Part 1: Introduction

Watercare Services Limited: Review of service performance.

In this Part, we set out:

Why we carried out our review

Section 104 of the Local Government (Auckland Council) Act 2009 requires that "The Auditor-General must, from time to time, review the service performance of the Council and each of its council-controlled organisations."

Although some of our reports cover the quality of services provided by organisations, a specific legislative requirement to review service performance is new.

The amalgamation of Auckland's local authorities and regional council into a single Auckland Council on 1 November 2010 significantly affected the arrangements for supplying water services in the Auckland region. Watercare became an integrated water and wastewater service provider. The assets and liabilities for the water supply and wastewater services of the Auckland region's former local councils were transferred to Watercare.

Given the extent of the change in arrangements and the importance of water to the Auckland region, we considered it appropriate to review Watercare's service performance.

This is the first review of service performance that we have carried out under section 104 of the Local Government (Auckland Council) Act. The next one will be a review of Auckland Council's building consent service performance.

Watercare Services Limited and the services it provides

Before 1 November 2010, most Auckland city and district councils received water in bulk from Watercare. Rodney and Franklin District Councils had their own water services. The councils distributed drinking water to homes and businesses in their district through their business units or subsidiary companies (local network operators). Half of the councils also collected, treated, and disposed of wastewater. Watercare treated and disposed of wastewater for Auckland, Manukau, Papakura, and Waitakere districts.

From 1 November 2010, Watercare became responsible for providing all drinking water and wastewater services in the Auckland region. It now provides its services to about 1.4 million people.

Watercare collects, treats, and distributes drinking water from 12 dams, 14 groundwater sources and springs, and three river sources. It sourced 143 billion litres of water in 2011/12, which was treated at 21 plants. This water was distributed through 8800 kilometres of water pipes, through 84 reservoirs and 90 pump stations to about 1.4 million people.

Watercare collects, treats, and disposes of wastewater at 20 treatment plants. The two main wastewater plants servicing most of the region are located at Mangere on the Manukau Harbour and Rosedale on the North Shore. Wastewater is conveyed through 7757 kilometres of sewers before treatment. The regional network includes 539 wastewater pump stations and 164,000 manholes.

Watercare transfers, treats, and disposes of trade wastes. As at 1 July 2012, Watercare had worked with 1650 customers in administering the four trade waste bylaws to protect the wastewater network and to help ensure that wastewater treatment plant discharges meet consent requirements. The way trade waste discharges are regulated will change from 1 July 2014 because Auckland Council has adopted a new bylaw that standardises the regulation of trade waste discharges.

Watercare also provides commercial laboratory services in support of its business. The independently accredited laboratory provides a full range of testing and sampling services for water, wastewater, and air quality. It also works with a range of industries to provide first-class laboratory analysis and sampling services.

These activities are supported by customer services, finance, legal services, capital programmes, human resources, information services, and maintenance services teams.

Watercare's total revenue in 2012/13 was just over $480 million. However, it does not operate to make a profit and is prohibited from paying a dividend to its shareholder, Auckland Council.

The scope of our review

This report is about service to the public and includes:

  • Watercare's tariffs;
  • the operation of Watercare's contact centre;
  • the introduction of monthly billing;
  • meter reading; and
  • Watercare's customer debt management practices, including the operation of the Water Utility Consumer Assistance Trust.

What we did not review

Watercare is a significant and sizeable organisation. It was not possible, nor was it our goal, to cover all areas of service performance. The two main aspects we have not covered are Watercare's asset management planning and drinking water quality.

Watercare has an extensive and exhaustive asset management plan for 2012-22 that covers expected capital expenditure of $4.8 billion. Watercare's annual report and, more recently, its new Global Reporting Initiative report provide relevant information on many supply activities. Watercare's annual report, asset management plan, and Global Reporting Initiative report are on Watercare's website.1

The Ministry of Health reports extensively on the quality of drinking water provided by all community drinking water supply organisations, including Watercare. It also reports on their progress towards meeting the requirements of the Health Act 1956 and the Drinking-water Standards for New Zealand. The Ministry of Health's most recent report is on its website.2 Watercare also provides information in its annual report and Global Reporting Initiative report on water quality, including an analysis of the quality of Auckland's drinking water and grades for its water treatment plants and networks.

Structure of this report

In Part 2, we discuss Watercare's tariffs for water and wastewater. We look at the tariffs Watercare inherited as well as the tariff changes Watercare has made since 1 July 2011.

In Part 3, we discuss the level of service provided by Watercare's customer service group. This includes aspects of Watercare's:

  • communication with its customers;
  • complaints processes;
  • staff development and retention; and
  • performance reporting.

In Part 4, we look at Watercare's billing process. In particular, we review meter reading and estimation processes.

In Part 5, we look at Watercare's customer debt management processes. We compare its practices with some other comparable organisations. We also look at Watercare's water restriction policy and how Watercare has applied it, and we discuss the Water Utility Consumer Assistance Trust.

1: See

2 See

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