3.Minutes from May 2018 meeting..pdf

Board - Public Session - Minutes of Meeting - 29 May 2018
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MINUTES
SUBJECT
WATERCARE SERVICES BOARD MEETING
VENUE
Watercare Services Limited, 73 Remuera Road, Remuera, Auckland
DATE
29 May 2018
TIME
9am
STATUS
Public Session
Present:
In Attendance:
Members of the Public:
M Devlin (Chair)
R Jaduram (CE)
2 members of the public from
J Hoare (Deputy Chair)
B Monk
9am - 9.15am
N Crauford
R Chenery
B Green
R Fisher
C Harland
S Webster
Hon Dame A King
J Simperingham
D Thomas
S Morgan
D Hawkins
J Glennon
E McBride
M Bridge (from 9.30am)
S Bird (departed at 9.35am)
S Cunis (departed at 10am)
P Drummond, of Watercare Harbour Clean-Up
Trust, from 9.45am until 10.15am
1.
Apologies
-
There were no apologies.
-
The Chair welcomed A Singleton (Chief Customer Officer) and S Morgan (Chief Operations Officer) to their
first Board meeting.
2.
Minutes of Previous Meetings
The Board resolved that the minutes of the public section of the Board meeting held on 24 April 2018 be
confirmed as true and correct.
3.
Review Directors’ Disclosure of Interests
-
N Crauford, as a director of the Environmental Protection Authority, has been appointed to a decision
making committee relating to OMV New Zealand Ltd’s request for a marine discharge consent.
-
A King has been appointed Chair of the Establishment Board tasked with setting up the proposed
Federation of Primary Health Aotearoa New Zealand.
-
B Green is providing consultancy advice to Trility (an Australian water infrastructure company) in relation
to a project in the Bay of Plenty.
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Board - Public Session - Minutes of Meeting - 29 May 2018
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Public Deputations relating to the Statement of Intent (SOI)
Additional
item
Directly after Items 1, 2 and 3, the Board received a submission from Sarah Thomson and Dr Grant Hewison on
behalf of the Waitemata Low Carbon Network.
-
The Network is a diverse community of residents, groups and businesses passionate about making low
carbon living, working and playing part of the distinct identity of central Auckland.
-
Ms Thomson and Dr Hewison noted that Watercare is often on the front line whenever extreme weather
events occur.  Events such as the Tasman Tempest will become more frequent with climate change and
will no longer be “one off events”. They were aware of the climate changes initiatives Watercare has
underway and expressed the view Watercare was in position to provide leadership to the Council family.
-
Ms Thomson and Dr Hewison had reviewed the first draft of the SOI and the comments of the shareholder.
They requested that the Board include climate change and other sustainability targets as performance
measures in Watercare’s SOI.  In particular, they requested the following performance measures:
a.
a clear pathway for the further reduction of greenhouse gas emissions;
b.
a timeframe for emissions from capital projects to be included into Watercare’s emissions reductions
targets; and
c.
more comprehensive measures relating to climate change resilience and water quality.
The Chair thanked Ms Thomson and Dr Hewison for their time, and advised that Watercare would review the
submission and respond.
Ms Thomson and Dr Hewison departed the meeting at 9.15am.
4.
For Discussion
4.1 Safety Moment
-
The CE provided the Board with an example taken from an incident with another entity that demonstrated
the importance of basic “housekeeping”. In times of emergency, key staff members must have up to date
names and contact details of their key customers and stakeholders.  These contact details should be pre-
dialled into phones and also easily available online and in hard-copy.  They should be regularly checked
and updated so people are not scrambling in times of crisis. The CE said Watercare was reviewing its
processes in light of the incident experienced by the other entity.
-
S Morgan, Chief Operations Officer, noted that the Strategic Transformation Programme (STP) will resolve
a number of these issues. The aim is to have an emergency contact system whereby staff will be able to
easily contact numerous people within a geographic ring-fence.
4.2
Health & Safety Report
The report was taken as read. The CE responded to questions from the Board.
-
In relation to point 3 (page 11), a contractor was lifting a heavy and awkwardly placed steel cover, which
slipped and damaged an alum dosing pipe. This resulted in a pressurised release, spraying the alum
mixture into the eye of the contractor.  S Morgan explained that while the contractor was wearing correct
Personal Protective Equipment (PPE), (namely, goggles and a face shield), the mixture sprayed up and then
drifted downwards into the workers eye through a gap. Watercare is now reviewing the design of the
steel covers to see if they can be re-engineered/re-designed.
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Board - Public Session - Minutes of Meeting - 29 May 2018
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In relation to point 6 and the Telarc Audit (page 12), the CE noted that the formal report has not yet been
received. However, Management expects the final report to be aligned with the positive feedback
received at the closing meeting of the audit.  At that meeting, the auditors noted that Watercare’s
openness had improved over the last three years.
-
In relation to point 4 (page 11), an articulated dump truck’s load was not balanced, causing the front of
the truck to lift and the cab to fall on its side. The investigation revealed that there was “inadequate hazard
identification”.  S Morgan confirmed to the Board that this particular contractor had subsequently been
issued with a “Stop Work” notice, as they have now had three trucks tip over. The contractor is now
working through its training processes. The Board requested an update on this issue by July 2018.
-
It was noted that “inadequate hazard identification” is often the cause of near-misses. S Morgan explained
that while there are always latent risks, staff is continually educated in safety and hazard identification
processes. In particular, all Watercare staff have been provided with a “Take 5” booklet and are
encouraged to “Take 5” each time they enter a worksite, or if they change tasks.
4.3
Chief Executive’s Report
The report was taken as read. The CE responded to questions from the Board.
Scorecard (page 17)
-
The CE noted he was concerned with the number of unplanned water shutdowns not restored within 5
hours (12 month rolling average). The score is 92%, against a target of 95% or higher. Management is
working with operational staff to determine how to reduce the time taken, and whether it is possible to
apply “band aids” to jobs that will take more than 5 hours.  As the score is a 12 month rolling average, it
may take some time for the performance score to rise again.
Cybersecurity (Point 3, page 19)
-
In response to questioning from the Board, R Chenery, Chief Digital Officer, explained that the Watercare
app, which is currently under development, will be designed and developed in accordance with standards
that will ensure that the personal details of customers are not at risk of exposure through security breaches
such as that recently experienced by Vector.
Value for Money review – Communications (Point 11, page 23)
-
In response to a question from the Board, D Hawkins, Chief Corporate Affairs Officer, confirmed that the
media monitoring contract with Isentia will be based on the Council Group-agreed charges, which will
provide Watercare with the same level of service, at a better rate.
Procurement (Point 12, page 23-24)
-
In response to questioning from the Board, S Bird, Procurement Manager, noted that the Council Group
source procurement in relation to PPE and uniforms, and the travel agreement with Air New Zealand, had
all resulted in price benefits flowing to Watercare.
Auckland’s Waters (Point 13, page 24)
-
The Chair reported that she attended the first meeting of the Auckland’s Waters Governance group and
the timelines for delivery are extremely tight.
-
Once available, Management will provide the Board with a copy of the Auckland’s Waters report, which
outlines the scope, budget and timeframes of the Auckland’s Waters Strategy, and seeks approval for the
strategy’s budget and forward plan.  This report is being tabled at the Environment and Community
Committee on 12 June.
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Southwest Sub-Regional Wastewater Servicing Project (Point 17, page 25)
-
The Company Secretary updated the Board by reporting that the mediation has reached a conclusion, and
all substantive appeal points have been addressed by updated consent conditions.  As a result, the appeal
has been withdrawn by The Manukau Harbour Restoration Society Incorporated and Mr Whyborn. This
means Watercare’s 35 year consent will proceed.
Huia Water Treatment Replacement Plant Designation (Point 18, page 25)
-
The Company Secretary reported that the High Court heard the appeal from the Titirangi Protection Group
and others in early May.  The Judge issued a decision three working days later, refusing the appeal.  The
Titirangi Protection Group has subsequently confirmed that they will not be lodging any further appeals
with the Court of Appeal. This means that Watercare’s designation will be confirmed.
Improved Weather Forecasting – Niwa’s super computer (page 26)
-
S Morgan noted that Niwa are working with Watercare on the Manukau Hydrodynamic Model. The Cray
supercomputer will be used on this project.
4.4
Board Committee Updates
STP Committee Update
Committee Chair, A King, provided an update on the Committee meeting held by teleconference on 28 May
2018.
-
The programme continues to progress as planned.  Release 1 is now complete and Release 2 has
commenced.  New software was introduced to a small group of users during Release 1 so that the users
can test and provide feedback on the solution which will then be refined through future releases.
-
The STP team continues to share learnings with other external organisations who are at various stages of
their own transformation journeys.
-
Frances Valintine, Chair of the Government’s Digital Advisory Panel, recently visited Watercare to meet
with the Executive Team and learn about Watercare’s transformation journey.  Ms Valintine complimented
Watercare on the commitment to transforming the business and the customer experience.
Audit and Risk Update
Committee Chair, J Hoare, updated the Board on the Committee meeting held on 17 May 2018.
-
The Committee received updates on the internal audit programme, the year end audit plan, Centralised
Treasury, and considered the Committee Charter and Delegations Policy.
AMP & Major Capex Committee Update
Committee Chair, N Crauford updated the Board on the Committee meeting held on 7 May 2018.
-
This year’s AMP is going to be more customer focussed.
-
The Committee has requested a list of all major capital expenditure projects, of $100m plus, including
those suitable to be funded via a Special Purpose Vehicle (SPV).
-
The Committee also received an update on the Central Interceptor (CI) project, which is in an interactive
phase with the four consortia.
-
An expert advisor is being approached to join the Committee.
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4.5
Low Emissions Economy Report
The report was taken as read.
-
The CE noted that Minister Shaw is planning to release Zero Carbon legislation in late 2018, which will
include targets for New Zealand. Watercare expects to be able to accommodate these targets. However,
before endorsing an emissions trading scheme, and the inclusion of wastewater treatment plants into the
scheme, Management needs to do further work in this area, including obtaining further information, as
well as feedback from other industry stakeholders, such as Water NZ and other wastewater utility
operators. Accordingly, whilst Management subscribe to the intent of the report, Watercare’s submission
will be that wastewater treatment plants should not be included within the scheme.
-
The Board received the report and supported Management’s position.
4.6
Major Storm Event – 10 April 2018
S Morgan spoke to the report and also provided the Board with a flyer illustrating the event (attached). In the
business, the event is being referred to as “The Big Wind”.
-
One of the issues that arose during the event concerned staff who had power outages at home, who could
not charge their phones. Management is now looking at solutions to this issue.
-
S Morgan noted there had been an attitudinal shift with staff from different parts of the business offering
to assist operations.
The Board requested that:
-
An update on The Big Wind event be included in the upcoming Board/Councillor workshop on 21 June;
-
That the flyer be uploaded to the corporate website; and
-
That Management speak with Fire and Emergency, who may be able to assist Watercare to utilise an
alternative communication network in emergency situations.
The Board also wished to thank M Bourne for his efforts over the last five months as Acting Chief Operations
Officer, including his good work during “The Big Wind”.
5.
Approvals
5.1
Statement of Intent
J Simperingham, Governance and Change Manager, spoke to the paper.
The paper was taken as read. The Board and Management then had a general discussion regarding the draft
SOI and the draft covering letter to the Mayor. The discussion covered the following points:
-
J Simperingham noted that while the draft SOI already included commitments around climate change
mitigation and adaptation, there were no specific performance measures.
-
The Board considered whether the draft SOI should include any further changes in light of the submission
received from Ms Thomson and Dr Hewison on behalf of the Waitemata Low Carbon Network.
-
Watercare is taking a leadership position in this area, and already has a number of actions, initiatives and
commitments underway, which should be reflected in the draft SOI.
-
It was noted that Auckland Council has not yet finalised its measures around climate change and the
Government will introduce Zero Carbon legislation in late 2018, which will include targets. Watercare will
want to ensure that any performance measures, at the very least align with, or else improve on, Auckland
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Council’s targets.  In the meantime, Watercare is to work towards determining what measures would be
meaningful and continue to demonstrate Watercare’s leadership capabilities in this area.
-
In relation to the NPS score, the draft SOI indicates that the target for this score will continue to rise year
on year (2018/19 target is 30, 2019/20 is 33, and 2020/21 is 36). C Harland noted that for many utilities,
the NPS score was negative.  The CE and A Singleton explained that with the adoption of STP, and other
initiatives underway at Watercare, the future targets should be achievable.
-
Page 89 of the draft SOI notes that “Watercare will require Veolia to ensure it is providing the necessary
water and wastewater infrastructure to meet growth”.  The Board requested that this be amended to read
“Watercare will require Veolia, within the terms of the contract, to ensure it is providing the necessary
water and wastewater infrastructure to meet growth”.
The Board resolved:
-
to approve the draft SOI, subject to it incorporating further amendments relating to climate change and
the amendments around the Veolia contract, as discussed at the Board meeting;
-
that the covering letter to the Mayor should be amended accordingly; and
-
that final sign off of the SOI and covering letter to the Mayor be delegated to the Chair of the Board.
5.2
Policy and Charter Approvals
5.2.1
Board Delegations to the Chief Executive Policy – Annual Review
The report was taken as read.
-
Two corrections were noted. First, the policy should next be reviewed in May 2019 (rather than 2018) and
the Authority to approve sale/lease of land and buildings should be amended to add in the word “not” as
follows “up to $3m not within budget or approved under the Asset Management Plan”.
The Board resolved to approve the Board Delegations to the Chief Executive Policy, as appended as Appendix
B, as recommended by the Audit and Risk Committee, subject to the discussed corrections being made.
5.2.2
Audit and Risk Committee Charter
The report was taken as read.
The Board resolved to approve the Audit and Risk Committee Charter, as appended as Appendix B.
5.2.3
Good Employer Policy
The report was taken as read.
The Board resolved to approve the Good Employer Policy, as appended as Appendix A.
5.2.4 Sensitive Expenditure Policy
The report was taken as read.
-
C Harland, Committee Chair of the PRAC Committee, noted that the policy required two changes, one
minor, and the second that pre-approvals for business travel expenditure outside of New Zealand and
Australia shall be pre-approved by the Chair for the Chief Executive, rather than the full Board.
The Board resolved to approve the Sensitive Expenditure Policy, as appended as Appendix A, subject to the
discussed amendments being made.
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6.
For Information
6.1
Compliance
6.1.1
RMA Compliance
The Board noted the report.
Watercare has been issued with a “Letter of Direction” from the Waikato Regional Council pertaining to its
partial compliance with existing resource consents for the Waikato WTP.  The Company Secretary explained
that a “Letter of Direction” is the lowest level of enforcement action available to Councils under the RMA.
6.2
Capital Programme
6.2.1
Infrastructure Dashboard
The Board noted the report.
7.
Presentations
7.1
Watercare Harbour Clean-Up Trust
P Drummond, Chair of the Trust, presented to the Board.
P Drummond presented a video detailing the charitable Trust’s clean-up activities in the Manukau and
Waitemata Harbours.  He then spoke to a PowerPoint presentation (copy attached), further explaining the
Trust’s activities.
Following the video and presentations, P Drummond took questions from the Board. He explained:
-
The Trust does not have any difficulty attracting volunteers; many come from large corporates, who spend
a day cleaning an area of the coastline.
-
The Trust is not requesting any additional funding from Watercare. However, it does wish to encourage
Watercare and the Mayor/Council to promote the Trust’s activities more.
-
D Hawkins noted that any promotion needs to be carefully done to ensure customers understand that
Watercare is helping to clean up litter found in the harbour and on the shorelines, although Watercare is
not responsible for it.
8.
Directors’ Corporate Governance Items
8.1
Board Planner
The Board noted the planner.
8.2
Review Executive Management Disclosure of Interests
The Board noted the report.
8.3
Director Appointment Terms and Committee Memberships
The Board noted the report.
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9.
General Business
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E McBride, Governance Manager, noted that the Chair and C Harland will be attending the Mayor’s official
opening of the Mangere Biological Nutrient Removal (BNR) facility on 1 June 2018.
-
E McBride noted that at 10.45am, experts from Simpson Grierson would provide the Board and Senior
Management with a detailed update on their obligations as Officers under health and safety laws, as well
as a review of recent developments and trends in the application of health and safety laws.
-
The Board also congratulated the STP and Procurement team, who won the “Successful Procurement
Change of the Year” award at the New Zealand Procurement Excellence Awards last week.
The meeting closed at 10.45am.
CERTIFIED AS A TRUE AND CORRECT RECORD
Margaret Devlin
Chair
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