Transcript Water and Wastewater System Planning

Water and Wastewater
System Planning
for Small and Medium Utilities
Using Prudent Utility Management
Practices
Florida Rural Water Association
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Planning Covers a very wide
range of Utility Functions

Identification of Utility Management Functions
 Identify the special problems faced by Small and Medium
Utilities
 Describe the Planning Function
 Identify the Critical Plans for Effective Utility
Management
 Review the Components of Cost of Service Ratemaking
 Identify Special Florida Planning Issues
 Identify Specific Utility Plans that Minimize Costs, Protect
Revenue, and Ensure Maximum Facility Life
Florida Rural Water Association
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Basic Utility Management
Responsibilities

Planning
 Organizing
 Staffing
 Directing
 Monitoring and Controlling
Florida Rural Water Association
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Planning is the Most Critical
of the
Utility Management Tasks
Florida Rural Water Association
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Planning addresses the Serious
Issues faced by Small and Medium
Utility Systems
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Insufficient Revenues
Aging Infrastructure
Difficulties in Obtaining Financial Assistance
Lack of Economy of Scale
Limited In-house Management Capabilities
New Regulatory Requirements
Uncertain Financial Stability because of the lack
of Long-Term Utility Planning
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Some Reasons for Insufficient
Utility Revenues

Increases in Chemical and Energy costs
 Increases in Equipment Maintenance costs
 Politics and difficulties in Raising Rates
 Conflicting Priorities for use of Utility
Funds
 No Reserve Funds for needed W/WW
improvements
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Problems with Aging
Infrastructure

Antiquated Infrastructure and Facilities
 Facilities are inadequate to meet current or
pending Regulations
 Useful age of facilities is exceeded
 Environmental Pressures, i.e. contamination
from septic tanks, water quality degradation
due to droughts and increasing populations
densities, water access restrictions, etc.
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Difficulties in Obtaining Financial
Assistance for Utility Projects

Treatment optimization is not a fundable component in
any loan or grant program.
 Demands for CIPs exceed SRF availability
 RD grants cover only poverty income designations
 Loans Applications are often Intimidating, confusing
and include cumbersome Paperwork requirements
 Loan payments often mean significant rate increases
for distressed customer base
 $100,000 is commonly the Threshold for Cost
Effectiveness removing critical improvements from
consideration
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Economies of Scale are Lacking
for Small W/WW Systems
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Smaller Customer Base to spread costs
 Cost per household are typically already
higher than larger systems
 Smaller Systems are more likely to be
under-funded
 Small systems lack financial, managerial
and technical capabilities as compared to
the capabilities of larger utility systems
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Limitations in Management
Capabilities for Small and Medium
Sized Utility Systems
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Management of Small Systems is performed by a
few individuals with limited OJT experience
Systems are have difficulty documenting and
evaluating the needs for improvements
Small systems have difficultly operating or
maintaining sophisticated equipment or systems
Management of infrastructure improvements is
either ad hoc or “part-time”
Understanding of System Requirements and
Regulatory Compliance is generally inadequate
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Difficulty with Regulatory
Compliance Issues

Regulations are Burdensome
 Regulations are Difficult to Understand
 Regulations are increasingly stringent and
complicated
 System Facilities often are not Adequate to
meet Regulations
 Uncertain Future Regulations Exacerbate
Problems
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Lack of Long-Term Planning
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Typically Long-Term Planning is neglected
Future impacts of demographic changes are
not known or their affects are not identified
Lack of Long-Term Planning often is the
cause of regulatory non-compliance
Most systems bogged down coping with
current issues (putting out fires)
Pending Regulations are often not known
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Capabilities of System
Operators
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Regulations are often Confusing
How Regulations apply to operated Facilities are not
Clear
Operator training did not include newer technologies
Succession Planning for current system operation does
not exist and often there is no backup
Often there are changes in operating services or
personnel based on unforeseen conditions
There are few opportunities to upgrade operator training
Labor shortages in coverage and in backup exist
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Some Very Recent Examples
of Regulatory Changes

Disinfection By-Products Rule (TTHM and
HAA5 compliance)
 New IDSE Requirements
 Biological Compliance Testing and CT
Calculations
 Groundwater Rule
 Total Coliform Rule
 Future Arsenic and Fluoride requirements
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Planning for Small
and Medium Utilities
“In preparing for battle I have found that
plans are useless but planning is
indispensable.” Dwight D. Eisenhower
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Components of System
Planning
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Establishing Goals and Objectives
Collecting and Evaluating Pertinent Information
Identifying and Setting Priorities
Identifying and Comparing options and
alternatives
Devising both short-term and long-term strategies
Developing Contingency Plans
Preparing Budgets, Developing Policies and
Procedures to achieve Planning Goals
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Utility Planning Concerns
Present Resources
Future Resources
– Budget (Monies)
– Financial Capability
– Human Resources
– Facility
(Staff)
– Assets (Facilities
and Equip.)
Rehabilitation and
Replacement
– New Facility Needs
Staffing
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Types of Plans Covered in this
Presentation
 Organizational Plan
 Financial Plan
– Operation and Maintenance Plan (O&M
Budget)
– Asset Management Plan
– Capital Improvements Plan (CIP)
– Financing Plan
– Personal Services Plan
 Preventative Management and Energy
Management Plan
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Organizational Plans
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The Organizational Plan
Primary Plan of an Organization
Defines organization’s structure, the system of
activities, authority relationships and provides
the linkage for effective collaborative planning.
1.
2.
3.
4.
5.
Establishes Unity of Command
Identifies Clear Lines of Authority
Defines the Divisions of Labor
Identifies Employee and Group Responsibilities
Identifies Formal Lines of Communications
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Financial Plans
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The Components of Financial
Planning
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Revenue Forecasting
– Rate Planning based on the Cost of Providing Services
(Cost of Service Study)
– Borrowing Plans such as Bonds and Short Term
Securities
Cost and Performance Tracking
Comfort Zone:
- Operating Budget
- Personal Services Budget
Performing tasks in areas
- Capital Improvement Plan
where we have experience
Financial Plan Maintenance
and knowledge that provides
– Asset Management Plan
obstacle to effective utility
management.
– Water Conservation Plan
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Rate Planning
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Typical Cost Components
Funded by Utility Rates
Govt. Transfers
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Sources of Revenues for a
Water System
 Operating
Revenues
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 Non-Operating
Revenues
Water sales
Connection Fees
Impact Fees
Late payments
Reconnection fees
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Interest on checking acct.
Interest on reserve acct.
Equity Buy-In fees
Capital Recovery Fees
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Major Sources of Utility Revenue
are Rates and Connection Fees
Operating Revues
Non-Operating Revenues
Water
Connection
Rates
Fees
(Typically Recover
(Typically Recover
Cost of WTP)
all other Costs)
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Objectives of a Rate
Analysis
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Identifies Current and Future Cost Variables
 Uses Most Current Utility Information
 Sets Upfront Reasonable Objectives
 Uses AWWA Methodology and GAAP Standards
 Sets Water Revenue meeting current requlatory
Requirements
 Identifies Operating , Debt Service and Replacement
Fund Requirements
 Sets sustainable Capacity Charges and Service Fees
 Provides Utility with Statistical Performance
information for gauging success
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FRWA Comprehensive Rate Analysis
& Rate Design
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Water Systems are evaluated in Technical,
Managerial and Financial Areas
 Water Rates are Analyzed using FRWA
Model
 This provides cost coverage, repairs, equity
to customers, CIP needs, population
analysis and needs for grants and loans
 Capital Needs are Analyzed using DWSFR
USF Methodology to build replacement
and annual annuity analysis building basic
“asset management” program
 FRWA assists utility in obtaining needed
funds
Florida Rural Water Association
FRWA Provides
Assistance to
Utility Boards in
Developing
Prudent LongTerm Capital
Program
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Setting Water Rates (AWWA M1)
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Determine the full cost of doing business by calculating your costs.
Determine your current revenues.
Consider your reserve requirements to ensure you have enough funds to
cover your asset rehabilitation and repair costs as well as unexpected costs
during the next 5 years.
Calculate how much money you need to collect from customer charges to
cover your costs and fully fund your reserve account.
Evaluate appropriate rate structures and distribute the variable costs
component to the various customer classes in accordance with their
requirements for service.
Implement the rates.
Review and adjust your rates so they recover from each class of customer,
within practical limits, the cost to serve them
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Customer Related Costs of
Providing Water Service
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Supply and Transmission Costs – average cost of supply and
transmission to customer, i.e. electricity, chemicals & labor
Commodity Cost - Costs that vary proportionately with the
amount of water provided under average consumption; typically
based on size of meter (proportioned by meter size)
Capacity Cost - Costs that are incurred to meet the maximum
demand (Peak demands have much higher costs)
Customer Related Cost - The costs that are associated with
serving customers independent of the amount of water they use
Public Fire Protection. The cost of hydrants and the oversizing of water mains and reservoirs to provide fire flows.
Taxes, Surcharges and GF Transfers. Costs include state &
city utility taxes, customer billing audits utility maintenance.
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Cost of Service Study used in Designing
Fair, Equitable and Sustainable Rates
•
Determine current expenses for residential, commercial and
industrial classes of customers.
•
Estimate short and long-term facility needs based on identified
development, historical trends and economic indicators.
•
Establish Construction Schedules, Capital Needs (cash flows), cash,
interest payments and interest ratios to be maintained required by
Bond Requirements.
•
Estimate operating revenue and non-operating expenses
•
Rates are allocated to individual classes of customers that fairly
allocates charges to those using the service
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Preparing the Financing Plan
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Debt Service Coverage (Bonds Outstanding)
Cash Funding of the Capital Improvement
Program (Typically ~30%)
Rate Stabilization Fund (Minimizes Rate Shock)
Cash Targets Maintained (Available Working
Capital)
Variable Rate Debt for Short-Term Securities
(Commercial Paper)
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Asset Management Concepts
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Defining all Facilities by type, age and condition
Defining and Identifying Status by category
Determining Sustainable Level of Service
Identifying Critical Assets
Defining CIP and O&M Strategies
Using Asset Management to determine costs
Identifying Long-Term Funding Strategies
Developing Rates and a Budgeting Plan
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The Water Conservation Plan
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Water System Operations Training
 Water Conservation Strategy
Development
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Performing Water System Audits
Performing Water System Rate Analysis
Engaging Water
Performing Leak Detection
Managers
Identifying Drought Management Responses
Performing W/WW Energy Reduction
Investigations (discussed later)
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Direct Benefits of Water
Conservation Programs

Locates, corrects and eliminates illegal taps
 Institutes water audits and institute leak detection
programs that reduce Water Loss levels < 10%.
 Evaluates water meters for efficiency and institute cost
effective replacement programs
 Trains meter readers in leak and illegal connections
 Evaluates User fees, deposits and other charges
 Improves timeliness and effectiveness of customer
collections policies
 Adds new customers to existing underutilized facilities
 Initiates Cooperative purchases for metes, pipe and
standardizes equipment
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O&M Budget Plan
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Purpose and Use of an O&M
Budget
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All businesses rely on proper budgeting and financial
management to monitor and control expenses
Because Growth, Aging of Facilities and Equipment,
External Constraints and Environmental Regulations affect
the budget conformance, the budget is always a planning
tool
A Budget can be a short or long-term plan that anticipates
future expenditures based on estimated variables
A Budget prioritizes financial needs using actual expenses
and trends from prior year(s) in “line items”
The line items are then monitored to identify extraordinary
expenses and their causes and to determine future needs
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Use of a Line Item Budget
Column #
Act
#
100
Item
Supply & Equip
120
1
Budget Exp.
2
Budget
3
4
Projections Request
Previous Yr
5-Yr. AVE
Current Yr.
Curr-Previous
Yr’ly Projection
Proj-Prop
Budget Request
Request Bud-Req
Maint Supplies
$13,900 2.5%
$14,700
10.6%
$15,380 4.6%
$ 15,800 7.4%
130
Small Tools
$6,500
0.6%
$ 6,700
3.1%
$6,432 (1.1%)
$ 6,500 (3.0%)
140
Safety Equip
$3,200 1..3%
$ 3,300
3.1%
$14,700 459%*
$ 3,300 0.0%
Totals
$23,600 2.3%
$24,700
4.1%
$36,512 54.7%
$25,600 3.6%
*140 Extraordinary Expense Necessary to Replace Confined Space DO Meter
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The Capital Improvement Plan
(CIP)
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Capital Improvement Plan (CIP)
Development Process
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Identification of the needs for capital
improvements
Development of the CIP (typically 20 years)
Prioritization of capital projects
Scheduling of the Projects (typically 5 year
horizon)
Identification of Funding Sources
Determining Borrowing Schedules
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Major Capital Improvement
Program CIP Categories
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Source Water Improvements (Wells)
Water Treatment Improvements
Water Storage and Pumping Improvements
Water Transmission Improvements
Water Distribution Improvements
Replacement and Rehabilitation
Relocation of Pipelines
Pipeline Improvements including Upsizing
New Development
Water Service (Meters and Appurtenances)
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CIP Project Management using a
Five Year (Short-Term) Window
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ESSENTIAL: Project needed to meet water demand from new
development or essential for the maintenance of the water system..
Water demands or infrastructure conditions if not completed there is
the risk of being unable to provide water to its new and existing
customers. These Projects are included in the First year Schedule.
REQUIRED: A project that is important for providing water service
to customers yet timing of construction is not as critical as an
essential project. Required projects are generally found in the last
four years of the plan. External factors such as the pace of new
development or the condition of existing infrastructure may delay or
accelerate the timing of project construction. These Projects are
included in the 5-yr. window.
DEFERRABLE: Projects are not immediately critical to the
operation of the water system. Expenditures in this category
generally require a business case study or specific criteria to be met
before spending can occur. Contingent spending is deferrable and
covers emergency replacement. These projects are long-term and
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are placed beyond window.
CIP Line Item Budget Example
Typically 5 Yrs.
FERC
Acct
Major Category
Current YR
FY 2009
FY 2010
Project
Total
100 Water Treatment
Improvements
1
Filter #6
Improvements
2
Clarifier #3 Upgrade
100 Totals
$230,000
$474,000
$538,0000
$ 67,000
$230,000
$1,242,000
$ 67,000
$541,000
$538,000
$1,309,000
Main Street Ext.
$24,700
$365,000
200 Totals
$24,700
$365,000
$389,700
$565,700
$903,000
$1,698,700
500 Water Transmission
Improvements
3
Capital Budget Totals
$230,000
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Capital Project Management
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Capital Improvement Program and
Technical Capacity Demonstration
•
Is Peak Demand Day > 85% of Permitted
Capacity and:
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Have Boil Water Notices been issued?
Are there Notices of Violations?
Are there Regulatory Agreements?
Is the System under a Formal Consent Orders?
Have all Regulatory Issues been Resolved?
Is both Capacity and type of facilities adequate?
Do Operator(s) have proper Licenses for needed
treatment levels?
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Environmental Pressures on
Existing Facilities
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Florida’s Population Growth
Leads to Stressed Water Supplies
30
10
Population
2005 PWS 37% of use – 6.5 BGD
2025 PWS 43% of use – 8.5 BGD
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Population (millions)
Water Use (BGD)
Water Use
20
15
5
10
5
0
0
1950 1960 1970 1980 1990 2000 2010 2020
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Florida’s Ground Water Supplies and
Projected Water Shortages
5,691 Public Water Systems use 10,160
Ground Water Supply Wells
Water
Resource
Caution
Areas
Withdrawals in Water Resource
Caution Areas results in upwelling
of water from lower zones and
higher dissolved solids content
Ground water supplies are already
scarce in some areas of Florida.
Ground water withdrawals are are
projected to result in critical water
supply problems in the next 20 years.
These problems include public water
degradation of water quality for public
use, significant declines in lake levels and
drying of wetlands within these areas.
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Florida Droughts are Common and
Sometimes Severe
Six Droughts Since
Year 2000
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Changes in Land Use Intensify the
Effects of Drought
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Capital Investment
Considerations
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Costs for new facilities will be the driving factor
for rate increases for the next 20 to 30 years.
Have alternatives to construction that are more
cost effective been evaluated?
Operational operating assistance are not fundable
under loan or grant programs
The fees paid to engineering consultants are based
on a percentage of the constructed cost
CIPs should be evaluated thoroughly
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DBPs Non-Compliance Caused by
Operational Mistakes
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Creating Disinfection By-Product
Problems
11.
12.
Not Measuring Cl/NH2Cl Location
Residuals
Chlorinating Aerator
Dosing Cl in combination with
NH2Cl
Selecting Anhydrous NH3
Making DBPs so the GAC Unit can
remove them
Flushing before Sampling
Not Trending DPBs
Dosing with old Cl
Growing Organics in Ion exchanger,
clearwell or tanks
Not Taking DBP Sample at POE
Not Fluctuating Tank Levels
Not knowing water quality at
individual wells
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Responsibilities in a
Constructed Project
Owner – Managing the Construction Project,
Financially Responsible for Project Costs and for its
efficient operation
 Engineer – Technically Responsible for Design,
Specifying of Materials and Quality of Finished
Product
 Contractor – Responsible for Methods used to
Construct Project in Conformance to Plans and
Specifications

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Project Management
•
Project Management is the Process used to
Enhance the Probability of Project Success by
providing Leadership using Successful Techniques
for Planning, Scheduling, Budgeting and
Controlling a Constructed Project.
• The objective of Project Management is to Build a
Quality Product that meets the Owner’s
Expectations, at the Lowest Cost according to a set
Schedule.
• To accomplish this the Owner must assume a
strong Management Role
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The Project Planning Time Line
Controlling Quality and Cost
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Reducing Project Costs through
Design Refinement
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Major Considerations in the
use of a Consulting Engineer

Beware of Delegating Control of Projects to the
Engineer
 Evaluate how well does Consultant’s Recommendations
meet Owner’s Basic Requirements
 Beware of “Scope Creep” (Right-Size Your Project!)
 Beware of " Newest Technology" Projects
 Beware of Slick Proposals and Flashy Brochures and
Professional Presenters
 Beware of Too Eager and Ready Solutions
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Insist on a Predesign Report for Larger Projects!
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Evaluating Consulting Engineer
Qualifications
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Engineering project manager, engineering team composition and
compatibility
Experience of design office and location of work to be performed
Ability to furnish the required services in a timely manner & team
member workload
Engineering approach, ability to adhere to project scope
Current Schedule Of Hourly Billing Rates
List Available Resources, Materials, Equipment, and Facilities that
includes list of Sub-Consultants
List of Clients / Utility Systems
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Personal Services Plan
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Preparing a Personal Services
Budget
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List Employee Roster of Full Time and Part
Time Equivalents (line item)
 Identify Pay Grade, Anticipated Pay Grade
and Anticipated Base Pay
 Determine Direct Yearly Compensation
 Sum Total
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Other Personal Service Expenses
Included in PS Budget
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Temporary Salaries
Overtime Pay
Training
Working Out or Class Straight Time
Other Personnel Expenses
Other Employee Allowances (Bonuses)
Health Insurance
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Preventative Maintenance
Programs
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Types and Acceptable Ranges for a
Preventative Maintenance Program
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Predictive Maintenance (~ 60%)
- Vibration Monitoring - Infrared Heat Monitoring
- Electrical Monitoring (Volts and Amps)
- Flows & Pressure Monitoring - Laser Alignment
- Wear/Corrosion Monitoring - Ultrasonic Testing
Preventative Maintenance (~ 40%)
- Performed on Regular Schedule
- Performed by Hours of Use
Planned Maintenance
- Performed based on History
- Performed based on Performance Drop
Breakdown Maintenance
(< 20%)
3% to 10% of original Equipment cost per yr. is spent on Maintenance in US
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Evolution of a Total PM
Program
Phase 1 Install PM System
T
I
Phase 2 Stabilize Mean Time
Between Equipment Failures
M
E
Phase 3 Lengthen Equipment Life
Phase 4 Periodically Restore Deterioration
Phase 5 Predict Equipment Life
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Energy Management
Programs
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Energy Monitoring and Energy
Surveys

The Goals are Twofold, reduce energy and/or reduce costs
 Identifies the amount Energy used in a facility by major
equipment
 Identifies Energy Costs and Tariffs
 Evaluates Alternatives for Reducing Energy Use
– Identify how energy is used
– Identify points of wasted energy
– Identifies opportunities for improving operating techniques
– Identifies Savings by Replacing Inefficient Equipment
 Identifies Cost Effectiveness of Energy Alternatives
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Components of a Typical
Electric Bill

Basic Service Fee ($/mo)
 Demand Charge ($/kW) (Typically
based on Highest 15 minutes/year)
 Power Factor ($/kvar)
 Energy Charge ($/kWh)
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Listing of Energy Consuming
Equipment in Water Plant
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Energy Requirements by Process
Typically 80 – 85% of Energy Use in a Water Treatment
System is for Pumping
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Reducing Energy Use or Costs with
Pumping Equipment
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Shifting Power Consumption from On-peak to Off-peak hours (Demand
Limiting)
Adding Storage for Off peak/Emergency pumping
Use of Efficient Pumping Programs
Replacing older motors with high efficiency motors (cost 15 – 20% more).
Adding or replacing eddy-speed drives with variable frequency drives (VFDs)
Using Effective Instrumentation and Controls.
Managing operations by the efficient use of available storage and highefficiency motors
Operating Emergency Generators for Peak-Clipping when no or little storage is
available.
Shifting Rates to Another Category (Master Metering)
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Energy Use for Space Heating & Cooling and
Lighting are Major Users in Commercial
Building
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In Conclusion

System Planning is the most critical aspect of
operating a water and wastewater utility
 The planning methods discussed in this
presentation lead to efficient and sustainable
operations at the lowest cost to the utility
 Assistance in any of the topics discussed in this
presentation are available by contacting Florida
Rural Water Association at 850-668-2746 or on
the WEB at: http.//[email protected]
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