Board of Water Supply City & County of Honolulu. State of the BWS: Challenges and Opportunities

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Lorena Harrell
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1 Board of Water Supply City & County of Honolulu State of the BWS: Challenges and Opportunities

2 Agenda Mission Overview of the BWS What s happened since 2012? Strategic Plan Water Master Plan Sustainability Initiatives BWS Improvements New Challenges

3 Draft Strategic Plan BWS Vision and Mission Vision: Ka Wai Ola Water for Life Mission: To provide safe, dependable, and affordablewater now and into the future

4 The BWS At-A-Glance

5 What s happened since 2012? Customer Information System & Monthly Billing Conversion Charter Resolutions City Auditor s Report Beretania Redevelopment

6 CIS and Monthly Billing Conversion In January of 2013, the BWS converted to a new billing system to replace an aging billing system that was no longer viable. The BWS also switched from a bimonthly to monthly bill. Despite extensive preparation and testing, the BWS experienced multiple problems during the transition to the new system.

7 Billing System Conversion All of these changes created a perfect storm resulting in: Shorter deadlines for meter reading to be completed (e.g., holidays, weekends). A meter reading upload error that was overwriting and erasing previous water meter entries as a result of a software configuration. Malfunctioning automatic meter reading equipment. Not enough staff to manually review the meter readings.

8 Billing System Conversion To date, many of these problems have been addressed: We have made changes to improve our AMR process. Since September of 2013, BWS obtains 98% of its meter readings; meaning only 2% or less must be estimated. Our billing system has been reconfigured to identify and hold any bill estimated for more than two consecutive months. Such bills will be reviewed and manually approved before being released.

9 Customer Service Providing a high level of customer service is critical to our mission. Customer bills are designed to provide easy-to-read information about their consumption and provides multiple ways for bill payment. The BWS publishes a quarterly newsletter called Water Matters, that features important information about BWS projects and tips for customers to save on their water bill. The newsletter is inserted in the customer bill.

10 Customer Service 91.00% 90.00% AMR Drive By Reads (%) February 2014 to January % 88.00% 87.00% 86.00% 85.00% 84.00% 83.00% 82.00% Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

11 Customer Service Total System Estimated Bills Per Month Feb '14 Mar '14 Apr '14 May '14 Jun '14 Jul '14 Aug '14 Sep '14 Oct '14 Nov '14 Dec '14 Series Jan '15 (thru Cycle 9)

Customer Service 300,000 250,000 270,551 CALL

150,000 100,000 160,381 170,384 148,521 92,391

12 Customer Service 300, , ,551 CALL CENTER Comparison: # OF CALLS 200, , , , , ,521 92,391 50,000 0 Presented Answered Abandoned 11,

13 Charter Resolutions Several City Council resolutions were introduced between 2012 and 2014: RESO Initiating amendments to the revised charter of the City and County of Honolulu 1973, as amended, to transfer the powers, duties and functions of the Board of Water Supply to a Department of Water Supply under the Executive Branch of the City.

14 Charter Resolutions RESO Initiating Amendments to the revised charter of the City and County of Honolulu 193, as amended, relating to the Board of Water Supply. This resolution sought to increase the BWS board of directors from seven members to 11. The resolution was not heard by the City Council. RESO , FD-1 Adopted in October Requiring a comprehensive management, performance and financial audit of the BWS.

15 City Auditor s Report The audit team reviewed BWS policies, procedures, regulations, management directives, management reports, and financial reports and statements. On-site inspections were performed and auditors accompanied technicians on their daily routes. Comparison data from 30 other water jurisdictions across the US was considered in the audit.

16 BWS Beretania Redevelopment

17 Beretania Property Development Project BWS is exploring pursuing alternative revenue sources, such as the lease and development of its Beretania property, to fund operational needs and capital system improvements. Development of the 6-acre Beretania property will ONLY make sense if it benefits our customers and employees. Utilize the Competitive Sealed Proposal or Request For Proposals (RFP) process to select a qualified developer.

18 Strategic Plan

19 Background Several Strategic Plans over the years Last Strategic Implementation Plan started in 2011 Implementation by agency began Not formally presented to the Board New management Strategic Plan to align management and Board Collaboration between management team and Board

20 Process Analyze the Current Environment Jan April 2014 Senior Management Team Reaffirm Vision, Mission & Strategic Goals Draft Shared Values Establish Permitted Interaction Group Develop the Strategic Direction May June 2014 Senior Management Team & Permitted Interaction Group Validate previous work Develop strategic direction Draft Strategic Plan June July 2014 Senior Management Team Develop Strategic Objectives Identify Key Action Plans Draft Strategic Plan

Strategic Goals Resource Sustainability Resource Sustainability (Safe) Protect and manage our

Operational Sustainability Financial Sustainability Operational Sustainability (Dependable)

practices consistent with current industry standards.

21 Strategic Goals Resource Sustainability Resource Sustainability (Safe) Protect and manage our groundwater supplies and watersheds through adaptive and integrated strategies. Operational Sustainability Financial Sustainability Operational Sustainability (Dependable) Foster a resilient and collaborative organization utilizing effective and proactive operational practices consistent with current industry standards. Financial Sustainability (Affordable) Implement sound fiscal strategies to finance our operating and capital needs to provide dependable and affordable water service.

22 Vision Ka Wai Ola Water for Life Mission To provide safe, dependable and affordable water now and into the future Goals Protect and manage our groundwater supplies and watersheds through adaptive and integrated strategies Objectives We will communicate the value of water to engage the community in a shared stewardship of Oahu s water resources Key Action Plans Broaden the BWS message of the Value of Water Increase educational activities to emphasize the importance of shared stewardship Use multi-media to keep internal & external stakeholders informed of BWS Programs

23 Water Master Plan

24 BWS Water Master Plan The Water Master Plan is a comprehensive program that, looking ahead over the next 30 years, evaluates the entire water system, identifies necessary improvements, and balances needs and costs for our customers. A best practice of water utilities seeking to ensure stewardship of water supplies and infrastructure. Provides vital information for policy makers to make decisions about how to balance water service adequacy & dependability with the cost of infrastructure improvements and rate affordability to our customers. Water Service Adequacy & Dependability Infrastructure Costs Rate Affordability

25 WMP Process

26 Note: Condition Assessments extending into 2015 Water Master Plan Schedule Phase 1: Initial Evaluation, WMP Methodology& Ph. 2&3 Scope Phase 2: Condition Assessment & System Analysis Phase 3: 30-year CIP, Water Master Plan & Stakeholder Advisory Group Financial Plan & Rate Study We are here

3-Year Public Engagement Strategy Key Topic Areas include: City Audit Report to City Council August 2015 BWS Water Master Plan (Water Supply, Demand Forecasts, Systems, CIP) AMR, BWS Organizational

27 3-Year Public Engagement Strategy Key Topic Areas include: City Audit Report to City Council August 2015 BWS Water Master Plan (Water Supply, Demand Forecasts, Systems, CIP) AMR, BWS Organizational Study, CC&B and Customer Service Alignment of initiatives with Strategic Plan Revised Water Rates Justification & Design ( ) Primary Stakeholder Groups Ratepayers and Residents Stakeholder Advisory Group BWS Employees and Retirees Elected Officials Press and Media

28 Sustainability Initiatives

29 Refinancing Debt to Achieve Savings The BWS recently completed two important financial transactions resulting in interest savings of more than $19M. Issued $144,985,000 in water system revenue bonds, paying a rate of 3.36 percent. BWS saved more than $13M in interest. BWS also received a low-interest loan through the Drinking Water State Revolving Funds (DWSRF) administered by the State Department of Health to refinance outstanding bonds, resulting in more than $6M of interest savings.

30 Enterprise Organizational Study As part of the Strategic Plan, the BWS has a goal to achieve operational sustainability: foster a resilient and collaborative organization utilizing effective and proactive operational practices consistent with current industry practices. Issued RFP to engage a consultant who will assist the BWS in analyzing our current organizational structure and work processes.

31 Energy Savings Performance Contract (ESPC)

32 What is an ESPC? State of Hawaii created procurement process for government agencies Focuses on projects that save energy Process allows for funding via guaranteed energy savings Involves a Monitoring and Verification (M&V) phase Guarantee can be made to last 20 years Currently being used by State DAGS, DOT, City ENV, Kauai DPW, UH Community Colleges, UH Main College

33 What is the Goal of the ESPC BWS Facilities? Reduce energy use by 20% Reduce fossil fuel consumption Develop and use renewable energy as economically feasible Includes the gasoline fueled vehicular fleet

34 The ESPC BWS Facilities can encompass: All BWS facilities (pump stations, storage tanks, office buildings, control valves, etc.) The gasoline fueled vehicular fleet NEXT STEP Investment Grade Audit

35 BWS Improvements

36 WSO Operational Program Management This initiative s goal is to move the Water System Operations Division (WSO) forward to better fulfill the BWS mission effectively and efficiently. Main tasks of this initiative are: Condition Assessment Organizational Assessment Improvement Initiatives

37 Condition Assessment Completed condition assessment of all BWS pumping and chlorination facilities. Created database with data capturing forms and reports. Analysis of assessment data Developed condition rating system Prioritized repair work needed Assessing feasibility of alternative project delivery for implementation of common repair needs Developing scope of work for high priority renovation/upgrade projects

38 Organizational Assessment Completed organizational assessment of Division Conducting Assessment of Computerized Maintenance Management System (CMMS) Organizational Recommendations: Develop Water Treatment Branch Develop Instrumentation and Controls Branch Additional Engineering Positions

39 Improvement Initiatives Temporarily staffed Water Treatment Branch function until re-organization is completed Development and implement electronic Operation and Maintenance Manuals Development and implement Process and Instrumentation Diagrams

40 Improvement Initiatives Installation of technology: Programmable Logic Controllers Chlorine Residual Analyzers Chlorine Tank Level Sensors Re-establishment of preventative maintenance programs Establishing measurable performance metrics Established a new apprenticeship program for Plant Electrician positions

41 Capital Projects Division (CPD) Program Optimization Overview

42 Aligning CPD Actions with Interests and Risks Mission: Safe, Dependable, and Affordable Water Its all about our Assets O Current Assets represent ~ $4-5 Billion community investment! We will likely be adding $80 Million/yr. CPD delivers the assets (new + replacements) Otherefore key to long-term BWS success

BWS Desired Outcomes for CPD Safe, Dependable, and

top Contractors and Consultants Shared and equitable

Predictable schedule Reliable bids and fewer change

43 BWS Desired Outcomes for CPD Safe, Dependable, and Affordable WaterO BWS is a preferred Owner Attract top Contractors and Consultants Shared and equitable risk management More consistent project delivery Predictable schedule Reliable bids and fewer change orders Higher quality projects Prepared to execute Water Master Plan

Key Initial Findings (Engineering) Update the Project Definition process Establish consistent project controls and provide resources to administer Identify metrics to better

44 Key Initial Findings (Engineering) Update the Project Definition process Establish consistent project controls and provide resources to administer Identify metrics to better communicate status Develop electronic data management tools Project Management Information System (PMIS) Project information archive Succession plan (~40% CPD can retire in 5 years)

Establish standards to improve consistency Scope projects to better capture existing conditions Define risks and permitting needs Define roles and

45 Establish standards to improve consistency Scope projects to better capture existing conditions Define risks and permitting needs Define roles and responsibilities Prioritize projects to leverage in-house capabilities first Develop electronic tools to streamline reporting Succession plan Key Initial Findings (Inspections)

46 New Challenges

Red Hill Fuel Leak On January 13 2014, Navy reported a 27,000 gallon

47 Red Hill Fuel Leak On January , Navy reported a 27,000 gallon leak of jet fuel from Tank 5 at Red Hill Bulk Fuel Storage Facility.

48 Five BWS wells closest to Red Hill Facility site. Irreplaceable Moanalua and Waimalu aquifer systems. Five wells contribute 11.5% of the 140 MGD average daily production. Halawa Shaft and Moanalua Wells contribute over 25% of the water serving Metro Honolulu system (Moanalua to Hawaii Kai).

Ref. Red Hill Bulk Fuel Storage Facility Final Technical Report, 2007, Fig. 1-3, p. 1-15 Twenty tanks sitting on end connected by an upper and lower access tunnel. Constructed from 1940 to 1943.

49 Ref. Red Hill Bulk Fuel Storage Facility Final Technical Report, 2007, Fig. 1-3, p Twenty tanks sitting on end connected by an upper and lower access tunnel. Constructed from 1940 to Each tank is 250 feet high and 100 feet in diameter million gallon capacity per tank. Facility declassified in Navy s Red Hill Shaft approx. 2,500 feet down gradient from the facility. Groundwater table is 100 feet below the tanks. 49

50 As of December 2014 Red Hill Task Force (SCR 73) met and completed report to Legislature Secondary containment needed. Navy disagrees Strengthen DOH UST regulations and increase program resources Taskforce should continue overseeing situation Create technical library and sub-committee Open public access to meeting minutes, technical information and taskforce decisions on the web

51 Haiku Stairs Also known as the Stairway to Heaven, is located on City property for the use of BWS. Stairs were originally built by the United States Navy along the ridgeline of the Koolau Mountains above Haiku Valley. Restricted access to the stairs has been in effect since 1987.

52 Haiku Stairs Haiku Stairs is located on one of several watershed properties owned and/or managed by the BWS. Other examples of places of interest on watershed lands sites include Nuuanu Reservoir No. 4, Waihee (Hamama) Falls and Kalihi Ice Ponds. Public access to ALL of the above is restricted. Violators can face fines and/or prison time.

53 Haiku Stairs The land under the stairs is designated as essential watershed land and, therefore, protected under Revised Ordinances of Honolulu Section This makes trespassing on watershed property a criminal offense, requiring a court appearance, and punishable by fines up to $600 and/or up to six months in prison. Current statistics on the number of citations issued and arrests made from June to December 2014: Citations: 135 Arrests: 6 Warnings: 100

54 Mahalo!

County of Orange Resources and Development Management Department Harbors, Beaches and Parks. Strategic Plan. HBP Strategic Plan Workshop 1.

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