2019-20 ANNUAL REPORT
our water our customers healthy living Traditional Owners Acknowledgement Central Highlands Water acknowledges the Traditional Owners/Peoples of the land on which we operate including Dja Dja Wurrung, Wadawurrung, Wurrundjeri Woi Wurrung, Tjap Wurrung, and Wotjobaluk, Jaadwa, Jadawadjali, Wergaia and Jupagulk Peoples. We pay our respect to the Elders of these communities past, present and emerging, acknowledging that they have been custodians of land and water for many centuries and that their continuing culture and contribution is important to the life of the region.
Service area
Navarre
Redbank
Havelock Timor Landsborough Bowenvale
Alma Maryborough Centenary Reservoir Tullaroop Sugarloaf Avoca Reservoir Reservoir Bung Bong Craigie Lead Daisy Hill Dam Majorca
Amphitheatre Talbot
Talbot Reservoir Lexton Lexton Evansford Reservoir Reservoir Clunes Hepburn Springs Smeaton Hepburn Reservoir Raglan Waubra Daylesford Kingston Broomfield Bullarto Reservoir Wombat Learmonth Newlyn Beaufort Lake Creswick Reservoir Learmonth Cosgrave Reservoir Dean Burrumbeet Miners Rest Dean Blackwood Lake White Swan Reservoir Burrumbeet Reservoir Wilsons Moorabool Ballarat Reservoir Reservoir Colbrook Gong Gong Reservoir Reservoir Kirks Wallace Bungaree Carngham Haddon Reservoir Gordon
Snake Valley Ballan Lal Lal Smythesdale Reservoir Pittong Buninyong Scarsdale Napoleons Skipton Linton
Enfield
Dereel 0 4.75 9.5 19 Kilometres
Corindhap LEGEND Rokewood Water pipeline Recycled water Wastewater treatment plant Water treatment plant Major road Lake and reservoir Water district Sewer district
2 About this report Contents This annual report details Central Highlands Water’s operational and financial performance during 2019-20. Traditional Owners Acknowledgement 2 It has been prepared in accordance with the relevant Service area map 2 Ministerial Reporting Directions, Financial Reporting About this report 3 Directions and Financial Reporting Direction FRD30D – Standard Requirements for the Publication of Annual The Corporation 3 Reports. This stipulates the specifications for design, print Responsible Body Declaration 3 and stock selection to ensure minimisation of cost and environmental impact. PART 1 THE YEAR IN REVIEW The Corporation About Us 6 Central Highlands Region Water Corporation is a statutory Message from our Chair and Managing Director 7 body and is one of 19 state-owned water businesses in At a Glance 8 Victoria operating under the guidance of the Water Act Urban Water Systems Serviced by CHW 8 1989 (Vic). We operate in accordance with a Statement of Obligations issued by the Minister for Water, pursuant to the Summary of Financial Results 9 Water Industry Act 1994 (Vic). Central Highlands Water’s Strategic Framework 10 Board reports to the Minister for Water via the Department of Environment, Land, Water and Planning (DELWP). Our pricing Key Initiatives and Projects 11 and service standards are regulated by the Essential Services Key Priorities – Letter of Expectations 12 Commission (Victoria’s economic regulator of prescribed essential utility services). PART 2 CORPORATE REPORT 19 The Minister responsible for Central Highlands Water for the period 1 July 2019 to 30 June 2020 was The Hon. Lisa Neville PART 3 WATER CONSUMPTION MP, Minister for Water. AND DROUGHT RESPONSE 30
PART 4 ENVIRONMENTAL AND SOCIAL SUSTAINABILITY 33 Responsible Body Declaration In accordance with the Financial Management Act PART 5 PERFORMANCE REPORT 43 1994, I am pleased to present Central Highlands Victorian Auditor-General’s Report (VAGO) 46 Water’s Annual Report for the year ending 30 June 2020. PART 6 FINANCIAL REPORT 48 Comprehensive Operating Statement 48 Balance Sheet 49 Statement of Changes in Equity 50 Cash Flow Statement 51 Dr Jeremy Johnson AM Notes to the Financial Statements 52 Chair Central Highlands Region Water Corporation Accountable Officer's and Chief Finance and Accounting Officer's Declaration 87 Victorian Auditor-General’s Report (VAGO) 88 30 October 2020 PART 7 DISCLOSURE INDEX 90
Additional copies ISSN: 2203-9503 (Print) This annual report is available for viewing or download from ISSN: 2203-9511 (Online) Central Highlands Water’s website, www.chw.net.au © State of Victoria, Central Highlands Water 2020. To minimise our impact on the environment, we print limited numbers of This publication is copyright. No part may be reproduced by any process this report and we encourage you to view this report online. If you require except in accordance with the provisions of the Copyright Act 1968. any additional printed copies, please contact Central Highlands Water at: This report has been printed on ecoStar 100% recycled stock. Email: [email protected] Phone: 1800 061 514 Cover image: Moorabool Falls, Michael Dwyer (Project Manager Capital Post: PO Box 152 Ballarat Vic 3353 Delivery) Ballarat South Wastewater Treatment Plant Solar Installation, In person: 7 Learmonth Rd Wendouree Vic 3355 Ballarat Begonia Festival February 2020 Water Cycle Installation, Jenna ABN: 75 224 340 348 Cashmore (Laboratory Signatory Biologist) Algae Identification.
Central Highlands Water 2019-20 Annual Report 3 Ballarat North Wastewater Treatment Plant solar array 4 PART 1 THE YEAR IN REVIEW Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 5 PART 1 THE YEAR IN REVIEW
ABOUT US
Our Vision Our core functions are: Our Water, Our Customers, Healthy Living Water supply Our Mission • collect, store, treat, transfer and distribute water • manage and protect the water supply system Together, we provide quality water and wastewater services, • identify current and future water needs safely, efficiently and sustainably to communities in the Central Highlands Region. • develop and implement programs for the conservation and efficient use of water Our Values • educate the public about the water supply Integrity Sewerage Teamwork • efficient collection, transfer, treatment and Leadership disposal of sewage Care • identify current sewerage needs and plan for future needs Central Highlands Water (referred to as CHW or the Corporation in this report) is a regional water corporation • develop and implement programs for the recycling and providing drinking water, sewerage, trade waste and recycled reuse of treated wastewater water services to customers throughout the Central • investigate, promote and conduct research into the Highlands Region of Victoria. provision of sewerage services Our region Trade waste • partner with industrial and commercial customers and CHW services a large geographical region of 9,275 square the community to provide environmentally friendly kilometres and manages 15 distinct water supply systems operating systems for the delivery, treatment and disposal and 13 wastewater systems in the local government areas of of trade waste Ballarat, Central Goldfields, Golden Plains, Hepburn, Pyrenees, Northern Grampians, Moorabool and Corangamite. Recycled water Our services Provide recycled water that supports us to: • reduce demand on our water catchments We provide water supply and sewerage services through 72,128 water supply connections and 62,475 wastewater • help us save a significant amount of drinking water service connections to 152,273 residents throughout the • reduce the amount of wastewater discharged to Central Highlands region. Throughout 2019-20, significant regional waterways customer and community engagement occurred to enable • provide a safe, alternative water source for gardening, CHW to gain a better understanding of our customers’ irrigation of public parks, golf courses, sporting ovals and needs and expectations, and to assist in planning services recreational lakes. for the future. CHW performs these functions in an environmentally sound way, recognising the need to preserve landscape, fauna and flora.
6 PART 1 THE YEAR IN REVIEW MESSAGE FROM OUR CHAIR AND MANAGING DIRECTOR
On behalf of the Central Highlands Water (CHW) Board welcomed over 60,000 visitors. We were also the major and our staff, we are pleased to present the community partner of the Ballarat International Foto Biennale, 2019-20 Annual Report on our operations to Government, an international event which ran from August to October 2019 our customers, communities and key stakeholders. and showcased our own CHW exhibition, Waterworks. Traditional Owners Acknowledgement Continuing customer focus In opening, we wish to acknowledge the Traditional Owners/ Reaffirming our customer focus has been a key strategy Peoples of the land on which we operate including Dja Dja throughout the year and we have initiated and trialled a range Wurrung, Wadawurrung, Wurrundjeri Woi Wurrung, Tjap of new initiatives we believe will continue to improve our Wurrung, and Wotjobaluk, Jaadwa, Jadawadjali, Wergaia and customers’ experience moving forward. These have included Jupagulk Peoples. a more user-friendly website, incorporating improved online functionality, such as Live Chat, and an online developer We look forward to continuing the positive relationships we consent platform. These online tools have become even have developed with Traditional Owners and Aboriginal And more important as we move through the COVID-19 pandemic. Torres Strait Islander Peoples as we continue to implement our We continue to engage and work closely with local land Reflect Reconciliation Action Plan and work towards finalising developers on a range of important matters. and implementing our Innovate Reconciliation Action Plan. In addition to the above, and as part of our pandemic COVID-19 response response, we have put in place a number of support services for small businesses and vulnerable customers in our region. 2019-20 has been an unprecedented year, not just for CHW CHW is an active member of the Network Coordination Group, but across the wider community. As we moved out of the collaborating with local community services on projects summer period, coronavirus (COVID-19) started to impact our such as Pocket Full of Help, supporting our most vulnerable region and business. A rapid response was required in order community members. Our annual Care Flow forum with the to manage the evolving public health situation. Protection of network group was revised to a digital event due to COVID-19 team members, families and communities were, and remain, and held via Zoom on 15 July. Our Customer Care team also paramount as we move through these difficult times. It is visited over 40 customers in their homes to offer support pleasing to note however, that the systems and processes between July 2019 and March 2020. put in place have enabled the ongoing supply of essential water and sewer services to all of our 15 supply systems. We would also like to thank our key stakeholders, especially the Leading health and safety Department of Environment, Land, Water and Planning for Internally, our business has also continued to focus on health their support and guidance through this difficult time. and safety under the banner ’It’s everyone’s priority’. Through our Learn Lead Grow leadership program, we communicated Downward pressure on customer bills new ways of leading to our team members as well as ways to support our business with a customer focus. In relation to As we move into year three of our five-year pricing plan, we health and safety, it is pleasing to see that our workplace safety can report that for the seventh year in a row, the average performance is trending towards our target of zero harm. customer bill has declined in real terms. This outcome will continue in the remaining years of this plan. Thank you to all Maintaining downward pressure on customer bills, while In conclusion, we would like to thank our Board members for catering for increased customer growth, has remained an their guidance throughout the year and recognise all of our staff important part of our evolving business model during the for their commitment as we, together with our communities, COVID-19 pandemic. As just, our business has had to be agile have worked through this extremely difficult time. It has been in how we address day-to-day situations. encouraging to see the adapted plans and actions we have collectively implemented, to allow CHW to continue to supply Major investment in our communities essential water and wastewater services on a daily basis. As part of our commitment to service provision during 2019-20, CHW invested $30.3 million across the region to build new, and replace ageing, water and sewer assets. Key projects, such as the replacement of 11.6 kilometres of the Evansford Reservoir to Maryborough raw water pipeline, and a new 140 megalitres storage at Ballan Wastewater Treatment Plant, will continue to support the provision of reliable water and wastewater services. In addition, the commissioning of five behind-the-meter solar power installations at White Swan and Lal Lal Reservoirs and Ballarat North and Ballarat South Wastewater Treatment Plants are major projects that will assist CHW to reach its target of a minimum 20% reduction in greenhouse gas emissions by 2025. Similarly, we remain strongly committed to our community members and continue to foster opportunities to engage with them. In 2020 we were again the major community partner Dr Jeremy Johnson AM Paul O’Donohue of the Ballarat Begonia Festival, a three day event which Chair Managing Director
Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 7 AT A GLANCE
152,273 $118.6 M $1.177 B 186.10 total population current operating value of infrastructure, property, full-time equivalent serviced revenue plant and equipment employees 30 13 34 17 47 reservoirs diversion groundwater bulk water service basins weirs bores entitlements held and tanks 15,654 ML 2,551 KM 15 41 total water of water water treatment water pumping supply volume mains plants stations 66,374 12,014 ML 1,478 KM 13 residential water of wastewater of sewer wastewater connections treated mains treatment plants 103 62,475 5,754 1,116 ML 22 wastewater wastewater non-residential effluent irrigated major trade pump stations connections water connections to land waste customers
URBAN WATER SYSTEMS SERVICED BY CHW
Size, based on Name of water Communities provided Communities provided with approximate supply system with water supply sewerage service number of water supply connections Greater than Ballarat Ballan, Ballarat and immediate suburbs, Ballan, Ballarat and immediate suburbs, 1,000 connections Bungaree, Buninyong, Cardigan Village, Buninyong, Cardigan Village, Creswick, Corindhap, Creswick, Dereel, Enfield, Gordon, Enfield, Gordon, Miners Rest, Skipton, Haddon, Linton, Miners Rest, Mount Egerton, Smythesdale, Snake Valley Napoleons, Rokewood, Scarsdale, Skipton, Smythesdale, Snake Valley, Wallace Maryborough Alma, Bet Bet, Carisbrook, Daisy Hill, Maryborough, Carisbrook Majorca, Maryborough, Talbot Daylesford Daylesford, Hepburn Daylesford, Hepburn 500 – 1,000 Clunes Clunes Clunes connections Beaufort Beaufort, Raglan* Beaufort Avoca Avoca Avoca Forest Hill Allendale, Broomfield, Newlyn, Kingston, N/A Smeaton, Springmount 100 – 500 Blackwood Barry’s Reef, Blackwood N/A connections Lexton Lexton N/A Landsborough Landsborough, Navarre N/A Waubra Waubra Waubra Learmonth Learmonth Learmonth Less than Amphitheatre Amphitheatre* N/A 100 connections Redbank Redbank* N/A Dean Dean N/A
Note: * Regulated (non-drinking water) supply
8 PART 1 THE YEAR IN REVIEW SUMMARY OF FINANCIAL RESULTS
2015-16 2016-17 2017-18 2018-19 2019-20 $'000 $'000 $'000 $'000 $'000
Core business revenue 93,073 94,433 101,640 108,537 109,013
Government contributions 2,091 452 650 234 91
Other revenue 4,375 4,700 5,014 6,534 9,476
Total revenue 99,539 99,584 107,304 115,305 118,580
Operating expenditure 47,318 48,561 49,896 55,493 55,332
Depreciation expenditure 21,744 23,173 23,701 24,235 25,248
Finance costs 10,288 9,770 8,965 8,252 7,393
Other expenditure 5,771 6,221 6,901 8,019 7,957
Total expenditure 85,121 87,725 89,463 95,999 95,930
Net result before tax 14,418 11,859 17,841 19,306 22,650
Current assets 33,430 31,183 27,779 28,089 26,289
Non-current assets 1,166,717 1,174,411 1,185,628 1,203,056 1,221,928
Total assets 1,200,147 1,205,594 1,213,407 1,231,145 1,248,217
Current liabilities 28,964 31,777 36,165 39,082 36,291
Non-current liabilities 243,561 237,896 228,838 230,150 234,159
Total liabilities 272,525 269,673 265,003 269,232 270,450
Net cash flows from operations 25,437 28,702 32,750 30,039 36,090
Payments for property, plant and equipment (including infrastructure) 15,182 20,699 22,985 27,643 27,393
Explanation for the summary of Financial management compliance financial results attestation statement CHW continued to perform strongly in 2019-20 delivering I, Jeremy Johnson, on behalf of the Board, certify that the a profit before tax of $22.7 million, an increase of 17% on Central Highlands Region Water Corporation has no Material the prior year. The 2019-20 year provided one of the most Compliance Deficiency with respect to the applicable challenging periods for CHW in responding to the global Standing Directions of the Assistant Treasurer under the COVID-19 pandemic, while continuing to deliver services Financial Management Act 1994 and Instructions. to customers and the community. There has been no material financial impacts during 2019-20 with an increase to doubtful debt provisions the only impact of note. A wet autumn saw water volume revenue reduce on the prior year. Strong population growth continues to drive revenue higher in terms of both increased demand and non-cash gifted assets. Temporary water sales were also higher. There was a Dr Jeremy Johnson AM flattening of costs in service delivery expenses particularly in Chair network costs, the overall result delivered an ongoing strong Central Highlands Region Water Corporation cash position. After funding a significant capital investment program total debt was reduced by $5.6 million. There were no significant changes or factors which changed our financial 30 October 2020 position during the reporting period.
Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 9 STRATEGIC FRAMEWORK
OUR VISION OUR WATER, OUR CUSTOMERS, HEALTHY LIVING OUR MISSION Together, we provide quality water and wastewater services, safely, efficiently and sustainably to communities in the Central Highlands region. OUR VALUES Integrity Teamwork Leadership Care STRATEGIC PILLARS
SUSTAINABLE CUSTOMER AND AGILE BUSINESS SAFETY AND ENVIRONMENT AND COMMUNITY MODEL OUR PEOPLE WATER RESOURCES We will engage and We will continually We will continue to We will ensure our act on the voice of evolve our business develop a collaborative, community has our customers to model to provide the safe and fair workplace sufficient water deliver exceptional most efficient and team capable of resources to live and experiences. effective 24/7 service. meeting all future invest with confidence challenges. while improving environmental outcomes. BOARD SUB- Sustainability Committee Customer & Community Audit & Risk Committee People, Culture & Safety Partnerships Committee Committee COMMITTEES KEY COMMITMENTS STATEMENT OF • Planning • Customer and • Price submission • Risk management OBLIGATIONS • Water services community engagement • Governance • Emission reduction • Compliance WATER FOR • Climate change • Customer and • Financial sustainability • Leadership and culture VICTORIA • Resilient and liveable community • Health and safety cities and towns • Aboriginal values • Recreational values CUSTOMER • Reliable and sustainable • Better customer • Increased value for • Safety OUTCOMES water and sewer systems experience money • Safe clean drinking water that tastes great • More efficient water use STRATEGIC • Drinking water quality • Customer needs • Financial sustainability • Health and safety RISKS (THREATS) • Climate change • Cyber and security threat • Infrastructure • Governance and sustainability compliance • Environmental impacts STRATEGIC RISKS • Environmental • Business transformation • Dynamic business model • People and culture (OPPORTUNITIES) regeneration • Partnerships and stakeholders SUPPORTING THE UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
10 PART 1 THE YEAR IN REVIEW KEY INITIATIVES AND PROJECTS
SUSTAINABLE CUSTOMER AND AGILE BUSINESS MODEL SAFETY AND ENVIRONMENT AND COMMUNITY (see Part 6) OUR PEOPLE WATER RESOURCES (see Parts 1, 2 and 5) (see Parts 1 and 2) (see Parts 1, 3, 4 and 5)
• Ongoing delivery of safe water and • Preparations for our Innovate • Developed partnership with • Development of new five-year wastewater services Reconciliation Action Plan Barwon Asset Solutions to provide People, Culture and Safety • Updated the CHW Sustainability • Ongoing meetings with Customer 24/7 customer response services strategy Framework Advisory Panel • Kept all price rises to CPI or below • Recommitted to ‘zero harm’ vision • Installation of five solar energy • Improvements to Learmonth, in 2019-20 for all interactions with our people, panel arrays across four treatment Waubra and Clunes water supplies • Met all financial KPIs customers, public and contractors plant sites following period of community • Harmonised Board and sub- • Conducted year one of the • Continued participation in Large engagement committee KPIs Learn Lead Grow leadership Scale Renewable Energy Project • Continued investment in • Maintained ‘A’ credit rating development program (Zero Energy Water Inc) Customer Experience program • Developed Social Procurement • Ongoing development of • Refreshed the Climate Adaptation • Continued participation in the ESC Strategy to assist disadvantaged workplace culture, including a Action Plan robocall Customer Satisfaction sectors of the local community Leadership Maturity Assessment • Contributed to DELWP’s water Survey with results steadily • Organised TCV briefings within • Ongoing implementation of resource strategic planning improving business diversity and inclusion initiatives initiatives • Continued investment in digital • Invested $30.3m in capital • Continued journey from • Continued to Chair the Central transformation program with improvements and programs ‘calculative’ OH&S culture towards additional online forms created ‘transformative’ culture Highlands Integrated Water • Supported the GovHack Management Forum • Launched new website with innovation event • Continued with workplace safety • Worked with a range of improved functionality and groups to implement six key customer focus, including Live Chat • Facilitated creation of Incident workplace projects stakeholders to develop a number Management Team to manage of regional integrated water • My Services portal developed response to COVID-19 pandemic • Introduction of Life Saving Rules management projects to manage online consent across the business applications • Undertook scenario planning of • Began implementation of a potential future operating states • Appointment of new Senior Safety number of initiatives from the • Ongoing support of vulnerable under COVID-19 uncertainties Lead role Recreational Assets Master Plan customers • Identified COVID-19 business • Implemented safe working • Continued to maintain and provide • Ongoing implementation of specific risks and created procedures in response to public access to 12 accessible Community Amenity Plan additional controls/actions to COVID-19 pandemic water storages and three reservoir • Supported the Ballarat Begonia mitigate • Undertook detailed risk parks Festival as Community Partner • Conducted desk top exercises to assessment in relation to • Installed new groundwater bore • Major Community Partner to the build capability in the event of a COVID-19 incident and tank at Learmonth Football 2019 Ballarat International Foto positive COVID-19 case • Conducted two staff Pulse Ground Biennale • Conducted financial modelling Surveys in response to the • Participation in Water Research • Supported Energy Breakthrough to determine potential impact COVID-19 disruption Australia international research at Maryborough of various scenarios upon our • Ongoing support and project re incidence of COVID-19 • Delivered a range of school customers and the business development of programs for staff markers in sewage inflows education programs including • Provided business continuity during the COVID-19 disruption, • Ongoing participation in a number financial support for schools to and ICT support services during including leave provisions, flexible of research projects in partnership participate in the Schools Water COVID-19 during the transition to working approaches, FAQs, with Federation University Efficiency Program (SWEP) working from home counselling, one-on-one coaching and regular newsletters • Successfully met the Department • Delivered a range of • IPS Billing Enhancement Project of Health and Human Services communication campaigns to delivered improved billing • Participation in the VPS People (DHHS) Safe Drinking Water Act assist and advise customers efficiencies and customer Matters workplace survey Compliance Audit by an external • Conducted Developer Forums outcomes • Water Industry Operators and accredited auditor regarding issues of OH&S and • Developed a 12-month 2020-21 Association of Australia (WIOA) • CHW Laboratory maintained its compliance Corporate Plan in accordance with award for Operator of the Year – NATA accreditation • Installed three new Choose Tap DELWP guidelines Lee Marshall drinking fountains at Maryborough • Continued to provide community support through the Customer Rebate Program and the Community Housing Retrofit Program
CAPITAL EXPENDITURE FUTURE PLANNING • Investing $130 million over five years to upgrade and improve 2020-21 projected outcomes infrastructure and to better secure and deliver high quality water and • CPI (inflation rate): 2.2% wastewater services. • Water access fees reduced by 4.4% • Delivered $30.3 million of capital works in 2019-20. Some of the key • Water volume fee increased by CPI only 2.2% projects delivered include: • Wastewater access fee reduced by 0.5% – Greenhouse gas reduction initiatives: $5.2 million • Average household cost reduced by 0.5% – Ballarat South Wastewater Treatment Plant upgrade works: $1.8 million • Capital expenditure proposed: $26.5 million – Water main renewals: $1.9 million – Sewer main renewals: $1.4 million – Operational and passenger fleet replacement program: $0.5 million – White Swan Dam Safety works: $0.1 million – Evansford Reservoir raw water pipeline replacement: $1.7 million – Website and online functionality: $0.8 million
Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 11 KEY PRIORITIES – LETTER OF EXPECTATIONS
This section reports on the Victorian Government’s to use the IAP2 framework in consultation programs with key priorities for the water sector per MRD07 Letter of local communities, undertaking the following activities and Expectations: initiatives during 2019-20. 1. Climate change New engagement programs 2. Customer and community outcomes • Customer Advisory Panel 3. Water for Aboriginal cultural, spiritual and economic values – A new Customer Advisory Panel was established in 2019. 4. Resilient and liveable cities and towns This panel includes representatives from local government, 5. Recognising recreational values local welfare support agencies, major customers, education sector, regional development, Traditional Owner groups 6. Leadership and culture and individual community members. The Customer 7. Financial sustainability Advisory Panel's purpose is directly aligned to the CHW strategic pillar ‘Customer and Community’. Leading, 1. Climate Change influencing, educating and engaging key stakeholders and the community will be crucial to achieving long-term water CHW continues to recognise climate change as presenting a security. Working to actively strengthen relationships to strategic risk in relation to its business operations and delivery positively influence decision making at all levels remains of services. Accordingly, CHW has committed to undertake a vital. In 2019-20, the panel met three times, and once range of activities that mitigate climate change and adapt to virtually, during the COVID-19 pandemic. climate change and variability. • Stakeholder Engagement Plan E2: Emission reduction – CHW communicates with a wide range of internal and CHW committed to an Emission Reductions Pledge in March external stakeholders in every aspect of its operations. To 2017 in support of Victoria’s target of zero net emissions by continually derive meaningful stakeholder engagement, 2050. This pledge commits to a minimum 20% reduction in strengthen relationships and reputation, as well as deliver carbon emissions (relative to CHW’s 2011-12 to 2015-16 on core programs and services, a strategic and consistent emissions baseline) by 2024-25. CHW will achieve its approach to stakeholder engagement is essential. emissions reduction target through a combination of In 2019, to support the Communications and Engagement investment in behind-the-meter solar generation, operational Strategy, a Stakeholder Engagement Plan was created optimisation and a Power Purchase Agreement (PPA) with through validating strategic and operational stakeholders, Zero Emissions Water Ltd. their needs, expectations and lifecycle. • Small-Town Water Quality Program E3: Climate adaptation – As part of the PR18 commitments for the 2018-23 period, To ensure CHW’s resilience to future climate impacts and to a community engagement program was conducted with take advantage of related opportunities, CHW has developed the small-town communities of Learmonth and Waubra a Climate Change Adaptation Plan (CCAP). The CCAP aims to collaboratively investigate potential water quality to manage climate change risks to CHW and enhance CHW’s improvements. These programs were a great success with ability to carry out its statutory functions and meet the needs future improvement pathways identified and endorsed by of its customers and shareholders now and into the future. the community. In 2019-20, we continued the small-town The CCAP is aligned with the Water Services Association of engagement activities with the above towns as well as Australia’s Climate Change Adaption Guidelines and supports in Clunes, where residents have discussed the aesthetic CHW’s objectives to: components of their town’s water quality. • Support the implementation of the State Government policy, • GovHack including Water for Victoria and the Pilot Water Sector Climate Change Adaptation Plan – Along with 19 other Australian water businesses, CHW sponsored GovHack 2019, to gain ideas to develop a water • Reduce CHW’s vulnerability to the direct and indirect efficiency app. 45 teams entered our two challenges – consequences of climate change Create innovative ways to be water efficient and Water – • Build resilience to climate change impacts and extreme source to tap. weather events Major community partnerships • Innovate to take advantage of new and emerging opportunities presented by changes in our climate CHW continued its partnership with the 2020 Ballarat Begonia Festival as the Major Community Partner due to the • Continuously grow CHW’s capacity and capability multiple benefits this association brings. for adaptation In 2020, CHW’s area at the festival included a large water 2. Customer and community outcomes cycle table that encouraged children and families to learn about how water gets from the catchment to their tap. Local C1: Customer satisfaction school students entered an insect hotel competition, for further environmental learning. Funds raised from the sale CR1 and CR4 are reported on in Part 5, Performance Report of reusable stainless-steel bottles were donated to WRISC (see page 44). Family Violence Support who provide support services for C2: Customer and community engagement women and children experiencing family violence. CHW will use the water cycle table for other educational events in In line with our commitment to meaningful engagement with the future. customers, community and stakeholders, CHW continued
12 PART 1 THE YEAR IN REVIEW In 2019, CHW was a Major Community Partner of the 2019 • 2019 Ballarat Business Awards Ballarat International Foto Biennale, as well as having our Continued to support these awards through sponsorship own CHW Exhibition – Waterworks. This international event of the ‘Trade Business Award’ category – the winner of this was held from August – October 2019 and provided the category in 2019 was Portable Buildings by Design. opportunity to showcase CHW’s historic photos of the early development of water and sewage services in the community. 3. Water for Aboriginal cultural, spiritual and Online engagement economic values Consistent with the digital transformation program, CHW developed a new website launched in December 2019 AC1 to AC3: Reconciliation Acton Plan (reflecting engagement featuring new online tools – My Account and My Services. of Aboriginal communities and Traditional Owners) CHW also provided new online two-way communication tools During 2019-20, CHW continued to implement its first Reflect to enable community members to have their say and contribute Reconciliation Action Plan (RAP). Although this one-year RAP to conversations about matters of importance to them. expired in February 2020, initiatives within the RAP have Parks masterplan continued to be progressed and implemented. Key initiatives that have been completed, and that support recognition and We engaged with the community via social media and our achievement of Aboriginal cultural values, are outlined below. website for feedback on the CHW Draft Parks Masterplan. The masterplan provides the vision to guide future • Identification of scar trees on Central Highlands Water development of our recreational parks and reservoirs to managed site/s benefit the community. • Reburial of Aboriginal artefacts at Kennedy’s Drive sewer pump station, Delacombe Second Reconciliation Action Plan – Innovate • Creation of signage that recognises Aboriginal culture at In late 2019, our Reconciliation Working Group commenced various CHW managed site/s the development of CHW’s second RAP – Innovate, which focusses on enhancing relationships, understanding and • Engagement with Wadawurrung to progress and create a opportunities with the five Traditional Owner groups in our contemporary scar tree on CHW managed site/s service region. • Engagement with Wadawurrung to undertake a cultural burn on CHW managed site/s Ongoing engagement programs and initiatives • Development of a social procurement strategy including • Choose Tap Program a focus on procurement from Aboriginal and Torres Strait CHW continued the promotion of the ‘Choose Tap’ program Islander businesses. Actions undertaken to support the throughout the region by installing more drinking water social procurement strategy include: fountains at public spaces. An ongoing agreement has – Procurement of ongoing land maintenance services in the seen the installation of new fountains in each of the City Daylesford region with a Dja Dja Wurrung business enterprise of Ballarat, Central Goldfields and Moorabool Shire Council regions. CHW has also strengthened its commitment with – Procurement of Traditional Owner artwork the Ballarat Aquatic Centre, providing two drinking water – Development and procurement of Aboriginal artwork fountains for inside their facility as well as an agreement themed corporate lanyards and KeepCup to provide reusable ‘Choose Tap’ drink bottles at the • Sponsorship of Aboriginal events and groups Centre’s cafeteria. • Cultural training for staff as follows: The local Choose Tap Ambassador program has seen The Ballarat Football Umpires Association become CHW’s latest – Annual Sorry Day, National Reconciliation Week and ambassadors. The umpires are local community members NAIDOC week events, including Aboriginal guest speakers who are passionate about the development of everyone’s and Indigenous cultural training general health and wellbeing. There are over 260 female and – Aboriginal Cultural Heritage and Land Use Activity male umpires ranging from teenagers who learn leadership Agreement training (for staff as required by their roles) skills, responsibility, judgement and general fitness to the – Three-hour cultural awareness training course by active, experienced umpires in their 60s who are great Wadawurrung Traditional Owners (over 80 staff) mentors and role models. • Implementation of CHW’s first Heritage Strategy, which • School education program seeks to identify, protect and enhance local heritage values, In 2019-20, CHW engaged with kindergartens, primary Aboriginal and non-Aboriginal (over 900 known heritage schools and secondary schools across the region, through sites on land under CHW management), and implementation the following ways: of the supporting action plan to ensure the ongoing – Developed and distributed electronic educational protection of heritage sites materials via a quarterly newsletter (144 subscribers to • Provision of support to people from Aboriginal and Torres 103 campuses) Strait Islander backgrounds into education and training – Provided drinking water fountains and drink bottles through a targeted trainee program during COVID-19 • Enhancement of respectful and inclusive relationships – Ran themed tours for schools and community groups with Traditional Owners and the Aboriginal community in (634 students) which we work – Ran Begonia Festival Insect Hotel competition with In addition, during 2019-20 CHW started development of its entries from 12 early learning centres, primary schools and second Innovate RAP. While currently in draft, this RAP seeks secondary schools (545 students) to further implement reconciliation at CHW. The RAP has a strong focus on developing and strengthening relationships – Hosted National Water Week poster competition entries with Aboriginal and Torres Strait Islander peoples, engaging and awards presentation (153 students) staff and stakeholders in reconciliation, and developing and – Developed Laboratory and Water Treatment Plant piloting innovative strategies to empower Aboriginal and virtual tours Torres Strait Islander peoples.
Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 13 4. Resilient and liveable cities and towns L3: Water bills (urban) Victorian water bills are amongst the lowest in Australia L1: Integrated Water Management (urban)
The Central Highlands Integrated Water Management 2018-19 Central National Comment (IWM) forum is a collaborative approach involving all Total Highlands median for key organisations and agencies that play a role in water residential bill Water relevant management within the region. The forum’s vision is working ($) utility sized together to leverage opportunities across the water cycle to grouping deliver a healthy, resilient and prosperous future for the region ($)* and its communities. L3 a) Average 1,260 1,370 CHW 8% During 2019-20, CHW supported the forum by providing consumption below national valuable resources and support which included utilising median a Senior Manager to coordinate forum activities, a Senior L3 b) 200 kL 1,344 1,383 CHW 3% Executive to Chair the forum and Managing Director consumption below national participation within the forum. median Major achievements of the IWM forum during 2019-20 included: Note: * Data from National performance report 2018-19: urban water utilities, part • Making significant progress on the development of five key A (Bureau of Meteorology, February 2020) for utilities with 50,000-100,000 projects captured within the Central Highlands Strategic connected properties (n=10) Direction Statement, including: L4: Payment management and hardship – Central Highlands Small Towns Green-Blue Infrastructure Plan a. The total number of payment arrangements:
– Integrated Management of the Tullaroop Catchment 2018-19 2019-20 – Breathing Life into the Yarrowee River 3,476 3,547 – Hepburn Shire (including Daylesford) Integrated Water Management Plan – Beaufort Closed Loop Recycled Water Scheme b. Number of customers awarded hardship grants: See Part 4 – Environmental and Social Sustainability for • Continuing to foster relationships, explore ideas and more information about the hardship grants (Utility Relief collaborate with stakeholders across the region and the Grant Scheme) on page 42. broader industry to improve and enhance integrated water management planning • Securing joint funding to enable three priority projects 5. Recognising recreational values highlighted within the Central Highlands Strategic Direction Statement to progress to the next stage of development (Rec1: Recreational values – explicit inclusion of recreational during 2021-22: values in planning and reporting activities) – Central Highlands Small Towns Green-Blue In 2019-20, CHW finalised a Parks and Recreation Masterplan. Infrastructure Plan Significant community consultation undertaken during development of the Masterplan highlighted that Gong Gong – Integrated Management of the Tullaroop Catchment Reservoir and Kirks Reservoir parks are significant community – Beaufort Closed Loop Recycled Water Scheme assets. CHW continues to work with local communities to provide access to these reservoir parks and other reservoirs, L2: Water Efficiency resulting in many positive beneficial recreational outcomes for Key Achievements 2019-20: the community. • Continued participation in Schools Water Efficiency CHW supports community bookings of a wedding space Program (SWEP) and increased support via funding for all within Kirks Reservoir Park. Our Communication and participating schools from across the region Engagement and Environmental Services teams provide • Retrofitted water tank and evaporative cooler initiative to information to park visitors and user groups on parks facilities, support vulnerable customers opening times and event management. • Land Development Manual in conjunction with Water In 2019-20, CHW collaborated with the Hepburn Shire on Efficiency Program mandating water tanks for new the further development of the Creswick Trails project. developments – over 600 tanks installed within the When completed, Creswick Trails will deliver around 100km CHW catchment of new purpose-built mountain biking trails on public land • Continued collaborative working with Smart Water Advice in partnership with DELWP, Parks Victoria and Hancocks website incorporating initiatives on CHW website Plantations. • Active participant with IWN smart metering workshops, CHW is co-funding, with the City of Ballarat, the Yarrowee webinars and knowledge sharing River and Tributaries: River Corridor Master Plan 2020. The • Developing Water Efficiency app aimed at educating project is supported by the Central Highlands Integrated students and the community on sustainable environmental Water Forum and seeks to create a vision for the Yarrowee water usage River corridor for the next 25 years. It is designed to protect, enhance and harness the Yarrowee River as a valued • Installed smart weather station at Kirks Reservoir Park to community asset, building on the success of ongoing manage irrigation in a more efficient sustainable manner. community engagement that has informed restoration and Technology will be offered to schools and council sporting improvement works over the past 25 years. facilities as part of the Water Efficiency Program
14 PART 1 THE YEAR IN REVIEW Recreational values 6. Leadership and culture CHW continues to provide public access to 15 of our reservoirs and reserves. Public access is subject to ongoing G1: Diversity and inclusion reviews of risks associated with safety, health and drinking CHW is committed to inclusion and representing the diverse water quality. communities we serve. The Diversity and Inclusion Strategy Open reservoirs and reservoir parks: 2019-20 focused on key actions and objectives aligned to the employee life cycle: attraction, recruitment, on-boarding, • Kirks Reservoir Park Brown Hill (Ballarat) development, retention and separation. The strategy has the • Gong Gong Reservoir Park Brown Hill (Ballarat) following desired outcomes: • Moorabool Reservoir Park, Springbank • A safe and inclusive working environment for all Reservoirs open for recreational fishing: • Leadership that encourages diversity of thought and • Bullarto Reservoir, Bullarto (Daylesford) innovation recognising the identities of individuals • Colbrook Reservoir, Creswick • Employees feel valued and respected with access to equal opportunities • Cosgrove Reservoir, Blakeville • Increased workforce capability • Dean Reservoir, Dean • Increase diversity in retention and recruitment • Hepburn Reservoir, Hepburn • Inappropriate behaviours eliminated • Moorabool Reservoir, Springbank • CHW to be viewed as an employer of choice for diversity • Russells Reservoir (Russells Dam), Wattle Flat CHW continues to develop and implement initiatives and • Talbot Reservoir, Evansford strategies that support the ongoing work of being a diverse • Wombat Reservoir, Daylesford and inclusive workplace. Some highlights include: Diversity • Landsborough Reservoir, Landsborough Working Group, Employee Value Proposition, Reconciliation • Redbank Reservoir, Redbank Action Plan, leadership work and learning and development procedures. The 2021 Diversity and Inclusion Strategy is • Sugarloaf Reservoir, Avoca currently being developed and will reflect our strategic Facilities and features of reservoir parks objectives relating to: • All: full visitor facilities (toilets, walking trails, picnic • Gender Equity tables and BBQs) • Aboriginal and Torres Strait Islander Peoples • Kirks Reservoir Park: Living Water Trail, a school’s • Culturally and Linguistically Diverse (CALD/Multicultural) education centre, weddings and Shakespeare in the Park • Lesbian, Gay, Bisexual, Transgender, Intersex (LGBTI) performances • Workplace Accessibility • Gong Gong Reservoir Park: a native bush setting, with walking and cycling trails, wetlands and supports a diverse • Respect at Work native animal population CHW also continues to promote a ‘Safe, Healthy and Inclusive • Moorabool Reservoir Park is managed in conjunction with Workforce’ and in doing so acknowledges and supports the Friends of Moorabool Reservoir community group International Women’s Day, Harmony Day, end of Ramadan celebration, NAIDOC Week, Reconciliation Week, Mental Recreation highlights 2019-20 Health Week, Suicide Prevention Awareness, White Ribbon • CHW installed a new all-abilities restroom facility at the Day, the work of Our Watch and International Day for People Gong Gong Reservoir Park. This major amenity installation with a Disability. CHW has noted a reduction in the percentage provides enhanced access for park visitors and users of the of employees reporting living with a disability. Yarrowee River walking trail • The irrigation system and controls at Kirks Reservoir Park and garden were upgraded resulting in more efficient water use and higher public amenity value • CHW hosted local running club events in Kirks and Gong Gong Reservoir parks • CHW finalised the CHW Parks and Recreation Masterplan which outlines a vision to guide future development of CHW’s recreational assets in alignment with community and organisational needs over the next five years. The plan contains site planning strategies based on three key principles: – something for all (creating the experience) – telling the water story (the role) – reinforcing the unique character (the physical place). It outlines a pathway to improved facilities and expanded lifestyle experiences. The plan will support CHW’s recreational planning enhancement activities in the future.
Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 15 Diversity and inclusion metrics
Initiative Target/Measure 2018-19 2019-20
Inclusive workplace 25% staff work flexibly 50% staff access workplace 47% staff work flexibly flexibility 35% caring responsibilities 45% caring responsibilities Caring responsibilities were not 7% LGBTQI community 7.6% LGBTI community measured 2% identify as non-heterosexual
Gender participation Gender representation 48% female and 38% leadership representation 39% senior leadership 52% male representation 40% minimum female representation in 38% female 39% female senior leadership roles. 62% male 61% male The 5-year projection for the percentage of females in senior leadership roles is 40%
People living with Water industry target is 10% 3% 3% a disability CHW set target of 6.2% to reflect communities we serve
Aboriginal and/or Water industry target is 3% 2% 2% Torres Strait Islander CHW target 1.2% to reflect communities representation we serve
Intergenerational Demographics align with communities 51% staff are over 45 years of age 54% staff are 45 years of age workforce we serve and over 49% staff are 45 years of age and under 46% staff are under 45 years of age
20% of our Water industry target is 12.5% Not reported 7% workforce speak a CHW target greater than 5% to reflect language other than communities we serve English at home.
CHW utilises a range of survey tools including the Victorian Public Sector People Matters Survey and targeted internal surveys (diversity and Team Member Pulse Survey) to measure and track diversity and inclusion performance to targets.
G1.4: Participation of Traditional Owners on Board The People Matter Survey (PMS) 2020 was postponed by committees and internal committees the VPS due to the impacts of COVID-19. Despite this, CHW • In all requests for expressions of interest for internal has continued to obtain regular, systematic feedback from committees, CHW includes a specific request for non- all team members to measure employee sentiment, health, traditional participants and will approach staff to request safety and wellbeing feedback and the impact of COVID-19 on participation our workforce. Regular Pulse Surveys have enabled CHW to: • A representative from Wathaurung Aboriginal Corporation is • Identify topics requiring immediate attention – we want a member of the Customer Advisory Panel. to know what’s important to our employees and how we can improve • CHW engaged the professional services of a Wadawurrung Traditional Owner to support development and • Inform decision making and activities required to support implementation of CHW’s Reconciliation Action Plan the health, safety, wellbeing and work performance which involved their attendance at reconciliation working of team members whilst ensuring business continuity group meetings during COVID-19 • To track how our business is feeling over time G1.5: People Matter Survey Some highlights from the Pulse Surveys include: People Matters Survey participation rate: • A high level of survey uptake across all business units, 80+% completion rate 2015 2017 2019 2020 • A high level of confidence in CHW's response to the 45% 55% 81% N/A pandemic, 98% favourable • Strong employee understanding of what to do to keep safe People Matters Survey Engagement index: and healthy during the pandemic, 98% favourable • Large majority of employees feel safe carrying out their role, 2015 2017 2019 2020 96% favourable • Large majority of employees feel they are staying 71 75 68 N/A connected, 92% favourable
16 PART 1 THE YEAR IN REVIEW • A strong commitment to employee wellbeing identified, G3: Health and safety 93% favourable See Part 2 – Corporate Report for more information • 42% of respondents stated they are thriving in their current (pages 24-26). work environment • A strong desire for CHW to continue with ongoing flexible working arrangements beyond COVID-19 • A large proportion of employee learnings and ideas for opportunities to continue and improve business processes, technology and new ways of working
7. Financial sustainability
F1 to F7: Financial indicators
2018-19 2019-20 2019-20 Variance to Variance to Result Result Target prior year target
F1: Interest Cover (Cash) 4.46 5.18 4.28 16.1% 21.0%
F2: Gearing Ratio 10.86% 10.26% 11.00% (5.5)% (6.7)%
F3: Internal Financing Ratio 108.67% 131.75% 98.30% 21.2% 34.0%
F4: Current Ratio 0.72 0.72 0.79 0.6% (8.9)%
F5: Return on Assets 2.24% 2.41% 2.00% 7.6% 20.5%
F6: Return on Equity 1.40% 1.61% 1.20% 15.0% 34.2%
F7: EBITDA Margin 44.92% 46.63% 44.10% 3.8% 5.7%
For more information, refer to Part 5 – Performance Report.
Central Highlands Water 2019-20 Annual Report PART 1 THE YEAR IN REVIEW 17 Central Highlands Water Waterworks Exhibition Ballarat International Foto Biennale 2019 Major Community Partner 18 PART 1 THE YEAR IN REVIEW PART 2 CORPORATE REPORT
ORGANISATIONAL STRUCTURE
Board of Directors Chair Dr Jeremy Johnson AM
Customer and People, Sustainability Community Audit and Risk Culture and Committee Partnerships Committee Safety Committee Committee
Managing Director Paul O’Donohue
Executive and Board operations Commercial and business development Strategic planning
Infrastructure Capital Delivery Customer and Business People and Planning and and Networks Community Services Culture Operations General Manager General Manager General Manager General Manager General Manager Jeff Haydon Stephen Answerth Jacqueline O’Neill Anthony O’Brien Michele Le Noury (01/07/19 – 19/01/20) Environmental Infrastructure Customer service Finance Renée Fearn (20/01/20 – 30/06/20) services delivery Communications Governance
Sustainability Capital expenditure and engagement and risk Health, safety program Water and Growth and Strategic and wellbeing wastewater Network field development procurement People services treatment services Customer Business Diversity and Water resources Maintenance experience intelligence inclusion Laboratory Digital metering Information Learning and program communication Strategic asset development management and technology Change and planning management People strategy
Central Highlands Water 2019-20 Annual Report PART 2 CORPORATE REPORT 19 BOARD OF DIRECTORS
Dr Jeremy Johnson AM Jim Hallam Chair Director Appointed 1 July 2010 Appointed 1 October 2017 Jeremy was Chief Executive Officer Jim is currently Chief Financial at Sovereign Hill 2002-2018. He is Officer of the ASX listed MMJ President of the Australian Chamber Phytotech Limited and has 20 years of Commerce & Industry, a Director/ of experience in the Australian Trustee of Care Super Pty Ltd and an investment management industry Executive Council Member and Past with alternative asset fund managers President of the Victorian Chamber of in Australia and overseas including Commerce & Industry. In 2011, he was awarded an Honorary Hastings Funds Management and Annuity Australia. Jim Doctorate by Federation University for his services to the has been a non-executive director of several businesses in business community. A Justice of the Peace, Jeremy is a the essential infrastructure, funds management, timberland, qualified Company Secretary, a Fellow of the Governance agriculture and manufacturing sectors within Australia and Institute of Australia and a Member of the Australian Institute the United Kingdom. Jim has a Bachelor of Economics, is a of Company Directors. Qualification: Dip Bus Studies (RMIT). Member of the Chartered Accountants Australia and New Jeremy received an Order of Australia in the Queen’s Birthday Zealand and a Fellow of the Governance Institute of Australia. Honours 2019 ‘for significant service to tourism and to the community of Ballarat’. Jodi Heath Director Angeleen Jenkins Deputy Chair Appointed 1 October 2017 Jodi is currently General Manager, Appointed 1 October 2017 Geelong and Ballarat Regions, Angeleen is an experienced Parks Victoria, she has a wealth professional company director. of experience in the banking and In her executive career, Angeleen was telecommunication sectors with top- previously employed as a director and 10 ASX listed companies over the company executive of a major multi- past 21 years. As a non-executive national engineering, building and director Jodi has worked across many sectors including water, construction group that participated education, health, employment services, disability services, in water and wastewater infrastructure. A proud resident of aged care and community organisations over the past 14 Ballarat, Angeleen is passionate about the local community, years and chaired various committees. She is currently a safe production, the environment, workplace diversity, risk Director of Gen U (Karingal St Laurence) and Professionals management, sound governance and sustainable business with Alzheimer’s (PALZ) which is near and dear to her. Jodi is performance. Angeleen is currently a Director as well as a a Graduate of the Australian Institute of Company Directors, a Chair of various committees of Tiaki Plantations Company, Member of the Deakin Alumni Community and an Australian Taumata Plantations Limited and VicForests. Angeleen is Rural Leaders Fellow. Jodi holds a Master of Business also a former director of McConnell Dowell Corporation Administration specialising in Corporate Governance and Limited, a major multi-national construction group. Angeleen Ethics from Deakin University. has a Bachelor of Arts in Psychology, and is a Fellow of the Australian Institute of Company Directors. Stewart Howe Director Janet Dore Appointed 1 October 2011 Director Departed 30 September 2019 Appointed 1 October 2015 Stewart has 30 years’ experience in Departed 11 June 2020 the global oil, gas and mining sectors Janet is an experienced non-executive in executive management, operations, director and former CEO of the mergers and acquisitions and Transport Accident Commission, restructuring roles. His career with BP Ballarat and Newcastle City Councils. and Zinifex included direction of major She is a past Chair of Committee for investment programs to develop long-life natural resource Ballarat, Commissioner Commercial assets, plus directorship of a range of subsidiary and joint Passenger Vehicles Victoria, Director MAV WorkCare, venture companies. For the past ten years Stewart has run his Member CTP Committee SIRA NSW and Municipal Monitor own corporate advisory firm, directing restructuring initiatives Ararat Rural City Council. Janet has a Master of Business and investment selection for financiers. Stewart holds non- Administration, Bachelor of Applied Science (Planning) executive advisory roles and ownership interests in privately and is a Fellow and Graduate of the Australian Institute of owned mining service companies. Qualifications: BEng(Chem), Company Directors. MEng(Mining), MAppFin, FAICD, FAusIMM(CP).
20 PART 2 CORPORATE REPORT Peter Le Lievre Paul O’Donohue Director Managing Director Appointed 1 October 2015 Appointed July 2012 Peter has been a resident of Ballarat Paul is the Managing Director of all of his adult life and is a very active Central Highlands Water. Since member of the community in sporting joining the organisation in 2003, he circles. Peter is a Life Member of two has overseen many key business cricket clubs and a director of the areas including major project Ballarat Cricket Association. Peter’s delivery, strategy, long-term planning, professional experience includes communications and account one year as a graduate accountant with the Ballarat Water management. Prior to joining Central Highlands Water, Paul Commission and Sewerage Authority in the late 1970s, 11 held senior management positions in the recreation and years as CEO in the agricultural sector and a partner in an hospitality sectors. Qualifications: BA (Mgt), Dip (Ldrshp), accounting practice for 15 years specialising in KPIs, business GradDip (BusMgt), GAICD, FIWA. management and management reporting systems within the family business sector. Peter has extensive experience in strategic planning and is currently contracted to Ballarat Regional Industries and Australian Plant Proteins. Peter holds Fellow designation of CPA Australia and is a Graduate of the Australian Institute of Company Directors.
Mark McKenzie Director Appointed 1 October 2019 Mark has recently been appointed to the role of General Manager and Senior Consultant with Meridian Agriculture. Mark is a wine and olive grower in the Grampians region and a consultant in strategic communications. His experience includes business management, corporate affairs, marketing and communications. He held senior wine industry roles as CEO of the Victorian Wine Industry Association, Executive Director of Wine Grape Growers Australia, and CEO of Murray Valley Winegrowers. Mark was CEO of NSW Irrigators Council, before returning to farming. He was a Director of National Irrigators Council and a Member of the National Farmers Federation Water Taskforce. He is a past director of the NSW TAFE Commission. Mark holds tertiary qualifications in agricultural science.
Rachel Thomson Director Appointed 1 October 2015 Rachel has over 20 years' experience internationally and in Australia in senior roles in risk management and insurance. Rachel’s previous executive role involved analysis of business strategy, financial performance, corporate governance processes and assessment of risk management of Australian and U.S. corporations. Rachel is a former member of the risk management board in the insurance sector and is currently a non-executive director on V/Line Corporation. Rachel has a Bachelor of Science in Mathematics from the University of Melbourne and is a Graduate of the Australian Institute of Company Directors.
Central Highlands Water 2019-20 Annual Report PART 2 CORPORATE REPORT 21 CORPORATE GOVERNANCE
Board of Directors Committee member Independent Number of The Board sets the strategic directions, policies and goals meetings for the business and management. It comprises nine Peter Le Lievre (Chair) Yes 4 of 4 directors, including a Chair and Managing Director. The Chair and Directors are appointed by the Minister for Water. The Janet Dore (Director until 11 June 2020) Yes 3 of 4 Managing Director is appointed by the Board. Jim Hallam (Director) Yes 4 of 4 Membership and meeting attendance Jodi Heath (Director) Number of meetings attended 1 July 2019 to 30 June 2020. (Member until 31 October 2019) Yes 1 of 4
Stewart Howe Board member Number of (Director until 30 September 2019) Yes 1 of 4 meetings attended Rachel Thomson (Director) (total 6 (Member from 1 November 2019) Yes 3 of 4 meetings)
Dr Jeremy Johnson AM (Chair) 6 of 6 Membership of the Committee is reviewed annually and members are eligible for reappointment. The Committee Angeleen Jenkins (Deputy Chair) 6 of 6 comprises at least three independent non-executive Janet Dore (Director until 11 June 2020) 5 of 6 Directors, with the option to include one independent external member. The members, collectively, will have diverse Jim Hallam (Director) 6 of 6 backgrounds with a broad and complementary range of skills Jodi Heath (Director) 5 of 6 and experience relevant to CHW’s operations. Meetings are held quarterly. Special meetings of the Committee can be Stewart Howe (Director until 30 September 2019) 1 of 6 called in accordance with CHW’s Board Charter 2018. Peter Le Lievre (Director) 6 of 6 Supporting policy Rachel Thomson (Director) 6 of 6 • Board Charter (2018) Mark McKenzie (Director appointed 1 October 2020) 5 of 6 • Audit and Risk Committee Charter Paul O'Donohue (Managing Director) 6 of 6 • Water Act 1989 • Standing Directions of the Minister for Finance under the Audit and Risk Committee Financial Management Act 1994
Purpose Other major Board committees
The Audit and Risk Committee assists the Board in the Sustainability Committee organisation's governance and exercising of due care, diligence and skill. Board Members: Purpose: to ensure the Jodi Heath (Chair) Board maintains a focus on The Committee’s key responsibilities are to: Peter Le Lievre Sustainability throughout • Oversee and appraise the scope and quality of the audits Mark McKenzie (from 1 October 2020) its policies, operations, Stewart Howe (until 30 September 2019) service delivery and conducted by internal and external auditors Dr Jeremy Johnson AM (ex officio) innovation. • Maintain, by holding quarterly meetings, open lines of Customer and Community Partnerships Committee communication among the Board, internal auditors and the external auditors to exchange views and information, and Board Members: Purpose: to ensure the confirm their respective authorities and responsibilities Janet Dore (Chair until 10 June 2020) Board remains informed Mark McKenzie (Chair from June 2020) on issues that impact • Serve as an independent and objective party to review the Angeleen Jenkins customers and customer reliability and integrity of financial information Jim Hallam perceptions of CHW. • Determine the adequacy of CHW’s administrative, operating Dr Jeremy Johnson AM (ex officio) and accounting controls People, Culture and Safety Committee
• Oversee the organisation's Risk Management Framework Board Members: Purpose: to assist the including the integration of risk management principles into Angeleen Jenkins (Chair) Board to fulfil its CHW's strategic objectives, policies and reporting Jodi Heath (from 1 October 2019) governance responsibilities • Ensure compliance with laws, regulations, financial code of Rachel Thomson in relation to organisational Dr Jeremy Johnson AM (ex officio) development and employee conduct and ethical standards. related activities including The Committee’s authority and role is set out in the Audit and leadership, safety, wellbeing and diversity and inclusion. Risk Committee Charter, a regulatory requirement that covers governance responsibilities including but not limited to those outlined in the Standing Directions of the Assistant Treasurer Information about CHW’s major committees, including the under the Financial Management Act 1994. extent to which the committee has achieved its purpose is available on request. Membership and meeting attendance Number of meetings attended 1 July 2019 to 30 June 2020. Performance appraisals Performance appraisals for all committees are conducted annually.
22 PART 2 CORPORATE REPORT PEOPLE AND CULTURE
Public sector values and employment principles Comparative workforce data The Public Administration Act 2004 established the Victorian Employees by division Public Sector Commission (VPSC). The VPSC’s role is to strengthen public sector efficiency, effectiveness and capability, The full-time employee equivalent (FTE) of all CHW team and advocate for public sector professionalism and integrity. members employed in the last full pay periods in June 2019 and June 2020: CHW has policies and practices that are consistent with the VPSC’s employment standards and provide for fair treatment, Division 2018-19 2019-20 career opportunities and the early resolution of workplace issues. CHW has provided employees with training in how to Office of Managing Director 5.00 4.00 avoid conflicts of interest, how to respond to offers of gifts and how it deals with misconduct. Business Services 33.66 33.66 All recruitment undertaken by CHW follows a consistent Infrastructure Planning process to ensure selection is based on merit. All applicants and Operations 54.74 56.23 are assessed and evaluated without discrimination on Capital Delivery and Network the basis of the key selection criteria and key capabilities. Field Services 40.06 41.06 Recruitment of managers and supervisors includes a focus on leadership and management capability. All people People and Culture 6.50 8.11 leaders undertake psychometric testing that assesses IQ, Customer and Community 50.72 43.06 engagement, commitment to OHS, risk of demonstrating discriminatory behaviour and emotional intelligence testing. Total FTE 190.67 186.10 CHW’s Code of Conduct policy is supported by procedures, team members development and awards programs to Employees by classification encourage behaviour that supports CHW’s and VPSC’s values and behaviours. A requirement that employees Workforce type 2018-19 2019-20 demonstrate and further develop these values and behaviours Administration Officer 118.81 116.40 is incorporated into all performance reviews. Employees have been correctly classified in workforce Executive Officer 6.00 6.00 data collections. Field Employees 47.80 47.80 Training and development Senior Manager 18.06 15.90 In line with our commitment to employee development, Total FTE 190.67 186.10 in 2019-20, CHW provided training and development opportunities across the business in the areas of individual Employees by age development, leadership and management, safety, governance and compliance, corporate/executive and water quality. Age group 2018-19 FTE 2019-20 FTE CHW remains committed to the development of our headcount headcount employees and provides opportunities for all people at 15-24 7 6.21 5 5.00 CHW to develop, grow and positively contribute. A key project commenced in 2019-20 was the Learn Lead 25-34 29 27.15 33 31.15 Grow Program, which is aligned to Great Leadership 35-44 57 51.85 53 48.11 that Leads with Values and developing CHW’s long-term leadership and organisational culture. The Learn Lead Grow 45-54 72 70.04 67 65.07 Program includes: 55-64 36 34.63 33 31.98 • Development opportunities for employees at all levels of the organisation Over 65 1 0.80 5 4.80 • Development of role specific authority, influence and Total 202 190.67 196 186.10 accountability • Contemporary leadership concepts, innovative thinking and strategies into CHW
Gender participation in the workforce
Total number (head count) 2018-19 2019-20
Percentage Number Percentage Number
Female employees 38% 77 39% 77
Male employees 62% 125 61% 119
Total 202 196
Central Highlands Water 2019-20 Annual Report PART 2 CORPORATE REPORT 23 OHS performance and benchmarking • Providing an environment that consults and cooperates between management, employees, contractors and OHS The 2019-20 year has been one of strong safety performance representatives with the following key achievements completed. • Executive Management and Board of Directors Key achievements commitment to ensure the requirements of the policy and subsequent OHS framework, strategies and plans • 54% reduction in the overall number of injuries in 2019-20 are in place and implemented compared to 2018-19 3. The first half of 2019-20 saw work continue to focus • Continued focus on hazard and near miss reporting on the priority action plan from the 2018 Safety Culture supported through the use of Hazard Recognition Awards. Review. Work included increasing OHS conversations, The emphasis is on eliminating hazards to reduce the implementing a fair and just culture process to incident likelihood of injury investigation, training line leaders in ICAM incident • Sustained Work Cover performance compared to industry investigation, launching a new contractor management peers. CHW’s employer performance rating for 2019-20 is onboarding and prequalification system and improving safe 0.57 a minor increase from the 2018-19 rating of 0.55. (A work procedures. score below 1 indicates CHW has performed better than the The latter half of the financial year shifted focus into industry average over the past 2.5 years) the COVID-19 pandemic response with dedicated OHS • CHW successfully transitioned to certification to the action plans developed to mitigate risks and support the new International Standard for OHS Management government direction in the management of COVID-19 in Systems (ISO 45001) the workplace. The COVID-19 Incident Management Team • 100% of the 102 scheduled OHS internal audits were is working with a primary objective to protect the health completed across the organisation with a significant number and wellbeing of our people, contractors and community. of improvements identified A revised Health, Safety and Wellbeing Strategy will • Further refinement and review of CHW’s OHS governance be developed in 2020-21 encompassing the ongoing arrangements including a comprehensive review of the work in COVID-19 and other priority areas as identified OHS Key Performance Indicators (KPIs) which are reported through OHS performance, Safety Culture review six weekly to the OHS Committee, bi-monthly to the and implementation of the VPS Leading the Way Board and quarterly to the People, Culture and Safety OHS Framework. Board Committee 4. CHW senior management are actively involved in OHS • Responding to the COVID-19 situation with OHS hazards improvement and consultation processes. Involvement identified and controlled as low as reasonably practicable and consultation occur through the Senior Management within the scope of CHW’s control Team meetings, membership on the OHS Committee and • Remaining agile and in a constant state of review of risks participation in 6 monthly reviews of the performance and external requirements to enable prompt adjustment to of the OHS Management System. In addition, Senior the COVID-19 situation Management have been directly involved in OHS working groups set up from the priority actions of the Summary of results Safety Culture review as a method to create a shared accountability model for safety leadership and maturity CHW is committed to the implementation of the Victorian across the business. Public Sector’s Leading the Way strategy to improve health and safety in the public sector. 2019-20 is the first reporting 5. Health and Safety Representatives (HSR) are in place cycle against the new framework. The current systems and across the organisation. HSRs meet formally with senior initiatives are in place at CHW to support Leading the Way: management bi-monthly via the OHS Committee. HSRs form an active role in their respective work groups to Commitment to OHS leadership, improvement facilitate resolving local OHS issues and provide a platform and achievement to escalate unresolved issues to the OHS Committee. 1. CHW has an OHS policy endorsed by the Managing HSRs also are engaged proactively in working groups Director and Board of Directors. CHW has committed to to enhance CHW’s OHS Management System by way implement a framework that provides a safe physical, of working collaboratively with Senior Management to psychological and emotional working environment develop and implement controls for identified risks and for all employees, contractors engaged by CHW and priority safety projects in the business. Throughout visitors to minimise and/or eliminate risk of physical or 2019-20 collaborative work has included improvements psychological injury. to Lone Worker procedures, Site Induction methods and 2. CHW embraces a 'safety is everyone's priority' culture trials of new equipment for gas line detection in Civil which is underpinned by principles that include (but not Maintenance as direct actions to identified hazards within limited to): the business. • Compliance with OH&S legislative requirements, ISO 6. CHW has an OHS Management System in place that is 45001 OH&S Management System, is a minimum independently certified to ISO 45001 OHS Management Systems. In 2018 CHW proactively elected to be further • Developing and implementing health, safety and assessed with a specific focus on Safety Culture. The wellbeing strategies and action plans that are aligned with assessment was conducted by an independent assessor organisational objectives, trends and industry best practice and scored against the Patrick Hudson Safety Culture • Identifying and controlling all OHS risks (physical and Maturity Model. CHW was assessed as calculative psychological) to a level that is reasonably practicable to (compliance as the standard). As well as maintaining conduct work safely and without harm to self or others management system certification there is a strong • Practicing continual improvement to build upon commitment and work continues to take place to further successes and learn from incidents and failures of improve the safety culture at CHW with an objective to the OHS framework and management system to best move up the safety culture maturity. practice standards and beyond
24 PART 2 CORPORATE REPORT 7. CHW has multi-level mental health and wellbeing support Health and Safety Reporting and guidance in place. The programs include Employee Assistance Program, Critical Incident Response, Mental – Leading the Way Measures Health First Aiders, Contact Officer Network and targeted training programs for Line Leaders. Measures of 2017-18 2018-19 2019-20 implementation During COVID-19 a suite of additional mental health and wellbeing initiatives have occurred including employee Near Misses 78 60 61 check-ins, online health and wellbeing webinars, men’s Reported health checks during June for Men’s Health Week as well Hazards 93 156 83 as communications campaigns targeted at taking a break, Reported mindfulness and wellbeing. CHW has psychosocial risks identified on the OHS risk profile and continually monitors Injuries (First aid) 28 23 10 the impacts COVID-19 and other emerging issues have on Lost Time these potential risks. 3 3 0 Injuries (LTIs) 8. CHW as part of our rewards and recognition program has Hazard Recognition and Safety and Innovation Awards Medical to recognise and reward proactive hazard recognition Treatment 0 1 1 and creative and practical solutions to health and safety. Injuries During 2019-20, innovations included a tool for creating Process (lead) – Measures of implementation psychological safety in the workplace and purchasing a spring-loaded Intermediate Bulk Container stand to Rates of 7.7% 6.9% 6.3% eliminate a hazardous manual handling task. absenteeism
9. CHW is connected to the Victorian Water and Water OHS Induction Services Association of Australia OHS networks. Our Training 100% 100% 100% Senior Leadership and OHS professionals regularly Completion contribute to emerging themes and working groups in Yearly employee 81% OHS. During 2019-20 CHW has also become an active Postponed committee member for the Ballarat Regional Occupational People Matters Did not Participation Survey (PMS) due to participate 68% Safety and Health Group and now is actively contributing to results COVID-19 local OHS issues affecting the region. Engagement Mental health OHS Performance data and wellbeing Not reported 98% The CHW Significant Injury Frequency Rate (SIFR) for employee training 2019-20 of three (3) was significantly lower than our score of Consultation – Not reported 100% 12.5 for 2018-19. The CHW contractors SIFR rate for 2019-20 OHS Committees of 17.8 was slightly higher than the score of 15.4 for 2018-19 reporting period. There were a number of contributing factors Consultation – Senior to this increase including three (3) Medical Treatment Injuries Not reported 100% (MTIs) involving contractors in 2019-20 and one (1) Lost Time management commitment Injury (LTI) and one (1) MTI involving contractors in 2018-19. Contractor Management continues to remain an ongoing area OHSMS of focus for CHW. Implementation, 100% 100% 100% Review and As shown below the SIFR has continued to trend Improvement downwards over time. Outcome (lag) – Measures of effectiveness No. of standard 0 1 2 H S FR Workcover claims ontractors S FR Linear H S FR Average cost per 0 $358,211* $17,979 claim Fatalities 0 0 0