The NSW Government's Best-Practice Management of Water Supply and Sewerage Framework (PDF 160 KB) requires local water utilities to prepare and implement a sound 30-year Integrated Water Cycle Management (IWCM) Strategy, which includes a Financial Plan (FP).
A 30-year IWCM Strategy addresses the complex linkages between elements of the urban water cycle (water supply, sewage and stormwater) and community expectations. This is done within the urban area and between the urban area and its water related physical and legislative operating environment. This multi-level transparent and systematic approach encourages cost-effective integration of these urban water systems in consultation with the local community.
Integrated systems often rely less on limited natural water sources, produce less pollutant loads to the environment and have strong pricing signals and demand management measures. They thus encourage water conservation and efficient water use and enable the implementation of cost-effective recycling of treated effluent and urban stormwater use options and the 'broader solutions' that satisfy the water-sensitive urban design and 'liveable cities and towns' objectives.
A sound 30-year IWCM Strategy 'right sizes' any necessary capital works projects and is essential for the provision of appropriate, affordable, cost-effective urban water services that meet community needs and protect public health and the environment.
A water utility's sound 30-year IWCM Strategy developed using a transparent evidence based analysis in accordance with the IWCM Check List identifies the integrated water supply, sewerage and stormwater scenario that provides the best value for money on the triple bottom line (TBL) basis of social, environmental and economic considerations.
The adopted scenario from the final IWCM Strategy defines the local water utility's (LWU) Total Asset Management Plan (TAMP) and includes a 30-year Financial Plan (FP).
A LWU's peak planning documents for its water supply and sewerage businesses are its current IWCM Strategy and Strategic Business Plan (SBP). The boxes below summarise the key outcomes of the IWCM Strategy and SBP.
Integrated Water Cycle Management (IWCM) Strategy
- 'Right sizes' any projects and identifies the best-value 30-year IWCM scenario and Strategy on a TBL basis. It includes a 30-year TAMP and FP.
- Identifies the lowest uniform level of stable typical residential bills (TRBs) to meet the levels of service negotiated with the community and the price path for the next 4 years in current dollars.
- The adopted IWCM scenario includes an update of the existing 30-year renewals plan, with only proven evidence based renewals included for the first 5 years. The renewals plan takes account of any avoided, re-sized, abandoned or re-prioritised works.
- An IWCM Strategy is prepared every 8 years.
- NSW Office of Water concurrence is needed to the IWCM Issues Paper, final IWCM Strategy and scenario and the Financial Plan prior to LWU implementation of the scenario.
Strategic Business Plan (SBP)
- Reviews and updates the LWU's existing 30-year TAMP, identifies any opportunities to downsize or defer significant projects and includes a FP.
- Analyses the renewals component of the TAMP to develop a sound 30-year renewals plan, the first 5 years of which include only proven evidence based renewals that provide value for money.
- Identifies the lowest uniform level of stable TRBs to meet the levels of service negotiated with the community and the price path for the next 4 years in current dollars.
- A SBP is prepared every 8 years, ie. 4 years after preparing the IWCM Strategy.
- Provide to NSW Office of Water for registration, your final SBP and FP.
The IWCM Strategy and SBP need to be prepared every 8 years on a rotation of every 4 years, as shown below. This involves preparing a TAMP and FP every 4 years, updating these plans annually, and including any necessary corrective action in your annual Action Plan to Council.
Note: All the key requirements of a SBP are addressed by an IWCM Strategy in accordance with the IWCM Check List.
The 2008 IWCM Scope of Work and the generic consultant engagement brief, IWCM Information Sheets 2 and 5 and any earlier Check Lists must no longer be used as they have now been superseded by the IWCM Check List (PDF 224 KB).
A LWU which is currently preparing an IWCM Evaluation or an IWCM Strategy can continue with the preparation of its plans.
IWCM Information Sheets
LWUs and their consultants should continue to use the remaining five IWCM Information Sheets listed below, until they are updated in 2014 to better align with the IWCM Check List (PDF 224 KB).
Inputs to Integrated Planning and Reporting (IPR)
The IWCM Check List identifies the following key water supply and sewerage inputs from your IWCM Strategy to Council's Integrated Planning and Reporting (IPR) system:
- Community Strategic Plan
- 4-year Delivery Plan
- Annual Operating Plan
- Annual Report.
Water Cycle Forecasting Model
The NSW Office of Water has developed a Water Cycle Forecasting Model which provides guidance on how to improve the accuracy of water cycle forecasts and obtain a better understanding of how investment in water conservation can bring about significant net savings in capital and operating costs. The model is only available to local water utilities in NSW undertaking IWCM studies. The manual that describes the water cycle forecasting model can be downloaded below:
FINMOD – NSW Financial Planning Model
The NSW Office of Water has developed the powerful NSW Financial Planning Model for Water Supply and Sewerage (FINMOD) to enable LWUs to carry out 30-year projections of their income, balance sheet and cashflow statements and prepare a robust 30-year Financial Plan. Use of FINMOD or similar software is recommended for identifying the required lowest uniform level of stable TRBs for the adopted 30-year TAMP and a price path for the next 4 years in current dollars. The FINMOD software and a user manual and financial planning guidelines are available to NSW local water utilities.
Two previously available models are no longer required and have been withdrawn:
- IWCM Water Demand Trend Tracking and Climate Correction Model
- IWCM Rainwater Tank Model
Working with the NSW Office of Water
Local water utilities should contact a NSW Office of Water urban water officer, prior to commencing work on IWCM studies to review the applicability of each item in the IWCM Check List (PDF 224) to their LWU's context. This Check List is suitable for defining the scope of work for engaging a consultant to undertake preparation of a LWU's IWCM Strategy. In addition, the LWU may elect to undertake specific items of the Check List in-house.
The urban water officer can provide LWUs with a copy of the water cycle forecasting model and the FINMOD software and user manual and guidelines on request.
Funding support is available to local water utilities undertaking their first IWCM Strategy under the NSW Government's Country Towns Water Supply and Sewerage Program. Financial support is available for:
- evaluation study (only if contract already awarded for its preparation)
- demand analysis and water use forecasts
- supply analysis of options (including secure yield)
- distribution analysis of new options
- scenario development and comparison on a triple bottom line basis
- economic assessment, impact on the Typical Residential Bill (TRB) and preparation of a Financial Plan for the adopted IWCM Scenario.
- community involvement
- IWCM report preparation.
Local water utilities are required to seek funding approval prior to engaging a consultant. Funds will be paid at the completion of the first satisfactory 30-year IWCM Strategy.
One of the major obstacles most utilities encounter when undertaking an IWCM Strategy has been the lack of suitable data. Utilities should advise the consultant and/or the IWCM project team on the availability of all performance monitoring, population, operational, service level, strategic business planning and related regional information/reports which may assist in preparing an IWCM Strategy when calling tenders for the preparation of an IWCM Strategy.
It is expected that local water utilities would implement appropriate data capture and management systems for each water supply and sewerage scheme such that subsequent IWCM Strategy studies would have minimal data, information and knowledge gaps.
A water supply and sewerage planning data set has been compiled by the NSW Office of Water to assist LWUs, based on the data reported by each LWU in the NSW Performance Monitoring System since and including 2002/03. An example data set based on the data reported by Coffs Harbour City Council (PDF 784 KB) can be downloaded. Such data sets will be provided to each LWU in August 2014.