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Yarra Valley Annual Report Water YARRA 2014–15 VALLEY ANNUAL REPORT WATER STATEMENT OF PURPOSE TO PROVIDE EXEMPLARY WATER AND SANITATION SERVICES THAT CONTRIBUTE TO THE HEALTH AND WELLBEING OF CURRENT AND FUTURE GENERATIONS. MITCHELL MURRINDINDI WHITTLESEA YARRA VALLEY WATER HUME CITY WEST WATER NILLUMBIK DAREBIN YARRA MORELAND BANYULE RANGES PORT PHILLIP BAY SOUTH EAST WATER MANNINGHAM MELBOURNE CBD BOROONDARA WHITEHORSE STONNINGTON WESTERN PORT MONASH CARDINIA OUR ASSETS KEY STATISTICS 9,391 9,729 1.8 million km of sewer mains km of water supply mains population served water pressure sewage reducing pumping 698,663 53,263 137 stations 104 stations residential properties business customers 52 75 9 14,489 537.6 water supply water pumping sewage treatment new customers full time tanks stations plants in 2014–15 equivalent staff CONTENTS About us 2 Nature and Scope of Main Activities 3 A message From the Chairman and the Managing Director 4 2014–15 Highlights 5 Year in Review MITCHELL MURRINDINDI Financial Summary 18 Five-Year Financial Summary 19 WHITTLESEA Corporate Information 21 HUME NILLUMBIK Risk Management Attestation 31 Annual Financial Report DAREBIN YARRA Directors’ Report 34 MORELAND BANYULE RANGES MANNINGHAM Statement of Comprehensive Income 36 MELBOURNE Balance Sheet 37 CBD BOROONDARA WHITEHORSE Statement of Changes in Equity 38 STONNINGTON MONASH Cash Flow Statement 39 CARDINIA Notes to the Financial Statements 40 Statutory Certification 78 Auditor-General’s Audit Report 79 Additional Information Performance Report 82 Auditor-General’s Audit Report 86 Water Consumption and Drought Response 88 Environmental and Social Sustainability Reporting 90 Annual Reporting of Major Non-Residential Water Users 94 Bulk Entitlements Report 95 Disclosure Index 97 ABOUT US Yarra Valley Water is the largest retail water corporation in Melbourne, providing essential water and sanitation services to more than 1.8 million people. We manage more than $3.6 billion of infrastructure on behalf of the community, across a service area of approximately 4,000 square kilometres in the northern and eastern suburbs – from Wallan in the north to Warburton in the east. On 1 July 2012, Yarra Valley Water became a statutory corporation, incorporated under the Water Act 1989. Our activities are overseen by an independent Board of Directors, appointed by the State Government of Victoria. We are accountable to the Minister for Environment, Climate Change and Water, the Hon Lisa Neville MP. Yarra Valley Water’s obligations regarding the performance of its functions and the exercise of its statutory powers are defined in the Statement of Obligations, issued by the Minister in accordance with Section 4I (2) of the Water Industry Act 1994. Yarra Valley Water is required to monitor compliance with the obligations set out in the Statement, report on non-compliance and take remedial action in relation to non-compliance. The Essential Services Commission is the economic regulator of the Victorian water sector. The Commission’s role includes the regulation of prices, service standards and market conduct across the water industry in Victoria. Yarra Valley Water is subject to regulation by the Commission. We buy bulk water from Melbourne Water and are also responsible for taking away sewage for treatment. Most of the sewage is transferred to Melbourne Water’s Eastern or Western Treatment Plants. The balance is treated at our nine regional plants, several of which produce recycled water for use in homes and for the irrigation of sports fields or open space. 2 YARRA VALLEY WATER ANNUAL REPORT 2014–15 NATURE AND SCOPE OF MAIN ACTIVITIES Introduction Our main business undertakings are: 2014–15 Highlights Area Scope of activities Water quality Provide water that meets all drinking water standards set by the Department of Health and Human Services. Manage compliance associated with recycled water. Reticulated water reliability Manage the number of planned and unplanned water supply interruptions. (bursts and leaks) Infrastructure Maintain and renew water supply and sewerage infrastructure. in Review Year Distribution water Minimise the possibility of a major burst in high risk areas. pipe reliability Sewer blockages Manage the number of planned and unplanned sewerage service interruptions. Responsiveness to water Meet customers’ expectations in relation to response times for water supply pipe bursts and leaks interruptions. Corporate Information Responsiveness to sewer Meet customers’ expectations in relation to response times for sewer spills and spills and blockages blockages. Sewerage system capacity Ensure that the sewerage system meets the environmental standards defined by the Environment Protection Authority Victoria (EPA Victoria). Reducing the environmental Provide modern sewerage systems to replace poor performing septic tanks. and public health impacts of poorly performing septic tanks Customer service Provide customer service associated with account management. Annual Financial Report Assisting financially vulnerable Offer effective assistance to customers facing financial difficulty. and hardship customers Water efficiency Maintain water efficiency through a variety of residential and commercial programs. Customer Charter requirements Meet all Customer Charter requirements as approved by the Essential Services Commission. Protecting the environment Meet all environmental standards imposed by the EPA Victoria and State Environment Protection Policies. Additional Information Statements of Obligations Meet our obligations as defined in the Statements of Obligations issued by the Minister for Environment, Climate Change and Water. Trade waste Meet our trade waste obligations as legislated in the Water Act 1989. Disclosure Index YARRA VALLEY WATER ANNUAL REPORT 2014–15 3 A MESSAGE FROM THE BOARD On behalf of the Board of Directors, we are pleased to We remain committed to driving extraordinary performance submit Yarra Valley Water’s 2014–15 Annual Report. through continued development of our vibrant organisational During 2014–15 we responded to our operating environment culture. In June 2015 we received world-leading results in which has been characterised by: the Human Synergistics Organisational Culture Inventory (OCI) survey. Globally, the OCI is the most widely used and • the need to reduce cost of living pressures on households most thoroughly researched tool for measuring organisational and support vulnerable customers; culture. It is our firm belief that a constructive culture is the key to high performance and achieving great organisational • evolving customer expectations regarding the services outcomes. In 2014–15, in addition to our financial results, we provide and how we engage with local communities; we outperformed all our environmental targets and achieved the lowest number of water quality complaints on record, • innovation in water and sanitation services and responding our best ever safety performance and high levels of to climate change; and customer satisfaction. • rapid growth in Melbourne and the need to provide essential On 8 April 2015, the Hon Lisa Neville MP, Minister for water and sanitation infrastructure for new communities. Environment, Climate Change and Water, announced a Our long-term Strategy is to provide exemplary water and review of all 135 Victorian Water Corporation Board Director sanitation services that contribute to the health and wellbeing positions. Expressions of interest were invited during April and of current and future generations. During 2014–15, delivering May 2015. New Directors were appointed on 1 October 2015. exceptional customer outcomes and looking after the natural The Victorian Auditor-General has proposed to issue a environment remained our top priorities. This Report details modified audit report on Yarra Valley Water Corporation’s projects and outcomes delivered during 2014–15 that have 2014-15 Financial Statements and Performance Report, contributed to deliver our long-term strategy. reflecting a difference in opinion on the method used to derive From a planning perspective, we have completed phase one the fair value of infrastructure assets. Yarra Valley Water is of the Water Future North Strategy, focussing on establishing of the view, supported by independent expert valuation advice, a robust plan for whole of water cycle management in the that its valuation of infrastructure assets remains appropriate rapidly growing northern corridor of Melbourne. and in accordance with relevant accounting standards and directions. The approach adopted in the 2014-15 valuation We continued to apply a $100 credit rebate on bills for has been consistently used in the annual accounts since residential customers with usage charges. This rebate has 2009-10, without qualification. Further information on been enabled by a continued focus on delivering significant this matter is provided within the Financial Report. savings in operating costs. We extend a sincere thank you to our Board of Directors We delivered a better than expected financial result in and our staff for their continued support, efforts and 2014–15. In relation to revenue, this was mainly due to achievements over the past year. In accordance with higher water use as a result of the dry and warm weather the Financial Management Act 1994, we are pleased experienced throughout the year and additional revenue to present Yarra Valley Water’s Annual Report for the from higher volumes of new development activity. From year ending 30 June 2015. It complies with all statutory an expenditure
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