FISC Meeting Minutes 3 October 2013

Financial Issues Steering Committee (FISC)

Thursday 3 October 201311.00am – 1.30pm

Venue: VicWater, Level 6, 2 Collins St. Melbourne 3000

Present

Mark Burke (Chair) (MB)Melbourne Water

Shauna McDonald (SM)VicWater

Tony O’Driscoll (TO’D)Goulburn-Murray Water

Jeff WaltonSouth East Water

David ThomasWestern Water

Tony Wright(TW)VicWater

Michael Watson (MW)Barwon Water

Steven WaterhouseWannon Water

Stuart Wrigglesworth (SWr)Southern Rural Water

Allan Cole (AC)(for Lisa Anelli)Yarra Valley Water

Binhur Sappideen (BS)DEPI (joined for Item 4 only)

Apologies

John BerginLower Murray Water

Lisa AnelliYarra Valley Water

  1. Welcome and Introductions

MB welcomed everyone to the meeting and notedapologies.

MB noted that at the last meeting the FISC, members agreed that the group needed reinvigorating and expansion. The TOR was reviewed to allow for these changes and an increase to the membership was subsequently approved.

MB welcomed items for general business -no items were added at this stage.

  1. Minutes from the last meeting

MB asked if the minutes of the meeting held on 15 November 2012 were a true and accurate record of the meeting. All sections were accepted.

  1. FISC operation

MB noted opportunity for FISC to reinvigorate actions of the group and collectively deal with issues as an industry.

The group then discussed operation of the group. Key points of the discussion included:

  • TW noted that VicWater’s expectation of the groups is that:
  • the Group facilitate Industry information sharing,including relationship with IWA Finance SIG
  • the focus of the group be on critical policy and strategy type issues, and not operational
  • TW also noted the various VicWater forums (i.e. MDs Forum; Chairs; etc.) and that Task Groups can utilise these forums to push messages shared by Industry.
  • MW noted that the finance group in the past has been bogged down on Asset Revaluation issues- keen to see the group to pick up these kind of issues but also pick up additional issues when required (when a response from Industry is required)
  • It was noted that the group has the opportunity to review current work of the Industry and to streamline working groups and actions

The Group then discussed whether Industry issues associated with pricing and regulation would be picked up:

  • Financial and commercial trade off with regulation – commercial thinking appears to be losing ground to regulation, The Committee considered whether there is an opportunity to circumvent the perceived growing disconnect between the regulator and the shareholder.
  • MB noted that there are opportunities to talk to DTF about shareholder expectations, credit ratings etc.
  • Opportunity for group to pick this up within future work program to start influencing discussions in this space
  • AC noted that they had undertaken a credit rating assessment and it was subsequently increased two levels to BBB+ leading to savings for YVW.
  • MW noted that there was a need for Industry to understand the background to credit ratings
  • MB asked if businesses were going out to assess current credit ratings
  • Mixed positions across industry
  • Need to get a clear position from Government about what they want from Industry
  1. DEPI Update

BS joined the group and provided an update on government work programs in the finance space. Questions arising from the update are as follows (specific detail is provided in Attachment A):

Questions and comments arising from the update:

  • 2013-14 Performance Monitoring and Reporting (Corporate Plan Guidelines 2013-14 – Section 6)

BS will follow up with DTF about whether supplementary information (point D on sheet) could be provided through SRIMS

  • Performance Reporting Framework for 2013-14

MB requested continued consultation from DEPI/DTF on the matter.

  • BS confirmed that they will try to ensure that consultation is undertaken with Industry before decisions are finalised.
  • MB emphasised the need for DEPI to keep the Committee informed of changes to compliance reporting requirements as increases to workloads are a challenge foror businesses under current resource and budgetary constraints, particularly as further compliance reporting seems counter productive to our quest to find efficiencies.
  • Financial Sustainability Issues Paper – Industry Response

It was noted that steps are being taken to amend the WIRO and that it is hoped that outcomes from this piece of work can be incorporated through this process.

BS asked what level communication should be directed to - it was agreed that CFOs would be sufficient.

BS noted that correspondence would be circulated next week.

Following the update MB advised BS of the discussion the group had earlier in the meeting relating to future operation of FISC and that the group will be the key point of contact into the future.

  • BS requested a regular item on future agendas of the group

BS noted that DEPI is currently managing transition of function from DEPI to OLV and impacts. For example how will FISC function with OLV into the future?

  • This is being discussed internally at DEPI with the hope of being able to update Industry in near future

MW asked Tony who FISC should be dealing with at DTF

  • Tony advised that he would get an understanding of current structure at DTF for the FISC
  • It was also agreed that group would invite Geoff Tabe to next FISC meeting

ACTION:

Add DEPI Update as agenda item to next and future agendas of the group

Tony to get an understanding of current structure at DTF and share this with the FISC

Invite Geoff Tabe to next FISC meeting

  1. Fire Services Levy

TW discussed current status of levy with the group including providing the considered impact of the levy on businesses which differs across Industry.TW advised that he would be sending correspondence to Governmentoutlining key issuesfor Industry with the levy.

The Group then discussed the levy and its impacts. Key points of the discussion included:

  • SW noted that the impact is large on their business but still waiting for final confirmation from assessments
  • Issues with lack of data across councils – information associated with rated/unrated properties
  • There shouldn’t be a difference between regional urban and rural businesses – Councils may just be dealing with the matter differently
  • It was noted that G-MW had undertaken an assessment of impact
  • It was agreed that this would be shared with the FISC
  • It was also agreed that the group would seek internal information on matter and feedback to VicWater by COB tomorrow to feed into letter to DTF

ACTION:

TO’D to share Fire Levy Assessment undertaken by G-MW with the Group

FISC members to seek internal information and provide to TW by COB Friday 4 October

  1. Compliance Reporting Red Tape

TW raised the review of performance reporting being undertaken by VicWater’s Red Tape WG. It was agreed that the outputs would be shared with the FISC.

The Group agreed that this may be a piece of work that they can progress

ACTION:

FISC (MB to lead) to prepare a project brief to present at the next MD Forum to get an understanding of interest and then if interest is there take it to Board and Council

  1. 2014 meeting dates

It was agreed that the group would meet quarterly, preferably on Thursdays.

It was agreed that the next meeting would be the end of January – after Australia Day.

  1. General Business
  2. Finance Conference

The Group discussed possible venue locations for the Finance Conference in 2014. It was agreed that first preference is for it to be held at a Melbourne venue. Also an opportunity for the Committee to meet prior to the conference should be considered as an option.

  1. Close

The Chair closed the meeting at 1.10pm

Action List

Item / Task / Follow up
4 / Add DEPI Update as agenda item to next and future agendas of the group / SM
Tony to get an understanding of current structure at DTF and share this with the FISC / TW
Invite Geoff Tabe to next FISC meeting / SM
5 / TO’D to share Fire Levy Assessment undertaken by G-MW with the Group / TO’D
FISC members to seek internal information and provide to TW by COB Friday 4 October / All
6 / FISC to prepare a project brief to present at the next MD Forum to get an understanding of interest and then if interest is there take it to Board and Council / MB to lead

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