=
© Cranleigh. Page 1© Cranleigh. Page 1
FUTURE DELIVERY MODEL OF WATER SERVICES
=
© Cranleigh. Page 2
Enhanced Shared Services
Water Activities
Strategy & Planning
Activities- Asset Planning- Growth Planning- Demand Mgmt- Development Engineering- AMPs- Compliance & Consenting- Statutory Planning- Resilience Planning
Projects
Activities- Project Delivery- Project Management- Renewals
Operations
Activities- Network Ops- Plant Ops- Maintenance & Planning- Laboratory-Trade waste
Stakeholder Management
Activities- Comms- Customer Services-Iwi Engagement-Water Education
Corporate Services
Activities:- Finance-IT-Procurement-HR-Heath & Safety-Risk Mgmt-Business Improvement-Sustainability
Existing Shared Services
Enhanced Shared Services
=
© Cranleigh. Page 3
CCO Option
Establishment Committee
Board
CEO
Strategy & Planning
GM
ProjectsGM
OperationsGM
Stakeholder Management
GM
Corporate Services
CFO
3 Councils
=
© Cranleigh. Page 4
CCO Option Governance Shareholder councils appoint representatives to a water CCO establishment
committee Committee will be responsible for:
o Appointing the CCO directors and monitoring their performanceo Approving the CCO Statement of Intent (formally endorsed by Councils)o Monitoring the CCO performanceo Approving water tariffs
2 Committee Members per Council Committee voting will be on the following basis:
o Ordinary business – 1 member 1 voteo Major decisions – voting in proportion to shareholding with 75% majority
required
=
© Cranleigh. Page 5
Savings by Type – CCO (3 Councils Combined)
Total Opex
$153.5m
Total Capex
$150.9m
Debt Optimisation
$164.0m
Total Savings $468m (Years 1 - 28)
=
© Cranleigh. Page 6
Savings by Recipient – CCO (3 Councils Combined)
=
© Cranleigh. Page 7
Savings by Council – CCOTotal Savings $107m
(Years 1 - 10)Total Savings $468m
(Years 1 - 28)
$282.1m$105.5m
$80.8m
Hamilton
Waikato
Waipa
$52.3m
$28.1m
$26.7m
=
© Cranleigh. Page 8
Indicative Waipa Savings
Years 1-10 28 YearsWAIPA CCO CCO ESS CCO CCO ESSSUMMARY OF SAVINGS Base Positive Base Positive $m $m $m $m $m $m
Opex 5.4 9.0 3.7 38.5 53.6 12.1Capex 10.1 16.5 3.0 19.5 30.4 7.4Debt Optimisation 11.2 8.7 0.0 22.7 27.6 0.0
Total Savings 26.7 34.2 6.1 80.8 111.6 19.5
=
© Cranleigh. Page 9
20%
30%
40%
50%
60%
70%
80%
90%
100%
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Waipa Debt to Revenue Ratio
Status Quo Waipa without Water
=
© Cranleigh. Page 10
0%
5%
10%
15%
20%
25%
30%
35%
0
100
200
300
400
500
600
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29
Deb
t ($m
)Debt Comparison - 3 Councils' Status Quo (SQ) Debt v CCO Debt
SQ CCO CCO Debt/Equity Ratio
=
© Cranleigh. Page 11
0.60%
0.70%
0.80%
0.90%
1.00%
1.10%
1.20%
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28 Y29 Y30
% o
f Hou
seho
ld In
com
e
Waipa Water/Wastewater Affordability
Water Bill/ Income % SQ Water Bill/ Income % CCO
Source: NZ Average Household Income June 2014, Statistics NZ
=
© Cranleigh. Page 12
1.20
1.40
1.60
1.80
2.00
2.20
2.40
2.60
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10Y11Y12Y13Y14Y15Y16Y17Y18Y19Y20Y21Y22Y23Y24Y25Y26Y27Y28Y29Y30
$
Waipa Average Water Cost per m3 (ex GST)
Status Quo CCO
Status Quo cost calculated for customer using 250 m3 of drinking water p.a. including both fixed and volume metric charges. Does not include wastewater or stormwater charges.
=
© Cranleigh. Page 13
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
50.0
70.0
90.0
110.0
130.0
150.0
170.0
190.0
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
$
Waipa Reduction in Average Total Rate Bill
Water, Waste and Storm water % of Rates
=
© Cranleigh. Page 14
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12
$m
Stranded Overhead Recovery Paid to Waipa by CCO
Governance etc Property HR, Finance etc
=
© Cranleigh. Page 15
0.15
0.17
0.19
0.21
0.23
0.25
0.27
Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12
$m
Monitoring & Planning Recovery Cost Paid to Waipa By CCO
$200,000 p.a. raising with inflation
=
© Cranleigh. Page 16
Council Impacts – Non Financial
Resourcing
Risks & Opportunities
Resource Consent
Planning
=
© Cranleigh. Page 17© Cranleigh. Page 17