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HomeMy WebLinkAbout03-20-24 F&A Committee Packet 1 OTAY WATER DISTRICT FINANCE AND ADMINISTRATION COMMITTEE MEETING and SPECIAL MEETING OF THE BOARD OF DIRECTORS 2554 SWEETWATER SPRINGS BOULEVARD SPRING VALLEY, CALIFORNIA BOARDROOM WEDNESDAY March 20, 2024 12:00 P.M. This is a District Committee meeting. This meeting is being posted as a special meeting in order to comply with the Brown Act (Government Code Section §54954.2) in the event that a quorum of the Board is present. Items will be deliberated, however, no formal board actions will be taken at this meeting. The committee makes recommendations to the full board for its consideration and formal action. AGENDA 1. ROLL CALL 2. PUBLIC PARTICIPATION – OPPORTUNITY FOR MEMBERS OF THE PUBLIC TO SPEAK TO THE BOARD ON ANY SUBJECT MATTER WITHIN THE BOARD’S JURISDICTION INCLUDING AN ITEM ON TODAY’S AGENDA DISCUSSION ITEMS 3. FISCAL YEAR 2024 MID-YEAR UPDATE FOR THE DISTRICT’S FISCAL YEAR 2023-2026 STRATEGIC PLAN (MIKE KERR) [15 minutes] 4. ADJOURNMENT BOARD MEMBERS ATTENDING: Tim Smith, Chair Jose Lopez All items appearing on this agenda, whether or not expressly listed for action, may be de- liberated and may be subject to action by the Board. The agenda, and any attachments containing written information, are available at the Dis- trict’s website at www.otaywater.gov. Written changes to any items to be considered at the open meeting, or to any attachments, will be posted on the District’s website. Copies of the agenda and attachments are also available by contacting the District Secretary at (619) 670-2253. 2 If you have any disability which would require accommodations to enable you to participate in this meeting, please call the District Secretary at 670-2253 at least 24 hours prior to the meeting. Certification of Posting I certify that on March 14, 2024, I posted a copy of the foregoing agenda near the regular meeting place of the Board of Directors of Otay Water District, said time being at least 24 hours in advance of the meeting of the Board of Directors (Government Code Section §54954.2). Executed at Spring Valley, California on March 14, 2024. /s/ Tita Ramos-Krogman, District Secretary STAFF REPORT TYPE MEETING: Regular Board MEETING DATE: April 3, 2024 PROJECT: Various DIV. NO.ALL SUBMITTED BY: Michael Kerr, Information Technology Manager APPROVED BY: Adolfo Segura, Chief, Administrative Services Jose Martinez, General Manager SUBJECT: FY24 MID-YEAR REPORT OF THE DISTRICT’S FY23-26 STRATEGIC PLAN GENERAL MANAGER’S RECOMMENDATION: No recommendation. This is an informational item only. COMMITTEE ACTION: Please see “Attachment A”. PURPOSE: To provide a mid-year report of the District’s FY23-26 Strategic Plan for FY24. ANALYSIS: Summary The current Otay Water District Strategic Plan is a four-year plan ranging from the start of FY23 through the end of FY26. This report details the mid-year results for the second year of the organization’s four-year program. Objectives – Target 90% Strategic Plan objectives are designed to ensure the District’s execution of mission-derived strategies and the implementation of changes necessary to guide the agency, addressing emerging challenges and fostering a positive adaptation to change. FY24 mid-year results are at 90%, with 27 of 30 active items completed or on schedule; one (1) is behind schedule, AGENDA ITEM 3 2 and two (2) are on hold. Objective Behind Schedule (1): FINANCIAL Strategy: Invest in technology to enhance customer engagement and satisfaction. Objective: Deploy Advanced Metering Infrastructure (AMI) technology in service areas to improve District operations. The District’s contractor, Master Meter, began the process of converting automated meter reading (AMR) meters to advanced meter infrastructure (AMI) meters in September 2023. However, progress has been slower than anticipated, with completion now projected for May or June 2024. As the transition progresses, the project will initiate customer engagement efforts accordingly. Objectives On Hold (2): FINANCIAL Strategy: Maintain a long-range financing plan that sets forth the long- term funding needs of the District. Objective: Evaluate the District’s cash reserve policies to consider optimal uses and levels of reserves, to ensure financial resiliency. To date, the District has encountered some challenges in identifying a consultant capable of providing the required services or an agency that has recently conducted a similar study. In the interim, the 0 5 10 15 20 25 30 35 40 45 27 1 2 5 On Schedule/Completed Behind On Hold Not Started 27 of 30 Objectives are Completed or On Schedule (90%) 3 District sought guidance from its financial advisor regarding its current reserve policy and debt coverage practices in relation to its bond rating. Additionally, staff initiated a study to benchmark the District’s reserve policy against those of other local agencies. However, due to turnover and prioritization of the ERP implementation, progress on this initiative has been put on hold. Staff intends to resume and complete the comparison when the department returns to full staffing levels. INTERNAL BUSINESS PROCESS Strategy #1: Leverage the use of renewable and clean energy resources and reduce the use of hazardous chemicals. Objective: Reduce the District’s chemical footprint by substituting hazardous chemicals for similar, less hazardous chemicals. The Ralph W. Chapman Water Recycling Facility Disinfection System Improvements project was recently approved and awarded in the second quarter, with construction planning meetings scheduled for the third quarter. However, given the expected delays in equipment manufacturing and the projected construction start date in FY25, the objective has been placed on hold. Key Performance Indicators (KPI’s) – Target 75% KPI’s are designed to track the District’s day-to-day performance. These indicators measure the effectiveness and efficiency of essential operational services. The District’s overall KPI goal of 75% is considered “on target”. For FY24, mid-year results are above target at 87%, with 20 of 23 items achieving the desired level or better. 20 of 23 Key Performance Indicators are On Target (87%) 0510152025303540 20 3 On Target Not on Target 4 KPI’s Not on Target (3): CIP Project Expenditures vs. Budget Target: 95% of budget annually. Capital Improvement Project (CIP) expenditures stand at 18%, falling short of the mid-year goal of 36%. This shortfall is attributed to delays in material acquisition and staff turnover. Hydrant Maintenance Program Target: 1220 fire hydrants maintained annually. Utility Maintenance Staff serviced 560 fire hydrants, slightly below the mid-year target of 610. Their efforts were redirected toward assisting in Capital Improvement Projects (CIP) and simulated shutdowns, contributing to this variance. Staff will prioritize ensuring the target is achieved before the end of the fiscal year. Employee Turnover Rate Target: Less than 5% turnover annually. Five (5) voluntary terminations occurred in the first and second quarters, resulting in a turnover rate of 3.65% for mid-year results. KPI’s are determined on established AWWA performance benchmarks, water agency standards, and historical trends. Of the total measures outlined in the Strategic Plan, 10 are reported annually to include: • Water Rate Ranking • Sewer Rate Ranking • Water Debt Coverage • Sewer Debt Coverage • Reserve Level • Accounts Per Full-Time Employee (FTE) • Business Recovery Exercises • Vulnerability Assessments • Potable Tank Inspection and Cleaning • Injury Incident Rate One (1) measure is reported biennially to triennially: • Customer Opinion Survey 5 Next Steps Staff will continue to focus on the plan’s objectives, key performance indicators, and emerging trends. Committee Reports – Slideshow The Strategic Plan mid-year results are presented to both the Conservation, Public Relations, Legal & Legislative Committee, and the Finance and Administration Committee (see “Attachment B”). The Strategic Plan is also available on the District’s website. FISCAL IMPACT: Joe Beachem, Chief Financial Officer Informational item only; no fiscal impact. STRATEGIC GOAL: Strategic Plan and Performance Measure reporting is a critical element in providing performance reporting to the Board and staff. LEGAL IMPACT: None. ATTACHMENTS: Attachment A – Committee Action Report Attachment B – PowerPoint Presentation 6 ATTACHMENT A SUBJECT/PROJECT: FY24 MID-YEAR REPORT OF THE DISTRICT’S FY23-26 STRATEGIC PLAN COMMITTEE ACTION: The Conservation, Public Relations, Legal & Legislative Committee, and the Finance & Administration Committee met on March 19 and 20, 2024, respectively, to review this item. The Committees support the presentation to the full Board. NOTE: The “Committee Action” is written in anticipation of the Committee moving the item forward for Board approval. This report will be sent to the Board as a committee approved item or modified to reflect any discussion or changes as directed by the committee prior to presentation to the full Board. OTAY WATER DISTRICT STRATEGIC PLAN FY 2024 Mid-Year Report 2023 2026 ATTACHMENT B BALANCED SCORECARD 2 Focuses on the financial performance of the District FINANCIAL Focuses on the District’s culture and development of staff to ensure there is a productive and skilled workforce in place LEARNING AND GROWTH Focuses on customer service levels, satisfaction, brand, and confidence CUSTOMER Focuses on business processes designed to deliver and improve customer objectives and services INTERNAL BUSINESS PROCESS 90% Total 35 ON SCHEDULE/ COMPLETED BEHIND SCHEDULE ON HOLD OBJECTIVES TR E N D S MID-YEAR FY 2024 27 Objectives 27/30 = 90% Overall Target 94% 88% 93%95%94% 82%86% 98%100% 50% 60% 70% 80% 90% 100% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Year-End Target 3 Active/Completed 30 Not Started 5 1 Objective 1/30 = 3% 2 Objectives 2/30 = 7% CUSTOMER Enhance and build public awareness of the District’s priorities, initiatives, programs, and services Collect and analyze customer feedback on District operations, projects, programs, service experience, and expectations Advance the District's web and social media presence Enhance internal communications, tools, and technology to disseminate information to District staff effectively Enhance education, outreach, and communication tools to the public on the understanding of water supply constraints and rates and how they affect/support a reliable water supply 4 Completed On Schedule Left to right: Alexis Salcedo and Leo Lopez Utility Maintenance staffOutreach Event: Chula Vista Starlight Parade (December 3, 2023) FINANCIAL Maintain a long-range financing plan that sets forth the long-term funding needs of the District Evaluate grant funding opportunities Evaluate banking functions for lower cost and process efficiencies Evaluate the District’s cash reserve policies to consider optimal uses and levels of reserves, to ensure financial resiliency Conduct an evaluation of a health savings investment account program for an optional post-employment benefit Conduct a compensation study to evaluate labor industry conditions and the District’s competitiveness Invest in technology infrastructure to enhance customer engagement and satisfaction Deploy Advanced Metering Infrastructure (AMI) technology in service areas to improve the District operations Evaluate Interactive Voice Response (IVR)/Online customer portal for water use management and assistance 5 Completed On Schedule Behind Schedule On Hold Hannah Tamjidi Finance Department Assistant INTERNAL BUSINESS PROCESS Leverage the use of renewable and clean energy resources and reduce the use of hazardous chemicals Evaluate and implement energy-efficient systems Evaluate and implement alternative energy opportunities Advance Clean Fleet Regulations District Implementation Program of Zero or near Zero Emissions Vehicles Reduce the District’s chemical footprint by substituting hazardous chemicals for similar, less hazardous chemicals Implement technologies to improve response time, security, and operational effectiveness Conversion of the District’s enterprise Geographic Information System (GIS/Esri) from a Geometric Network to a Utility Network Model Conduct needs assessment/replacement of District's financial management system Maintain and regularly evaluate internal financial controls Leverage Cityworks to further develop job task process standardization and work order cost modeling 6 Completed On Schedule On Hold Not Started Abraham Yanez Equipment Mechanic II INTERNAL BUSINESS PROCESS Develop appropriate water resource mix to meet the water reliability needs of the community Use the Water Facilities Water Management Plan/Urban Water Management Plan to analyze future needs and prescribe approaches to meeting future requirements Evaluate City of San Diego’s recycled water purchase Develop the District’s long-term water supply strategies and planning efforts with regional partnerships Respond to anticipated water shortages through rate structure modification, conservation assistance, and outreach Monitor and modify the Water Shortage Contingency Plan, as needed Identify, evaluate, and implement new opportunities for recycled water, including potential for potable reuse 7 Completed On Schedule Javier Vasquez Meter Maintenance Worker II INTERNAL BUSINESS PROCESS Advancement of District's Asset Management Program Formalization of Standard Operating Procedures (SOP) and Planned Job Observations (PJO) Develop long-term strategic operations and maintenance program (Total Asset Management) Collect and maintain accurate asset records, including criticality, maintenance history, asset condition, and performance for continuous improvement Cloud migration of the District’s enterprise Geographic Information System (GIS/Esri) and the associated Asset Management and Field Applications Cyber and Physical Security Advance the use of the District's Supervisory Control and Data Acquisition (SCADA) system to further enhance the security and reliability of the distribution system and optimize administration Evaluate new disaster recovery solutions and advance the District's enterprise business continuity program 8 Completed On Schedule Not StartedSam Battikha SCADA/Instrumentation Tech LEARNING AND GROWTH Coordinate workforce planning activities to determine future needs, identify gaps, and implement actions to close the gaps Maximize opportunities to develop employees through training and mentoring Evaluate the implementation of learning and development programs in coordination with partner agencies Analyze and identify workforce trends to address critical gaps between the current workforce and future needs Improve Organization Effectiveness Negotiate successor Memorandum of Understanding (MOU) with the employee association and unrepresented employees to focus on recruitment and retention Implement a cross-functional innovation committee to advance the District’s culture of collaboration and process improvement among departments 9 On Schedule Not Started Left to right: Carlos Ayala, Dustin Schwegel, and Marco Ramirez Utility Maintenance staff Training: Rescue Vactor Truck Training KEY PERFORMANCE INDICATORS TR E N D S MID-YEAR FY 2024 Overall Target 75% Total 34 Reported Quarterly 23 Reported Annually 10 83% 90%88% 95% 83% 90%90%88%88% 50% 60% 70% 80% 90% 100% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Year-End Target 20 KPIs 20/23 = 87% ON TARGET NOT ON TARGET 3 KPIs 3/23 = 13% Reported Biennial to Triennial 1 10 11 0.85 0.73 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile TECHNICAL QUALITY COMPLAINT (AWWA | Customer Relations) TARGET No more than 4.6 complaints per 1,000 customer accounts annually | No more than 1.15 complaints per 1,000 customer accounts per quarter CALCULATION Number of technical quality complaints per year/Number of active accounts per reporting period AWWA BENCHMARK Average of 75th Percentile, 2.6, and Median, 6.6, for population served between 100,001 – 500,000 (Combined Utilities) LAURA YORK Lab Analyst TARGET 100% of all health-related drinking water standards per quarter and annually CALCULATION Number of days the primary health regulations are met/Number of days in the reporting period AWWA BENCHMARK 100% - 75th Percentile for population served between 100,001 – 500,000 (Water)12 100% (FY 23 Q1 & Q2 Result) 99.05% 97.99% 95% 96% 97% 98% 99% 100% Q1 Q2 Q3 Q4 Result Target ANSWER RATE TARGET 97% average answer rate per quarter and annually CALCULATION Number of calls answered/Total number of calls 100%100% 95% 96% 97% 98% 99% 100% Q1 Q2 Q3 Q4 Result Target POTABLE WATER COMPLIANCE RATE (AWWA | Water Operations) 13 70% 72% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Q1 Q2 Q3 Q4 Result Target PLANNED POTABLE WATER MAINTENANCE RATIO IN $ TARGET 70% of all labor costs spent on preventative maintenance per quarter and annually CALCULATION Total Planned Maintenance Cost/Total Maintenance CostDEANDRE SAVAGE Water Systems Operator III 95%97% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Q1 Q2 Q3 Q4 Result Target PLANNED RECYCLED WATER MAINTENANCE RATIO IN $ TARGET 70% of all labor costs spent on preventative maintenance per quarter and annually CALCULATION Total Planned Maintenance Cost/Total Maintenance Cost 14 89% 98% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Q1 Q2 Q3 Q4 Result Target PLANNED WASTEWATER MAINTENANCE RATIO IN $ TARGET 80% of all labor costs spent on preventative maintenance per quarter and annually CALCULATION Total Planned Maintenance Cost/Total Maintenance Cost 3.4% 4.1% 0% 1% 2% 3% 4% 5% 6% 7% Q1 Q2 Q3 Q4 Result Target DISTRIBUTION SYSTEM LOSS TARGET Less than 5% of unaccounted water per quarter and annually CALCULATION Volume purchased from CWA, City of San Diego customers + volume used by District/Volume purchased from CWA, City of San Diego, and RWCTP production 15 $1,138.00 $1,116.64 $500 $700 $900 $1,100 $1,300 $1,500 $1,700 $1,900 Q1 Q2 Q3 Q4 Result Target DIRECT COST OF TREATMENT PER MGD TARGET No more than $1464 per MGD spent on wastewater treatment annually | No more than $1255 MGD spent in Q1 & Q4 and $1673 MGD spent in Q2 & Q3 CALCULATION Total O&M costs directly attributable to sewer treatment/Total volume in MG for one quarter 0.0% 0.5% 0% 1% 2% 3% 4% 5% 6% 7% Q1 Q2 Q3 Q4 Result Target CONSTRUCTION CHANGE ORDER INCIDENCE TARGET No more than 5% per quarter and annually CALCULATION Cost of Change Orders (not including allowances)/Original construction contract amount (not including allowances)16 10% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Q2 Q3 Q4 Result Target CIP PROJECT EXPENDITURES VS. BUDGET TARGET 95% of budget annually (Q1: 15% + Q2: 21% + Q3: 29% + Q4: 30% = 95%) CALCULATION Actual Expenditures/Annual Budget 17 99.99%99.99% 95% 96% 97% 98% 99% 100% 101% Q1 Q2 Q3 Q4 Result Target BILLING ACCURACY TARGET 99.8% billing accuracy per quarter and annually CALCULATION Number of correct bills/Number of bills issued during the reporting period CARLOS ROMERO Customer Service Field Rep II 25%25% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 Q2 Q3 Q4 Result Target EASEMENT EVALUATION AND FIELD INSPECTION TARGET 100% assigned easements, evaluated via desktop tools, and inspected annually (100 easements are assigned for FY24 | 25 easements per quarter) CALCULATION Number of easements evaluated and inspected/Total easements assigned for the period 18 JOSUE BEAS Construction Inspector I 0.14 0.27 0 2 4 6 8 10 12 14 16 18 20 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile POTABLE WATER DISTRIBUTION SYSTEM INTEGRITY (LEAKS) (AWWA | Water Operations) TARGET No more than 2.5 leaks per 100 miles of distribution piping annually | No more than 0.625 leaks per 100 miles of distribution piping per quarter CALCULATION 100 (Number of leaks)/Total miles of distribution piping AWWA BENCHMARK 2.5 – 75th percentile for population served between 100,001-500,000 19 0 0.140 2 4 6 8 10 12 14 16 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile POTABLE WATER DISTRIBUTION SYSTEM INTEGRITY (BREAKS) (AWWA | Water Operations) TARGET No more than 3 breaks per 100 miles of distribution piping annually | No more than 0.75 breaks per 100 miles of distribution piping per quarter CALCULATION 100 (Number of breaks)/Total miles of distribution piping AWWA BENCHMARK 3 – 75th percentile for population served between 100,001-500,000 0 00 0.5 1 1.5 2 2.5 3 Q1 Q2 Q3 Q4 Result Target RECYCLED WATER SYSTEM INTEGRITY (LEAKS) TARGET No more than 2.5 leaks per 100 miles of recycled distribution system annually | No more than 0.625 leaks per 100 miles of recycled distribution system per quarter CALCULATION 100 (Number of leaks)/Total miles of recycled distribution system 20 0 00 0.5 1 1.5 2 2.5 3 Q1 Q2 Q3 Q4 Result Target RECYCLED WATER SYSTEM INTEGRITY (BREAKS) TARGET No more than 3 breaks per 100 miles of recycled distribution system annually | No more than 0.75 breaks per 100 miles of recycled distribution system per quarter CALCULATION 100 (Number of breaks)/Total miles of recycled distribution system 21 1241 917 0 200 400 600 800 1000 1200 1400 1600 1800 2000 Q1 Q2 Q3 Q4 Result Target SYSTEM VALVE EXERCISING PROGRAM TARGET 20% of District valves exercised annually to accomplish 100% every five years (4092 valves annually | 1023 valves per quarter) CALCULATION Total number of valves exercised per year 322 238 100 150 200 250 300 350 Q1 Q2 Q3 Q4 Result Target HYDRANT MAINTENANCEPROGRAM TARGET 20% of District fire hydrants maintained annually to accomplish 100% every 5 years (1220 fire hydrants annually | 305 fire hydrants per quarter) CALCULATION Total number of fire hydrants maintained 22 0 00 1 2 3 4 5 6 7 8 9 10 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile SEWER OVERFLOW RATE (AWWA | Wastewater Operations) TARGET 0 overflows per quarter and annually CALCULATION 100 (Number of sewer overflows during the reporting period)/Total miles of pipe in the sewage collection system AWWA BENCHMARK 0 – 75th Percentile for population served between 0-50,000 100%100% 95% 96% 97% 98% 99% 100% 101% Q1 Q2 Q3 Q4 Result Target MARK-OUT ACCURACY TARGET 100% mark-out accuracy per quarter and annually CALCULATION Number of mark-outs performed without an at-fault hit, which is damage to a District facility that results from a missing or erroneous mark-out/Total number of mark-outs 1.46% 2.17% 0% 1% 2% 3% 4% 5% Q1 Q2 Q3 Q4 Result Target EMPLOYEE VOLUNTARY TURNOVER RATE TARGET Less than 5% turnover annually | Less than 1.25% turnover per quarter CALCULATION Number of voluntary terminations (not including retirements)/Average number of employees 23 STAFF TOURS 624-3 and 870-2 Pump Station 7.60 8.58 0 5 10 15 20 25 30 35 40 Q1 Q2 Q3 Q4 Result Target 75th Percentile Median 25th Percentile TRAINING HOURS PER EMPLOYEE (AWWA | Organizational Development) 10.38 17.97 0 10 20 30 40 50 60 70 80 90 100 Q1 Q2 Q3 Q4 Result Target SAFETY TRAINING PROGRAM TARGET 24 hours per field employee annually | 6 hours per employee per quarter CALCULATION Total qualified safety training hours for field employees/Average number of field employees 24 TARGET 15.6 hours per employee annually | 3.9 hours per employee per quarter CALCULATION Total qualified training hours for all employees/Average number of FTEs AWWA BENCHMARK 15.6 – Median for combined utilities RESOURCE LINKS Otay Water District Website | Strategic Plan FY23 - FY26 Strategic Plan Digital Publication QUESTIONS?