Florida Rural Water Association1 Water and Wastewater System Planning for Small and Medium Utilities Using Prudent Utility Management Practices

Florida Rural Water Association 1

Water and Wastewater Water and Wastewater System Planning System Planning

for Small and Medium Utilitiesfor Small and Medium Utilities

Using Prudent Utility Management Using Prudent Utility Management Practices Practices


Planning Covers a very wide Planning Covers a very wide range of Utility Functionsrange of Utility Functions

Identification of Utility Management FunctionsIdentification of Utility Management Functions Identify the special problems faced by Small and Medium Identify the special problems faced by Small and Medium

UtilitiesUtilities Describe the Planning FunctionDescribe the Planning Function Identify the Critical Plans for Effective Utility Identify the Critical Plans for Effective Utility

ManagementManagement Review the Components of Cost of Service RatemakingReview the Components of Cost of Service Ratemaking Identify Special Florida Planning IssuesIdentify Special Florida Planning Issues Identify Specific Utility Plans that Minimize Costs, Protect Identify Specific Utility Plans that Minimize Costs, Protect

Revenue, and Ensure Maximum Facility LifeRevenue, and Ensure Maximum Facility Life


Basic Utility Management Basic Utility Management ResponsibilitiesResponsibilities

PlanningPlanningOrganizingOrganizingStaffingStaffingDirectingDirectingMonitoring and ControllingMonitoring and Controlling


Planning is the Most Critical Planning is the Most Critical of the of the

Utility Management TasksUtility Management Tasks


Planning addresses the Serious Planning addresses the Serious Issues faced by Small and Medium Issues faced by Small and Medium

Utility SystemsUtility Systems Insufficient RevenuesInsufficient Revenues Aging InfrastructureAging Infrastructure Difficulties in Obtaining Financial AssistanceDifficulties in Obtaining Financial Assistance Lack of Economy of Scale Lack of Economy of Scale Limited In-house Management Capabilities Limited In-house Management Capabilities New Regulatory RequirementsNew Regulatory Requirements Uncertain Financial Stability because of the lack Uncertain Financial Stability because of the lack

of Long-Term Utility Planningof Long-Term Utility Planning


Some Reasons for Insufficient Some Reasons for Insufficient Utility RevenuesUtility Revenues

Increases in Chemical and Energy costsIncreases in Chemical and Energy costsIncreases in Equipment Maintenance costsIncreases in Equipment Maintenance costsPolitics and difficulties in Raising RatesPolitics and difficulties in Raising RatesConflicting Priorities for use of Utility Conflicting Priorities for use of Utility

FundsFundsNo Reserve Funds for needed W/WW No Reserve Funds for needed W/WW

improvementsimprovements


Problems with Aging Problems with Aging InfrastructureInfrastructure

Antiquated Infrastructure and FacilitiesAntiquated Infrastructure and FacilitiesFacilities are inadequate to meet current or Facilities are inadequate to meet current or

pending Regulationspending RegulationsUseful age of facilities is exceededUseful age of facilities is exceededEnvironmental Pressures, i.e. contamination Environmental Pressures, i.e. contamination

from septic tanks, water quality degradation from septic tanks, water quality degradation due to droughts and increasing populations due to droughts and increasing populations densities, densities, water access restrictions, etc.


Difficulties in Obtaining Financial Difficulties in Obtaining Financial Assistance for Utility ProjectsAssistance for Utility Projects

Treatment optimization is not a fundable component in Treatment optimization is not a fundable component in any loan or grant program.any loan or grant program.

Demands for CIPs exceed SRF availability Demands for CIPs exceed SRF availability RD grants cover only poverty income designationsRD grants cover only poverty income designations Loans Applications are often Intimidating, confusing Loans Applications are often Intimidating, confusing

and include cumbersome Paperwork requirementsand include cumbersome Paperwork requirements Loan payments often mean significant rate increases Loan payments often mean significant rate increases

for distressed customer basefor distressed customer base $100,000 is commonly the Threshold for Cost $100,000 is commonly the Threshold for Cost

Effectiveness removing critical improvements from Effectiveness removing critical improvements from considerationconsideration


Economies of Scale are Lacking Economies of Scale are Lacking for Small W/WW Systemsfor Small W/WW Systems

Smaller Customer Base to spread costsSmaller Customer Base to spread costsCost per household are typically already Cost per household are typically already

higher than larger systemshigher than larger systemsSmaller Systems are more likely to be Smaller Systems are more likely to be

under-fundedunder-fundedSmall systems lack financial, managerial Small systems lack financial, managerial

and technical capabilities as compared to and technical capabilities as compared to the capabilities of larger utility systemsthe capabilities of larger utility systems


Limitations in Management Limitations in Management Capabilities for Small and Medium Capabilities for Small and Medium

Sized Utility SystemsSized Utility Systems Management of Small Systems is performed by a Management of Small Systems is performed by a

few individuals with limited OJT experiencefew individuals with limited OJT experience Systems are have difficulty documenting and Systems are have difficulty documenting and

evaluating the needs for improvementsevaluating the needs for improvements Small systems have difficultly operating or Small systems have difficultly operating or

maintaining sophisticated equipment or systemsmaintaining sophisticated equipment or systems Management of infrastructure improvements is Management of infrastructure improvements is

either ad hoc or “part-time”either ad hoc or “part-time” Understanding of System Requirements and Understanding of System Requirements and

Regulatory Compliance is generally inadequate Regulatory Compliance is generally inadequate


Difficulty with Regulatory Difficulty with Regulatory Compliance IssuesCompliance Issues

Regulations are BurdensomeRegulations are BurdensomeRegulations are Difficult to UnderstandRegulations are Difficult to UnderstandRegulations are increasingly stringent and Regulations are increasingly stringent and

complicatedcomplicatedSystem Facilities often are not Adequate to System Facilities often are not Adequate to

meet Regulationsmeet RegulationsUncertain Future Regulations Exacerbate Uncertain Future Regulations Exacerbate

ProblemsProblems


Lack of Long-Term PlanningLack of Long-Term Planning

• Typically Long-Term Planning is neglectedTypically Long-Term Planning is neglected• Future impacts of demographic changes are Future impacts of demographic changes are

not known or their affects are not identifiednot known or their affects are not identified• Lack of Long-Term Planning often is the Lack of Long-Term Planning often is the

cause of regulatory non-compliancecause of regulatory non-compliance• Most systems bogged down coping with Most systems bogged down coping with

current issues (putting out fires)current issues (putting out fires)• Pending Regulations are often not known Pending Regulations are often not known


Capabilities of System Capabilities of System OperatorsOperators

Regulations are often ConfusingRegulations are often Confusing How Regulations apply to operated Facilities are not ClearHow Regulations apply to operated Facilities are not Clear Operator training did not include newer technologiesOperator training did not include newer technologies Succession Planning for current system operation does not Succession Planning for current system operation does not

exist and often there is no backupexist and often there is no backup Often there are changes in operating services or personnel Often there are changes in operating services or personnel

based on unforeseen conditionsbased on unforeseen conditions There are few opportunities to upgrade operator trainingThere are few opportunities to upgrade operator training Labor shortages in coverage and in backup existLabor shortages in coverage and in backup exist


Some Very Recent Examples Some Very Recent Examples of Regulatory Changesof Regulatory Changes

Disinfection By-Products Rule (TTHM and Disinfection By-Products Rule (TTHM and HAA5 compliance)HAA5 compliance)

New IDSE RequirementsNew IDSE RequirementsBiological Compliance Testing and CT Biological Compliance Testing and CT

CalculationsCalculationsGroundwater RuleGroundwater RuleTotal Coliform RuleTotal Coliform RuleFuture Arsenic and Fluoride requirementsFuture Arsenic and Fluoride requirements


Planning for Small Planning for Small and Medium Utilitiesand Medium Utilities

“In preparing for battle I have found that plans are useless but planning is indispensable.” Dwight D. Eisenhower


Components of System Components of System Planning Planning

Establishing Goals and ObjectivesEstablishing Goals and Objectives Collecting and Evaluating Pertinent InformationCollecting and Evaluating Pertinent Information Identifying and Setting PrioritiesIdentifying and Setting Priorities Identifying and Comparing options and Identifying and Comparing options and

alternatives alternatives Devising both short-term and long-term strategies Devising both short-term and long-term strategies Developing Contingency Plans Developing Contingency Plans Preparing Budgets, Developing Policies and Preparing Budgets, Developing Policies and

Procedures to achieve Planning GoalsProcedures to achieve Planning Goals


Utility Planning ConcernsUtility Planning Concerns

Present ResourcesPresent Resources– Budget (Monies)Budget (Monies)– Human Resources Human Resources

(Staff)(Staff)– Assets (Facilities Assets (Facilities

and Equip.)and Equip.)

Future ResourcesFuture Resources– Financial Capability Financial Capability – Facility Facility

Rehabilitation and Rehabilitation and ReplacementReplacement

– New Facility NeedsNew Facility Needs

Staffing Staffing


Types of Plans Covered in Types of Plans Covered in this Presentationthis Presentation

Organizational PlanOrganizational Plan Financial PlanFinancial Plan

– Operation and Maintenance Plan (O&M Operation and Maintenance Plan (O&M Budget)Budget)– Asset Management PlanAsset Management Plan– Capital Improvements Plan (CIP)Capital Improvements Plan (CIP)– Financing PlanFinancing Plan– Personal Services PlanPersonal Services Plan

Preventative Management and Energy Preventative Management and Energy Management PlanManagement Plan


Organizational PlansOrganizational Plans


The Organizational PlanThe Organizational PlanPrimary Plan of an OrganizationPrimary Plan of an Organization

Defines organization’s structure, the system of Defines organization’s structure, the system of activities, authority relationships and provides activities, authority relationships and provides the linkage for effective collaborative planning.the linkage for effective collaborative planning.

1.1. Establishes Unity of Command Establishes Unity of Command 2.2. Identifies Clear Lines of AuthorityIdentifies Clear Lines of Authority3.3. Defines the Divisions of LaborDefines the Divisions of Labor4.4. Identifies Employee and Group Responsibilities Identifies Employee and Group Responsibilities 5.5. Identifies Formal Lines of CommunicationsIdentifies Formal Lines of Communications


Financial PlansFinancial Plans


The Components of Financial The Components of Financial PlanningPlanning

Revenue ForecastingRevenue Forecasting– Rate Planning based on the Cost of Providing Services Rate Planning based on the Cost of Providing Services

(Cost of Service Study) (Cost of Service Study) – Borrowing Plans such as Bonds and Short Term Securities Borrowing Plans such as Bonds and Short Term Securities

Cost and Performance Tracking Cost and Performance Tracking - Operating Budget- Operating Budget - Personal Services Budget- Personal Services Budget - Capital Improvement Plan - Capital Improvement Plan Financial Plan MaintenanceFinancial Plan Maintenance

– Asset Management PlanAsset Management Plan– Water Conservation PlanWater Conservation Plan

Comfort Zone:

Performing tasks in areas where we have experience and knowledge that provides obstacle to effective utility management.


Rate PlanningRate Planning


Typical Cost Components Typical Cost Components Funded by Utility RatesFunded by Utility Rates

Govt. Transfers


Sources of Revenues for a Sources of Revenues for a Water SystemWater System

Operating Operating RevenuesRevenues– Water salesWater sales– Connection FeesConnection Fees– Impact FeesImpact Fees– Late paymentsLate payments– Reconnection feesReconnection fees

Non-Operating Non-Operating RevenuesRevenues– Interest on checking acct.Interest on checking acct.– Interest on reserve acct.Interest on reserve acct.– Equity Buy-In feesEquity Buy-In fees– Capital Recovery FeesCapital Recovery Fees


Major Sources of Utility Revenue Major Sources of Utility Revenue are Rates and Connection Feesare Rates and Connection Fees

Water

Rates(Typically Recover

all other Costs)

Connection

Fees(Typically Recover

Cost of WTP)

Operating Revues Non-Operating Revenues


Objectives of a Rate Objectives of a Rate AnalysisAnalysis

Identifies Current and Future Cost VariablesIdentifies Current and Future Cost Variables Uses Most Current Utility InformationUses Most Current Utility Information Sets Upfront Reasonable Objectives Sets Upfront Reasonable Objectives Uses AWWA Methodology and GAAP StandardsUses AWWA Methodology and GAAP Standards Sets Water Revenue meeting current requlatory Sets Water Revenue meeting current requlatory

RequirementsRequirements Identifies Operating , Debt Service and Replacement Identifies Operating , Debt Service and Replacement

Fund RequirementsFund Requirements Sets sustainable Capacity Charges and Service FeesSets sustainable Capacity Charges and Service Fees Provides Utility with Statistical Performance Provides Utility with Statistical Performance

information for gauging successinformation for gauging success


FRWA Comprehensive Rate FRWA Comprehensive Rate Analysis & Rate DesignAnalysis & Rate Design

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

FRWA Provides Assistance to

Utility Boards in Developing

Prudent Long-Term Capital

Program


Setting Water Rates (AWWA M1)Setting Water Rates (AWWA M1)

Determine the full cost of doing business by calculating your costs.Determine the full cost of doing business by calculating your costs. Determine your current revenues.Determine your current revenues. Consider your reserve requirements to ensure you have enough funds to Consider your reserve requirements to ensure you have enough funds to

cover your asset rehabilitation and repair costs as well as unexpected costs cover your asset rehabilitation and repair costs as well as unexpected costs during the next 5 years.during the next 5 years.

Calculate how much money you need to collect from customer charges to Calculate how much money you need to collect from customer charges to cover your costs and fully fund your reserve account.cover your costs and fully fund your reserve account.

Evaluate appropriate rate structures and distribute the variable costs Evaluate appropriate rate structures and distribute the variable costs component to the various customer classes in accordance with their component to the various customer classes in accordance with their requirements for service. requirements for service.

Implement the rates.Implement the rates. Review and adjust your rates so they recover from each class of customer, Review and adjust your rates so they recover from each class of customer,

within practical limits, the cost to serve themwithin practical limits, the cost to serve them


Customer Related Costs of Customer Related Costs of Providing Water ServiceProviding Water Service

Supply and Transmission Costs – Supply and Transmission Costs – averageaverage cost of supply and cost of supply and transmission to customer, i.e. electricity, chemicals & labor transmission to customer, i.e. electricity, chemicals & labor

Commodity Cost - Commodity Cost - Costs that vary proportionately with the amount of Costs that vary proportionately with the amount of water provided under average consumption; typically based on size of water provided under average consumption; typically based on size of meter (proportioned by meter size)meter (proportioned by meter size)

Capacity Cost - Capacity Cost - Costs that are incurred to meet the maximum demand Costs that are incurred to meet the maximum demand (Peak demands have much higher costs)(Peak demands have much higher costs)

Customer Related Cost - Customer Related Cost - The costs that are associated with serving The costs that are associated with serving customers independent of the amount of water they use customers independent of the amount of water they use

Public Fire Protection. Public Fire Protection. TheThe cost of hydrants and the over-sizing of cost of hydrants and the over-sizing of water mains and reservoirs to provide fire flows.water mains and reservoirs to provide fire flows.

Taxes, Surcharges and GF Transfers. Taxes, Surcharges and GF Transfers. Costs include state & city Costs include state & city utility taxes, customer billing audits utility maintenance.utility taxes, customer billing audits utility maintenance.


Cost of Service Study used in Designing Cost of Service Study used in Designing Fair, Equitable and Sustainable RatesFair, Equitable and Sustainable Rates

• Determine current expenses for residential, commercial and Determine current expenses for residential, commercial and

industrial classes of customers. industrial classes of customers.

• Estimate short and long-term facility needs based on identified Estimate short and long-term facility needs based on identified

development, historical trends and economic indicators.development, historical trends and economic indicators.

• Establish Construction Schedules, Capital Needs (cash flows), cash, Establish Construction Schedules, Capital Needs (cash flows), cash,

interest payments and interest ratios to be maintained required by interest payments and interest ratios to be maintained required by

Bond Requirements.Bond Requirements.

• Estimate operating revenue and non-operating expenses Estimate operating revenue and non-operating expenses

• Rates are allocated to individual classes of customers that fairly Rates are allocated to individual classes of customers that fairly

allocates charges to those using the serviceallocates charges to those using the service


Preparing the Financing PlanPreparing the Financing Plan

Debt Service CoverageDebt Service Coverage (Bonds Outstanding) (Bonds Outstanding) Cash Funding of the Capital Improvement Cash Funding of the Capital Improvement

Program (Typically ~30%)Program (Typically ~30%) Rate Stabilization Fund (Minimizes Rate Shock)Rate Stabilization Fund (Minimizes Rate Shock) Cash Targets Maintained (Available Working Cash Targets Maintained (Available Working

Capital)Capital) Variable Rate Debt for Short-Term Securities Variable Rate Debt for Short-Term Securities

(Commercial Paper) (Commercial Paper)


Asset Management ConceptsAsset Management Concepts

Defining all Facilities by type, age and conditionDefining all Facilities by type, age and condition Defining and Identifying Status by categoryDefining and Identifying Status by category Determining Sustainable Level of ServiceDetermining Sustainable Level of Service Identifying Critical AssetsIdentifying Critical Assets Defining CIP and O&M StrategiesDefining CIP and O&M Strategies Using Asset Management to determine costsUsing Asset Management to determine costs Identifying Long-Term Funding StrategiesIdentifying Long-Term Funding Strategies Developing Rates and a Budgeting PlanDeveloping Rates and a Budgeting Plan


The Water Conservation PlanThe Water Conservation Plan

Water System Operations TrainingWater System Operations Training Water Conservation Strategy Water Conservation Strategy DevelopmentDevelopment

– Performing Water System Audits Performing Water System Audits – Performing Water System Rate AnalysisPerforming Water System Rate Analysis– Performing Leak DetectionPerforming Leak Detection– Identifying Drought Management ResponsesIdentifying Drought Management Responses

Performing W/WW Energy Reduction Performing W/WW Energy Reduction InvestigationsInvestigations (discussed later)(discussed later)

Engaging Water Engaging Water ManagersManagers


Direct Benefits of Water Direct Benefits of Water Conservation ProgramsConservation Programs

Locates, corrects and eliminates illegal taps Locates, corrects and eliminates illegal taps Institutes water audits and institute leak detection Institutes water audits and institute leak detection

programs that reduce Water Loss levels < 10%. programs that reduce Water Loss levels < 10%. Evaluates water meters for efficiency and institute cost Evaluates water meters for efficiency and institute cost

effective replacement programseffective replacement programs Trains meter readers in leak and illegal connectionsTrains meter readers in leak and illegal connections Evaluates User fees, deposits and other chargesEvaluates User fees, deposits and other charges Improves timeliness and effectiveness of customer Improves timeliness and effectiveness of customer

collections policiescollections policies Adds new customers to existing underutilized facilitiesAdds new customers to existing underutilized facilities Initiates Cooperative purchases for metes, pipe and Initiates Cooperative purchases for metes, pipe and

standardizes equipmentstandardizes equipment


O&M Budget PlanO&M Budget Plan


Purpose and Use of an O&M Purpose and Use of an O&M BudgetBudget

All businesses rely on proper budgeting and financial All businesses rely on proper budgeting and financial management to monitor and control expenses management to monitor and control expenses

Because Growth, Aging of Facilities and Equipment, Because Growth, Aging of Facilities and Equipment, External Constraints and Environmental Regulations affect External Constraints and Environmental Regulations affect the budget conformance, the budget is always a planning the budget conformance, the budget is always a planning tooltool

A Budget can be a short or long-term plan that anticipates A Budget can be a short or long-term plan that anticipates future expenditures based on estimated variables future expenditures based on estimated variables

A Budget prioritizes financial needs using actual expenses A Budget prioritizes financial needs using actual expenses and trends from prior year(s) in “line items”and trends from prior year(s) in “line items”

The line items are then monitored to identify extraordinary The line items are then monitored to identify extraordinary expenses and their causes and to determine future needsexpenses and their causes and to determine future needs


Use of a Line Item BudgetUse of a Line Item Budget

Act

#

100

Column #

Item

Supply & Equip

1

Budget Exp.

Previous Yr

5-Yr. AVE

2

Budget

Current Yr.

Curr-Previous

3

Projections

Yr’ly Projection

Proj-Prop

4

Request

Budget Request

Request Bud-Req

120 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


The Capital Improvement Plan The Capital Improvement Plan (CIP)(CIP)


Capital Improvement Plan Capital Improvement Plan (CIP) Development (CIP) Development

ProcessProcess Identification of the needs for capital Identification of the needs for capital

improvementsimprovements Development of the CIP (typically 20 years)Development of the CIP (typically 20 years) Prioritization of capital projectsPrioritization of capital projects Scheduling of the Projects (typically 5 year Scheduling of the Projects (typically 5 year

horizon)horizon) Identification of Funding SourcesIdentification of Funding Sources Determining Borrowing SchedulesDetermining Borrowing Schedules


Major Capital Improvement Major Capital Improvement Program CIP CategoriesProgram CIP Categories

Source Water Improvements (Wells)Source Water Improvements (Wells) Water Treatment ImprovementsWater Treatment Improvements Water Storage and Pumping ImprovementsWater Storage and Pumping Improvements Water Transmission ImprovementsWater Transmission Improvements Water Distribution ImprovementsWater Distribution Improvements Replacement and RehabilitationReplacement and Rehabilitation Relocation of PipelinesRelocation of Pipelines Pipeline Improvements including UpsizingPipeline Improvements including Upsizing New DevelopmentNew Development Water Service (Meters and Appurtenances)Water Service (Meters and Appurtenances)


CIP Project Management using a CIP Project Management using a Five Year (Short-Term) WindowFive Year (Short-Term) Window

ESSENTIAL: ESSENTIAL: PProject needed to meet water demand from new development or roject needed to meet water demand from new development or essential for the maintenance of the water system.. Water demands 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 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 provide water to its new and existing customers. These Projects are included in the First year Schedule. the First year Schedule.

REQUIRED: REQUIRED: A project that is important for providing water service to A project that is important for providing water service to customers yet timing of construction is not as critical as an essential project. 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 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 factors such as the pace of new development or the condition of existing infrastructure may delay or accelerate the timing of project construction. These infrastructure may delay or accelerate the timing of project construction. These Projects are included in the 5-yr. window.Projects are included in the 5-yr. window.

DEFERRABLE: DEFERRABLE: Projects are not immediately critical to the operation of the Projects are not immediately critical to the operation of the water system. Expenditures in this category generally require a business case water system. Expenditures in this category generally require a business case study or specific criteria to be met before spending can occur. Contingent study or specific criteria to be met before spending can occur. Contingent spending is deferrable and covers emergency replacement. These projects are spending is deferrable and covers emergency replacement. These projects are long-term and are placed beyond window.long-term and are placed beyond window.


CIP Line Item Budget ExampleCIP Line Item Budget Example

FERC

AcctMajor Category Current YR

FY 2009

FY 2010 Project

Total

100 Water Treatment 100 Water Treatment

ImprovementsImprovements

11 Filter #6 Filter #6 ImprovementsImprovements

$230,000$230,000 $474,000$474,000 $538,0000$538,0000 $1,242,000$1,242,000

22 Clarifier #3 UpgradeClarifier #3 Upgrade $ 67,000$ 67,000 $ 67,000$ 67,000

100 Totals100 Totals $230,000$230,000 $541,000$541,000 $538,000$538,000 $1,309,000$1,309,000

500 Water Transmission 500 Water Transmission

ImprovementsImprovements

33 Main Street Ext.Main Street Ext. $24,700$24,700 $365,000$365,000

200 Totals200 Totals $24,700$24,700 $365,000$365,000 $389,700$389,700

Capital Budget TotalsCapital Budget Totals $230,000$230,000 $565,700$565,700 $903,000$903,000 $1,698,700$1,698,700

Typically 5 Yrs.


Capital Project ManagementCapital Project Management


Capital Improvement Program and Capital Improvement Program and Technical Capacity DemonstrationTechnical Capacity Demonstration

• Is Peak Demand Day > 85% of Permitted Is Peak Demand Day > 85% of Permitted Capacity and:Capacity and:

• Have Boil Water Notices been issued?Have Boil Water Notices been issued?• Are there Notices of Violations?Are there Notices of Violations?• Are there Regulatory Agreements?Are there Regulatory Agreements?• Is the System under a Formal Consent Orders?Is the System under a Formal Consent Orders?• Have all Regulatory Issues been Resolved?Have all Regulatory Issues been Resolved?• Is both Capacity and type of facilities adequate?Is both Capacity and type of facilities adequate?• Do Operator(s) have proper Licenses for needed Do Operator(s) have proper Licenses for needed

treatment levelstreatment levels?


Environmental Pressures on Environmental Pressures on Existing FacilitiesExisting Facilities


Florida’s Population Growth Florida’s Population Growth

Leads to Stressed Water Supplies Leads to Stressed Water Supplies

0

5

10

1950 1960 1970 1980 1990 2000 2010 2020

Wat

er U

se (

BG

D)

0

5

10

15

20

25

30

Pop

ula

tion

(m

illi

ons)

Water Use Population

2005 PWS 37% of use – 6.5 BGD

2025 PWS 43% of use – 8.5 BGD


Florida’s Ground Water Supplies and Florida’s Ground Water Supplies and Projected Water ShortagesProjected Water Shortages

5,691 Public Water Systems use 10,160 5,691 Public Water Systems use 10,160 Ground Water Supply WellsGround Water Supply Wells

Ground water supplies are already Ground water supplies are already scarce in some areas of Florida.scarce in some areas of Florida.

Ground water withdrawals are are Ground water withdrawals are are projected to result in critical water projected to result in critical water supply problems in the next 20 years.supply problems in the next 20 years.

These problems include public water These problems include public water degradation of water quality for public degradation of water quality for public use, significant declines in lake levels and use, significant declines in lake levels and drying of wetlands within these areasdrying of wetlands within these areas..

Water Resource Caution Areas

Withdrawals in Water Resource Caution Areas results in upwelling of water from lower zones and higher dissolved solids content


Florida Droughts are Common and Florida Droughts are Common and Sometimes SevereSometimes Severe

Six Droughts Since Year 2000


Changes in Land Use Intensify the Changes in Land Use Intensify the Effects of DroughtEffects of Drought


Capital Investment Capital Investment ConsiderationsConsiderations

Costs for new facilities will be the driving factor Costs for new facilities will be the driving factor for rate increases for the next 20 to 30 years.for rate increases for the next 20 to 30 years.

Have alternatives to construction that are more Have alternatives to construction that are more cost effective been evaluated?cost effective been evaluated?

Operational operating assistance are not fundable Operational operating assistance are not fundable under loan or grant programsunder loan or grant programs

The fees paid to engineering consultants are based The fees paid to engineering consultants are based on a percentage of the constructed coston a percentage of the constructed cost

CIPs should be evaluated thoroughlyCIPs should be evaluated thoroughly


DBPs Non-Compliance Caused by DBPs Non-Compliance Caused by Operational Mistakes Operational Mistakes

1. Not Measuring Cl/NH2Cl Location Residuals

2. Chlorinating Aerator3. Dosing Cl in combination with NH2Cl 4. Selecting Anhydrous NH35. Making DBPs so the GAC Unit can

remove them6. Flushing before Sampling 7. Not Trending DPBs8. Dosing with old Cl9. Growing Organics in Ion exchanger,

clearwell or tanks10. Not Taking DBP Sample at POE11. Not Fluctuating Tank Levels12. Not knowing water quality at

individual wells Creating Disinfection By-Product Creating Disinfection By-Product

ProblemsProblems


Responsibilities in a Responsibilities in a Constructed ProjectConstructed Project

Owner – Managing the Construction Project, Owner – Managing the Construction Project, Financially Responsible for Project Costs and for its Financially Responsible for Project Costs and for its efficient operationefficient operation

Engineer – Technically Responsible for Design, Engineer – Technically Responsible for Design, Specifying of Materials and Quality of Finished Specifying of Materials and Quality of Finished ProductProduct

Contractor – Responsible for Methods used to Contractor – Responsible for Methods used to Construct Project in Conformance to Plans and Construct Project in Conformance to Plans and SpecificationsSpecifications


Project ManagementProject Management

• Project Management is the Process used to Enhance the Project Management is the Process used to Enhance the Probability of Project Success by providing Leadership using Probability of Project Success by providing Leadership using Successful Techniques for Planning, Scheduling, Budgeting Successful Techniques for Planning, Scheduling, Budgeting and Controlling a Constructed Project.and Controlling a Constructed Project.

• The objective of Project Management is to Build a Quality The objective of Project Management is to Build a Quality Product that meets the Owner’s Expectations, at the Lowest Product that meets the Owner’s Expectations, at the Lowest Cost according to a set Schedule.Cost according to a set Schedule.

• To accomplish this the Owner must assume a strong To accomplish this the Owner must assume a strong Management RoleManagement Role


The Project Planning Time LineThe Project Planning Time LineControlling Quality and CostControlling Quality and Cost


Reducing Project Costs through Reducing Project Costs through Design RefinementDesign Refinement


Major Considerations in the Major Considerations in the use of a Consulting Engineer use of a Consulting Engineer

Beware of Delegating Control of Projects to the Beware of Delegating Control of Projects to the EngineerEngineer

Evaluate how well does Consultant’s Recommendations Evaluate how well does Consultant’s Recommendations meet Owner’s Basic Requirementsmeet Owner’s Basic Requirements

Beware of “Scope Creep” (Beware of “Scope Creep” (Right-Size Your Project!) Right-Size Your Project!) Beware of " Newest Technology" ProjectsBeware of " Newest Technology" Projects Beware of Slick Proposals and Flashy BrochuresBeware of Slick Proposals and Flashy Brochures and and

Professional PresentersProfessional Presenters Beware of Too Eager and Ready Solutions Beware of Too Eager and Ready Solutions Insist on a Predesign Report for Larger ProjectsInsist on a Predesign Report for Larger Projects!


Evaluating Consulting Engineer Evaluating Consulting Engineer QualificationsQualifications

Engineering project manager, engineering team composition and Engineering project manager, engineering team composition and compatibilitycompatibility

Experience of design office and location of work to be performedExperience of design office and location of work to be performed Ability to furnish the required services in a timely manner & team Ability to furnish the required services in a timely manner & team

member workloadmember workload Engineering approach, ability to adhere to project scope Engineering approach, ability to adhere to project scope Current Schedule Of Hourly Billing RatesCurrent Schedule Of Hourly Billing Rates List Available Resources, Materials, Equipment, and Facilities List Available Resources, Materials, Equipment, and Facilities

that includes list of Sub-Consultantsthat includes list of Sub-Consultants List of Clients / Utility SystemsList of Clients / Utility Systems


Personal Services PlanPersonal Services Plan


Preparing a Personal Services Budget

List Employee Roster of Full Time and Part List Employee Roster of Full Time and Part Time Equivalents (line item)Time Equivalents (line item)

Identify Pay Grade, Anticipated Pay Grade Identify Pay Grade, Anticipated Pay Grade and Anticipated Base Payand Anticipated Base Pay

Determine Direct Yearly CompensationDetermine Direct Yearly CompensationSum Total Sum Total


Other Personal Service Expenses Other Personal Service Expenses Included in PS BudgetIncluded in PS Budget

• Temporary SalariesTemporary Salaries• Overtime PayOvertime Pay• TrainingTraining• Working Out or Class Straight TimeWorking Out or Class Straight Time• Other Personnel ExpensesOther Personnel Expenses• Other Employee Allowances (Bonuses) Other Employee Allowances (Bonuses) • Health InsuranceHealth Insurance


Preventative Maintenance Preventative Maintenance ProgramsPrograms


Types and Acceptable Ranges for a Types and Acceptable Ranges for a

Preventative Maintenance ProgramPreventative Maintenance Program Predictive Maintenance (~ 60%)Predictive Maintenance (~ 60%) - Vibration Monitoring - Infrared Heat Monitoring- Vibration Monitoring - Infrared Heat Monitoring - Electrical Monitoring (Volts and Amps)- Electrical Monitoring (Volts and Amps) - Flows & Pressure Monitoring - Laser Alignment- Flows & Pressure Monitoring - Laser Alignment - Wear/Corrosion Monitoring - Ultrasonic Testing- Wear/Corrosion Monitoring - Ultrasonic Testing Preventative Maintenance (~ 40%)Preventative Maintenance (~ 40%) - Performed on Regular Schedule- Performed on Regular Schedule - Performed by Hours of Use- Performed by Hours of Use Planned MaintenancePlanned Maintenance - Performed based on History- Performed based on History - Performed based on Performance Drop- Performed based on Performance Drop Breakdown Maintenance (<Breakdown Maintenance (< 20%)

3% to 10% of original Equipment cost per yr. is spent on Maintenance in US3% to 10% of original Equipment cost per yr. is spent on Maintenance in US


Evolution of a Total PM Evolution of a Total PM ProgramProgram

Phase 1 Install PM SystemPhase 1 Install PM System

Phase 2 Stabilize Mean Time Phase 2 Stabilize Mean Time Between Equipment FailuresBetween Equipment Failures

Phase 3 Lengthen Equipment LifePhase 3 Lengthen Equipment Life

Phase 4 Periodically Restore DeteriorationPhase 4 Periodically Restore Deterioration

Phase 5 Predict Equipment LifePhase 5 Predict Equipment Life

TT

II

MM

EE


Energy Management Energy Management ProgramsPrograms


Energy Monitoring and Energy Energy Monitoring and Energy SurveysSurveys

The Goals are Twofold, reduce energy and/or reduce costsThe Goals are Twofold, reduce energy and/or reduce costs Identifies the amount Energy used in a facility by major Identifies the amount Energy used in a facility by major

equipment equipment Identifies Energy Costs and Tariffs Identifies Energy Costs and Tariffs Evaluates Alternatives for Reducing Energy UseEvaluates Alternatives for Reducing Energy Use

– Identify how energy is usedIdentify how energy is used– Identify points of wasted energyIdentify points of wasted energy– Identifies opportunities for improving operating techniquesIdentifies opportunities for improving operating techniques– Identifies Savings by Replacing Inefficient EquipmentIdentifies Savings by Replacing Inefficient Equipment

Identifies Cost Effectiveness of Energy AlternativesIdentifies Cost Effectiveness of Energy Alternatives


Components of a Typical Components of a Typical Electric BillElectric Bill

Basic Service Fee ($/mo)Basic Service Fee ($/mo) Demand Charge ($/kW) (Typically Demand Charge ($/kW) (Typically

based on Highest 15 minutes/year) based on Highest 15 minutes/year) Power Factor ($/kvar)Power Factor ($/kvar) Energy Charge ($/kWh)Energy Charge ($/kWh)


Listing of Energy Consuming Listing of Energy Consuming Equipment in Water PlantEquipment in Water Plant


Energy Requirements by ProcessEnergy Requirements by ProcessTypically 80 – 85% of Energy Use in a Water Treatment Typically 80 – 85% of Energy Use in a Water Treatment

System is for PumpingSystem is for Pumping


Reducing Energy Use or Costs with Reducing Energy Use or Costs with Pumping EquipmentPumping Equipment

Shifting Power Consumption from On-peak to Off-peak hours (Demand Shifting Power Consumption from On-peak to Off-peak hours (Demand Limiting)Limiting)

Adding Storage for Off peak/Emergency pumpingAdding Storage for Off peak/Emergency pumping Use of Efficient Pumping ProgramsUse of Efficient Pumping Programs Replacing older motors with high efficiency motors (cost 15 – 20% more).Replacing older motors with high efficiency motors (cost 15 – 20% more). Adding or replacing eddy-speed drives with variable frequency drives (VFDs)Adding or replacing eddy-speed drives with variable frequency drives (VFDs) Using Effective Instrumentation and Controls.Using Effective Instrumentation and Controls. Managing operations by the efficient use of available storage and high-Managing operations by the efficient use of available storage and high-

efficiency motorsefficiency motors Operating Emergency Generators for Peak-Clipping when no or little storage Operating Emergency Generators for Peak-Clipping when no or little storage

is available.is available. Shifting Rates to Another Category (Master Metering)Shifting Rates to Another Category (Master Metering)


Energy Use for Space Heating & Cooling and Energy Use for Space Heating & Cooling and Lighting are Major Users in Commercial Lighting are Major Users in Commercial

BuildingBuilding


In ConclusionIn Conclusion

System Planning is the most critical aspect of System Planning is the most critical aspect of operating a water and wastewater utilityoperating a water and wastewater utility

The planning methods discussed in this The planning methods discussed in this presentation lead to efficient and sustainable presentation lead to efficient and sustainable operations at the lowest cost to the utilityoperations at the lowest cost to the utility

Assistance in any of the topics discussed in this Assistance in any of the topics discussed in this presentation are available by contacting Florida presentation are available by contacting Florida Rural Water Association at 850-668-2746 or on Rural Water Association at 850-668-2746 or on the WEB at: http.//[email protected] the WEB at: http.//[email protected]

Documents

Florida Rural Water Association1 Water and Wastewater System Planning for Small and Medium Utilities Using Prudent Utility Management Practices