Effectively Managing Your Utility Into The FutureWhat is EUM and how can you implement the process at your utility?

Presenter Introductions• Craig Calvert

Senior Business Analyst, RA ConsultantsB.S. Finance, Indiana University SoutheastLean Six Sigma Green Belt

• Darren Gore, PECity of Murfreesboro, Asst. City Manager – Utility EnterprisesBachelors & Masters in Engineering Georgia Tech Professional Engineer licensed in TN, KY and AL

What is Effective Utility Management (EUM)• EUM helps you take a 360-degree look at your utility and then set priorities

that work for you and your community.

• It helps you protect your current infrastructure investments and ensure that your workforce is motivated and able to address the challenges that they face every day.

• It moves you from reacting only to the “hot priorities” of the day to proactively planning for the future.

• It helps you engage your staff in the process of assessing and charting your own course for the future.

• It is simple, actionable, affordable, and scalable to meet the needs of all utilities.

Organizations Involved

10 Attributes of an Effectively Managed Utility

Utility Management

Product Quality

Customer Satisfaction

Employee Leadership & Development

Operational Optimization

Financial Viability

Infrastructure Stability

Operational Resiliency

Community Sustainability

Water Resource Adequacy

Stakeholder Understanding

& Support

Where To StartProduct Quality• Meets or exceeds regulatory and reliability

requirements.

• Operates consistent with customer, public health, economic, and ecological needs.

Financial Viability• Understands and plans for full life-cycle cost of utility.

• Effectively balances long-term debt, asset values, operations and maintenance expenditures, and operating revenues.

• Sets predictable and adequate rates to support utility current needs and plans to invest in future needs, taking into account affordability and the needs of disadvantaged households when setting rates.

• Understands opportunities for diversifying revenue and raising capital.

Sample EUM Dashboard

Product Quality

Product QualityDegree of Success in Achieving Target WTER1 of 3

Product QualityDegree of Success in Achieving Target WTER2 of 3

Product QualityDegree of Success in Achieving Target WTER3 of 3

Financial Viability

Financial ViabilityPercentage of Revenue Available for Capital Spending

Financial ViabilityPercentage of Revenue Available for Capital Spending

EUM ResultsBenefits Noticed• Improvement in 7 of 9 attribute areas

• Broke down silos of communication

• Better understanding of correlation between business areas

• Company Goals became clear

• Asset Management Planning nearly completed through EUM Efforts

• EUM became basis of Sustainability Planning

Chain reactions• Deep dive analysis of electric bills

• Further review of contractor invoices

• New method of tracking company goals

• Alignment with strategic planning

How can you get started?

The EUM Primer is a “How-To” document for everything EUM

Great resources including the primer can be located on the EPA website

https://www.epa.gov/sustainable-water-infrastructure/tools-effective-water-and-wastewater-utility-management

ACWA Excellence in Management

Water WastewaterResidents Served 78,000 130,000Lines 442 mi. 646 mi.Plant Capacity 20 mgd 24 mgd

Water Supply: East Fork Stones River andPercy Priest ReservoirReceiving Stream: W. Fork Stones River

Last WTP Expansion 2010Last WWTP Expansion Fall 2017

SYSTEM PROFILE

2016Receives “Utility

of the Future: Today”

Recognition

2017Receives

NACWA’s Gold Peak

Performance Award

Utility of the Future Today

IT Master PlanResulted by Focusing on

Customer Satisfaction in EUM Self-Assessment

AWWA BENCHMARKING SURVEY PARTICIPATIONResulted from EUM-Self Assessment

3222 MWRD

5761Top

Quartile

3777Median

2705BottomQuartile

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000

Average Calls per Rep (Benchmark)

Average Calls per Rep MWRD

3.2% MWRD

11.9%BottomQuartile

6.4%Median

3.4%Top

Quartile

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00%

Abandoned Call Ratio (Benchmark)

Abandoned Call Ratio MWRD

0

1000

2000

3000

4000

5000

6000

7000

8000

Dec

-11

Jun-

12D

ec-1

2Ju

n-13

Dec

-13

Jun-

14D

ec-1

4Ja

n-15

Feb-

15M

ar-1

5Ap

r-15

May

-15

Jun-

15Ju

l-15

Aug-

15Se

p-15

Oct

-15

Nov

-15

Dec

-15

Jan-

16Fe

b-16

Mar

-16

Apr-

16M

ay-1

6Ju

n-16

Jul-1

6Au

g-16

Sep-

16O

ct-1

6N

ov-1

6

CASHIER PAYMENTS

Walk in and drive through transactions are down 27.7% (~2100 per month)

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000MAILED AND DEPOSITED PAYMENTS

MAIL NIGHT DEP

Night deposits (drop box) are down 46.7% (~900 per month)Receipts by mail are down 32.4% (~2500 per month)

02000400060008000

10000120001400016000

ELECTRONIC PAYMENTS

ACH ELECTRONIC ONLINE/IVR

Electronic bill payments are up 56.6% (~1000 per month), currently serving ~10% of our customer base and growing

Online and IVR transactions are trending strongly upward and currently stand at ~4800 per month, serving ~18% of our customer base

Infinity.Link On-line CIS Portal

AMI Portal – Early Leak Notification & Water Budgeting

Annual Budget

Revenue Sales

O&M Expenses

Debt Funded Capital Outlay

Rate Funded CapEx

Reserve Funded Working Capital

ContinuousFinancial Planning

Pro Forma

Rate Design

Cost of Service Study

Capital Improvements

Plan

ContinuousStrategic Planning

Trends and Strategic

Planning Issues

Effective Utility

Management

Information Technology Master PlanEUM &

Strategic Planning

Current & Target

Performance2017 Targets

2017 Performance

Where is MWRD Focused Next?EMPLOYEE LEADERSHIP & DEVELOPMENT

8.9%8.1%

10.6%

11.1%11.8%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

2011 2012 2013 2014 2015 2016 2017 2018

AWWABenchmark

MWRD

Gaps in Years of Service (5-10yrs) – Why?

$22.51

$21.87

$21.87

$21.87

$21.87

$21.87

$21.87

$21.87

$22.42$22.42$22.42$22.98$22.98

$22.98

$28.98

$26.75

$24.75

$30.94

$25.25

$27.46

$25.80$26.00

$26.20

$26.40$27.00$27.25

$28.42

$28.42

$33.75

$29.00

$33.75 $33.75 $33.75

$21.00

$23.00

$25.00

$27.00

$29.00

$31.00

$33.00

$35.00

0%10%20%30%40%50%60%70%80%90%

100%110%120%130%

0.00 5.00 10.00 15.00 20.00 25.00 30.00

Years of Service

M’boro Job Class

6 Pay Grades 5 Steps @ 2.5% &

1.5% Adjustment each Year 21.9% Min to Mkt

Mkt Max

Entr

yN

ovic

eIn

term

edia

te

Adva

nced

Expe

rt

Min.

Open frameworkMkt to Max

45.0% Min to Max

Yr1 Yr2 Yr3 Yr6 On

Appr

entic

e

Yr4

New Pay Plan Strategy

Maintenance Tech (Basic Skills)

Maintenance Tech I (1+ yrs w/ Class I Certification)

Maintenance Tech II (3+ yrsw/ Class II Certification)

Lead Maintenance Tech (5+ yrs w/ Class III Certification)

Maintenance Supervisor (1st

Tier Supervisor; 5+ yrs w/ Class III & Electrician License)

Asst. Plant Manager (2nd

Tier Supervisor)

MAINTENANCE TECH “Job Family” Water Plant & WRRF

Competency-based Grade Increases

Murfreesboro Water and Sewer DepartmentMaintenance Levels

Maintenance Technician

Maintenance Technician I

Maintenance Technician II

Lead Maintenance

TechnicianMaintenance

SupervisorExperience Requirement 1+years 3+years 5+years 5+yearsBasic Skills X X X X XMECH 1100 Electronic Components X X X XMECH 1200 Mechanical Components and Motors X X XMECH 1300 Pneumatic and Hydraulic Control Circuits X X XMECH 1500 Digital Fundamentals and PLCs X XMechatronics Technology Certificate of Credit X XLevel 1 Certification Exam - Siemens Mechatronics System Assistant XMECH 2400 Motor Control XABC Plant Maintenance Technologist Class I Certification XABC Plant Maintenance Technologist Class II Certification XABC Plant Maintenance Technologist Class III Certification X XElectrician License (LLE) X

Competency-based Grade Increases

Annual Budget

Revenue Sales

O&M Expenses

Debt Funded Capital Outlay

Rate Funded CapEx

Reserve Funded Working Capital

ContinuousFinancial Planning

Pro Forma

Rate Design

Cost of Service Study

Capital Improvements

Plan

ContinuousStrategic Planning

Trends and Strategic

Planning Issues

Effective Utility

Management

Information Technology Master Plan

10-20 Year Service

Area Planning

Water Resource Integration Plan

Murfreesboro 2035

BiosolidsMaster Plan

EUM & MWRD’s

Vision of the Future

Water Resource Integration Plan, 2018

Cultural Goal

The Iceberg Concept

Change is the Only Constant• I used to say Learning Organizations are “change-

ready” and embrace change• But I recently read “reinvention is taking control of change”

• So I think MWRD is going to change this mantra to state Learning Organizations are reinventors, or Learning Organizations take control of change.

• MWRD’s WRIP is that attempt – to reinvent conventional water resources services and take control of the change that water resource providers must make to serve our growing communities.

• EUM focused MWRD on this new paradigm

Questions?