Auditor-General's overview
The Local Government (Auckland Council) Act 2009 requires me to periodically review the service performance of Auckland Council and each of its council-controlled organisations. For the first such review, I chose to look at the work of Watercare Services Limited (Watercare).
Overall, Watercare strives to provide its customers with good customer service. In my view, it has been largely successful. However, Watercare could improve some aspects of its performance – in particular, by providing its customers with better information about how it operates and what customers can expect.
About Watercare
On 1 November 2010, Auckland's local authorities were amalgamated into a single Auckland Council. Watercare became an integrated water and wastewater service provider with responsibility for supplying all water from source to tap and for providing all wastewater services in the Auckland region. The assets and liabilities relating to the water supply and wastewater services of the Auckland region's former local authorities were transferred to Watercare.
Positive changes to date
Watercare inherited a complex set of tariff arrangements. It has been progressively standardising them to address inconsistency throughout the region. The price of water reduced in 2011/12 and was held unchanged in 2012/13. Watercare is also implementing a new standard non-domestic wastewater tariff that will take effect from 1 July 2014. I endorse the work that Watercare has done to standardise tariffs.
Other aspects of Watercare's operations are done well. It has a customer contact centre that, despite technology constraints, works well. Its staff have access to a knowledge base that is up to date, clear, and concise, and staff are well trained. Watercare's website includes its customer contract, which sets out the terms and conditions of water and wastewater supply.
Introducing monthly billing was a positive change for customers because it helps them in managing their expenses. Watercare's meter-reading process is efficient, and the system adopted has in-built quality control mechanisms to ensure that meter readings are accurately read and recorded.
Room to improve
A need to provide more relevant information to customers was a theme throughout my review. For example, estimating how much water a customer has used is a fundamental part of Watercare's billing activity. However, it provides no information about how it does the estimating. Watercare's customer contract simply states that sometimes Watercare might have to estimate how much water a customer uses (as opposed to using an actual meter reading). This could lead a customer to think that readings are estimated only occasionally. Watercare actually uses estimated readings more often than its customer contract suggests.
Overseas water utilities often set out their approach to debt recovery so that customers know what to expect. Watercare provides no such information. Also, Watercare provides no information about its water restriction policy and practices. In my view, Watercare should provide its customers with all the information they need to understand their rights and obligations, and what they can expect from Watercare.
I also have concerns about the way that Watercare reports some of its performance measures – in particular, its customer satisfaction performance. Reporting customer satisfaction as a percentage of the target rather than the actual result might overstate Watercare's performance.
Watercare has a team dedicated to collecting outstanding customer debt. Its practices are broadly consistent with good practice guidelines. However, at least in the early stages of its debt-recovery process, Watercare adopts a "one size fits all" approach that does not consider people's individual circumstances. Other utility companies tailor their debt-recovery action, and Watercare could usefully consider such an approach.
Watercare can restrict a customer's water supply and we found that Watercare's operational staff get a good understanding of a customer's circumstances before recommending a water restriction. Watercare applies few water restrictions. However, Watercare could review the use of its correspondence about water restrictions to ensure that it does not send its water restriction reminder letter to customers who cannot have their water restricted.
I also consider that Watercare should review its water restriction policy to ensure that senior managers are given additional assurance that Watercare has met all the requirements of the Local Government Act 2002, the Health Act 1956, and its water restriction policy.
I thank Watercare's staff for their assistance as my staff carried out this review.
Lyn Provost
Controller and Auditor-General
26 May 2014