An update on the

Central Coast Water Corporation

Context to Reform on the Central Coast

1977 Agreement to share bulk water supply

Joint Council & State Government committee

State Government reviews

1993 Gosford-Wyong Councils’ Water Authority

2004 Government requests review of institutional arrangement

Review of Institutional Arrangements

• Models for emerging commercial & regulatory expectations

• Councils engaged PwC

• “What was best for community”

• Legally separate corporation– Improve the delivery of water & wastewater services to the community– Enhance the sustainability of the Councils – Create an organisation with focus on commercial & regulatory requirements– Council/community ownership of assets, employment & strategic direction

Corporate Models

• Corporations under Local Government Act– Subject to Commonwealth Corporations Act– Taxation– Industrial relations

• Statutory corporation– State owned corporation model – Exempt from certain Commonwealth Corporations Act

Central Coast Water Corporation Act 2006

• Statutory corporation

• Equal social, environmental & commercial objectives

• Owned in equal shares by Councils

• Governed by a majority independent board

• Any profits returned to community through Councils

• Independent price & service level regulation

Concerns with CCWC Act

• Control over timing of staff & asset transfers

• Scope of asset transfers

• Memorandum of Understanding– Amendments to Act

– Est within 90 days of amendments

– 5 stage approach subject to CBA

Implementation - Project Dimensions InstitutionalDeveloping legal instruments & a business framework to create a resilient & successful organisation for the community & shareholders

Change Management Winning the hearts & minds of the people, our most valuable assets

Implementation – Institutional

• Key Instruments– Constitution– Voting Shareholders Agreement– Service Level & Funding Agreement– Joint Works Agreement

• Appointment of Board

• Dissolution of Gosford-Wyong Councils’ Water Authority

Implementation – Institutional

Cost Benefit Analysis

• Financial implications of Staged vs Full transfer

• Alternative arrangements

• OptionsIntegrated CCWC + Joint Services Business (JSB)

All water & wastewater functions, assets & resources transferred

JSB provides all corporate services to CCWC & Councils

Integrated CCWC (Long term lease) + JSB

Plus Councils lease the assets to the CCWC under a commercial agreement

Implementation- Change Management

• The Councils’ overall program objectives are:– Maximise benefits for staff, residents & businesses

– Maintain job security & continuity for all permanent Award Staff

– Long term service improvements by changing the way we do business

– To protect & ensure the safety of staff & the community at all times

Implementation - Change Management

• Cross Council Reference Group

• Staff & union representation

• Communication Strategy

• Road shows

• Intranet

• Transparent & open

Implementation - Project Governance

• Project Steering Group

• Project Management Office

• Cross Council Working Groups– Water & Sewer– Financial– Information Technology– Human Resources– Fleet

Current Situation

• IPART Determination

• Independent Local Government Review Panel

• Change of Councils & management

Observations

• It is HARD!

• Lessons – Agree & understand the intent, purpose & vision

– Agree & commit the resourcing requirements

– Agree the risk appetite & develop a robust business plan for the establishment & delivery of the service

– Agree the most appropriate service delivery model, governance & management structure