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2009/2019 Ten Year Plan

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2009/2019 Ten Year Plan 2009/2019 Ten Year Plan 88 2009/2019 Ten Year Plan The Manukau Family COUNCIL CONTROLLED ORGANISATIONS To help achieve the Tomorrow’s Some CCOs are council-controlled Manukau community outcomes, some trading organisations (CCTO) which of our services and activities are operate to make a profit. Each CCO is provided through trusts and other required to agree a Statement of Intent organisations. Where necessary, the (SOI) with the council each year. The council provides funding or part of the SOI sets out the CCOs nature and scope funding for these organisations, which of activities, key performance targets, independently manage the facilities or and reporting requirements along with services they’re set up to provide for other matters. Manukau’s communities. The council can exempt small CCOs A council-controlled organisation (CCO) from the reporting requirements that is a company or organisation in which are otherwise required. CCOs that the a council or councils hold 50 per cent council currently exempts are: or more of the voting rights or can • Arts Regional Trust appoint 50 per cent or more of the • Mangere Mountain Education Trust. trustees, directors or managers. Manukau City Council The Manukau Family 2009/2019 Ten Year Plan 1 Manukau Water Limited Why does it exist? tree roots. These blockages result in wastewater escaping from the pipes into the environment. Activities within plumbing inside The council provides water and wastewater services to the city’s properties have the potential to pollute the public drinking water. residents and businesses, through Manukau Water, which was set There are also potential visual and noise impacts of the operation up as a CCO on 1 July 2006. Because the council owns 100 per and maintenance of infrastructure. This includes the disruption cent of the company, it has: to road users when pipes are laid and repaired under roads. • Control of ownership of the city’s water and wastewater assets Manukau Water is required to manage its assets and operations • Control of service level specification and of pricing policy; incorporating best practice procedures to minimise negative and adverse impacts on its customers and to the environment. By • Oversight and final signoff approval of Manukau Water’s Asset their very presence, wastewater treatments plants, in Beachlands Management Plan (AMP) and funding plans and Maraetai and the proposed plant at Kawakawa Bay will have visual • Control of any changes in residential and non-residential and odour effects. Wastewater services may also impact on the tariff structures for water and wastewater. environment through the unintended discharge of wastewater into Manukau Water’s objective is to provide a cost efficient water the environment due to equipment failure or rainwater entering and wastewater service. As a CCO its primary objective is not and overloading the system during storm events. to make a profit but to break even in the long run, while making sure the water and wastewater systems can meet the needs of Key Performance Measures and Targets current and future generations. • Manukau Water remains financially sound by achieving Funds from Operation Interest Cover Ratio (EBITDA/Interest Accordingly Manukau Water is a council controlled organisation Payable) within the range 2.7 to 3.8 and debt remains and a Public Benefit Entity. Because it does not have a purpose to between 50 and 60% of total assets. make profits, it is not a council controlled trading organisation. • Price increases will be within CPI increases subject Manukau Water has annual revenues of more than $87m; to adjustments if required, for price increases imposed total assets of $973.1m and total liabilities of $548.3m1. by Watercare Services Limited. What does it do? • Achieve operational efficiency by maintaining controllable Manukau Water is responsible for providing water and wastewater costs to CPI-1% excluding one-off items, new compliance requirements effectively and efficiently. The company provides the requirements and times that are funded by corresponding reticulation system to distribute water and collect wastewater. It revenues. also treats wastewater for the Beachlands/Maraetai community. • Asset service capacity and quality is maintained by ensuring Wholesale water treatment and distribution and wastewater asset management planning process and procedures meet collection and treatment are provided by Watercare Services industry best practice Limited which is jointly owned with the other territorial authorities of the Auckland region except for Franklin District Council. • Achieving full compliance with the Drinking Water Standards Manukau Water’s role is to: for New Zealand 2005 for potable reticulated water and the health (Drinking Water) Amendment Act 2007; and • Provide water services; • Operating the water reticulation system to maintain the • Provide wastewater services; Ministry of health “a” grading • Develop and maintain the water and, wastewater system; and • Managing the water reticulation system to ensure that • Maintain the council’s storm water system. there are less than five water quality complaints per 1,000 Negative Effects customer connections on average in any year. • Ensuring at least 90% of all planned and unplanned water While the provision of good public water and wastewater shutdowns are restored within five hours. services is fundamental to the improvement of public health and environment, and for growth, its operation has the potential to • Operating the water system with less than 30 watermain have adverse effects. There is a potential for wastewater pipes breaks per 100 km of pipe annually. to be blocked by undesirable habits of customers or naturally by 90 1 Financial data for CCOs that are companies or joint ventures refer to the period ending 30 June 2008. Manukau City Council 2009/2019 Ten Year Plan The Manukau Family Manukau Water Limited 1 • Operating its wastewater system in compliance with the Forecast spending on assets conditions of the resource consents it has obtained from Manukau Water’s capital expenditure allows for replacing assets as the Auckland Regional Council. they end their useful lives, and for investment in new assets as the • Planning for and constructing infrastructure required to meet city grows. Over the next two years Manukau Water is forecasting the needs of its customers and shareholder, while minimising to spend over $11.2 million to complete the construction of the environmental impacts, in accordance with the standards wastewater scheme at Kawakawa Bay. prescribed in the conditions of the resource consents. The following table sets out Manukau Water’s projected capital • Ensuring at least 98% of wastewater blockages are expenditure for the next 10 years in $millions. The table divides the responded to within one hour. expenditure into four categories; renewals, growth, level of service and that undertaken in association with major roading projects. • Operate the wastewater system with less than 60 blockages The table shows this for both water and wastewater. The table does per 100km of pipe annually. not include assets built by developers and vested in the council • Ensuring at least 95% of all customers’ enquiries and then sold to Manukau Water. complaints are responded to in a meaningful way within ten working days. • Ensuring requests for new service connections are actioned within 15 working days of payment or as agreed with the customer. Capex Forecast ($millions) Year ending 30 June 5 Years to Water 2010 2011 2012 2013 2014 2019 Growth 1.37 1.84 3.15 3.46 3.28 19.94 Level of Service 1.76 1.98 1.48 0.72 0.38 2.39 Roading 1.45 0.80 0.84 0.88 1.16 8.14 Renewal 2.22 1.98 1.74 2.39 2.63 19.66 Total 6.80 6.60 7.21 7.45 7.45 50.13 Wastewater 2010 2011 2012 2013 2014 2019 Growth 4.01 4.82 6.45 5.82 8.52 45.10 Level of Service 1.76 2.87 5.04 3.49 6.37 30.69 Roading 0.56 0.78 0.72 0.84 0.96 5.12 Renewal 2.32 3.23 4.05 3.92 2.69 19.46 Rural 7.0 4.2 Total 15.65 15.9 16.26 14.07 18.54 100.37 Capex Overall Total 22.45 22.50 23.47 21.51 25.99 150.50 91 Manukau City Council The Manukau Family 2009/2019 Ten Year Plan 1 Manukau Water Limited Manukau Water’s Forecast Financial Performance The following table sets out Manukau water’s projected financial performance and funding requirements for the next 10 years ($000s). 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Operating Revenue 91,379 95,933 102,155 109,781 115,157 119,625 124,081 130,446 136,567 142,276 Payments to 45,370 47,255 49,538 54,105 57,581 61,120 66,404 69,862 74,553 79,437 Watercare Operating 21,909 22,904 23,741 24,866 25,670 26,424 27,690 28,594 29,504 30,818 Expenditure Depreciation 19,459 19,938 20,334 21,985 22,251 22,446 24,048 24,419 24,885 26,392 Interest 10,370 10,370 10,108 9,846 9,584 9,322 9,060 8,798 8,536 8,406 net Profit/Loss -5,729 -4,534 -1,566 -1,021 71 313 -3,121 -1,227 -911 -2,777 Funded From reverse non-cash items (depreciation 19,599 20,308 20,734 22,485 22,751 22,946 24,618 24,989 25,455 26,962 and asset write offs) less Asset Development -20,150 -20,100 -21,400 -18,260 -26,790 -26,750 -30,030 -32,810 -32,800 -31,410 (including purchase of vested assets) Total Cash -6,280 -4,326 -2,232 -3,205 -3,968 -3,491 -8,533 -9,048 -8,256 -7,225 Requirement MCC Loans 4,229 4,343 5,569 7,290 8,483 9,552 9,462 9,900 10,114 10,114 Working Capital -2051 -17 -3,337 -4,085 -4,515 -6,061 -929 -852 -1,858 -2,889 Total Funding 6,280 4,326 -2,232 3,205 3,968 3,491 8,533 9,149 8,256 7, 255 Manukau Water’s charges this is not possible over the next 10 years because of substantial increases in bulk water and wastewater prices signalled by Following extensive consultation in 2008 the council decided to Watercare Services Limited.
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