are supported by a collection of design and construction contractors delivering our new assets. The efficient delivery of these new assets will be improved with the establishment of a Design and Consultancy Panel, where a select group of designers will provide their services. From July 2005, our prices and the amount of money required to run our operation will be specified by the Essential Services Commission (ESC). The role of the ESC is to oversee customer service standards and to ensure that the water businesses are efficiently run and that the cost of water to consumers is kept to a minimum.

Several programs to ensure our business operates more efficiently were implemented OPERATIONAL EFFICIENCY during the year. Adopting the Six Sigma Business Improvement Methodology provided a process for us to seek out and eliminate causes of defects, mistakes and waste in 05 business processes by focusing on results that 84 85 Yarra Valley Water Annual Report 2003-04

Contributing to economic growth

Financial summary We recorded a profit before tax of $75.6 business. At the time of certification, we For example we have some critical water Achievements and million in 2003-04, representing a decrease are the only water utility in Australasia and mains that are over 100 years old. When Our business must meet our shareholder’s disappointments for 2003-04 of $19.1 million on the previous year and the only water business in the world with these mains fail, they tend to fail completely expectation of adequate returns. Our financial Recorded a profit before tax of $75.6 $1.7 million above budget. The major company-wide certification. See page 100. which can lead to property damage and major management must comply with legislation million, profit after tax of $52.5 million. unfavourable variance to our budget was for disruptions to traffic. Newer mains fail by and it also needs to deliver against short- Undertook a review of all of the risks facing water usage. The budget was set at stage Paid dividends to the State Government developing a small leak that can be identified term requirements while ensuring an equal or the business and reviewed and developed one restrictions, however we operated under totalling $48.4 million. and fixed without major disruption. Many of improved outcome for future generations. controls to manage each of these risks. stage two restrictions from August 2003. This Trained eight staff as Six Sigma ‘Black these older mains could last another 50 years Won awards for our IT processes including We believe that our financial performance was offset largely by developer contributions, Belts’ and trained Craig Lindley, one of our with no problem – however they may fail the Government Technology Productivity demonstrates our balanced approach with the new housing industry continuing at senior managers, as a Master Black Belt. tomorrow. The business needs to weigh up Award, Intergraph 100% Club Award and between providing a high level of customer high levels of activity during the year. Profit See pages 93-94. the reduced risk of replacing these mains, Geospatial Information Technology service, environmental improvement and after tax was $52.5 million after incurring Undertook major IT infrastructure with the significant cost of doing so. At the Association Award. financial returns to our shareholder, the $23.1 million for income tax expense. The replacement programs including primary moment we are progressively replacing the The pipeline constructed as part of the State Government. result was $1.4 million higher than budget. computer replacement, to increase more critical mains and undertaking Emerald Cockatoo Sewerage Transfer efficiency and to reduce licensing costs. monitoring of the less critical mains. System failed to pass pressure testing Revenue and expenses Undertook benchmarking of our finance requirements and is currently being rectified. We recognise that stronger relationships Figure 16: Where our revenue comes from division, which showed the division as This has delayed the planned closure of between our business and our contractors are Other Revenue 4.2% ‘best practice’. sewage treatment plants in the area. one way we can jointly identify and benefit Water Service Charges 10.2% Developer Contributions 9.4% Entered into a printing contract with from efficiencies. However, we need to be able Our target to undertake 18% of our capital Trade Waste Charges 2.9% Leigh-Mardon to provide our billing expenditure program with annual or longer to do that without compromising our ability to services, which delivered significant term contracts proved difficult to achieve. change contractors to achieve better value. savings to the business. See page 92. Sewage Disposal Charges 21.2% Water Usage Charges 31.5% Prepared our submission to the Essential Summary of our long-term Services Commission, and circulated to all Challenges we face targets stakeholders. The submission outlines all of One of our major ongoing dilemmas is how to Controllable Operating Expenditure our service obligations and costs required to balance the competing requirements of serving decreasing by at least 2.4% in real achieve these obligations. The submission can customers and the environment, while providing terms during 2004-05 to 2006-07. Sewerage Service Charges 20.6% be reviewed on our website. See pages 89-91. a strong financial dividend for our shareholders. Redesign of IT architecture to reduce IT Participated in benchmarking with the For example, we have to balance the high cost maintenance costs. Figure 17: What we spend our money on Water Services Association of Australia of fixing assets that may impact on only a small Implementing mobile computing for field Finance Charges 8.2% (WSAA) for management of our assets. number of customers who receive poor service. activities. We take the view that none of our customers Yarra Valley Water was the best in Australia Continue to participate in industry Dividend to State Government 11.5% Wholesaler Charges 31.6% should have to experience chronically poor OPERATIONAL EFFICIENCY for five of the seven categories tested. This benchmarking programs such as the indicates that our investment in maintaining service and our capital program includes WSAA asset management and customer the assets is appropriate and efficient. progressively fixing these problems. This service benchmarking programs. increases our costs, compared to a business Achieved Information Security Reduce maintenance costs by reducing totally focused on the financial ‘bottom line’. Capital Works 21.6% 05 Management System (ISMS) certification, water pressure in our system which reduces our risk of IT security The management of risk is critical for any progressively by June 2010.

breaches that can significantly impact the business and requires judgement and trade-offs. Operating Expenses 27.1% 86 87 Yarra Valley Water Annual Report 2003-04

Figure 18: Earnings before interest and tax $m* Figure 19: Profit after tax and Figure 22: Capital expenditure $m* Figure 23: Return on average assets %* Figure 24: Return on equity %* finance charges $m*

120 100 140 12 20 18.7 128.4 127.6 93.7 10.7 118.7 110.7 100 99.9 9.9 120 111.6 80 93.8 9.6 8.7 8.1 16 100 110.1 80 9 59.9 12.2 68.9 64.4 60 7.9 12 80 58.9 49.2 52.5 9.6 10.3 60 52.5 46.6 6 8.3 60 40 40 51.1 8 40 8.2 20 3 20 20 4 0 0 0 0 0 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04

Previous Actual Target Previous Actual Target Previous Actual Target Previous Actual Target Previous Actual Target

Figure 20: Total revenue $m* Figure 21: Total dividend paid or payable Figure 25: Gearing (debt to assets) %* Figure 26: Interest cover (times)* Figure 27: Borrowings $m* (or advised) $m*

400 70 40.4 45 371.0 62.7 45 41.0 39.8 39.7 4.0 3.6 3.4 600 568.5 356.6 356.8 37.7 3.9 3.2 343.2 336.0 60 56.0 58.2 40 40 502.0 502.0 506.9 510.3 300 358.8 46.1 35 38.4 35 3.0 500 547.9 50 49.2 30 30 400 40 42.5 200 25 25 30 20 20 300 20 15 15 200 100 10 10 10 100 5 5 0 0 0 0 0 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04 99-00 00-01 01-02 02-03 03-04

Previous Actual Target Previous Actual Target Previous Actual Target Previous Actual Target Previous Actual Target

Dividends are paid to our shareholder, the $24.0 million for the 2002-03 financial year Figure 28: Accounts receivable >90 days $m* State Government, in return for its investment and an interim dividend of $24.4 million for 4.7 in our business. These payments are based the half-year ended 31 December 2003. 5 on the government’s dividend payment ratio The final dividend for the year ended 30 June 4 3.5 of 65% of pre-tax profits. Dividends paid to 2004 was $21.7 million. 3 2.7 the State Government in 2003-04 totalled 2.3 2.5 * Details of our financial performance are outlined in our 2 1.9 $48.4 million, made up of a final dividend of statements in the appendices of this report. 1

OPERATIONAL EFFICIENCY 0 99-00 00-01 01-02 02-03 03-04 05 Previous Actual Target 88 89 Yarra Valley Water Annual Report 2003-04

Operating for efficiency

Operating expenditure Since 2000-01, we have experienced a Pricing As a retail water business, Yarra Valley Water small real increase in operating costs, From 1 January 2004, the Essential Services is responsible for operating and maintaining predominantly due to prolonged dry weather Commission (ESC) assumed the economic the water supply system and the sewerage causing a substantial increase in water regulation function for the Victorian water system in our licensed area. Melbourne system breaks, resulting in increased field industry. Its role now includes undertaking Water Corporation, as the water industry maintenance costs. This trend has continued price reviews, in addition to overseeing wholesaler, collects the water in the water as the drought conditions have persisted. customer service standards, supervising catchments, purifies or treats the water if In 2003-04 our operating costs rose in real operational audits and administering the required, then distributes the water through terms by 4.42%. competition by comparison regime. its pipe network to our pipe network. We then We improved our operating efficiency through A maximum price has been set according to distribute the water to our customers, a range of innovations in 2003-04. These the State Government Pricing Order and for ensuring that the highest water quality included integrating management of both 2003-04 the price was set at the previous standards are maintained. emergency and account enquiries, a year’s price, plus Consumer Price Index (CPI). The sewage discharged from customer pipes continued focus on reducing avoidable billing The ESC will set prices from July 2005 and goes into our sewerage system and is contacts, the first contact resolution program, government strategy provides for changes transported to a site where it can be treated. streamlining our billing system, bringing the Total revenue for 2003-04 was $356.8 Revenue is also provided by property to the price of water from October 2004, Some of the sewage is treated at our own recruitment process in-house, consolidating million compared with $371.0 million for the developers who operate in our licensed area. to encourage water conservation. Each water treatment plants, but most of the sewage we our IT systems, introducing electronic bill previous year. This result was $2 million These developers pay us a fee, which is used business is required to prepare a Water receive from customers is transported via our payment and presentment, implementing a below budget. Revenue from developers was to provide large infrastructure required for the Plan outlining the customer service and sewerage system to Melbourne Water new bill printing contract and changing our $33.4 million and represented a 7.8% larger water zones and sewerage catchments. environmental outcomes we are planning Corporation’s two large treatment plants in meter reading and billing cycle. decrease on the previous year. The developers are also required to construct to achieve from July 2005 and the costs Werribee and Bangholme, where it is treated the local water and sewerage mains and On 1 July 2003 we extended our meter associated with achieving these outcomes, We charge customers a fixed fee to access on our behalf. pipes, and then ‘gift’ these assets to us. When reading and billing cycle from eight weeks including operating, capital and wholesale our water system and to dispose of certain this occurs, we are required to treat the value Continual improvement in our organisational to ten weeks. This resulted in cost savings to expenditure. waste products into our sewerage system. of these assets as revenue. efficiency is essential for us to be able to the business; however we had to increase Commercial trade waste customers pay an We submitted our Draft Water Plan to deliver our key objectives of serving our debtor day targets to 11.9 days for total additional fee, as their waste products Our expenses include paying Melbourne the Minister for Water, the Treasurer, the customers and the environment. One of our overdue and 4.7 debtor days for more than generally require a higher level of treatment Water Corporation for the services it provides Environment Protection Authority, the major business challenges has always been 89 days overdue. We will continue to assess than normal household and business waste. to us, including the supply of water and the Department of Human Services (drinking balancing the competing interests of and improve our debt collection approach We also charge our customers for water collection, treatment, transfer and disposal water quality regulator) and the ESC to delivering the highest possible levels of and strategies. This includes streamlining or usage and sewage disposal, based on the of sewage. confirm that we have correctly interpreted customer service, while also minimising our automating processes between ourselves actual volume of water used and an the requirements. In servicing our customers, we deliver clean operating costs. Our increased focus on and our debt collection agency, Baycorp estimated amount of sewage disposed to the drinking water, collect sewage, maintain our minimising our environmental impact has Advantage, and benchmarking our In this submission, Yarra Valley Water and sewerage system. OPERATIONAL EFFICIENCY assets, monitor and maintain water quality, impacted our short and long-term objectives performance against other companies. the other water businesses are required to We collect revenue for Melbourne Water educate our customers and promote water and introduced another vital element in include proposals on what we believe water Corporation to cover the cost of the provision conservation. Where insufficient money is strategic planning. More than ever we need prices for the next three years should be. 05 of drainage and we collect a charge on behalf generated internally to fund our activities, to continue using innovation to achieve of Parks Victoria to cover the cost of money is borrowed. Like any other business, service level increases, reduce operating maintaining Melbourne’s parks and gardens. we are charged interest on these borrowings. costs and reach our environmental targets. 90 91 Yarra Valley Water Annual Report 2003-04 We seek business partners who share our philosophy of continuous improvement.

necessary. We are also committed to Secondly, by working together and focusing Maunsell Australia Pty Ltd ensuring that price increases do not unfairly on improving quality while reducing cost, we Water Engineering Solutions Pty Ltd impact those of our customers who innovate throughout the term of these Connell Wagner Pty Ltd experience difficulty in paying their bills. contracts to improve efficiency and share in Gutteridge Haskins and Davey Pty Ltd the benefits. We seek business partners who Our market research indicated that a share our philosophy of continuous Parsons Brinkerhoff Pty Ltd small percentage of our customers did not improvement and our major contracts contain Sinclair Knight Mertz Pty Ltd support paying more for water and key performance measures associated with sewerage services, even if it meant MWH Australia Pty Ltd improving efficiency, often containing improvement to the environment. There is Civil Landscape & Design Pty Ltd incentive clauses associated with achieving also a significant number of people who think Lanco Group Pty Ltd improved service levels. This mutual that the price of water is too low to commitment to efficiency has helped the Dalton Consulting Engineers Pty Ltd. encourage water conservation. company consistently achieve one of the A Design and Consultancy Panel has been The submission date for our final Water Plan lowest operating cost (per property served) established to continue the efficiency gains is 1 September 2004. The ESC will review ratios for Australian water utilities. by improving the quality and effectiveness the efficiency of our proposed expenditure There is a significant number of sewer and of our design and consultancy. The members and ultimately set our prices. As part of the water contractors, including designers and a and categories of this panel are listed in public process, the ESC will conduct public range of consultants, who help us deliver our Table 18. hearings and our Water Plan will be made capital works program. Yarra Valley Water available by the ESC to all interested parties does not have its own construction capability. for comment. A copy of the Water Plan will be Table 18: Design and consultancy Those involved in major projects during made available on our website, panel members 2003-04 include: www.yvw.com.au. Category 1 – Water & Sewer ACME Construction Group Pty Ltd Assets other than Reticulation Contracting for efficiency Sinclair Knight Mertz Pty Ltd ABIGroup Asset Services Pty Ltd Since its inception, Yarra Valley Water has MWH Australia Pty Ltd relied significantly on its major business DKM Utility Services Pty Ltd Maunsell Australia Pty Ltd We sought advice from stakeholders to the environment, we are effectively partners to deliver business outcomes. This Berry Pipelines Pty Ltd Gutteridge Haskins and Davey Pty Ltd including our Customer Consultative getting water from the environment for ‘free’. ranges from our key contract for the provision Baromatic Constructions Pty Ltd Connell Wagner Pty Ltd Committee, Environmental Consultative This will change in October 2004, when the of maintenance services through to contracts Interflow Pty Ltd Category 2 – Water Reticulation Committee, Australian Industry Group, land government introduces an environmental for asset construction, meter reading, billing, Water ECOscience Pty Ltd Sewerfix Pty Ltd developers and financial counsellors in contribution on water and sewage disposal debt collection, plumbing services and Lanco Group Pty Ltd Scariff Construction Services Pty Ltd preparation of our pricing proposal. We also prices to assist with funding environmental information technology, to name a few. Dalton Consulting Engineers Pty Ltd held a public meeting on 2 June 2004. projects across the state. Harris Civil Pty Ltd Civil Landscape & Design Pty Ltd One of the primary characteristics in our Haulton Construction Pty Ltd Category 3 – Sewerage Reticulation OPERATIONAL EFFICIENCY relationships with these business partners The current price of water only includes the We support an increase in the price of water Water EcoScience Pty Ltd is a mutual and ongoing commitment to MFJ Constructions Pty Ltd cost of the infrastructure used to collect, store so the environment can be ‘paid’ and to Maunsell Australia Pty Ltd pursuing efficiency and quality. Firstly, and deliver the water to customers. It does encourage water conservation. We are fully LRM Contractors (Vic) Pty Ltd Lanco Group Pty Ltd not include any estimate of environmental committed to continuously improving our by securing services in the open Simpson Construction Co. Pty Ltd Dalton Consulting Engineers Pty Ltd 05 marketplace we can assure ourselves that cost or any type of resource rent for water operating efficiency to ensure that our Gerristone Excavations Pty Ltd Civil Landscape & Design Pty Ltd extracted. We are not paying a resource rent customers are not paying higher bills than the cost is competitive and benchmarked. 92 93 Yarra Valley Water Annual Report 2003-04

Investing in the future

We take a long-term view with our investment Our 2003-04 target to undertake 18% of Table 19: Capital expenditure in infrastructure and place an emphasis on our capital expenditure program with annual investment to maintain the integrity of our or longer term contracts proved difficult Capital Expenditure 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 water and sewerage systems. Rather than to achieve. This was largely due to Actual $m 43.64 43.11 49.86 44.81 43.92 47.53 50.14 59.93 87.93 reducing our debt as much possible to reduce problems establishing long-term contracts Budget $m 41.72 47.30 53.70 44.74 43.85 45.90 57.22 77.04 90.81 finance charges and increase profit, we believe for water mains renewals. One of our large long-term contractors in this area went into our approach ultimately provides a better Community Service Obligations standardising our IT infrastructure and In March 2004, after evaluating a number service to our customers in the long term and voluntary administration halfway through Community Service Obligations (CSO) refer to gaining the benefits this provides both in cost of options and products, we signed a major improves our environmental outcomes. the year, compromising progress on our concessions provided to certain customers, savings and additional functionality. contract with Intergraph Mapping and renewals program. During 2003-04, we spent $90.81 million on rebates to certain not-for-profit organisations Geospatial Solutions for a Geospatial ‘Yarra Valley Water was entering capital items. This represented a record level To prevent water main bursts and improve our and payments under the Rates and Charges Resource Management system. This solution a strategic update cycle and was of expenditure on infrastructure investment. service to customers, our water mains Relief grant scheme. The State Government supports our strategic integration of looking at adding or extending diverse We spent $71.5 million on delivery of new renewal program targets mains that funds these CSOs in a transparent manner. operating systems and environments, as well and improved assets to reduce sewer spills, experience multiple bursts and those nearing capabilities such as data warehousing, as our business goals of increasing service Our Community Service Obligations for the sewer blockages and water supply the end of their service life. We renewed knowledge management, mobile while reducing costs. It provides up-to-date, past three years are outlined in Table 20. interruptions, manage sewage quality, 54km of water mains during the year, 21km computing for the field workforce, integrated spatial asset information, which improve sewer capacity, improve water less than our target. The loss of a contractor IT investment updated GIS capabilities, portal will improve our service and productivity in technology and expanding use of new connection approvals, planning and quality and cater for growth. who went into voluntary administration Our capital expenditure program incorporates workflow products,’ rates-settlement statements. The ability to caused a substantial drop in activities that our information technology (IT) investment. maintain a single system with Intergraph was never made up due to difficulties in Yarra Valley Water has a comprehensive suite Simon Soon, Chief Information Officer, Yarra Valley Water technology will lower the costs of both our tendering the works in a tight market. of IT systems to support its business, with a In 2003-04 Yarra Valley Water adopted a operations and maintenance. major dependence on IT to enable improved more formal approach to the governance of Figure 29: Water mains renewed customer service and efficient asset Improvement methodology IT projects through the introduction of the IT management. One of the core aims of our program office. Collectively these significant Although we have set efficiency goals, our 100 10-year IT strategic plan is to minimise total 90 initiatives work to regulate and prioritise our business is still refining a strategy, framework capital and operating costs of information IT investment decisions to ensure that all IT and methodology to achieve the next level of 80 75 75 75 technology over the long term. The strategy is business process efficiency. Historically, our 68 change is closely aligned with the strategic 65 65 65 based on upgrading, consolidating and intent of the business. approach to delivering business improvements 60 54 has not followed a single methodology, relying Table 20: Community service obligations instead on the skills, experience and 40 capabilities of individual managers. Value of Community Service ($) ($) ($)

ter mains renewed (kilometres) Obligation provided by Govt. 2001-02 2002-03 2003-04 In 2003-04, Yarra Valley Water adopted Wa 20 OPERATIONAL EFFICIENCY Pensioner concessions 18,562,916 19,094,049 20,174,414 the Six Sigma Business Improvement and Utility Relief Grant Scheme 89,505 56,473 42,636 Change Methodology to underpin the 0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 efficiency strategy of our Statement of Water and Sewerage Rebate Scheme 67,341 70,100 54,080 Strategic Intent and support the Water Usage Dialysis Rebate 6,311 6,309 7,099 Previous Actual Target environmental, cultural and customer 05 Total CSOs provided 18,726,073 19,226,931 20,278,229 service strategies.

Source: Figures based on 2003-04 and previous customer accounts 94 95 Yarra Valley Water Annual Report 2003-04 ‘Six Sigma is not magic. It is a rigorous, focused and highly effective implementation of time- proven tools and techniques that maximises and sustains business success by delivering increased customer value and efficient business processes.’

Craig Lindley, Master Black Belt at Yarra Valley Water

Corporate Governance

Efficiency through good Role of the Board governance The Board of Directors is responsible for the As a retail water business all our decisions strategic direction and monitoring of the must take into account our corporate business on behalf of the shareholder, the governance arrangements, Operating Licence State Government of Victoria. Day-to-day obligations, Customer Contract obligations, responsibility for operations and integrated management systems, corporate administration is delegated by the Board to policies and public reporting requirements. the Managing Director and his Executive Team. Members of the Executive Team are There is an increasing emphasis being invited to Board meetings when their areas placed on corporate governance, which is of operational responsibility are considered. testament to its importance to organisational The Board ensures that Yarra Valley Water efficiency and accountability. As a business funds are used to deliver value for money we aim to operate in a transparent manner services to our customers and financial and remain accountable for our decisions. returns to our shareholder. Strong corporate governance practices are essential to achieving our goals. Board Membership

Verification of our key data and figures is The Yarra Valley Water Board has seven undertaken on behalf of, or in conjunction directors, comprising a non-executive Chairman, five non-executive directors Yarra Valley Water staff attend Six Sigma Black Belt training with third parties. These include the Essential Services Commission (ESC) which endorses a and one executive director (the Managing Director). All directors are appointed by The most recognised brand for business Yarra Valley Water is the first water utility in third party auditor to assess compliance with and accountable to the shareholder, the process improvement in the world, Six Sigma the world and the first government-owned our Licence obligations and to validate the State Government. essentially seeks to find and eliminate causes organisation in Victoria to adopt Six Sigma. accuracy of the key performance indicators of defects, mistakes or waste in business used in the ESC’s annual Comparative Introducing the Six Sigma program involved processes by focusing on outputs that are Performance Report. The Victorian Auditor- training staff to varying degrees depending significant to customers. General is the Company’s external auditor, on their role, as well as appointing a Steering while Ernst & Young provides internal audit The Six Sigma approach supports our Committee to oversee the program. services and reports to the Board Risk activities and strategic objectives: The Steering Committee selected eight Six Management and Audit Committee. Maunsell Identifying and reducing waste is a key Sigma projects and eight staff to be trained Australia Pty Ltd audits environmental element of our sustainability strategy in as ‘Black Belts’ to undertake the projects. aspects and reports to the Board terms of the environment. One of the eight Black Belts was a Environmental Committee. PR Risk representative from our maintenance Getting it right the first time and Management Pty Ltd audits our Occupational OPERATIONAL EFFICIENCY contractor, Abigroup, to help identify cost eliminating errors and rework is Health & Safety systems and processes and savings within Abigroup’s business. fundamental to customer satisfaction. reports to the Board Occupational Health & Our cultural objectives include an Safety Committee. 05 emphasis on effective change management. 96 97 Yarra Valley Water Annual Report 2003-04

Board of Directors Company Secretary

Alan Cornell, LLB, JD, MAICD Tony Kelly, CPEng, SFCDA, MAICD Bryan Kelly, BE (Chem), MAICD Elizabeth Parkin, BA (Acc.), CA, MAICD Terry Swingler, Dip Bus (Acc.), FCPA, FCIS, FAICD, CFTP Alan Cornell, 66, was Tony Kelly, 51, was Bryan Kelly, 66, was Elizabeth Parkin, 43, Terry Swingler has been the Company appointed Chairman appointed Managing appointed to the Board became a Director in Secretary of Yarra Valley Water Ltd since in June 1997. He is a Director in January in December 2000. January 2004. Ms Parkin March 1995. He has been a member of consultant for the law 2003. He has extensive He has wide experience has over 20 years CPA Australia since 1979 and a Fellow since firm Blake Dawson experience in the water in Board processes and experience in a range 1998. Mr Swingler has also been a Fellow Waldron and practises industry and has worked corporate governance, of corporate finance, of Chartered Secretaries Australia Ltd for company and commercial law in its Melbourne at Yarra Valley Water since its inception in along with technical and managerial business and advisory roles. She has over 12 years. office. Mr Cornell is a Director of Colorado 1995. Over this time at Yarra Valley Water, experience through his involvement in operated her own general business advisory Board Committees Group Limited, Océ Australia Ltd, ICI South Mr Kelly has held four General Manager petroleum, resources and utility businesses. company since 1997. Prior to its Pacific Holdings Pty Ltd, Opera Australia roles. He is Chairman of WaterAid Australia establishment, Ms Parkin was a Director The Board has set up four committees to Mr Kelly is a former chairman of Ecogen Capital Fund Ltd, ICI Holdings (Australia) Pty Ltd and chairs the VicWater Task Group with KPMG Corporate Finance. assist it in carrying out its responsibilities. Energy Limited and Western Region Water Ltd and is also Chairman of the Co-operative on Sustainability. The Managing Director attends all committee Authority and prior to that was a Director of Ms Parkin is a Director of the Port of Research Centre for Bioproducts. meetings, together with executives and Judith Dwyer, MBA, BA, MAICD, FACSHE Shell Australia Limited and Woodside Melbourne Corporation, Beaconsfield Gold senior managers as required. Minutes of Mr Cornell has also served as President of Judith Dwyer, 53, Petroleum Limited. N.L. and First Samuel. She is also a Board committee meetings are presented to the the Law Council of Australia, as President of became a Director in member of North East Regional Water full Board of Directors. Pauline Ladiges, PhD, MSc, Dip Ed, MAICD, FAA the Law Institute of Victoria and as a Council December 2000. Authority; a Director and Treasurer of 3MBS Pauline Ladiges, 56, Risk Management and Audit Committee Member of the International Bar Association. As Associate Professor and a trustee of the Northcote Trust. She is became a Director of Health Services also employed part-time by KPMG. Elizabeth Parkin (Chair), Alan Cornell, Geoff Phillips, BE (Chem), MBA, MAICD in February 1998. Bryan Kelly and Geoff Phillips. Management at La Trobe Geoff Phillips, 60, became a Director in Professor Ladiges is the JoAnne Stephenson, BCom, LLB, MAICD University, she is involved in teaching, All members of the Committee are March 1995 and was Head of the School of JoAnne Stephenson, 42, research and consulting to the health independent non-executive directors. appointed Deputy Botany at The University became a Director in late industry. She is a member of the National The Risk Management and Audit Committee Chairman in January of Melbourne, is a Fellow of the Australian December 2000 and Health and Medical Research Council’s liaises with the internal and external auditors, 2001. He is the Deputy Academy of Science and is a member of the resigned as a Director on Advisory Committee. approves the audit plan, reviews the Annual Managing Director, Board of the Royal Botanic Gardens, 31 December 2003. She Financial Report, accounting policies, Transurban Group. Mr She was formerly the Chief Executive Officer Melbourne. is partner in charge of internal controls, audit performance, business Phillips was formerly a senior executive at the of Southern Health Care Network and of the National Risk Advisory Services Division Professor Ladiges is a member of the risks and adequacy of the company’s oil and gas company, Santos Limited and Flinders Medical Centre in Adelaide and has and a member of the National Executive Environment Committee, Parks Victoria and insurance policies. Chief Operating Officer - Corporate Finance worked in most areas of the health industry Committee at KPMG. Her specialty areas of has also been a member of the Advisory and Fixed Interest at Potter Warburg Pty Ltd over the last 20 years. practice are risk management and corporate Committee of the Australian Biological (now UBS Warburg Australia Limited). governance. Ms Stephenson has participated Resources Study and member of the Advisory in major corporate restructuring assignments OPERATIONAL EFFICIENCY Committee, CSIRO Division of Plant Industry. and the development and advancement of corporate governance practice within a wide range of organisations. She is also a Trustee 05 of the Queen Victoria Women’s Centre Trust and the Shrine of Remembrance. 98 99 Yarra Valley Water Annual Report 2003-04

The Auditor-General Victoria is the auditor The remuneration of the Managing Director The Board has adopted a process to review Independent external advice Privacy Compliance under the authority of the Audit Act 1994 and is approved by the shareholder on the the effectiveness and performance of the Each director has the right to seek As a custodian of a large volume of has been appointed as the Company’s recommendation of the Board. Board, individual directors, management and independent professional advice on matters confidential and personal information of our external auditor. Ernst & Young provides the Company, which includes: Occupational Health & Safety Committee relating to the business of Yarra Valley Water customers, we are very conscious of the need internal audit services for the Company and Three Yearly: Conduct an externally at the company’s expense, subject to the to ensure this information is protected and Bryan Kelly (Chairman), Judith Dwyer and reports directly to the Risk Management and Pauline Ladiges and external representative facilitated performance review of the Board. prior approval of the Chairman. No director that any unauthorised access to, and Audit Committee. Representatives of the Trevor Sweeny. Annually: Interviews to be conducted by exercised this right during the year. improper use of that information is prevented. external and internal auditors attend The Occupational Health & Safety (OH&S) the Chairman with each director to discuss Committee meetings by invitation. Ethical standards We have in place our own Privacy Policy and their performance and the performance of Committee assists the Board in fulfilling its Code of conduct Code of Practice for our employees, Environmental Committee duties and responsibilities relating to the the Board, management and the Company. contractors and agency staff to ensure that Our directors acknowledge the need for the Pauline Ladiges (Chairman), Geoff Phillips and OH&S standards and practices of the Annually: Progress on the Board’s customer information is protected. We also highest standards of corporate governance Bryan Kelly and external representatives Mike Company and its contractors. It has a focus performance to be measured against the maintain a Register of Privacy issues raised practices and ethical conduct by all directors, Waller and Rob Joy. Dr Brian Robinson, who on improving the Company’s OH&S Action Plan developed as part of the and actions taken, which is reviewed on a sadly passed away in May 2004, had been an employees and contractors of the Company. performance and ensuring our contractors externally facilitated review. half yearly basis to measure the Company’s external representative on the committee since The directors have adopted the Code of review and improve their OH&S performance. performance in this important area. September 2002. The review also identified that the Board Conduct issued by the Australian Institute of The Committee also ensures that the Marketing and Customer Service Committee Company Directors (AICD). Whistleblowers Protection Act The Environmental Committee is responsible business is proactive in identifying risks and should be disbanded on the basis that the for reviewing the Company’s environmental hazards and takes appropriate measures to Declaration of pecuniary interests The purpose of the Whistleblowers Protection performance and sustainability and water responsibilities of the Committee were able to Act is to encourage and facilitate disclosures avoid incidents. PR Risk Management Pty Ltd All directors and nominated officers have quality risks and standards. Maunsell Australia be managed appropriately through existing of improper conduct by public officers and undertakes OH&S audits for the Company completed the required declaration of Pty Ltd undertakes environmental audits in and/or improved planning and reporting public bodies and provide protection of and reports directly to the OH&S Committee. pecuniary interests. accordance with the three-year environmental processes. The Board resolved to disband the persons who make disclosures and who may audit program and reviews the Consolidated Performance review of the Board Committee in November 2003. Compliance with legislation suffer reprisals as a result of any disclosures. Risk Profile. The environmental auditors report In September 2003, a review of the Compliance Calendar Inspections and workshops by directors We have developed procedures to help directly to the Environmental Committee and Performance of the Board was conducted Directors undertook a number of inspections Being a highly regulated business and one employees and contractors understand the attend Committee meetings by invitation. by Pro:Ned, an independent Board and at the Company’s head office and received which strives to achieve its own high requirements and obligations under the Act Executive Search Consultant. A workshop Executive Remuneration Committee briefings on a range of issues such as the standards places the Company in a position and appointed officers to handle any was held by the Board in October 2003 to Alan Cornell (Chairman), Judith Dwyer and Supervisory Control and Data Acquisition where many of our tasks and obligations disclosures of improper conduct or detrimental review the outcomes of the individual Geoff Phillips. (SCADA) System. Two workshops were have to be performed within certain action by Yarra Valley Water or its employees. meetings with the consultant and the conducted for directors to consider and review timeframes. To meet or exceed these These procedures are also available to the The Executive Remuneration Committee questionnaires completed by directors and issues and provide input to the development of obligations, we have a comprehensive public at our Registered Office. advises the Board on remuneration policies to develop an action plan that included the for executives and senior managers of the the Company’s first Water Plan. Compliance Calendar that identifies these development of a Board Charter, a revised In 2003-04, no disclosures, or disclosed Company. In accordance with the Company’s tasks and ensures they are performed within Board performance review policy and matters, or investigations of disclosed matters OPERATIONAL EFFICIENCY Constitution, the remuneration for the non- the required timeframe. This approach helps restructured Board documentation. were received by Yarra Valley Water or the executive directors is determined by the us to meet the service obligations and the State Ombudsman in relation to the operation, shareholder, the State Government. expectations of all our stakeholders. 05 activities or officers of Yarra Valley Water. 100 101 Yarra Valley Water Annual Report 2003-04

Managing risks within our business

Disclosures of improper conduct by Yarra Our management system Figure 30: Risk management framework Valley Water or its employees may be made to: To maintain our high standards of service, we Terry Swingler operate to international standards of practice in Protected Disclosure Coordinator Quality (ISO 9001), Environment (ISO14001), Occupational Health & Safety (AS4801), Yarra Valley Water Ltd ESTABLISH CONTEXT Private Bag 1 Product Public Health Standards (HACCP) and Strategic & operational Mitcham Victoria 3132 Information Security (AS7799). Our approach Telephone: (03) 9872 1427 has incorporated all requirements of the Facsimile: (03) 9872 2609 standards into our everyday practices. IDENTIFY RISKS Hazards & opportunities Email: [email protected] Yarra Valley Water is certified to the above The Ombudsman Victoria five Standards. To achieve recognition as a Level 22, 459 Collins Street certified company an organisation must be COMMUNICATE ANALYSE RISKS MONITOR independently assessed by a third party. Melbourne Victoria 3000 AND CONSULT Likelihood & consequences AND REVIEW Telephone: (03) 9613 6222 Every three years the system is fully audited. Toll free: 1800 806 314 Audits conducted throughout 2003-04 confirmed that our practices meet all of the Freedom of Information EVALUATE RISKS requirements of the certifications. Ranked & prioritised The Company received 24 requests for In May 2004 we gained Information Security access to documents under the Freedom of Management System (ISMS) Information Act 1982 during 2003-04. accreditation. Like ISO 9001, ISO 14001 and TREAT RISKS Access to documents was granted either in Identify action plans HACCP, this is a recognised industry standard full or in part in all cases. based on compliance to the AS/NZS 7799. Requests for access to Yarra Valley Water There are 636 companies worldwide with AS/NZS 4360:1999 documents under the Freedom of Information ISMS accreditation and only 11 in Australasia. Act are to be made in writing and addressed to: At the time of certification, Yarra Valley Water was the only utility in Australasia and the only Manager, Corporate Services Risk management approach Within our business, the identification, Potential risks to the business, our customers, water business in the world with company- Yarra Valley Water Ltd Our process to manage risks is centred treatment and control of risks is a responsibility the community and the environment have been wide certification. Private Bag 1 around our Risk Management Framework. borne by everyone within our business and identified and their impact assessed based on forms part of our annual Risk Profiling. our existing controls, their consequence and Mitcham Victoria 3132 With increasing focus on information security, The principal objective is to ensure that no probability. As part of our assessment process physical security and business continuity single event will jeopardise the continued Risk profile Each application must be accompanied we rank the risks to establish where we should planning in case of unforseen disaster, operation of our Company. by a $20 fee and clearly identify the Risk Profiling is an integral part of our focus resources to improve our control in certification provides a means for us to documents sought. Implicit in the way we manage our risks is our organisational efficiency. It applies to a logical influencing the potential of an event occurring. OPERATIONAL EFFICIENCY benchmark our Information Security ongoing process of identification, analysis, and systematic method of establishing Our Risk Profile captures all identified risks we Management System. It will also foster a evaluation, treatment, monitoring and review. context, identifying, analysing, evaluating, face, the levels of consequence and the security culture with our business partners Our process is based on the Risk Management treating, monitoring and communicating risks definition of likelihood of each. and staff by heightening security awareness Standard of AS/NZS 4360:1999. associated with our activities, functions or 05 within the organisation. processes in a way that enables us to minimise losses and maximise opportunities. 102 103 Yarra Valley Water Annual Report 2003-04

These arrangements are designed for use Our training program in 2003-04 included SAI Global concluded: by authorities and organisations at all levels general awareness and induction sessions for ‘The emergency response procedures and are consistent with local and state all staff on emergency management. Roleplays have been updated and modified emergency services arrangements, the conducted to better prepare personnel considerably over the last 12 months. Victorian Emergency Management Act 1986, involved with incident management included: The procedures appear more focused the Emergency Management Manual of Exercise Safe Water – threat to and considerable training has been Victoria, Commonwealth arrangements, and contaminate the water supply. are consistently referred to at international undertaken and the training plan is Exercise Concern – a communications emergency management forums. comprehensive. The identification of exercise regarding a loss of water supply. potential emergency situations, To ensure our approach is consistent at the Brushy Creek sewage treatment plant – throughout the Corporate Risk Profile, local level we are represented on council and incident response to chemical spill. is comprehensive and appropriate for Victoria Police Emergency Management SCADA outage – test the recovery of Yarra Valley Water.’ Planning Committees. a critical business system. The introduction of the Terrorism Act 2002 In November 2003, the Department of Mitcham office complex evacuation. increased the focus on emergency Human Services (DHS) arranged a Safe Water Exercise Pinpoint – suspicious persons management. To improve our response forum for the Victorian water industry. and activity. capability to identified extreme risks next year Yarra Valley Water presented the protocols Exercise Water Pressure – electricity we are participating in two external roleplays for managing threats to the water supply outage impacting the water supply system. in conjunction with the owners of critical developed by the metropolitan water infrastructure. Exercises with the Victoria Risk Officer, Konrad Gill, takes staff through an incident management roleplay. During the year our emergency management businesses and DHS, in conjunction with Police and DHS will test communication, the Police Tactical Response Squad. The arrangements were independently reviewed The Risk Profile is used in our annual command, control and confirm the roles Emergency management aim was to share this information with the by a number of external auditors. business planning process and enables the and responsibilities of response agencies. The emergency arrangements we have non-metropolitan water industry. Maunsells observed: business to proactively manage the risks, in place represent our commitment to Security systems rather than reacting to problems as they responding to incidents and emergencies ‘Your presentation was particularly ‘The audit resulted in us concluding In 2003-04, we finalised the Security arise, and identifies areas where we focus promptly and efficiently. The purpose of valuable in that it presented work that YVW has established a robust Vulnerability Risk Assessment Guideline our annual audit program. the arrangements is to provide an incident that has been developed in the framework for management of (SV-RAG), in conjunction with Melbourne response capability that foresees, prevents metropolitan setting so that regional As part of our ongoing effort to manage our emergency situations that may arise Water Corporation and the other two or minimises the impact of incidents on the water authorities can take advantage risks we have established a program to in the course of YVW operations. The metropolitan retail water businesses. proactively reduce the impact and likelihood company and the community. This aims to of the thinking and processes that This guideline is a response to the challenges five-level emergency management of risk by reviewing our controls for each risk, increase protection for community health, have already been developed.’ posed by recent terrorism events and the hierarchy adopted provides a sound and defining actions to improve the existing the environment and community assets. consequent change in attitude regarding Jan Bowman, Manager, Environmental Health Unit, DHS. means to define responsibilities and controls. These improvement actions are critical infrastructure protection. Our emergency management principles are processes for emergency response and OPERATIONAL EFFICIENCY monitored by the Board. based on a company-wide approach, with investigation.’ a framework of Prevention, Preparedness, Response and Recovery (PPRR). The 05 framework of PPRR was developed for the Commonwealth of Australia by Emergency Management Australia. 104 105 Yarra Valley Water Annual Report 2003-04 Yarra Valley Water Limited ABN 93 066 902 501 Annual financial report for the year ended 30 June 2004

While we have developed and tested industry IT risk mitigation Directors’ Report 106 response plans to manage the effects of a Over the last few years, the focus on IT large-scale security incident in the past, there governance has increased due to our reliance Statement of Financial Performance 110 has never been a common approach across on IT systems, changing regulatory Statement of Financial Position 111 the industry to the assessment of security and requirements, increasing awareness of IT Statement of Cash Flows 112 the application of security control measures. security and the potential external threats SV-RAG has been developed and applied from from terrorism and system intrusions. Notes to the Financial Statements 113 a water and sewage perspective, however the 1 Summary of Significant Accounting Policies 113 Failure of key systems which are heavily underlying principles and methodology can be 2 Revenue from Ordinary Activities 118 reliant on information technology (IT) is a universally adapted to all organisations. It 3 Expenses and Losses 118 major risk for the business. ISMS/AS7799.2 provides a methodology to assess likely 4 Income Tax 119 is a management system that encompasses threats, rank the criticality of assets in terms 5Dividends Paid 120 the business processes and documentation of their security vulnerability and provides a 6 Current Assets – Cash 120 related to risk management and protection of risk-based system of applying security 7 Current Assets – Prepayments 120 information. The standard has 76 mandatory measures according to criticality and current 8 Current Assets – Receivables 120 requirements and 126 best practice controls threat levels. 9 Infrastructure, Property, Plant and Equipment 121 which have been met as part of our 10 Current Liabilities – Payables 123 Yarra Valley Water presented SV-RAG as a certification. Our certification includes all the 11 Current Liabilities – Interest Bearing 123 paper at the Enviro 2004 conference and the mission-critical business applications as well 12 Current Liabilities – Provisions 123 guideline has been adopted and used by all as the IT infrastructure at our head office. the Victorian water utilities. It was also 13 Non-Current Liabilities – Interest Bearing 123 endorsed by Victoria Police, the Department 14 Non-Current Liabilities – Provisions 124 of Sustainability and Environment and DHS. 15 Contributed Equity 124 16 Reserves 125 Our security review, criticality assessment 17 Retained Profits 125 and implementation of control measures in 18 Financial Instruments 126 the field were subject to an internal audit by 19 Related Party Disclosures 128 Ernst & Young. The auditors concluded that 20 Remuneration of Directors 129 the measures we have in place met, and in 21 Remuneration of Auditor 130 some cases exceeded, the standards 22 Contingent Liabilities and Contingent Assets 130 detailed in the Security Vulnerability Risk 23 Commitments 131 Assessment Guidelines. 24 Employee Benefits 132 25 Economic Dependency 132 26 Cash Flow Information 133 27 Executive Remuneration 133 OPERATIONAL EFFICIENCY 28 Segment Information 134 29 Impact of adopting Australian Equivalents to International Financial reporting Standards 135 05 Directors’ Declaration 136 Auditor General’s Report 137 106 107 Yarra Valley Water Annual Report 2003-04

Directors’ Report Directors’ Report (cont.)

The Directors of Yarra Valley Water Limited present their report for the financial year ended Principal Activities 30 June 2004. The principal activities of the Company during the course of the financial year were the Directors provision, within its licensed area, of retail water supply and sewerage services and the The following persons were Directors of the Company during the financial year up to the date collection of trade waste. of this Report: There were no significant changes in the nature of these activities during the year. Alan K Cornell (Chairman) Geoffrey R Phillips (Deputy Chairman) Dividends Vincent A (Tony) Kelly (Managing Director) The following dividends have been paid or recommended by the Directors since the start of the Judith M Dwyer financial year: Bryan L Kelly As shown in last year’s Directors’ Report, a final dividend of $24.0 Million for the year ended Pauline Y Ladiges 30 June 2003 was recommended. This dividend was paid on 31 October 2003. Elizabeth H Parkin (appointed 1 January 2004) An interim dividend of $24.4 Million for the year ended 30 June 2004 was paid on 30 April 2004. JoAnne M Stephenson (resigned 31 December 2003) The Directors’ estimate of the final dividend for the year ended 30 June 2004 is $21.7 Million. The Directors have no interests in the shares of the Company. Details of the qualifications, age, experience and special responsibilities of Directors are set out Review of Operations on pages 96, 97, 98 and 99 of this Annual Report. A review of the operations of the Company during the year ended 30 June 2004 and the results of those operations are contained in earlier sections of this Annual Report. Directors’ Attendance at Meetings The number of Directors’ meetings (including meetings of Committees of Directors) and the State of Affairs number of meetings attended by each Director during the financial year are shown below. The Victorian Government’s White Paper ‘Securing Our Water Future Together’ released in June Two workshops were held for Directors to consider, review issues and provide input to the 2004 sets out an action plan to secure Victoria’s water future for the next 50 years. There are a development of the Company’s first Water Plan. number of actions from the White Paper for Yarra Valley Water that are detailed within this Annual Report. The Directors also conducted an inspection of new developments in major growth corridors including the Whittlesea Corridor, the Epping North area and the Plenty Valley Corridor. The main issue is the introduction of ‘rising block tariffs’ for water usage from 1 October 2004 for all domestic customers in Melbourne – a tiered pricing system that rewards water Directors’ Meetings – Number Attended conservation and discourages excessive use. Board of Risk Management Environmental Executive Marketing Occupational The Victorian State Government also proposes to introduce legislation to require environmental Directors and Audit Committee Remuneration and Customer Health and Safety Meetings Committee Meetings Committee Service Committee Committee contributions from water authorities for an initial period commencing 1 October 2004 which is Meetings Meetings Meetings # Meetings likely to increase prices by an average of five percent for urban water customers.

A K Cornell 10 of 11 1 of 3 * 2 of 2 0 of 1 * The fixed water charges and other sewerage prices will be specified by the Minister for Water G R Phillips 9 of 11 5 of 5 2 of 4 2 of 2 * * in a new Melbourne Metropolitan Water, Wastewater and Drainage Services Pricing Order 2004 J M Dwyer 10 of 11 * * 2 of 2 1 of 1 3 of 3 B L Kelly 9 of 11 4 of 5 3 of 4 * * 3 of 3 prior to the introduction of ‘rising block tariffs’ on 1 October 2004. V A Kelly 11 of 11 * * * * * The fixed water charge will depend on the level of consumption and revenue requirements of P Y Ladiges 11 of 11 * 4 of 4 * * 1 of 3 the Company. E H Parkin 5 of 5 2 of 2 * * * * J M Stephenson 5 of 6 2 of 3 * * 1 of 1 *

* Not a member of the Committee # The Marketing and Customer Service Committee was disbanded as from 19 November 2003. 108 109 Yarra Valley Water Annual Report 2003-04

Directors’ Report (cont.) Directors’ Report (cont.)

Except as provided above, there were no significant changes in the state of affairs of the The Company’s Constitution provides that every person who is or has been an officer or auditor Company during the year ended 30 June 2004 not otherwise disclosed in this Report or the of the Company will be indemnified out of the property of the Company against liabilities to the Annual Financial Report. extent allowed by the Corporations Act 2001. Events Subsequent to Balance Date No amounts have been paid out under this indemnity during or since the end of the financial year. Since 30 June 2004 to the date of this Report, no matter or circumstance has arisen that, in Insurance of Officers the opinion of the Directors, has significantly affected or may significantly affect the operations During the financial year, the Company paid premiums in respect of contracts to insure of the Company, the results of those operations, or the state of affairs of the Company in future Directors, former Directors and Officers of the Company against certain liabilities. financial years. The Directors of the Company made a contribution towards the Directors and Officers Likely Developments insurance contract premium. Likely developments in the operations of the Company known at the date of this Report have Some of the contracts of insurance prohibit disclosure of the nature of the liabilities insured been covered generally within this Annual Report. and the amount of the premium. Environmental Regulation Rounding of Amounts to Nearest Thousand Dollars The Company maintains an Environmental Management System certified to ISO 14001 which The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in is designed to ensure compliance with environmental regulation and manage any areas of non accordance with that Class Order, amounts in this Report and the Annual Financial Report have compliance. As part of this System, regular external environmental audits are undertaken which been rounded off to the nearest thousand dollars, unless otherwise stated. focus on key areas requiring regulatory compliance. The issues raised in the audits are monitored to ensure that appropriate actions are taken in relation to the recommendations made by the auditors. This Report is made in accordance with a resolution of the Directors of the Company on the The Company also holds licences for its sewage treatment plants. The licences have been 25th day of August 2004. issued by the Environment Protection Authority under section 20 of the Environment Protection Act 1970. The licences allow the discharge of treated effluent to the environment subject to specified conditions.

During the year, all sewage treatment plant licence requirements were fully complied with Alan K Cornell Vincent A (Tony) Kelly Chairman Managing Director except one. In one test at the Brushy Creek Sewage Treatment Plant on 7 October 2003, the ammonia levels exceeded the licence requirement (13 mg/litre compared to the licence requirement of 10 mg/litre) due to a series of minor plant mechanical problems that occurred causing an upset to the plant processes. The mechanical problems were subsequently repaired. All prior and subsequent samples taken at the Brushy Creek Sewage Treatment Plant achieved licence compliance. No enforcement action has arisen from this breach. Indemnification of Officers and Auditor The Company has entered into a Deed with each Director of the Company under which the Company is required to provide access to the books of the Company and to maintain insurance coverage for at least seven years after the Director ceases to be a Director of the Company. 110 111 Yarra Valley Water Annual Report 2003-04

Yarra Valley Water Ltd Yarra Valley Water Ltd Statement of Financial Performance for the year ended 30 June 2004 Statement of Financial Position as at 30 June 2004

Note 2004 2003 Note 2004 2003 $’000 $’000 $’000 $’000 Revenue from Ordinary Activities 2 356,782 371,002 Current Assets Expenses from ordinary activities 3 (a) (246,673) (243,346) Cash 6, 18 177 41 Borrowing costs expense 3 (a) (34,514) (32,932) Receivables 8, 18 40,247 39,856 Deferred tax assets 4 2,190 6,315 Profit from Ordinary Activities before Income Tax Expense 75,595 94,724 Prepayments 7 1,882 837 Income Tax Expense relating to Ordinary Activities 4 23,121 30,290 Total Current Assets 44,496 47,049

Profit from Ordinary Activities after Income Tax Expense 52,474 64,434 Non–Current Assets NET PROFIT 52,474 64,434 Receivables 65 120 Infrastructure, property, plant and equipment 9 1,380,257 1,305,233 Net increase in Asset Revaluation Reserve 16(b) – 17,584 Deferred tax assets 4 1,185 1,273 Total valuation adjustments recognised directly in equity – 17,584 Total Non–Current Assets 1,381,507 1,306,626 TOTAL ASSETS 1,426,003 1,353,675 Total changes in equity other than those resulting from transactions with owners as owners 52,474 82,018 Current Liabilities Payables 10, 18 56,426 43,932 The above Statement of Financial Performance should be read in conjunction with the accompanying notes. Interest bearing liabilities 11, 18 114,143 56,528 Deferred tax liabilities 4 528 375 Provisions 12 3,357 3,379 Total Current Liabilities 174,454 104,214

Non–Current Liabilities Interest bearing liabilities 13, 18 433,800 453,800 Deferred tax liabilities 4 174,248 155,494 Provisions 14 3,792 4,531 Total Non–Current Liabilities 611,840 613,825

TOTAL LIABILITIES 786,294 718,039

NET ASSETS 639,709 635,636

Equity Contributed equity 15 43,503 43,503 Reserves 16 (a) 442,620 442,620 Retained profits 17 153,586 149,513 TOTAL EQUITY 639,709 635,636

The above Statement of Financial Position should be read in conjunction with the accompanying notes. 112 113 Yarra Valley Water Annual Report 2003-04

Yarra Valley Water Ltd Notes to the Financial Statements Statement of Cash Flows for the year ended 30 June 2004 For the year ended 30 June 2004

Note 2004 2003 1. Summary of Significant Accounting Policies $’000 $’000 The accounting policies which have been adopted in the preparation of the Financial Statements are: Cash Flows from Operating Activities Receipts from customers 345,484 354,803 (a) Basis of Accounting Payments to suppliers and employees (231,045) (218,108) The Financial Statements are a general purpose financial report prepared in accordance with the Interest received 27 231 requirements of the Corporations Act 2001 which includes applicable Accounting Standards. Other Goods and services tax refunded 10,112 7,447 mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also Interest and other costs of finance paid (34,219) (33,015) been complied with. NET CASH INFLOW FROM OPERATING ACTIVITIES 26(a) 90,359 111,358 The Financial Statements have been prepared on an accruals basis in accordance with the historical Cash Flows from Investing Activities cost convention, except where stated. Payments for infrastructure, property, plant and equipment (79,547) (55,370) (b) Changes in Accounting Policies Proceeds from sale of infrastructure, property, plant and equipment 121 123 The accounting policies adopted are consistent with those of the previous year. NET CASH OUTFLOW FROM INVESTING ACTIVITIES (79,426) (55,247) (c) Infrastructure, Property, Plant and Equipment

Cash Flows from Financing Activities (i) Depreciation of Infrastructure, Property, Plant and Equipment Advances / Loans (13) 67 Items of infrastructure, property, plant and equipment, including buildings but excluding Dividends paid (48,400) (60,400) freehold land, are depreciated by asset class over their estimated useful lives to the Company Proceeds from borrowings 126,593 127,593 on the following basis: Repayment of borrowings (88,977) (124,178) Buildings 15 to 60 years Straight Line NET CASH OUTFLOW FROM FINANCING ACTIVITIES (10,797) (56,918) Infrastructure 7 to 100 years Straight Line NET INCREASE/(DECREASE) IN CASH HELD 136 (807) Plant and Equipment 3 to 13.3 years Straight Line Cash at the beginning of the period 41 848

CASH AT THE END OF THE PERIOD 6 177 41 (ii) Recoverable Amount of Non-Current Assets Expected net cash flows are discounted to their present value in determining the recoverable amount of assets. Non-current assets are not carried at an amount above their recoverable The above Statement of Cash Flows should be read in conjunction with the accompanying notes. amount.

(iii) Revaluation of Non-Current Assets Land and buildings are revalued in accordance with AASB 1041 “Revaluation of Non-Current Assets” and AASB 1010 “Recoverable Amount of Non-Current Assets”. Revaluation of land and buildings is made on the basis of fair value. Assets are revalued with sufficient regularity to ensure that the carrying amount of each asset in the class does not differ materially from its fair value at the reporting date. Potential capital gains tax is not taken into account in determining revaluation amounts unless there is an intention to sell the assets concerned. All other assets are carried at cost. 114 115 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

1. Summary of Significant Accounting Policies (Cont.) 1. Summary of Significant Accounting Policies (Cont.) (d) Revenue Recognition (g) Taxation Revenue is brought to account when services have been provided or when a usage or service (i) Income Taxes charge has been made. The payment in advance by customers of accounts which at reporting date The Company, in accordance with the State Owned Enterprises Act 1992, is liable to pay an were unbilled is classified as trade creditors. income tax equivalent to the Victorian Government calculated on a similar basis as the Income Water usage charges and sewage disposal charges are recognised as revenue when the service has Tax Assessment Act 1936 (as amended) and the Income Tax Assessment Act 1997. been used. As meter reading is cyclical, an estimation is made at the end of the accounting period Tax-Effect accounting is applied using the liability method whereby income tax is regarded as for water usage and sewage disposal by customers and recorded on meters which have not yet an expense and is calculated on the accounting profit after allowing for permanent differences. been read. The estimate is made by multiplying the number of days since the last reading by daily To the extent timing differences occur between the time items are recognised in the Financial average water consumption for that period. Statements and when items are taken into account in determining taxable income, the net related Property sales are recognised on the signing of an unconditional contract of sale with a deposit of at taxation benefit or liability, calculated at current rates, is disclosed as a future income tax benefit or a least 10%. provision for deferred income tax. The net future income tax benefit relating to tax losses and timing Assets acquired at no cost to the Company (developer contributions) are recognised as revenue at differences is not carried forward as an asset unless the benefit is virtually certain of being realised. fair value upon the gaining of control of the asset. Cash new connection contributions represent fees (ii) Goods and Services Tax (GST) paid by developers so they can connect new developments to the Company’s existing water supply Revenues, expenses and assets are recognised net of the amount of GST except: and sewerage systems. These are recognised as revenue when the contribution has been received. Where the GST incurred on a purchase of goods and services is not recoverable from the (e) Employee Benefits taxation authority, in which case the GST is recognised as part of the cost of acquisition of (i) Superannuation the asset or as part of the expense item as applicable; and A liability in respect of defined benefits superannuation is recognised, where appropriate, and Receivables and payables are stated with the amount of GST included. is measured as the difference between the vested benefits at the reporting date and the net The net amount of GST recoverable from, or payable to, the taxation authority is included as market value of the superannuation fund’s assets at that date. part of receivables or payables in the Statement of Financial Position. (ii) Other Employee Benefits Cash flows are included in the Statement of Cash Flows on a gross basis and the GST Provision is made for employee benefits accumulated as a result of employees rendering component of cash flows arising from investing and financing activities, which is recoverable services up to the reporting date. These benefits include wages and salaries, annual leave and from, or payable to, the taxation authority, are classified as operating cash flows. long service leave. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or Liabilities arising in respect of wages and salaries, annual leave and any other employee payable to, the taxation authority. benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the (h) Cash and Cash Equivalents liability is settled. All other employee benefit liabilities are measured at the present value of the For the purpose of the Statement of Cash Flows, cash includes deposits at call which are readily estimated future cash outflow to be made in respect of services provided by employees up to convertible to cash and which is used in the cash management function on a day-to-day basis. the reporting date. In determining the present value of future cash outflows, the market yield as (i) Foreign Currencies at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used. Transactions in foreign currencies are converted to local currency at the rate of exchange ruling at the date of the transaction. All resulting exchange differences arising on re-statement are brought to In respect of the Company’s defined benefits superannuation plan, any contributions made to account in determining the net profit or loss for the financial year. the superannuation plan are recognised against profits when due. (j) Receivables (f) Doubtful Debts All debtors are recognised at the amounts receivable less any provision for doubtful debts. Credit is The collectibility of debt is assessed each accounting period for usage and other charges. generally allowed for a period of 14 days. Bad debts are written off when the debt is determined to A provision for doubtful debts is raised where doubt as to its collection exists. be uncollectible. 116 117 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

1. Summary of Significant Accounting Policies (Cont.) 1. Summary of Significant Accounting Policies (Cont.) (k) Creditors and Accruals (r) Comparatives Creditors and accruals are recognised for future amounts to be paid in respect of goods and Where necessary, comparatives have been reclassified and repositioned for consistency with current services received. The amounts are unsecured and are usually paid net 30 days of recognition. year disclosures.

(l) Borrowings In particular, items have been reclassified under: Loans are repaid on maturity and are carried at their principal amounts. Interest is payable semi- (i) Cash (Notes 6 and 18) and Prepayments (Note 7) where the Smart Water Fund contribution is annually and is accrued over the period it becomes due. Interest is recorded as part of creditors and reclassified from cash to prepayments in 2004. accruals. (ii) Total Provision for Annual Leave (Notes 12, 14 and 24) is shown as a current liability in 2004, (m) Advances whereas in 2003 a portion of the provision was shown as non-current. Advances represent amounts advanced to the Company by developers for capital and recurrent (iii) Employee Benefits (Note 24) is shown in greater detail in 2004, whereas in 2003 employee works not completed. The advances are non-interest bearing. benefits was shown in aggregate.

(n) Leases (s) Impact of Adopting AASB equivalents to IASB Standards Leases are classified at their inception as either operating or finance leases based on the economic For annual reporting periods ending on or after 30 June 2004, AASB 1047 Disclosing the Impacts of substance of the agreement so as to reflect the risks and benefits incidental to ownership. Payments Adopting Australian Equivalents to International Financial Reporting Standards requires narrative made under operating leases are charged against profits in equal instalments over the accounting disclosure of how the transition process is being managed and an explanation of the key differences periods covered by the lease term. The Company does not use finance leases. in accounting policies that are expected to arise from the transition to AASB equivalents and IASB pronouncements. Refer to Note 29 for further details. (o) Final Dividend Estimate An obligation to pay a dividend only arises after consultation between the Board, the relevant portfolio Minister and the Treasurer. Following this consultation, an agreement on the dividend payable is passed by the members in general meeting. Although this process had not been completed at the reporting date, the Board’s preliminary final dividend estimate in respect of 2003-2004 is $21.7 Million (2003: $24.0 Million).

(p) Segment Reporting The accounting policies adopted for Segment Reporting are consistent with those used throughout this Annual Financial Report. Directly attributable revenue, expenses, assets and liabilities have been reported against a particular segment. Where no direct attribution exists, the amounts have been reported as unallocated.

(q) Rounding of Amounts to Nearest Thousand Dollars Amounts in the Annual Financial Report have been rounded to the nearest thousand dollars. 118 119 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

2004 2003 2004 2003 $’000 $’000 $’000 $’000 2Revenue from Ordinary Activities 4 Income Tax Revenue from Operating Activities The aggregate amount of income tax expense attributable to Water usage charges 112,365 122,324 the financial year is reconciled to the prima facie income tax Sewage disposal charges 75,623 80,143 expense on the operating profit as follows: Rendering of services 110,182 106,789 Operating Profit before Income Tax 75,595 94,724 Trade waste charges 10,323 10,343 Prima facie income tax calculated @ 30% 22,679 28,417 Developer contributed assets 14,710 17,034 Tax effect of permanent differences: Cash new connection contributions by developers 18,687 19,201 Non–deductible expenses 22 18 Other 13,469 13,642 Non–deductible depreciation 752 689 Total Revenue from Operating Activities 355,359 369,476 Non–assessable customer contributions (324) (1,165) Under provision in prior years – 2,350 Revenue from outside the Operating Activities Research and development allowance – (11) Rent 1,212 1,077 Environmental impact and protection allowances (8) (8) Interest 27 231 Recovery of debt previously written off as bad 63 88 Income Tax Expense attributable to Ordinary Activities 23,121 30,290 Proceeds from sale of non–current assets 121 130 Tax loss included in future income tax benefit shown below amounts to $0.722 Million. Total Revenue from outside the Operating Activities 1,423 1,526 The Company believes there is virtual certainty that sufficient taxable income Total Revenue from Ordinary Activities 356,782 371,002 will be generated in the future to recoup the value of these losses.

Deferred Tax Assets 3 Expenses and Losses Future income tax benefit – current 2,190 6,315 (a) Expenses Future income tax benefit – non current 1,185 1,273 Wholesaler charges 132,623 131,713 Total Deferred Tax Assets 3,375 7,588 Depreciation of: Buildings 169 135 Deferred Tax Liabilities Infrastructure 22,881 22,121 Provision for deferred income tax – current 528 375 Plant and equipment 6,391 6,173 Provision for deferred income tax – non current 174,248 155,494 Total depreciation expense 29,441 28,429 Total Deferred Tax Liabilities 174,776 155,869 Write down of buildings 3,073 – Borrowing costs expense 34,514 32,932 Income Tax Expense Comprises: Bad and doubtful debts 2,399 2,778 Future Income Tax Benefit (4,213) (6,713) Operating lease minimum lease payments 1,216 1,683 Provision for Deferred Income Tax (18,908) (23,577) Contract payments 30,594 30,137 Salary and employee benefits expense 19,164 21,670 Total Income Tax Expense (23,121) (30,290) Other expenses 28,163 26,936

Total Expenses from Ordinary Activities 281,187 276,278

(b) Losses Net loss on disposal of property, plant and equipment 438 505 120 121 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

2004 2003 2004 2003 $’000 $’000 $’000 $’000 5 Dividends Paid 9Infrastructure, Property, Plant and Equipment Dividends paid by the Company to the Victorian Government were: Infrastructure (a) Unfranked interim dividend paid 24,400 34,200 At cost 1,433,330 1,375,603 (b) Unfranked final dividend paid for prior year 24,000 26,200 Accumulated depreciation (179,376) (157,646) Total Dividends Paid 48,400 60,400 Total Infrastructure 1,253,954 1,217,957

The Company, under National Income Tax Equivalent, Freehold Land is not required to maintain a franking account. At independent valuation 30 June 2003 52,085 52,085 The final dividend estimate for the year, as disclosed in At cost 2,579 – Note 1(o) is $21.7 Million. Total Freehold Land 54,664 52,085 Buildings 6Current Assets – Cash At independent valuation 30 June 2000 60 1,185 Cash at bank 177 41 At independent valuation 30 June 2004 1,350 – At cost – 3,173 Total Current Assets – Cash 177 41 Accumulated depreciation (12) (397) Total Building 1,398 3,961 7Current Assets – Prepayments Prepayments Total Freehold Land and Buildings 56,062 56,046

Total Current Assets – Prepayments 1,882 837 Plant and Equipment At cost 71,067 56,865 Prepayments include $1,413,088 (2003: $342,196) which relates to Accumulated depreciation (49,716) (45,490) amounts paid to the Smart Water Fund but not yet distributed. Refer Note 23(c). Total Plant and Equipment 21,351 11,375 Capital Works in Progress 48,890 19,855 8Current Assets – Receivables Trade debtors 41,846 41,540 Total Infrastructure, Property, Plant and Equipment Less: Provision for doubtful debts (1,694) (1,804) At independent valuation 30 June 2000 60 1,185 At independent valuation 30 June 2003 52,085 52,085 40,152 39,736 At independent valuation 30 June 2004 1,350 – Other debtors 95 120 At cost 1,506,977 1,435,641 Total Current Assets – Receivables 40,247 39,856 Capital works in progress 48,890 19,855 1,609,362 1,508,766 Less accumulated depreciation (229,105) (203,533) Total Written Down Amount 1,380,257 1,305,233

Valuations The 30 June 2000 valuation of buildings (with the exception of buildings with minor value) was independently determined by Edward Rushton Australia Pty Ltd using fair market value based on existing use as at 30 June 2000. The 30 June 2003 valuation of freehold land was independently determined by Urbis Pty Ltd using fair value as at 30 June 2003. The 30 June 2004 valuation of buildings was independently determined by Edward Rushton Australia Pty Ltd using fair market value based on existing use as at 30 June 2004. 122 123 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

2004 2003 2004 2003 $’000 $’000 $’000 $’000 10 Current Liabilities – Payables 9Infrastructure, Property, Plant and Equipment (Cont.) Trade creditors 18,930 13,904 Reconciliations Advances 216 269 Accruals 37,280 29,759 Infrastructure Carrying amount at beginning 1,217,957 1,175,548 Total Current Liabilities – Payables 56,426 43,932 Additions * 59,589 65,149 Disposals (539) (619) 11 Current Liabilities– Interest Bearing Depreciation expense (22,881) (22,121) Borrowings 114,143 56,528 Write offs (172) – Total Current Liabilities – Interest Bearing 114,143 56,528 Total Infrastructure 1,253,954 1,217,957 12 Current Liabilities – Provisions Freehold Land Employee benefits 2,888 3,189 Carrying amount at beginning 52,085 34,501 Other 469 190 Additions * 2,579 – Net amount of revaluation increments less decrements – 17,584 Total Current Liabilities – Provisions 3,357 3,379 Total Freehold Land 54,664 52,085 Employee benefits include amounts relating to accrued annual leave, long service leave, and unfunded superannuation liability amounts. Buildings Other provisions include amounts relating to minor claims made against the Company. Carrying amount at beginning 3,961 3,085 Additions * 679 1,011 13 Non–Current Liabilities– Interest Bearing Net amount of revaluation increments less decrements (3,073) – Borrowings 433,800 453,800 Depreciation expense (169) (135) Total Non-Current Liabilities – Interest-Bearing 433,800 453,800 Total Buildings 1,398 3,961

Plant and Equipment Carrying amount at beginning 11,375 11,905 Additions * 16,387 5,651 Disposals (20) (8) Depreciation expense (6,391) (6,173) Total Plant and Equipment 21,351 11,375

Works In Progress Carrying amount at beginning 19,855 14,457 Additions 108,269 77,209 Transfers (79,234) (71,811) Total Works In Progress 48,890 19,855

* Refers to items transferred from Works In Progress 124 125 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

2004 2003 2004 2003 $’000 $’000 $’000 $’000 14 Non–Current Liabilities – Provisions 16 Reserves Employee benefits 3,792 4,531 a) Composition Total Non–Current Liabilities – Provisions 3,792 4,531 Capital Reserve 392,357 392,357 Asset Revaluation Reserve 50,263 50,263 Movements in Provisions 442,620 442,620 Employee Benefits (Current and Non–Current) Carrying amount at beginning 7,720 6,159 b) Movement Additional provision 2,090 4,279 Asset Revaluation Reserve Reduction of provision following remeasurement (954) (364) Opening balance 50,263 32,679 Amounts utilised during year (2,176) (2,354) Revaluation increments on revaluation of land – 17,584 Carrying amount at end 6,680 7,720 Closing balance 50,263 50,263

Other provisions c) Nature of Reserves Carrying amount at beginning 190 262 The Capital Reserve represents an amount equivalent to the Additional provision 1,191 514 net assets transferred to the Company following its Amounts utilised during year (912) (586) formation and forms part of the Company’s general reserves Carrying amount at end 469 190 and is not part of its capital under the Corporations Act 2001. The Asset Revaluation Reserve is used to record certain 15 Contributed Equity increments and decrements in the value of non–current assets. Paid up capital 17 Retained Profits Ordinary shares of 1 dollar each fully paid 43,503 43,503 Balance at the beginning of the year 149,513 145,479 The shares are beneficially owned by the Victorian Government. Net profit after income tax 52,474 64,434 Total available for appropriation 201,986 209,913 Dividends paid (48,400) (60,400) Balance at end of year 153,586 149,513 126 127 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

18 Financial Instruments 18 Financial Instruments (Cont.) (a) Interest Rate Risk Exposures (b) Net Fair Value The Company’s exposure to interest rate risk and the effective weighted average interest rate All financial assets and liabilities are recognised in the Statement of Financial Position. Cash, cash equivalents and non–interest bearing for each class of financial assets and financial liabilities is set out below. financial assets and financial liabilities are carried at a cost which approximates the net fair value. The net fair value of other financial assets and financial liabilities is determined by discounting the expected future cash flows at current interest rates. The carrying amounts and 2004 Weighted Floating Fixed interest maturing in: net fair values of financial assets and liabilties at balance date are as follows: average effective interest interest rate rate 1 year 1 to 5 over 5 Non Total or less years years interest 2004 2004 2003 2003 bearing Carrying Net fair Carrying Net fair amount value amount value % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 FINANCIAL ASSETS Cash 4.66 163 – – – 14 177 FINANCIAL ASSETS Receivables – – – – 40,247 40,247 Cash 177 177 41 41 Total Financial Assets 163 – – – 40,261 40,424 Receivables 40,247 40,247 39,856 39,856 Total Financial Assets 40,424 40,424 39,897 39,897 FINANCIAL LIABILITIES Trade creditors and accruals – – – – 56,210 56,210 FINANCIAL LIABILITIES Borrowings 6.21 65,943 48,200 192,800 241,000 – 547,943 Trade creditors and accruals 56,210 56,210 43,663 43,663 Advances – – – – 216 216 Borrowings 547,943 564,063 510,328 548,136 Total Financial Liabilities 65,943 48,200 192,800 241,000 56,426 604,369 Advances 216 216 269 269 Net Financial Assets (Liabilities) (65,780) (48,200) (192,800) (241,000) (16,165) (563,945) Total Financial Liabilities 604,369 620,489 554,260 592,068

(c) Credit Risk Exposure The Company’s exposure to credit risk for each class of financial assets recognised on the Statement of Financial Position is generally the carrying amount, net of any provision for doubtful debts. 2003 Weighted Floating Fixed interest maturing in: average effective interest interest rate rate 1 year 1 to 5 over 5 Non Total or less years years interest bearing

% $’000 $’000 $’000 $’000 $’000 $’000

FINANCIAL ASSETS Cash 4.46 27 – – – 14 41 Receivables – – – – 39,856 39,856 Total Financial Assets 27 – – – 39,870 39,897

FINANCIAL LIABILITIES Trade creditors and accruals – – – – 43,663 43,663 Borrowings 6.26 28,328 48,200 192,800 241,000 – 510,328 Advances – – – 269 269 Total Financial Liabilities 28,328 48,200 192,800 241,000 43,932 554,260

Net Financial Assets (Liabilities) (28,301) (48,200) (192,800) (241,000) (4,062) (514,363) 128 129 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

19 Related Party Disclosures 19 Related Party Disclosures (Cont.) (a) Directors (e) Victorian Government related parties – disclosure exemption The names of persons holding the position of director of Yarra Valley Water Limited at any time during the financial year ended 30 June 2004 were: The Company, under section 340(1) of the Corporations Act 2001, has obtained relief from section 296(1) of the Corporations Act 2001, Alan K Cornell (Chairman) specifically in relation to clauses 5.1 and 5.2 of the Australian Accounting Standard 1017 “Related Party Disclosures”. The relief Geoffrey R Phillips (Deputy Chairman) applies to disclosure of transactions during the financial year with related parties in the wholly–owned group. Vincent A (Tony) Kelly (Managing Director) Judith M Dwyer (f) Relationship with the Treasury Corporation of Victoria Bryan L Kelly The Company borrows from and invests with the Treasury Corporation of Victoria. The aggregate amount of borrowings payable at Pauline Y Ladiges reporting date and the amounts of interest revenue and interest expense included in the determination of profit before income tax is: Elizabeth H Parkin (appointed 1 January 2004) 2004 2003 JoAnne M Stephenson (resigned on 31 December 2003). $’000 $’000 Remuneration of directors is reported in Note 20. Aggregate amount of borrowings 547,943 510,328 Interest revenue 4 208 (b) Transactions with director related entities Interest expense 32,945 31,701 Water and sewerage services were provided to Directors or Director–related entities for properties within Yarra Valley Water’s licensed area under normal commercial terms and conditions. Mr Alan K Cornell is a consultant for the law firm, Blake Dawson Waldron, which has provided certain legal services to the Company for 20 Remuneration of Directors which an amount of $880,317 (2003: $560,770) in fees were paid or payable on normal commercial terms and conditions. Income received, or due and receivable, by Directors of the Company from the Company 519 720 Mr Alan K Cornell is a director of Océ Australia Ltd from which the Company has purchased goods to the value of $173,454 (2003: Nil) paid or payable on normal commercial terms and conditions. The number of Directors of the Company whose income from the Company was within the specified bands is as follows: Mr Geoffrey R Phillips is the Deputy Managing Director of Transurban Group. CityLink Melbourne Ltd is a part of Transurban Group, 2004 2003 which has provided services to the Company for which an amount of $19,927 (2003: $16,120) in fees was paid or payable on normal $$ No. No. commercial terms and conditions. 10,000 – 19,999 2– Mr Vincent A (Tony) Kelly, is the Chairman of AquaAid Australia Ltd, to which the Company during the year advanced $56,696 (2003: Nil) 30,000 – 39,999 45 to assist with the startup of AquaAid Australia Ltd, all of which will be reimbursed at a later date. The Company has paid fees for the amount 70,000 – 79,999 11 of $11,000 (2003: Nil) for a two year corporate membership. Donations were also paid during the year for which an amount of $66,384 was 90,000 – 99,999 –1 paid by way of corporate support for two years. 250,000 – 259,999 1– 360,000 – 369,999 –1 Professor Pauline Y Ladiges is the Head of the School of Botany at the University of Melbourne, which has provided services to the Company for which an amount of $6,384 (2003: $3,480) in fees was paid or payable on normal commercial terms and conditions. The Directors do not receive share options as part of their remuneration. Ms Elizabeth H Parkin is employed part time by KPMG, which has provided services to the Company for which an amount of $34,567 Where applicable, the table above includes performance bonuses paid during the year, (2003: Nil) in fees were paid or payable on normal commercial terms and conditions. based on performance of the previous year. There were no other transactions with director related entities.

(c) Relationship with the Melbourne Water Corporation The Company transacts solely with the Melbourne Water Corporation for the purchase of potable water and disposal of sewage. The Company, under a normal commercial agency arrangement, bills and collects on behalf of Melbourne Water Corporation drainage rates and charges.

(d) Relationship with the Minister for Environment The Company, under a normal commercial agency arrangement, bills and collects rates on behalf of the Minister for Environment relating to Parks Victoria services. 130 131 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

2004 2003 23 Commitments 2004 2003 21 Remuneration of Auditor $’000 $’000 $’000 $’000 (a) Capital Commitments Amount received, or due and receivable, by the auditor of the Company for auditing the accounts of the Company 84 86 Total capital expenditure contracted for at balance date but not provided for in the accounts Payable: 22 Contingent Liabilities and Contingent Assets Not later than one year 27,859 21,004 (a) Contingent Liabilities Later than one year but not later than five years 1,467 – The Company is unaware of any material contingent liabilities. 29,326 21,004

A Western Australian Supreme Court Writ issued in September 2000 and a Victorian Supreme (b) Lease Commitments Court Writ issued in October 2001 seek damages from the Company (and others) in respect of Non–cancellable operating leases contracted for at balance an allegedly defective product known as SAIF–T. Liability for these claims has been denied by date but not provided for in the accounts the Company. The SAIF–T product was developed by a group of which the Company was a member. The other parties involved in the development of the product are in administration and there appears Payable: to be no prospect of recovery from them with respect to any liability which may be established in Not later than one year 803 1,112 favour of the claimants. The amounts claimed substantially relate to asserted future damages, Later than one year but not later than five years 491 802 are untested and it is not practicable to make an estimate of them at this time. Any liability on the Later than five years –1 part of Yarra Valley Water for these claims is not covered by Yarra Valley Water’s insurance cover. 1,294 1,915 Claims to which the Company is aware and which may result in a liability being incurred have been There are no commitments in relation to finance leases. provided for as other provisions. Refer Note 12. (c) Other Commitments – Smart Water Fund (b) Contingent Assets The Smart Water Fund was established by Melbourne’s four water businesses and the Victorian The Company enters into agreements with land developers whereby assets are transferred to the Government for the purpose of providing grant funding to support the development of sustainable Company at no cost. These assets are brought to account as revenue and capitalised. water use projects. Each water business has a 25% interest in the Fund and has contributed At reporting date, land developers had commenced construction of assets that would eventually be $2 Million over a two year period to 30 June 2004 (providing a Fund total of $8 Million). transferred to the Company contingent upon the release of Statements of Compliance by the Contributions made to the Smart Water Fund are initially recognised as assets in the water Company. Due to the nature of the industry and the assets involved, a contingent asset amount businesses’ Statements of Financial Position. Expenses are subsequently recognised by the water cannot be reliably measured. businesses when incurred by the Fund. Yarra Valley Water’s share of the Fund disbursements for the year is $479,108 (2003: $107,803) and is included in the Statement of Financial Performance. As at 30 June 2004, Yarra Valley Water’s Statement of Financial Position reflects its share of cash in the Fund totalling $1,413,089 (2003: $342,196). Refer Note 7. 132 133 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

2004 2003 2004 2003 $’000 $’000 $’000 $’000 24 Employee Benefits 26 Cash Flow Information Current For the purpose of the Statement of Cash Flows, cash includes deposits at call which are readily convertible to cash on hand and which are used in the cash management function on a day–to–day basis. Accrued wages and salaries 418 216 Annual leave 2,370 2,278 (a) Reconciliation of Net Profit to Net Cash Inflow from Operating Activities Long service leave 518 607 Net profit 52,474 64,434 Unfunded superannuation liability – 304 Depreciation 29,441 28,429 Write down of buildings 3,073 – 3,306 3,405 Asset write off 172 – Non–current Provision for doubtful debts (110) 56 Long service leave 3,792 3,935 Net loss on sale of non–current assets 438 505 Unfunded superannuation liability – 596 Value of works taken over from developers (14,710) (17,036) Change in operating assets and liabilities: 3,792 4,531 (Increase)/Decrease in trade debtors 284 (1,587) Aggregate employee benefit liability 7,098 7,936 (Increase)/Decrease in prepayments (1,045) (78) (Increase)/Decrease in goods and services tax receivable (552) (466) Where applicable, employees are covered for superannuation benefits by the equipsuper (Increase)/Decrease in future income tax benefits 4,212 6,713 Superannuation Fund defined benefits scheme. An agreed percentage of salaries is contributed (Decrease)/Increase in trade creditors (1,215) 3,994 to the fund by the Company as recommended by an actuary. (Decrease)/Increase in interest creditors 294 (82) The following amounts were measured as at 30 June, or in the case of employer contributions in relation (Decrease)/Increase in deferred income tax liability 18,908 23,577 to the period ended 30 June. The excess of any present value of employees’ vested benefits over (Decrease)/Increase in other provisions (1,305) 2,899 assets held to meet future benefit payments is recognised as a liability. Net Cash Inflow from Operating Activities 90,359 111,358 equipsuper Superannuation Fund (b) Financing arrangements Vested benefits 22,420 21,600 The Company’s borrowings are made exclusively with the Treasury Corporation of Victoria in Net market value of assets held by the Fund to meet future benefit payments 24,340 20,700 accordance with approvals from the Treasurer of Victoria. Surplus/(deficit) of the assets held to meet future benefit payments over vested benefits 1,920 (900) 27 Executive Remuneration Aggregate income received or due and receivable by executive Employer contributions to the Fund 848 616 officers whose total remuneration is more than $100,000. 927 1,263 Present value of employees’ accrued benefits 21,298 20,500

2004 2003 The number of executives whose remuneration was within the specified bands are: No. No. 2004 2003 $$ No. No. Number of Employees 140,000 – 149,999 –1 Number of employees, including Company Directors, at year end 390 359 150,000 – 159,999 –1 25 Economic Dependency 160,000 – 169,999 11 170,000 – 179,999 1– The normal trading activities of the Company depend on the provision of bulk water and sewerage 180,000 – 189,999 11 services from the Melbourne Water Corporation. 190,000 – 199,999 11 The normal trading activities of the Company also depend to a significant extent on the provision of 200,000 – 209,999 11 finance from the Treasury Corporation of Victoria. 230,000 – 239,999 –1 The executives do not receive share options as part of their remuneration. The table above includes performance bonuses paid during the year, based on performance of the previous year. 134 135 Yarra Valley Water Annual Report 2003-04

Notes to the Financial Statements (Cont.) Notes to the Financial Statements (Cont.)

28 Segment Information 29. Impact of adopting Australian Equivalents to International Financial Reporting Business Segments Water Sewerage Consolidated Standards 2004 2003 2004 2003 2004 2003 Yarra Valley Water has commenced transitioning its accounting policies and financial reporting from current Australian $'000 $'000 $'000 $'000 $'000 $'000 Standards to Australian equivalents of International Financial Reporting Standards (IFRS). The Company has allocated internal Revenue resources to perform diagnostics and conduct impact assessments to isolate key areas that will be impacted by the transition Sales to customers outside the consolidated entity 153,761 164,075 161,267 162,820 315,029 326,895 to IFRS, and has engaged expert consultants to review the diagnostics and impact assessments. As a result of these Other revenue from customers outside the procedures, internal resources will address each of the impacted areas and will report to the Risk Management and Audit consolidated entity 11,279 12,535 22,132 23,540 33,411 36,075 Committee on a regular basis as to its progress. Total segment revenue 165,040 176,610 183,399 186,360 As Yarra Valley Water has a 30 June year end, priority has been given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to IFRS as at 1 July 2004. This will form the basis of accounting for Australian Unallocated revenue 8,342 8,032 equivalents of IFRS in the future, and is required when Yarra Valley Water prepares its first fully IFRS compliant financial report Total Consolidated Revenue 356,782 371,002 for the year ending 30 June 2006. Set out below are the key areas where accounting policies will change and may have an impact on the financial report of Results Yarra Valley Water. At this stage the Company has not been able to reliably quantify the impacts on the financial report. Segment result 80,095 87,685 79,391 89,983 159,486 177,668 Employee Benefits Unallocated expenses (92,233) (90,976) Under AASB 119 Employee Benefits, employer sponsors are required to recognise the net surplus or deficit in their employer Unallocated revenue 8,342 8,032 defined benefit funds as an asset or liability, respectively. This will result in a change in the Company’s current accounting Consolidated entity profit from ordinary activities policy which does not recognise the net assets of the defined benefit fund. Under the new policy, Yarra Valley Water will be before income tax expense 75,595 94,724 required to recognise an asset of the defined benefit fund for the net surplus based on an actuarial calculation of the position of the fund. The initial adjustment on transition will be through retained earnings and subsequent adjustments will be to net Income tax expense 23,121 30,290 profit or loss for the period. As at 30 June 2004 actuarial calculations identified a net surplus therefore the future financial effect of this change in accounting policy will result in bringing to account an asset and increasing retained earnings. Net Profit 52,474 64,434 Income Taxes Assets Under the Australian equivalent to IAS 12 Income Taxes, the Company will be required to use a balance sheet liability method Segment assets 495,582 471,112 863,338 831,544 1,358,920 1,302,656 which focuses on the tax effects of transactions and other events that affect amounts recognised in either the Statement of Financial Position or a tax based balance sheet. The most significant impact will be the recognition of a deferred tax liability in Unallocated assets 67,083 51,019 relation to the Asset Revaluation Reserve. Previously, the capital gains tax effects of asset revaluation reserves were not recognised. It is not expected that there will be any further material impact as a result of the adoption of this standard. Total Assets 1,426,003 1,353,675 Impairment of Assets Liabilities Under the Australian equivalent to IAS 36 Impairment of Assets the recoverable amount of an asset is determined as the Unallocated liabilities 786,294 718,039 higher of net selling prices and value in use. This will result in a change in the company’s current accounting policy which Total Liabilities 786,294 718,039 determines the recoverable amount of an asset on the basis of discounted cash flows. Under the new policy it is likely that impairment of assets will be recognised sooner and that the amount of write-downs will be greater. Reliable estimation of the future financial effects of this change in accounting policy is impracticable because the conditions under which impairment Other segment information will be assessed are not yet known. Acquisitions of infrastructure, property, plant and equipment 30,810 30,270 31,357 34,879 Depreciation 8,449 8,564 14,604 13,558

The water segment purchases bulk potable water and transports it to properties within the Company's licensed area. The sewer segment removes wastewater and trade waste from properties within its licensed area and treats or transports the waste for treatment. The Company operates in one geographical area. 136 137 Yarra Valley Water Annual Report 2003-04

Directors’ Declaration

In the opinion of the directors of Yarra Valley Water Limited:

(a) the Financial Statements and notes of the Company are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the financial position of the Company as at 30 June 2004 and its performance for the year ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations; and

(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This Declaration is made in accordance with a resolution of the directors of the Company on the 25th day of August 2004.

Alan K Cornell Vincent A (Tony) Kelly Chairman Managing Director 138 139 Yarra Valley Water Annual Report 2003-04 Appendix

Environment Improvement Plan 2003–2010 140 Performance against 2003-04 Environment Improvement Plan 140 Reducing water consumption 140 Improving sewage treatment plant performance 145 Increasing our recycling 147 Improving stakeholder, customer and staff involvement, understanding and behaviours 150

Proposed 2004-05 Environment Improvement Plan 151 Greenhouse reduction 151 Water conservation 151 Recycling and treatment of sewage 152 Landfill 154

Abbreviations 155 Glossary 156 Licensed area map 158 Feedback form 159

APPENDIX 06 140 141 Yarra Valley Water Annual Report 2003-04

Environment Improvement Plan 2003–2010 Performance against 2003-04 Environment Improvement Plan (cont.) Performance against 2003-04 Environment Improvement Plan

Action (ongoing / new) and actions in progress When Progress Action (ongoing / new) and actions in progress When Progress

Reducing water consumption Reducing water consumption (cont.)

Work with the State Government and Stakeholders to achieve a 15% June 2010 Completed Consider water conservation impacts when establishing alternative tariff April 2004 Completed reduction in water consumption by addressing the 23 recommendations Detailed quarterly report on water conservation activities proposals for the Essential Services Commission pricing submission. Our suggested 3 tier ‘step-block’ tariff has been incorporated in the Water Resources Strategy (WRS). are available. into the Government’s White paper.

Work with Melbourne Water, City West Water, and South East Water to September 2003 Completed Conduct water efficiency audits and replace inefficient water appliances Ongoing 2003-04 Financial Year, a total of 181 water audits have prepare a joint water conservation plan for Melbourne. A plan was prepared and submitted to the DSE. free for customers in financial hardship via our Smart Homes project. been conducted with 228 properties having free retrofitting of water efficient appliances. Retrofitting includes repair of leaks at the property. Establish the Savewater!™ alliance as Victoria’s pre-eminent source June 2004 Completed of water conservation information to assist in delivering a consistent Alliance now established with members including SEW, Deliver water conservation information to business audiences via Ongoing 4 sessions per year approach across Victoria to reduce water consumption through CWW, Barwon, Glenelg, South Gippsland, North East, business forums, networks, conferences and Key Account Managers. Savewater!™.com website, Savewater!™ awards for business, and Western, and WesternPort. Target met for year 2003-04 joint marketing campaigns. •Savewater!™ Awards managed on behalf of alliance. •Trade Waste and Water management plans sessions Achieved a 30% increase in entries. completed in Nov / Dec • First Savewater!™ HIA Home Show Exhibition completed • Business Partnership program launched Dec and received commendation award. •Water Management Plan workshop in March •White paper seminar held in June 04 In conjunction with the State Government distribute 50,000 flow control November 2004 Completed •4 sessions completed for 2003-04. valves to reduce flow rates in showers available for our customers. 50,000 flow control valves have been distributed to Victorian homes as part of the Our Water Our Future campaign. Develop industry water management plans for Yarra Valley Water’s June 2004 Behind target largest customers June 2005 Water management plan template developed and launched Develop and implement a coordinated program to achieve consistent December 2003 Completed • 2003-04 – top 15 customers by Yarra Valley Water at two seminars. community education in water smart gardening practices. We are piloting key elements of a joint water / garden • 2004-05 – next 15 customers 2003-04 target not met due to customers resourcing issues industry garden program at Chadstone Shopping Centre • 2005-06 – work with the next 15 customers to prepare plans. Draft plans for top 42 by 30 Dec 04 on between December 2003 and March 2004. This is being target. Five drafts received to 30 July 04 conducted with the involvement and support of both the garden and water industry. It is intended to take these Continue to provide and promote the Water Efficiency Service for Ongoing Behind target findings and turn them into a full program post July 2004 business customers. (involving all parties). 75 Audits per year Licensing agreements have been signed to allow SEW, Barwon Water and CWW to sell our services to their customers. This has created a new standard for Victoria and Encourage garden mulching by continuing to market high quality 30 June 2004 Completed consistent message for businesses. mulch. This service ceased 30 June 2004. Year-to-date (30 June) = 4793 orders Sales figures will not hit 75 audits in YVW service area given our new sales strategy to target large organisations where the Promote the use of rainwater tanks by offering high quality, 30 June 2004 Completed potential savings are more significant and costs issues are professionally installed product to customers. This service became a Year to date (30 June) = 724 tanks less. This target will be changed to volumetric in the next plan. referral service on 1 July 2004. Key results include several councils, RMIT University and the Northern Hospital and the Investa Property Group. Each of these consists of up to 200 separate buildings. 142 143 Yarra Valley Water Annual Report 2003-04

Performance against 2003-04 Environment Improvement Plan (cont.) Performance against 2003-04 Environment Improvement Plan (cont.)

Action (ongoing / new) and actions in progress When Progress Action (ongoing / new) and actions in progress When Progress

Reducing water consumption (cont.) Reducing water consumption (cont.)

Develop open space Water Management Plans for Yarra Valley June 2004 Behind target Implement zone metering in all zones to improve our ability to June 2004 Behind target Water’s local government and other open space managers. YVW has sponsored ICLEI ‘Water Campaign’ to assist with target leakage from our pipe network. All meters installed and finalising commissioning and data • 2003-04 – top 10 customers facilitating WMP’s with councils. 14 of 15 councils have now reporting arrangements. The delay has been the accuracy of • 2004-05 – next 10 customers joined campaign, however 2003-04 target will not be met for the data transfer via SCADA. Revised program is to complete all councils. Following customer briefings and workshops by end of October 2004. • 2005-06 – next 10 customers. facilitated by our Business Program Managers it has become apparent that the work required to complete a plan can have Implement stage one of a pressure management strategy which will June 2006 On target a considerable impact on customers. This work load had not reduce supply pressures to 34% of our customers and 26% of our been anticipated and or resourced yet by customers (ie. first A number of our pressure management areas were delayed water mains. This will involve establishing 46 new pressure year) – creating delays in progress. during 2003-04 due to construction delays. However we are managed zones. still confident of meeting our June 2006 target. Draft plans will be completed for all 15 councils by June 05. Implementation of the 2003-04 program will occur during Draft plans for top 3 open space managers (other than this financial year. councils) by Jan 05. We completed our communication strategy for 2003-04 Pressure Managed Area (PMA). Deliver according to our Memorandum of Understanding with Ongoing MOU signed. 14 of 15 councils now signed with water Design works for the 2004-05 program has commenced. International Council for Local Environmental Initiatives (ICLEI) to campaign. Recruitment continuing with remaining council. assist them in promoting and delivering their Water Campaign to all councils in our service area. Conduct research and trial new technology to identify efficient June 2004 Complete leakage practices. Assessed different equipment and work practices and Communicate important messages on water conservation, Ongoing Currently 75% of weekly advertorials contain messages of recommendations being implemented into 2004-05 leakage sustainability and the environment to the business and residential these types. program. customers, including weekly advertorials. We are also undertaking ongoing restrictions media information. Repair 80% of leaks within 24 hours. June 2004 Not achieved – Performance to end of June was 72%. Participate in National Water Week to promote water conservation. October 2003 Completed Primarily due to a large backlog of minor leaks in March and April caused by a significant increase in burst water mains.

Work with the Water Industry to develop a comprehensive and April 2004 Completed Reducing sewage spills by 30%. June 2008 A number of projects have experienced delays to the consistent education program. The program has been launched. programmed completion dates (as reported below); however we Driven by the following strategies: are confident of meeting the 2008 target of 30% reduced spills. Undertake a survey of existing water using appliances in 800 homes by Behind target • All emergency relief structures will be compliant with the June 2011 On target households to improve our water consumption models. June 2004 Data collection complete. Analysis commenced with report ‘1-in-5-year’ design standard. due for completion in August. • 64 of our 106 emergency relief structures will be compliant June 2004 Not achieved. 60 compliant. Delays in construction (detailed with the ‘1-in-5-year’ design standard in item 25 below) resulted in us missing this target. Undertake measurement of all appliances for 100 homes to June 2004 Completed improve our water consumption models Data loggers installed in pilot homes with data downloaded and end-to-end analysis undertaken. A winter monitoring program has now commenced. 144 145 Yarra Valley Water Annual Report 2003-04

Performance against 2003-04 Environment Improvement Plan (cont.) Performance against 2003-04 Environment Improvement Plan (cont.)

Action (ongoing / new) and actions in progress When Progress Action (ongoing / new) and actions in progress When Progress

Reducing water consumption (cont.) Improving sewage treatment plant performance

Complete Cardinal Road and Hartington Branch sewer hydraulic October 2005 On target – construction commenced in October 2003. Continue to implement the Northern Suburbs Sewerage Strategy in June 2004 Behind target improvements works. conjunction with Melbourne Water’s own hydraulic improvement strategy. Review of the recommended servicing strategy was completed • Deliver the functional design for the Merri Creek relieving sewer and in April 2004 and the final report issued in May 2004. Sign off Complete Camberwell Branch sewer hydraulic improvements works. June 2005 Behind schedule due to longer than anticipated construction the Bundoora and Janefield Flow Control Facilities. by both organizations is expected to occur in August 2004. timelines due to scale of works required. This project has • Functional design of Bundoora completed but issuing to now been programmed over 2 years. The expected Asset Creation delayed pending outcome of land completion date is Dec 2006. acquisition process.

Complete Faversham Road (Canterbury) sewer hydraulic improvements May 2004 Pipeline construction completed. Cease discharge of Ferres Rd and Symons Rd Sewage Treatment June 2004 Behind target works. Construction of the Pump Station is behind target due to Plants at Emerald, consistent with the objectives of State Further problems were recently encountered during delays associated with finalising the design and obtaining a Environmental Protection Policy commissioning of relayed pipeline sections. These additional Planning Permit. Completion is expected by Oct 2004. failures have resulted in a further delay to ceasing discharge from the STP’s. Complete Dry Creek (Darebin) sewer hydraulic improvements works. December 2003 Behind target due to construction difficulty. Completion is We have continued to keep the EPA up to date with our expected by August 2004. progress in resolving the issue. Agreement of all parties, the contractors, the pipe suppliers Complete Box Hill West sewer hydraulic improvements works. May 2004 Behind target due to issues associated with finalising the and YVW is being finalised for a solution to the problems detailed design. Expected completion is Mar 05. encountered with the pipeline. We will advise the EPA of the process for rectification and accordingly apply for a license amendment to cover this Complete Malvern North Branch sewer hydraulic improvements works. April 2004 Behind target due to construction difficulties associated with interim period. groundwater. Expected completion is Sept 04.

Construct a new sewage treatment plant at Whittlesea to service June 2004 Behind target Complete Rosanna Branch sewer hydraulic improvements works. September 2004 Behind target due to the scope of works needing to be growth and improve the quality of water produced by the plant. redefined. Expected completion is June 2005. Works on the new winter storage lagoon to capture recycled water have been completed. Complete Coonans Road (Pascoe Vale South) Branch sewer hydraulic July 2003 Completed Construction delays on the new plant have extended improvements works. completion to Sept 2004.

Complete Beresford Road (Lilydale) sewer hydraulic improvements June 2004 Behind Target. Expected completed mid August 2004. Delay Cease the use of chlorine for disinfection of treated water from June 2004 Completed works. due to increased scope of work due to a gas main relocation Craigieburn sewage treatment plant. being necessary. Undertake monitoring at the Healesville and Craigieburn sewage June 2004 Completed Construct emergency storage capacity at Eucalyptus Drive (Eltham) and August 2003 Completed treatment plant to assess their impact on the environment in their The second year of monitoring commenced in March 2004 James Cook Drive (Diamond Creek) sewage pump stations. receiving waters. and will be completed in January 2005. The final report for both years of monitoring is due in April 2005. 146 147 Yarra Valley Water Annual Report 2003-04

Performance against 2003-04 Environment Improvement Plan (cont.) Performance against 2003-04 Environment Improvement Plan (cont.)

Action (ongoing / new) and actions in progress When Progress Action (ongoing / new) and actions in progress When Progress

Improving sewage treatment plant performance (cont.) Increasing our recycling

Gain agreement with EPA regarding the appropriate water quality December 2004 On target Develop a detailed recycling strategy for the Craigieburn area February 2004 Completed produced by the plant to ensure that the objectives of State Biological monitoring in Merri Creek has commenced. Once It was envisaged that the final report would be made available Environmental Protection Policy are achieved at Craigieburn. the results of this monitoring are known, we plan to work to stakeholders late in Feb; however, with emphasis placed on with EPA to develop a strategy for the Craigieburn sewage the co-ordinated Water Recycling Plan for Melbourne (due to treatment plant. the Minister in May 2004) and the need to provide findings from the report. Report sent to DSE in July due to work load required for recycling plan for Melbourne. Install sand filters at Brushy Creek and Lilydale sewage treatment plants June 2004 Behind target to improve the environmental quality of the receiving waters, consistent Works to Brushy Creek Complete. with the objectives of State Environmental Protection Policy. Work with VISY Industries / Pratt Water to examine recycling Ongoing Ongoing Construction delays on Lilydale have extended completion to opportunities at their Coolaroo site Aug 2004. We presented our response to VISY’s proposal in mid- November 2003. We found that while their proposal appears to have benefits, it does not rank as high as some of our Six independent environmental audits will be undertaken to assess June 2004 Complete other water conservation and recycling options. our performance. In December, we provided VISY with the base assumptions used in our modelling. We aim to have less than 100 customers experience >2 sewer June 2004 Not achieved – 211 to end of June 2004. In lieu of the preliminary findings of the Water Recycling Plan interruptions in 12 months. We continue to maintain a strong emphasis on this measure for Melbourne (due to the Minister in May 2004), we will but continue to be significantly influenced by climatic factors. review our previous analysis to ensure consistency with the other Melbourne water businesses. Introduce a system of Blower Control Optimisation at the Brushy June 2004 Behind target Creek sewage treatment plant, reducing 140 tonnes pa of PLC control system was been modified to optimize aeration Achieve 30% recycling of water from Lilydale and Brushy Creek June 2008 Target on hold greenhouse gas by June 2004. performance. This did not achieve the savings identified and sewage treatment plant. The development of the Yering scheme stage one will help so a trial to use a variable speed drive unit for one blower is achieve this potential for the scheme. now proceeding to determine the potential savings to be However, in light of the preliminary findings of the Water gained. This trial will be complete by end December 2004. Recycling Plan for Melbourne (due to the Minister in May 2004), we will review our previous analysis to ensure that Undertake a review of high energy consumption equipment at June 2004 Behind target the project will contribute to achieving Melbourne’s 20% Brushy Creek sewage treatment plant to determine the viability of Variable speed blower trial mentioned above is proceeding recycling target. replacing it with more energy efficient equipment. for completion by end December 2004. At this stage, it appears that stage two (connection of Brushy Crk flows) will not proceed, with stage one requiring further investigation. 148 149 Yarra Valley Water Annual Report 2003-04

Performance against 2003-04 Environment Improvement Plan (cont.) Performance against 2003-04 Environment Improvement Plan (cont.)

Action (ongoing / new) and actions in progress When Progress Action (ongoing / new) and actions in progress When Progress

Increasing our recycling (cont.) Increasing our recycling (cont.)

Achieve 20% recycling of water produced from Yarra Valley Water owned Commence biosolids recycling with the objective of eliminating on-site June 2005 On target sewage treatment plants by: storage practices at Lilydale and Craigieburn sewage treatment plants. Lilydale – The biosolids processing at Lilydale will not Ceasing discharge of water to the Plenty River from the Whittlesea June 2008 Whittlesea – Construction of the stage one of the storage proceed due to the commercial cost of establishing a facility. sewage treatment plant and achieve 100% reuse, consistent with the dam complete and discharge ceased. We are currently reviewing our strategy at Lilydale and plan objectives of State Environmental Protection Policy. to conduct a trial with Collex to compost biosolids at an existing off site facility. Develop irrigation and third pipe recycling scheme for Aurora. June 2004 Aurora – On target • The preliminary design of the winter storage and irrigation Craigieburn – It is planned to cease on site storage of system was completed as expected; however the detailed biosolids and commence wasting sludge from the design depends on the outcome of the Works Approval Craigieburn treatment plant to the Melbourne metropolitan Process which is expected to be known by the end of sewerage system by 30 June 2005. The functional design of September 2004. the Craigieburn flow control facility, pump station and raising main is completed with construction planned during 2004- 05. Before construction may commence however, we require Establish market and design for the Healesville reuse scheme. June 2004 Healesville – Delayed approval from Environment Australia due to the potential An offer has been made to the customer. Based on verbal impacts on the Growling Grass Frog. advice, the customer is likely to ask for the project to be placed on hold pending further analysis by the customer. Investigation options to treat and process the existing stockpile of June 2004 Completed biosolids at Craigieburn sewage treatment plant. A detailed options report was prepared and will be sent Establish market and start design of the first stage of the Yering June 2004 Yering – On-hold to EPA for comment. reuse scheme. Following the development of the metropolitan recycling plan for Melbourne, the Yering scheme was not selected as one of Continue to work with community consultative groups to obtain Ongoing Ongoing the projects identified to achieve the 20% for Melbourne. customer feedback on major projects such as the Northern Suburbs We are currently conducting community consultative Further discussions with potential users of the water Sewerage Strategy, Emerald, Cockatoo and Monbulk Sewerage committees for the following projects. continue eg. Croydon Golf Course. Scheme and Lilydale Biosolids Processing Facility and the •Northern Suburbs Sewerage Strategy Stage 2 Whittlesea sewage treatment plant upgrade. • Gembrook Sewerage Scheme Investigate recycling schemes for sporting fields near Scotch College June 2004 Kooyong – Completed • Whittlesea STP upgrade and golf course adjacent to the Eastern Freeway. Yarra Valley Water in conjunction with Melbourne Water has completed preliminary investigations into the potential to • Monbulk Sewerage Scheme establish a recycled water scheme in Kooyong and • Lilydale biosolids recycling facility. Richmond to irrigate private schools, Kooyong tennis club and sporting field. Participate in development of Edwardes Lake Neighbourhood Ongoing The proposal to develop the Edwardes Lake Neighbourhood Following the development of the metropolitan recycling plan Environment Improvement Plan (NEIP). Environment Improvement Plan (NEIP) was formerly endorsed for Melbourne, no further work is proposed. by EPA on 21 October 2003. Yarra Valley Water was a signatory to the proposal and has agreed to be a partner and participate in the development NEIP. We have a nominated representative on the working group. The NEIP was officially launched in April 2004.

Hold five or more meetings each year of the Environmental Consultative June 2004 Completed Committee to obtain input and advice on environmental issues. 150 151 Yarra Valley Water Annual Report 2003-04

Performance against 2003-04 Environment Improvement Plan (cont.) Proposed 2004-05 Environment Improvement Plan

Action (ongoing / new) and actions in progress When Progress 2004-05 Outcomes When

Improving stakeholder, customer and staff involvement, understanding and behaviours Greenhouse reduction

Restore 98.5% of unplanned water supply interruptions in four hours June 2004 Achieved target. Purchase ‘green power’ to reduce Greenhouse gas emissions to 19,000 tonnes. 2004-05 in 2003-04. Performance at end June was 99.9%. Produce Electricity Reduction Strategy. December 2004 Continue to maintain the Company’s certifications to ISO14001 via June 2004 Completed Analyse the results and opportunities following monitoring of top 23 electricity use sites November 2004 the two independent surveillance audits by SAI Global. The next Audit is due in December 2004. (representing 80% of electricity consumption) initiated during 2002.

Continue membership of the Greenfleet Program to offset all carbon Ongoing On target Complete implementation of optimisation model for Monbulk Water Pump Station energy use May 2005 (highest energy use water pump station) Review benefits after summer demand period. dioxide emissions through tree planting. Still a member of the Greenfleet Program. Install variable speed blowers at Brushy Creek STP. March 2005 Complete investigations into energy efficiencies in the Lucknow St, December 2004 Completed Mitcham buildings to achieve energy efficiency standards as set by Energy efficiency standards met. Implement monthly electricity use reporting in BRM report. July 2004 the Sustainable Energy Authority of Victoria for government buildings. Prepare report on benefits of power factor correction equipment installed during 2002-03 with December 2004 Include greenhouse information in internal company Ongoing On target recommendation for implementation at other sites if appropriate. communications. Results of our Greenhouse review to be published Develop Guidelines for designing in Power Factor correction into relevant new sites. March 2005 in our internal staff newsletter.

Investigate viability of using solar power at minor electricity consumption sites April 2005 Consider the issues, environmental benefits and our hybrid car June 2004 Behind target (eg Emergency Sewer Relief Sites). experience to help us decide whether to purchase more in the future. Along with other projected benefits from MGOS, analysis is still continuing on the benefits with a full analysis still to be Off set “green house” generation by company vehicle fleet by maintaining membership of green fleet program. June 2005 undertaken to quantify the benefits and future applications of the hybrid vehicle. This is due for completion by Sept 04. Mitcham complex electricity efficiency actions completed. 30 June 2005 Undertake electricity usage analysis. September 2004 Develop a “sustainability strategy”, including our recent learning Aug 2004 Completed from the Natural Step guiding principles. This includes a review of the Policy, and developing a Undertake review of building system controls. November 2004 framework to implement the Sustainability Strategy. This will now be integrated into the day to day business activities. Investigate the effectiveness of installing external louvres to building fascia and reflective tint coating to windows. November 2004

Develop plan to encourage reduction of vehicle emissions generated by YVW staff. April 2005 Support the State Government’s ‘Our water, Our future’ campaign. Ongoing YVW sits on the steering committee that manages this campaign, which will now focus on a comprehensive behavioural change program while maintaining the mass Water conservation media awareness campaign. Lead the development and ongoing management of a joint water and gardening/nursery industry gardening program. June 2005 Work in partnership with CERES Environmental Park to enhance our Ongoing A pilot rainwater tank-to-hot water service commenced in Accreditation of 60 garden centres across Melbourne, of which up to 30 are within Yarra Valley Water’s area based on understanding of sustainability and alternative ways of delivering November in support of the Aurora project provided figures from the Nursery and Garden Industry Victoria. water and sewer services. successful. The Raintank service has received industry and trade media attention. 10% of schools in Yarra Valley Waters area participating in joint education framework. December 2004 Improving sewage treatment plant performance. Work with ICLEI and councils to develop Water Management Plans (complete milestone 3 of ICLEI Water Campaign) for all 15 councils. June 2005

Water Management Plans for open space managers completed for the top 5 major open space managers. June 2005 152 153 Yarra Valley Water Annual Report 2003-04

Proposed 2004-05 Environment Improvement Plan (cont.) Proposed 2004-05 Environment Improvement Plan (cont.)

2004-05 Outcomes When 2004-05 Outcomes When

Water conservation (cont.) Recycling and treatment of sewage (cont.)

Commence Water Management Plans for top 42 industrial water users. June 2005 Continue joint planning activities with Goulburn Valley Water (GVW), Mitchell Shire Council and the City of Hume August 2004 • The current target is to have 38 drafts / completed documents by 30 Dec 04. The public hospitals to develop a long-term sewerage servicing strategy for the Hume Corridor. (remaining 4 customers) will take at least 2 years to complete a plan. Subject to EPA works approval Aurora treatment plant, Irrigation and storage lagoons on the treatment plant site to be completed. September 2005 Permanent water savings measures implemented as per the Government’s direction. December 2004 Commence the functional design of Stage 1 of the Yering Reuse Scheme to supply recycled water from Lilydale sewage December 2005 treatment plant to the Yering area. • Contribute funds to Savewater!™ to upgrade the website to be Australia’s leading source of water conservation advice. Ongoing

• Participation in the Savewater!™ awards. Ongoing Proceed with the supply of recycled water from the Healesville Sewage Treatment Plant to the RACV Healesville Golf Club, June 2005 • Partner with Savewater!™ at three major events. Each year subject to agreement with RACV. • Receive agreement from RACV Club as to project costs and price of recycled water; and the Policies for water sensitive urban design adopted and guidelines for developers published. June 2005 • Commence construction of a recycled water supply to the RACV Club in Healesville.

Leakage detection completed on 1000 km of water main in zones identified as high water loss. June 2005 Develop a Sustainable Biosolids Management Strategy. June 2005

Capital works completed and pressure management commenced in seven areas i.e. Hadfield, Fawkner, June 2005 Complete construction of the Emerald-Cockatoo Outlet Main Stage 2 at a cost of $650K. This outlet will enable backlog allotments June 2005 Glenroy, Gladstone Park, Bundoora, Greensborough and Lower Templestowe. in Cockatoo, Gembrook, Avonsleigh, Emerald, Clematis, Menzies Creek and Selby catchments to be sewered in the future.

Sell water audits to an additional 20 businesses. June 2005 Conduct further studies regarding options to service the Monbulk area. Complete planning phase and obtain December 2004 necessary approvals (cost $50K). Subject to EPA works approval complete the construction of storage dams and irrigation system on the treatment facility at Aurora September 2005 Commence design of the outlet sewers and reticulation sewers for the Mernda township at a total cost of $293K. March 2005

Recycling and treatment of sewage Design and construction of reticulation sewers for 35 properties in Healesville (cost $425K). June 2005

Commence operation of the Emerald-Cockatoo Transfer system. The Ferres Rd and Symons Rd sewage treatment plants January 2005 Work with the customers to ensure that 70% of households provided with a service are connected within 6 months of construction. June 2005 will be decommissioned and replaced by pumped connection to Melbourne Water’s Eastern Treatment Plant in line with the ‘in principle’ agreement with the EPA. Construct reticulation sewers for two properties in Mount Evelyn (cost $34k). June 2005

Commence section by section commissioning of the transfer pipeline leading up to full system commissioning. January 2005 Develop a Waste Minimisation / Cleaner Production Strategy. Outcome to identify the targets for the future reduction June 2005 of load and volume. To improve the performance of our two largest STPs. We shall commence operation of Brushy Creek and Lilydale sewage June 2004 Continue our monitoring program of customers through the management of Trade Waste Agreements. June 2005 treatment plants sand filters. The estimated combined annual cost is $250K. This will allow our treatment plants to achieve the (median) of phosphorus in our discharge from requirement of 1.0mg/l, down to 0.3mg/l. Conduct at least 1500 customer per annum inspections based on risk profile. June 2005 Review the long-term operation of the Monbulk Sewage Treatment Plant. We have an EPA licence requirement to cease discharge. December 2004 However following feedback from the community, we are investigating alternatives. This work will be completed by December 2004. Achieve 90% trade waste agreement compliance. June 2005

Undertake biological and water quality monitoring in waterways to which sewage treatment plants discharge, to demonstrate June 2005 100% Waste Management Plans for Risk Rank 1 and 2 Customers. Waste Management Plans for 85% Risk Rank 3 Customers. June 2005 achievement of SEPP (Waters of Victoria) objectives (cost of $90K). 100% Risk Profile Plan for Risk Rank 1 and 2 Customers. June 2005 Complete biological and water quality monitoring in Brushy and Olinda Creeks, downstream of the sewage treatment plant July 2005 effluent discharge points as part of the installation of sand filters. 90% of existing Trade Waste Agreements processed within 4 days. June 2005

Achieve 100% recycling from Whittlesea sewage treatment plant. July 2006

3.4% re-use of flows from YVW sewage treatment plants. 2004–05 154 155 Yarra Valley Water Annual Report 2003-04

Proposed 2004-05 Environment Improvement Plan (cont.) Abbreviations

ADWG EPA OEI 2004-05 Outcomes When Australian Drinking Water Guidelines Environment Protection Authority Organisational Effectiveness Inventory Recycling and treatment of sewage (cont.) AICD ESC OH&S Australian Institute of Company Directors Essential Services Commission Occupational Health and Safety Effective management of commercial grease trap customers. The accuracy of trade waste agreements will be targeted. June 2005 ATA EWOV PPRR Improved risk management and increased revenue will result from this strategy. Australian Teleservices Association Energy and Water Ombudsman Victoria Prevention, Preparedness, Response and Recovery Implement grease trap system and have commenced follow up with 30% of existing customers (2,600). June 2005 AWA FCR Australian Water Association First contact resolution QMS Total trade waste customers to be at least 6500 customers. June 2005 Quality Management System BOD FLASH Implement new Trade Waste Management System. June 2005 Biochemical Oxygen Demand Faults Logging and Service Help SS Suspended solids Yarra Valley Water will continue with a strategy to complete the sewage spill abatement program. 2011 CERES GIS Centre for Education and Research in Geographic Information System SV-RAG Environmental Strategies Security Vulnerability Risk Assessment Guideline Completion of augmentation works in Box Hill and Campbellfield at a capital cost of $9.1M, September 2005 GITA with a total of 63 compliant ERS. COAG Geospatial Information Technology Association VWIA Coalition of Australian Governments Victorian Water Industry Association Two pumping stations for an approximate cost of $1.5M. 2004-05 GL CSIA Gigalitre = 1,000,000,000 litres WITS Customer Service Institute of Australia Water Industry Technical Standards Landfill GRI CSO Global Reporting Initiative WSAA Reduce office waste to landfill by 40%. June 2005 Community Service Obligations Water Services Association of Australia HACCP CRC for Water Quality and Treatment Hazard Analysis and Critical Control Points Identify where and how much waste is generated from operational activities, investigate reduction options, and program 2010 Cooperative Research Centre for Water Quality activities to contribute to meeting the 2010 target. ICLEI and Treatment International Council for Local Environmental Identify where and how much waste is generated from sewerage treatment plants , investigate reduction options, 2010 and program activities to contribute to meeting the 2010 target. DHS Initiatives Department of Human Services ISMS Identify where and how much waste is generated from construction activities, investigate reduction options, 2010 and program activities to contribute to meeting the 2010 target. DSE Information Security Management System Department of Sustainability and Environment km EBPP Kilometre = 1,000 metres Electronic Bill Payment and Presentment LTI EEO Lost time injury Equal Employment Opportunity NATA EIP National Association of Testing Authorities Environment Improvement Plan NHMRC EMS National Health and Medical Research Council Environmental Management System OCI Organisational Culture Inventory 156 157 Yarra Valley Water Annual Report 2003-04

Glossary Glossary (cont.)

Aurora Coliform bacteria Gifted assets pH Sustainability Water quality The name of VicUrban’s sustainable housing A group of bacteria found in the intestine and Infrastructure built by developers and A measure of the degree of acidity or alkalinity The Brundtland definition used by Yarra Valley The microbiological, biological, physical and development in Epping North. faeces of most animals. Coliforms can subsequently transferred in ownership to Yarra (pH 7 = neutral) Water: ‘Sustainable development is one that chemical characteristics of water. sometimes be found in untreated water. Valley Water to maintain and operate in meets the needs of the present without Backlog sewerage Planned interruption Water quality zone The treatment process removes them and perpetuity. This adds to the value of Yarra Valley compromising the ability of future generations to Refers to the program of providing reticulated A scheduled interruption to customers’ water An area with common water quality characteristics, disinfection prevents their reappearance in the Water’s fixed assets and is part of assets meet their own needs’. sewerage services to properties generally using supply or sewerage service, to assist in where supply is linked through common pipes distribution system. In water receiving discharges, completed during the financial year. septic tanks for sewage disposal. maintenance or cleaning works, where at least Third pipe system and a tank or pump. A water quality zone is faecal coliform bacteria are used to indicate the Greenhouse gases 48 hours notice is given to customers. The introduction of an extra (third) pipe, in often a township or a group of suburbs. Biodiversity presence of sewage. See also Total Coliforms. The group of gases which contribute to addition to the standard water supply pipe and The variety of plants and animals and other Potable water Water treatment Developer charges atsmospheric warming, and the greenhouse sewer disposal pipe, for recycled water for living things in a particular region or area. In Drinking water. The process of converting raw untreated water The fees charged by water businesses to effect: carbon dioxide (CO2), nitrous oxide (N2O), irrigation purposes. practice, biodiversity suggests sustaining the to a public water supply safe for human developers or property owners to assist in methane (CH4), sulphur hexafluoride (SF6) Receiving water diversity of species in each ecosystem as we Total Coliforms consumption; can involve, variously, screening, recovering the costs of extending and improving perfluorocarbons and hydrofluorocarbons. Inland and coastal water receiving treated plan human activities that affect the use of the A group of bacteria used to indicate possible initial disinfection, clarification, filtration, pH water supply and sewer networks serving effluent to which pollution control legislation land and natural resources. Grease traps contamination of drinking water supplies. correction and final disinfection. new developments. applies generally. Typically used by restaurants and fast food Includes Escherichia, Citrobacter, Enterobacter Biosolids E. coli (Escherichia coli) outlets (low risk rank trade waste customers) to Relieving sewer and Klebsiella. The solid organic by-product from the treatment A bacterium taken as an indicator of collect the fat or oil that washes off plates and A secondary sewer with the capacity to carry of sewage or from septic tanks. Otherwise Treated effluent faecal contamination. pans or goes down the sink. excess sewage flows. known as sewage sludge, it is stabilised and Typically, the effluent discharged from a sewage suitable for reuse. EasyDevelop Greywater Reticulated treatment plant after treatment of domestic or Yarra Valley Water’s new system that streamlines Name given to domestic sewage discharged Connected to a system or network of Yarra Valley industrial sewage. Catchment processes and services for developers and from fixtures and appliances such as showers, Water pipes (water or sewer). A natural drainage area (generally pristine Trade waste plumbers wishing to connect to the water and baths, spas, hand basins, laundry troughs, environmental conditions), that collects Sedimentation Waste produced by trade and industry; not sewerage system dishwashers and kitchen sinks. It does not predominantly surface waters, which is dammed The process by which solids settle on the domestic sewage. include sewage from toilets and bidets. or diverted to storage for irrigation purposes or Emergency Relief Structures (ERSs) floor rather than remaining suspended in water Turbidity drinking water. To prevent overloading of the sewerage system Industrial customer (or sewage). Visible suspended materials carried in water. during storm events, Emergency Relief A customer with a trade waste consent Chlorination Sewage Interference with the passage of light rays Structures are installed on the sewer network to or agreement. The application of chlorine to water for the Water and raw effluent disposed through toilets, through a liquid indicates the presence of prevent uncontrolled spills at manholes or purpose of disinfection Mains kitchens and bathrooms. Includes water-borne suspended matter. customer properties. Pipes that carry treated drinking water. wastes from domestic uses of water from Class A recycled water Ultraviolet (UV) disinfection First contact resolution (FCR) households, or similar uses in trade or industry. Defined by EPA Guidelines as being suitable Meter Treatment of drinking water or effluent with UV Resolving a customer’s request for assistance for non-potable uses with unrestricted A device for measuring the quantity and flow Sewer rays (sunlight) to neutralise bacteria. in the first instance, with no need for the public access. rate of water. A pipe conveying sewage or sewage. customer to make further contact regarding Unplanned interruption Class B recycled water the same issue. Nutrients Sewerage An interruption caused by a fault in Yarra Valley Defined by EPA Guidelines as suitable for A substance such as nitrogen and phosphorus A system of pipes and mechanical appliances Water’s system or a fault which is the Fluoridation agricultural and some industrial use. that provides nourishment to organisms. for the collection and transportation of domestic maintenance responsibility of Yarra Valley Water. Application of fluoride to drinking water at the and industrial sewages. May include the result of a burst water main, or CO2-e request of health authorities as a preventive Pathogen a leak, and water supply is usually interrupted to Carbon dioxide equivalent gases, or measure against dental decay. An organism that is capable of producing disease. stop water loss or to manage safety or ‘greenhouse gases’. environmental concerns. 158 159 Yarra Valley Water Annual Report 2003-04

Yarra Valley Water Annual Report 2003-04 FEEDBACK FORM

Your feedback is crucial to helping us improve our Annual Report. We use feedback gathered to modify the report structure, content and tone to suit you. Please complete and return this reply paid form to Tony Kelly, Managing Director, Yarra Valley Water, Reply Paid 66193 Mitcham VIC 3132.

Poor Average Good Very Good Excellent Licensed area map 1. What was your overall impression of this report? 2. How would you rate this report for: Completeness of information Clarity and ease of understanding Consideration of impacts Accuracy of technical information Credibility of data and information Reporting on achievements and disappointments VICTORIA 3. Yarra Valley Water attempted to achieve a number of things with this report. How would you rate our success on: Providing an overview section on chapters for a quick summary Providing detailed information and case studies to address the needs of stakeholders Contributing to the sustainability of the environment through Torourrong Reservoir strategic planning and operations MURRINDINDI Contributing to economic growth through sound financial practices

MURRINDINDI Open and transparent reporting Yan Yean WHITTLESEA Reservoir Examining future issues and plans

Greenvale Reservoir 4. Can you indicate any areas for improvement? NILLUMBIK Maroondah Reservoir (a) in this report (b) in our activities (Please specify) HUME Sugarloaf Upper Yarra Reservoir Reservoir

DAREBIN MORELAND BANYULE YARRA RANGES MANNINGHAM 5. Comments on the tone and style (including language and layout): MAROONDAH YARRA MELBOURNE YVW HEAD OFFICE BOROONDARA WHITEHORSE Silvan 6. Did this Annual Report meet your expectations as a sustainability report? Reservoir

STONNINGTON MONASH 7. Any other comments: CARDINIA

If you wish to tell us your name and/or the organisation you represent, please complete this section.

PORT PHILLIP BAY Name: Organisation: Address: Postcode: Yarra Valley Water is the largest of As a retail water business, we provide water We serve more than 600,000 residential and Telephone: Email: Melbourne’s three retail water businesses supply and sewerage services to more than business customers in an area over more established in January 1995. Melbourne 1.5 million people who live and work in the than 4,000 square kilometres across Please add me to the mailing list for future reports Yes No Water Corporation is the wholesaler to the Yarra River catchment area of Melbourne. Melbourne’s northern and eastern suburbs. I am happy to be contacted for further comment Yes No retail water businesses, which are divided Do you have a preferred format for receiving the report? Electronic Summary hard copy Full hard copy according to geographic area. No stamp required if posted in Australia

Tony Kelly Managing Director Yarra Valley Water Reply Paid 66193 MITCHAM VIC 3132