Best practice management
Best-practice management is essential for efficient and sustainable management of water resources and the environment. It enables local water utilities to achieve sustainable water supply and sewage businesses and comply with the Australian Government’s National Competition Policy and National Water Initiative.
Best-practice management involves a triple bottom line focus that provides a balanced view of the long-term sustainability of NSW water utilities. Triple bottom line accounting assesses the social, environmental and economic effects of a business.
The State Government’s Guidelines for Best-Practice Management of Water Supply and Sewage 2007 encourages continuing improvement in provision of water supply and sewage services, and identifies six focus areas where councils need to develop and implement strategies in order to achieve the goals of best-practice management of these services.
These areas are:
- Strategic business planning
- Pricing
- Demand management (or water conservation)
- Drought management
- Performance reporting
- Integrated water cycle management
- Department of Water and Energy: Guidelines for Best-Practice Management of Water Supply and Sewage 2007 (1.72mb).
Strategic business plans
Council has developed strategic business plans for its Water and Sewer businesses that set out the vision, mission and goals of the businesses, and strategies to achieve these.
View Muswellbrook Shire Council Strategic Business Plans.
Best practice pricing
Water supply pricing
Best practice water supply pricing requires that the usage charge recover those costs that vary with demand in the long-term (i.e. long-run marginal cost), through a usage charge. Council has adopted, in accordance with best practice pricing, the following pricing principles when setting water supply tariffs:
- Appropriate water usage charge/kL based on the long-run marginal cost of water supply.
- Residential water usage charges must be set to recover at least 75% of residential revenue
- To encourage water conservation, high water consuming residential customers should be subjected to a step price increase of at least 50% for incremental usage above a specified threshold.
- Billing at least three times each year to improve the effectiveness of pricing signals.
- Including both water access charges and water usage charges in each bill to customers.
Sewage pricing
Best-practice sewage pricing involves a uniform annual sewage bill for residential customers. For non-residential customers an appropriate sewer usage charge is required for the estimated volume discharged to the sewage system, together with an access charge based on the capacity requirements.
Developer charges
Developer charges are up-front charges levied to recover part of the infrastructure costs incurred in servicing new development or changes to existing development. Developer charges provide a source of funding for infrastructure and provide signals to the community regarding the cost of urban development. In essence, where the costs of serving new urban development are in excess of the current and expected costs of servicing existing customers, then the additional costs should be recovered from new entrants in the form of an up-front contribution.
Development servicing plan
Council is currently preparing a Development Servicing Plan (DSP) with commercial water supply or sewage developer charges in accordance with Developer Charges Guidelines for Water Supply, Sewage and Stormwater, December 2002.
Muswellbrook Shire Council best practice pricing can be viewed here.
Development servicing plan
Section 64 of the Local Government Act 1993 enables a local government council to levy developer charges for water supply, sewage and stormwater. This derives from a cross reference in that Act to section 306 of the Water Management Act 2000.
A Development Servicing Plan (DSP) details the water supply and sewage developer charges to be levied on a development area utilising a utility's water supply and/or sewage infrastructure. Council’s proposed DSP covers water supply and sewage developer charges for the following areas within Muswellbrook Shire:
Water Supply Serviced Development Areas
- Muswellbrook Low Level Zone
- Muswellbrook High Level Zone
- Denman
- Sandy Hollow
Sewage Serviced Development Areas
- Muswellbrook
- Denman
Demand management plan
Demand management is aimed at reducing potable water consumption by eliminating waste and improving efficiency. Integral to achieving this are customers recognising that water is a scarce resource, is costly to provide, and that inefficient and wasteful practices need to be eliminated. Demand management measures can include user-pays water pricing, community education, encouraging the use of water efficient appliances and practices, and operational steps such as pressure reduction, leakage detection and pipe renewal.
Council’s policy is to supplement its existing demand management practices with measures that increase benefits to the community. Council’s intention is not to ration water use, but to recognise that potable water is a scarce resource, to educate all its customers to use water wisely, and encourage them to take the necessary steps to reduce wasteful practices. In this way Council can provide better value for money to its customers and improve its environmental performance.
RECOMMENDATIONS from Council’s Demand Management Strategy 2003 include:
- Community Education and Support
- Encourage Technological Improvements
- Implement best practice Water Pricing
- Improve Council’s Water Operations
- Improve Reuse Options
Drought management plan
A fundamental responsibility of the manager of a water supply system is to soundly manage water use during droughts. Adoption of a schedule of trigger points for the timely implementation of appropriate water restrictions is a key element of a drought management plan. Council’s General Manager is responsible for ensuring that timely water restrictions are implemented in accordance with the schedule adopted in the Plan.
Integrated water cycle management
Integrated Water Cycle Management (IWCM) is the integrated management of the water supply, sewage and stormwater services in a local government area, in a way that supports the overall management strategies of the greater catchment in which the area is located. IWCM is a framework used to help to;
- identify water management problems;
- identify possible solutions to these problems;
- determine the appropriate management responses and;
- manage the impacts of the problems so that social, environmental and economic objectives are met.
An IWCM Strategy has a long-term planning horizon. The first phase of the strategy (the IWCM Evaluation) defines the catchment, water resource and urban water issues. Catchment issues such as floodplain management and acid sulphate soils may impact on the location of sewage treatment works, whilst water resource issues would include the changes to water access faced by water utilities under the Water Management Act 2000, and urban water issues might include existing system deficiencies.
Once the issues are broadly defined, studies are undertaken for the second phase (the IWCM strategy) to better define issues and look at ways of managing them. Studies involve population and water demand projections, bulk supply and distribution analysis and management option development. This process has resulted in Council adopting a long-term strategy for the integrated delivery of water supply, sewage and stormwater services to customers. Council’s strategy involves integrating planning and management of all areas in which it has an impact on the water cycle so that water is used optimally and in a sustainable manner.
The context of Council’s IWCM strategy is that Council is part of a very large water using community in the Hunter Valley, is an active participant in the Water Sharing Plan as and when it is effective, and consumes approximately 1.8% of the total water used in the valley.
Muswellbrook Shire Council Integrated Water Cycle Management can be viewed here.
Capital works programme
Replacement and upgrading of components of the water and sewer networks is scheduled in the Water and Sewer Capital Works Programme. This programme facilitates the renewal and upgrade as required of treatment plants, pumps, pipework and fittings, fixtures and other items of plant in a progressive manner. As an asset is replaced, it is entered into the database with a projected working life, e.g. 50 years. As assets come to the end of their working life, they are programmed for replacement. Naturally if there is still usable life in the asset, the replacement is postponed until the condition of the asset determines it should be replaced. The cost of this programme is factored into Council’s long term financial plan and in this way, Council is able to ensure adequate funding and resources are made available for ongoing maintenance of the water and sewer networks.
Council’s Water and Sewer Capital Works Programme can be viewed here.
All plans associated with best practice Management are normally reviewed every 6 years.
This page last updated 16 February, 2012 12:10 PM
