Strata Communities Australia Mike Paine 9/8/13 TasWater Strata Communities Australia Mike Paine 9/8/13

Reform Journey – Part 1 Tasmanian Government – industry review in 2006 Discussion Paper – released for comment The Government and Owners disagree on structure Government released compromise model in 2008 Corporations created - November 2008 Interim Operating Licence Issued 15 April 2009 Commenced operations – 1 July 2009 Operating Licence Issued – June 2010

Brief History Prior to 1 July 2009 water and sewerage services were provided by 29 Councils and 3 bulk water authorities. Councils have boundaries. Bulk Water – a not universal coverage 23 towns on permanent boil water notices The 2007/08 “State of the Industry” report stated:- That not one of the 78 Level 2 (EPA regulated) wastewater treatment plants fully complied with its licence – 31 in Southern Water’s region There are many water and sewerage tariff structures. Difficult to assess the level of customer service due to a lack of measurement and reporting practices 32 utilities serving 500 000 people, ie one for every 15 625 people Large utilities eg LCC and Hobart Water Small utilities eg Flinders & Tasman Councils In 2006 the state government commissioned a report that concluded that not all Councils were unable to access expertise or provide affordable and sustainable services. Update is now 6

Reform Journey Part 2 - TasWater Opened our doors 1 July 2013 Merger: Southern Water, Ben Lomond Water, Cradle Mountain Water & service firm, Onstream – four years after they opened their doors Statewide corporation owned by 29 local councils Dividends paid each year to local government

TasWater’s responsibilities Water & sewerage services for 200,000 customer connections Trade waste services for business & industry Irrigation / re-use water supplies

About TasWater Owner Representatives Group gives owner input Board of Management New CEO & Executive Team Approximately 760 employees statewide (no headquarters) Cost savings of $5M/a

Vital statistics Service area – 68,000 sq km Population serviced – 470,000 Water connections – 201,800 Sewer connections – 179,100 Water supplied – 77,400 million litres pa Sewage volume – 50,000 million litres pa Total asset value - $1.7B

More vital statistics Length of water mains – 6,380km Drinking water treatment plants / dosing stations – 60 Pump stations – 716 Water supply dams – 121 Water catchments – 75 Length of sewer mains – 4,774kms Level 1 sewage treatment Plants – 31 Level 2 sewage treatment plants – 79

Two-Part Pricing From 1 July 2012, every Water customer with a water connection will have their water charges divided into two parts: a fixed Water Service Charge and a variable Water Usage Charge. These will replace your existing Water Service Charge. A fixed Sewerage Service Charge continues to apply for customers with a sewerage connection. Total $297.26 compared to $470 if single or sub metered. In this case each unit would have to consume an extra 200kl to get to break even

Two-Part Pricing Over time, every customer in Tasmania will be paying the same price for the same service. Between FY12 and FY15 the Water and Sewerage Service target prices will increase by 6% each year. Water Usage Charge target price will increase in line with CPI for each of the next three years. If you have been paying water and sewerage charges much higher or lower than these target prices, you will move to the target prices over a number of years. Charges are not on top of existing charges

Two-Part Pricing 2012 to 2013 Target Pricing

Two-Part Pricing What is different for strata title properties:- The size of the water connection required to service a strata title property is generally larger than a single dwelling. This means that the connection attracts a higher fixed Water Service Charge. The target prices for each connection size are listed in the table below.

Metering TasWater’s policy is to install one boundary meter on the connection entering the property. The Water Service Charge and the Water Usage Charge will be divided between the owners according to the strata’s unit entitlements.

Sub-meters Strata title property owners do have the option of sub-metering each strata title. One in all in. Sub-meters supplied by TasWater Owners cover the cost of installation Southern Water will read and maintain the meters In most cases, sharing a single boundary meter costs less per strata unit than having a separate sub-meter. Total $297.26 compared to $470 if single or sub metered. In this case each unit would have to consume an extra 200kl to get to break even

Sub-meters – example? Up to 4 units – 25mm connection, one 25mm shared meter Fixed tariff $450.30/4= $112.58 each Variable tariff 92.34c/KL @ 800KL = $738.82 /4 = $184.68 each Total charges/a/unit = $297.26 Sub Metered units – separate 20mm meters $288.65 each 92.34c/KL @ 200KL $184.68 each Total charges/a/unit = $473.33 Total $297.26 compared to $470 if single or sub metered. In this case each unit would have to consume an extra 200kl to get to break even A saving of $176.07.

Electing to sub-meter TasWater requires a one in, all in approach from strata owners in order to sub-meter a strata property. Check the Tasmanian Government’s publication ‘Strata living in Tasmania’ for information and legislation on how the body corporate can make this decision. http://www.dpiw.tas.gov.au/inter.nsf/Attachments/JGAY-53L72E?open

Fire Services Strata title properties may have a water service provided to support a fire sprinkler system or hose reels. Southern Water’s target price for fire service connections is 25% of the Water Service Charge for the fire service pipe size. Eg. A 50mm fire service charge is $451.02, rather than the full charge of $1,804.09. These charges are also divided among the strata title owners, in proportion to the unit entitlements. Total $297.26 compared to $470 if single or sub metered. In this case each unit would have to consume an extra 200kl to get to break even

Tenant billing Tenant Billing Arrangements TasWater’s legislated relationship for billing purposes is with the owner of the property, not with the tenant. Residential tenancy billing In accordance with the Residential Tenancy Act (1997) Tasmania, landlords may only seek water usage charges from tenants as long as there is an individual meter installed on the rental property. Where there is only one boundary meter serving a number of units that are tenanted, a landlord cannot fairly apportion water usage charges to the tenant of each property. Fixed water and sewerage charges are the responsibility of the property owner.

How sub-metering works

Sub-meter enquiries Southern Region – Daniel Duharte: daniel.duharte@taswater.com.au Northern Region – Jodie Terrington: jodie.terrington@taswater.com.au North West Region – Trudy French: trudy.french@taswater.com.au