Transcript APWA Public Works Institute Managing A Water Supply Utility Terry Leeds P.E. , Director Charlie Stevens, Water Utility Officer Water Services, KCMO April 8, 2015

APWA
Public Works Institute
Managing A Water Supply Utility
Terry Leeds P.E. , Director
Charlie Stevens, Water Utility Officer
Water Services, KCMO
April 8, 2015
CLEAN, SAFE, RELIABLE WATER IS
FUNDAMENTAL TO QUALITY OF LIFE
IT’S OUR MOST VALUBLE RESOURCE
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Goals of the Presentation
Provide an over-view of a water utility
• Identify the key functional areas
• Describe internal relationships and complexity of
operation
• Identify the challenges for management
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General Utility Information
• Water Services is part of KCMO City government
• Water Services operates three utilities
• Water
• Wastewater
• Stormwater
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•
•
•
Each utility is a separate enterprise fund
Source of revenue is customer payments
FY15 Budget - $351 million
FTE’s 1,005; 843 filled
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Water Utility
 Approximately 168,000 accounts
 32 whole sale customers
 ~600,000 consumers
 FTE’s - 546
 FY2015 Budget $158 million
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KCMO Water System
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Managing A Water Supply Utility
Primary Functional Areas
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•
•
•
•
•
Operations
Engineering/Contracting
Customer Service
Communications
Human Resources
Finance/Performance Management
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Operations
• Water Treatment
• Distribution System Maintenance
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Water Treatment
• 240 MGD Treatment Plant
- Missouri River Intake & Wells
- Enhance Lime Softening
- Built in the 1920s
- Average Flow - 105 MGD (FY 14)
- Staff of 102 FTEs; (FY 15 avg. filled 86)
• Pumping System
- 18 Pumping Stations
- Water Storage – 143 mg
- 5 Pressure Zones
• Challenges
- Maintaining Aged Facilities
- Comply with Regulations
- Reducing Unaccounted for Water
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Water Treated
6,000
5,000
1998
1999
2000
2001
Millions of Gallons
4,000
2002
2003
2004
2005
3,000
2006
2007
2008
2009
2,000
2010
2011
2012
2013
2014
1,000
Average for last 17 Yrs
0
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Water Distribution System
Assets
• Staff of 111 FTEs; (FY 15 avg. filled 93)
• 2,805 Miles of Main – Pipe Dating From 1874
• 35,000 Line Valves
• 24,000 Hydrants
• 1,270 air release valves
• 165,000 curb boxes
• 16,500 Backflow Devices
Challenges
• Deferred Maintenance
 44.9 main breaks/100 miles (CY 2014)
 Valve Assessment & Exercise program
 Hydrants
•
11.5 percent of repair work orders (CY 2014) were done by contractors
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350
Main Break Graph
300
1998
1999
2000
250
2001
2002
Millions of Gallons
2003
2004
200
2005
2006
2007
150
2008
2009
2010
2011
100
2012
2013
2014
Average for last 17 Yrs
50
0
Jan
March
May
July
September
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November
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Water FY16-FY20:
Maintenance Program
FY16
FY17
FY18
FY19
FY20
Valve Exercising
$1,100,000
$850,000
$850,000
$850,000
$850,000
Pipeline
Workforce
$2,500,000
$2,500,000
$2,650,000
$2,650,000
$2,650,000
$300,000
$150,000
$500,000
$500,000
$500,000
$1,000,000
$500,000
Service Line Kill
$400,000
$500,000
Hydrant Repair
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$1,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$2,000,000
$8,300,000
$7,500,000
$7,000,000
$7,000,000
$7,000,000
Project Type
Air Release Valves
Curb Stops
Valve
Replacement
TOTAL:
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Engineering/Contracting
• Master Planning
• Capital Improvements Program
• Operations & Maintenance Support
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Water Services Capital Improvement
Program
Investing in the future of our team and our community so we may continue a
legacy of providing quality services for generations to come.
• $1.2 billion investment over 5 years
• Over 18,000 direct and indirect jobs created
• Projects designed to:
•
•
•
•
•
Improve water quality and protect public health
Improve customer utility services
Meet regulatory requirements
Promote economic development
Build and maintain utility infrastructure
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Consequence of Failure
BRE Analysis & Results
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1
10
2
20
3
30
9
9
8
8
16
24
7
7
14
6
6
5
Likelihood of Failure
4
5Predictive
6
Monitoring
40
50
60
Strategy
Economic-Based
18
27
36
Replacement Strategy
7
70
8
80
9
90
10
100
63
72
81
90
56
64
72
80
49
56
63
70
45
54
32
40
48
21
28
35
42
12
18
24
30
36
42
48
54
60
5
10
15
20
25
30
35
40
45
50
4
4
8
12
16
20
32
36
40
3
3
6
12
15
18
21
24
27
30
2
2
4
6
8
10
12
14
16
18
20
1
1
2
3
4
5
6
7
8
9
10
Run to
Failure
9
16
Replace / Redesign
Strategy
Condition
Monitoring
24
28
Strategy
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FY 2016 BRE Results
Likelihood of Failure
0
10
Consequence of Failure
INTERACTIVE CAPITAL IMPROVEMENT PLANNING
LoF vs. CoF Heat Map Graphics and Action Strategy Groups
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8
7
6
5
4
3
2
1
1
2
3
4
5
6
Group
7
8
9
10
Miles
Percent
3.56
1.08
0.56
0.16
0.15
0.00
0.20
0.00
0.00
0.99
A
8.7
0.3%
14.30
1.91
0.37
0.40
0.32
0.58
0.00
0.07
0.43
0.13
B
11.2
0.4%
22.78
3.87
1.94
1.18
1.12
0.67
0.40
0.28
0.00
0.69
C
16.8
0.6%
53.69
9.44
2.84
4.00
0.46
1.40
1.22
0.49
0.07
1.84
D
14.2
0.5%
73.79
16.50
7.59
5.57
3.68
1.33
1.70
1.71
0.12
4.57
E
35.2
1.3%
150.61 25.09
10.71
8.17
4.70
3.75
4.06
2.43
2.39
8.69
F
55.5
2.1%
246.52 48.55
27.63
19.86
13.45
11.39
8.74
8.18
7.50
14.42
G
13.4
0.5%
362.09 150.77 91.75
78.34
53.06
32.13
33.62
20.60
6.70
2.40
H
113.3
4.2%
430.35 242.18 79.68
91.78
83.00
23.16
5.58
1.43
0.00
0.00
Z
2,411.3
90.0%
2.18
1.35
0.01
0.00
0.00
0.00
0.00
6.19
3.63
0.61
0 Miles
Total: 2,679.6
100.0%
Total Miles: 2,679.6
36.7 miles in A, B and C Groups
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Water CIP: FY16-FY20
Budget Amounts by Project Type
Project Type
FY16
FY17
FY18
FY19
FY20
Treatment
$10,500,000 $22,000,000 $23,500,000 $15,500,000 $27,000,000
Pump Station
$11,090,000 $25,915,000 $5,300,000 $17,000,000
Transmission
$7,850,000
$0 $6,000,000
$1,820,000
$0
$900,000
Distribution
$49,255,000 $56,940,000 $46,000,000 $46,000,000 $51,000,000
Total
$78,695,000 $104,855,000 $80,800,000 $80,320,000 $78,900,000
Total Water 5-Year CIP
$423,570,000
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Engineering (Continued)
Example Capital Improvements
Cash Funded
Water Main Replacement: $5 million
Facility Improvements: $1 million
Treatment & Pumping Equipment: $6 million
Valve Rehabilitation & Replacement: $2 million
Fire Hydrants: $1 million
Bond Funded
Shoal Creek Pump station: $6.6 million
Vivion Road Transmission Main: $7.8 million
Water Main Replacement Construction: $25.7 million
Water Main Replacement Design: $7 million
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Engineering (continued)
System Support
• Trouble Shooting
- Plant Equipment problems
- SCADA
• Distribution System
• Difficult/Complex System Repairs
• Modelling
* Low Flow
* Low Pressure
• Maintain GIS
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Customer Service
• Meter Reading
• Billing
• Customer Service
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Meter Reading & Billing
• Cash Register
• Total Meters – ~169,000
• 89% residential and 11 % commercial
• Sizes vary from 5/8-inch (91%) to 12-inch
• Automated Meter Reading – 95 percent
• Delinquent Accounts
• Monthly Billing
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Business Customer Care
• Call Center, 7 a.m. – 7 p.m., M-F
• Lobby, 8 a.m. – 5 p.m., M-F
• 32 Customer Service Reps/Specialists
• 20,000 to 30,000 Phone Calls per Month
• Common Issues
- Open-Close Accounts
- Late Payment/Payment Plans
- Delinquent accounts
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Call Abandonment Rates
May 2014 to March 2015
30000
25%
25000
20000
15%
15000
6.31%
10000
3.90%
4.68%
3.08%
4.31%
4.08%
3.11%
1.92%
4.99%
2.32%
4.15%
5%
Target 5%
5000
0
-5%
May-14
Jun-14
Jul-14
Calls Received
Aug-14
Sep-14
Oct-14
Calls Handled
Nov-14
Target Abandon Rate
24
Dec-14
Jan-15
Feb-15
Mar-15
Abandonment Rate
4/8/2015
Average speed of answer
120
97
100
80
Seconds
70
66
64
60
60
52
50
45
41
40
33
29
20
0
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Oct-14
25
Nov-14
Dec-14
Jan-15
Feb-15
Mar-15
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Communications
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Customer Communications is Key
Higher Expectations
Transparency
More Sophisticated Consumer
New Forms of Communication
Hot Topics
- Construction Disruption
- Water Outages – Repairs
- Post-Repair/Construction Restoration
- Water Rates & High Bills
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Utility Reputation for reliability
(WSD Customer survey)
90%
Natural gas company
89%
Electric company
84%
Kansas City Water Services
73%
Wireless or cellular company
69%
Internet service provider
68%
Local telephone company
62%
Cable/satellite television provider
0%
10%
20%
30%
Q4 2014
Q3 2014
40%
Q2 2014
50%
60%
70%
80%
90%
100%
Q1 2014
% of “Always” and “Usually”
4/8/2015
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Human Resources
People are What Make or Break the Utility
Issues/Concerns
- Finding/Hiring Good People
- Keeping Good People
- Succession Planning
- Training Programs
- Diversified Workforce
- Safe Work Environment
- Union Grievances
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Finance/Performance Mgmt.
• Budget
• Rates
• 47 Key Performance Indicators
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Water Utility Example Budget
FY15
 Operating Budget
$101,949,131
 Capital Investment
Cap. Outlay - $ 5,126,330
Debt Services - $34,553,267
Capital Imp. - $16,000,000
$55,679,597
$157,628,728
 Anticipated Revenue: $153,039,596
 Projected Cash Reserve: $48,618,864 (142 days)
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Rate Making Perspectives
 Utility’s Perspective
 Does the revenue meet cost of service requirements?
 Are expenses fairly allocated to customer base?
 Customer’s Perspective
 Cost of water is growing faster than the CPI
 Society’s Perspective
 Does the rate structure promote economic efficiency?
 Oversight and Regulatory Perspective
 Do rates balance system and customer interests?
 Overall Perspective
 Underpricing
 Overpricing
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Utility Revenue Requirements
(simplified)
Debt
+ equity costs
Annualized capital costs
&
Operation and
maintenance expenses
+ Depreciation
+ General Fund Fees
Annual operating expenses
Annualized capital costs
+ Annual operating expenses
Annual revenue requirements
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Historical Water Rates
400
350
Price Index
(1982-1984 = 100)
300
250
200
150
100
50
0
Year
CPI
Water Rate
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Managing a Water Supply Utility
Challenges
• Maintain High Quality Water
• Aging Infrastructure – Deferred Maintenance
• Providing for Growth
• Workforce
- Retiring Baby Boomers
- Hiring/Retaining Good People
• Keeping Up With Technology
• Data-driven management
• Find/Utilize Sustainable Solutions
• High Customer Expectations
• Rate Fatigue
• Meeting Regulations
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QUESTIONS
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